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HomeMy WebLinkAboutFY2007-08 Basic Finincial StatementsCITY OF SAN RAFAEL BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2008 This Page Left Intentionally Blank CITY OF SAN RAFAEL, CALIFORNIA Basic Financial Statements For the Year Ended June 30, 2008 Table of Contents INTRODUCTORY SECTION Tableof Contents................................................................................................................................................ i FINANCIAL SECTION Independent Auditor's Report on Basic Financial Statements.................................................................. 1 Management's Discussion and Analysis........................................................................................................3 Basic Financial Statements: Government -wide Financial Statements: Statementof Net Assets...................................................................................................................... 17 Statementof Activities....................................................................................................................... 18 Fund Financial Statements: Major Governmental Funds: BalanceSheet..................................................................................................................................22 Balance Sheet - Reconciliation of Governmental Fund Balances to Net Assets of Governmental Activities...................................................................................... 23 Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................ 24 Reconciliation of the Net Change in Fund Balances - Total Governmental Funds with the Statement of Activities...................................................................................... 25 Proprietary Funds: Statementof Net Assets.................................................................................................................. 28 Statement of Revenues, Expenses, and Changes in Fund Net Assets ........................................... 29 Statementof Cash Flows................................................................................................................ 30 Notes to Basic Financial Statements....................................................................................................... 31 CITY OF SAN RAFAEL, CALIFORNIA Basic Financial Statements For the Year Ended June 30, 2008 Table of Contents FINANCIAL SECTION (Continued) Required Supplementary Information: Schedules of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual - Budgetary Basis GeneralFund................................................................................................................................... 64 Traffic and Housing Mitigation Special Revenue Fund................................................................. 65 GasTax Special Revenue Fund...................................................................................................... 66 Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual - Budgetaiy Basis Redevelopment Agency Capital Projects Fund.............................................................................. 69 Non -major Governmental Funds: CombiningBalance Sheet.................................................................................................................. 74 Combining Statement of Revenues, Expenditures, and Changes inFund Balance.......................................................................................................................... 80 Budgeted Non -major Government Funds: Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual............................................................................... 80 Internal Service Funds: Combining Statement of Net Assets.................................................................................................. 98 Combining Statement of Revenues, Expenses and Changes in Net Assets ...................................... 99 Combining Statement of Cash Flows............................................................................................... 100 MAZE & ASSOCIATES ACCOUNTANCY CORPORATION 3478 Buskirk Ave. - Suite 215 Pleasant Hill, California 94523 (925) 930-0902 • FAX (925) 930-0135 maze C mazeassociates. com www.mazeassociates.com INDEPENDENT AUDITOR'S REPORT ON BASIC FINANCIAL STATEMENTS To the Honorable Mayor and Members of the City Council City of San Rafael, California We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of San Rafael as of and for the year ended June 30, 2008, which collectively comprise the City's basic financial statements as listed in the Table of Contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the component unit financial statements of the San Rafael Sanitation District (District), which represents 12% and 11% of the assets and revenues and 4% and 8% of liabilities and expenses of the reporting entity, respectively. These component unit financial statements were audited by other auditors, whose report thereon has been furnished to us. Our opinion, insofar as it relates to the amounts included for this entity, is based solely on the report of these other auditors. We conducted our audit in accordance with generally accepted auditing standards in the United States of America and the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion the basic financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of San Rafael as of June 30, 2008 and the respective changes in the financial position and cash flows, where applicable, thereof for the year then ended, in conformity with generally accepted accounting principles in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 22, 2008 on our consideration of the City of San Rafael's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. A Professional Corporation As described in Note 6 the City implemented the provisions of GASB Statement No. 48 Sales and Pledges of Receivables and Future Revenue and Intra-Entity Transfers of Assets and Future Revenues. Management's Discussion and Analysis and Budget and Actual schedules for the General Fund, Traffic and Housing Mitigation Special Revenue Fund and Gas Tax Special Revenue Fund are not a required part of the basic financial staternents but are supplementary information required by the Government Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplernentary information. However, we did not audit this information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The supplemental information listed in the Table of Contents is presented for purposes of additional analysis and is not a required part of the basic statements of the City of San Rafael. This information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section listed in the Table of Contents have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. p� f) I October 22, 2008 2 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2008 This analysis of the City of San Rafael's (City) financial performance provides an overview of the City's financial activities for the fiscal year ended June 30, 2008. Please read it in conjunction with the basic financial statements and the accompanying notes to those basic financial statements. FINANCIAL HIGHTLIGHTS Government -Wide Highlights: Net Assets - The assets of the City exceeded its liabilities at fiscal year ending June 30, 2008 by $220.4 million. Of this amount, $6.8 million was reported as "unrestricted net assets" and may be used to meet the government's ongoing obligations to citizens and creditors. Expense Activities - During the fiscal year the City's total revenues ($94.0 million) exceeded expenses for governmental and business -type activities ($93.0 million) by $1.0 million. Excluding Depreciation (non - cash expense of $7.1 million), collected revenues were $8.1 million above expenses. Changes in Net Assets - The City's total net assets increased by $1.03 million in fiscal year 2008. Net assets of governmental activities increased by $0.37 million, while net assets of the business type activities increased by $.66 million. Fund Highlights: Governmental Funds - Fund Balances- As of the close of fiscal year 2008, the City's governmental funds reported combined ending fund balances of $34.6 million, a decrease of $4.9 million from the prior year. Of this total amount, $19.8 million represents reserved fund balances and $4.1 million is designated. General Fund - The fund balance of the general fund on June 30, 2008 was $6.2 million, an increase of $0.3 million from the prior year. $2.2 million was held in reserve, and $4.0 million is designated to meet our 10% reserve requirement as defined by the City's Financial Management Policies. Long -Term Debt: The City's total outstanding debt decreased by $2.4 million (5.0 percent) during the fiscal year, which reflects payment on redevelopment debt, court fine repayment note, and capitalized lease obligations. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City's basic financial statements, which are comprised of three components: 1) Government -Wide Financial Statements, 2) Fund Financial Statements, and 3) Notes to the Basic Financial Statements. The basic financial statements include the City (primary government) and all legally separate entities (component units) for which the government is financially accountable. The City's component units consist of the following: The Redevelopment Agency of the City of San Rafael (Agency) and the San Rafael Joint Powers Financing Authority (Authority). These component units are, for practical purposes, departments of the City and have been included in the basic financial statements as an integral part of the primary government using the blended method. This report also contains other supplementary information in addition to the basic financial statements for further information and analysis. CITY OF SA N RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2008 Government -Wide Financial Statements The Government -Wide Financial Statements present the financial picture of the City and provide readers with a broad view of the City's finances. These statements present governmental activities and business - type activities separately and include all assets of the City (including infrastructure) as well as all liabilities (including long-term debt). Additionally, certain interfund receivables, payables and other interfund activity have been eliminated as prescribed by Government Accounting Standards Board (GASB) Statement No. 34. The Statement of Net Assets and the Statement of Activities and Changes in Net Assets report information about the City as a whole and about its activities. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current year's revenues and expenses are taken into account, regardless of when cash is received or paid. The Statement of Net Assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time, increases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities and Changes in Net Assets presents information showing how the City's net assets changed during the year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of timing of related cash flows. In the Statement of Net Assets and the Statement of Activities and Changes in Net Assets, we separate the City activities as follows: Governmental Activities —Most of the City's basic services are reported in this category, including Public Safety, Public Works and Parks, Community Development and Economic Development, Cultural and Recreation and Government Administration (finance, human resources, legal, City Clerk and City Manager operations). Property, sales and use taxes, user fees, interest income, franchise fees, hotel taxes, business license and property transfer taxes, plus state and federal grants finance these activities. Business -Type Activities —The City charges a fee to customers to cover all or most of the costs of certain services it provides. The City's Parking Services program is reported as a business -type activity. Discretely Presented Component Units - The government -wide financial statements include not only the City itself (known as the primary government), but also a legally separate entity, the San Rafael Sanitation District for which the City is financially accountable. Financial information for the San Rafael Sanitation District is reported separately from the financial information presented for the primary government itself. The government -wide financial statements can be found on pages 15 through 19 of this report. Fund Financial Statements and Major Component Unit Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. 11 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2008 The fund financial statements provide detail information about each of the City's most significant funds, called Major Funds. The concept of Major Funds, and the determination of which are major funds, was established by GASB Statement 34 and replaces the concept of combining like funds and presenting them in total. Instead, each Major Fund is presented individually, with all Non -major Funds summarized and presented in a single column. Further detail on the Non -major funds is presented on pages 71 through 96 of this report. Governmental Funds - Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financial capacity. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for government funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliation's are presented on the page immediately following each governmental fund financial statement. The City has twenty-eight governmental funds, of which four are considered major funds for presentation purposes. Each major fund is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances. The City's four major funds are - the General Fund, Redevelopment Agency Capital Projects, Gas Tax, and Traffic and Housing Mitigation. Data from the other twenty-four governmental funds are combined into a single, aggregated presentation. The basic governmental fund financial statements can be found on pages 21 through 25 of this report. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements on pages 71 through 96 of this report. Proprietary Funds - The City maintains two different types of proprietary funds - enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City uses an enterprise fund to account for its Parking Services program. Internal service funds are used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its fleet of vehicles, building maintenance, radio systems, telephone systems, personal computer replacement program, self-insurance for workers compensation, dental, public liability, and employee benefits programs. Because these services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities in the governmental -wide financial statements. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. Like the government -wide financial statements, proprietary fund financial statements use the accrual basis of accounting. There is no reconciliation needed between the government -wide financial statements for business -type activities and the proprietary fund financial statements. The basic proprietary fund financial statements can be found on pages 27 through 30 of this report. CITY OF SAN RAFAEL Managements Discussion and Analysis Fiscal Year Ended June 30, 2008 Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government wide and fund financial statements. The notes to the financial statements can be found on pages 31 through 60 of this report. Required Supplementary Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. One section includes budgetary comparison statements for the major funds (general, redevelopment agency capital project, gas tax, and traffic and housing mitigation). The other section is a schedule of funding progress for the Marin County Employees' Retirement System. All budgeted positions that are filled by either full-time or permanent part-time employees (working seventy-five percent of full time equivalent) are eligible to participate in this system. Required supplementary information can be found on pages 61 through 66 of this report. GOVERNMENT -WIDE FINANCIAL ANALYSIS Statement of Net Assets Net assets are a good indicator of the City's financial position. During this fiscal year, net assets of the City were $220.4 million, which is an increase of $1.0 million from the prior year. The following is the condensed Statement of Net Assets for the fiscal years ended June 30, 2007 and 2008. Assets: Current assets Capital assets, net Total assets Liabilities: Current liabilities Long-term liabilities Total liabilities Net Assets: Invested in capital assets, net of related debt 176.7 171.9 4.8 10.1 9.7 0.4 Restricted 26.8 31.1 (4.3) - - - Unrestricted 4.3 4.5 (0.2) 2.5 2.2 0.3 $ 207.8 $ 207.5 $ 0.3 $ 12.6 $ 11.9 $ 0.7 June 30, (Amounts in Millions) Governmental Activities 2008 2007 $ 45.9 $ 214.9 260.8 10.1 42.9 53.0 Increase Business -Type Activities Increase (Decrease) 2008 2007 (Decrease) 47.8 $ (1.9) $ 213.7 1.2 261.5 (0.7) 9.1 1.0 44.9 (2.0) 54.0 (1.0) 2.7 $ 2.5 $ 0.2 17.3 17.0 0.3 20.0 19.5 0.5 0.3 0.3 - 7.1 7.3 (0.2) 7.4 7.6 (0.2) Total net assets Cel CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2008 At June 30, 2008, the largest portion of net assets (84.8 percent) consists of the City's investment in capital assets net of related debt. This component portrays the total amount of funds required to acquire those assets less any related debt used for such acquisition that is still outstanding. The City uses these capital assets to provide services to citizens. The increase in total net assets from 2006-2007 to 2007-2008 is largely attributable to a netting of capital assets acquisition against depreciation expense for the year. Total depreciation for this current year was $7.1 million, while capital asset acquisition totaled $8.9 million, leaving a net increase of $1.8 million. The capital assets of the City are not sources of income for repayment of debt as most assets are not revenue generating and generally are not liquidated to repay debt. Therefore, debt service payments are funded from other sources available to the City. A portion of the City's net assets (12.2 percent) is subject to restrictions imposed by external parties and their use is determined by those restrictions and agreements. The remainder of net assets, $6.8 million, may be used to meet the City's ongoing operations. For the year ended June 30, 2008, the City reported positive balances in all three categories of net assets for governmental activities. Business -type activities reported positive net assets in capital and unrestricted net assets. $250.0 $200.0 N c $150.0 $100.0 $50.0 $0.0 p200 Net Assets y Invesment in Capital Assets, Restricted Unrestricted Total Net Assets net of related debt 8 $186.8 $26.80 $6.80 $220.4 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2008 Statement of Activities The following is the condensed Statement of Activities and Changes in Net Assets for the fiscal years ended June 30, 2008 and 2007: Revenues: Program revenues General revenues Total revenues Expenses Change in net assets before transfers Governmental Activities TIM )nn7 For the Fiscal Years Ended June 30, (Amounts in Millions) _ Increase Business -Type Activities (Decrease) 2008 2007 $ 26.9 $ 24.7 $ 2.2 $ 62.8 58.0 4.8 89.7 82.7 7.0 99.7 83.5 6.2 4.2 $ 3.2 0.1 0.1 4.3 3.3 3.3 3.1 (0.8) 0.8 1.0 0.2 Increase (Decrease) $ 1.0 1.0 0.2 0.8 Transfers 0.3 0.2 $ 0.1 (0.3) (0.2) $ (0.1) Net Assets: Beginning, as restated 207.5 208.1 11.9 11.9 Ending $ 207.8 $ 207.5 $ 12.6 $ 11.9 Governmental Activities: The City's governmental activities increased net assets by $300,000, which represents a 0.1 % increase from last year. Key elements of this change were as follows: Revenue highlights: • Property Tax revenues increased by $1.8 million or 9.0 percent in 2008. The increase includes $934,000 for the SB418 settlement amount for excess Educational Revenue Augmentation Fund (ERAF). • Sales tax increased by $1.3 million or approximately 5.2 percent compared to fiscal year 2007. The increase in sales tax revenues includes an $867,000 increase in the transaction and use tax revenue and a $465,000 in the backfill amount received. Over all the sales tax remained relatively flat and is dependent on consumer retail and business related activity in the City. • Motor vehicles revenues decreased by $74,000 or 22 percent. • Other Tax revenues increased by $400,000 or approximately 4.7 percent compared to fiscal year 2007. The increases were primarily due to increases in franchise fees, which now include North San Rafael refuse area ($105,000); increases in transient occupancy taxes ($284,000) and increases in business license tax ($16,000). 8 CITY OFSAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2008 Governmental Activities -Revenues: 22% Governmental Activities Revenues By Source June 30, 2008 5% 7% 2% 9 R% 10% 29% Governmental Activities - Expenses: 6% 6% 2% Governmental Activities Expenses by Function June 30, 2008 10% i% Property Taxes ■ Sales Taxes ❑ Other Taxes 0 Charges for Services ■ Miscellaneous ❑ Capital Grants and Contributions ® Investment Earnings []General Government ■Public Safety ❑Public Works and Parks OCommunity Development ■Culture and Recreation []Capital Imprv/Spec proj. ■Debt Service Total expenses for governmental activities were $87.7 million (not including interest on long-term debt of $2.0 million). Program revenues offset total expenditures as follows: • Those who directly benefited from programs contributed $20.2 million in charges for services. • A total of $3.2 million in capital projects was funded by outside agencies through capital grants and contributions. i CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2008 As a result, total expenses that were funded by tax revenues; investment income and other general revenues were $60.8 million. Functional expenses for the years ended June 30, 2008 were as follows: Expenses by Function For the fiscal year ended June 30, 2008 Function Amount Percent of Total General Government $ 8,621,079 9.6% Public Safety 40,845,347 45.5% Public works and parks 16,981,276 18.9% Community development 5,811,866 6.5% Culture and recreation 10,300,230 11.5% Capital Imprv/Spec Proj 5,124,091 5.7% Interest on Debt 1,989,620 2.2% Total Expenses $ 89,673,509 100.0% Business -Type Activities: Net assets for business -type activities were $12.6 million, a $0.7 million increase from the prior fiscal year. Parking services is the City's only business type activity and income is derived from program revenues of $4.2 million. Program revenues include parking meter coin at $1.3 million, and parking garage hourly parking at $0.6 million. Revenues also include parking and non -vehicle code fines totaling $1.7 million and $0.3 million for garage parking permits. Total expenses for parking services were $3.3 million during fiscal year 2007-2008. FINANCIAL ANALYSIS OF INDIVIDUAL FUNDS Governmental Funds The focus of the CiVs governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financial capacity. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City`s governmental funds reported combined ending fund balances of $34.6 million. Approximately, $14.8 million of this amount constitutes unreserved and undesignated fund balance, which is available for spending at the government's discretion. The remainder of fund balance is reserved to indicate that it is not available for spending because it has already been legally committed. General Fund - The General Fund is the primary operating fund of the city. At the end of the current fiscal year, unreserved fund balance of the general fund was $4.0 million, while total fund balance reached $6.2 million. $4.0 million is held as part of the 10 percent designated unreserved for emergencies and cash flow cycles as defined in San Rafael's Financial Management Policies. As a measure of the general fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 6.6 percent of total general fund expenditures including transfers out, while total fund balance represents 10.2 percent of that same amount. a CITY OFSANRAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2008 The available fund balance in the City's General Fund increased by $0.3 million compared to the 2007 fiscal year. This increase resulted from: • One-time allocation for the settlement amount from SB418 received from the County of Marin for the amount withheld from the excess Educational Revenue Augmentation Fund. • Reimbursements received from FEMA and the State OES for the 2005-2006 winter storms. • Expenditures increased with personnel costs mainly benefit costs leading the way. Redevelopment Agency Capital Project Fund - The Redevelopment Agency is responsible for assisting in the clearance and rehabilitation of areas determined to be in a declining condition in the City. The Agency's operations are funded primarily by the issuance of debt, which is expected to be repaid out of property tax increment revenue generated by increased in property assessed values in the redevelopment areas. The Redevelopment Agency Capital Project Fund was established to account for capital improvement projects related to the various redevelopment areas. At the end of fiscal year 2008, the reserved fund balance was $5.9 million, a decrease of $3.0 million from the prior year. Expenditures exceeded revenues by $3.0 million. The increase is primarily related to increased expenditures for capital improvement projects. A total of $5.3 million in fund balance as of June 30, 2008 was reserved for future capital project and housing programs. Proprietary Funds The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. As discussed in the business -type activities previously, the City's net assets increased by $0.7 million as a result of operations in the Parking Services fund. GENERAL FUND BUDGETARY HIGHLIGHTS The final amended budget totaled $56.2 million, including an increase of $1,884,593 in appropriations to the originally adopted budget. The amendments can be briefly summarized as follows: 1. Increases in the following budgets: o General Government $ 491,502 o Public Safety 968,443 o Public Works and Parks 81,526 o Community Development/Redevelopment 110,908 o Culture and Recreation 17,453 o Capital Improvement/Special Projects 214,761 During the year, however, revenues exceeded budgetary estimates and expenditures did not exceed the final budgetary estimate. Overall, revenues exceeded expenditures by $4.3 million. The transfers out exceeded the transfers in by $4.0 million. 11 CITY OF, RAF,IEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2008 CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City's investment in capital assets for its governmental and business -type activities as of June 30, 2008 amounts to $232.1 million, net of accumulated depreciation of $106.5 million. This investment in capital assets includes land, buildings, improvements, machinery and equipment, infrastructure and construction in progress. Infrastructure assets are items that are normally immovable and of value only to the City such as roads, bridges, streets and sidewalks, drainage systems, lighting systems and similar items. The total additions to the City's investment in capital assets for the current fiscal year was $7.7 million, offset by accumulated depreciation and retirements of $6.8 million, thereby equaling a net increase of $0.9 million. Major capital asset additions during the current fiscal included work in process Medway Canal Intersection Improvements, Medway/Canal Rule 20B Underground, and 4th Street Rehabilitation -West End. The City also purchased twenty-seven vehicles, which included two ambulances and a Type III fire engine. Capital Projects The Library HVAC and Window Replacement project was completed in 2008. Sun Valley ADA Compliance Additional information on the City's capital assets can be found in Note 5 on pages 45 through 47 of this report. Debt Administration As of June 30, 2008, the City had outstanding debt issues as listed below. Not included in the following table is the Community Facilities District No.1 Special Tax Bond, which is backed by property tax levies against property owners. The City has no obligation for these bonds. Certain specific revenues back each of the City's other bonds or General Fund lease payments and carry respectable ratings. The City's long-term obligations for the fiscal years 2008 and 2007 were as follows: Governmental Business -Type Activities Activities Total 2008 2007 2008 2007 2008 2007 Revenue Bonds $ 0.8 $ 1.0 $ 7.1 $ 7.3 $ 7.9 $ 8.3 Special Assessment Bonds - - - - - Tax Allocation Bonds 37.5 39.2 - - 37.5 39.2 Court Fine Promissory note 0.8 1.0 - 0.8 1.0 Redevelopment note 0.2 0.2 - 0.2 0.2 Capitalized Leases 0.4 0.6 - - 0.4 0.6 Compensated Absences 4.6 4.5 - - 4.6 4.5 Total Outstanding Debt $ 44.3 $ 46.5 $ 7.1 $ 7.3 $ 51.4 $ 53.8 12 CITY OF, SANRAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2008 ECONOMIC CLIMATE AND NEXT YEAR'S BUDGET Many factors were considered in preparing the City's budget for fiscal year 2008-2009. In July, the budget was balanced with strategic remedies like freezing six positions, reducing reserves for liability and workers compensation funds, and using one-time sources of funding form the Librarys Transaction Based Revenues. The magnitude and depth of the current recession could not be harnessed for the rest of the fiscal year. This downturn in the economy impacts many City revenues. Our sales tax, the City's biggest tax revenue generator, faces a decline of seven percent with no relief in sight. Other revenues affected by the economic downturn include the transient occupancy tax (also known as a hotel tax) with approximately a six percent decline since July's adopted budget. The credit crisis instigated a slow down in the sale of property causing a reduction in the City's property transfer tax. The City's second largest tax generator is property tax. Although property sales are not as strong as in previous years, the assessed values of the properties rose slightly. We have included a 4 percent growth in property tax revenues for fiscal year 2008-2009. In November of 2006, the citizens of San Rafael, CSA #13, CSA #19, and Marinwood passed Measure P, which raised the tax rate cap to $85 per residential living units and $0.11 per non-residential building square footage. To cover the proposed costs in the Paramedic Fund for fiscal year 2008-09, we raised the rates to $77 per residential living unit and to $.0960 per non-residential building square foot. The City's largest expenditure by far relates personnel costs. Salaries and benefits are tied to the labor agreements with each bargaining group. Except for known increases in contractual obligations, the Fiscal Year 2007-2008 baseline operating cost levels were maintained for Fiscal Year 2008-2009. Unfortunately, the City's revenues are not keeping up with the City's expenditures. Difficult decisions will be made in the coming months in order to achieve and maintain a balanced budget. REQUEST FOR INFORMATION This financial report is designed to provide our residents, businesses, customers, and investors and creditors with a general overview of the City's finances and to demonstrate the City's accountability for providing high quality services within the limits of our fiscal resources. If you have questions about this report or need additional financial information, contact the City of San Rafael - Finance Department, 1400 Fifth Avenue, Room 204, San Rafael, California 94901. 13 This page intentionally left blank CITY OF SAN RAFAEL STATEMENT OF NET ASSETS AND STATEMENT OF ACTIVITIES The Statement of Net Assets and the Statement of Activities summarize the entire City's financial activities and financial position. The Statement of Net Assets reports the difference between the City's total assets and the City's total liabilities, including all the City's capital assets and all its long-term debt. The Statement of Net Assets focuses the reader on the composition of the City's net assets, by subtracting total liabilities fi-om total assets. The Statement of Net Assets summarizes the financial position of all the City's Governmental Activities in a single column, and the financial position of all the City's Business -Type Activities in a single column; these columns are followed by a total column which presents the financial position of the entire City. The City's Governmental Activities include the activities of its General Fund, along with all its Special Revenue, Capital Projects and Debt Service Funds. Since the City's Internal Service Funds service these Funds, their activities are consolidated with Governmental Activities, after eliminating inter -fund transactions and balances. The City's Business Type Activities include all its Enterprise Fund activities. The Statement of Activities reports increases and decreases in the City's net assets. It is also prepared on the full accrual basis, which means it includes all the City's revenues and all its expenses, regardless of when cash changes hands. This differs from the "modified accrual" basis used in the Fund financial statements, which reflect only current assets, current liabilities, available revenues and measurable expenditures. The Statement of Activities presents the City's expenses first, listed by program, and follows these with the expenses of its business -type activities. Program revenues —that is, revenues which are generated directly by these programs —are then deducted from program expenses to arrive at the net expense of each governmental and business -type program. The City's general revenues are then listed in the Governmental Activities or Business -type Activities column, as appropriate, and the Change in Net Assets is computed and reconciled with the Statement of Net Assets. Both these Statements include the financial activities of the City, the City of San Rafael Redevelopment Agency, and the San Rafael Joint Powers Financing Authority which are legally separate but are component units of the City because they are controlled by the City, which is financially accountable for their activities. The balances and the activities of the discretely presented component units of the San Rafael Sanitation District are included in these statements as separate columns. 15 This Page Left Intentionally Blank CITY OF SAN RAFAEL STATEMENT OF NET ASSETS JUNE 30, 2008 iASSETS Cash and investments available for operations (Note 2) Restricted cash and investments (Note 2) Receivables: Accounts Taxes Grants Interest Loans (Note 4) Internal balances (Note 3) Prepaid expenses and other Capital assets (Note 5): Nondepreciable Depreciable, net Total Assets LIABILITIES Accounts payable Deposits payable Interest payable Developer bonds payable Arbitrage payable Unearned revenue Claims payable (Note 13): Due in one year Due in more than one year Compensated absences (Note I ft Due in one year Due in more than one year Long-term debt (Note 6): Due in one year Due in more than one year Total Liabilities NET ASSETS (Note 8) Component Unit Primary Government San Rafael Governmental Business -Type Sanitation Activities Activities Total District $33,351,818 $2,695,555 $36,047,373 $9,537,550 2,329,615 55 2,329,670 482,015 2,416,166 42,705 2,458,871 107,173 4,740,493 4,740,493 1,451,440 1,451,440 308,791 308,791 3,714 1,297,317 1,297,317 (21,865) 21,865 64,742 64,742 59,210 86,367,316 8,743,714 95,111,030 251,394 128,490,354 8,526,615 137,016,969 26,403,000 260,796,187 20,030,509 280,826.696 36,844,056 3,478,247 68,440 3,546,687 182,835 44,945 44,945 326,921 82,904 409,825 39,646 376,548 376,548 25,127 25,127 235,101 235,101 2,284,387 2,284,387 1,975,742 1,975,742 760,716 11,917 772,633 3,737,361 125,802 3,863,163 2,569,318 165,000 2,734,318 410,000 37,134,117 6,975,000 44,109,117 1,723,765 52,948,530 7,429,063 60,377,593 2,356,246 Invested in capital assets, net of related debt 176,724,820 10,130,329 186,855,149 24,546,262 Restricted for: Special revenue projects 13,744,048 13,744,048 Capital projects 4,359,953 4,359,953 Debt service 2,818,762 2,818,762 446,083 Redevelopment projects 5,926,137 51926,137 Total Restricted Net Assets 26,848,900 26,848,900 446,083 Unrestricted 4,273,937 2,471,117 6,745,054 9,495,465 Total Net Assets $207,847,657 $12,601,446 $220,449,103 $34,487,810 See accompanying notes to financial statements 17 CITY OF SAN RAFAEL STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2008 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary Government Governmental Activities: General government $8,621,079 $1,494,784 $666,040 Public safety 40,845,347 5,562,072 799,121 Public works and parks 16,981,276 4,983,288 1,078,093 $2,833,144 Community development / redevelopment 5,81 1,866 3,247,024 406,365 Culture and recreation 10,300,230 4,870,884 920,362 Capital improvements / special projects 5,124,091 Interest on long-term debt 1,989,620 Total Governmental Activities Business -type Activities Parking services Total Business -type Activities Total Primary Government Component Unit San Rafael Sanitation District 89,673,509 20,158,052 / 3,463,616 'r 3,239,509 3,282,235 4,161,936 3,282,235 4,161,936 $92,955,744 $24,319,988 $3,463,616 $3,239,509 $8,090,636 $9,366,305 General revenues: Taxes: Property taxes Sales taxes Special assessments Motor vehicles Other Investment earnings Miscellaneous Aid from other governmental agencies Transfers Total general revenues and transfers Change in Net Assets Net Assets, beginning of year Net Assets, end of year See accompanying notes to financial statements 18 Net (Expenses) Revenues and Changes in Net Assets Component Primary Government Unit San Rafael Governmental Business -Type Sanitation Activities Activities Total District ($6,460,255) ($6,460,255) (34,484,154) (34,484,154) (8,086,751) (8,086,751) (2,158,477) (2,158,477) (4,508,984) (4,508,984) (5,124,091) (5,124,091) (1,989,620) (1,989,620) (62,812,332) (61812,332) $879,701 879,701 879,701 879.701 (62,812,332) 879,701 (61,932,631) 22,195,606 22,195,606 803,071 25,764,457 25,764,457 3,503,555 V 3,503,555 257,320 © 257,320 9,242,241 r 9,242,241 1,583,056 121,486 1,704,542 341,032 296,454 296,454 3,546 577,860 344,080 (344,080) 63,186,769 (222,594) 62,964,175 1,725,509 374,437 657,107 1,031,544 3,001,178 207,473,220 11,944,339 219,417,559 31,486,632 $207,847,657 $12,601,446 $220,449,103 $34,487,810 Ow This Page Left Intentionally Blank FUND FINANCIAL STATEMENTS Major funds are defined generally as having significant activities or balances in the current year. The funds described below were determined to be Major Funds by the City in fiscal 2008. Individual non -major funds may be found in the Supplemental section. GENERAL FUND Established to accounts for all financial resources and transactions except those required to be accounted for in other funds. TRAFFIC AND HOUSING MITIGATION FUND Established to maintain a long-term developer deposits for major housing and street improvement projects. GAS TAX FUND Established to receive and expend the City's allocation of the State gasoline taxes. REDEVELOPMENT AGENCY CAPITAL PROJECTS FUND Established to account for the capital projects activities of the San Rafael Redevelopment Agency. 21 ASSETS Cash and investments available for operations (Note 2) Restricted cash and investments (Note 2) Receivables: Accounts Taxes G rants Interest Loans (Note 4) Due From other funds (Note 3A) Prepaid expenses Total Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Deposits payable Developer bonds payable Arbitrage payable Due to other funds (Note 3A) Deferred revenue Total Liabilities Fund Balances (Note 8): Reserved for: Encumbrances Petty cash Project development Loans receivable Prepaid expense Debt service Court fine audit Assessment districts/open space Improvement projects Traffic and housing Unreserved, designated: Emergency and cash Flow Unreserved, undesignated Total Fund Balances Total Liabilities and Fund Balances CITY OF SAN RAFAEL GOVERNMENTALFUNDS BALANCE SHEET JUNE 30, 2008 � ZOO ✓ Redevelopment� Traffic and ..2 Agency Other Total Housing Capital Governmental Governmenta General Mitigation Gas Tax Projects Funds Funds $824,OS5 $9,816,172 $2,541,924 $4,202,285 $10,441,460 $27,825,89( 73,273 1,594,297 662,045 2,329,61 ` 277,511 33,464 48,307 806,556 1,165,831 4,365,440 353,850 3,106 18,097 4,740,49: 108,272 961,905 381,263 1,451,44( 285,703 23,088 308,79' 632,316 71,429 593,572 1,297,31- 952,072 952,07: 55,859 1,426 57,28' $7,466,229 $9,887,601 $3,037,510 $7,426.560 S12.310.847 540,128,74' $866,126 31,290 350,048 1,247,464 181,589 3,795 433,202 632,316 55,859 816,119 73,273 $896,508 $488,391 $1,153,864 $3,404,88' $13,655 44,94: 25,000 1,500 376,54, 25,127 25 1 2' 497,323 497,32: 961,905 235,101 1,197,00, 13,655 896.508 1,500,423 1,887,788 5,545,83 71,429 9,802,517 181,58 3,79 433,20 593,572 1,297,31 1,426 57,28 753,444 753,44 816,11 73,27 3,999,263 3,999,26 2,377,491 12,1 80,OC 4,078,471 4,078,47 (55,859) 2,141,002 (1,044,189) 9,668,1 89 10,709,14 6,218,765 9,973,946 2,141,002 5,926,137 10,423,059 34,582,9( $7,466,229 $9,887,601 $3,037,510 $7,426,560 $12,310,847 $40,128,7z See accompanying notes to basic financial statements 22 CITY OF SAN RAFAEL GOVERNMENTAL FUNDS BALANCE SHEET - RECONCILIATION OF GOVERNMENTAL FUND BALANCES TO NET ASSETS OF GOVERNMENTAL ACTIVITIES JUNE 30, 2008 Total fund balances reported on the governmental funds balance sheet Amounts reported for Governmental Activities in the Statement of Net Assets are different from those reported in the Governmental Funds because of the following: Capital assets used in Governmental Activities are not financial resources and, therefore, are not reported in the Governmental Funds. Internal service funds are used by management to charge the cost of management of communication, telephone, building, fleet maintenance, equipment replacement, workers' compensation, employee benefits, insurance, and post -retirement healthcare benefits to individual funds. The assets and liabilities are included in Governmental Activities in the Statement of Net Assets. Interest payable on long-term debt does not require the use of current financial resources and, therefore, are not reported in the Governmental Funds. Revenues that are deferred because they are not available currently are taken into revenue in the Statement of Activities. Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the Governmental Funds. Long-term compensated absences Net assets of governmental activities See accompanying notes to financial statements $34,582,909 214,857,670 1,973,606 (326,921) 961,905 (39,703,435) (4,498,077) $207,847,657 23 CITY OF SAN RAFAEL GOVERNMENTALFUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2008 REVENUES Taxes and special assessments Licenses and permits Fines and forfeitures Use of money and property Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Community development / redevelopment Culture and recreation Capital outlay Capital improvement / special projects Debt service: Principal Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER)EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in (Note 3B) Transfers out (Note 313) Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR Redevelopment Traffic and Agency Other Total Housing Capital Governmental Governmental General Mitigation Gas Tax Projects Funds Funds $48,084,486 $964,526 $7,080,183 $56,129,195 1,489,748 1,489,748 796,081 1,000 797,081 224,439 $437,122 $84,377 318,957 519,613 1,584,508 7,246,381 2,638,429 377,365 1,819,793 12,081,968 2,203,852 707,034 762,609 22,356 11,911,609 15,607,460 269,656 40,582 40,522 464,944 815,704 60,314,643 1,144,156 3,525,997 1,723,726 21,797,142 88,505,664 7,023,660 31,317 1,233,193 8,288,170 34,435,419 5,864,443 40,299,862 7,602,332 68,763 107,315 137,530 5,725,725 13,641,665 3,705,928 698,472 1,382,261 5,786,661 2,292,848 7,527,517 9,820,365 264,919 317,721 1,403,105 2,818.072 1,439,700 6,243,517 484,926 19,720 1,874,605 401,594 2,343,246 5,124,091 213,598 2,290,772 2,504,370 1,776,354 1,776,354 56,023,630 1,104,676 3,385,025 4,770,774 28,200,950 93,485,055 4,291,013 39,480 140,972 (3,047,048) (6,403,808) (4,979,391) 933,760 268,061 31000 5,120,395 6,353,216 (4,928,005) (100,000) (384,189) (916,942) (6,329,136) (3,994,245) (100,000) (116,128) 31,000 4,203,453 24,080 296,768 (60,520) 24,844 (3,016,048) (2,200,355) (4,955,311) 5,921,997 9,934,466 2,116,159 8,942,185 12.623,414 39,538220 $6,218,765 $9,873,946 $2,141,002 $5,926,137 $10,423,059 $34,582,909 See accompanying notes to financial statements 24 CITY OF SAN RAFAEL Reconciliation of the NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS with the STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUKE 30, 2008 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS ($4,955,31 1) Amounts reported for Governmental Activities in the Statement of Activities are different because of the following: Capital Assets Transactions Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense. Expenditures for capital assets are added back to fund balance 7,953,819 Current year depreciation is deducted from fund balance (6,819,601) Long -Term Debt Proceeds and Payments Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. 2,504,370 Bond interest accretion is deducted from fund balance (209,660) Accrual of Non -Current Items The amount below included in the Statement of Activities does not require the use of current financial resources and therefore is not reported as revenue or expenditures in governmental funds (net change): Interest payable (3,606) Compensated absences (233,590) Deferred revenue 961,905 Allocation of Internal Service Fund Activity Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of the internal service fund is reported with governmental activities. 1,176,1 1 1 $374,437 See accompanying notes to financial statements 25 This Page Left Intentionally Blank MAJOR PROPRIETARY FUNDS I Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges. The City reported its only enterprise fund as a major proprietary fund. PARKING SERVICES FUND Established to maintain parking garages, lots and spaces in the Downtown Parking District (established over 40 years ago), and to pay for parking enforcement, meter collection, and downtown office services. 27 CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF NET ASSETS JUNE 30, 2008 Business -type Activities - Enterprise Governmental Funds Activities Parking Internal Services Service Funds ASSETS Current Assets: Cash and investments available for operations (Note 2) $2,695,555 $5,525,922 Restricted cash and investments (Note 2) 55 Accounts receivable 42,70S 1,250,328 Prepaids and deposit 7.457 Total Current Assets 2,738,315 6,783,707 Noncurrent Assets: Capital assets (Note 5): Nondepreciable 8,743,714 Depreciable, net 8,526,615 Total Noncurrent Assets 17,270,329 Total Assets 20,008,644 6,783,707 LIABILITIES Current Liabilities: Accounts payable 68,440 73,358 Interest payable 82,904 Due to other funds (Note 3A) 454,749 Claims payable, due in one year (Note 13) 2,284,387 Compensated absences, due in one year (Note IJ) 11,917 Long-term debt, due in one year (Note 6) 165,000 Total Current Liabilities 328,261 2,812,494 Noncurrent Liabilities: Claims payable (Note 13) 1,975,742 Compensated absences (Note IJ) 125,802 Long-term debt (Note 6) 6,975,000 Total Noncurrent Liabilities 7,100,802 1,975,742 Total Liabilities 7,429,063 4,788,236 NET ASSETS (Note 8) Invested in capital assets, net of related debt 10,295,329 Unrestricted 2,284,252 1,995,471 Total Net Assets 12,579,581 $1,995,471 Some amounts reported for business -type activities in the Statement of Net Assets are different because certain internal service fund assets and liabilities are included with business -type activities. 21,865 Net assets business -type activities $12,601,446 See accompanying notes to financial statements 28 CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED JUNE 30, 2008 Business -type Activities - Enterprise Governmental Parking Internal OPERATING REVENUES Charges for current services $2,229,615 $5,346,965 Other operating revenues 1,932,321 1,876,037 Total Operating Revenues 4,161,936 7,223,002 OPERATING EXPENSES Personnel 1,929,825 Insurance premiums and claims 5,617,670 Maintenance and repairs 49,668 391,625 Depreciation 289,845 General and administrative 733,079 538,495 Total Operating Expenses 3,002,417 6,547,790 Operating Income (Loss) 1,159,519 675,212 NONOPERATING REVENUES (EXPENSES) Investment income 121,486 236,297 Interest expense (335,216) Total Nonoperating Revenues (Expenses) (213,730) 236,297 Income (Loss) Before Transfers 945,789 911,509 Transfers in (Note 3B) 350,000 Transfers out (Note 3B) (344,080) (30,000) Change in Net Assets 601,709 1,231,509 NET ASSETS, BEGINNING OF YEAR 11,977,872 763,962 NET ASSETS, END OF YEAR 12,579,581 $1,995,471 Change in Net Assets 601,709 Some amounts reported for business-hlpe activities in the Statement of Activities are different because the portion of the net income of certain internal service funds is reported with the business -type activities which those funds serviced. 55,398 Change in Net Assets of Business -type Activities $657,107 See accompanying notes to financial statements QI CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2008 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers/other funds Cash payments to suppliers for goods and services Cash payments to employees Other operating revenues Cash Flows from Operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Interfund payments Cash Flows from Noncapital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Cash paid for capital acquisitions Principal payments on certificates of participation Interest expenses and fiscal charges Cash Flows from Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Investment income Cash Flows from Investing Activities NET ASSETS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR FUND BALANCES, BEGINNING OF YEAR provided by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to cash flows from operating activities: Depreciation Net change in assets and liabilities: Accounts receivable Prepaids and deposits Accounts payable Deposits payable Compensated absence obligations Claims payable Net Cash Provided by (Used in) Operating Activities Business -type Activities - Enterprise Governmental Funds Activities Parking Internal Services Service Funds $2,229,115 $5,163,153 (64,099) (6,801,064) (2,650,979) 1,920,265 1,976,037 1,434,302 238,126 (344,080) 171.858 (344,080) 171,858 (542,673) (160,000) (336,416) (1,039,089) 121,486 236,297 121,486 236,297 172,619 646,281 2,522,991 4,879,641 $2,695,610 $5,525,922 $1,159,519 $675,212 289,845 (12,056) (183,812) (7,457) (14,431) 52,235 (500) 11,925 (298,052) $1,434,302 $238,126 do] CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of the Financial Reporting Entity As required by generally accepted accounting principles, the financial statements present the City of San Rafael (the City) as the Primary Government, with its component units for which the City is considered financially accountable. The component units discussed below are included in the City's reporting entity because of the significance of their operational and financial relationships with the City. B. Description of Blended Component Units The accompanying basic financial statements include all funds and boards and commissions that are controlled by the City Council. The basic financial statements include the City's blended component units, entities for which the City is considered to be financially accountable. A blended component unit, although a legally separate entity, is in substance, part of the City's operations and so data from this entity is combined with the City. The City's following blended component units are described below. San Rafael Redevelopment Agency — The San Rafael Redevelopment Agency (Agency) was established under the provisions of the Community Redevelopment Law (California Health and Safety Code, commencing with Section 33000) primarily to assist in the clearance and rehabilitation of areas determined to be in a declining condition in the City. Financial activity of the Agency commenced in July 1983. Under the Agency's Redevelopment Plan (Plan), approved in November 1982, the Agency is to assist in the development of the property located in the central San Rafael business core and east San Rafael. The Agency receives incremental tax revenues on the developed property due to increases in assessed value. The Agency functions as an independent entity. The City Council serves as the governing board of the Agency. The Agency's assets, liabilities, revenues and expenditures (other than those applicable to its capital assets and long-term debt) are reported in the Fund Financial Statements. The Agency's capital assets and long -tern debt are reported with the Governmental Activities in the Government -Wide Financial Statements. San Rafael Joint Powers Financing Authority — The San Rafael Joint Powers Financing Authority (Authority) was created by the City of San Rafael pursuant to Articles 1 and 2 of Chapter 5 of Division 7 of Title 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 in the City. All of the Authority's assets, liabilities, revenues and expenditures are reported in the Fund Financial Statements. The Agency's capital assets and long-term debt are reported with the Governmental Activities in the Government -Wide Financial Statements. 31 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Description of Discretely Presented Component Unit San Rafael Sanitation District — The San Rafael Sanitation District (District) was fonned 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 basic financial statements which includes the District's assets, liabilities, revenues, expenses, results of operations and cash flows. The District's fiscal year end in June 30 and its separately issued component unit financial statements can be obtained at Central Marin Sanitation Agency, Finance Department, 1301 Andersen Drive, San Rafael, California 94901. D. Basis of Presentation Government -wide Statements - The Statement of Net Assets and the Statement of Activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Interfund transfers and amounts owed between funds within the primary government have been eliminated from the statements. Amounts representing interfund services and uses remain in the statements. These statements distinguish between the governmental and business - type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business -type activities are financed in whole or in part by fees charged to external parties. The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business -type activities of the City and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Separate statements for each fund category — governmental and proprietary — are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. 32 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. E. Major Funds Major funds are defined as funds that have either assets, liabilities, revenues or expenditures/expenses equal to ten percent of their fund -type total and five percent of the grand total. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds. The City reported the following major governmental funds in the accompanying financial statements: General Fund — Accounts for all financial resources and transactions except those required to be accounted for in other funds. Traffic and Housing Mitigation Fund — Established to maintain long-term developer deposits for major housing and street improvement projects. Gas Tax Fund - Established to receive and expend the City's allocation of the State gasoline taxes. Redevelopment Agency Capital Projects Fund — Consist of five funds; 1) the 1999 Agency Bonds Funds, 2) the 2002 Agency Bonds Funds, 3) the RDA Capital Improvement Fund (for improvement projects), 4) project Administration Fund, and 5) the Housing Fund. The City reported its only enterprise fund as a major fund in the accompanying financial statements. The enterprise funds is: Parking Services Fund — Established to maintain parking garages, lots and spaces in the Downtown Parking District (established over 40 years ago), and to pay for parking enforcement, meter collection, and downtown officer services. The City also reports the following fund types: Internal Service Funds - These funds account for: building maintenance, employee benefits, liability insurance, workers' compensation, dental insurance, all of which are provided to other departments on a cost -reimbursement basis. 33 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) F. Basis of Accounting The government -wide, proprietary and discretely presented component unit financial statements are reported using the economic resources measurement focus and the frill accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Governmental -funds -are reported using the current financial resources measurement focus and the nabasis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds from long -tern debt and acquisitions under capital leases are reported as other financing sources. Those revenues susceptible to accrual are property and sales taxes, certain intergovernmental revenues, interest revenue, charges for services, fines and forfeitures. Sales taxes collected and held by the state at year end on behalf of the City are also recognized as revenue. Other receipts and taxes are recognized as revenue when the cash is received. Non -exchange transactions, in which the City gives or receives value without directly, receiving or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Under the terms of grant agreements, the City may fund certain programs with a combination of cost -reimbursement grants, categorical block grants, and general revenue. Thus, both restricted and unrestricted net assets may be made available to finance program expenditures. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary. The City considers restricted shared state revenues such as gasoline taxes and public safety sales taxes, restricted locally imposed transportation sales taxes, fines, forfeitures, licenses, permits, charges for services, and program grants as program revenues. Certain indirect costs are included in program expenses reported for individual functions and activities. The City follows statements and interpretations of the Financial Accounting Standards Board and its predecessors that were issued on or before November 30, 1989, in accounting for its business - type activities, unless they conflict with Government Accounting Standards Board pronouncements. 34 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 71 G. Budgets, Budgetary Accounting, And Encumbrances The City adopts a budget on a biannual basis, to be effective July ] 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. Encumbrance accounting, under which purchase orders, contracts and other commitments for expenditures are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of the budgetary process. Encumbrances outstanding at year end are reported as a reservation of fund balances since they do not constitute expenditures or liabilities and are carried forward in the subsequent year's budget. All unencumbered appropriations lapse at year end. The following departments incurred expenditures in excess of their budgets: General Government Redevelopment Agency Capital Projects Fund $2,727 Grants Special Revenue Fund 81 Telephone Replacement Capital Projects Fund 36,600 Public Safety Public Safety Special Revenue Fund 17,383 Public Works and Parks Traffic and Housing Mitigation Special Revenue Fund 2,313 Baypoint Lagoon Assessment District Special Revenue Fund 386 Street Maintenance and Cleaning Special Revenue Fund 54,280 Loch Lomond Assessment District Special Revenue Fund 54 Development Services Special Revenue Fund 602 Community Development/Redevelopment General Fund 115,221 Culture and Recreation General Fund 58,761 Recreation Revolving Special Revenue Fund 258,220 Childcare Special Revenue Fund 211,335 $757,963 35 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) H. Cash Equivalents For purposes of the statement of cash flows, the City considers all highly liquid investments (including all restricted assets) with maturity of three months or less when purchased to be cash equivalents. The City maintains a cash and investment pool that is available for use by all funds. As the proprietary funds' share of this pool is readily available when needed, such share is also considered to be cash equivalent. Deposit assets in the proprietary funds are related to insurance and benefits and are not considered cash equivalents for purposes of the statement of cash flows. L Capital Assets All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair market value on the date contributed. GASB Statement No 34 requires the inclusion of infrastructure capital assets in local governments' basic financial statements. In accordance with GASB Statement No. 34, the City has included the value of all infi-astructure capital assets into its Basic Financial Statements using the Basic Approach for infrastructure reporting. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each year represents that year's pro rata share of the cost of capital assets. Depreciation is provided using the straight-line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. The City has assigned the useful lives listed below to capital assets: Buildings, improvements, and structures 20 — 50 years Machinery and equipment 5 - 15 years Infrastructure 15- 50 years Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Capital assets, excluding infi-astructure, are recorded if acquisition or construction costs exceeds $5,000. The similar threshold for infrastructure is $25,000. J. Compensated Absences Compensated absences are accrued as earned. Upon termination, employees are paid for all unused vacation at their current hourly rates. After five to twenty years of employment, one half of accumulated sick leave becomes vested, up to a maximum amount as specified under labor contract provisions. The vested portion is available for current use or, if unused, is payable at termination or retirement. f'. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The long-term portion of the liability for compensated absences for governmental fund type operations is recorded as compensated absences in the government -wide financial statements. Compensated absences are liquidated by the fund that has recorded the liability. Proprietary fund liabilities are recorded within their respective funds. The changes of the compensated absences were as follows: Governmental Business -Type Activities Activities Total Beginning Balance $4,355,720 $125,794 $4,481,514 Additions 3,880,151 97,318 3,977,469 Payments (3,737,794) (85,393) (3,823,187) Ending Balance $4,498,077 $137,719 $4,635,796 Current Portion $760,716 $11,917 $772,633 K. Property Tax Levy, Collection and Maximum Rates State of California Constitution Article XIII A provides that the combined maximum property tax rate on any given property may not exceed 1% of its assessed value unless an additional amount for general obligation debt has been approved by voters. Assessed value is calculated at 100% of market value as defined by Article XIII A and may be adjusted by no more than 2% per year unless the property is sold, transferred, or substantially improved. The State Legislature has determined the method of distribution of receipts from a 1% tax levy among the counties, cities, school districts and other districts. Marin County assesses properties, bills for and collects property taxes on the schedule that follows: Secured Unsecured Valuation/lien dates January 1 January 1 Levy dates July 1 July 1 Due dates (delinquent as of) 50% on November 1 (December 10) July 1 (August 31) 50% on February 1 (April 10) The term "unsecured" refers to taxes on personal property other then land and buildings. These taxes are secured by liens on the property being taxed. Property taxes are levied and recorded as revenue when received in the fiscal year of levy because of the adoption of the "alternate method of property tax distribution," known as the Teeter Plan, by the City and the County of Marin. The Teeter Plan authorized the auditor -controller of the County of Marin to allocate 100% of the secured property taxes billed, but not yet paid. The County of Marin remits tax monies to the City in three installments, as follows: 55 % remitted on December 15 40% remitted on April 15 5% remitted on June 15 37 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) L. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the dates of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting periods. Actual results could differ from those estimates. NOTE 2 - CASH AND INVESTMENTS The City's goal is to invest at the maximum yield, consistent with safety and liquidity, while individual funds can process payments for expenditures at any time. A. Policies The City invests in individual investments and in investment pools. Individual investments are evidenced by specific identifiable securities instruments, or by an electronic entry registering the owner in the records of the institution issuing the security, called the book entry system. In order to increase security, the City employs the Trust Department of a bank as the custodian of certain City managed investments, regardless of their form. California Law requires banks and savings and loan institutions to pledge government securities with a market value of 110% of the City's cash on deposit, or first trust deed mortgage notes with a market value of 150% of the deposit, as collateral for these deposits. Under California Law this collateral is held in a separate investment pool by another institution in the City's name and places the City ahead of general creditors of the institution. The City's investments are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year. 38 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 2 - CASH AND INVESTMENTS (Continued) B. Classification Cash and investments as of June 30, 2008 are classified in the financial statements as shown below, based on whether or not their use is restricted under the terms of City debt instruments or agency agreements. Financial Statement Presentation: Statement of Net Assets: City of San Rafael: Cash and investments available for operations $36,047,373 Restricted cash and investments 2,329,670 Total Primary Government Cash and Investments 38,377,043 San Rafael Sanitation District: Cash and investments available for operations 9,537,550 Restricted cash and investments 482,015 Total San Rafael Sanitation District Cash and Investments 10,019,565 Total Cash and Investments $48,396,608 The City does not allocate investments by fund. Each proprietary fund's portion of Cash and Investments Available for Operations is in substance a demand deposit available to finance operations, and is considered a cash equivalent in preparing the statement of cash flows. C. Investments Authorized by the California Government Code and the City's Investment Policy The City's investment policy and the California Government Code allow the City to invest in the following provided the credit ratings of the issuers are acceptable to the City; and approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code, or the City's Investment Policy where it is more restrictive: Authorized Investment TvDe U.S. Government Obligation U.S. Agency Securities and Instruments Repurchase Agreements Primer Commercial Paper Bankers' Acceptances Medium -Term Corporate Notes Negotiable Certificates of Deposit Non-negotiable Certificates of Deposit Local Agency Investment Fund Money Market/Mutual Funds Maximum Maturity 5 years 5 years Minimum Credit Quality AAA Maximum Maximurn Percentage of Investment in Portfolio One Issuer No limit No limit No limit No limit 1 year A-1 No limit No limit 270 days A-1 25% $1,000,000 180 days A-1 40% $2,000 000 5 years A 30% $1,000,000 5 years AA 30% No limit 180 days N/A No limit No limit N/A N/A N/A AAA N/A N/A 10% N/A 39 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 2 - CASH AND INVESTMENTS (Continued) W (A) The City of San Rafael Sanitation District adopted the investments policy of the Treasurer and Tax Collector of the County of the Marin. Accordingly, the District, following the County, may invest in U.S. Treasury and agency securities, commercial paper, banker's acceptances, time deposits, repurchases agreements, and the State of California LAIR The district, additionally, may invest in the Marin County Investment Pool. At year-end, the District's investments were in compliance with the above provisions. Investments Authorized by Debt Agreements The City must maintain required amounts of cash and investments with trustees or fiscal agents under the teens of certain debt issues. These funds are unexpended bond proceeds or are pledged as reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with City ordinance bond indentures or State statute. The table below identifies the investment types that are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements: Authorized Investment Maximum Minimum Credit Type Maturity Quality Maximum Percentage of Portfolio U.S. Treasury Obligations N/A N/A No Limit U.S. Agency Securities 3 years N/A No Limit Category Bankers' Acceptances 360 days Highest No Limit Rating Category Money Market Funds N/A Highest No Limit Rating Category Commercial Paper 270 days Highest No Limit Rating Guaranteed Investment Category Contracts (fully N/A Highest No Limit collateralized) (A) Rating Municipal Obligations N/A Two Highest Category Ratings No Limit Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury Obligations or U.S. Agency Obligations. M CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 2 - CASH AND INVESTMENTS (Continued) L. Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Nonnally, the longer the maturity of an investment, the greater the sensitivity of its fait- value to changes in market interest rates. The City also manages its interest rate risk by holding most investments to maturity, thus reversing unrealized market gains and losses. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity or earliest call date: 12 Months 13 to 24 25 to 60 Type of Investment or Less Months Months Total City: U.S, Treasury Bill $1,009,258 $1,033,163 $2,042,421 U.S. Federal Agency Securities 1,015,625 1,513,039 $4,090,590 6,619,254 Money Market Mutual Funds 2,329,670 2,329,670 Local Agency Investment Fund 25,266,945 25,266,945 Corporation Notes 509,615 509,615 Total Investments $29,621,498 $2,546,202 $4,600,205 36,767,905 Cash in banks and on hand 1,609,138 Total City Cash and Investments 38,377,043 San Rafael Sanitation District: Cash in banks and shoe!-tern7 pooled investments 10,019,565 Total District's Cash and Investments Total Cash and Investments 10,019,565 $48,396,608 The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance is available for withdrawal on demand, and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage -backed securities, other asset -backed securities, loans to certain state fonds, and floating rate securities issued by federal agencies, government -sponsored enterprises, United States Treasury Notes and Bills, and corporations. At June 30, 2008, these investments matured in an average of 212 days. Money Market Mutual Funds are available for withdrawal on demand and at June 30, 2008 matured in an average of 7 to 55 days. 41 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 2 - CASH AND INVESTMENTS (Continued) F. Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is treasured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of June 30, 2008 for each of the Primary Government's investment types as provided by Standard and Poor's or Fitch investment rating systems, except as noted: Type of Investment Aaa/AAA Total City: U.S. Federal Agency Securities $6,619,254 Money Market Mutual Funds 2,329,670 Corporation Notes 509,615 $9,458,539 Not rated: U.S. 'treasury Bill 2,042,421 Local Agency Investment Fund 25,266,945 Cash in banks and on hand 1,609,138 Total City Cash and Investments 38,377,043 San Rafael Sanitation District: Not rated: Cash in banks and short-term pooled investments $10,019,565 Total District's Cash and Investments 10,019,565 Total Cash and Investments $48,396,608 NOTE 3 - INTER -FUND TRANSACTIONS A. Liter fund Receivables and Payables Amounts due to or due from other funds reflect inter -fund balances for services rendered or short- term loans expected to be repaid in the next fiscal year. As of June 30, 2008, the Household Hazinat Facility Special Revenue Fund, the Telephone Replacement Capital Project Fund, and the Employee Benefits Internal Service Fund owed the General Fund $242,077, 255,246, and $454,749, respectively. B. Transfers Resources may be transferred from one City fund to another. Transfers routinely fund capital projects or capital outlays, lease or debt service payments, operating expenses and low and moderate -income housing projects. 42 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 3 - INTER -FUND TRANSACTIONS (Continued) Transfers between funds during the fiscal year ended June 30, 2008 were as follows: From Fund General Fund Traffic and Housing Mitigation Fund Gas Tax Fund Non -Major Governmental Funds Parking Services Enterprise Funds To Fund Amount Non -Major Governmental Funds $4,578,005 A Internal Service Funds 350,000 B Gas Tax Fund 100,000 C Redevelopment Agency Capital Projects Fund 31,000 D Non -Major Governmental Funds 353,189 A General Fund 648,140 E Gas Tax Fund 168,061 C Non -Major Governmental Funds 100,741 A General Fund 264,080 E Non -Major Governmental Funds 80,000 A Internal Service Funds General Fund 21,540 E Non -Major Governmental Funds 8,460 A $6,703,216 (A) Transfers to the Non -major Governmental Funds were for administrative costs, program support, capital projects, special projects and housing portion of debt service. (B) Transfers to the Internal Service Funds were for benefits and claims reserves. (C) Transfers to Gas Tax Fund for capital projects cost. (D) Transfers to Redevelopment Agency Capital Projects Fund is for Administrative support. (E) Transfers to the General Fund were for administrative costs and costs of dispatch. C. Internal Balances Internal balances are presented in the Entity -wide financial statements only. They represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business -type activities. 43 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 4 — LOANS RECEIVABLE AND DEFERRED REVENUE A. Summary of Loans Receivable The City has reserved the portion of fund balance represented by these loans. At June 30, 2008, these loans totaled: Employee Loans $37,907 Centertown Associates 294,023 One "H" Street Associates 71,429 Fire Chief Loan 594,409 Marin Housing Authority 299,549 Total $1,297,317 B. Employee Loans Effective February 1, 2000, the City agreed to loan employees up to $2,500 for the purchase of computer hardware and software. The loan program, which stipulates that employees may not have more than one loan outstanding, provides financial assistance from the City in the form of a no interest loan repaid through automatic payroll deductions. C. Centertown Associates The City loaned Centertown Associates, Ltd, $303,000 at 3% interest due semiannually. The loan was made for the construction of 60-units affordable Centertown apartments and is fully secured by a deed of trust. The final payment is due on July 31, 2065. D. One W" Street Associates The City loaned One "H" Street Associates $100,000 at zero percent interest with annual payments of $2,857 and with a final payment due January 18, 2034. The loan was made in connection with an affordable housing project located at One "H" Street. E. Fire Chief Loan On September 17, 2007 the City Council approved a Home Loan Agreement to provide the Fire Chief with housing assistance. The City loaned the Fire Chief $600,000 to assist in the purchase of his primary residence. The loan is secured by a recorded Deed of Trust. The initial interest rate to be charged was 5.25% through August 31, 2008. On September 1, 2008 and on each September 1 following, under the Loan is paid off, the interest rate of the loan will be adjusted based upon the then reported quarter -to -date Local Agency Investment Fund rate on the City's investment portfolio. On October 3, 2007, the Home Loan Agreement was executed. Repayment of the Loan is deducted through payroll withholding. As of June 30, 2008, the balance of the loan was $594,409. 44 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 4 — LOANS RECEIVABLE AND DEFERRED REVENUE (Continued) F. Marin Housing Authority On April 7, 2008 the Redevelopment Agency approved a loan in the amount of $333,000 to the Marin Housing Authority. This loan is funded by the Agency's Low and Moderate Income Housing Capital Projects Fund to assist the Authority in the acquisition of a housing unit so that the unit might remain in the City's Below Market Rate program. The Agency further approved a subsidy of up to $35,000 to reduce the sales price of the unit. As of June 30, 2008 the balance of the loan was $299,549. NOTE 5 - CAPITAL ASSETS Changes in capital assets during the fiscal year consist of. Balance Balance .tune 30, 2007 Additions Retirements Transfers June 30, 2008 Governmental Activities Capital assets not being depreciated: Land $82,146,643 $317,721 $92,464,364 Construction in progress 10,016,438 4,606,817 ($160,076) ($10.560.227) 3,902,952 Total capital assets not being depreciated 92,163,081 4,924,538 (160,076) (10,560,227) 86,367,316 Capital assets being depreciated: Land improvements 7,954,041 7,954,041 Buildings and structures 28,081,015 (209,661) 10,560,227 38,431,581 Machinery and equipment 14,567,758 1,457,265 (297,394) 15,727,629 Infrastructure 169,310,418 1,970,706 171,281,124 Total capital assets being depreciated 219,913,232 3,427,971 (507,055) 10,560,227 233,394,375 Less accumulated depreciation for: Land improvements (3,339,742) (274,646) (3,614,388) Buildings and structures (6,910,764) (665,822) (240,524) (7,817,110) Machinery and equipment (9,500,681) (1,186,739) 269,441 (9,418,979) Infrastructure (79,601,674) (4,692,394) 240,524 (84,053,544) Total accumulated depreciation (99,352,861) (6,819,601) bS.1.11 (104,904,021) Total net capital assets being depreciated 121,560,371 (3,391,630) (238,614) 10,560,227 128,490,354 Total governmental activity capital assets $213,723,452 $1,532,908 ($398,690) $214,957,670 W CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 5 - CAPITAL ASSETS (Continued) Balance June 30, 2007 Additions Retirements Business -type Activities Capital assets not being depreciated: Land $8,620,853 Construction in progress 44,250 $122,861 Total capital assets not being depreciated 8,665,103 122,861 Balance Transfer June 30, 2008 $8,620,853 ($44,250) 122,861 (44,250) 8,743,714 Capital assets being depreciated: Buildings and structures 8,808,876 195,230 9,004,106 Machinery and equipment 888,847 224,582 ($54,291) 44,250 1,103,388 Total capital assets being depreciated 9,697,723 419,812 (54,291) 44,250 10,107,494 Less accumulated depreciation for: Buildings and structures (1,073,524) (178,200) (1,251,724) Machinery and equipment (271,801) (111,645) 54,291 (329,155) Total accumulated depreciation (1,345,325) (289,845) 54,291 (1,580,879) Total net capital assets being depreciate( 8,352,398 129,967 44,250 8,526,615 Total business -type activity capital asset: $17,017,501 $252,828 $17,270,329 Balance Balance June 30, 2007 Additions Transfers June 30, 2008 San Rafael Sanitation District Capital assets not being depreciated: Land and easements $115,329 $115,329 Construction in progress 3,496,227 $1,684,449 ($5,044,611) 136,065 Total capital assets not being depreciated 3,611,556 1,684,449 (5,044,611) 251,394 Capital assets being depreciated: Subsurface lines 12,152,655 12,152,655 Sewage collection facilities 28,383,975 5,044,611 33,428,586 General plant and administration 371,394 371,394 Total capital assets being depreciated 40,908,024 5,044,611 45,952,635 Less accumulated depreciation for Subsurface lines (7,961,772) (211,397) (9,173,169) Sewage collection facilities (10,476,395) (751,474) (11,227,869) General plant and administration (114,335) (34,262) (148,597) Total accumulated depreciation (18,552,502) (997,133) (19,549,635) Total net capital assets being depreciated 22,355,522 (997,133) 5,044,611 26,403.000 Total District's capital assets $25,967,078 $687,316 $26,654,394 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 5 - CAPITAL ASSETS (Continued) Capital Asset Contributions - Some capital assets may have been acquired using Federal and State grant funds, or were contributed by developers or other governments. GASB Statement 34 requires that these contributions be accounted for as revenues at the time the capital assets are contributed. Depreciation Allocation - Depreciation expense is charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program are as follows: Governmental Activities General government $561,831 Public safety 719,704 Public works and parks 5,217,803 Community development/redevelopment 50,728 Culture and recreation 269,535 Total Governmental Activities $6,819,601 Business -type Activities Parking services $289,845 Total Business -type Activities $289,845 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 6 - LONG-TERM OBLIGATIONS A summary of governmental and business -type activities transactions for the fiscal year ended June 30, 2008, follows: Authorized Balance Balance Current and Issued June 30, 2007 Additions Retirements June 30, 2008 Portion Governmental Activities: San Rafael Joint Powers Financing Authority 1997 Authority Revenue Bonds 4.00%-6.00%, due 9/2/2011 $5,250,000 $950,000 $170,000 $780,000 $180,000 San Rafael Redevelopment Agency 1999 Tax Allocation Bonds Current Interest Bonds 4.5%-5.00%, due 12/1/2022 21,115,000 16,505,000 695,000 15,810,000 730,000 Capital Appreciation Bonds 5.58%-5.6%, due 12/1/2022 2,389,004 3,697,501 $209,660 3,907,161 2002 Tax Allocation Refunding Bonds 2.00%-5.25%, due 12/1/2021 25,020,000 19,015,000 1,195,000 17,820,000 1,235,000 Total Tax Allocation Bonds 39,217,501 209,660 1,990,000 37,537,161 1,965,000 Special Assessment Bonds Mariposa Road Assessment 4.50%-6.90%, due 9/2/2008 233,688 35,000 35,000 Total Special Assessment Bonds 35,000 35,000 Ground Lease Note Payable, 8.00%, due 11/l/2024 169,000 169,000 169,000 Court Fine Repayment Promissory Note, 3.873%, due November 2011 1,133,458 1,029,717 213,598 816,119 222,019 Fire Truck Capitalized Lease Obligations, 2.92%, due 3/24/2009 668,134 278,927 137,442 141,495 141,445 Telephone System Capitalized Lease Obligations, 4.28%, due 05/30/2012 318,000 318,000 58,330 259,670 60,854 Total Governmental Long-term Debt $41,998,145 $209,660 $2,504,370 $39,703,435 $2,569,318 Business -type Activities 2003 Authority Lease Revenue Bonds 7,605,000 $7,300,000 $160,000 $7,140,000 $165,000 Total Enterprise Fund Debt $7,300,000 $160,000 $7,140,000 $165,000 San Rafael Sanitation District 2001 Certificates of Participation 4,710,000 $2,615,000 $395,000 $2,220,000 $410,000 Less: unamortized discount/ issuance cost ($1 14,204) (27,969) (86,235) Total District Debt $2,500,796 $367,031 $2,133,765 $410,000 48 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 6 - LONG-TERM OBLIGATIONS (Continued) A. 1997Authority Revenue Bonds On January 28, 1997, the San Rafael Joint Powers Financing Authority issued the 1997 Authority Revenue Bonds in the amount of $5,250,000 bearing interest at rates from 4.00% to 6.00%. 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 fi•om 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. This pledge of revenues ends upon repayment of the $876 thousand in remaining debt service on the Authority's long-term debt which is scheduled to occur in fiscal 2012. For fiscal year 2008 pledged special assessment revenues amounted to $239 thousand and debt service of these Bonds amounted to $220 thousand. B. 1999 Tax Allocation Bonds and Capital Appreciation Bonds On June 16, 1999, the Agency issued Tax Allocation Bonds in the amount of $23,504,004. The bonds were issued as Current Interest Bonds in the aggregate principal amount of $21,115,000 and as Capital Appreciation Bonds in the original amount of $2,389,004. The proceeds of the bonds were used to finance certain redevelopment activities of benefit to the Agency's Central San Rafael Redevelopment Project Area. The Current Interest Bonds mature annually each December 1 from 2000 to 2022, in amounts ranging from $560,000 to $1,460,000 and bear interest at rates ranging from 4.50% to 5.00%. Interest is payable semiannually on June 1 and December 1. The Current Interest Bonds maturing on or after December 1, 2008, are subject to optional redemption prior to maturity, in whole or in part, either in inverse order of maturity or on a pro rata basis among maturities, on any date on or after December 1, 2007, at a price equal to the principal amount, plus accrued interest on the redemption date, plus a premium ranging fi-om 0.00% to 2.00%. The Capital Appreciation Bonds mature annually after December 1 from 2018 to 2022, in amounts ranging from $1,440,000 to $2,070,000 and bear interest at rates from 5.58% to 5.60%. Interest on the Capital Appreciation Bonds will compound on each interest premium date and will be payable solely at maturity. The bonds are secured, on parity with the 1992 and 1995 bonds (refunded in 2002), by a pledge and a lien on tax revenues and amounts on deposit in certain funds and accounts held by the fiscal agent. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 6 - LONG-TERM OBLIGATIONS (Continued) The pledge of future tax increment revenues ends upon repayment of the $19.7 million in remaining debt service on the Redevelopment Agency's long-term debt which is scheduled to occur in 2022. For fiscal year 2008 tax increment revenues amounted to $1.5 million and debt service amounted to $1.5 million. C. 2002 Tax Allocation Refunding Bonds On October 9, 2002, the Agency issued Tax Allocation Refunding Bonds in the amount of $25,020,000. The proceeds of the bonds were used to refund the 1992 Tax Allocation Refunding Bonds and the 1995 Tax Allocation Bonds. The Bonds mature annually each December 1 from 2002 to 2022, in amounts ranging from $540,000 to $1,920,000 and bear interest at rates ranging from 2.00% to 5.25%. Interest is payable semiannually on June 1 and December 1. The Bonds maturing on or after December 1, 2013, are subject to optional redemption prior to maturity, in whole or in part, and by lot within any one maturity, prior to their respective maturity dates, on any date on or after December 1, 2012, at a price equal to the principal amount, plus accrued interest on the redemption date. The bonds are payable from tax revenues to be derived from the redevelopment activities of the Agency related to the Central San Rafael Redevelopment Project Area. The pledge of future tax increment revenues ends upon repayment of the $17.8 million in remaining debt service on the Redevelopment Agency's long term debt which is scheduled to occur in 2021. For fiscal year 2008 tax increment revenues amounted to $2.1 million and debt service also amounted to $2.1 million. D. Mariposa Road Assessment District Limited Obligation Improvement Bonds 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 cost of issuance on the bonds. The bonds were issued as Serial Bonds and mature in various amounts on each September 2 commencing September 2, 1994 and ending September 2, 2008. Interest is 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%. The bonds were called on September 2, 2007. E. Note Payable At June 30, 2007, 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. The outstanding balance of the loan at June 30, 2008 was $169,000 plus accrued interest of $171,874 which is recorded as interest payable. 50 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 6 - LONG-TERM OBLIGATIONS (Continued) F. Capitalized Lease Obligations The City leased two fire trucks in the amount of $668,134. The annual lease payment of $72,295 for five years started in September 2004. The lease expires in 2009. Under the lease agreements, ownership of the fire trucks passes to the City at the end of the lease. Since the lease is in essence a financing arrangement, the cost of the fire trucks and the amount of the leases have been included in the City's financial statements. G. Court Fine Repayment Promissory Note On December 29, 2006, the City signed a promissory note in the amount of $1,133,458 to repay the Superior Court of California, County of Marin. The purpose of the note is to repay the Superior Court for over payment of court revenues, generated from traffic violations, made to the City from the period July 1999 through June 2006. The note bears interest at 3.873% per annum. Principal and interest are payable monthly commencing from January 2007 until December 2011. IL Telephone System Capital Lease On May 30, 2007, the City entered into a capital lease agreement in the amount of $318,000 to purchase telephone related network equipment and services. Principal and interest payments are due each May 30 and November 30, commencing November 30, 2007, until May 30, 2011. The capital lease bears interest at 4.28% per annum. L 2003 Authority Lease Revenue Bonds On March 26, 2003, the Authority issued 2003 Authority Lease Revenue Bonds in the amount of $7,605,000 bearing interest at rates from 3.00% to 4.70%. The proceeds of the bonds were provided for the design and construction of a new public parking garage. The bonds mature annually each April 1 from 2006 to 2033, in amounts ranging from $150,000 to $290,000. Interest is payable semiannually on April 1 and October 1. The bonds maturing on or after April 1, 2011 are subject to optional redemption prior to maturity on or after April 1, 2010 at the option of the City, as a whole on any date. The Lease Revenues are secured by lease payments made by the City to the Authority for leasing the City facilities. J. Discretely Presented Component Unit — San Rafael Sanitation District — 2001 Certificates of Participation On May 1, 2001, the District and its Financing Corporation issued $4,710,000 of Certificates of Participation at a discount of $35,121 maturing in 2012. The certificates were to be used (1) to refund in whole the outstanding Series 1991 Certificates of Participation (2) to finance the District's share of a new construction corporation yard, (3) to fund in whole or in part, a reserve fund for certificates, and (4) to pay certain costs of issuing the certificates. The certificates are fully registered with principal due annually on August 1 and interest payable semiannually on February 1 and August 1. The certificates are subject to optional prepayment on any date on or after August 1, 2009. Terms of the Trust Agreement call for a premium at 101% to exercise optional prepayment between August 1, 2009 and July 31, 2010, and no premium August 1, 2010 and after. 51 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 6 - LONG-TERM OBLIGATIONS (Continued) Future debt service requirements, including interest and capital leases, at June 30, 2008, were as follows: For the Year Ended June 30 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 2029-2033 Totals Governmental Activities Principal $2,565,318 2,538,298 2,65 6,103 2,672,555 2,380,000 13,879,946 16,765,054 169,000 Interest $1,675,137 1,560,463 1,442,930 1,313,760 1,186,144 3,958,130 1,063,464 Business -type Activities _ Principal Interest $165,000 $331,616 170,000 326,666 175,000 321,141 185,000 314,141 190,000 306,741 1,080,000 1,410,388 1,335,000 1,151,203 1,685,000 799,750 2,155,000 333,750 43,626,274 $12,200,028 $7,140,000 S5,295,396 Reconciliation of long-term debt: Less unaccreted discount (3,922,839) Less unamortized original issue discount $39,703,435 NOTE 7 - DEBT WITHOUT CITY COMMITMENT Component Unit San Rafael Sanitation Distric Principal $410,000 430,000 440,000 940,000 lntcrest $96,745 69,310 50,820 20,680 2,220,000 $227.555 (86,235) $2,133,765 The City has sponsored the issuance of the following debt, for which the City is not liable for repayment but is only acting as an agent for the property owners and bondholders: San Rafael Redevelopment Agency Multifamily Housing Revenue Bonds California Statewide Communities Development Authority Revenue Bonds San Rafael Redevelopment Agency Variable Rate Demand Multifamily Housing Revenue Bonds Project Original Outstanding Description Amount June 30, 2008 162-175 Belvedere Apartments $3,590,529 $1,367,780 St. Marks School 5,605,000 5,255,000 55 Fairfax Apartments 3,000,000 2,700,000 San Rafael Redevelopment Agency San Rafael Commons Multifamily Housing Revenue Bonds-2001 Apartments 6,100,000 Multifamily Housing Revenue Bonds-2007 Martinelli House 1,000,000 City of San Rafael Kaiser Foundation Variable Rate Revenue Bonds Hospitals 275,000,000 San Rafael Redevelopment Agency Martinelli House Multifamily Housing Revenue Bonds-2007 Sei Project 6,000,000 5,720,000 195,630 5,745,338 52 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 8 - NET ASSETS AND FUND BALANCES A. Net Assets Net Assets is the excess of all the City's assets over all its liabilities, regardless of fund. Net Assets are divided into three captions. These captions apply only to Net Assets, which is determined only at the Government -wide level, and are described below: Invested in Capital Assets, net of related debt describes the portion of Net Assets which is represented by the current net book value of the City's capital assets, less the outstanding balance of any debt issued to finance these assets. Restricted describes the portion of Net Assets which is restricted to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include assets restricted due to Redevelopment Agency bond covenants or low and moderate income housing loan agreements. Unrestricted describes the portion of Net Assets which is not restricted to use. B. Fund Balance In the fund financial statements, fund balances represent the net current assets of each fund. Net current assets generally represent a fund's cash and receivables, less its liabilities. Portions of a fund's balance may be reserved or designated for future expenditure. C. Reservations Reserves are restrictions placed by outside entities, such as other governments, which restrict the expenditures of the reserved funds to the purpose intended by the entity which provided the funds. The City cannot modify or remove these restrictions or reserves. D. Designations Designations are imposed by City Council to reflect the future spending plans or concerns about the availability of future resources. Designations may be modified, amended, or removed by Council action. 53 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 9 — 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 who work at least 75% of a full time position 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 fi-om Marin County Employee's Retirement Association, 3501 Civic Center Drive, Room 408, Civic Center, San Rafael, California 94903. B. Funding Policy The funding policy of the 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 53.93% and 64.38% of payroll to Fund for Police and Fire personnel, respectively, and 30.32% for other covered employees for the year ended June 30, 2008. C. Annual Pension Cost The City's annual pension cost to the Fund for the year ended June 30, 2008, of $13,754,798 was equal to the City's required and actual contributions. The annual required contribution was determined as part of the actuarial performed as of June 30, 2007. The employer rates for normal cost is determined using the Entry Age Nonnal Actuarial Cost Method, projected benefit cost method. It takes into account those benefits that are expected to be earned in the future as well as those already accrued. The significant assumptions used in the 2007 actuarial valuation include an assumed rate of return on invested assets of 8.00%, annual payroll increases reflecting 4.00% for inflation and an approximate range of 0.50% to 3.00% for merit and longevity. The actual rate of return on investments was a gain of 12%. The actuarial value of assets was detenmined using techniques that sinooth 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 was revised to sixteen years level in the amortization period. It is assumed that payroll will increase at an annual inflation rate of 4.00% over the amortization period. 54 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 9 — EMPLOYEES RETIREMENT PLAN (Continued) The Plans' actuarial value (which differs from market value) and funding progress over the most recent three years available is set forth below at their actuarial valuation date of June 30: Actuarial Excess Excess (Deficit) Actuarial Actuarial Accrued (Deficit) Assets Over AAI Valuation Value Liability (AAL) Assets Funded Covered As a % of Date of Assets Entry Age Over AAL Ratio Payroll Payroll 6/30/05 $195,698,000 $265,205,000 ($69,507,000) 74% $28,357,000 (245%) 6/30/06 209,785,000 306,079,000 (96,294.000) 69% 29,606,000 (337%) 6/30/07 234,930,000 314.604,000 (79,674.000) 75% M729,000 (277%) Actuarially required contributions for fiscal years 2008, 2007, and 2006 were $13,754,798, $11,108,650, and $9,316,354, respectively. The City made these contributions as required, together with certain immaterial amounts required as the result of the payment of other additional employee compensation. NOTE 10 - PUBLIC AGENCY RETIREMENT SYSTEM (DEFINED CONTRIBUTION RETIREMENT PLANS) The City contributes to the Public Agency Retirement System (PARS), which is defined contribution retirement plan. A defined contribution retirement plan provides retirement benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's accounts are determined instead of specifying the amount of benefits the individual is to receive. The plan is administered by Phase 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 participants in the plan from the date that they hired. An eligible employee is any employee who, at any time during which the employer maintains this plan, is not accruing a benefit under the Marin County Employees' Retirement Fund. As detennined by the plan, each employee must contribute 3.75% of gross earnings to the plan. The City contributes an additional 3.75% of the employee's gross earnings. Contributions made by an employee and the employer vest immediately. During the year, the City and employees contributed $69,940. The total covered payroll of employees participating in the plan for the year ended June 30, 2008, was $1,865,066. The total payroll for the year was $38,867,057. 55 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 10 - PUBLIC AGENCY RETIREMENT SYSTEM (DEFINED CONTRIBUTION RETIREMENT PLANS) (Continued) Additionally, the City participates in a 401(a) tax qualified plan for eligible non -represented management/mid-management employees. This is an employer only contribution program separate from the Marin County Employees' Retirement 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 $139,124 to the plan on behalf of the eligible employees. NOTE 11— POST -EMPLOYMENT HEALTH CARE BENEFITS The City provides certain health care benefits for retired employees and their spouses. The benefit provisions were established under the authority of the 1937 Act, Section 31450, et. Seq. of the Government Code. Substantially, all of the City's employees may become eligible for these benefits if they are receiving a retirement benefit from the Marin County Employees' Retirement Fund within 120 days of retirement from City employment. At June 30, 2008, 268 retirees and surviving spouses received post -employment health care benefits. Those expenditures are reduced by reimbursements from the Marin County retirement Office by the annual amount set forth in the County Retirement Rules and Regulations 1937 Act as amended and in Sections 31450 et. seq, of the Government Code. The cost of retiree health care benefits is recognized as an expenditure as claims are paid. For the fiscal year ended June 30, 2008, those costs totaled $2,037,878 of which $1,206,071 was reimbursed. The City participates in the jointly governed organizations discussed below through formally organized and separate entities established under the .Joint Exercise of Powers Act of the State of California. As separate legal entities, these entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for-atll funds, the power to make and execute contracts and the right to sue and be sued. Each joint organization is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective joint organization, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on that board. Obligations and liabilities of this joint organization are not the City's responsibility and the City does not have an equity interest in the assets of each joint organization except upon dissolution of the joint organization. 56 NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS A. The Marin County Integrated On -Line Library System (System) The Marin County Integrated On -Line Library System was formed to provide for the procurement, ownership, operation, maintenance, and governance of an integrated on-line system that is jointly owned and operated by the cities of San Rafael, Mill Valley, Sausalito, and the County of Marin. The Governing Board of the System consists of the library director or designated alternate of each participant in the System. In accordance with the cost sharing formula developed by the library directors of the participants, the City's share of the acquisition cost in the amount of $108,007 represents 17.35% of ownership in the System. Operating costs for the System are also shared by each participant by applying the cost sharing formula. The City contributed $111,064 to the System for operating costs for the year ended June 30, 2008. Financial statements of the System can be obtained at the County Librarian, Marin County Free Library, Civic Center, Administration Building, San Rafael, California 94903. B. The Marin Street Light Acquisition Joint Powers Authority (MSLAJPA) The MSLAJPA was formed by the County of Marin and twelve local agencies to acquire street light facilities, operate the facilities during the tendency of an eminent domain action against PG&E, and the subsequent transfer of the facilities to the individual local agencies. Each of the local agency's share of contributions was based on the number of street lights to be acquired in the local agency's individual jurisdiction in relation to the total number of street lights to be acquired by the MSLAJPA. The City's contribution to MSLAJPA was $2,267 for the year ended June 30, 2008. Financial statements of the MSLAJPA can be obtained at 27 Commercial Boulevard, Suite C, Novato, CA 94949. C. The Marin Emergency Radio Authority (MERA) MERA was formed on February 28, 1998 by the County of Marin and 25 local agencies within the County to plan, finance, implement, manage, own, and operate a County -wide public safety and emergency radio system. The Governing Board consists of one representative from each member. On February 1, 1999, the Authority issued the 1999 Revenue Bonds in the amount of $26,940,000 with interest rates ranging from 4.75% to 5.01%, maturing on August 15, 2016, to finance the acquisition and installation of the system. The costs of maintenance, operation, and debt service will be divided on a pro rata share based on an agreed -upon formula established by a majority of the Governing Board. The members entered into a Project Operating Agreement on February 1, 1999. Under the Operating Agreement, members are obligated to contribute service payments to cover the Authority's operation and debt service. The City's portion of the obligation is 16.913%. The first operating service payment was in July 1999. The first debt service payment was in August 2002. The City contributed $647,890 for the Authority's operation and debt service for the fiscal year ended June 30, 2008. The City has established a reserve in its internal service funds to pay future service payments. Financial statements of the MERA can be obtained at 3501 Civic Centre Drive, San Rafael, California 94903. 57 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS (Continued) D. The Countywide Planning Agency The Agency was established by the County of Marin and ten local cities to implement countywide performance standards for traffic, housing, water and sewer facilities, and environmental protection to ensure that residential and commercial growth does not exceed local water, sewer and transportation capacities. The Governing Board of the Countrywide Planning Agency consists of one member of the County Board of Supervisors and one member of the City Council of each participating city. Financial statements of the Agency can be obtained at 3501 Civic Center Drive, San Rafael, California 94903. E. The Marin Telecommunications Agency The Agency was established to regulate the rates for cable television service and equipment and to advise the participants of their license authority. The Governing Board of the Marin Telecommunications Agency consists of one member from each of the eleven participating agencies. The City's contribution to the Agency was $133,401 for the year ended June 30, 2008. Financial statements of the Agency can be obtained at 371 Bel Marin Keys Blvd, Suite 100, Novato, CA 94949. F. The Marin County Hazardous and Solid Waste Joint Powers Authority The Authority was established by the County, local cities, and waste franchising districts to finance, prepare and implement source reduction and recycling elements on a county -wide integrated waste management plan as required by State Assembly Bill 939. The City's contribution to the Authority was $8,816 for the year ended June 30, 2008. Financial statements of the Authority can be obtained at 3501 Civic Center Drive, San Rafael, California 94903. G. Friends of San Rafael Friends of San Rafael is a California nonprofit Public Benefit Corporation established to help finance and accomplish the City's efforts to erect, construct and maintain public buildings, roads, monuments, plazas, parks, gardens, safety features and similar public improvement and infrastructure. Financial statements of the Corporation can be obtained at P.O. Box 151560, San Rafael, CA 94915. 58 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 13 - RISK MANAGEMENT I The City manages risk by participating in the public entity risk pools described below and by retaining certain risks. Public entity risk pools are formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, those entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each risk pool is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective risk pool, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on that board. Obligations and liabilities of these risk pools are not the City's responsibility. A. Risk Coverage The City is a member of the California Joint Powers Risk Management Authority (CJPRMA) which covers general liability claims up to $40,000,000 and workers' compensation claims up to the statutory limits. The City also purchases commercial insurance for property damage claims with an insured amount of $65,704,863. The City is self -insured up to a maximum of $500,000 for each general liability claim, $750,000 for each worker's compensation claim, and $25,000 for each property damage claim. Once the self -insured retention is met CJPRMA becomes responsible for payment of all claims up to the limit. During the fiscal year ended June 30, 2008, the City contributed $411,436 for coverage during the current year and received a refund of $128,025 of prior year excess contributions. The contributions made to each risk pool equal the ratio of their respective payrolls to the total payrolls of all entities participating in the same layer of each program, in each program year. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating. B. Insurance Internal Service Funds The Governmental Accounting Standards Board (GASB) requires municipalities to record their liability for uninsured claims and to reflect the current portion of this liability as an expenditure in their financial statements. As discussed above, the City has coverage for such claims, but it has retained the risk for the deductible, or uninsured portion of these claims. R7 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2008 NOTE 13 - RISK MANAGEMENT (Continued) The City's liability for uninsured general liability claims and workers' compensation claims, including claims incurred but not reported, are reported in the City's Liability Insurance Internal Service Fund and Workers' Compensation Internal Service Fund, respectively. The liability is based on historical trend information provided by its third party administrators and was computed as follows at June 30: General Workers' Liability Compensation Total Balance, beginning of year $916,023 $3,642,158 $4,558,181 Current year claims and changes in estimates 756 1,328,897 1,329,653 Claims paid (479,261) (1,148,444) (1,627,705) Balance, end of year $437,518 $3,822,611 $4,260,129 Current portion $284,387 $2,000,000 $2,284,387 The claims settlements have not exceeded insurance coverage for the past three years. Indemnity NOTE 14 - COMMITMENTS AND CONTINGENCIES 1 The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney there is no pending litigation which is likely to have a material adverse effect on the financial position of the City. The City worked with the Department of Justice (DOJ) to determine the City's compliance with the Americans with Disabilities Act of 1990 (ADA). The DOJ ratified an ADA Settlement Agreement in August 2004 providing a number of specific remedies including timelines, law specific solutions and reporting over the next ten years. For example, several facility deficiencies require resolution within the next year, the City's Web site needs an ADA overhaul, and a significant amount of items relate to curb ramps. The City detennined a range from $2,000,000 to $3,000,000 to expend on the remedies determined by the Agreement. However, this is only an estimate and the City does not have a measurable amount at this time. Therefore, no liability has been recorded. As of June 30, 2008, the City has made significant progress in improving the accessibility of its programs, activities, services, and facilities. The majority of the remaining items relate to curb ramps. The 325 to 400 ramps can range in price between $3,500 to $5,000. On October 1, 2002, the Agency entered into a second amendment to Section 33401 Tax Sharing Agreement with San Rafael High School District. This agreement provides for additional payments in the amount of $179,000 each fiscal year beginning with fiscal year 2002-03 through fiscal year 2021-22. 60 REQUIRED SUPPLEMENTAL INFORMATION 61 This Page Left Intentionally Blank GENERAL FUND AND MAJOR SPECIAL REVENUE FUND BUDGET -TO -ACTUAL STATEMENTS GASB Statement 34 dictates that budget -to -actual information in the basic financial statements should be limited to the General Fund and major Special Revenue Funds. This section is provided for the presentation of Budget -to -Actual Statements for the General Fund, Traffic and Housing Mitigation, and the Gas Tax Special Revenue Funds. 63 CITY OF SAN RAFAEL GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2008 Budgeted Amounts Original Final Variance with Final Budget Actual Positive Amounts (Negative) REVENUES Taxes and special assessments $45,773,562 $48,153,318 $48,084,486 ($68,832) Licenses and permits 1,278,285 1,386,895 1,489,748 102,853 Fines and forfeitures 476,650 703,640 796,081 92,441 Use of money and property 449,218 449,218 224,439 (224,779) Intergovernmental 6,326,038 6,716,428 7,246,381 529,953 Charges for services 1,841,008 2,064,918 2,203,852 138,934 Other revenue 123,860 105,300 269,656 164,356 Total Revenues 56,268,621 59,579,717 60,314,643 734,926 EXPENDITURES Current: General government 6,925,810 7,417,312 7,023,660 393,652 Public safety 33,656,950 34,625,393 34,435,419 189,974 Public works and parks 7,589,110 7,670,636 7,602,332 68,304 Community development/redevelopment 3,479,799 3,590,707 3,705,928 (115,221) Culture and recreation 2,216,634 2,234,087 2,292,848 (58,761) Capital outlay 140,470 140,470 264,919 (124,449) Capital improvement/special projects 56,380 271,141 484,926 (213,785) Debt service: Principal 213,600 213,600 213,598 2 Total Expenditures 54.278,753 56,163,346 56,023,630 139.716 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,989,868 3,416,371 4,291.013 874,642 OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 942,220 933,760 933,760 (4,822,790) (4,822,790) (4,928,005) (105,215) (3,880,570) (3,889,030) (3,994,245) (105,215) ($1,890,702) ($472,659) 296,768 $769,427 5,921,997 $6,218,765 ME CITY OF SAN RAFAEL TRAFFIC AND HOUSING MITIGATION SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2008 REVENUES Use of money and property Charges for services Total Revenues EXPENDITURES Current: Public works and parks Community development / redevelopment Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $21,000 $21,000 $437,122 $416,122 707,034 707,034 21,000 21,000 1,144,156 1,123,156 $65,640 $66,450 68,763 (2,313) 698,472 698,472 317,721 (317,721) 19,720 (19,720) 65,640 764,922 1,104,676 (339,754) (44,640) (743,922) 39,480 783,402 (268,061) (100,000) 168,061 (44,640) (268,061) (100,000) 168,061 ($44,640) ($1,011,983) (60,520) $951,463 9,934,466 $9,873,946 65 CITY OF SAN RAFAEL GAS TAX SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2008 REVENUES Use of money and property Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: Public works and parks Capital outlay Capital improvement / special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $31,840 $31,840 $84,377 $52,537 1,585,400 1,485,400 2,638,429 1,153,029 621,000 621,000 762,609 141,609 39,784 40,582 798 2,238,240 2,178,024 3,525,997 1,347,973 143,410 143,560 1,769,830 1,709,614 107,315 1,403,105 1,874,605 36,245 306,509 (1,874,605) 1,913,240 1,853,174 3,385,025 (1,531,851) 325,000 324,850 140,972 (183,878) 268,061 268,061 (325,000) (353.189) (38C189) (31,000) (325,000) (85,128) (116,128) (31.000) $239,722 $24,844 ($214.878) 2,116,158 $2,141,002 rTol SUPPLEMENTARY INFORMATION This Page Left Intentionally Blank CITY OF SAN RAFAEL REDEVELOPMENT AGENCY CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2008 REVENUES Taxes and special assessments Use of money and property Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public works and parks Community development/redevelopment Capital outlay Capital improvement/special projects Total Expenditures Net Assets (Accumulated Deficit), beginning of year OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR Budgeted Amounts Actual Original Final Amounts Variance with Final Budget Positive (Negative) $900,000 $900,000 $964,526 $64,526 263,240 263,240 318,957 55,717 900,000 900,000 377,365 (522,635) 13,570 13,570 22,356 8,786 40,522 40,522 2,076,810 2,076,810 1,723,726 (353,084) 28,590 28,590 31,317 (2,727) 154,640 154,740 137,530 17,210 1,527,530 1,564,460 1,382,261 182,199 900,000 900,000 2,818,072 (1,918,072) 247,950 257,950 401,594 (143,644) 2,858,710 2,905,740 4,770,774 (1,865,034) (781,900) (828,930) (3,047,048) (2,218,118) 31,000 31,000 31,000 31,000 ($781,900) ($828,930) (3,016,048) (52.187,118 ) Rod,) 1 RS IR5 Q7(, 117 69 This Page Left Intentionally Blank NON -MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Recreation Revolving Fund -- Established to administer the Recreation Department's program and facility rental charge and accounts for the Recreation Memorial Fund. Baypoint Lagoons Assessment District Fund — The Baypoint Lagoons Lighting and Landscape District was formed to protect and enhance wildlife habitat and water quality in Baypoint (Spinnaker) Lagoon and the adjacent diked salt marsh. Household Hazmat Facility Fund - Established to account for State mandated hazardous materials information, collection, and reporting. Expenditures include inspection of businesses for compliance with regulations. This fund also serves as the depository for countywide Household Hazardous Waste Program. Childcare Fund — Established to administer and account for childcare programs at eleven sites throughout the City. Street Maintenance and Cleaning Fund — Established to maintain the City's streets, pubic properties and rights of way. Loch Lomond Assessment District Fund — Established to provide maintenance for stormwater and geotechnic mitigation facilities. A Mello Roos District was formed to fund this maintenance. Library Fund — Established to account for restricted library activities that are intended to be self - funding. Public Safety Fund — Established for special police services, which are intended to be self -funding. Stormwater Fund — Established to provide f'or self -funding storm drain maintenance program plus separate programs through the County and Bay Area to educate residents about urban runoff pollution. Development Services Fund — Established to account for development activities that are supported by external sources of funds. This fund does not account for the operating costs of building, planning, and engineering, which are located in the General Fund. Grants Fund -- Established to account for grants for the Library, Childcare, Police and Falkirk Cultural Center. Parkland Dedication Fund — Established to account for long-term developer deposits used to enhance and maintain the park structure within City limits. Emergency Medical Services Fund — Established to account for the Emergency Medical Services and Transportation program that provides services to all segments of the community. Business Improvement Fund — Established to account for activities held in Downtown San Rafael, such as the Farmers Market. 71 NON -MAJOR GOVERNMENTAL FUNDS Sewer Maintenance Fund — Established under the terms of the JPA to provide all necessary maintenance to the Sanitation District's gravity collection sewer system. DEBT SERVICE FUNDS Peacock Gap Assessment District Fund — Established to accumulate funds for the payment of principal and interest for the 1993 Bonds which mature in 2005. The proceeds were used to refund the 1984 Bonds, which provided for the construction of public improvements in the project area. Financing is to be provided by property tax increments generated within the specific geographic region described by the bond assessment district. Mariposa Assessment District Fund - Established to accumulate funds for the payment of principal and interest for the 1993 Bond, which matures in 2008. The proceeds were used to finance the grading and paving of Mariposa Road. 1997 Financing Authority Revenue Bonds Fund — Established to accumulate funds for the payment of principal and interest for the 1997 Revenue Bonds which matures in 2011. The proceeds were used to purchase the previously issued special assessment bonds. Financing is to be provided by property tax increments generated within the specific geographic region described by the bond assessment district. Redevelopment Agency Fund — Established to account for the principal payments, interest payments, and related costs of the 1999 Project Tax Allocation Bonds and 2002 Tax Allocation Refunding Bonds. CAPITAL PROJECTS FUNDS Capital Improvement Fund — Established for the costs associated with major capital improvement projects not tied to specific funds elsewhere. Improvements could include medians, parkways, sidewalks, and other public assets. Bedroom Tax Fund — Established to collect fi.inds from multiple -unit housing used to pay for maintaining and developing parks within local neighborhoods. Assessment Districts Fund — Established to account for ongoing construction and improvement needs within the following assessment districts: Peacock Gap, Kerner Boulevard, Sun Valley/Lucas Valley Open Space, East San Rafael Drainage Assessment District 1. Park Capital Projects Fund — Established to account for capital improvements for all City owned parks, whether paid for by City funds, grants, donations, or partnership with the community. Open Space Fund — Established for the acquisition of open space. God `a I 6 Jy Equipment Replacement Fund - Established to provide replacement of equipment. 72 NON -MAJOR GOVERNMENTAL FUNDS bo& Radio Replacement Fund - Established to meet radio system operating costs, capital acquisition and replacement, and operating lease obligations for the Public Works, Fire, Community Development and Police Departments. The Marin Emergency Radio Authority (MERA) is a countywide JPA that has taken the roll in procurement and installation of a new digital radio system. This fund supports San Rafael's portion of the MERA efforts and related contractual obligations a Telephone Replacement Fund — Established to provide ongoing support services for telephone equipment and usage throughout the City. 73 CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2008 SPECIAL REVENUE FUNDS Baypoint Lagoons Household Street Recreation Assessment Hazmat Maintenance Revolving District Facility Childcare and Cleaning ASSI 'I'S Cash and investments $199,953 $85,961 $82,329 $518,374 Restricted cash and investments Receivables: Accounts 168,176 $594,737 11,772 Taxes 127 Grants 42,818 Prepaids and deposits Total Assets $368,129 $86,088 $594,737 $136,919 $518,374 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $116,677 $309,041 $35,185 $31,106 Developer bonds payable Due to other funds 242,077 Deferred revenue 218,572 4,518 Total Liabilities 335,249 551,118 39,703 31,106 Fund Balances: Reserved for: Prepaids and deposits Debt service Unreserved, undesignated Total Fund Balances 32,880 $86,088 43,619 32,880 86,088 43,619 Total Liabilities and Fund Balances $368,129 $86,088 $594,737 97,216 487,268 97,216 487,268 $136,919 $518,374 SPECIAL REVENUE FUNDS Loch Lomond Assessment Public Development Parkland District Library Safety Stormwater Services Grants Dedication $824,263 $32,276 $140,342 $471,770 $797,365 $962,705 $959,551 31,871 71 2,627 167,440 118,523 $824,334 $199,716 $172,213 $474,397 $797,365 $1,081,228 $959,551 $11,794 $601 $15,253 $122,964 $101,508 1,500 11,794 601 15,253 124,464 101,508 $824,334 187,922 171,612 459,144 672,901 979,720 $959,551 824,334 187,922 171,612 459,144 672,901 979,720 959,551 $824,334 $199,716 $172,213 $474,397 $797,365 $1,081,228 $959,551 (Continued) 75 ASSETS Cash and investments Restricted cash and investments Receivables: Accounts Taxes Grants Prepaids and deposits I•otal Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Developer bonds payable Due to other funds Deferred revenue Total Liabilities Fund Balances: Reserved for: Prepaids and deposits Debt service Unreserved, undesignated Total Fund Balances CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2008 SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS Emergency Peacock Gap Mariposa Medical Business Sewer Assessment Assessment Services Improvement Maintenance District District $231,623 $4,892 $285,764 $2,875 $15,999 15,272 1,426 $248,321 $4,892 $285,764 $2,875 $15,999 $23,342 ($33) $243,691 23,342 (33) 243,691 1,426 $2,875 $15,999 223,553 4,925 42,073 224,979 4,925 42,073 2,875 15,999 Total Liabilities and Fund Balances $248,321 $4,892 $285,764 $2,875 $15,999 76 $35,430 DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS 1997 Financing Park Authority Redevelopment Capital Bedroom Assessment Capital Open Revenue Bonds Agency Improvement Tax Districts Projects Space $4111,397 $33.622 $909.821 $224,967 $223,741 $31,379 $143,745 332,184 1,808 52,482 $746,581 $35,430 $962,303 $224,967 $223,741 $31,379 $143,745 $129,469 $8,626 $12,011 12,011 129,469 8,626 7311J70 832,834 216.341 $223.741 $31,379 $143,745 734,570 35,430 832,834 216,341 223,741 31,379 143,745 $746,581 $35,430 $962,303 $224,967 $223,741 $31,379 $143,745 (Continued) 77 CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2008 CAPITAL PROJECT FUNDS Total Non -Major Equipment Radio Telephone Governmental Replacement Replacement Replacement Funds ASSETS Cash and investments $2,036,087 $807,659 $10,441,460 Restricted cash and investments $328,053 662,045 Receivables: Accounts 806,556 Taxes 18,097 Grants 381,263 Prepaids and deposits 1,426 Total Assets $2,036,087 $807,659 $328,053 $12,310,847 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $2,983 $1,657 $1,153,864 Developer bonds payable 1,500 Due to other funds 255,246 497,323 Deferred revenue 235.101 Total Liabilities 2,983 256,903 1,887,788 Fund Balances: Reserved for: Prepaids and deposits 1,426 Debt service 753,444 Unreserved, undesignated 2,033,104 $807,659 71,150 9,668,189 Total Fund Balances 2,033,104 807,659 71,150 10,423,059 Total Liabilities and Fund Balances $2,036,087 $807,659 $328,053 $12,310,847 78 This Page Left Intentionally Blank CITY OF SAN RAFAEL COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUKE 30, 2008 REVENUES Taxes and special assessments Fines and forfeitures Use of money and property Intergovernmental Charges for services Other revenue "Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Debt service: Principal Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balance, Beginning Fund Balance, Ending SPECIAL REVENUE FUNDS Baypoint Lagoons Household Recreation Assessment Hazmat Revolving District Facility $25,368 Street Maintenance Childcare and Cleaning $3,378 3,394 $1,692 $4,765 $45,550 15,722 399,439 15,241 1,990,630 1,240,970 2,724,868 53,549 20 1,085 3,902 2,047,557 28,762 1,258,304 3,130,157 64,693 3,700,960 58,618 1,266,914 386 1,916,608 3,423,400 21,033 794,088 3,759,578 386 1,266,914 3,423,400 2,731,729 (1,712,021) 28,376 (8,610) (293,243) (2,667,036) 1.578.300 4M00 253.920 1.792,219 (168,061) 1,578,300 4,000 253,920 1,624,159 (133,721) 28,376 (4,610) (39,323) (1,042,878) 166,601 57,712 48,229 136,539 1,530,146 $32,880 $86,088 $43,619 $97,216 $487,268 80 SPECIAL REVENUE FUNDS Loch Lomond Assessment Public Development Parkland District Library Safety Stormwaler Services Grants Dedication $14,256 $1,000 36,502 $45,980 $5,684 10,994 $45,254 $36,047 $42,829 194,379 76,529 1,092,176 (51,295) 5,970 6,439 793,928 24,761 1,968 65,185 850 1,139 298,615 12,460 90 50,758 311,514 89,502 807,061 368,630 1,140,683 (6,408) 12,351 195,703 100,000 54 1,334,517 602 102,533 300,624 13,369 161,643 231,889 217,631 9,777 175,499 353,129 643,884 54 320,164 217.849 1,671,659 353,731 50,704 (9,650) (128,347) (864,598) 14,899 1,288,748 (148,065) (6,408) 80,000 1,055,340 228,491 (97,941) (2,800) 80,000 1,055,340 130,550 (2,800) 50,704 (8,650) (48,347) 190,742 14,899 (17,515) (9,208) 773,630 196,572 219,959 268,402 658,002 997,235 968,759 $824,334 $187,922 $171,612 $459,144 $672,901 $979,720 $959,551 (Continued) 81 CITY OF SAN RAFAEL COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2008 REVENUES Taxes and special assessments Fines and forfeitures Use of money and property Intergovernmental Charges for services Otherrevenue Total Revenues EXPENDITURES C LI I-1-e n t: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Debt service: Principal Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OT14ER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balance, Beginning Fund Balance, Ending SPECIAL REVENUE FUNDS Emergency Medical Business Sewer Services Improvement Maintenance DEBT SERVICE FUNDS Peacock Gap Mariposa Assessment Assessment District District $3,224,610 3,552 $380 $2,048 $716 13,000 1,676,412 1,421,749 17,269 4,904,574 30,649 1,423,797 716 29,983 4.301,926 1,282,072 18,139 35,000 1,996 4,319,965 29,883 1,282,072 36,996 584,609 766 141,725 (36,280) 8,460 (368,090) (129,400) (150) (359,630) (129,400) (150) 224,979 766 12,325 (36,430) 4,159 29,748 $2,875 52,429 $224,979 $11,925 $42,073 $2,875 $15,999 82 DEBT SERVICE FUNDS 1997 Financing Authority Redevelopment Capital Revenue Bonds Agency Improvement $239,321 $3,568,850 26,562 1.314 $50,643 52,492 265,883 CAPITAL PROJECT FUNDS Bedroom Tax $7,778 9.917 3,570,164 103,125 17,695 Park Assessment Capital Open Districts Projects Space $1,380 $6,426 (5,625) 1,550 6,426 742,203 68,185 8,626 11,933 2,876 170,000 1,890,000 75,366 1.679.850 245,366 3,568,850 810,388 8,626 11,933 2,876 20,517 1,314 (707,263) 9,069 (10,383) 3,550 97,941 (1,750) (148,750) (1,750) (50,809) 18,767 1,314 (758,072) 9,069 (10,383) 3,550 715,803 34,116 1,590,906 207,272 $223,741 41,762 140,195 %'734,570 $35,430 $832,834 $216,341 $223,741 $31,379 $143,745 (Continued) 83 CITY OF SAN RAFAEL COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2008 CAPITAL PROJECT FUNDS Total Non -Major Equipment Radio Telephone Governmental Replacement Replacement Replacement Funds REVENUES 'Faxes and special assessments Fines and forfeitures Use of money and property $94,741 Intergovernmental 17,745 Charges for services 1,353,774 Otherrevenue 4,985 Total Revenues 1,471,245 EXPENDITURES Current: General government 335,989 Public safety Public works and parks 1,191,486 Culture and recreation Capital outlay Capital improvement/special projects Debt service: Principal 137,442 Interest and fiscal charges 7.149 Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balance, Beginning Fund Balance, Ending $7,080,183 1,000 $29,812 $10,053 519,613 1,819,793 420,240 250,000 11,911,609 464,944 450,052 260,053 21.797.142 647,890 1.672,066 647,890 207,090 1,233,193 5,864,443 5,725,725 7,527,517 251,424 1,439,700 2,343,246 58,330 2,290,772 12,993 1,776,354 (200,921) (197,838) (269,774) (6,403,808) 21,724 5,120,395 (916,942) 21,724 4,203,453 (200,821) (197,838) (248,050) (2,200,355) 2,233,925 1,005,497 319,200 12,623,414 $2,033,104 $807,659 $71,150 $10,423,059 84 This Page Left Intentionally Blank CITY OF SAN RAFAEL BUDGETED NONMAIOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED DUNE 30, 2008 REVENUES Taxes and special assessments Fines and forfeitures Use of money and property Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Debt service: Principal Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) FUND BALANCES, BEGINNING OF YEAR AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES. END OF YEAR SPECIAL REVENUE FUNDS Recreation Revolving Baypoint Lagoons Assessment District Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) $25,000 $25,368 $368 $5,000 $3,378 ($1,622) 800 3,394 2,594 1,892,680 1,990,630 97,950 19,700 53,549 33,849 1,917,380 2,047,557 130,177 25,800 28,762 2,962 386 (386) 3,442,740 3,700,960 (258,220) 2,480 2,480 15,000 58,618 (43,618) 3,460,220 3,759,578 (299,358) 386 (386) (1,542.840) (1,712,021) (169,181) 25,800 28,376 2,576 1,441,500 1,578,300 136,800 1,441,500 1,578,300 136,800 ($101,340) (133,721) ($32,381) $25,800 166,60 I $32,880 28,376 $2,576 57,712 $86,098 86 SPECIAL REVENUE FUNDS Household Hazmat Facilitv Childcare Street Maintenance and Cleaning Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $1,540 $1,692 $152 $4,765 $4,765 $21,050 $45,550 $24,500 5,160 15,722 10,562 $391,383 399,439 9,056 15,241 15,241 1,342,800 1,240,870 (101,930) 2.597,800 2,724,868 127,068 20 20 1,085 1,085 2,500 3,902 1,402 1,349,500 1,258,304 (91,196) 2,989,183 3,130,157 140,974 23,550 64,693 41,143 1,334,174 1,266,914 67,260 1,862,328 1,916,608 (54,280) 3,212,066 3,423,400 (211,334) 11,520 11,520 119,310 21,033 98,277 6,000 6,000 794,089 (794,088) 1,340,174 1,266,914 73,260 3,223,586 3,423,400 (199,814) 1,981,638 2,731,729 (750,091) 9,326 (8,610) (17,936) (234,403) (293,243) (58,840) (1,958,088) (2,667,036) (708,948) 4,000 4,000 342,930 253,920 (89,010) 1,792,219 1,792,219 (89,010) 89,010 (168,061) (168,061) 4,000 4,000 253,920 253,920 1.792,219 1,624,159 (168,061) $9,326 (4,610) ($13,936) $19,517 (39,323) ($58,840) ($165,869) (1,042,878) ($877,009) 48,229 136,539 1,530,146 $43,619 $97,216 $487,268 (Continued) 87 CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2008 REVENUES Taxes and special assessments Fines and forfeitures Use of money and property Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Debt service Principle Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OI' REVENUES OVI R (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR SPECIAL REVENUE FUNDS Loch Lomond Assessment District Library Final Budget Actual Variance Variance Positive Final Positive (Negative) Budget Actual (Negative) $14,260 $14,256 ($4) 20,000 36,502 16,502 $26,060 $45,980 $19,920 123,152 194,379 71,227 4,000 5,970 1,970 22,982 65,185 42,203 34,260 50,758 16,498 176,194 311,514 135,320 54 (54) 178,510 102,533 75,977 67,834 217,631 (149,797) 54 (54) 246,344 320,164 (73,820) 34,260 50,704 16,444 (70,150) (8,650) 61,500 $34,260 50,704 $16,444 ($70,150) (8,650) S61,500 773,630 196,572 $824,334 $187,922 88 SPECIAL REVENUE FUNDS Public Safety Stormwater Development Services Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $2,190 $1,000 ($1,190) $2,110 $5,684 $3,574 10,610 10,994 384 $33,110 $45,254 $12,144 65,710 76,529 10,919 15,890 6,439 (9,451) 851,400 793,928 (57,472) 24,761 24,761 2,580 850 (1,730) 1,139 56,069 298,615 242,546 86,290 89,502 3,212 864,200 807,061 (58,278) 89,179 368,630 279,451 179,320 195.703 (17,393) 1,445,577 1,334, 517 1 1 1,060 51,000 13,369 37,631 535,000 161,643 373,357 1,000 8,777 (7,777) 175,499 (175,499) 602 (602) 56,069 353,129 (297,060) 230,320 217,849 12,471 1,980,577 1,671,659 309,918 56,069 353,731 (297,662) (144,030) (128,347) 15,683 (1,116,377) (864,598) 251,779 33,110 14,899 ($18,211) 80,000 80,000 80,000 90,000 1,055,340 1,055,340 1,055,340 1,055,340 ($64,030) (48,347) 315,683 (561,037) 190,742 $251,779 $33,110 14,899 ($18,211) 219,959 268,402 658,002 $171.612 $459,144 $672,901 (Continued) ,Ml CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED .TUNE 30, 2008 SPECIAL REVENUE FUNDS Grants Parkland Dedication Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Taxes and special assessments Fines and forfeitures Use of money and property $26,430 $36,047 $9,617 $42,829 $42,829 Intergovernmental 552,168 1,092,176 540,008 (51,295) (51,295) Charges for services 1,968 1,969 Other revenue 128,730 12,460 (116,270) 90 90 'total Revenues 707,328 1,140,683 433,355 (6,408) (6,408) EXPENDITURES Current: General government 12,270 12,351 (81) Public safety 112,240 100,000 12,240 Public works and parks Culture and recreation 411,370 300,624 110,746 Capital outlay 225,000 231,889 (6,889) Capital improvement/special projects 255,808 643,884 (388,0176) Debt service: Principle Interest and fiscal charges Total Expenditures 1,016,698 1,288,748 (272,060) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (309,360) _ (148,065) 161,295 (6,408) (6,409) OTHER FINANCING SOURCES (USES) Transfers in 293,000 228,491 (54,509) Transfers out (97,941) (97,941) (2,800) (2,900) Total Other Financing Sources (Uses) 283,000 130,550 (152,450) (2,800) (2,900) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES ($26,360) (17,515) $8,845 (9,208) ($9,208) FUND BALANCES, BEGINNING OF YEAR 997,235 968,759 FUND BALANCES, END OF YEAR $979,720 $959,551 90 SPECIAL REVENUE FUNDS Emergency Medical Services Business Improvement Sewer Maintenance Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negauve) Budget Actual (Negative) Budge( Actual (Negative) $3,235,000 $3,224,610 ($10,390) 3,552 3,552 $540 $380 ($160) $6,800 $2,048 ($4,752) 16,000 13,000 (3,000) 1,675,000 1,676,412 1,412 1,647,270 1,421,749 (225,521) 21,820 17,269 (4,551) 4,910,000 4,904,574 (5,426) 38,360 30,649 (7,711) 1,654,070 1,423,797 (230,273) 38,350 29,883 8,467 4,497,559 4,301,826 195,733 7,500 18,139 (10,639) 1,543,692 1,282,072 261,620 4,505,059 4,319,965 185,094 38,350 29,883 8,467 1,543,692 1,282,072 261,620 404,941 584.609 179,668 10 766 756 110,378 141,725 31,347 8,460 9,460 (368,090) (368,090) (129,400) (129,400) (359,630) (359,630) (129,400) (129,400) 145,311 224,979 $179,668 $10 766 $756 ($19,022) 12,325 $31,347 4,159 29,748 $224,979 $4,925 $42,073' (Continued) 91 CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR Tl IF YEAR ENDED JUNE 30, 2008 REVENUES Taxes and special assessments Fines and forfeitures Use of money and property Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Debt service: Principle interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR DEBT SERVICE FUNDS Peacock Gap Assessment District Mariposa Assessment District Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) $1,050 $716 ($334) 1,050 716 (334) 35,600 35,000 600 3,530 1,996 1,534 39,130 36,996 2,134 (38,080) (36,280) 1,800 $2,875 $2,875 (150) (150) (150) (150) ($38,230) (36,430) $1,800 52,429 $15,999 92 DEBT SERVICE FUNDS CAPITAL PROJECT FUND 1997 Financing Authority Revenue Bonds Redevelopment Agency Capital Improvement Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $318,910 $239,321 ($79,589) $3,568,850 $3,568,850 2,540 26,562 24,022 1,314 $1,314 $50,643 $50,643 $6,950,000 5 2,4 82 (6,897,518) 321,450 265,883 (55,567) 3,568,850 3,570,164 $1,314 $6,950,000 103,125 (6,846,875) 742,203 (742,203) 6,950,000 68,185 6,881,815 194,770 170,000 24,770 1,890,000 1,890,000 65,490 75,366 (9,876) 1,678,850 1,678,850 260,260 245,366 14,894 3,568,850 3,569,850 6,950,000 810,388 6,139,612 61,190 20,517 ($40,673) 1,314 1,314 (707,263) (707,263) (1,750) (1,750) (1,750) (1,750) 97,941 97,941 (148,750) (148,750) (148,750) (50,809) 97,941 $59,440 18,767 ($40,673) 1,314 $1,314 ($148,750) (758,072) ($609,322) 715,803 34,116 1,590,906 $734,570 $35,430 $832,834 (Continued) 93 CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2008 REVENUES Taxes and special assessments Fines and forfeitures Use of money and property Intergovernmental Charges for services Other revenue Total Revenues LXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special prgjects Debt service: Principle Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES O'ITIER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR Bedroom Tax Final Budget Actual $7,778 9,917 CAPITAL PROJECT FUNDS Variance Positive Final (Negative) Budget $7,778 9,917 17,695 17,695 8,626 (8,626) 8,626 (8,626) 9,069 9,069 Assessment Districts Variance Positive Actual (Negative) 9,069 $9,069 207,272 $223,741 $216,341 $223,741 MA I CAPITAL PROJECT FUNDS Park Capital Projects Open Space Equipment Replacement Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $1,380 $1,380 $5,300 $6,426 $1,126 $42,000 $94,741 $52,741 (5,625) (5,625) 17,745 17,745 1,353,773 1,353,774 1 5,795 5,795 4,985 4,985 1,550 1,550 5,300 6,426 1,126 1,395,773 1,471,245 75,472 371,278 335,989 35,289 43,640 43,640 1,329,282 1,191,486 137.796 11,933 (11,933) 12,560 2,876 9,684 137,780 137,442 338 13,460 7,149 6,311 11,933 (11,933) 12,560 2,876 9,684 1,895,440 1,672,066 223,374 (10,383) (10,383) (7,260) 3,550 10,810 (499,667) (200,821) 298,846 (10,383) ($10,383) ($7,260) 41,762 $31,379 3,550 $10,810 ($499,667) 140,195 $143,745 (200,821) $298,846 2,233,925 $2,033,104 (Continued) CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2009 REVENUES Taxes and special assessments Fines and forfeitures Use of money and property Intergovernmental Charges I'or services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Debt service: Principle Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other financing Sources (Uses) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR CAPITAL PROJECT FUNDS Radio Replacement Telephone Replacement Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) $31,840 $29,812 ($2,028) $300 $10,053 $9,753 420,240 420,2110 250,000 250,000 452,080 .150.052 (2,028) 250,300 260,053 9,753 1,135,890 647,990 488,000 170,480 207,080 (36,600) 1,135,890 647,890 (683,910) (197,838) 262,000 251,424 10,576 58,330 59,330 12,990 12,993 (3) 488,000 503,800 529,827 (26.027) 485,972 (253,500) (269,774) (16,274) ($6832810) (197,838) $485,972 ($253,500) $807,659 21,724 21,724 21,724 21,724 (248,050) $5,450 319,200 $71,150 M INTERNAL SERVICE FUNDS Internal service funds account for department services and financing performed for other departments within the same governmental jurisdiction. Funding comes from charges assessed to the departments benefiting from the service. 60,27 Building Maintenance Fund - Established to account for construction projects and cyclical large dollar maintenance tasks (roof, painting) completed on City owned buildings. boy - Employee Benefits Fund - This fund is utilized for the payment of retiree benefits, unemployment insurance, accumulated leave requirements and other negotiated benefits not tied to a specific department. Liability Insurance Fund - Established to maintain sufficient reserves for outstanding claims. All costs associated with liability premiums are paid from this fund. G-0� Workers' Compensation Fund - Established to maintain sufficient reserves for injury clairns. All costs associated with workers compensation, including safety training, wellness programs, claim expenses and insurance premiums are paid from this fund. °7 Dental Insurance Fund - Set up to maintain sufficient reserves for dental claims. All costs associated with dental claims and administrations are paid from this fund. &A CITY OF SAN RAFAEL INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET ASSETS JUNE 30, 2008 Building Employee Liability Workers' Dental Maintenance Benefits Insurance Compensation Insurance Total ASSETS Current Assets: Cash and investments $406,027 $907,415 $4.205,526 $6.954 $5,525,922 Accounts receivable $1,250,328 1,250,329 Prepaids and deposits 4,118 3,339 7,457 Total Assets 406,027 1,250,328 911,533 4,208,865 6,954 6,783,707 LIABILITIES Current Liabilities: Accounts payable 61,009 516 3,083 4,560 4,190 73,358 Due to other funds 454,749 454,749 Claims payable 284,387 2,000,000 2,284,387 Total Current Liabilities 61,009 455,265 287,470 2,004,560 4,190 2,812,494 Noncurrent Liabilities: Claims payable 153,131 1,822,611 1.975,742 Total Noncurrent Liabilities 153,131 1,822,611 1,975,742 Net Assets Total Liabilities 61,009 455,265 440,601 3,827,171 4,190 4,788,236 NET ASSETS: Unrestricted 345,018 795,063 470,932 381,694 2,764 1,995,471 Total Net Assets $345.019 $795,063 $470,932 $381,694 $2,764 $1,995,471 98 CITY OF SAN RAFAEL INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED JUNE 30, 2008 Building Employee Liability Workers' Dental Maintenance Benefits Insurance Compensation Insurance Total OPERATING REVENUES Charges for current services $91,070 $1,287,418 $1,525,829 $1,949,525 $493,123 $5,346,965 Other operating revenues 1,737,893 128,025 59 10,060 1,876,037 Total Operating Revenues 91.070 3,025,311 1,653,854 1,949,584 503,183 7,223,002 OPERATING EXPENSES Insurance premiums and claims 2,157,139 1,214,008 1,735,436 511,087 5,617,670 Maintenance and repairs 391,625 391,625 General and administrative 538,477 18 538,495 Total Operating Expenses 391,625 2,695,616 1,214,026 1,735,436 511,087 6,547,790 Operating Income (Loss) (300,555) 329,695 439 828 214,148 (7,904) 675,212 NONOPERATING REVENUES (EXPENSES) Investment income 25,369 2,450 31,104 176,800 574 236,297 Total Nonoperating Revenues (Expenses) 25,369 2,450 31,104 176.800 574 236,297 Net income (loss) before transfers (275,186) 332,145 470,932 390.948 (7,330) 911,509 Transfers in 350,000 350,000 Transfers out (30.000) (30,000) Change in Net Assets 74,814 332,145 470,932 360,948 (7,330) 1,231,509 NET ASSETS, BEGINNING OF YEAR 270,204 462,918 20,746 10,094 763,962 NET ASSETS, END OF YEAR $345,018 $795,063 $470,932 $381,694 $2,764 $1,995,471 CITY OF SAN RAFAEL INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2008 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers/other funds Cash payments to suppliers for goods and services Other operating revenues Cash Flows from Operating Activities CASH FLOWS PROM NONCAPITAL FINANCING ACTIVITIES Interfund receipts Cash Flows from Noncapital Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Investment received Cash Flows from Investing Activities Net Increase (Decrease)in cash and cash equivalents CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) Net change in assets and liabilities - Accounts receivable Prepaids and deposits Accounts payable Claims payable Net Cash Provided by (Used in) Operating Activities Building Employee Liability Workers' Dental Maintenance Benefits Insurance Compensation Insurance Total $91,070 $1,103,606 $1,525,829 $1,949,525 $493,123 $5,163,153 (341,836) (2,695,807) (1,696,765) (1,557,482) (509,174) (6,801,064) 1,737,893 129,025 59 10,060 1,876,037 (250,766) 145,692 (42,911) 392,102 (5,991) 239,126 350,000 (148.142) (30,000) 171,958 350JX)0 (148,142) (30,000) 171,858 25,369 2,450 31,104 176,800 574 236,297 25,369 2,450 31,104 176,800 574 236,297 124,603 (11,807) 538,902 (5,417) 646,281 281,424 919,222 3,666,624 12,371 4,879,641 $406,027 $907,415 $4,205.526 $6,954 $5,525,922 ($300,555) $329,695 $439,828 $214,148 ($7,904) $675212 (183,812) (183,812) (4,118) (3,339) (7,457) 49,789 (191) (1 16) 840 1,913 52,235 (478,505) 180,453 (298,052) ($250,766) $145,692 ($42,911) $392.102 ($5.991) $238,126 100