No preview available
HomeMy WebLinkAboutFin Financial Reports FY2012-13CITY OW Agenda Item No: 3. a Meeting Date: November 4, 2013 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: FINANCE Prepared by: Mark Moses )(P— Finance Director City Manager Approval: SUBJECT: FISCAL YEAR 2012-2013 ANNUAL FINANCIAL REPORT; SINGLE AUDIT; GANN APPROPRIATIONS LIMIT; MEMORANDUM ON INTERNAL CONTROL; AND CHILD DEVELOPMENT PROGRAM RECOMMENDATION: ACCEPT THE FISCAL YEAR 2012-2013 ANNUAL FINANCIAL REPORT; ACCEPT THE SINGLE AUDIT REPORT; ACCEPT THE GANN APPROPRIATIONS LIMIT REPORT; ACCEPT THE MEMORANDUM ON INTERNAL CONTROL; AND ACCEPT THE CHILD DEVELOPMENT PROGRAM REPORT. BACKGROUND: As required by local code, State law, bond covenants, and best practices, the City of San Rafael completes an annual audit of its financial activities. The auditing firm of Maze and Associates,, Accountancy Corporation conducted the audit for fiscal year 2012-2013. Their work was completed in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget Circular A-13 3 ), Audits of State and Local Government and Non -Profit Organizations. The Federal Government requires that any local agency expending $500,000 or more in combined federal grant funds, either directly or indirectly in a fiscal year, is subject to a separate audit on those programs and a separate Single Audit Report is issued. This threshold amount did occur in fiscal year 2012-2013.-, therefore, this separate audit was required. The requirements of Section 1.5 of Article X111B of the California Constitution are met with an agreed upon procedure report applied to the Gann Appropriation Limit calculated for the year ending June 30, 2014. A Memorandum on Internal Control is also prepared by the auditors to help identifv areas that could help improve the City's organization and controls over its financial Ili activities. These reports are also attached to this staff report. Finally., as part of the fiscal A. -ear -end closing activities. the Finance and Community Services FOR CITY CLERK ONLY File No.: Council Meeting: Disposition: SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paye: 2 departments worked with Maze and Associates to complete the annual audit of the City's childcare program, as required by the State of California. ANALYSIS: Financial results: City-wide The actual results of the City's financial activities are presented in the attached Comprehensive Annual Financial Report. The report includes Government -wide financial statements with governmental activities and business -type activities presented separately. Net position is one indicator of the City's financial position. At the end of the fiscal year, net position of the City was $253.3 million,, an increase of $12.5 million from the prior year. This increase is largely attributable to positive general fund operating results, coupled with the accumulation of funds for specific purposes — e.g., traffic and housing mitigation, capital projects, equipment replacement, building maintenance,, gas tax., etc. A financial summary of revenues and expenditures is shown in the Statement of Activities and Changes in Net Position. Total governmental revenues and transfers in of $97.3 million exceeded the $84.8 million in expenditures by $12.5 million. Strong sales and property tax performance., coupled with development -related fees and reimbursements from the Successor Agency on behalf of the former Redevelopment Agency contributed to this result. Total revenues from business activities (Parking Fund) of $3,995,000 exceeded expenditures and operating transfers out of $3,969,000 by $26,000. Supplementary explanatory information is provided in the Management's Discussion and Analysis (MD&A) section beginning on page three. The MD&A provides key highlights and a summary view of performance of financial activities for the year. Financial results: General Fund The final operating results for the General Fund exceeded the original projections made at the time the budget was adopted for fiscal year 2012-2013 by approximately $1.0 million. These funds were added to the City's Emergency and cash flow reserve in the General Fund. .01 The original, adopted General Fund budget projected total revenue of $56.1 million and transfers in of $1.5 million for total resources of $57.6 million. This budget appropriated expenditures of $56.2 million and transfers out of $ 1.4 million, for a total of $57.6 million. Actual revenues, at $60.0 million,, exceeded the original budgeted revenues by $3.9 million. This positive performance was driven by tax revenues {property tax,, sales tax, transient occupancy tax) and payments from the Successor Agency for obligations due to the general fund from the former Redevelopment Agency. In addition, actual transfers in of $3 ).1 million exceeded budgeted transfers in by $1.6 million, primarily as a result of $1.5 million released from the general liability reserN:e following a positive outcome from litigation. Of the $5.5 million in additional resources, $4.5 million was allocated via additional appropriations during the year to support long-term capital infrastructure. building repair and maintenance, technolocyy. and unfunded retirement -related liabilities. The remaining $1.0 million rn was added to the emergency and cash flow reserve. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Pau: 3 Single Audit The City incurred a total of $2,894,896 in federal expenditures during fiscal year 2012-2013 that fall under the parameters of this audit. The auditor identified the following three major programs to be audited. 1. U.S Department of Transportation - Highway Planning and Construction: $1,115,979 in funds supported Citywide street resurfacing, transit center connectors and safe routes to school constructions. 2. U.S Department of Energy — Energy Efficiency and Conservation Block Grant: $410,948 in funds supported upgrade to the City Hall heating, ventilation and air condition system. 3. U.S Department of Homeland Security — Assistance to Firefighters Grant: $329,316 in funds supported the purchase of self-contained breathing apparatus (SOBA). As required under the Single Audit Act, a number of separate reports are contained within the document. Most of these reports comment on either compliance with Federal assistance regulations or recommendations regarding the City's accounting practices. With respect to compliance, the auditors found no material instances of noncompliance with laws, regulations,, contracts or grants applicable to our programs. There were no findings or recommendations for fiscal year 2012-2013.. Gann Appropriations Limit The Agreed -Upon Procedures report for the Gann Appropriations Limit required three steps to be performed including testing the accuracy of the calculations and comparison of information presented. No exceptions were noted in the three steps for the fiscal year 2013-2014 calculation. Afemorandum on Internal Control I The auditors are required to communicate to the City Council matters that come to their attention relating to the audit in a report entitled Memorandum on Internal Control. The section titled "Schedule of Other Matters" addresses items that are considered by the auditors to be worthy of note to the Council. One recommendation was included which pertained to the review of workers compensation claim -related disbursements initiated by the City's third -party administrator. There were no areas that the auditors considered to be material weaknesses for fiscal year 2012-2013, and all of the issues raised in prior year communications have been successfully addressed. The auditors noted several new pronouncements issued by the Governmental Accounting Standards Board (GASB) which become effective over the upcoming years. This is significant., due to both the number of new statements and the scope of change associated with some of them GAS13 Statement No. 65 - Items Previously Reported as Assets and Liabilities and No. 68 - Accounting and Financial Reporting for Pensions). (._'hildcare Audit The Childcare Program operated at near breakeven. with $3.7 million in total revenues and $3 ) .7 million in expenditures for the fiscal year. The audit resulted in no adverse findings. SAN RAFAEL CITY COUNCIL AGENDA REPORT / PaLye: 4 FISCAL IMPACT: No fiscal impact occurs by the City Council's acceptance of these reports. The fiscal year 2012-2013 Comprehensive Annual Financial Report and related reports are presented as the actual results of the City and related entities' financial activities for the year. RECOMMENDATION: Staff recommends that City Council accept the reports as presented. Attachments: Comprehensive Annual Financial Report — Fiscal Year Ending June 30, 2013 Single Audit for the year ended June 30, 2013 Prop 111 (GANN) fiscal year 2013-2014 Appropriations Limit Memorandum on Internal Control Child Development Program (Childcare) W-ManagementServices- WorkFileTinance- WorkFile"'Council Materlal\Staff Reports-\2013\City\YE-Financial-Audit Reports FY12-13.doc COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDING JUNE 3O, 2013 Canal Front This Page Left Intentionally Blank ��• M V V 10 61 MA MMI WMA 0 10 111 For the Fiscal Year Ended June 30, 2013 City of • P.O. Box 151560 M1114WHIII10 Ma �Tft Prepared by the Finance Department of the City of San Rafael This Page Left Intentionally Blank San Rafael Police Patrol Boat INTRODUCTORY SECTION This Page Left Intentionally Blank CITY OF SAN RAFAEL, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2013 Table of Contents INTRODUCTORY SECTION TABLE OF CONTENTS Letterof Transmittal....................................................................................................................................v Mission Statement and Vision Statement....................................................................................................x CityCouncil and Staff................................................................................................................................ xi LocationMap............................................................................................................................................ xii OrganizationalChart ................................................................................................................................ xiii FINANCIAL SECTION I Independent Auditor's Report..................................................................................................................1 Management's Discussion and Analysis..................................................................................................5 Basic Financial Statements: Government -wide Financial Statements: Statementof Net Position.............................................................................................................23 Statementof Activities..................................................................................................................24 Fund Financial Statements: Major Governmental Funds: BalanceSheet............................................................................................................................28 Balance Sheet - Reconciliation of Governmental Fund Balances to Net Position of Governmental Activities..............................................................................29 Statement of Revenues, Expenditures, and Changes in Fund Balances....................................30 Reconciliation of the Net Change in Fund Balances - Total Governmental Funds with the Statement of Activities.................................................................................31 Proprietary Funds: Statementof Net Position..........................................................................................................34 Statement of Revenues, Expenses, and Changes in Fund Net Position....................................35 Statementof Cash Flows...........................................................................................................36 i CITY OF SAN RAFAEL, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2013 Table of Contents FINANCIAL SECTION (Continued) I Fiduciary Funds: Statement of Fiduciary Net Position..........................................................................................3 8 Statement of Changes in Fiduciary Net Position.......................................................................39 Notes to Basic Financial Statements..................................................................................................41 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual - Budgetary Basis GeneralFund..............................................................................................................................82 Traffic and Housing Mitigation Special Revenue Fund............................................................83 Gas Tax Special Revenue Fund.................................................................................................84 Supplementary Information: Non -major Governmental Funds: CombiningBalance Sheets...........................................................................................................90 Combining Statements of Revenues, Expenditures, and Changes inFund Balance.....................................................................................................................96 Budgeted Non -major Government Funds: Combining Schedules of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual......................................................................102 Internal Service Funds: Combining Statements of Net Position.......................................................................................112 Combining Statements of Revenues, Expenses and Changes in Fund Net Position ..................114 Combining Statements of Cash Flows........................................................................................116 Agency Funds: Combining Statements of Changes in Assets and Liabilities .....................................................120 ii CITY OF SAN RAFAEL, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2013 Table of Contents STATISTICAL SECTION Financial Trends: Net Position by Component — Last Ten Fiscal Years............................................................................. 124 Changes in Net Position — Last Ten Fiscal Years................................................................................... 126 Fund Balances of Governmental Funds — Last Ten Fiscal Years........................................................... 130 Changes in Fund Balance of Governmental Funds — Last Ten Fiscal Years .......................................... 132 Revenue Capacity: Assessed and Estimated Actual Value of Taxable Property — Last Ten Fiscal Years ............................134 Property Tax Rates - All Direct and Overlapping Governments— Last Ten Fiscal Years......................135 Principal Property Tax Payers — Current Year and Nine Years Ago......................................................136 Property Tax Levies and Collections — Last Ten Fiscal Years...............................................................137 Debt Capacity: Ratio of Outstanding Debt by Type — Last Ten Fiscal Years.................................................................138 Computation of Direct and Overlapping Debt........................................................................................139 Computation of Legal Bonded Debt Margin..........................................................................................140 Revenue Bond Coverage Parking Facility — Last Ten Fiscal Years .......................................................141 Demographic and Economic Information: Demographic and Economic Statistics — Last Ten Fiscal Years............................................................142 PrincipalEmployers................................................................................................................................143 Operating Information: Full -Time Equivalent City Government Employees by Function — Last Ten Fiscal Years.......................................................................................................................144 Operating Indicators by Function/Program — Last Ten Fiscal Years .....................................................146 Capital Asset Statistics by Function/Program — Last Ten Fiscal Years .................................................148 iii This Page Left Intentionally Blank October 21, 2013 Honorable Mayor, Members of the City Council and Residents of San Rafael: The Comprehensive Annual Financial Report (CAFR) of the City of San Rafael for the year ended June 30, 2013, is hereby submitted as required by local ordinances, State statutes and bond covenants. This financial report has been prepared in conformance with Generally Accepted Accounting Principles as promulgated by the Governmental Accounting Standards Board (GASB) and includes the report of the independent certified public accounting firm, Maze and Associates Accountancy Corporation, who has issued an unqualified ("clean") opinion on the City of San Rafael's financial statements for the fiscal year ended June A, 2013. The independent audit of the financial statements is part of a broader, federally mandated "Single Audit" designed to meet the needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report on the audited agency's internal controls and compliance with legal requirements, with special emphasis on such controls and requirements involving the administration of federal awards. These reports will be available in the City's separately issued Single Audit Report. Responsibility for both the data accuracy, and the completeness and fairness of the presentation, rests with management. To the best of our knowledge and belief, the data presented is accurate in all material respects and is reported in a manner that presents fairly the financial position and results of operations of the various funds and component units of the City of San Rafael. Further, the CAFR is prepared in accordance with procedures and policies set by the Government Finance Officers Association. The analysis of the financial condition and the result of operations are in the Management's Discussion and Analysis document in the financial section. The CAFR is organized into three sections: 1. Introductory section, which is unaudited, includes this letter of transmittal, an organizational chart and a list of the City of San Rafael's elected and appointed officials. 2. Financial section, includes the general-purpose financial statements, related footnote disclosures, and the combining and individual fund and account group financial statements and schedules, as well as the independent auditors' report. 3. Statistical section, which is unaudited, includes selected financial and demographic information, presented on a multi-year basis. Generally, ten-year data is presented for expenditures, revenues, assessed valuation for local properties and construction activity. 1400 FIFTH AVENUE • PO Box 151560 • SAN RAFAEL, CA 94915-1560 WWW. CITYOFSANRAFAEL.ORG CAFR TRANSMITTAL LETTER REPORTING ENTITY — PROFILE OF THE GOVERNMENT The City of San Rafael is located 17 miles north of San Francisco in Marin County. Protected by its Mediterranean like setting along the shores of the San Francisco Bay, the City enjoys a mild climate year round. As the County seat, San Rafael is considered the commercial, financial, cultural and civic hub of Marin County. Abundant recreational facilities are available in and around the City. The City's park and recreational resources include 25 City parks, City and County open space, and China Camp State Park. San Rafael is close to other attractions, including Muir Woods, Mount Tamalpais, four other State parks, as well as San Francisco, Oakland and the wine country. In 1874, the City of San Rafael became the first incorporated City in the County, later becoming a charter city in 1913 by vote of City residents. The City Council comprises five members; four are elected at large to four-year terms. The mayor is elected separately to a four-year term. The City's land area is 22 square miles, including 17 square miles of land and five of water and tidelands. San Rafael's population on January 1, 2013 was 58,182, an increase of 0.3% from the January 1, 2012 population of 57,982. Downtown San Rafael is the location of many community events, including May Madness Classic Car Parade, a 26 week Farmers Market Festival on Thursday Nights, Second Friday Art Walks, Twilight Criterium Bike Race, Mill Valley Film Festival, and the Winter Wonderland/Parade of Lights. San Rafael is also the heart of the County's cultural activities with venues such as the Marin Center, Falkirk Cultural Center, the Christopher B. Smith Film Center, and a host of diverse dining and entertainment venues. Marin Center presents numerous ballets, concerts, speaking engagements, and the award winning Marin County Fair. The Falkirk Cultural Center provides art exhibits and children's programming. The City is also home to the distinguished Dominican University of California. The City of San Rafael provides a full range of municipal services required by statute or charter, namely: police and fire protection, construction and maintenance of streets, parks, storm drains and other infrastructure, recreation, childcare, permits, planning, code enforcement, and a library system serving two locations. The City performed certain infrastructure construction and economic development activities through a separate Redevelopment Agency until its dissolution on February 1, 2012. The City of San Rafael accepted the role of Successor Agency to the Redevelopment Agency per Council action on January 3, 2012. The City and California Municipal Finance Authority compose the San Rafael Joint Powers Financing Authority, which was originally established by the City and former Redevelopment Agency for the purpose of financing redevelopment and other projects. The San Rafael Sanitation District is a discretely presented component unit of the City of San Rafael and is presented independent of City financial information. For a further explanation of these entities, refer to Footnote No. 1 in the Financial Section of the CAFR. The City participates in various organizations through formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these agencies exercise full powers and authorities within the scope of the related Joint Powers Agreement including the preparation of annual budgets, accountability for all funds, and the power to make and execute contracts. Obligations and liabilities of the separate entities are not those of the City. For a further explanation of these separate entities, refer to Footnote No. 12 in the CAFR. vi CAFR TRANSMITTAL LETTER ECONONHC FACTORS The City has a diversified economic base, which includes high-tech, fmancial, service -based, entertainment and industrial businesses. Downtown San Rafael provides a mix of restaurants, retail stores and financial institutions. The City's diversified economic base is also reflected in a diverse property tax base, which is 76% residential, 21% commercial and 3% industrial. The top 50 sales tax producers provide 56% of overall sales tax revenues. For fiscal year 2013-2014, sales tax is projected to increase over the prior year by approximately 6.5%, and Transaction Use Tax (Measure S) is projected to increase by about 5%. Property -related taxes are projected to increase by approximately 3%. On the November 2013 ballot there will be a measure (Measure E) to extend the existing Transaction Use Tax and add an additional .25% to this tax for another 20 years. All other revenues, including business tax, franchise tax, charges for services and permit fees are expected to experience modest increases. It is anticipated that economy will continue to grow during the upcoming year, but job gains will be limited. The City has achieved significant progress by funding current year operating expenses without the use of one-time revenues or reserves. However, the organization has deferred maintenance and capital replacement for several years, and reduced its organizational capacity by approximately 20% over the past six years. Demographic Data A sampling of demographic information is provided to give the user an understanding of the character and diversity that make San Rafael an exceptional place to live and work. 0 Economic development organizations in San Rafael include the Downtown Business Improvement District, Chamber of Commerce and the Marin Economic Forum. 0 The City of San Rafael is Marin county's largest employment base with 29,600 jobs in 2012.The City's largest employers include Kaiser Permanente, Autodesk, Comcast, City of San Rafael, Safeway, Macy's, MHN, Bradley Real Estate, Dominican University of California, and Guide Dogs for the Blind El Major shopping areas, as measured in available retail square footage, include the Downtown corridor (938,000 aggregate), Northgate Mall (725,000), Montecito Center (130,000) and Northgate One (113,900). 0 The top three sales tax categories in 2012 for San Rafael are as follows: 1. Autos and Transportation, 2. General Consumer Goods, 3. Building and Construction. 0 Several hotels and motels support tourism activity, led by 235 room facilities for both the Embassy Suites and Four Points Sheraton. Citywide, the total number of hotel rooms is 803. 1E Home buying and apartment rentals continue to be an affordability challenge both in San Rafael and Marin County. Rents for one bedroom apartments range from $1,00041,900, while two bedroom apartments go for $1,500 to $2,950. vii CAFR TRANSMITTAL LETTER Recent growth and economic vibrancy: • Terrapin Crossroads, a food and entertainment venue, opened in 2012 • New Audi/VW dealership (49,995 sq. ft.), opened in October 2013 • New Nissan dealership (15,000 sq. ft), to open in 2014 • New Target store (137,000 sq. ft.) opened in October 2013 • TJ Maxx replaced Borders Books (20,000 sq. ft.), opened in 2012 • Completion a new 82 unit apartment building at 33 North • Completion of a 24 unit townhouse complex at 1515 Lincoln Avenue • Completion of a Station Area Plan for the Downtown and Civic Center SMART (Sonoma Marin Area Rapid Transit) Station • The San Rafael Pacifics, a minor league baseball team, began operations downtown in Albert Park FINANCIAL INFORMATION The City's management is responsible for establishing and maintaining internal controls to ensure that the City's assets are adequately protected from loss, theft or misuse. In addition, management controls should ensure that proper accounting data is collected so as to prepare reports in conformance with generally accepted accounting principles. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived. All internal control evaluations occur within the above framework. It is management's belief that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance that financial transactions are properly recorded. The City develops a budget based upon City Council priorities and department objectives. The Finance Department maintains a traditional line item budget by major function. Budget control is accomplished at the functional or division level within each fund. This budget creates a comprehensive management and fiscal system aimed at achieving the objectives of each operating level consistent with those that have been set for the community by the City Council. Each department director is responsible for accomplishing goals within his or her functional area and monitoring the use of his or her budget allocations consistent with policies set by the City Council and monitored by the City Manager. viii CAFR TRANSMITTAL LETTER ACKNOWLEDGMENTS The preparation of this City-wide document would not have been possible without the assistance from each of the City's departments. We would like to specifically call out the diligent, dedicated efforts of the Finance Department's staff. Appreciation goes to Van Bach, Accounting Manager, Helen Yu, Senior Accountant, and Carl Tregner, Accountant. These employees were instrumental in coordinating the annual audit in a timely and professional manner. We believe this document meets the Government Finance Officers Association's (GFOA) Certificate of Achievement for Excellence in Financial Reporting requirements, and will be submitting it to the GFOA to determine its eligibility. If accepted, this will mark the second consecutive year that the City received the award. Lastly, support by the Mayor and City Council Members, with an emphasis on community based guidance and customer service, has allowed the Finance Department to bring professional level financial leadership and management home to San Rafael. Respectfully submitted, Nancy Mackle City Manager lx Mark Moses Finance Director CITY OF MISSION STATEMENT The Mission of the City of San Rafael is to enhance the quality of life and to provide for a safe, healthy, prosperous and livable environment in partnership with the community. VISION STATEMENT Our vision for San Rafael is to be a vibrant economic and cultural center reflective of our diversity, with unique and distinct neighborhoods in a beautiful natural environment, sustained by active and informed residents and a responsible innovative local government. January 1996 Gary O. Phillips, Mayor Barbara Heller, Vice Mayor Damon Connolly, Council Member Kate Colin, Council Member Andrew Cuyugan McCullough, Council Member X � cr. City Council and Staff Citv Council J Gary O. Phillips, Mayor Barbara Heller, Vice Mayor Damon Connolly, Council Member Kate Colin, Council Member Andrew Cuyugan McCullough, Council Member Elected Officials Rob Epstein, City Attorney Esther Beirne, City Clerk Executive Team Nancy Mackle, City Manager Jim Schutz, Assistant City Manager Anil Comelo, Human Resources Director Paul Jensen, Community Development Director Sarah Houghton, Library Director Chris Gray, Fire Chief Stephanie Lovette, Economic Development Director Carlene McCart, Community Services Director Mark Moses, Interim Finance Director Nader Mansourian, Public Works Director Diana Bishop, Chief of Police Doris Toy, District Manager/ Engineer- SRSD CAFR Team Mark Moses, Interim Finance Director Van Bach, Accounting Manager Helen Yu, Senior Accountant Carl Tregner, Accountant X1 Santa Rosa 0 i 0 Vacaville r Napa 'ta 11 0 � t 101 ,.. s tda sU} SAN RAFAEL 13 Richmond Concord Tib resn Sausaiitu Berkeley ..� 1 Qmlart San G M �Francisco San Leandro N South Sart; \ 0 Francisco' Haymard 0 San a Fremont (� e 61) Mated Fade Alto'— 4- s � +? Greater San Francisca a f �4 .. San Jose Bay Area cantn 0. 5 0 5 til t5 files � "����Vjaro. LOCATION MA?. X11 c m Q au a a E a� CL E E o - E a, Q. U O p E > E v Q. O N cu U p 'Y L N co O 4 N — u v :fl — A E = U m O L- U ^' W bD L v N O N > U C U c 76 CU V 4A /� V) O p 0 , qwl_ N u W co 00 U O m >- MO O I 4-J V c m Q au a a E a� CL E E o - E a, Q. U O p E > E v Q. O N cu U p L 4 N u v :fl E E = ° c L- 0 bD L v N O N > a C f0 N m N � 'N I I N a V0 O cu tv O c U E .Y i = N M N 40- C F.. Xlll c m Q au a a E a� CL E E o - E a, Q. U O p E > E v Q. O N cu U p This Page Left Intentionally Blank Glass Pumpkin Patch at Falkirk Culture Center FINANCIAL SECTION This Page Left Intentionally Blank MAZE ® &ASSOCIATES INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of San Rafael, California Report on Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, the aggregate remaining fund information and the discretely presented component unit of the City of San Rafael as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the Table of Contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the San Rafael Sanitation District which is reported as a discretely presented component unit. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the District, is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. T 925.930.0902 Accountancy Corporation F 925.930.0135 3478 Buskirk Avenue, Suite 215 e maze@mazeassociates.com Pleasant Hill, CA 94523 w mazeassociates.com Opinions In our opinions, based on our audit and the report of other auditors the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, the aggregate remaining fund information and the discretely presented component unit of the City as of June 30, 2013, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparisons listed as part of the basic financial statements for the year then ended in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matters Management adopted the provisions of the following Governmental Accounting Standards Board Statements, which became effective during the year ended June 30, 2013 and had material effects on the financial statements: Statement 63 - Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. See note 8 to the financial statements for relevant disclosures. The emphasis of these matters does not constitute a modification to our opinions. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management's Discussion and Analysis, and budgetary comparison information for the General Fund, Traffic and Housing Mitigation Fund, and Gas Tax be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements as a whole. The Introductory Section, Supplementary Information, and Statistical Section as listed in the Table of Contents are presented for purposes of additional analysis and are not required parts of the basic financial statements. 2 The Supplementary Information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplementary Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 18, 2013, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. 40 Pleasant Hill, Califo is October 18, 2013 3 This Page Left Intentionally Blank ii luioi�i�iii a 1d11111i1o11u1i Mud 11/11/11111 iii���11101 1.1 1 11 iii I 1 111111 ol1111u1111110u111m1 111111111111111111 11 111111, 111 1 111 1 1111 11 11 1 111 1 a 111 111111 1111/11111111 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 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, 2013. Please read it in conjunction with the basic financial statements and the accompanying notes to those basic financial statements. FINANCIAL HIGHLIGHTS Government -wide: • Net Position —The assets of the City exceeded its liabilities as of June 30, 2013 by $253.3 million. • Activities — During the fiscal year the City's total revenues of $100.9 million were greater than expenses for governmental and business -type activities of $88.4 million by $12.5 million. • Changes in Net Position — The City's total net position increased by $12.5 million in fiscal year 2013. Net position of governmental activities increased by $12.5 million, while net position of the business type activities increased by $26 thousand. Fund Level: • Governmental Funds — Fund Balances- As of the close of fiscal year 2013, the City's governmental funds reported combined ending fund balances of $39.6 million, an increase of $8.8 million from the prior year. Of this total amount, $0.6 million is nonspendable, $20.8 million is restricted, $9.2 million is committed, and $9.0 million is assigned. • Governmental fund revenues were $94.1 million; an increase of $8.9 million from fiscal year 2012. This increase was attributable to stronger General Fund, Traffic and Housing Mitigation, and Gas Tax revenue performance. • Governmental fund expenditures increased by $5.1 million to $87.0 million in fiscal year 2013, from $81.9 million in the prior year, due to expenditure increases in the General fund and Gas Tax fund. • Enterprise fund financial results remained relatively flat in fiscal year 2013. OVERVIEW OF FINANCIAL STATEMENTS The Comprehensive Annual Financial Report is composed of the following: 1. Introductory section, which includes the Transmittal Letter and general information 2. Management's Discussion and Analysis (this part) 3. Basic Financial Statements, which include the Government -wide and the Fund financial statements along with the Notes to these financial statements 4. Combining statements for Non - Major Governmental Funds, Internal Services Funds, and Fiduciary Funds 5. Statistical Information This discussion and analysis is intended to serve as an introduction to the City's basic financial statements, which have three components: 1) Government -wide Financial Statements, 2) Fund Financial Statements, and 3) Notes to the Basic Financial Statements. The basic financial statements include the City (primary government) and all legally separate entities (component units) for which the government is financially accountable. This report also contains other supplementary information in addition to the basic financial statements for further information and analysis. Wi CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 Government -wide Financial Statements The government -wide financial statements present the financial picture of the City and provide readers with a broad view of the City's finances. These statements present governmental activities and business -type activities separately and include all assets of the City (including infrastructure) as well as all liabilities (including long-term debt). Additionally, certain interfund receivables, payables and other interfund activity have been eliminated as prescribed by Governmental Accounting Standards Board (GASB) Statement No. 34. The Statement of Net Position and the Statement of Activities and Changes in Net Position report information about the City as a whole. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current year's revenues and expenses are taken into account, regardless of when cash is received or paid. The Statement of Net Position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities and Changes in Net Position presents information showing how the City's net position changed during the year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of timing of related cash flows. In the Statement of Net Position and the Statement of Activities and Changes in Net Position, City activities are separated as follows: Governmental Activities — Most of the City's basic services are reported in this category, including Public Safety, Public Works and Parks, Community Development, Cultural and Recreation and Government Administration (finance, human resources, legal, City Clerk and City Manager operations). Property, 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 fees to customers to cover the full costs of certain services it provides. The City's Parking Services program is the City's sole business -type activity. Discretely Presented Component Units - The government wide financial statements include not only the City itself (the primary government), but also the San Rafael Sanitation District, a legally separate entity for which the City is financially accountable. Financial information for the San Rafael Sanitation District is reported separately from the financial information presented for the primary government. The government -wide financial statements can be found on pages 23 through 25 of this report. Fund Financial Statements and Major Component Unit Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City are divided into three categories: governmental funds, proprietary funds, and fiduciary funds. The fund financial statements provide detailed information about each of the City's most significant funds, called major funds. The concept of major funds, and the determination of which are major funds, was established by Governmental Accounting Standards Board Statement No. 34. Each major fund is presented individually, with all non -major funds summarized and presented in a single column. Further detail on the non -major funds is presented on pages 90 through 110 of this report. Cel CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 Governmental Funds — Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial capacity. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for government funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are presented on the page immediately following each governmental fund financial statement. The City has thirty-four 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, Gas Tax, Traffic and Housing Mitigation, and Equipment Replacement. Data from the other thirty governmental funds are combined into a single, aggregated presentation. The basic governmental fund financial statements can be found on pages 28 through 31 of this report. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements on pages 90 through 110 of this report. Proprietary Funds — The City maintains two different types of proprietary funds - enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City uses an enterprise fund to account for its Parking Services program, and reports it as a major fund. Internal service funds are used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its building maintenance, workers compensation, general liability, and self- insured dental program, and other employee and retiree benefits programs. Because these services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities in the government wide financial statements. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. Like the government -wide financial statements, proprietary fund financial statements use the accrual basis of accounting. There is no reconciliation needed between the government -wide financial statements for business -type activities and the proprietary fund financial statements. The basic proprietary fund financial statements can be found on pages 34 through 36 of this report. Fiduciary Funds — Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The City acts as an agent on behalf of others, holding amounts collected, and disbursing them as directed or required. The City's fiduciary activities are reported in the separate Statements of Fiduciary Net Position and the Agency Funds Statement of Changes in Assets and Liabilities. The City's fiduciary funds include a private purpose trust fund to account for activities of the City of San Rafael Successor Agency, and an agency fund that accounts for resources held by the City in a custodial capacity for the Pt. San Pedro Road Assessment District. Information for the fiduciary funds can be found on pages 38 through 39 of this report. VA WWWWYWWYYWWY.WYWWiW.�IYWi�WYuWIWi�hIYY�:rrYi'WirYUJIWWWWW.WYWJWIYNWaWYWiWYYIYIYYYiWYWWOiIWY1WW1Yn IWIWIYWY.YYWYWL6WYWWYWUIiIIL111YW1YeWYYYNYdidWIY11M1WY IYWIY 400nWWYAIYYWIY'Y IInIWIIBYWIIWIIIb WIIW Yiluoll"WYIYYiYIIYIIIIIYYnYYhWYWIIYYYY IY�Il YY1dYlYUIWtlIYWYWYWIWWUWYtlWnIWYIW'Y YYIY' IW m� Y'YnYYIWYIiYYIYiIIh�IWWLIIYJWiuWdWWIANIWwI.YWy51Wi "0i- ""' WIuWYLWiWWWIWWWImIdYeYIYIYYWIYYIWYYYYWIiYitlYuuWWWYdiihl/miY.WWWWh1YWIWI�W CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 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 41 through 77 of this report. Required Supplementary Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. One section includes budgetary comparison statements for the major funds (general, gas tax, and traffic and housing mitigation). The other section is a schedule of funding progress for the Marin County Employees' Retirement System. All budgeted positions that are filled by either full-time or permanent part-time employees (working seventy-five percent of full-time equivalent) are eligible to participate in this system. Required supplementary information can be found on pages 82 through 84 of this report. GOVERNMENT -WIDE FINANCIAL ANALYSIS Statement of Net Position Net position is one indicator of the City's financial position. During this fiscal year, the net position of the City was $240.1 million from Governmental Activities, and $13.2 million from Business -type Activities, for a total of $253.3 million. This represents an increase of $12.5 million from the prior year. The following is the condensed Statement of Net Position for the fiscal years ended June 30, 2013 and 2012. Summary of Net Position June 30, (in thousands) Net Position: Net investment in capital assets Governmental Activities Increase Business -Type Activities Increase 35,780 2013 2012 (Decrease) 2013 2012 (Decrease) Current and other assets $64,595 $64,476 $119 $2,774 $2,722 $52 Capital assets 193,223 195,680 (2,457) 16,924 17,096 (172) Total assets 257,818 260,156 (2,338) 19,698 19,818 (120) Current and other liabilities 5,294 10,915 (5,621) 422 337 85 Noncurrent liabilities 12,370 21,534 (9,164) 6,104 6,335 (231) Total liabilities 17,664 32,449 (14,785) 6,526 6,672 (146) Net Position: Net investment in capital assets 193,223 192,361 862 10,670 10,650 20 Restricted 35,780 24,693 11,087 0 Unrestricted 11,151 10,652 499 2,502 2,496 6 Total net position $240,154 $227,706 $12,448 $13,172 $13,146 $26 Current governmental liabilities decreased by approximately $5.6 million, primarily due to the retirement of a $6.0 million tax revenue anticipation note during fiscal year 2012-2013. The $9.2 million decrease in non-current, governmental liabilities and $231K in business -type liabilities was largely due to the establishment of the OPEB trust, which resulted in the recognition of $12.0 million in trust pre -funding when assets previously set aside were transferred from the City to the trust. 8 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 The increase in total net position from fiscal year 2012 to fiscal year 2013 is chiefly attributable to positive general fund operating results and the accumulation of funds for specific purposes (e.g., traffic and housing mitigation, capital projects, equipment replacement, building maintenance, gas tax, etc.). The net position in business -type activities, which reflects the activity of the Parking Services program, was substantially unchanged, registering a $26 thousand increase from the previous year. At June 30, 2013, the largest portion of net position, 81 percent, consisted of the City's net investment in capital assets. This component represents the total amount of funds required to acquire capital assets less any related debt used for such acquisition that is still outstanding. The City uses these assets to provide services to residents. The capital assets of the City are not sources of income for repayment of debt as most assets are not revenue generating and generally are not liquidated to repay debt. Therefore, debt service payments are funded from other sources available to the City. A portion of the City's net position, 14 percent, is subject to external restrictions, and their use is determined by those restrictions whether legal or by covenant. The remaining portion, 5 percent, is not subject to external restrictions, but may be assigned to reserves or other specified funding needs. Net Position as of June 30, 2013 Total - $253,326 (in thousands) I n res tri cted 5% CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 Statement of Activities - Governmental The following is the condensed Statement of Activities and Changes in Net Position for the fiscal years ended June 30, 2013 and 2012: Summary of Changes in Net Position June 30, (in thousands) General revenues: Property taxes Governmental Activities Increase (2,790) 2013 2012 (Decrease) Revenues Paramedic tax 3,805 3,807 Program revenues: Transient occupancy tax 2,185 107 Charges for services $27,031 $23,452 $3,579 Operating grants and contributions 405 3,158 927 Capital grants and contributions 5,877 2,706 3,171 Total program revenues 36,993 29,316 7,677 General revenues: Property taxes 17,318 20,108 (2,790) Sales taxes 24,262 22,356 1,906 Paramedic tax 3,805 3,807 (2) Transient occupancy tax 2,185 107 318 Franchise tax 3,331 3,076 255 Business license tax 2,508 2,332 176 Other taxes 2,930 3,575 (645) Investment earnings 992 205 787 Miscellaneous 2,581 543 2,038 Total general revenues 59,912 57,869 2,043 Transfers in 424 58 366 Total revenues and transfers 97,329 87,243 1006 Expenses General government 10,203 10,171 32 Public safety 41,966 39,877 209 Public works and parks 17,695 17,423 272 Community/economic development 3,403 4,588 (1,185) Culture and recreation 11,330 11,021 309 Interest on long-term debt 284 1,225 (941) Total expenses 84,881 84,305 576 Transfers out Total expenses and transfers 84,881 84,305 576 Extraordinary Items Transfers to Successor Agency 28,926 (28,926) Change in net position $12,448 $31,864 $9,510 10 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 The City's governmental activities net position increased by $12.5 million, which represents a 5.5 percent increase from the previous year. The most significant factor in this change was an increase in tax revenues. Revenue highlights: • Sales tax (including Triple Flip Backfill and Measure S transactions and use tax) increased by $1.9 million, an 8.5 percent increase compared to fiscal year 2012. Automobile sales contributed heavily to this trend. Transient Occupancy Tax revenues increased by $319 thousand, or 17.1 percent, fueled by lower vacancy rates coupled with higher room rates when compared to the previous year. • Franchise tax increased by $255 thousand, or 8.3 percent. Revenues in this area were enhanced by a one-time adjustment of $97 thousand relating to a distribution of funds collected for prior periods. • Miscellaneous general revenues increased by $2.0 million due to one-time payments that included an RDA loan repayment and other reimbursements totaling $605 thousand, and a legal fee reimbursement of $853 thousand. • Charges for services increased by $3.6 million, or 15.3 percent. These charges included internal charges of $1.6 million to fund building maintenance, $670 thousand for vehicle and equipment replacement, and $700 thousand for technology replacement, as well as $669 thousand in external, community development -related charges. 11 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 The following charts display the City's governmental activities for fiscal year 2013, highlighting the proportionate elements of the Revenue and Expenses by program. $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $56,339 Revenues by Source Governmental Activities Total - $96,905 (in thousands) ton) el? 1;R1 31 $4,085 ),877 N Charges for services ® Operating grants and contributions 7:a Capital grants and contributions ® Taxes ri Investment earnings 1 4Miscellaneous Expenses and Program Revenues Governmental Activities General Government Public Safety Public works and parks Community/economic Culture and recreation Interest on tong -term development debt ■ Program Revenue N Expenses 12 CITY OF a. RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 Total expenses for governmental activities were $84.6 million (excluding interest on long-term debt of $284 thousand). Program revenues offset total expenditures as follows: ® Those who directly benefited from programs contributed $27.0 million in charges for services. ® A total of $10.0 million in operating and capital projects were funded by outside agencies through operating, capital grants, and contributions. As a result, total expenses that were funded by tax revenues, investment income and other general revenues were $47.9 million. Functional expenses for the years ended June 30, 2013 were as follows: Expenses by Function For the fiscal year ended June 30, 2013 (in thousands) Function Amount Percent of Total General government $10,203 12.0% Public safety 41,966 49.5% Public works and parks 17,695 20.9% Community development 3,403 4.0% Culture and recreation 11,330 13.3% Interest on debt 284 0.3% Total expenses $84,881 100% 13 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 Statement of Activities — Business -type Summary of Changes in Net Position June 30, (in thousands) Business -Type Activities Increase 2013 2012 (Decrease) Revenues Program revenues: Charges for services $3,991 $3,901 $90 Total program revenues 3,991 3,901 90 General revenues: Investment earnings 4 8 (4) Total general revenues 4 8 (4) Total revenues 3,995 3,909 86 Expenses General government 3,545 3,446 99 Total expenses 3,545 3,446 99 Transfers out 424 58 366 Total expenses and transfers 3,969 3,504 465 Change in net position $26 $405 ($379) Net position for business -type activities was $13.2 million, a $26 thousand increase from the prior fiscal year. Parking services is the City's only business -type activity with income derived from program revenues of $4.0 million. Program revenues include parking meter coin income of $1.2 million, and parking garage hourly parking income of $1.1 million. Revenues also include parking and non -vehicle code fines totaling $1.7 million. Total expenses for parking services were $3.5 million and transfers out to general fund and non -major governmental fund for support totaled $424 thousand during fiscal year 2012-2013. FINANCIAL ANALYSIS OF INDIVIDUAL FUNDS Governmental Funds Fund Balance Classifications In February 2009, the Governmental Accounting Standards Board issued Statement No. 54 (GASB 54), "Fund Balance Reporting and Governmental Fund Type Defmitions." The objective of GASB 54 was to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be applied. Under GASB 54, fund balances are classified in five categories: nonspendable, restricted, committed, assigned, and unassigned based on hierarchy of constraint. Further details on fund balance classifications can be found in Note 8B. 14 +CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financial capacity. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $39.6 million, an increase of $8.8 million from the prior year•, $0.6 million is nonspendable, $20.8 million is restricted, $9.2 million is committed, and $9.0 million is assigned. General Fund — The General Fund is the primary operating fund of the city. General Fund — The fund balance of the General Fund as of June 30, 2013 was $3.8 million, a $1.0 million increase from the prior year; $527 thousand is nonspendable, $801 thousand is committed, and $2.5 million is assigned. The assigned portion of the balance includes $2.3 million for emergency and cash flow needs. General Fund Budaetary HiAli6ts: The original, adopted General Fund budget projected total revenue of $56.1 million and transfers in of $1.5 million for total resources of $57.6 million. This budget appropriated expenditures of $56.2 million and transfers out of $1.4 million, for a total of $57.6 million. Actual revenues, at $60.0 million, exceeded the original budgeted revenues by $3.9 million. This positive performance was driven by tax revenues (property tax, sales tax, transient occupancy tax) and payments from the Successor Agency for obligations due to the general fund from the former Redevelopment Agency. In addition, actual transfers in of $3.1 million exceeded budgeted transfers in by $1.6 million, primarily as a result of $1.5 million released from the general liability reserve following a positive outcome from litigation. Of the $5.5 million in additional resources, $4.5 million was allocated via additional appropriations during the year to support long-term capital infrastructure, building repair and maintenance, technology, and unfunded retirement -related liabilities. The remaining $1.0 million was added to the emergency and cash flow reserve. Summary of General Fund Budget and Actual For the fiscal year ended June 30, 2013 (in thousands) Adopted Budget Revenues $56,120 Transfers in 1,485 Total resources 57,605 Expenditures 56,146 Transfers out 1,439 Total uses 57,585 Net Operating Results $20 Revised Appropriations Final Results $60,028 3,105 63,133 $59,256 57,762 4,338 4,338 63,594 62,100 $1,033 Gas Tax Fund — The City established this fund to manage its allocation of State gasoline taxes and local funding for street maintenance projects. At June 30, 2013, the Gas Tax fund had a total fund balance of $6.1 million of which $3.9 million is committed for construction projects approved by the City Council. 15 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 Equipment Replacement Fund — The City established this capital project fund to manage the replacement of vehicles and equipment. At June 30, 2013, the Equipment Replacement fund had a total fund balance of $5.1 million. Non -major Governmental Funds — The City's non -major funds are presented in the basic financial statements in the aggregate. At June 30, 2013, non -major funds had a total fund balance of $12.2 million of which 52.5 percent ($6.4 million) is legally restricted for specific purposes by external funding source providers and 35.3 percent ($4.3 million) is committed for special purposes by the City Council. More information about these aggregated non -major funds can be found in the combining statements which immediately follow the required supplementary information. 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 proprietary fund net position increased by $26 thousand reflecting net operating results in the Parking Services fund. 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, 2013 amounts to $210.1 million, net of accumulated depreciation of $142.5 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 $4.8 million, offset by accumulated depreciation of $7.4 million, thereby equaling a net decrease of $2.6 million. Major capital asset additions during the current fiscal year included work in process such as Mahon Creek Path -Transit Center Connector, Pt. San Pedro Median Landscaping, Canal Lifeline Phase H, and Grand Ave. Pedestrian Bicycle (Bay Trail). Capital Projects ➢ City Hall HVAC Upgrades project was completed in 2013 ➢ Dominican/Black Canyon Landscape project was completed in 2013 ➢ Traffic Signal Cabinet & Controller Upgrades project was completed in 2013 ➢ Safe Routes to School- Belle Ave. project was completed in 2013 11JJd11011u111YI161lalueJtlu 11h; II1Ili II111 11, 111111 11111 IYudYll1l1 Jednll11, 1111111101I1,11W1"9111,1111111111 mllllihdl I II,InpuIl1111Ili Ili ill I All Ili l Ill le11 IIIIII 1,11411111i11III IIY11n11,1111YJ111111Yl Y IIIW1111111141111111 JY lutlII VIII 11 11 IIIII,I, 111i,IiI,iii II,,IulululWlJUIIhuII11wIIll lYIIYWA11o1ililul I IIIIIIYII1:1 WY11i I IIIll hill lI ,I I, llllluYOJlulIll lllllu, Illi'll"IIYIYIII, 11,1, 111 Illi 1111,ltlltlY11,,1illiilWiYIIIIIIYim liiliI IIII!,IIICY111.1Ili, 1I,IWILIli iW1,u1u IIWi IIIlul YYlii 1u1i111 �l i II I lit 1 I VIII Atli IIIJiI�11Y11111uIIm1111Yi111uIdI�liJidtlulluYi11161u�luIIlY11tu111dilllllulill gal 1111i�ii 111tl11��11111 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 The City's Capital Assets for the fiscal year 2013 and 2012 were as follows: Summary of Capital Assets June 30, (in thousands) Business -type Activities Land 2013 2012 Governmental Activities 10,328 10,235 Land $82,464 $82,464 Construction in progress 2,548 1,173 Land improvements 8,789 8,581 Buildings and structures 40,321 38,856 Machinery and equipment 16,921 16,604 Infrastructure 181,556 181,198 Less accumulated depreciation (139,376) (133,196) Subtotal Governmental Activities 193,223 195,680 Business -type Activities Land 8,621 8,621 Buildings and structures 10,328 10,235 Machinery and equipment 1,139 1,097 Less accumulated depreciation (3,164) (2,857) Subtotal Business -type Activities 16,924 17,096 Total Capital Assets $210,147 $212,776 Additional information on the City's capital assets can be found in Note 5 on pages 55 through 57 of this report. 17 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 Debt Administration The City's debt is discussed in more detail in Note 6 to the financial statements. The debt of the former Redevelopment Agency is now reported under the Successor Agency, which is presented as Private Purpose Trust Fund on the Statement of Fiduciary Net Position. See Note 15 to the financial statements for additional information. The City's long-term obligations for the fiscal years 2013 and 2012 were as follows: Summary of Long -Term Debt June 30, (in thousands) 2013 2012 Governmental Activity Debt: 2010 Taxable Pension Obligation Bonds $4,490 $4,490 Ground Lease Note Payable 169 169 Subtotal Governmental Activity Debt 4,659 4,659 Business -type Debt: 2003 Authority Lease Revenue Bonds 6,445 2012 Authority Lease Revenue refunding Bonds 6,254 Subtotal Business -type Debt 6,254 6,445 Total Long -Term Obligations $10,913 $11,104 18 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 1 9 W10 a l *: r• �r:� . i��e The nation is finally emerging from the longest, deepest recession since the Great Depression of the 1930s. Beacon Economics is expecting the U.S. economy to grow by 3 percent through 2013, with continued lowering of the unemployment rate. This optimism is partly driven by a resurgent housing market. Overall, the national economy is on the mend, but there are many longer-term issues the nation must address, including working through changes to the national healthcare system, long-term underemployment and unemployment, and resolving fundamental issues related to underfunded federal entitlements and state and local pensions. California is likewise headed down the road toward economic recovery. Slightly more than half of the jobs lost during the downturn have been recovered, and almost every major indicator is showing improvement. Real estate has been one of the major shifts in California's economy over the past 12 months — transitioning from being a drag on the recovery to becoming a driver of growth in the state, with the median price of an existing single-family home up 26 percent. Unlike many states that were hit hard by the mortgage market crash, California continues to maintain one of the lowest overall housing vacancy rates in the nation — a positive sign for future homebuilding. In addition, tourism continues to be a force to be reckoned with in California. With over 70 percent occupancy entering fiscal year 2013-2014, California's hotel occupancy rate well exceeds the 62 percent occupancy rate nationwide. The instability of the State budget continues to be a threat to local governments. However, the State's fiscal year 2013-2014 budget reflects a significant improvement in the State's finances due, according to the State Legislative Analyst's Office (LAO), "to the economic recovery, prior budgetary restraint, and voters' approval of temporary tax increases." The LAO believes the State has reached a point where its underlying expenditures and revenues are roughly in balance. There are still significant risks to revenue estimates given uncertainty surrounding federal fiscal policy and the volatility inherent in the State's revenue system. The State will still have no sizable reserve at the end of fiscal year 2016-2017, and will not have begun the process of addressing high unfunded liabilities associated with the teachers' retirement system and State retiree health benefits. With the exception of some continuing employee concessions, the City's general fund budget for fiscal year 2013-2014 marks the first year in over a decade that short-term strategies (e.g., one-time reductions in contributions to capital replacement funds, delayed hiring, uses of reserves and borrowed funds, etc.) have not been employed to balance the budget. The projected trends for sales tax and transactions and use tax (Measure S), which combined represent the City's biggest tax revenue generators, are for continued growth. For fiscal year 2013-2014, sales tax is projected to increase by 6.5 percent and transactions and use tax (Measure S) is projected to increase by about 5 percent. The City's second largest tax generator is property tax. The City is expecting the fiscal year 2013-2014 tax roll to increase by approximately three percent over the previous year. This is the first increase of more than one percent in the secured tax rolls for more than five years. The City's largest expenditure relates to personnel costs. Salaries and benefits are tied to the labor agreements with each bargaining group. Most labor units are on a one-year contract that expires on June 30, 2014. The exception is SEIU, which has a two-year agreement that expires on June 30, 2015. 19 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2013 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. 20 CITY OF SAN RAFAEL l STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES The Statement of Net Position and the Statement of Activities summarize the entire City's financial activities and financial position. They are also referred to as Government -wide financial statements. The Statement of Net Position reports the difference between the City's total assets and the City's total liabilities, including all the City's capital assets and all its long-term debt. The Statement of Net Position focuses the reader on the composition of the City's net position, by subtracting total liabilities from total assets. The Statement of Net Position summarizes the financial position of all of the City's Governmental Activities in a single column, and the financial position of all the City's Business -type Activities in a single column; these columns are followed by a total column which presents the financial position of the entire City. The City's Governmental Activities include the activities of its General Fund, along with all its Special Revenue, Capital Projects and Debt Service Funds. Since the City's Internal Service Funds service these Funds, their activities are consolidated with Governmental Activities, after eliminating inter -fund transactions and balances. The City's Business -type Activities include all its Enterprise Fund activities. The Statement of Activities reports increases and decreases in the City's net position. It is also prepared on the full accrual basis, which means it includes all the City's revenues and all its expenses, regardless of when cash changes hands. This differs from the "modified accrual" basis used in the Fund financial statements, which reflect only current assets, current liabilities, available revenues and measurable expenditures. The Statement of Activities presents the City's expenses first, listed by program, and follows these with the expenses of its business -type activities. Program revenues - that is, revenues which are generated directly by these programs - are then deducted from program expenses to arrive at the net expense of each governmental and Business -type program. The City's general revenues are then listed in the Governmental Activities or Business -type Activities column, as appropriate, and the Change in Net Position is computed and reconciled with the Statement of Net Position. Both these Statements include the financial activities of the City and the San Rafael Joint Powers Financing Authority which are legally separate but are considered to be component units of the City because they are controlled by the City, which is financially accountable for their activities. The balances and the activities of the San Rafael Sanitation District, a discretely presented component unit, are included in these statements in a separate column. 21 This Page Left Intentionally Blank CITY OF SAN RAFAEL STATEMENT OF NET POSITION JUNE 309 2013 NET POSITION (Note 8): Net investment in capital assets 193,222,791 10,670,190 203,892,981 33,340,892 Restricted for: Component Special revenue projects 28,085,574 28,085,574 Unit 7,529,594 7,529,594 Primary Government 165,244 San Rafael Total Restricted Net Position Governmental Business -type Unrestricted Sanitation 13,652,816 18,575,184 Activities Activities Total District ASSETS Cash and investments available for operations (Note 2) $46,275,269 $2,741,909 $49,017,178 $18,916,657 Restricted cash and investments (Note 2) 76,285 76,285 Receivables: Accounts 4,016,536 24,862 4,041,398 18,053 Taxes 4,534,162 4,534,162 Grants 641,871 641,871 Interest 54,261 54,261 Loans (Note 4) 1,189,576 1,189,576 Long-term receivable from the Successor Agency (Note 15) 2,160,210 2,160,210 Prepaid expenses and others 134,914 6,879 141,793 143,722 Net Pension asset (Note 9C) 1,000,000 1,000,000 Net OPEB asset (Note 11) 4,512,141 4,512,141 Capital assets (Note 5): Nondepreciable 85,011,974 8,620,853 93,632,827 360,049 Depreciable, net 108,210,817 8,303,353 116,514,170 32,980,843 Total Assets 257,818,016 19,697,856 277,515,872 52,419,324 LIABILITIES Accounts payable 2,252,754 110,416 2,363,170 5031248 Deposits payable 100,768 100,768 Interest payable 42,943 52,822 95,765 Developer bonds payable 321,766 321,766 Interest payable Unearned revenue 103,034 103,034 Claims payable (Note 13): Due in one year 1,939,300 1,939,300 Due in more than one year 3,976,049 3,976,049 Compensated absences (Note 1J): Due in one year 533,485 13,614 547,099 Due in more than one year 3,734,396 95,300 3,829,696 Long-term debt (Note 6): Due in one year 245,000 245,000 Due in more than one year 4,659,000 6,009,016 10,668,016 Total Liabilities 17,663,495 6,526,168 24,189,663 503,248 NET POSITION (Note 8): Net investment in capital assets 193,222,791 10,670,190 203,892,981 33,340,892 Restricted for: Special revenue projects 28,085,574 28,085,574 Capital projects 7,529,594 7,529,594 Debt service 165,244 165,244 Total Restricted Net Position 35,780,412 35,780,412 Unrestricted 11,151,318 2,501,498 13,652,816 18,575,184 Total Net Position $240,154,521 $13,171,688 $253,326,209 $51,916,076 See accompanying notes to financial statements 23 CITY OF SAN RAFAEL STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2013 General revenues: Taxes: Property Sales Paramedic Transient occupancy Franchise Business license Other Investment earnings Miscellaneous Aid from other governmental agencies Transfers (Note 3C) Total general revenues and transfers Change in Net Position Net Position, beginning of year Net Position, end of year See accompanying notes to financial statements o Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary Government Governmental Activities: General government $10,202,530 $2,655,749 $389,325 Public safety 41,966,065 6,478,321 726,058 $394,289 Public works and parks 17,695,164 7,837,472 2,630,588 5,482,704 Community development 3,403,158 3,984,204 36,400 Culture and recreation 11,330,058 6,075,129 302,702 Interest on long-term debt and fiscal charges 283,805 Total Governmental Activities 84,880,780 27,030,875 4,085,073 5,876,993 Business -type Activities Parking services 3,545,387 3,990,706 Total Business -type Activities 3,545,387 3,990,706 Total Primary Government $88,426,167 $31,021,581 $4,085,073 $5,876,993 Component Unit San Rafael Sanitation District $10,169,082 $12,413,123 General revenues: Taxes: Property Sales Paramedic Transient occupancy Franchise Business license Other Investment earnings Miscellaneous Aid from other governmental agencies Transfers (Note 3C) Total general revenues and transfers Change in Net Position Net Position, beginning of year Net Position, end of year See accompanying notes to financial statements o Net (Expenses) Revenues and Changes in Net Position Component Primary Government Unit 445,319 San Rafael Governmental Business -type Sanitation Activities Activities Total District ($7,157,456) ($7,157,456) (34,367,397) (34,367,397) (1,744,400) (1,744,400) 617,446 617,446 (4,952,227) (4,952,227) (283,805) (283,805) (47,887,839) (47,887,839) 25 $445,319 445,319 445,319 445,319 (47,887,839) 445,319 (47,442,520) $2,244,041 17,317,772 17,317,772 1,177,469 24,262,282 24,262,282 3,804,985 3,804,985 2,185,287 2,185,287 3,331,160 3,331,160 2,507,785 2,507,785 2,929,915 2,929,915 991,762 3,739 995,501 25,591 2,580,882 2,580,882 56,589 423,817 (423,817) 60,335,647 (420,078) 59,915,569 1,259,649 12,447,808 25,241 12,473,049 3,503,690 227,706,713 13,146,447 240,853,160 48,412,386 $240,154,521 $13,171,688 $253,326,209 $51,916,076 25 This Page Left Intentionally Blank FUND FINANCIAL STATEMENTS Major funds are defined generally as having significant activities or balances in the current year. Only individual major funds are presented in the Fund Financial Statements; while non -major funds are combined in a single column. Individual non -major funds may be found in the Supplemental Section. The funds described below were determined to be major funds by the City in fiscal 2012-2013. DU\�`111 Established to account for all financial resources necessary to carry out basic governmental activities of the City which are not accounted for in another fund. The General Fund supports essential City services such as police and fire protection, building and street maintenance, libraries, recreation, parks and open space maintenance. TRAFFIC AND HOUSING MITIGATION SPECIAL REVENUE FUND Established to maintain long-term developer contributions for major housing and street improvement projects. GAS TAX SPECIAL REVENUE FUND Established to receive and expend the City's allocation of the State gasoline taxes. EQUIPMENT REPLACEMENT CAPITAL PROJECTS FUND Established to provide for the replacement of vehicles and equipment. 27 ASSETS Cash and investments available for operations (Note 2) Restricted cash and investments (Note 2) Receivables: Accounts Taxes Grants Interest Loans (Note 4) Long-term receivable from the Successor Agency (Note 15) Prepaids Total Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Deposits payable Developer bonds payable Due to other funds (Note 3) Deferred revenue Total Liabilities Fund Balances (Note 8): Nonspendable Restricted Committed Assigned Total Fund Balances Total Liabilities and Fund Balances CITY OF SAN RAFAEL GOVERNMENTALFUNDS BALANCE SHEET JUNE 30, 2013 Capital Special Revenue Funds Projects Fund Traffic and Other Total Housing Equipment Governmental Governmental General Mitigation Gas Tax Replacement Funds Funds $12,382,897 $5,873,321 $2,848,696 66,367 4,292,861 118,676 5,913 714,143 214,695 54,261 4,534,162 451,453 57,144 2,160,210 54,261 75,782 1,189,576 $9,883,263 $12,440,041 $6,273,059 $5,193,343 $11,319,984 $34,769,545 76,285 76,285 5,913 714,143 3,635,119 122,625 4,534,162 427,176 641,871 43,317 54,261 680,979 1,189,576 2,160,210 6,215 45,306 127,303 $5,205,471 $13,386,498 $47,188,332 $959,179 $166,560 $139,553 $881,163 $2,146,455 57,451 43,317 100,768 320,266 1,500 321,766 748,239 748,239 3,993,341 292,564 4,285,905 6,078,476 166,560 139,553 1,218,544 7,603,133 527,235 6,215 45,306 578,756 $12,140,041 2,232,975 6,396,530 20,769,546 800,876 300,000 3,873,524 4,273,971 9,248,371 2,476,676 5,059,703 1,452,147 8,988,526 3,804,787 12,440,041 6,106,499 5,065,918 12,167,954 39,585,199 $9,883,263 $12,440,041 $6,273,059 $5,205,471 $13,386,498 $47,188,332 See accompanying notes to basic financial statements 28 CITY OF SAN RAFAEL GOVERNMENTAL FUNDS BALANCE SHEET - RECONCILIATION OF GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES JUNE 30, 2013 Total fund balances reported on the governmental funds balance sheet $39,585,199 Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds because of the following: Capital assets used in Governmental Activities are not financial resources and, therefore, are not reported in the Governmental Funds. 193,222,791 Internal service funds are used by management to charge the cost of management of building, workers' compensation, employee benefits, insurance, and post-retirement healthcare benefits to individual funds. The assets and liabilities are included in Governmental Activities in the Statement of Net Position. 12,133,484 Interest payable on long-term debt does not require the use of current financial resources and, therefore, are not reported in the Governmental Funds. (42,943) Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the Governmental Funds. (4,659,000) Compensated absences (4,267,881) Deferred revenue 4,182,871 Net position of governmental activities $240,154,521 See accompanying notes to financial statements 29 CITY OF SAN RAFAEL GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2013 REVENUES Taxes and special assessments Licenses and permits Fines and forfeitures Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Community development Culture and recreation Capital outlay Capital improvement / special projects Debt service: Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in (Note 313) Transfers out (Note 313) Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR $46,670,007 1,929,387 734,005 228,565 6,475,596 2,079,265 1,910,686 60,027,511 9,087,723 33,987,636 8,875,111 2,961,275 2,200,468 170,138 194,425 283,805 57,760,581 $17,226 $7,366 3,305,466 3,096,328 1,031,919 53,993 3,113,554 4,398,744 74,609 30,084 428,230 1,641,022 Capital Special Revenue Funds Projects Fund Traffic and Other Total Housing Equipment Governmental Governmental General Mitigation Gas Tax Replacement Funds Funds $46,670,007 1,929,387 734,005 228,565 6,475,596 2,079,265 1,910,686 60,027,511 9,087,723 33,987,636 8,875,111 2,961,275 2,200,468 170,138 194,425 283,805 57,760,581 $17,226 $7,366 3,305,466 3,096,328 1,031,919 53,993 3,113,554 4,398,744 74,609 30,084 428,230 1,641,022 3,077,558 23,458,048 94,075,415 492,597 1,132,192 1,441,757 7,389,426 3,022,644 8,390,589 2,918,489 2,317,081 74,609 2,099,336 1,624,789 25,479,986 10,529,480 41,377,062 12,002,448 2,961,275 10,591,057 4,009,454 5,284,720 283,805 87,039,301 2,266,930 $4,879,299 $51,549,306 1,452,769 (2,021,938) 1,929,387 3,104,622 734,005 $5,327 66,559 325,043 329,316 1,759,511 11,869,889 2,670,927 14,696,935 23,575,374 71,988 2,055,744 4,092,411 3,077,558 23,458,048 94,075,415 492,597 1,132,192 1,441,757 7,389,426 3,022,644 8,390,589 2,918,489 2,317,081 74,609 2,099,336 1,624,789 25,479,986 10,529,480 41,377,062 12,002,448 2,961,275 10,591,057 4,009,454 5,284,720 283,805 87,039,301 2,266,930 3,038,945 2,299,408 1,452,769 (2,021,938) 7,036,114 3,104,622 365 5,320,487 8,425,474 (4,338,227) (674,521) (1,698,909) (6,711,657) (1,233,605) (674,156) 3,621,578 1,713,817 1,033,325 3,038,945 1,625,252 1,452,769 1,599,640 8,749,931 2,771,462 9,401,096 4,481,247 3,613,149 10,568,314 30,835,268 $3,804,787 $12,440,041 $6,106,499 $5,065,918 $12,167,954 $39,585,199 See accompanying notes to financial statements 30 CITY OF SAN RAFAEL Reconciliation of the NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS with the STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2013 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $8,749,931 Amounts reported for Governmental Activities in the Statement of Activities are different because of the following: Capital Assets Transactions Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense. Capital outlay and capital projects expenditures are therefore added back to fund balance 9,294,174 Non -capitalized capital outlay expenditures were reclassified to various governmental activities (4,611,188) Depreciation expense is deducted from the fund balance (7,124,286) Loss on retirement of capital assets is deducted from the fund balance (15,539) 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 183,011 Compensated absences 107,322 Deferred revenue 1,962,295 Allocation of Internal Service Fund Activities Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of the internal service fund is reported with governmental activities. 3,902,088 Change in Net Position of Governmental Activities $12,447,808 See accompanying notes to financial statements 31 This Page Left Intentionally Blank PROPRIETARY FUND FINANCIAL STATEMENTS Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges, whether external or internal. The City reports its only enterprise fund, as a major fund. 171:3:11MM-104 � .y �liJ►`117 Established to maintain parking garages, lots and spaces in the Downtown Parking District, and to pay for parking enforcement and meter collection. 33 CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2013 34 Business -type Activities - Governmental Enterprise Funds Activities Parking Internal Services Service Funds ASSETS Current Assets: Cash and investments available for operations (Note 2) $2,710,360 $11,537,273 Accounts receivable 24,862 381,417 Due from other funds (Note 3) 748,239 Prepaids 6,879 7,611 Net Pension Asset (Note 9) 1,000,000 Net OPEB Asset (Note 11) 4,512,141 Total Current Assets 2,742,101 18,186,681 Noncurrent Assets: Capital assets (Note 5): Nondepreciable 8,620,853 Depreciable, net 8,303,353 Total Noncurrent Assets 16,924,206 Total Assets 19,666,307 18,186,681 LIABILITIES Current Liabilities: Accounts payable 110,416 106,299 Interest payable 52,822 Compensated absences, due in one year (Note 1J) 13,614 Claims payable, due in one year (Note 13) 1,939,300 Long-term debt, due in one year (Note 6) 245,000 Total Current Liabilities 421,852 2,045,599 Noncurrent Liabilities: Compensated absences (Note 1J) 95,300 Claims payable (Note 13) 3,976,049 Long-term debt (Note 6) 6,009,016 Total Noncurrent Liabilities 6,104,316 3,976,049 Total Liabilities 6,526,168 6,021,648 NET POSITION (Note 8): Net investment in capital assets 10,670,190 Restricted 5,512,141 Unrestricted 2,469,949 6,652,892 Total Net Position 13,140,139 $12,165,033 Some amounts reported for business -type activities in the Statement of Net Position are different because certain internal service fund assets and liabilities, are included with business -type activities. 31,549 Net position business -type activities $13,171,688 See accompanying notes to financial statements 34 CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION FOR THE YEAR ENDED JUNE 30, 2013 OPERATING REVENUES Charges for current services Other operating revenues Total Operating Revenues OPERATING EXPENSES Personnel Insurance premiums and claims Maintenance and repairs Depreciation (Note 5) General and administrative Total Operating Expenses Operating Income NONOPERATING REVENUES (EXPENSES) Investment income Interest expense Total Nonoperating Revenues (Expenses) Income Before Transfers Transfers in (Note 3B) Transfers out (Note 3B) Change in Net Position NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR * Reconciliation of the Change in Net Position with the Statement of Activities Change in Net Position Some amounts reported for business -type activities in the Statement of Activities are different because the portion of the net income of certain internal service funds is reported with the business -type activities which those funds serviced. Change in Net Position of Business -type Activities See accompanying notes to financial statements 35 Business -type Activities - Enterprise Funds Parking Services $2,277,771 1,712,935 3,990,706 2,101,937 32,253 323,076 836,048 3,293,314 697,392 3,739 (240,012) (236,273) 461,119 (423,817) 37,302 13,102,837 $13,140,139 $37,302 (12,061) $25,241 Governmental Activities Internal Service Funds $8,635,073 1,135,735 9,770,808 4,315,160 199,484 943,198 5,457,842 4,312,966 867,061 867,061 5,180,027 1,879,113 (3,169,113) 3,890,027 8,275,006 $12,165,033 CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2013 Business -type Activities - Enterprise Funds Parking Services CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers/other funds $2,277,771 Cash payments to suppliers for goods and services (828,630) Cash payments to employees (2,079,056) Other operating revenues 1,708,997 Payment to Pension Trust Payment to OPEB Trust Cash Flows from Operating Activities 1,079,082 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Interfund receipts (payments) (423,817) Cash Flows from Noncapital Financing Activities (423,817) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on revenue bonds (190,984) Interest expenses and fiscal charges (263,875) Acquisition of capital assets (151,724) Cash Flows from Capital and Related Financing Activities (606,583) CASH FLOWS FROM INVESTING ACTIVITIES Investment income 3,739 Proceeds from sale of investments Cash Flows from Investing Activities 3,739 NET INCREASE IN CASH AND CASH EQUIVALENTS 52,421 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 2,657,939 CASH AND CASH EQUIVALENTS, END OF YEAR $2,710,360 Reconciliation of operating income to net cash provided by operating activities: Operating income $697,392 Adjustments to reconcile operating income to cash flows from operating activities: Depreciation 323,076 Net change in assets and liabilities: Accounts receivable (3,938) Prepaids and deposits (6,879) Net Pension Asset Net OPEB Asset Accounts payable 46,550 Compensated absence obligations 22,881 Claims payable Net Cash Provided by Operating Activities $1,079,082 See accompanying notes to basic financial statements 36 Governmental Activities Internal Service Funds $8,326,594 (6,784,394) 1,135,735 (1,000,000) (4,512,141) (2,834,206) (2,038,239) (2,038,239) 867,061 3,584,164 4,451,225 (421,220) 11,958,493 $11,537,273 $4,312,966 (308,479) (7,611) (1,000,000) (4,512,141) 65,072 (1,384,013) ($2,834,206) . .FIDUCIARY FUND FINANCIAL STATEMENTS I Fiduciary funds are used to account for assets held by the City as an agent or custodian for other entities. The fmancial activities of such funds are excluded from the Government -wide financial statements and presented in fund statements that consist of a Statement of Net Position. SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY — PRIVATE PURPOSE TRUST FUND Established to account for the activities of the Successor Agency to the San Rafael Redevelopment Agency. PT. SAN PEDRO ROAD ASSESSMENT DISTRICT AGENCY FUND Established to accumulate funds for payment of principal and interest for Pt. San Pedro Road Median Landscaping Assessment District bonds. 37 CITY OF SAN RAFAEL FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2013 Total Assets $6,280,077 $302,064 LIABILITIES Accounts payable Successor Agency Interest payable to the Other long-term obligations (Note 15D) Redevelopment Long-term debt (Note 15C): Agency Due within one year Private -Purpose Agency Due more than one year Trust Fund Funds ASSETS 31,344,339 302,064 Cash and investments (Note 2) $1,340,802 Cash and investments with fiscal agent (Note 2) 1,375,048 $300,578 Receivable: Taxes 3,563,575 1,486 Interest 517 Prepaids 135 Total Assets $6,280,077 $302,064 LIABILITIES Accounts payable $1,856 Interest payable 255,838 Other long-term obligations (Note 15D) 2,160,210 Long-term debt (Note 15C): Due within one year 2,540,000 Due more than one year 26,386,435 $302,064 Total Liabilities 31,344,339 302,064 NET POSITION (DEFICIT): Held in trust for private purpose ($25,064,262) See accompanying notes to financial statements 38 CITY OF SAN RAFAEL STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED JUNE 30, 2013 Successor Agency to the Redevelopment Agency Private -Purpose Trust Fund ADDITIONS Property taxes $7,128,844 Use of money and property 2,700 Bond premium 79,860 Other revenue 1,134,711 Total Additions 8,346,115 DEDUCTIONS General government 667,721 Interest expense 1,416,768 Total Deductions 2,084,489 Change in Net Position 6,261,626 SPECIAL ITEM (Note 15) Liability assumed by the Successor Agency (2,406,431) NET POSITION HELD IN TRUST FUND FOR OTI ER PURPOSES Beginning of year (28,919,457) End of year ($25,064,262) See accompanying notes to financial statements W This Page Left Intentionally Blank CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of the Financial Reporting Entity As required by generally accepted accounting principles, the financial statements present the City of San Rafael (the City) as the Primary Government, with its component units for which the City is considered financially accountable. The component units discussed below are included in the City's reporting entity because of the significance of their operational and financial relationships with the City. B. Description of Blended Component Units The accompanying basic financial statements include all funds and boards and commissions that are controlled by the City Council. The basic financial statements include the City's blended component units, entities for which the City is considered to be financially accountable. A blended component unit, although a legally separate entity, is in substance, part of the City's operations and so data from this entity is combined with the City. The City's blended component units are described below. San Rafael Joint Powers Financing Authority — The San Rafael Joint Powers Financing Authority (Authority) was formed by the City of San Rafael and the former San Rafael Redevelopment Agency (Agency) pursuant to Articles 1 and 2 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California for the purpose of assisting in the financing and refinancing of certain assessment district and redevelopment -related activities in the City. On March 18, 2013, the Agency was replaced by the California Municipal Finance Authority (CMFA) in order that the life of the Authority would extend beyond that of the Agency. The Authority is administered by a governing board whose members are the City Council of the City of San Rafael. As of June 30, 2013, the Authority had no assets or liabilities to report. For the fiscal year ended June 305 2013, the Authority had no revenues or expenditures to report. Separate financial statements are not prepared for the Authority. C. Description of Discretely Presented Component Unit San Rafael Sanitation District — The San Rafael Sanitation District (District) was formed in 1947 under Section 4700 of the California Health and Safety Code to provide wastewater transmission over the southern two-thirds of the City and adjacent unincorporated areas. The 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 ends on June 30 and its separately issued component unit financial statements can be obtained at the San Rafael Sanitation District, 111 Morphew Street, San Rafael, California 94901. 41 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Basis of Presentation Government -wide Statements - The Statement of Net Position and the Statement of Activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Interfund transfers and amounts owed between funds within the primary government have been eliminated from the statements. Amounts representing interfund services and uses remain in the statements. These statements distinguish between the governmental and business - type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business -type activities are financed in whole or in part by fees charged to external parties. The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business -type activities of the City and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements - The fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Separate statements for each fund category — governmental, proprietary, and fiduciary — are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-maj or funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. E. Major Funds and Other Reported Funds Major funds are defined as funds that have either assets, liabilities, revenues or expenditures/expenses equal to ten percent of their fund -type total and five percent of the grand total. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds. The City reported the following major governmental funds in the accompanying financial statements: General Fund — Established to account for all financial resources necessary to carry out basic governmental activities of the City which are not accounted for in another fund. Traffic and Housing Mitigation Special Revenue Fund — Established to maintain long-term developer contributions for major housing and street improvement projects. 42 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued) Gas Tax Special Revenue Fund - Established to receive and expend the City's allocation of the State gasoline taxes. Equipment Replacement Capital Projects Fund — Established to provide for the replacement of vehicles and equipment. The City reported its only enterprise fund as a major fund in the accompanying financial statements. The enterprise fund is: Parking Services Fund — Established to maintain parking garages, lots and spaces in the Downtown Parking District, and to pay for parking enforcement, meter collection, and downtown enforcement services. The City also reports the following fund types: Internal Service Funds - These funds account for: building maintenance, employee benefits, liability insurance, workers' compensation, dental insurance, pension plan reserve, and retiree health (OPEB). Fiduciary Fund — These funds include: Successor Agency to the Redevelopment Agency Private - Purpose Trust Fund — which accounts for the accumulation of resources held by the Successor Agency to the Redevelopment Agency to be used for payments at appropriate amounts and times in the future; Pt. San Pedro Road Assessment District Agency Fund — which accumulates funds for the payment of principal and interest for Pt. San Pedro Road Median Landscaping District bonds. The financial activities of these funds are excluded from the government -wide financial statements, but are presented in the separate Fiduciary Fund financial statements. F. Basis of Accounting The government -wide, proprietary, fiduciary and discretely presented component unit financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Fiduciary funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds from long-term debt and acquisitions under capital leases are reported as other financing sources. 43 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Those revenues susceptible to accrual are property and sales taxes, certain intergovernmental revenues, interest revenue, charges for services, fines and forfeitures. Other receipts and taxes are recognized as revenue when the cash is received. Non-exchange transactions, in which the City gives or receives value without directly, receiving or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Under the terms of grant agreements, the City may fund certain programs with a combination of cost -reimbursement grants, categorical block grants, and general revenue. Thus, both restricted and unrestricted net position may be made available to finance program expenditures. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary. The City considers restricted shared state revenues such as gasoline taxes and public safety sales taxes, restricted locally imposed transportation sales taxes, fines, forfeitures, licenses, permits, charges for services, and program grants as program revenues. Certain indirect costs are included in program expenses reported for individual functions and activities. G. Budgets, Budgetary Accounting, and Encumbrances The City adopts an annual budget which is effective July 1 for the ensuing fiscal year. The budget reflects estimated revenues and expenditures, except for the Grants Special Revenue Fund, capital projects funds and the Peacock Gap Assessment District Debt Service Fund. Appropriations and spending authorizations for projects in the capital projects funds and some special revenue funds are approved by the City Council on a multi-year basis. From the effective date of the budget, which is adopted at the department level, the amounts stated therein as proposed expenditures become appropriations to the various City departments. The City Council may amend the budget by resolution during the fiscal year in order to respond to emerging needs, changes in resources, or shifting priorities. Expenditures may not exceed appropriations at the fund level, which is the legal level of control. The City Manager is authorized to transfer budgeted amounts between accounts, departments or funds; the Council must approve any increase in the City's operating expenditures as well as any appropriations for capital projects. Budgets are adopted on a basis consistent with Generally Accepted Accounting Principles for the General Fund and Special Revenue Funds. 44 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Encumbrance accounting, under which purchase orders for expenditures are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of the budgetary process. 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. 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. I Capital Assets All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair market value on the date contributed. The City has included the value of all infrastructure capital assets into its Basic Financial Statements using the Basic Approach for infrastructure reporting. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Capital assets, excluding infrastructure, are recorded if acquisition or construction costs exceeds $5,000. The similar threshold for infrastructure is $25,000. Depreciation is provided using the straight-line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each year represents that year's pro rata share of the cost of capital assets. The City has assigned the useful lives listed below to capital assets: Buildings, improvements, and structures 20 — 50 years Machinery and equipment 4 — 20 years Infrastructure 15 — 50 years MR CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I J. Compensated Absences Compensated absences are accrued as earned. Upon termination, employees are paid for all unused vacation at their current hourly rates. Unused sick leave may be compensable up to 600 hours, depending upon the provisions of the MOUs, which vary by bargaining unit. The long-term portion of the liability for compensated absences for governmental fund type operations is recorded as compensated absences in the government -wide fmancial statements. Compensated absences are liquidated by the fund that has recorded the liability. Proprietary fund liabilities are recorded within their respective funds. The long-term portion of governmental activities compensated absences is liquidated primarily by the General Fund. The changes of the compensated absences were as follows: 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) 46 Governmental Business -Type Activities Activities Total Beginning Balance $4,375,203 $86,033 $4,461,236 Additions 3,389,844 134,534 3,524,378 Payments (3,497,166) (111,653) (3,608,819) Ending Balance $4,267,881 $108,914 $4,376,795 Current Portion $533,485 $13,614 $547,099 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) 46 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I The term "unsecured" refers to taxes on personal property other than land and buildings. These taxes are secured by liens on the property being taxed. Property taxes are levied and recorded as revenue when received in the fiscal year of levy because of the adoption of the "alternate method of property tax distribution," known as the Teeter Plan, by the City and the County of Marin. The Teeter Plan authorized the auditor -controller of the County of Marin to allocate 100% of the secured property taxes billed, but not yet paid. The County of Marin remits tax monies to the City in three installments, as follows: 55% remitted on December 15 40% remitted on April 15 5% remitted on June 15 L. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the dates of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting periods. Actual results could differ from those estimates. M. New Funds The Measure A Open Space Special Revenue Fund was established to account for the use of proceeds distributed by the County of Marin from Measure A, as well as other supplementary matching or City -finding for the operation or maintenance of open space, park or recreation lands. The Pt. San Pedro Road Assessment District Agency Fund was established to accumulate funds for payment of principal and interest for Pt. San Pedro Road Median Landscaping Assessment District bonds. NOTE 2 -CASH AND INVESTMENTS The City's goal is to invest at the maximum yield, consistent with safety and liquidity. 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. 47 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 2 -CASH AND INVESTMENTS (Continued) 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. B. Classification Cash and investments as of June 30, 2013, 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 Position: City of San Rafael: Cash and investments available for operations $49,017,178 Restricted cash and investments 76,285 Total Primary Government Cash and Investments 49,093,463 San Rafael Sanitation District (Component Unit) Cash and investments available for operations 18,916,657 Total San Rafael Sanitation District cash and Investments 18,916,657 Statement of Fiduciary Net Position (separate statement): Successor Agency to the Redevelopment Agency: Cash and investments available for operations 1,340,802 Restricted Cash and investments 1,375,048 Total Successor Agency Cash and Investments 2,715,850 Pt. San Pedro Road Assessment District Agency Fund 300,578 Total Fiduciary Cash and Investments 3,016,428 Total Cash and Investments $71,026,548 The City does not normally allocate investments by fund. Each proprietary fund's portion of Cash and Investments Available for Operations is in substance a demand deposit available to finance operations, and is considered a cash equivalent in preparing the statement of cash flows. 48 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 2 - CASH AND INVESTMENTS (Continued) N 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: The San Rafael Sanitation District adopted the investment policy of the Treasurer and Tax Collector of the County of Marin. Accordingly, the District, following the County, may invest in U.S. Treasury and agency securities, commercial papers, bankers' acceptances, time deposits, repurchase agreements, and the State of California LAW. 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. 49 Minimum Maximum Maximum Maximum Credit Percentage of Investment in Authorized Investment Type Maturity Quality Portfolio One Issuer U.S. Government Obligation 5 years No limit No limit U.S. Agency Securities and 5 years AAA No limit No limit Instruments Repurchase Agreements 1 year A-1 No limit No limit Prime Commercial Paper 270 days A-1 25% $1,000,000 Bankers' Acceptances 180 days A-1 40% $2,000,000 Medium -Term Corporate Notes 5 years A 30% $11,0001000 Negotiable Certificates of Deposit 5 years AA 30% No limit Non-negotiable Certificates 180 days N/A No limit No limit of Deposit Local Agency Investment Fund N/A N/A N/A N/A Money Market Mutual Funds N/A AAA 10% N/A Limited Obligation Improvement 30 years N/A N/A N/A Bonds related to Special Assessment Districts and Special Tax Districts The San Rafael Sanitation District adopted the investment policy of the Treasurer and Tax Collector of the County of Marin. Accordingly, the District, following the County, may invest in U.S. Treasury and agency securities, commercial papers, bankers' acceptances, time deposits, repurchase agreements, and the State of California LAW. 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. 49 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 2 - CASH AND INVESTMENTS (Continued) D. Investments Authorized by Debt Agreements The City and the Successor Agency to the Redevelopment Agency must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged as reserves to be used if there are insufficient resources to meet debt repayment obligations. The California Government Code requires these funds to be invested in accordance with City ordinance bond indentures or State statute. The table below identifies the investment types that are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements: Local Agency Investment Fund N/A N/A N/A (A) Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury Obligations or U.S. Agency Obligations. a Maximum Maximum Minimum Credit Percentage of Authorized Investment Type Maturity Quality Portfolio 5 years to no U.S. Treasury Obligations maximum N/A No Limit U.S. Agency Securities 3- 5 years N/A No Limit U.S. Agency Instruments 5 years AAA No Limit Repurchase Agreements 1 year A-1 No limit Category Bankers' Acceptances 360 days Highest Rating No Limit Category Money Market Funds N/A Highest Rating No Limit Category Prime Commercial Paper 270 days Highest Rating No Limit Guaranteed Investment Contracts Category (fully collateralized) (A) N/A Highest Rating No Limit Two Highest Category Municipal Obligations N/A Ratings No Limit Medium -Term Corporate Notes 5 Years A No Limit Non -Negotiable Certificates of Deposit 180 Days N/A No Limit Negotiable Certificates of Deposit 5 Years N/A No limit Local Agency Investment Fund N/A N/A N/A (A) Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury Obligations or U.S. Agency Obligations. a CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 2 - CASH AND INVESTMENTS (Continued) N E. Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City also manages its interest rate risk by holding most investments to maturity, thus reversing unrealized market gains and losses. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity or earliest call date: The City is a participant in the Local Agency Investment Fund (LATE) 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 LAW at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance is available for withdrawal on demand, and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and Bills, and corporations. At June 30, 2013, these investments matured in an average of 278 days. Money Market Mutual Funds are available for withdrawal on demand and at June 30, 2013, matured in an average of 53 days. 51 12 Months More than Type of Investment or Less 12 Months Total City and Fiduciary: Money Market Mutual Funds $1,451,333 $1,451,333 Local Agency Investment Fund 44,009,433 44,009,433 Limited Obligation Improvement Bonds $1,750,000 1,750,000 Total Investments $45,460,766 $1,750,000 47,210,766 Cash in banks and on hand 4,899,125 Total City and Fiduciary Cash and Investments 52,109,891 San Rafael Sanitary District: Cash in banks and short-term pooled investments 18,916,657 Total District's Cash and Investments 18,916,657 Total Cash and Investments $71,026,548 The City is a participant in the Local Agency Investment Fund (LATE) 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 LAW at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance is available for withdrawal on demand, and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and Bills, and corporations. At June 30, 2013, these investments matured in an average of 278 days. Money Market Mutual Funds are available for withdrawal on demand and at June 30, 2013, matured in an average of 53 days. 51 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 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 measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of June 30, 2013, 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 and Fiduciary: Money Market Mutual Funds $1,451,333 $1,451,333 Total rated investments $1,451,333 1,451,333 Not rated: Limited Obligation Improvement Bonds 1,750,000 Local Agency Investment Fund 44,009,433 Cash in banks and on hand 4,899,125 Total City and Fiduciary Cash and Investments 52,109,891 San Rafael Sanitary District: Not rated: Cash in banks and short-term pooled investments 18,916,657 Total District's Cash and Investments 18,916,657 Total Cash and Investments $71,026,548 G. Concentration Risk The City's investments that are greater than five percent of the total investments are in either an external investment pool or mutual funds and are therefore exempt. 52 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 3 -INTER-FIIND TRANSACTIONS Interfund Receivables and Payables Inter -fund receivables and payables represent short term loans owed by one fund to another fund for the purpose of covering short term negative cash positions. Such inter -fund transactions are routine, year-end adjustments. Inter -fund receivables and payables at June 30, 2013, were as follows: Due To: Due From: Employee Retirement Internal Service Fund General Fund $748,239 $7485239 Transfers Resources may be transferred from one City fund to another. Transfers routinely fund capital projects or capital outlays, lease or debt service payments, and operating expenses. Transfers between funds during the fiscal year ended June 30, 2013, were as follows: From Fund To Fund Amount General Fund Non -Major Governmental Funds $3,754,627 (A) Internal Service Funds 583,600 (B) Gas Tax Fund General Fund 440,000 (C) Non Major Governmental Fund 234,521 (A) Non -Major Governmental Funds General Fund 805,805 (C) Gas Tax Fund 365 (D) Non -Major Governmental Fund 892,739 (A) Parking Services Enterprise Fund General Fund 358,817 (C) Non -Major Governmental Funds 65,000 (A) Internal Service Funds General Fund 1,500,000 (C) Internal Services Funds 1,295,513 (B ) Non -Major Governmental Funds 373,600 (A) $10,304,587 ( A) Transfers to the Non -Major Governmental Funds were for administrative costs, program support, capital projects, and special projects. ( B) Transfers to the Internal Service Funds were to fund internal operations. ( C) Transfers to the General Fund were for street maintenance support, administrative costs, dispatch contract, and to reverse excess liability reserve. ( D) Transfer to Gas Tax Fund was for project reimbursement. C. Internal Balances Internal balances are presented in the Government -wide financial statements only. They represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business -type activities. 53 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 4 — LOANS RECEIVABLE A. Summary of Loans Receivable The City has reserved the portion of fund balance represented by these loans. At June 30, 2013, these loans totaled: Employee Loans $5,545 Centertown Associates 280,979 One "H" Street Associates 57,144 Fire Chief Loan 445,908 Marin Housing Authority 4009000 Total $19189,576 B. Employee Loans The City administers a computer loan program that supports the use of technology by employees. Employees are permitted to borrow up to $1,500 for the purchase of computer hardware and software. The loans are interest-free, have maximum terms of one year, and are repaid through automatic payroll deductions. C. Centertown Associates On August 20, 1990, the former Redevelopment Agency loaned Centertown Associates, Ltd, $303,000 at 3% interest due semiannually. The loan was made for the construction of a 60 -unit affordable Centertown apartment complex and is fully secured by a deed of trust. The fmal payment is due on July 31, 2065. With the dissolution of the Redevelopment Agency effective February 1, 2012, the assets of the Agency's Low and Moderate Income Housing fund, including the Centertown Associates loan, were assumed by the City's Low and Moderate Income Housing Special Revenue Fund. D. One "H" Street Associates On January 18, 1994, the City loaned One "H" Street Associates $100,000 at zero percent interest with annual payments of $2,857 and with a final payment due January 18, 2034. E. Fire Chief Loan On September 17, 2007, the City Council approved a Home Loan Agreement to provide the Fire Chief with housing assistance. Under the Agreement, which was executed on October 3, 2007, the City loaned the Fire Chief $600,000 to assist in the purchase of his primary residence. The loan is secured by a recorded deed of trust. The initial interest rate to be charged was 5.25% through August 31, 2008. On September 1, 2008, and on each September 1 following, until the loan is paid off, the interest rate of the loan will be adjusted based upon the then reported quarter -to -date Local Agency Investment Fund rate on the City's investment portfolio. As of June 30, 2013, the balance of the loan was $445,908. 54 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 4 — LOANS RECEIVABLE (Continued) I F. Redevelopment Agency Loan In 1972, the City loaned the former Redevelopment Agency $20,000 at an annual rate of 7%. This obligation, with a principal and accrued interest balance totaling $299,489, was assumed by the Successor Agency of the Redevelopment Agency Private Purpose Trust. The obligation was included in the Third Recognized Obligation Payment Schedule, approved by the Successor Agency Oversight Board on August 31, 2012, and approved by the California Department of Finance on October 15, 2012. The principal and accrued interest was paid off in full on June 3, 2013. G. Marin Housing Authority Loans In 2012, the former Redevelopment Agency and the City, as Housing Successor to the Redevelopment Agency, loaned Marin Housing Authority $235,000 and $165,000, respectively, at zero percent interest for the purchase of two low and moderate income units. The loans due upon the sale of the units. With the dissolution of the Redevelopment Agency effective February 1, 2012, the assets of the Redevelopment Agency Low and Moderate Income Housing fund, including these Marin Housing Authority loans, were assumed by the City's Low and Moderate Income Housing Special Revenue fund. The $235,000 loan was repaid by Marin Housing Authority on December 19, 2012. On February 6, 2013, the City loaned Marin Housing Authority an additional $235,000 at zero percent interest for the purchase of a low and moderate income unit. NOTE 5 - CAPITAL ASSETS Changes in capital assets during the fiscal year consisted of: (4,712,975) (274,647) Balance Buildings and structures (12,360,994) Balance June 30, 2012 Additions Retirements Transfers June 30, 2013 Governmental Activities (12,969,169) Infrastructure (103,199,547) (4,722,849) Capital assets not being depreciated: (107,922,396) Total accumulated depreciation (133,196,004) (7,124,286) Land $82,464,364 Total net capital assets being depreciated 112,042,133 $82,464,364 Construction in progress 1,173,133 $3,438,215 ($2,063,738) 2,547,610 Total capital assets not being depreciated 83,637,497 3,438,215 (2,063,738) 85,011,974 Capital assets being depreciated: Land improvements 8,580,916 208,069 8,788,985 Buildings and structures 38,855,645 60,604 1,405,295 40,321,544 Machinery and equipment 16,603,920 1,184,167 ($959,442) 92,000 16,920,645 Infrastructure 181,197,656 358,374 181,556,030 Total capital assets being depreciated 245,238,137 1,244,771 (959,442) 2,063,738 247,587,204 Less accumulated depreciation for: Land improvements (4,712,975) (274,647) (4,987,622) Buildings and structures (12,360,994) (1,136,206) (13,497,200) Machinery and equipment (12,922,488) (990,584) 943,903 (12,969,169) Infrastructure (103,199,547) (4,722,849) (107,922,396) Total accumulated depreciation (133,196,004) (7,124,286) 943,903 (139,376,387) Total net capital assets being depreciated 112,042,133 (5,879,515) (15,539) 2,063,738 108,210,817 Total governmental activity capital assets $195,679,630 ($2,441,300) ($15,539) $193,222,791 55 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 5 - CAPITAL ASSETS (Continued) I Balance June 30, 2012 Additions Retirements Business -type Activities Capital assets not being depreciated: Land $8,620,853 Construction in process Balance $93,743 Total capital assets not being depreciated 8,620,853 Adjustments Capital assets being depreciated: $115,329 Buildings and structures 10,234,521 $115,329 Machinery and equipment 1,097,136 57,981 Total capital assets being depreciated 11,331,657 57,981 Less accumulated depreciation for: (605,539) Buildings and structures (2,063,518) (210,538) Machinery and equipment (793,434) (112,538) Total accumulated depreciation (2,856,952) (323,076) Total net capital assets being depreciated 8,474,705 (265,095) Total business -type activity capital assets $17,095,558 ($265,095) San Rafael Sanitation District Capital assets not being depreciated: Land and easements Construction in progress Total capital assets not being depreciated Capital assets being depreciated: Subsurface lines Sewage collection facilities General plant and administration Total capital assets being depreciated Less accumulated depreciation for: Subsurface lines Sewage collection facilities General plant and administration Total accumulated depreciation Total net capital assets being depreciated Total District's capital assets ($15,840) (15,840) 15,840 15,840 Transfers ($93,743) (93,743) 93,743 93,743 93,743 Balance June 30, 2013 $8,620,853 8,620,853 10,328,264 1,139,277 11,467,541 (2,274,056) (890,132) (3,164,188) 8,303,353 $16,924,206 Balance Transfers & Balance June 30, 2012 Additions Retirements Adjustments June 30, 2013 $115,329 $115,329 455,002 $395,257 ($605,539) 244,720 570,331 395,257 (605,539) 360,049 19,720,409 127,569 563,512 20,411,490 36,811,811 ($104,465) 42,027 36,749,373 1,192,998 32,803 (32,050) 1,193,751 57,725,218 160,372 (136,515) 605,539 58,354,614 (9,200,965) (368,656) (9,569,621) (14,530,447) (828,365) 104,465 (15,254,347) (453,846) (128,007) 32,050 (549,803) (24,185,258) (1,325,028) 136,515 (25,373,771) 33,539,960 (1,164,656) 605,539 32,980,843 $34,110,291 ($769,399) $33,340,892 56 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 5 - CAPITAL ASSETS (Continued) Capital Asset Contributions - Some capital assets may have been acquired using Federal and State grant funds, or were contributed by developers or other governments. These contributions are accounted for as revenues at the time the capital assets are contributed. Depreciation Allocation - Depreciation expense is charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program are as follows: Governmental Activities General government $198,973 Public safety 725,584 Public works and parks 5,409,188 Community development/redevelopment 42,304 Culture and recreation 748,237 Total Governmental Activities $7,124,286 Business -type Activities Parking services $323,076 Total Business -type Activities $323,076 NOTE 6 —LONG TERM OBLIGATIONS The City generally incurs long-term debt to finance projects or purchase assets which will have useful lives equal to or greater than the related debt. A summary of governmental and business -type activities transactions for the fiscal year ended June 30, 2013, are as follows: Authorized Balance and Issued June 30, 2012 Governmental Activities: 2010 Taxable Pension Obligation Bonds 6%-6.25%, due 7/1/2025 $4,490,000 Total Pension Obligation Bonds Ground Lease Note Payable, 8.00%, due 11/1/2024 169,000 Total Governmental Long-term Debt Business -type Activities 2003 Authority Lease Revenue Bonds 3.00-4.70%, due 4/1/2033 $7,605,000 2012 Authority Lease Revenue Refunding Bonds 2.00-4.00%, due 4/1/2033 6,750,000 Less: unamortized discount/issuance cost Total Enterprise Fund Debt $4,490,000 4,490,000 169,000 $4,659,000 $6,445,000 $6,445,000 57 Balance Current Additions Retirements June 30, 2013 Portion $4,490,000 4,490,000 169,000 $4,659,000 $6,445,000 $6,750,000 305,000 $6,445,000 $245,000 (199,848) (8,864) (190,984) $6,550,152 $6,741,136 $6,254,016 $245,000 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 6 . LONG-TERMJnmu uuu OBLIGATIONS (Continued) A. 2010 Taxable Pension Obligation Bonds On July 1, 2010, the City issued 2010 Taxable Pension Obligation Bonds in the amount of $4,490,000 bearing interest at rates from 6.00% to 6.25%. Interest on the Bonds are payable on January 1 and July 1 on each year. Principal payable on the Bonds will be paid on July 1 starting July 1, 2016. The Bonds were issued to prefund a portion of the obligations of the City to the Marin County Employees' Retirement Association. Payment of the principal and interest on the Bonds is not limited to any special source of funds and is payable from any legally available moneys of the City. The City is not empowered or obligated to levy or pledge taxes to make payments on the Bonds. B. Ground Lease Note Payable On November 6, 1989, the City of San Rafael Redevelopment Agency signed a $169,000 promissory note with Bridge Housing Corporation, 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. Assembly Bill 1x26 dissolved all California redevelopment agencies, effective January 31, 2012, and required the transfer all assets and liabilities to the Successor Agency. The City of San Rafael as Housing Successor assumed the liabilities of the Successor Agency of the Housing fund. This note will be repaid from City Housing Successor Low and Moderate Income Housing special revenue fund. C. 2003 Authority Lease Revenue Bonds On March 26, 2003, the Authority issued 2003 Authority Lease Revenue Bonds in the amount of $75605,000 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 were to mature annually each April 1 from 2006 to 2033, in amounts ranging from $150,000 to $290,000. Interest was payable semiannually on April 1 and October 1. The bonds maturing on or after April 1, 2011 were subject to optional redemption prior to maturity on or after April 1, 2010 at the option of the Authority, as a whole on any date. In August 2012, the Authority exercised the redemption option. The outstanding balance of the Bonds was refunded through the issuance of 2012 Authority Lease Revenue Refunding Bonds as discussed on Note 6D. 58 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 6 - LONG-TERM OBLIGATIONS (Continued) D. 2012 Authority Lease Revenue Refunding Bonds On August 7, 2012, the Authority issued 2012 Authority Lease Revenue Refunding Bonds in the amount of $6,750,000 bearing interest at rates from 2.00% to 4.00%. The proceeds of the Series 2012 Bonds were used to repay the Authority's 2003 Authority Lease Revenue Bonds that financed the construction of the 3rd and C Street parking structure and achieved lower interest rates and lower annual debt service payments. The refunding resulted in a net present value savings to the City in debt service of $670,496. In addition, the requisition price exceeded the net carrying amount of the old debt by $295,278. The Series 2012 Bonds are payable from lease payments made by the City to the Authority for leasing the City facilities. Principal payments are due annually on April 1 and interest payable semiannually on October 1 and April 1. The bonds are payable from revenues consisting primarily of certain Base Rental payments payable by the City of San Rafael. The Bonds maturing on or prior to April 1, 2022 are not subject to optional redemption prior to their maturity. The Bonds maturing on or after April 1, 2023 are subject to optional redemption as a whole or in part on any date after April 1, 2022 at the option of the Authority, at a redemption price equal to the principal amount of the Bonds subject to redemption, plus accrued interest to the date fixed for redemption, without premium. E. Future Debt Service Future debt service requirements, including interest, at June 30, 2013, are as follows: For the Year Ended June 30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 Governmental Activities Principal Interest $245,000 $276,512 245,000 276,512 250,000 276,512 $100,000 273,512 205,000 264,362 2,38000 948,898 1,974,000 173,912 Business -type Activities Principal Interest $245,000 $211,288 245,000 206,388 250,000 201,488 260,000 193,988 270,000 186,188 1,460,000 805,390 1,695,000 564,400 2,020,000 241,806 Totals $49659,000 $29490,220 $6,4459000 $2,6109936 59 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 7 —DEBT WITHOUT CITY COMMITMENT The City has sponsored the issuance of the following debt, for which the City is not liable for repayment but is only acting as an agent for the property owners and bondholders: NOTE 8 —NET POSITION AND FUND BALANCE A. Net Position Net Position is the excess of all the City's assets and deferred outflow over all its liabilities, and deferred inflows regardless of fund. Net Position are divided into three captions. These captions apply only to Net Position, which is determined only at the Government -wide level and business type activity and are described below: Net Investment in Capital Assets describes the portion of Net Position which is represented by the current net book value of the City's capital assets, less the outstanding balance of any debt issued to fmance these assets. Restricted describes the portion of Net Position which is restricted to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. Unrestricted describes the portion of Net Position which is not restricted to use. Mi Project Original Outstanding Description Amount June 30, 2013 San Rafael Redevelopment Agency 162-175 Belvedere Multifamily Housing Revenue Bonds Apartments $3,590,529 $1,227,402 California Statewide Communities Development Authority Revenue Bonds St. Marks School 5,605,000 4,505,000 San Rafael Redevelopment Agency Variable Rate Demand Multifamily 55 Fairfax Housing Revenue Bonds Apartments 3,000,000 2,500,000 San Rafael Redevelopment Agency San Rafael Commons Multifamily Housing Revenue Bonds -2001 Apartments 6,100,000 5,315,000 Martinelli House 1,000,000 City of San Rafael Kaiser Foundation Variable Rate Revenue Bonds Hospitals 275,000,000 195,630,000 San Rafael Redevelopment Agency Martinelli House Multifamily Housing Revenue Bonds -2007 Series A Project 6,000,000 2,109,849 Multifamily Housing Revenue Bonds -2007 Series B Martinelli House 1,000,000 257,014 Pt. San Pedro Road Median Landscaping Pt. San Pedro Road 1,750,000 1,750,000 Assessment District Limited Obligation Bonds Median Landscaping NOTE 8 —NET POSITION AND FUND BALANCE A. Net Position Net Position is the excess of all the City's assets and deferred outflow over all its liabilities, and deferred inflows regardless of fund. Net Position are divided into three captions. These captions apply only to Net Position, which is determined only at the Government -wide level and business type activity and are described below: Net Investment in Capital Assets describes the portion of Net Position which is represented by the current net book value of the City's capital assets, less the outstanding balance of any debt issued to fmance these assets. Restricted describes the portion of Net Position which is restricted to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. Unrestricted describes the portion of Net Position which is not restricted to use. Mi CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 8 — NET POSITION AND FUND BALANCE (Continued) B. Fund Balance In the fund financial statements, fund balances represent the net current assets of each fund. Net current assets generally represent a fund's cash and receivables, less its liabilities. The City's fund balances are classified in accordance with Governmental Accounting Standards Board Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions, which requires the City to classify its fund balances based on spending constraints imposed on the use of resources. For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint: Nonspendable represents balances set aside that do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for redevelopment are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed or assigned, then Nonspendable amounts are required to be presented as a component of the applicable category. Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose. Encumbrances and nonspendable amounts subject to restrictions are included along with spendable resources. Committed fund balances have constraints imposed by resolution of the City Council which may be altered only by resolution of the City Council. Encumbrances and nonspendable amounts subject to council commitments are included along with spendable resources. Assigned fund balances are amounts constrained by the City's intent that they be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Manager as designated by the City Council and may be changed at the discretion of the City Council or City Manager. This authorization is given through Resolution No. 13173 which adopts the City's Fund Balance Policy. This category includes encumbrances; Nonspendables, when it is the City's intent to use proceeds or collections for a specific purpose; and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or committed. Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual General Fund balance and residual fund deficits, if any, of other governmental funds 61 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 (NOTE 8 - NET POSITION AND FUND BALANCE (Continued) Detailed classifications of the City's Fund Balances, as of June 30, 2013, are below: 62 Special Revenue Funds Capital Projects Traffic and Other Housing Equipment Governmental General Fund Mitigation Gas Tax Replacement Funds Total Fund balances: Nonspendable: Loans receivable $451,453 $451,453 Prepaids 75,782 $6,215 $45,306 127,303 Total Nonspendable 527,235 6,215 45,306 578,756 Restricted for: Assessment District capital projects 302,174 302,174 Baypoint Lagoons Assessment District 194,517 194,517 Bedroom tax capital projects 21,970 21,970 Business improvement 4,298 4,298 Development services 479,329 479,329 Emergency medical services 736,842 736,842 1997 financing authority revenue bonds debt service 145,826 145,826 Gas tax $2,232,975 2,232,975 Grants 459,600 459,600 Household hazmat facility 183,123 183,123 Library 10,383 10,383 Library assessment 51,469 51,469 Loch Lomond Assessment District 521,224 521,224 Mariposa Assessment District debt service 16,543 16,543 Measure A Open Space 217,213 217,213 Parkland dedication 695,630 695,630 Peacock Gap Assessment District debt service 2,875 2,875 Public safety 183,855 183,855 Pt. San Pedro - Maintenance Portion 166,296 166,296 Recreation revolving 496 496 Street maintenance and cleaning 550,529 550,529 Storm water 1,452,338 1,452,338 Traffic and housing mitigation $12,140,041 12,140,041 Total Restricted 12,140,041 2,232,975 6,396,530 20,769,546 (Continued) 62 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 (NOTE S - NET POSITION AND FUND BALANCE (Continued) Special Revenue Funds Capital Projects Traffic and Other Housing Equipment Governmental General Fund Mitigation Gas Tax Replacement Funds Total Committed to: Assessment District capital projects 57,190 57,190 Capital improvement capital projects 1,143,215 1,143,215 Childcare 9,700 9,700 Development services 181,703 181,703 Gas tax 3,873,524 3,873,524 Grants 766,788 766,788 Household hazmat facility 35,273 35,273 Library 104,782 104,782 Library assessment 541,195 541,195 Low and moderate income housing 806,479 806,479 Park capital projects 12,986 12,986 Parkland dedication 255,000 255,000 Project development 800,876 800,876 Public safety 4,766 4,766 Recreation revolving 23,310 23,310 Storm water 331,584 331,584 Traffic and housing mitigation 300,000 300,000 Total Committed 800,876 300,000 3,873,524 4,273,971 9,248,371 Assigned to: Childcare 56,744 56,744 Contractual commitments 19,412 19,412 Development services 210,633 210,633 Emergency and cash flow 2,288,411 2,288,411 Equipment replacement capital projects 5,059,703 5,059,703 Household hazmat facility 21,985 21,985 Library 106,679 106,679 Open space capital projects 130,836 130,836 Park capital projects 4,315 4,315 Project development 168,853 168,853 Radio replacement capital projects 580,328 580,328 Recreation revolving 29,505 29,505 Sewer maintenance 31,141 31,141 Street maintenance and cleaning 82,759 82,759 Telephone replacement capital projects 197,222 197,222 Total Assigned 2,476,676 5,059,703 1,452,147 8,988,526 Total Fund Balances $3,804,787 $12,440,041 $6,106,499 $5,065,918 $12,167,954 $39,585,199 63 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 9 —EMPLOYEES RETIREMENT PLAN A. Plan Description The City's retirement plan is administered by the Marin County Employees' Retirement Association (Association). All full-time and permanent part-time employees who work at least 75% of a full time position are eligible to participate. The Association is a multiple -employer retirement system governed by the 1937 Act of the California Government Code. The Association acts as a common administrative and investment agent for defined benefit retirement plan for various local governmental agencies within the County of Marin. The Association provides retirement, disability, and death benefits based on the employee's years of service, age, and final compensation. Employees vest after five years of service and are eligible to receive retirement benefits after 10 years of service and having attained the age of 50, or 30 years of service (20 years for safety employees) regardless of age. Copies of the Association's annual financial reports, which include required supplementary information for each plan may be obtained from the Marin County Employees' Retirement Association, One McInnis Parkway, Suite 100, San Rafael, California 94903. B. Funding Policy The funding policy of the Association provides for actuarially determined periodic contributions by the City at rates such that sufficient assets will be available to pay plan benefits when due. The City contributed 65.82% and 66.64% of payroll for Police and Fire personnel, respectively, and 44.13% for other covered employees for the year ended June 30, 2013. C: Annual Pension Cost The annual required contribution was determined as part of the actuarial valuation performed as of June 30, 2012. The employer rates for normal cost are determined using the Entry Age Normal Actuarial 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 2012 actuarial valuation include an assumed rate of return on invested assets of 7.50%, annual payroll increases reflecting 3.25% for inflation and an approximate range of 0.50% to 5.00% for merit and longevity. The actual rate of return on investments was a gain of 1.6%. The actuarial value of assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a period of five years. The Association uses a 17 -year level percentage, open method to amortize the unfunded actuarial liability. It is assumed that payroll will increase at an annual inflation rate of 3.25% over the amortization period. The City uses the actuarially determined percentages of payroll to calculate and pay contributions to the Association. In the fiscal year ended June 30, 2013, the City made an additional contribution of $1,000,000. The required contributions and related rates for the year ended June 30 were as follows: Fiscal Year Annual Percentage of Net Ended Pension Cost APC Pension June 30 (APC) Contributed Obligation (Asset) 2011 $15,409,519 100% $0 2012 14,627,709 100% 0 2013 15,522,832 106% (1,000,000) N CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 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: D. Public Employees' Pension Reform Act (PEPRA) Assembly Bill 340 (AB 340) created the Public Employees' Pension Reform Act (PEPRA) that implemented new benefit formulas and final compensation periods, as well as new contribution requirements for new employees hired on or after January 1, 2013, who meet the definition of new member under PEPRA. The table below provides the details of the new provisions. Benefit Formula Final Compensation Period Miscellaneous 2.0%(a),62 Average of the highest 3 years Safety 2.7% (a, 57 Average of the highest 3 years NOTE 10 -PUBLIC AGENCY RETIREMENT SYSTEM (DEFINED CONTRIBUTION RETIREMENT PLANS) The City contributes to the Public Agency Retirement System (PARS), which administers a defined contribution retirement plan. A defined contribution retirement plan provides retirement benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's accounts are determined instead of specifying the amount of benefits the individual is to receive. The benefits a participant will receive depend on the amount contributed to the participant's account, and the returns earned on investments on those contributions. The Plan's trust administrator is Phase H, P.O. Box 12919, Newport Beach, California 92658. As established by the plan, all eligible part-time and temporary employees of the City become participants in the plan from the date that they are hired. An eligible employee is any employee who, at any time during which the employer maintains this plan, is not accruing a benefit under the Marin County Employees' Retirement Fund. As determined by the plan, each employee must contribute 3.75% of gross earnings to the plan. The City contributes an additional 3.75% of the employee's gross earnings. Contributions made by an employee and the employer vest immediately. During the year, the City and employees each contributed $66,909. The total covered payroll of employees participating in the plan for the year ended June 30, 2013, was $1,784,229. The total payroll for the year was $35,326,393. 65 Actuarial Excess Excess (Deficit) Actuarial Actuarial Accrued (Deficit) Assets Over AAL Valuation Value Liability (AAL) Assets Funded Covered As a % of Date of Assets Entry Age Over AAL, Ratio Payroll Payroll 6/30/10 $248,500,000 $394,889,000 ($146,389,000) 63% $30,320,000 (483%) 6/30/11 258,963,000 412,743,000 (153,780,000) 63% 31,692,000 (4850%) 6/30/12 267,317,000 437,785,000 (170,468,000) 61% 31,182,000 (547%) D. Public Employees' Pension Reform Act (PEPRA) Assembly Bill 340 (AB 340) created the Public Employees' Pension Reform Act (PEPRA) that implemented new benefit formulas and final compensation periods, as well as new contribution requirements for new employees hired on or after January 1, 2013, who meet the definition of new member under PEPRA. The table below provides the details of the new provisions. Benefit Formula Final Compensation Period Miscellaneous 2.0%(a),62 Average of the highest 3 years Safety 2.7% (a, 57 Average of the highest 3 years NOTE 10 -PUBLIC AGENCY RETIREMENT SYSTEM (DEFINED CONTRIBUTION RETIREMENT PLANS) The City contributes to the Public Agency Retirement System (PARS), which administers a defined contribution retirement plan. A defined contribution retirement plan provides retirement benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's accounts are determined instead of specifying the amount of benefits the individual is to receive. The benefits a participant will receive depend on the amount contributed to the participant's account, and the returns earned on investments on those contributions. The Plan's trust administrator is Phase H, P.O. Box 12919, Newport Beach, California 92658. As established by the plan, all eligible part-time and temporary employees of the City become participants in the plan from the date that they are hired. An eligible employee is any employee who, at any time during which the employer maintains this plan, is not accruing a benefit under the Marin County Employees' Retirement Fund. As determined by the plan, each employee must contribute 3.75% of gross earnings to the plan. The City contributes an additional 3.75% of the employee's gross earnings. Contributions made by an employee and the employer vest immediately. During the year, the City and employees each contributed $66,909. The total covered payroll of employees participating in the plan for the year ended June 30, 2013, was $1,784,229. The total payroll for the year was $35,326,393. 65 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 10 - PUBLIC AGENCY RETIREMENT SYSTEM (DEFINED CONTRIBUTION RETIREMENT PLANS) (Continued) Additionally, the City participates in a 401(a) tax qualified plan for eligible executive management and mid -management employees, and elected officials. This is an employer only contribution program separate from the Marin County Employees' Retirement Association. Under this plan, the percent amount of contribution is 3% of base salary of eligible employees. During the year, the City contributed $123,704 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. Employees who meet the vesting criteria become eligible for these benefits if they receive a retirement benefit from the Marin County Employees' Retirement Association within 120 days of retirement from City employment. At June 30, 2013, 324 retirees and surviving spouses received post -employment health care benefits. The provisions and benefits of the City's Other Post Employment Benefit Plan, in effect at June 30, 2013, are summarized as follows: Elected Officials, Mid -Management, & Unrepresented Management All other Bargaining Units Eligibility Retire directly from the City: - Age 50 (age 55 if hired > 7/1/11) with 10 years services (Including reciprocity) OR - 30 years service (Miscellaneous), 20 years service (Safety) OR - Disability Retirement Benefit Hired:5 1/1/09 Full premium/cap Hired < 1/1/10 Up to cap Hired > 1/1/09 PEMHCA Min (Hired > 1/1/10 PEMHCA Min Surviving Spouse Benefit Continuation to surviving spouse Medicare Part B Hired < 4/1/07 Full reimbursement INone Hired > 4/1/07 None Other No Dental, Vision, or Life Benefits Funding Policy and Actuarial Assumptions The City's funding policy requires a minimum annual contribution equivalent to the annual required contribution (ARC). The ARC was determined as part of a June 30, 2011 actuarial valuation using the entry age normal actuarial cost method. This is a projected benefit cost method, which takes into account those benefits that are expected to be earned in the future as well as those already accrued. The actuarial assumptions included (a) 4.25% investment rate of return and (b) 3.25% of general inflation increase, and (c) a healthcare trend of declining annual increases ranging from 9.40% in 2013 to 5.00% for years starting 2021. In addition, the fixed dollar benefit amounts are assumed to be held flat in the future and the premium related benefits are assumed to increase with the healthcare trend rate. N6 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 11— POST -EMPLOYMENT HEALTH CARE BENEFITS (Continued) Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the City and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the City and plan members at that point. The actuarial methods and assumptions used include techniques that smooth the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial calculations reflect a long-term perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to revision at least biennially as results are compared to past expectations and new estimates are made about the future. The City's OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll using a 23 -year fixed (closed) period for June 30, 2012. Funding Progress and Funded Status During the fiscal year ended June 30, 2013, the City has recorded a Net OPEB Asset in the Statements of Net Position, representing the difference between the ARC and actual contributions, as presented below: Annual required contribution (ARC) Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB cost Contributions made: Benefits payment Trust pre -funding Additional contribution to OPEB Trust Total contributions Change in net OPEB obligation/(asset) Net OPEB Obligation (Asset) at June 30, 2012 Net OPEB Obligation (Asset) at June 30, 2013 67 Amounts (in thousands) $2,434 843 (782) 2,495 2,073 12,028 500 14,601 (12,106) 7,594 ($4,512) CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 11—POST-EMPLOYMENT HEALTH CARE BENEFITS (Continued) I Generally accepted accounting principles permit assets to be treated as OPEB assets and deducted from the Actuarial Accrued Liability when such assets are placed in an irrevocable trust or equivalent arrangement. Contributions to a 401(h) account held and administered by the MCERA were made by the City in prior years and were included in the June 30, 2011, actuarial valuation. The balance in this account was recorded as an asset on the City's government -wide statements. On June 25, 2013, the 401(h) account balance of $12,027,705 was transferred to an irrevocable trust under the California Employers' Retiree Benefit Trust Fund (CERBT) managed by CalPERS. This amount is treated as a contribution toward the Net OPEB Obligation (Asset). As of June 30, 2013, the account balance in the CERBT was $12,665,652. For the fiscal year ended June 30, 2013, the City has calculated and recorded the Net OPEB Asset, representing the difference between the ARC, and contributions, as presented below: The Schedule of Funding Progress presents trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Trend data from the June 30, 2011, actuarial study is presented below: Annual Required Annual Unfunded Annual Contribution OPEB Cost Actual Percentage Net OPEB Fiscal Year (ARC) (AOC) Contribution of AOC Obligation (Asset) Ended (000's omitted) (000's omitted) (000's omitted) Contributed (000's omitted) June 30, 2011 $4,025 $3,868 $2,648 66% $6,485 June 30, 2012 2,312 3,233 2,124 92% 7,594 June 30, 2013 2,434 29495 149601 600% (4,512) The Schedule of Funding Progress presents trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Trend data from the June 30, 2011, actuarial study is presented below: 68 Overfunded (Underfunded) Actuarial Liability as a Percentage of Covered Payroll (104.75%) (122.85%) (71.84%) Actuarial Unfunded Annual Value of Accrued Accrued Covered Valuation Assets Liability Liability Funded Payroll Date (000's omitted) (000's omitted) (000's omitted) Ratio (000's omitted) 6/30/2007 $14,563 $52,767 ($38,204) 28% $36,470 6/30/2009 12,773 56,262 (43,489) 23% 35,401 6/30/2011 10,861 35,156 (24,295) 31% 31,692 68 Overfunded (Underfunded) Actuarial Liability as a Percentage of Covered Payroll (104.75%) (122.85%) (71.84%) CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 12 —JOINTLY GOVERNED ORGANIZATIONS The City participates in the jointly governed organizations discussed below through formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each joint organization is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective joint organization, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on that board. Obligations and liabilities of this joint organization are not the City's responsibility and the City does not have an equity interest in the assets of each joint organization except upon dissolution of the joint organization. A. The Marin County Integrated On -Line Library System (System) The N UUNet Library Consortium was formed to provide for the procurement, ownership, operation, maintenance, and governance of shared library services among the libraries, public and academic, in Marin County. Current services shared and paid for on a consortial level through annual membership dues include an integrated library system including patron database, cataloging system, and online catalog of materials; delivery of items between libraries in Marin, a statewide library delivery service called Link+, numerous online resources, and more. The Governing Board of the System consists of the library director or designated alternate of each participant in the System. In accordance with the cost sharing formula developed by the library directors of the participants, the City's share of annual operating costs is 16.94% or $188,738 for the year ended June 30, 2013. Financial statements of the System can be obtained from the County Librarian, Marin County Free Library, Civic Center, Administration Building, San Rafael, California 94903. B. The Marin General Services Authority (MGSA) The MGSA was formed by the County of Marin and twelve local agencies to acquire street light facilities, operate the facilities during an eminent domain action against PG&E, and coordinate the subsequent transfer of the facilities to the individual local agencies. Each of the local agency's share of contributions was based on the number of street lights to be acquired in the local agency's individual jurisdiction in relation to the total number of street lights to be acquired by the MSLAJPA. MGSA services now include street light maintenance, abandoned vehicle abatement, taxicab regulation and administrative responsibility for MarinMap. The City's contribution to MGSA was $3,134 for the year ended June 30, 2013. Financial statements of the MGSA can be obtained at 555 Northgate Drive, Suite 230, San Rafael, California 94903. Z CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 12 —JOINTLY GOVERNED ORGANIZATIONS (Continued) C. The Marin Emergency Radio Authority (MERA) MERA was formed on February 28, 1998, by the County of Marin and 25 local agencies within the County to plan, finance, implement, manage, own, and operate a County -wide public safety and emergency radio system. The Governing Board consists of one representative from each member. On February 1, 1999, the Authority issued the 1999 Revenue Bonds in the amount of $26,940,000 with interest rates ranging from 4.75% to 5.01%, maturing on August 15, 2016, to finance the acquisition and installation of the system. The costs of maintenance, operation, and debt service are divided on a pro rata share based on an agreed-upon formula established by a majority of the Governing Board. The members entered into a Project Operating Agreement on February 1, 1999. Under the Operating Agreement, members are obligated to contribute service payments to cover the Authority's operation and debt service. The City's portion of the obligation is 16.913%. The first operating service payment was in July 1999. The first debt service payment was in August 2002. The City contributed $270,123 of the Authority's operation and debt service for the fiscal year ended June 30, 2013. The City has established a reserve in its internal service funds to pay future service payments. Financial statements of the MERA can be obtained at 95 Rowland Way, Novato, California 94945. D. The Countywide Planning Agency The Agency was established on October 16, 1990, by the County of Marin and the cities of Belvedere, Corte Madera, Fairfax, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito, and Tiburon to implement countywide performance standards for traffic, housing, water and sewer facilities, and environmental protection to ensure that residential and commercial growth does not exceed local water, sewer and transportation capacities. The Governing Board of the Countrywide Planning Agency consists of one member of the County Board of Supervisors and one member of the City Council of each participating city. Financial statements of the Agency can be obtained at 3501 Civic Center Drive, San Rafael, California 94903. E. The Marin Telecommunications Agency The Agency was established to regulate the rates for cable television service and equipment and to advise the participants of their license authority. The Governing Board of the Marin Telecommunications Agency consists of one member from each of the eleven participating agencies. The City's contribution to the Agency was $43,144 for the year ended June 30, 2013. Financial statements of the Agency can be obtained at 371 Bel Marin Keys Blvd, Suite 100, Novato, California 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 $13,187 for the year ended June 30, 2013. Financial statements of the Authority can be obtained at 3501 Civic Center Drive, San Rafael, California 94903. 70 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS (Continued) G. Regional Government Services and Local Government Services Regional Government Services (RGS) and Local Government Services (LGS) were established in 2001 to provide administrative, support and staffing services to other California public agencies. RGS and LCS help their clients address the increasing demand for local services with limited revenues and assist with the recruitment and retention of key employees. The members are the cities of Dublin, Larkspur and San Rafael, the town of Yountville and the Association of Bay Area Governments (ABAG). Each agency's chief executive officer appoints a seat on the Board of Directors for RGS and on the Board of Directors for LGS. Financial statements of LGS and RGS can be obtained at P.O. Box 1350, Carmel Valley, CA. 93924 (NOTE 13 -RISK MANAGEMENT The City manages risk by participating in the public entity risk pools described below and by retaining certain risks. Public entity risk pools are formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each risk pool is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective risk pool, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on that board. Obligations and liabilities of these risk pools are not the City's responsibility. A. Risk Coverage Liability Coverage The City is a member of the California Joint Powers Risk Management Authority (CJPRMA) which covers general liability claims up to $40,000,000. The purpose of CJPRMA is to spread the adverse effects of general liability losses among the member agencies. The City also purchases commercial insurance for property damage claims with an insured amount of $99,236,049. The City is self- insured up to $500,000 for each general liability claim and $25,000 for each property damage claim. Once the self-insured retention is met CJPRMA becomes responsible for payment of all liability claims up to the limit. During the fiscal year ended June 30, 2013, the City contributed $191,896 for coverage during the current year and received a refund of $101,040 of prior year excess contributions. Five years after settlement of all claims for a program year, CJPRMA retroactively adjusts premium deposits for any excess or deficiency in deposits related to paid claims and reserves. CJPRMA refunds excess contributions to members from time to time, based on the results of actuarial studies of each program year's claims experience. Financial statements for the risk pools may be obtained from CJPRMA at 3201 Doolan Road, Suite 285, Livermore, California 94551. 71 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 13 RISK MANAGEMENT (Continued) Workers' Compensation Coverage The City purchases insurance for workers' compensation through Safety National Casualty Corporation Excess Workers' Compensation and Employers Liability Insurance with coverage up to statutory limits. The City is self-insured up to $750,000 for each worker's compensation claim. B. Insurance Internal Service Funds and Financial Reporting The City records estimated liabilities for claims filed up to the amounts for which it retains risk in the General Liability and Workers Compensation Internal Service Funds. Charges to the General Fund and other funds are based on relative general liability and workers compensation risk associated with the activities of each fund. Charges are recorded in the funds as expenditures or expenses and as revenues in the respective internal service funds. The Governmental Accounting Standards Board (GASB) requires municipalities to record their liability for uninsured claims and to reflect the current portion of this liability as an expenditure in their financial statements. As discussed above, the City has coverage for such claims, but it has retained the risk for the deductible or uninsured portion of these claims. The City's liability for uninsured general liability claims and workers' compensation claims, including claims incurred but not reported, are reported in the Statements of Net Position. The liability is based on an actuarial valuation prepared as of June 30, 2012: The claims settlements have not exceeded insurance coverage for the past three years. 72 General Workers' Totals, as of June 30 Liability Compensation 2013 2012 Balance, beginning of year $2,581,164 $4,718,198 $7,299,362 $3,970,177 Current year claims and changes in estimates (1,177,543) 1,193,909 16,366 3,940,606 Claims paid (300,834) (1,099,545) (1,400,379) (611,421) Balance, end of year $1,102,787 $4,812,562 $5,915,349 $7,299,362 Due in one year $512,376 $1,426,924 $1,939,300 $1,842,820 Due in more than one year 590,411 3,385,638 3,976,049 5,456,542 Total claim liabilities $1,102,787 $4,812,562 $5,915,349 $7,299,362 The claims settlements have not exceeded insurance coverage for the past three years. 72 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 14 - COMMITMENTS AND CONTINGENCIES Litigation 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. In 2004, the City of San Rafael entered into a Settlement Agreement with the federal Department of Justice to bring City managed programs, activities, services and facilities into compliance with the Americans with Disabilities Act (ADA). The City has made significant progress over the past eight years and is in the process of completing the few remaining projects identified in the Settlement Agreement. Among those projects is the construction of 800 curb ramps throughout San Rafael. As of June 30, 2013, the City had constructed 404 ramps. During fiscal year 2012-2013, the City negotiated a 5 - year extension to the original 2014 expiration date to complete the ramp construction project. The revised Agreement expires in February 2019. NOTE 15 —SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE - PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES Aa Redevelopment Dissolution In an effort to mitigate its budget deficit, the State of California adopted ABxl 26 on June 28, 2011, amended by AB 1484 on June 27, 2012, which suspended all new redevelopment activities except for limited specified activities as of that date and dissolved redevelopment agencies on January 31, 2012. The suspension provisions prohibited all redevelopment agencies from a wide range of activities, including incurring new indebtedness or obligations, entering into or modifying agreements or contracts, acquiring or disposing of real property, taking actions to adopt or amend redevelopment plans and other similar actions, except actions required by law or to carry out existing enforceable obligations, as defined in ABxl 26. In addition, ABxl 26 and AB 1484 directed the State Controller to review the activities of all redevelopment agencies and successor agencies to determine whether an asset transfer between an agency and any public agency occurred on or after January 1, 2011. If an asset transfer did occur and the public agency that received the asset is not contractually committed to a third party for the expenditure or encumbrance of the asset, the legislation requires the State Controller to order the asset returned to the redevelopment agency. This review was performed in May 2013, and a report issued on July 29, 2013 (see section B of this footnote). The City elected to become the Successor Agency to the Redevelopment Agency, and on February 1, 2012, the Redevelopment Agency's remaining net assets were distributed to the Successor Agency. ABx1 26 requires the establishment of an Oversight Board to oversee the activities of the Successor Agency and one was established on April 2, 2012. The activities of the Successor Agency are subject to review and approval of the Oversight Board, which is comprised of seven members. 73 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE - PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES (Continued) The activities of the Successor Agency are reported in the Successor Agency to the Redevelopment Agency Private -Purpose Trust Fund as the activities are under the control of the Oversight Board. The City provides administrative services to the Successor Agency to wind down the affairs of the former Redevelopment Agency. Pursuant to the dissolution of the City of San Rafael Redevelopment Agency, certain assets of the Redevelopment Agency Capital Projects Fund were distributed to the Housing Successor and all remaining Redevelopment Agency assets and liabilities were distributed to the Successor Agency. The City elected to become the Housing Successor and on February 1, 2012, certain housing assets were transferred to the City's Low and Moderate Income Housing Special Revenue Fund. B. Due Diligence and Other Required Reviews Low and Moderate Income Housing Fund Due Diligence Review Pursuant to Health and Safety Code section 34179.6 (c), the City of San Rafael Successor Agency (Agency) submitted an Oversight Board approved Low and Moderate Income Housing Due Diligence Review to the California Department of Finance (DOF) on October 15, 2012. In November 2012, the DOF sent correspondence to the City questioning a transfer of $1,371,751 for cash and investment transfers made. The City contended that the transfers were lawfully made and requested a meet -and -confer session. Following this meeting, the DOF upheld its position and demanded payment of $1,371,751. The full payment was made from the Low and Moderate Income Housing Fund to the Marin County Auditor Controller on December 19, 2012. The Auditor Controller has indicated the housing funds have been distributed to the taxing entities. Non -Housing Funds Due Diligence Review Pursuant to Health and Safety Code section 34179.6(c), the City of San Rafael Successor Agency submitted an Oversight Board approved Non -Housing Funds Due Diligence Review to the California Department of Finance (DOF) on February 26, 2013. As of the end of the 45 -day review period, there was no requirement to pay funds from the Non -Housing funds. State Asset Transfer Review Pursuant to Health and Safety Code section 34167.5, the State Controller's Office is required to review the records of the former redevelopment agency for asset transfers that took place after January 1, 2011, between the city or county, or city and county that created a redevelopment agency, or any other public agency, and the redevelopment agency through its termination on January 31, 2012. The State Controller's Office is required to order that such assets, except those that already had been committed to a third party prior to June 28, 2011, the effective date of ABxl 26, be turned over to the Successor Agency. The State Controller's Office completed this review on May 17, 2013, and issued its report on July 29, 2013. The report resulted in no action required by the City of San Rafael Successor Agency. 74 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE - PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES (Continued) C. Long -Term Debt 1999 Tax Allocation Bonds and Capital Appreciation Bonds On June 16, 1999, the former Agency issued Tax Allocation Bonds in the amount of $23,504,004. The bonds were issued as Current Interest Bonds in the aggregate principal amount of $21,115,000 and as Capital Appreciation Bonds in the original amount of $2,389,004. The proceeds of the bonds were used to finance certain redevelopment activities of benefit to the former Agency's Central San Rafael Redevelopment Project Area. In December, 2009 of the former Agency exercised the redemption option of the Current Interest Bonds. The outstanding balance of the Bonds was refunded, on a current basis, through the issuance of the 2009 Tax Allocation Refunding Bonds as discussed below. The Capital Appreciation Bonds mature annually after December 1 from 2018 to 2022, in amounts ranging from $1,440,000 to $2,070,000 and bear interest at rates from 5.58% to 5.60%. Interest on the Capital Appreciation Bonds will compound on each interest premium date and will be payable solely at maturity. The bonds are secured, on parity with the 1992 and 1995 bonds (refunded in 2002), by a pledge and a lien on tax revenues and amounts on deposit in certain funds and accounts held by the fiscal agent. 2002 Tax Allocation Refunding Bonds On October 9, 2002, the former Agency issued Tax Allocation Refunding Bonds in the amount of $25,020,000. The proceeds of the bonds were used to refund the 1992 Tax Allocation Refunding Bonds and the 1995 Tax Allocation Bonds. The Bonds mature annually each December 1 from 2002 to 2022, in amounts ranging from $540,000 to $1,920,000 and bear interest at rates ranging from 2.00% to 5.25%. Interest is payable semiannually on June 1 and December 1. The Bonds maturing on or after December 1, 2013, are subject to optional redemption prior to maturity, in whole or in part, and by lot within any one maturity, prior to their respective maturity dates, on any date on or after December 1, 2012, at a price equal to the principal amount, plus accrued interest on the redemption date. The bonds are payable from tax revenues to be derived from the redevelopment activities of the former Agency related to the Central San Rafael Redevelopment Project Area. 2009 Tax Allocation Refunding Bonds On December 14, 2009, the former Agency issued 2009 Tax Allocation Refunding Bonds in the amount of $14,660,000 bearing interest at rates from 3.00% to 5.00%. The proceeds of the Series 2009 Bonds were used to refund the former Agency's 1999 Tax Allocation Current Interest Bonds, to advance funds to the City to finance street and parking improvements for the benefit of the Agency's Central San Rafael Redevelopment Project. Principal payments are due annually on December 30 and interest payable semiannually on June 30 and December 30. 75 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE - PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES (Continued) The Series 2009 Bonds maturing on or before December 1, 2019, are not subject to optional redemption prior to their respective stated maturities. The Series 2009 Bonds maturing on or after December 1, 2020, are subject to optional redemption as a whole or in part either on a pro rata basis among maturities or in inverse order of maturity, and by lot within any one maturity, prior to their respective maturity dates, at the option of the Agency, on any date on or after December 1, 2019, at a price equal to the principal amount of such Series 2009 Bonds called for redemption, together with interest accrued on the date fixed for redemption, without premium. The former Agency pledged all future tax increment revenues, less amounts required to be set aside in the Low and Moderate Income Housing Fund, for the repayment of the 1999 Capital Appreciation Bonds, and the 2002 and 2009 Tax Allocation Refunding Bonds. The pledge of all future tax increment revenues ends upon repayment of $35.7 million in remaining debt service on the Bonds, which is scheduled to occur in 2023. For fiscal year June 30, 2013, tax increment revenues amounted to $3.6 million which was used to make the debt service payments of $3.6 million. The following table summarizes the activity for the fiscal year ended June 30, 2013: Authorized Balance and Issued June 30, 2012 Additions Retirements San Rafael Redevelopment Agency Activities 1999 Tax Allocation Bonds Interest Capital Appreciation Bonds 1,023,576 5.58%-5.6%, due 12/1/2022 $2,389,004 $4,871,597 $276,233 2002 Tax Allocation Refunding Bonds 766,926 2.00%-5.251/o, due 12/1/2021 25,020,000 12,525,000 2009 Tax Allocation Refunding Bonds 484,026 3.00%-5.00%, due 12/1/2022 14,660,000 12,880,000 Add: deferred bond premium costs 878,465 Total Successor Agency Long-term Debt Debt Service Requirements Balance Current June 30, 2013 Portion $5,147,830 $1,495,000 11,030,000 $1,575,000 930,000 11,950,000 965,000 79,860 798,605 $31,155,062 $276,233 $2,504,860 $28,926,435 $2,540,000 Annual debt service requirements are shown below: For the Year Ended June 30 2014 2015 2016 2017 2018 2019-2023 Totals Reconciliation of long-term debt: Less unaccreted discount Add deferred bond premium costs 76 Governmental Activities Principal Interest $2,540,000 1,023,576 2,675,000 893,201 2,800,000 766,926 2,930,000 634,276 3,080,000 484,026 16,785,000 1,039,189 30,810,000 $4,841,194 (2,682,170) 798,605 $28,926,435 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2013 NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE - PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES (Continued) D. Other Long -Term Obligations During the fiscal year ending June 30, 2013, the San Rafael Successor Agency Oversight Board approved two personnel -related obligations of the former Redevelopment Agency. On August 30, 2012, the Oversight Board approved the inclusion of $1,904,431, representing the unfunded pension liability attributable to former Redevelopment Agency employees; the repayment is being made in ten equal, annual installments. On January 22, 2013, the Oversight Board approved the inclusion of $502,000, representing the unfunded OPEB (retiree medical) liability attributable to former Redevelopment Agency employees; the repayment is being made in nine equal, annual installments. The following table summarizes the activity for the fiscal year ended June 30, 2013: Approved Balance Balance Amount June 30, 2012 Additions Retirements June 30, 2013 Unfunded Pension Liability $1,904,431 $1,904,431 $190,443 $1,713,988 Unfunded OPEB Liability 502,000 502,000 55,778 446,222 Total Long Term Obligations E. Commitment and Contingencies State Approval of Enforceable Obligation $2,406,431 $246,221 $2,160,210 The Successor Agency prepares a Recognized Obligation Payment Schedule (ROPS) semi-annually that contains all proposed expenditures for the subsequent six-month period. The ROPS is subject to the review and approval of the Oversight Board as well as the State Department of Finance. As of June 30, 2013, the Successor Agency had prepared four ROPS, all of which have been approved by the Oversight Board and the California Department of Finance. The Department of Finance has stated that all items on a future ROPS are subject to a subsequent review. The amount, if any, of current obligations that may be denied by the Department of Finance cannot be determined at this time. The City expects such amounts, if any, to be immaterial. Demand for True -Up Payment Pursuant to Health and Safety Code section 34183.5 (b), Successor Agencies are required to remit a True -Up Payment representing a calculation of tax increment collected in December 2011 by the former Redevelopment Agency in excess of the enforceable obligations, as approved by the County Auditor/Controller. On July 9, 2012 the Successor Agency received a Demand from the County Auditor/Controller that had calculated a True -Up Payment of $1,731,446. Management reviewed the calculation and believes it is inaccurate. Management's calculation of the True -Up Payment amounted to $148,589 and on July 12, 2012 the Successor Agency remitted that amount to the County Auditor/Controller. The remaining unpaid balance of the Demand has not been recorded in the accompanying financial statements as management believes its calculation is accurate. The California State Attorney General's Office has been in contact with the Successor Agency to inform the Successor Agency of the litigation process that will resolve the issue in the amount paid on July 12, 2012. The City anticipates proceeding with this process during fiscal year 2013-2014. 77 This Page Left Intentionally Blank REQUIRED SUPPLEMENTAL INFORMATION This Page Left Intentionally Blank GENERAL FUND AND MAJOR SPECIAL REVENUE FUND BUDGET -TO -ACTUAL STATEMENTS GASB Statement No. 34 dictates that budget -to -actual information in the basic financial statements should be limited to the General Fund and major Special Revenue Funds. This section is provided for the presentation of Budget -to -Actual Statements for the General Fund, Traffic and Housing Mitigation, and the Gas Tax Special Revenue Funds. Budgets are adopted on a basis consistent with Generally Accepted Accounting Principles for the General Fund and Special Revenue Funds. 81 CITY OF SAN RAFAEL GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2013 REVENUES Taxes and special assessments Licenses and permits Fines and forfeitures Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Community development/redevelopment Culture and recreation Capital outlay Capital improvement/special projects Debt service: Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR, as restated FUND BALANCES, END OF YEAR Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $44,877,050 $45,373,704 $46,670,007 $1,296,303 1,685,000 1,813,000 1,929,387 116,387 714,700 714,700 734,005 19,305 148,210 173,310 228,565 55,255 6,370,308 6,370,308 6,475,596 105,288 2,099,750 2,219,750 2,079,265 (140,485) 225,000 564,489 1,910,686 1,346,197 56,120,018 57,229,261 60,027,511 2,798,250 8,274,237 9,989,088 9,087,723 901,365 33,708,233 34,259,194 33,987,636 271,558 8,892,289 8,909,453 8,875,111 34,342 2,971,296 2,971,296 2,961,275 10,021 2,231,769 2,231,768 2,200,468 31,300 44,850 172,940 170,138 2,802 23,260 438,260 194,425 243,835 283,805 283,805 56,145,934 59,255,804 57,760,581 1,495,223 (25,916) (2,026,543) 2,266,930 4,293,473 1,485,200 3,104,622 3,104,622 (1,438,998) (4,338,227) (4,338,227) 46,202 (1,233,605) (1,233,605) $20,286 ($3,260,148) 1,033,325 $4,293,473 2,771,462 $3,804,787 82 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, 2013 REVENUES Use of money and properties Charges for services Total Revenues EXPENDITURES Current: Public works and parks Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 74,543 74,649 Variance with 40 74,543 Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $19,000 $19,000 $17,226 ($1,774) $3,094,594 3,096,328 3,096,328 19,000 19,000 3,113,554 3,094,554 74,543 74,649 74,609 40 74,543 74,649 74,609 40 (55,543) (55,649) 3,038,945 3,094,594 ($55,543) ($55,649) 3,038,945 $3,094,594 9,401,096 $12,440,041 83 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, 2013 REVENUES Use of money and properties 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 Budgeted Amounts Actual Original Final Amounts $3,750 $3,750 $7,366 4,760,442 4,760,442 3,305,466 496,000 619,800 1,031,919 53,993 5,260,192 5,383,992 4,398,744 30,026 30,190 30,084 1,489,009 1,490,338 428,230 3,469,143 3,219,143 1,641,022 4,988,178 4,739,671 2,099,336 272,014 644,321 2,299,408 365 365 (440,000) (674,521) (674,521) (440,000) (674,156) (674,156) ($167,986) ($29,835) 1,625,252 4,481,247 $6,106,499 84 Variance with Final Budget Positive (Negative) $3,616 (1,454,976) 412,119 53,993 (985,248) 106 1,062,108 1,578,121 2,640,335 1,655,087 $1,655,087 SUPPLEMENTARY INFORMATION This Page Left Intentionally Blank NON -MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Recreation Revolving Fund - Established to administer the Community Services Department's program and facility rental charge and accounts for the Recreation Memorial Fund. Baypoint Lagoons Assessment District Fund - The Baypoint Lagoons Lighting and Landscape District was formed to protect and enhance wildlife habitat and water quality in Baypoint (Spinnaker) Lagoon and the ad acent diked salt marsh. Household Hazmat Facility Fund - Established to account for State mandated hazardous materials information, collection, and reporting. Expenditures include inspection of businesses for compliance with regulations. This fund also serves as the depository for countywide Household Hazardous Waste Program. Childcare Fund - Established to administer and account for childcare programs at ten sites throughout the City. 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 geotechnical mitigation facilities. A Mello Roos District was formed to fund this maintenance. Library Fund - Established to account for restricted library activities that are intended to be self - funding. Library Assessment Fund - Established to account for a special parcel tax dedicated to public library services and facilities, equipment, and technology improvements. Public Safety Fund - Established for special police services, which are intended to be self -funding. Stormwater Fund - Established to provide for self -funding storm drain maintenance program plus separate programs through the County and Bay Area to educate residents about urban runoff pollution. Development Services Fund - Established to account for development activities that are supported by external sources of funds. This fund does not account for the operating costs of building, planning, and engineering, which are located in the General Fund. Grants Fund - Established to account for grants for the Library, Childcare, Police and Falkirk Cultural Center. Parkland Dedication Fund - Established to account for long-term developer deposits used to enhance and maintain the park structure within City limits. Emergency Medical Services Fund - Established to account for the Emergency Medical Services and Transportation program that provides services to all segments of the community. 87 NON -MAJOR GOVERNMENTAL FUNDS (Continued) Business Improvement Fund — Established to account for activities held in Downtown San Rafael, such as the Farmers Market. Sewer Maintenance Fund — Established under the terms of the JPA to provide all necessary maintenance to the Sanitation District's gravity collection sewer system. Pt. San Pedro Maintenance Portion Special Revenue Fund — Established to account for ongoing maintenance needs within the Pt. San Pedro assessment district. Low and Moderate Income Housing Special Revenue Fund — Established to account for the activities related to the assets assumed by the City as Housing Successor to the San Rafael Redevelopment Agency for the housing activities of the former Redevelopment Agency. Measure A Open Space Special Revenue Fund — Established to account for the use of proceeds distributed by the County of Marin from Measure A, as well as other supplementary matching or City -funding for the operation or maintenance of open space, park or recreation lands. DEBT SERVICE FUNDS Peacock Gap Assessment District Fund — Established to accumulate funds for the payment of principal and interest for the 1993 Bonds which matured in 2005. The proceeds were used to refund the 1984 Bonds, which provided for the construction of public improvements in the project area. Financing is to be provided by property tax increments generated within the specific geographic region described by the bond assessment district. Mariposa Assessment District Fund - Established to accumulate funds for the payment of principal and interest for the 1993 Bond, which matured in 2008. The proceeds were used to finance the grading and paving of Mariposa Road. 1997 Financing Authority Revenue Bonds Fund — Established to accumulate funds for the payment of principal and interest for the 1997 Revenue Bonds which matured in 2011. The proceeds were used to purchase the previously issued special assessment bonds. Financing is to be provided by property tax increments generated within the specific geographic region described by the bond assessment district. Pt. San Pedro Debt-CIP Portion Payment Debt Services Fund — Established to accumulate funds for payment of principal and interest for Pt. San Pedro Assessment District bonds. CAPITAL PROJECTS FUNDS Capital Improvement Fund — Established for the costs associated with major capital improvement projects not tied to specific funds elsewhere. Improvements could include medians, parkways, sidewalks, and other public assets. Bedroom Tax Fund — Established to collect funds from multiple -unit housing used to pay for maintaining and developing parks within local neighborhoods. 88 NON -MAJOR GOVERNMENTAL FUNDS (Continued) 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. Radio Replacement Fund - Established to meet radio system operating costs, capital acquisition and replacement, and operating lease obligations for the Public Works, Fire, Community Development and Police Departments. The Marin Emergency Radio Authority (MERA) is a countywide JPA that has taken the roll in procurement and installation of a new digital radio system. This fund supports San Rafael's portion of the MERA efforts and related contractual obligations. Telephone Replacement Fund — Established to provide ongoing support services for telephone equipment and usage throughout the organization. 89 ASSETS Cash and investments Restricted cash and investments Receivables: Accounts Taxes Grants Loans Prepaids Total Assets CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS JUNE 30, 2013 SPECIAL REVENUE FUNDS Baypoint Lagoons Household Street Recreation Assessment Hazmat Maintenance Revolving District Facility Childcare and Cleaning $239,660 $194,238 $217,744 $78,148 $633,288 225,103 2,371 17,145 $484,279 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $121,259 Deposits payable Developer bonds payable Deferred revenue 292,564 Total Liabilities 413,823 Fund Balances: Nonspendable 17,145 Restricted 496 Committed 23,310 Assigned 29,505 Total Fund Balances 70,456 Total Liabilities and Fund Balances $484,279 267,040 279 29,297 6,814 $194,517 $484,784 $114,259 $633,288 $244,403 $41,001 244,403 41,001 6,814 $194,517 183,123 $550,529 35,273 9,700 21,985 56,744 82,759 194,517 240,381 73,258 633,288 $194,517 $484,784 $114,259 $633,288 SPECIAL REVENUE FUNDS Loch Lomond Assessment Library Public Development District Library Assessment Safety Stormwater Services Grants $521,052 $226,967 $617,883 $171,621 $1,804,837 $846,125 $1,070,681 17,000 45,000 172 $521,224 $226,967 $617,883 8,413 225,545 $188,621 $1,813,250 $891,125 $1,296,226 $5,123 $25,219 $29,328 $8,073 $36,408 9,887 33,430 1,500 5,123 25,219 29,328 19,460 69,838 $521,224 10,383 51,469 $183,855 1,452,338 479,329 459,600 104,782 541,195 4,766 331,584 181,703 766,788 106,679 210,633 521,224 221,844 592,664 188,621 1,783,922 871,665 1,226,388 $521,224 $226,967 $617,883 $188,621 $1,813,250 $891,125 $1,296,226 (Continued) 91 CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS JUNE 30, 2013 Parkland Dedication ASSETS Cash and investments $847,553 Restricted cash and investments Receivables: Medical Accounts Sewer Taxes Services Grants 103,077 Loans $593,674 Prepaids $126,651 Total Assets $950,630 LIABILITIES AND FUND BALANCES Liabilities: Emergency Accounts payable Deposits payable Medical Developer bonds payable Sewer Deferred revenue Services Total Liabilities Maintenance Fund Balances: $593,674 Nonspendable $126,651 Restricted $695,630 Committed 255,000 Assigned 45,627 Total Fund Balances 950,630 Total Liabilities and Fund Balances $950,630 SPECIAL REVENUE FUNDS Emergency Pt. San Pedro Medical Business Sewer Maintenance Services Improvement Maintenance Portion $593,674 $4,298 $126,651 $165,362 160,000 45,627 934 7,907 $807,208 $4,298 $126,651 $166,296 $62,459 $95,510 62,459 95,510 7,907 736,842 $4,298 $166,296 31,141 744,749 4,298 31,141 166,296 $807,208 $4,298 $126,651 $166,296 92 67,200 66,886 680,979 $811,319 $217,213 $2,875 $16,543 $145,826 $1,213,910 $4,840 $70,695 4,840 70,695 $217,213 $2,875 $16,543 $145,826 806,479 1,143,215 806,479 217,213 2,875 16,543 145,826 1,143,215 $811,319 $217,213 $2,875 $16,543 $145,826 $1,213,910 (Continued) 93 CAPITAL PROJECT SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS FUND Low and 1997 Pt. San Pedro Moderate Peacock Gap Mariposa Financing Debt-CIP Income Measure A Assessment Assessment Authority Portion Capital Housing Open Space District District Revenue Bonds Payment Improvement $130,340 $150,013 $2,875 $16,543 $145,826 $19147,024 67,200 66,886 680,979 $811,319 $217,213 $2,875 $16,543 $145,826 $1,213,910 $4,840 $70,695 4,840 70,695 $217,213 $2,875 $16,543 $145,826 806,479 1,143,215 806,479 217,213 2,875 16,543 145,826 1,143,215 $811,319 $217,213 $2,875 $16,543 $145,826 $1,213,910 (Continued) 93 CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS JUNE 30, 2013 ASSETS Cash and investments Restricted cash and investments Receivables: Accounts Taxes Grants Loans Prepaids Total Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Deposits payable Developer bonds payable Deferred revenue Total Liabilities Fund Balances: Nonspendable Restricted Committed Assigned Total Fund Balances Total Liabilities and Fund Balances CAPITAL PROJECT FUNDS Park Bedroom Assessment Capital Open Radio Tax Districts Projects Space Replacement $21,970 $379,145 $18,446 $130,836 $580,328 76,285 $21,970 $455,430 $18,446 $130,836 $580,328 $96,066 $1,145 96,066 1,145 $21,970 302,174 57,190 12,986 4,315 $130,836 $580,328 21,970 359,364 17,301 130,836 580,328 $21,970 $455,430 $18,446 $130,836 $580,328 94 Total Non -Major Telephone Governmental Replacement Funds $236,856 $11,319,984 76,285 714,143 122,625 427,176 680,979 13,440 45,306 $250,296 $13,386,498 $39,634 $881,163 43,317 1,500 292,564 39,634 1,218,544 13,440 45,306 6,396,530 4,273,971 197,222 1,452,147 210,662 12,167,954 $250,296 $13,386,498 95 CITY OF SAN RAFAEL COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONIVIAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2013 REVENUES Taxes and special assessments Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balance, Beginning Fund Balance, Ending 1,428,074 SPECIAL REVENUE FUNDS Baypoint 3,834,741 3,692,141 Lagoons Household Street Recreation Assessment Hazmat Maintenance Revolving District Facility Childcare and Cleaning 3,692,141 $25,368 (1,219,655) 21,280 20,083 $139 251 $208 $84 $883 14,999 1,160,998 257,134 2,600,368 1,447,674 3,403,782 20,083 37,534 1,353 1,400 250 470 2,653,040 25,619 1,449,282 3,661,250 1,353 1,428,074 4,339 3,834,741 3,692,141 6,868 31,086 1,125 3,872,695 4,339 1,429,199 3,692,141 (1,219,655) 21,280 20,083 (30,891) 1,353 1,160,998 100,000 1,160,998 100,000 (58,657) 21,280 20,083 69,109 1,353 129,113 173,237 220,298 4,149 631,935 $70,456 $194,517 $240,381 $73,258 $633,288 Loch Lomond Assessment District $15,606 1,111 16,717 54 54 16,663 (413,952) (413,952) (397,289) 918,513 $521,224 Library $20,615 19,515 7,038 356 47,524 24,920 46,858 71,778 (24,254) (24,254) 246,098 $221,844 SPECIAL REVENUE FUNDS Library Public Development Assessment Safety Stormwater Services $861,498 764 862,262 830,324 830,324 31,938 31,938 560,726 $592,664 Grants $201 $1,643 $30,124 $617 103,242 1,364,237 2,118 784,459 49,175 6,160 5,937 60,549 41,465 111,721 792,039 139,848 1,406,319 153,886 821,962 (478,787) 677,547 5,159 517,442 15,299 46,576 174,344 724,123 (62,623) 67,916 65,000 713,952 (2,221) 62,779 713,952 156 781,868 188,465 1,002,054 $188,621 $1,783,922 97 41,513 100,000 29,040 64,973 56,286 1,031,783 56,286 1,267,309 83,562 139,010 478,787 821,962 (478,787) (304,520) 517,442 83,562 656,452 788,103 569,936 $871,665 $1,226,388 (Continued) CITY OF SAN RAFAEL COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2013 98 SPECIAL REVENUE FUNDS Emergency Pt. San Pedro - Parkland Medical Business Sewer Maintenance Dedication Services Improvement Maintenance Portion REVENUES Taxes and special assessments $19,058 $3,804,985 $82,269 Use of money and properties 1,184 117 $9 171 Intergovernmental Charges for services 2,384,514 $2,407,505 Other revenue 17,694 Total Revenues 20,242 6,189,616 17,703 2,407,505 82,440 EXPENDITURES Current: General government 17,842 Public safety 5,707,466 Public works and parks 2,188,640 2,119 Culture and recreation 8,463 Capital outlay 14,478 Capital improvement/special projects Total Expenditures 8,463 5,721,944 17,842 2,188,640 2,119 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 11,779 467,672 (139) 218,865 80,321 OTHER FINANCING SOURCES (USES) Transfers in Transfers out (280,200) (218,864) Total Other Financing Sources (Uses) (280,200) (218,864) Net Change in Fund Balances 11,779 187,472 (139) 1 80,321 Fund Balance, Beginning 938,851 557,277 4,437 31,140 85,975 Fund Balance, Ending $950,630 $744,749 $4,298 $31,141 $166,296 98 SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS 120,905 Low and 1997 Pt. San Pedro - Moderate Peacock Gap Mariposa Financing Debt-CIP Income Measure A Assessment Assessment Authority Portion Housing Open Space District District Revenue Bonds Payment $67,200 $2,875 16,519 145,623 120,905 $5819 13 $24 $203 $2,875 $16,543 $145,826 291,391 297,210 67,213 24 203 1,382,402 $120,905 1,382,402 120,905 (1,085,192) 67,213 24 203 (120,905) 150,000 150,000 (1,085,192) 217,213 24 203 (120,905) 1,891,671 $2,875 16,519 145,623 120,905 $806,479 $217,213 $2,875 $16,543 $145,826 CAPITAL PROJECT FUNDS Capital Improvement $384 480,642 481,026 1,279,822 31,945 1,311,767 (830,741) 1,753,600 1,753,600 922,859 220,356 $1,143,215 (Continued) CITY OF SAN RAFAEL COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2013 REVENUES Taxes and special assessments Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balance, Beginning Fund Balance, Ending 100 CAPITAL PROJECT FUNDS Park Bedroom Assessment Capital Open Radio Tax Districts Projects Space Replacement $3,315 29 $1,552 $24 $182 $385 648,660 1,585,555 6,983 3,344 1,587,107 7,007 182 649,045 1,547,189 1,325 3,905 629,080 1,547,189 1,325 3,905 629,080 3,344 39,918 5,682 (3,723) 19,965 76,188 (365) 75,823 3,344 115,741 5,682 (3,723) 19,965 18,626 $243,623 11,619 134,559 560,363 $21,970 $359,364 $17,301 $130,836 $580,328 100 Total Non -Major Telephone Governmental Replacement Funds $4,879,299 $207 66,559 1,759,511 481,000 14,696,935 2,055,744 481,207 23,458,048 1,441,757 7,389,426 3,022,644 8,390,589 2,918,489 421,813 2,317,081 421,813 25,479,986 59,394 (2,021,938) 5,320,487 (1,698,909) 3,621,578 59,394 1,599,640 151,268 10,568,314 $210,662 $12,167,954 101 CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2013 SPECIAL REVENUE FUNDS Recreation Revolving Baypoint Lagoons Assessment District Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Taxes and special assessments $25,000 $25,368 $368 Licenses and permits Use of money and properties $420 $139 ($281) 330 251 (79) Intergovernmental 14,999 14,999 Charges for services 2,638,270 2,600,368 Other revenue 8,480 37,534 Total Revenues 2,662,169 2,653,040 EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation 3,778,826 3,834,741 Capital outlay 6,870 6,868 Capital improvement/special projects 86,999 31,086 Total Expenditures 3,872,695 3,872,695 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (1,210,526) (1,219,655) OTHER FINANCING SOURCES (USES) Bonds issued Transfers in 1,160,998 1,160,998 Transfers out (60,000) Total Other Financing Sources (Uses) 1,100,998 1,160,998 FUND BALANCES, BEGINNING OF YEAR AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES ($109,528) (58,657) FUND BALANCES, BEGINNING OF YEAR 129,113 FUND BALANCES, END OF YEAR $70,456 102 (37,902) 29,054 (9,129) 25,330 25,619 289 4,339 4,339 (55,915) 2 55,913 (9,129) 60,000 60,000 4,339 4,339 20,991 21,280 289 $50,871 $20,991 21,280 173,237 $194,517 $289 SPECIAL REVENUE FUNDS Household Hazmat Facility Childcare Street Maintenance and Cleaning Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $120 $208 $88 $84 $84 $1,370 $883 ($487) 5,330 (5,330) $259,030 257,134 (1,896) 1,388,340 1,447,674 59,334 3,336,730 3,403,782 67,052 1,400 1,400 250 250 470 470 1,393,790 1,449,282 55,492 3,595,760 3,661,250 65,490 1,370 1,353 (17) 1,428,319 1,428,074 245 3,763,090 3,692,141 70,949 5,330 5,330 1,130 1,125 5 1,429,449 1,429,199 250 3,768,420 3,692,141 76,279 (35,659) 20,083 55,742 (172,660) (30,891) 141,769 100,000 100,000 100,000 100,000 ($35,659) 20,083 $55,742 ($72,660) 69,109 $141,769 220,298 4,149 $240,381 $73,258 103 130 130 1,240 1,353 130 130 113 $1,240 1,353 $113 631,935 $633,288 (Continued) CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2013 SPECIAL REVENUE FUNDS Loch Lomond Assessment District Variance Final Positive Final Budget Actual (Negative) Budget REVENUES Taxes and special assessments $15,610 $15,606 ($4) Licenses and permits Use of money and properties 1,900 1,111 (789) $25,390 Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Bonds issued 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 19,515 4,000 20,000 17,510 16,717 (793) 68,905 Library Variance Positive Actual (Negative) $20,615 19,515 7,038 356 47,524 ($4,775) 3,038 (19,644) (21,381) 16,050 54 15,996 89,350 24,920 64,430 24,515 46,858 (22,343) 16,050 54 15,996 113,865 71,778 42,087 1,460 16,663 15,203 (44,960) (24,254) 20,706 (413,952) (413,952) (413,952) (413,952) ($412,492) (397,289) $15,203 918,513 $521,224 104 ($44,960) (24,254) $20,706 246,098 $221,844 105 SPECIAL REVENUE FUNDS 153,886 7,960 Library Assessment Public Safety Stormwater 1,052,117 677,547 374,570 Variance 830,324 3 Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $886,500 $861,498 ($25,002) 830,324 3 179,455 174,344 5,111 1,152,117 724,123 427,994 57,073 31,938 (25,135) (114,015) $5,000 51,392 ($5,000) $900 764 (136) $340 $201 ($139) 2,200 $1,643 (557) 713,952 65,100 103,242 38,142 (2,221) 2,118 2,118 793,000 784,459 (8,541) 713,952 $57,073 31,938 6,160 6,160 156 5,937 5,937 887,400 862,262 (25,138) 65,440 111,721 46,281 800,200 792,039 (8,161) 105 161,846 153,886 7,960 1,052,117 677,547 374,570 830,327 830,324 3 5,159 5,159 12,450 15,299 (2,849) 100,000 46,576 53,424 830,327 830,324 3 179,455 174,344 5,111 1,152,117 724,123 427,994 57,073 31,938 (25,135) (114,015) (62,623) 51,392 (351,917) 67,916 419,833 65,000 65,000 713,952 713,952 (2,221) (2,221) 62,779 62,779 713,952 713,952 $57,073 31,938 ($25,135) ($51,236) 156 $51,392 $362,035 781,868 $419,833 560,726 188,465 1,002,054 $592,664 $188,621 $1,783,922 (Continued) 105 CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2013 SPECIAL REVENUE FUNDS Development Services Variance Final Positive Fina Budget Actual (Negative) Budg REVENUES Taxes and special assessments Licenses and permits Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Bonds issued 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 $26,100 $30,124 $4,024 49,175 49,175 60,549 60,549 26,100 139,848 113,748 $2,040 Parkland Dedication Variance Positive Actual (Negative) $19,058 $19,058 1,184 (856) 2,040 20,242 18,202 8,500 8,463 37 $150,000 150,000 56,300 56,286 14 56,300 56,286 14 158,500 8,463 150,037 (30,200) 83,562 $113,762 (156,460) 11,779 168,239 478,787 478,787 (478,787) (478,787) ($30,200) 83,562 $113,762 788,103 $871,665 106 ($156,460) 11,779 $168,239 938,851 $950,630 (280,200) (280,200) (280,200) (280,200) (218,864) (218,864) (218,864) (218,864) $128,437 187,472 $59,035 $20 (139) ($159) $8,636 1 ($8,635) 557,277 4,437 31,140 $744,749 $4,298 $31,141 (Continued) 107 SPECIAL REVENUE FUNDS Emergency Medical Services Business Improvement Sewer Maintenance Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $3,882,520 $3,804,985 ($77,535) 280 117 (163) $20 $9 ($11) 2,300,000 2,384,514 84,514 $2,502,442 $2,407,505 ($94,937) 22,520 17,694 (4,826) 6,182,800 6,189,616 6,816 22,540 17,703 (4,837) 2,502,442 2,407,505 (94,937) 22,520 17,842 4,678 5,768,163 5,707,466 60,697 2,274,942 2,188,640 86,302 6,000 14,478 (8,478) 5,774,163 5,721,944 52,219 22,520 17,842 4,678 2,274,942 2,188,640 86,302 408,637 467,672 59,035 20 (139) (159) 227,500 218,865 (8,635) (280,200) (280,200) (280,200) (280,200) (218,864) (218,864) (218,864) (218,864) $128,437 187,472 $59,035 $20 (139) ($159) $8,636 1 ($8,635) 557,277 4,437 31,140 $744,749 $4,298 $31,141 (Continued) 107 CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2013 REVENUES Taxes and special assessments Licenses and permits Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Bonds issued 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 Pt. San Pedro -Maintenance Portion Low and Moderate Income Housing Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) $88,600 $82,269 ($6,331) (1,085,192) 171 171 $5,819 $5,819 291,391 88,600 82,440 (6,160) 297,210 5,819 $1,456,845 1,382,402 74,443 2,282 2,119 163 2,282 2,119 163 1,456,845 1,382,402 74,443 86,318 80,321 (5,997) (1,456,845) (1,085,192) 371,653 $86,318 80,321 85,975 $166,296 108 ($5,997) ($1,456,845) (1,085,192) $371,653 1,891,671 $806,479 SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS Measure A Mariposa Assessment District 1997 Financing Authority Revenue Bonds Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $67,200 $67,200 13 $13 $40 $24 ($16) $310 $203 ($107) 67,213 67,213 40 24 (16) 310 203 (107) 67,213 67,213 40 24 (16) 310 203 (107) $150,000 150,000 150,000 150,000 $150,000 217,213 $67,213 $40 24 ($16) $310 203 ($107) 16,519 145,623 $217,213 $16,543 $145,826 (Continued) 109 CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2013 REVENUES Taxes and special assessments Licenses and permits Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Bonds issued 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 Pt. San Pedro-Debt-CIP Payment Variance Final Positive Budget Actual (Negative) $124,600 ($124,600) 124,600 (124,600) 120,906 $120,905 1 120,906 120,905 1 3,694 (120,905) ($124,599) 1,750,000 (1,585,555) 164,445 $168,139 (120,905) 120,905 110 (1,750,000) 1,585,555 (164,445) ($289,044) INTERNAL SERVICE FUNDS Internal service funds account for department services and financing performed for other departments within the same governmental jurisdiction. Funding comes from charges assessed to the departments benefiting from the service. Building Maintenance Fund - Established to account for construction projects and cyclical large dollar maintenance tasks (roof, painting) completed on City owned buildings. Employee Benefits Fund - This fund is utilized for the payment of retiree benefits, unemployment insurance, accumulated leave requirements and other negotiated benefits not tied to a specific department. Liability Insurance Fund - Established to maintain sufficient reserves for outstanding claims. All costs associated with liability premiums are paid from this fund. Workers' Compensation Fund - Established to maintain sufficient reserves for injury claims. All costs associated with workers compensation, including safety training, wellness programs, claim expenses and insurance premiums are paid from this fund. Dental Insurance Fund - Set up to maintain sufficient reserves for dental claims. All costs associated with dental claims and administrations are paid from this fund. Employee Retirement Fund — Established to maintain sufficient reserves to fund debt service payments on the 2010 Taxable Pension Obligation Bonds and other pension related obligations. OPEB/Retiree Medical Fund — Established to account for activities related to the funding, administration and procurement of retiree medical benefits. 111 CITY OF SAN RAFAEL INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF NET POSITION JUNE 30, 2013 112 Building Employee Liability Workers' Maintenance Benefits Insurance Compensation ASSETS Current Assets: Cash and investments $2,431,599 $740,698 $1,377,886 $5,205,995 Accounts receivable 189,908 Due from other funds Prepaids 3,522 3,639 Net Pension Asset (Note 9) Net OPEB Asset Total Assets 2,435,121 740,698 1,377,886 5,399,542 LIABILITIES Current Liabilities: Accounts payable 58,343 10,419 13,760 Claims payable - due in one year 512,376 1,426,924 Non-current Liabilities: Claims payable - due in more than one year 590,411 3,385,638 Total Liabilities 58,343 10,419 1,102,787 4,826,322 NET POSITION: Restricted Unrestricted 2,376,778 730,279 275,099 573,220 Total Net Position $2,376,778 $730,279 $275,099 $573,220 112 OPEB/ Dental Employee Retiree Insurance Retirement Medical $135,058 $1,032,541 $613,496 191,509 748,239 450 1,000,000 4,512,141 135,058 2,780,780 5,317,596 3,715 20,062 3,715 20,062 1,000,000 4,512,141 131,343 1,780,780 785,393 $131,343 $2,780,780 $5,297,534 Total $11,537,273 381,417 748,239 7,611 1,000,000 4,512,141 18,186,681 106,299 1,939,300 3,976,049 6,021,648 5,512,141 6,652,892 $12,165,033 113 CITY OF SAN RAFAEL INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION FOR THE YEAR ENDED JUNE 305 2013 OPERATING REVENUES Charges for current services Other operating revenues Total Operating Revenues OPERATING EXPENSES Insurance premiums and claims Maintenance and repairs General and administrative Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Investment income Interest expense Total Nonoperating Revenues (Expenses) Net income (loss) before transfers Transfers in Transfers out Change in Net Position NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR Building Employee Liability Workers' Maintenance Benefits Insurance Compensation $1,614,190 $700,000 $1,569,880 $1,972,083 11,300 101,040 1,625,490 700,000 1,670,920 1,972,083 739,636 380,000 (868,977) 1,307,005 199,484 $730,279 $275,099 $573,220 669,391 173,068 98,739 199,484 669,391 (695,909) 1,405,744 1,426,006 30,609 2,366,829 566,339 1,136 670 3,783 6,881 1,136 670 3,783 6,881 1,427,142 31,279 2,370,612 573,220 583,600 319,000 (373,600) (2,095,513) 1,637,142 350,279 275,099 573,220 739,636 380,000 $2,376,778 $730,279 $275,099 $573,220 114 379 4,077 OPEB/ Dental Employee Retiree Insurance Retirement Medical $495,588 (500,000) $2,283,332 8,490 (221,410) 1,014,905 504,078 3,002,190 3,298,237 380,610 $2,780,780 3,496,522 $2,000 380,610 2,000 3,496,522 123,468 (2,000) (198,285) 379 4,077 850,135 379 4,077 850,135 123,847 2,077 651,850 276,513 700,000 (200,000) (500,000) (76,153) (221,410) 1,351,850 207,496 3,002,190 3,945,684 $131,343 $2,780,780 $5,297,534 Total $8,635,073 1,135,735 9,770,808 4,315,160 199,484 943,198 5,457,842 4,312,966 867,061 867,061 5,180,027 1,879,113 (3,169,113) 3,890,027 8,275,006 $12,165,033 115 CITY OF SAN RAFAEL INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2013 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers/other funds Cash payments to suppliers for goods and services Other operating revenues Payment to Pension Trust Payment to OPEB Trust Cash Flows from Operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Interfund receipts (payments) Interest expense Cash Flows from Noncapital Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Investment received Proceeds from sale of investments 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 Net Pension Asset Net OPEB Asset Accounts payable Claims payable Net Cash Provided by (Used in) Operating Activities Building Employee Liability Workers' Maintenance Benefits Insurance Compensation $1,614,190 $772,938 $1,569,880 $1,782,175 (150,576) (673,998) (789,647) (1,310,694) 11,300 322,088 101,040 4,727,633 1,474,914 98,940 881,273 471,481 210,000 319,000 (2,095,513) 210,000 319,000 (2,095,513) $566,339 1,136 670 3,783 6,881 1,136 670 3,783 6,881 1,686,050 418,610 (1,210,457) 478,362 745,549 322,088 2,588,343 4,727,633 $2,431,599 $740,698 $1,377,886 $5,205,995 $1,426,006 $30,609 $2,366,829 $566,339 72,938 (189,908) (3,522) (3,639) 52,430 (4,607) (7,179) 4,325 (1,478,377) 94,364 $1,474,914 $98,940 $881,273 $471,481 116 (200,000) (971,726) 700,000 (2,038,239) (200,000) (971,726) 700,000 (2,038,239) 379 4,077 379 4,077 OPEB/ (1,969,649) Dental Employee Employee $1,032,541 Insurance Retirement Retirement Total $495,588 $2,091,823 $8,326,594 (380,569) ($2,000) (3,476,910) (6,784,394) 8,490 1,014,905 1,135,735 (1,000,000) (1,000,000) (4,512,141) (4,512,141) 123,509 (1,002,000) (4,882,323) (2,834,206) (200,000) (971,726) 700,000 (2,038,239) (200,000) (971,726) 700,000 (2,038,239) 379 4,077 379 4,077 (76,112) (1,969,649) 211,170 3,002,190 $135,058 $1,032,541 850,135 867,061 3,584,164 3,584,164 4,434,299 4,451,225 251,976 (421,220) 361,520 11,958,493 $613,496 $11,537,273 $123,468 ($2,000) ($198,285) $4,312,966 (191,509) (308,479) (450) (7,611) (1,000,000) (1,000,000) (4,512,141) (4,512,141) 41 20,062 65,072 (1,384,013) $123,509 ($1,002,000) ($4,882,323) ($2,834,206) 117 This Page Left Intentionally Blank AGENCY FUNDS Agency Funds account of assets held by the City as agent for individuals, governmental entities, and non- public organizations. Pt. San Pedro Road Assessment District Fund - Established to accumulate funds for payment of principal and interest for Pt. San Pedro Road Median Landscaping Assessment District bonds. 119 CITY OF SAN RAFAEL AGENCY FUNDS COMBINING STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED JUNE 30, 2013 Balance Balance June 30, 2012 Additions Deductions June 30, 2013 Pt. San Pedro Road Assessment District Assets Restricted cash and investments $300,578 $300,578 Taxes Receivable 1,486 1,486 Total Assets $302,064 $302,064 Liabilities Due to bondholders $302,064 $302,064 Total Liabilities $302,064 $302,064 Balance Balance June 30, 2012 Additions Deductions June 30, 2013 Total Agency Fund Assets Restricted cash and investments $300,578 $300,578 Taxes Receivable 1,486 1,486 Total Assets $302,064 $302,064 Liabilities Due to bondholders $302,064 $302,064 Total Liabilities $302,064 $302,064 120 Terra Linda Community Pool STATISTICAL SECTION This Page Left Intentionally Blank STATISTICAL SECTION This part of the City's Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. In contrast to the financial section, the statistical section information is not subject to independent audit. Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well- being have changed over time: 1. Net Position by Component 2. Changes in Net Position 3. Fund Balances of Governmental Funds 4. Changes in Fund Balance of Governmental Funds Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax: 1. Assessed and Estimated Actual Value of Taxable Property 2. Property Tax Rates, All Direct and Overlapping Governments 3. Principal Property Taxpayers 4. Property Tax Levies and Collections Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future: 1. Ratio of Outstanding Debt by Type 2. Computation of Direct and Overlapping Debt 3. Computation of Legal Bonded Debt Margin 4. Revenue Bond Coverage Parking Facility Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place: 1. Demographic and Economic Statistics 2. Principal Employers Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs: 1. Full -Time Equivalent City Government Employees by Function 2. Operating Indicators by Function/Program 3. Capital Asset Statistics by Function/Program Sources Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year. 123 $290,000 $240,000 $190,000 $140,000 $90,000 $40,000 ($10,000) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CITY OF SAN RAFAEL NET POSITION BY COMPONENT Last Ten Fiscal Years (accrual basis of accounting) ®Net of Related Debt ®Restricted ■Unrestricted 124 As of June 30 2004 2005 2006 2007 Governmental activities Invested in capital assets, net of related debt $202,215,793 $194,658,126 $175,806,100 $171,849,149 Restricted 2,708,397 2,378,641 620,889 31,124,935 Unrestricted 9,775,565 14,167,627 32,739,318 4,499,136 Total governmental activities net position $214,699,755 $211,204,394 $209,166,307 $207,473,220 Business -type activities Invested in capital assets, net of related debt $8,749,750 $8,615,483 $9,819,435 $9,717,501 Unrestricted 1,447,467 1,900,504 2,113,659 2,226,838 Total business -type activities net position $10,197,217 $10,515,987 $11,933,094 $11,944,339 Primary government Net Investments in capital assets $210,965,543 $203,273,609 $185,625,535 $181,566,650 Restricted 2,708,397 2,378,641 620,889 31,124,935 Unrestricted 11,223,032 16,068,131 34,852,977 6,725,974 Total primary government net position $224,896,972 $221,720,381 $221,099,401 $219,417,559 124 $10,130,329 $11,243,637 As of June 30 $10,793,592 $10,650,558 $10,670,190 2008 2009 2010 2011 2012 2013 $176,724,820 $178,744,119 $173,536,144 $174,281,922 $192,361,245 $193,222,791 26,848,900 25,721,231 26,150,254 21,322,937 24,693,205 35,780,412 4,273,937 (700,985) (4,631,276) (8,170,324) 10,652,263 11,151,318 $207,847,657 $203,764,365 $195,055,122 $187,434,535 $227,706,713 $240,154,521 $10,130,329 $11,243,637 $10,950,825 $10,793,592 $10,650,558 $10,670,190 2,471,117 1,936,958 2,017,354 1,948,447 2,495,889 2,501,498 $12,601,446 $13,180,595 $12,968,179 $12,742,039 $13,146,447 $13,171,688 $186,855,149 $189,987,756 $184,486,969 $185,075,514 $203,011,803 $203,892,981 26,848,900 25,721,231 26,150,254 21,322,937 24,693,205 35,780,412 6,745,054 1,235,973 (2,613,922) (6,221,877) 13,148,152 13,652,816 $220,449,103 $216,944,960 $208,023,301 $200,176,574 $240,853,160 $253,326,209 125 Expenses Governmental Activities: General government Public safety Public works and parks Community development Culture and recreation Interest on long-term debt and fiscal charges Total Governmental Activities Expenses Business -Type Activities: Parking services Total Business -Type Activities Expenses Total Primary Government Expenses Component Unit: San Rafael Sanitation District Program Revenues Governmental Activities: Charges for services: General government Public safety Public works and parks Community development Culture and recreation Operating grants and contributions Capital grants and contributions Total Government Activities Program Revenues Business -Type Activities: Charges for services: Parking services Total Business -Type Activities Program Revenues Total Primary Government Program Revenues Component Unit: Charges for services: San Rafael Sanitation District Net (Expense)/Revenue Governmental Activities Business -Type Activities Total Primary Government Net Expense Component Unit Activities CITY OF SAN RAFAEL CHANGES IN NET POSITION Last Ten Fiscal Years (Accrual Basis of Accounting) Fiscal Year Ended June 30, 2004 2005 2006 $5,074,335 30,453,108 16,043,092 3,921,422 7,444,339 2,516,659 65,452,955 $5,895,390 32,891,692 16,820,453 4,624,345 8,450,017 2,129,818 70,811,715 $6,252,533 33,178,537 23,401,246 4,194,249 8,652,445 1,725,559 77,404,569 1,539,441 2,451,941 2,761,511 1,539,441 2,451,941 2,761,511 $66,992,396 $73,263,656 $80,166,080 $5,297,737 $5,288,582 $6,148,915 $1,487,595 2,203,371 2,697,858 1,982,211 3,960,777 5,252,820 573,485 18,158,117 $1,831,269 4,315,141 3,298,076 1,974,527 3,924,360 3,321,135 606,589 19,271,097 $402,094 5,085,679 3,799,861 3,190,832 4,368,274 2,745,570 3,936,474 23,528,784 2,307,432 2,604,066 3,025,380 2,307,432 2,604,066 3,025,380 $20,465,549 $21,875,163 $26,554,164 $5,811,437 $6,060,993 $6,340,773 ($47,294,838) 767,991 ($46,526,847) $513,700 126 ($51,540,618) 152,125 ($51,388,493) $772,411 ($53,875,785) 263,869 ($53,611,916) $191,858 2007 $8,908,433 37,271,272 20,998,749 4,384,408 9,729,485 2,183,683 83,476,030 3,110,254 3,110,254 $86,586,284 $6,656,432 $1,512,814 5,279,785 4,030,060 2,815,009 4,521,004 3,701,901 2,786,761 24,647,334 3,242,046 3,242,046 $27,889,380 $7,857,916 ($58,828,696) 131,792 ($58,696,904) $1,201,484 2008 2009 2010 2011 2012 2013 $8,621,079 $8,075,344 $8,396,759 $8,269,846 $10,171,332 $10,202,530 40,845,347 42,708,538 42,752,033 44,735,486 39,876,910 41,966,065 22,105,367 23,036,676 17,401,923 17,408,038 17,423,033 17,695,164 5,811,866 5,759,171 6,738,873 7,804,650 4,587,557 3,403,158 10,300,230 11,505,896 11,139,225 11,487,999 11,020,663 11,330,058 1,989,620 1,907,229 2,200,024 1,621,605 1,224,991 283,805 89,673,509 92,992,854 88,628,837 91,327,624 84,304,486 84,880,780 3,282,235 3,563,235 4,016,198 3,785,751 3,446,482 3,545,387 3,282,235 3,563,235 4,016,198 3,785,751 3,446,482 3,545,387 $92,955,744 $96,556,089 $92,645,035 $95,113,375 $87,750,968 $88,426,167 $8,090,636 $9,143,977 $9,087,354 $9,677,630 $10,185,779 $10,169,082 $1,494,784 $1,738,685 $1,665,460 $1,636,542 $1,986,791 $2,655,749 5,562,072 5,906,445 6,308,912 6,167,925 7,122,396 6,478,321 4,983,288 4,753,817 3,916,874 4,141,103 5,214,267 7,837,472 3,247,024 2,915,872 2,830,179 2,676,663 3,255,367 3,984,204 4,870,884 5,253,683 5,280,458 5,362,497 5,873,147 6,075,129 3,463,616 3,544,248 3,721,055 3,651,902 3,158,281 4,085,073 3,239,509 7,311,173 2,116,906 1,857,670 2,705,696 5,876,993 26,861,177 31,423,923 25,839,844 25,494,302 29,315,945 36,992,941 4,161,936 4,454,490 4,244,404 4,011,333 3,901,175 3,990,706 4,161,936 4,454,490 4,244,404 4,011,333 3,901,175 3,990,706 $31,023,113 $35,878,413 $30,084,248 $29,505,635 $33,217,120 $40,983,647 $9,366,305 $10,567,647 $11,559,549 $12,223,779 $12,368,889 $12,413,123 ($62,812,332) ($61,568,931) ($62,788,993) ($65,833,322) ($54,988,541) ($47,887,839) 879,701 891,255 228,206 225,582 454,693 445,319 ($61,932,631) ($60,677,676) ($62,560,787) ($65,607,740) ($54,533,848) ($47,442,520) $1,275,669 $1,423,670 $2,472,195 $2,546,149 $2,183,110 $2,244,041 127 CITY OF SAN RAFAEL CHANGES IN NET POSITION (continued) Last Ten Fiscal Years (Accrual Basis of Accounting) 128 2004 2005 2006 2007 General Revenues and Other Changes in Net Position Governmental Activities: Taxes: Property $14,895,188 $17,385,722 $20,848,887 $20,360,475 Sales 17,166,966 17,132,100 18,188,524 24,484,356 Special assessments 3,329,680 3,642,184 3,017,488 2,998,925 Paramedic Motor vehicles 2,495,598 4,657,817 372,726 331,620 Transient occupancy Franchise Business license Other 5,476,044 5,151,205 6,963,448 8,830,955 Investment earnings 809,242 1,112,548 1,248,409 1,669,181 Gain (Loss) on disposal of assets Miscellaneous 498,200 876,907 361,195 491,488 Special item - Court fines repayment (1,133,458) Transfers 142,970 15,720 201,191 212,170 Total Government Activities 44,813,888 49,974,203 51,201,868 58,245,712 Business -Type Activities: Investment earnings 29,534 28,522 44,536 91,623 Aid from other government agencies 40,735 1,309,893 Transfers (142,970) (15,720) (201,191) (212,170) Total Business -Type Activities (113,436) 53,537 1,153,238 (120,547) Total Primary Government $44,700,452 $50,027,740 $52,355,106 $58,125,165 Component Unit: San Rafael Sanitation District Property Taxes $591,078 $125,959 $179,479 $755,763 Investment earnings 75,739 117,348 237,206 367,887 Miscellaneous 154,919 Aid from other governmental agencies 609,419 645,804 340,642 Total Component Unit $821,736 $852,726 $1,062,489 $1,464,292 Change in Net Position Governmental Activities ($2,480,950) ($1,566,415) ($2,673,917) ($582,984) Business -Type Activities 654,555 205,662 1,417,107 11,245 Total Primary Government ($1,826,395) ($1,360,753) ($1,256,810) ($571,739) Change in Net Position Component Unit Activities $1,335,436 $1,625,137 $1,254,347 $2,665,776 128 2008 2009 2010 2011 2012 2013 $22,195,606 $21,978,859 $21,684,131 $21,632,733 $20,107,637 $17,317,772 25,764,457 21,970,262 19,055,124 21,623,445 22,355,749 24,262,282 3,503,555 3,210,317 3,489,494 3,661,064 3,807,545 3,804,985 257,320 197,989 171,518 297,425 1,678,912 1,558,243 1,644,262 1,866,575 2,185,287 2,941,149 2,868,332 2,990,539 3,076,094 3,331,160 2,405,934 2,317,664 2,296,460 2,332,146 2,507,785 9,242,241 1,561,835 1,411,583 1,930,531 3,574,918 2,929,915 1,583,056 717,968 302,180 176,502 205,413 991,762 221,791 296,454 461,224 541,390 1,496,174 542,816 2,580,882 344,080 361,190 458,300 463,600 57,960 423,817 63,186,769 57,485,639 54,079,750 58,212,735 57,926,853 60,335,647 121,486 49,084 17,678 11,878 7,675 3,739 (344,080) (361,190) (458,300) (463,600) (57,960) (423,817) (222,594) (312,106) (440,622) (451,722) (50,285) (420,078) $62,964,175 $57,173,533 $53,639,128 $57,761,013 $57,876,568 $59,915,569 $803,071 $855,511 $823,187 $1,214,519 $1,192,566 $1,177,469 341,032 206,752 93,274 59,265 38,191 25,591 3,546 3,540 577,860 381,144 415,391 6,499 9,613 56,589 $1,725,509 $1,446,947 $1,331,852 $1,280,283 $1,240,370 $1,259,649 $374,437 ($4,083,292) ($8,709,243) ($7,620,587) ($2,938,312) $12,447,808 657,107 579,149 (212,416) (226,140) (404,408) 25,241 $1,031,544 ($3,504,143) ($8,921,659) ($7,846,727) ($3,342,720) $12,473,049 $3,001,178 $2,870,617 $3,804,047 $3,826,432 $3,423,480 $3,503,690 129 CITY SAN RAFAEL FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Thousands $55,000 - $45,000 $35,000 $25,000 $15,000 = _ = $5,000 ($5,000) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 General Fund Pre -GASB 54 Presentation: Reserved Unreserved GASB 54 Presentation: Nonspendable Restricted Committed Assigned Unassigned Total General Fund All Other Governmental Funds Pre -GASB 54 Presentation: Reserved Unreserved, reported in: Special Revenue Funds Capital Project Funds Debt Service Funds Expendable Trust Fund GASB 54 Presentation: Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds ■Total Fund Balance 2004 2005 2006 2007 2008 $1,451,036 $2,442,881 $2,335,391 $905,068 $2,196,153 4,246,152 5,779,680 3,362,151 5,016,929 4,022,612 $5,697,188 $8,222,561 $5,697,542 $5,921,997 $6,218,765 $32,471,197 $26,599,557 $21,603,724 $20,773,760 $17,599,142 5,574,048 5,628,187 7,168,753 8,107,477 7,413,808 35,430 4,734,986 3,315,764 $38,045,245 $32,227,744 $28,772,477 $33,616,223 $28,364,144 (a) The change in total fund balance for the General Fund and other governmental funds is explained in Management's Discussion and Analysis. 130 $16,680,568 8,641,239 (1,030,293) 3,360,540 $15,352,723 8,778,027 4,527,627 $27,652,054 $28,658,377 $377,180 19,289,367 3,864,322 4,124,029 $27,654,898 $788,031 16,856,959 5,135,257 5,283,559 $28,063,806 131 $51,521 20,769,546 8,447,495 6,511,850 $35,780,412 As of June 30 2009 2010 2011 2012 2013 $2,225,775 $1,763,622 1,670,455 5,038,173 $589,833 $527,509 $527,235 200,238 76,188 555,561 651,121 800,876 5,439,879 1,516,644 2,476,676 $3,896,230 $6,801,795 $6,785,511 $2,771,462 $3,804,787 (a) $16,680,568 8,641,239 (1,030,293) 3,360,540 $15,352,723 8,778,027 4,527,627 $27,652,054 $28,658,377 $377,180 19,289,367 3,864,322 4,124,029 $27,654,898 $788,031 16,856,959 5,135,257 5,283,559 $28,063,806 131 $51,521 20,769,546 8,447,495 6,511,850 $35,780,412 CITY OF SAN RAFAEL CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS Last Ten Fiscal Years (Modified Accrual Basis of Accounting) 132 2004 2005 2006 2007 2008 Revenues Taxes and special assessments $40,875,826 $42,901,520 $44,901,544 $52,472,246 $56,129,195 Licenses and permits 928,303 929,993 1,175,030 1,157,981 1,489,748 Fines and forfeitures 791,975 1,088,459 622,494 515,528 797,081 Use of money and properties 1,024,199 1,244,406 1,316,558 1,744,688 1,584,508 Intergovernmental 8,049,002 10,522,095 11,705,917 12,760,496 12,081,968 Charges for services 10,423,754 11,407,622 13,104,572 13,504,621 15,607,460 Other revenue 735,976 1,135,485 1,475,078 1,468,743 815,704 Total Revenues 62,829,035 69,229,580 74,301,193 83,624,303 88,505,664 Expenditures Current: General government 5,014,452 5,539,191 6,200,338 8,188,999 8,288,170 Public safety 28,863,197 31,784,872 33,321,967 36,264,321 40,299,862 Public works and parks 9,257,991 9,294,419 10,622,585 11,972,537 13,641,665 Community development 3,875,542 3,763,614 4,184,084 4,319,042 5,786,661 Culture and recreation 7,145,264 7,538,607 8,409,833 9,005,370 9,820,365 Capital outlay 31,703 1,027,267 60,411 6,716,630 6,243,517 Capital improvement / special projects 9,825,103 9,253,661 13,200,872 1,189,613 5,124,091 Debt service: Capitalized lease obligation 10,775 141,197 130,315 Principal 2,360,000 2,585,000 2,525,000 2,287,255 2,504,370 Interest and fiscal charges 2,456,357 2,140,673 1,878,265 1,829,091 1,776,354 Total Expenditures 68,840,384 73,068,501 80,533,670 81,772,858 93,485,055 Excess (deficiency) of revenues over (under) expenditures (6,011,349) (3,838,921) (6,232,477) 1,851,445 (4,979,391) Other Financing Sources (Uses) Issuance of debt Payment to refunded bonds Bond premiums Capital lease for equipment acquisition 318,000 Contribution from Sanitation District Proceeds from sale of capital asset Transfers in 5,222,868 8,636,544 6,925,107 6,812,260 6,353,216 Transfers (out) (4,979,898) (7,740,324) (6,672,916) (6,958,046) (6,329,136) Total other financing sources (uses) 242,970 896,220 252,191 172,214 24,080 Extraordinary Item Transfer to Successor Agency Net Change in fund balances ($5,768,379) ($2,942,701) ($5,980,286) $2,023,659 ($4,955,311) Debt service as a percentage of noncapital expenditures 35.1% 8.2% 7.8% 6.7% 5.6% 132 8,059,526 Fiscal Year Ended June 30, 8,783,873 10,529,480 2009 2010 2011 2012 2013 $51,019,143 $47,678,541 $51,448,130 $51,395,116 $51,549,306 1,472,913 1,518,819 1,416,772 1,648, 890 1,929,3 87 660,338 787,411 862,820 801,758 734,005 847,120 433,874 380,720 315,561 325,043 17,518,670 13,001,703 11,864,127 10,537,396 11,869,889 16,384,265 15,787,325 15,888,750 19,649,433 23,575,374 759,320 716,760 1,026,845 870,957 4,092,411 88,661,769 79,924,433 82,888,164 85,219,111 94,075,415 8,059,526 7,997,067 6,863,142 8,783,873 10,529,480 41,209,972 39,574,091 40,967,352 39,311,551 41,377,062 12,926,646 10,731,669 10,666,176 11,518,822 12,002,448 5,572,079 4,398,594 4,527,351 3,755,504 2,961,275 10,233,361 9,605,684 10,067, 822 10,345,673 10,591,057 5,048,044 1,890,559 1,745,483 1,312,383 4,009,454 6,606,857 3,436,608 6,240,861 3,604,171 5,284,720 2,714,358 2,804,258 2,530,338 2,518,320 1,683,240 1,979,372 1,448,910 735,221 283,805 94,054,083 82,417,902 85,057,435 81,885,518 87,039,301 (5,392,314) (2,493,469) (2,169,271) 3,333,593 7,036,114 14,660,000 (14,315,000) 1,038,185 221,791 8,972,495 7,494,560 5,806,834 4,539,646 8,425,474 (6,614,806) (6,411,150) (4,657,326) (4,864,293) (6,711,657) 2,357,689 2,688,386 1,149,508 (324,647) 1,713,817 (2,352,584) ($3,034,625) $194,917 ($1,019,763) $656,362 $8,749,931 5.2% 5.3% 5.2% 4.2% 0.4% 133 CITY OF SAN RAFAEL ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS $12,000 $10,000 A $8,000 $6,000 $4,000 $2,000 $o r_ a K 9 yj 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 —0—Unsecured Property m-s—Secured Property) Real Property Total Real Total Fiscal Residential Commercial Industrial Secured Unsecured Total Estimated Direct Year Property Property Property Other Property Property Assessed (a) Full Market (a) Tax Rate (b) 2004 $5,160,984,286 $1,514,445,365 $130,514,420 $91,737,340 $6,897,681,411 $431,291,562 $7,328,972,973 $7,328,972,973 0.20661% 2005 5,510,630,728 1,546,579,852 146,822,250 93,875,824 7,297,908,654 406,163,129 7,704,071,783 7,704,071,783 0.19903% 2006 6,018,318,932 1,618,091,589 177,974,231 91,321,393 7,905,706,145 407,016,133 8,312,722,278 8,312,722,278 0.19349% 2007 6,544,841,348 1,745,483,576 197,040,979 122,977,950 8,610,343,853 376,890,454 8,987,234,307 8,987,234,307 0.18087% 2008 7,024,610,641 1,824,656,505 214,341,528 105,409,028 9,169,017,702 362,727,209 9,531,744,911 9,531,744,911 0.17718% 2009 7,357,121,277 1,941,927,620 234,669,841 129,177,656 9,662,896,394 374,976,613 10,037,873,007 10,037,873,007 0.17951% 2010 7,335,863,721 2,052,276,292 244,857,019 130,177,994 9,763,175,026 401,201,906 10,164,376,932 10,164,376,932 0.19215% 2011 7,215,965,203 2,056,985,417 247,409,955 124,426,487 9,644,787,062 383,414,952 10,028,202,014 10,028,202,014 0.17851% 2012 7,317,280,602 2,036,262,351 247,485,238 118,579,648 9,719,607,839 384,950,872 10,104,558,711 10,104,558,711 0.17827% 2013 7,265,617,525 1,987,170,644 245,917,096 115,453,836 9,614,159,101 384,534,108 9,998,693,209 9,998,693,209 0.17456% Source: HdL Coren & Cone, Marin County Assessor 2003/04-2012/13 Combined Tax Rolls (a) The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of no more than two percent annually, plus any local over -rides. These values are considered to be full market values. (b) California cities do not set their own direct tax rate. The state constitution establishes the rate at 1% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area. 134 CITY OF SAN RAFAEL PROPERTY TAX RATES ALL OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Fiscal School Misc. Special Year City County (1) Districts Districts Total 2004 0.154 0.295 0.6483 0.0461 1.1430 2005 0.154 0.295 0.6593 0.0461 1.1540 2006 0.154 0.295 0.6828 0.0461 1.1775 2007 0.154 0.295 0.7160 0.0461 1.2107 2008 0.154 0.295 0.7225 0.0461 1.2172 2009 0.154 0.295 0.7192 0.0461 1.2139 2010 0.154 0.295 0.7402 0.0461 1.2349 2011 0.154 0.295 0.7542 0.0461 1.2489 2012 0.154 0.295 0.7831 0.0461 1.2779 2013 0.154 0.295 0.7743 0.0461 1.2691 Notes: (1) Like other cities, San Rafael includes several property tax rate areas with different rates. A mean average is indicated. Source: Marin County Assessors Office 2003/04 - 2012/13 Tax Rate Tables 135 CITY OF SAN RAFAEL PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO Taxpayer Northgate Mall Associates SR Corporation Center Phase Two SR Corporation Center Phase 1 LLC Sutter Health Robert Dickson Trust Regency Center Associates Northbay Properties 11 Bay Apartment Communities Marin Sanitary Service Rafael Town Center Investors AMG Realty Partners LP Lucas Digital Ltd. LLC 4040 Civic Center LLC BIT Holdings Forty -Five Inc. Subtotal Total Net Assessed Valuation: Fiscal Year 2012-2013 Fiscal Year 2003-2004 2012-13 Percentage of Total City Taxable Taxable Assessed Assessed Value Value $135,444,524 70,306,032 52,500,001 49,632,065 45,189,250 42,728,882 42,394,545 40,340,145 38,365,767 35,497,775 $552,398,986 $9,998,693,209 $7,328,966,973 136 1.35% 0.70% 0.53% 0.50% 0.45% 0.43% 0.42% 0.40% 0.38% 0.36% 2003-2004 Percentage of Total City Taxable Taxable Assessed Assessed Value Value $81,047,490 1.11% 43,598,607 0.59% 37,050,248 30,736,645 31,229,307 29,399,739 0.51% 0.42% 0.43% 0.40% 69,880,258 0.95% 34,113,865 0.47% 34,783,073 0.47% 28,901,905 0.39% 5.52% $420,741,137 5.74% CITY OF SAN RAFAEL PROPERTY TAX LEVIES AND COLLECTIONS (i) LAST TEN FISCAL YEARS $25 0 0 $22 - $19 —a, —Allocations $16 — Apportionments $12 $9 $6 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Notes: (1) Includes deductions for County property tax administration. (2) Information not applicable. All general purpose property taxes are levied by the county and allocated to other governmental entities. Source: San Rafael Finance Department Revenue Reports 137 Delinquent taxes Fiscal as a Percent of Year Rate Levies Allocations Collections ApportionmentsDelinquencies Allocations 2004 1.00 (2) $14,895,188 (2) $14,895,188 (2) 0.0% 2005 1.00 (2) 17,385,722 (2) 17,385,722 (2) 0.0% 2006 1.00 (2) 20,848,887 (2) 20,848,887 (2) 0.0% 2007 1.00 (2) 20,360,475 (2) 20,360,475 (2) 0.0% 2008 1.00 (2) 22,195,606 (2) 22,195,606 (2) 0.0% 2009 1.00 (2) 219978,859 (2) 21,978,859 (2) 0.0% 2010 1.00 (2) 21,702,536 (2) 21,702,536 (2) 0.0% 2011 1.00 (2) 219632,731 (2) 21,6329731 (2) 0.0% 2012 1.00 (2) 20,704,368 (2) 20,704,368 (2) 0.0% 2013 1.00 (2) 209883,041 (2) 20,883,041 (2) 0.0% Notes: (1) Includes deductions for County property tax administration. (2) Information not applicable. All general purpose property taxes are levied by the county and allocated to other governmental entities. Source: San Rafael Finance Department Revenue Reports 137 $50 A $45 —� $40 $35 $30 $25 $20 $15 $10 $5 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CITY OF SAN RAFAEL RATIO OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS ® Total Governmental ■ Total Business Notes: Debt amounts exclude any premiums, discounts, or other amortization amounts. In August 2012, the series 2003 parking services bonds were refunded with series 2012 refunding bonds. Sources City of San Rafael State of California, Department of Finance (population) U.S. Department of commerce, Bureau of the Census (income) 138 Governmental Activities RDA Tax Financing Court Fine Capitalized Pension Fiscal Allocation Authority Note Promissory Lease Obligation Year Bonds Revenue Bonds Payable Note Obligations Bonds Total 2004 $43,239,004 $2,340,000 $169,000 0 0 0 $45,748,004 2005 41,514,004 1,685,000 169,000 0 0 0 43,368,004 2006 40,849,107 1,155,000 169,000 0 $412,441 0 42,585,548 2007 39,217,501 950,000 169,000 $1,029,717 596,927 0 41,963,145 2008 37,537,161 780,000 169,000 816,119 401,155 0 39,703,435 2009 35,793,692 455,000 169,000 594,100 198,816 0 37,210,608 2010 35,355,988 0 169,000 363,328 135,330 0 36,023,646 2011 33,298,499 0 169,000 124,222 69,098 $4,490,000 38,150,819 2012 0 0 169,000 0 0 4,490,000 4,659,000 2013 0 0 169,000 0 0 4,490,000 4,659,000 Business -Type Activities Parking Total Percentage Fiscal Services Primary of Personal Per Year Bonds Total Government Income (a) Capita (a) 2004 $7,605,000 $7,605,000 $53,353,004 2.34% 933.04 2005 7,605,000 7,605,000 50,973,004 2.14% 890.76 2006 7,455,000 7,455,000 50,040,548 1.97% 872.56 2007 7,300,000 7,300,000 49,263,145 1.85% 848.68 2008 7,140,000 7,140,000 46,843,435 1.73% 804.39 2009 6,975,000 6,975,000 44,185,608 1.67% 757.08 2010 6,805,000 6,805,000 42,828,646 1.85% 728.11 2011 6,630,000 6,630,000 44,780,819 1.87% 770.28 2012 6,445,000 6,445,000 11,104,000 n/a 190.45 2013 6,445,000 6,445,000 11,104,000 n/a 190.85 Notes: Debt amounts exclude any premiums, discounts, or other amortization amounts. In August 2012, the series 2003 parking services bonds were refunded with series 2012 refunding bonds. Sources City of San Rafael State of California, Department of Finance (population) U.S. Department of commerce, Bureau of the Census (income) 138 CITY OF SAN RAFAEL COMPUTATION OF DIRECT AND OVERLAPPING DEBT June 30, 2013 2012-13 Assessed Valuation: $9,998,693,209 Redevelopment Incremental Valuation: 2,187,187,899 Adjusted Assessed Valuation: $7,811,505,310 Total Debt City's Share of OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2013 % Applicable (1) Debt 6/30/13 Marin Community College District $223,440,000 17.660% $39,459,504 San Rafael High School District 47,780,315 78.332% 37,427,276 Tamalpais Union High School District 151,215,000 0.082% 123,996 Dixie School District 6,270,810 66.613% 4,177,175 Ross School District 17,909,941 1.583% 283,514 Ross Valley School District 38,384,639 0.015% 5,758 San Rafael School District 55,750,451 83.501% 46,552,184 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $128,029,407 DIRECT AND OVERLAPPING GENERAL FUND DEBT: Marin County Certificates of Participation $74,396,820 17.631% $13,116,903 Marin County Pension Obligations 108,400,000 17.631% 19,112,004 Marin County Transit District General Fund Obligations 187,384 17.631% 33,038 Marin Municipal Water District General Fund Obligations 152,448 22.654% 34,536 Marin Community College District Certification of Participation 2,740,834 17.660% 484,031 San Rafael School District Certificates of Participation 3,875,000 83.501% 3,235,664 City of San Rafael General Fund Obligations 9,130,308 100.000% 9,130,308 (2) City of San Rafael Pension Obligations 4,490,000 100.000% 4,490,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $49,636,484 Less: City of San Rafael lease revenue bonds supported by parking revenues 6,445,000 TOTAL NET DIRECT AND OVERLAPPING GENERAL, FUND DEBT 43,191,484 OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 25,369,004 100.000% 25,369,004 TOTAL GROSS DIRECT DEBT $13,620,308 TOTAL NET DIRECT DEBT $7,175,308 TOTAL OVERLAPPING DEBT $189,414,587 GROSS COMBINED TOTAL DEBT $203,034,895 (3) NET COMBINED TOTAL DEBT $196,589,895 (1) Percentage of overlapping agency's assessed valuation located within boundaries of the city. (2) Include city's share of Marin Emergency Radio Authority refunding revenue bonds. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non -bonded capital lease obligations. Ratios to 2012-13 Assessed Valuation: Total Overlapping Tax and Assessment Debt 1.28% Total Gross Combined Direct Debt ($13,620,308) 0.14% Total Net Direct Debt ($7,175,308) 0.07% Gross Combined Total Debt 2.03% Net Combined Total Debt 1.97% Ratios to Redevelopment Incremental Valuation ($2,187,187,899): Total Overlapping Tax Increment Debt 1.16% Source: California Municipal Statistics, Inc. 139 CITY OF SAN RAFAEL COMPUTATION OF LEGAL BONDED DEBT MARGIN June 30, 2013 ASSESSED VALUATION: BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a) LESS AMOUNT OF DEBT SUBJECT TO LIMIT: LEGAL BONDED DEBT MARGIN $9,998,693,209 374,950,995 4,490,000 $370,460,995 NOTE: (a) California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted prior to the change in basing assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is one-fourth Source: California Municipal Statistics. Inc. and City of San Rafael's Management Service Department 140 Total net debt Total Net Debt Legal applicable to the limit Fiscal Debt Applicable to Debt as a percentage Year Limit Limit Margin of debt limit 2004 $274,836,486 $43,239,004 $231,597,482 18.67% 2005 288,902,692 41,514,004 247,388,688 16.78% 2006 311,727,085 40,849,107 270,877,978 15.08% 2007 337,021,287 39,217,501 297,803,786 13.17% 2008 357,440,434 37,537,161 319,903,273 11.73% 2009 376,420,238 35,793,692 340,626,546 10.51% 2010 381,164,135 35,355,988 345,808,147 10.22% 2011 376,057,576 33,298,499 342,759,077 9.71% 2012 378,920,952 4,490,000 374,430,952 1.20% 2013 374,950,995 4,490,000 370,460,995 1.21% NOTE: (a) California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted prior to the change in basing assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is one-fourth Source: California Municipal Statistics. Inc. and City of San Rafael's Management Service Department 140 4.00 3.00 - 2.00 - 1.00 - 0.00 - CITY OF SAN RAFAEL REVENUE BOND COVERAGE PARKING FACILITY LAST TEN FISCAL YEARS 2004 2005 2006 2007 2008 2009 11 a Coverage N 2010 2011 2012 2013 141 Debt Service Requirements Net Revenue Fiscal Gross Operating Available for Year Revenue (1) Expenses (2) Debt Service Principal Interest Total Coverage 2004 $2,336,966 $1,498,740 $838,226 - - - N/A 2005 2,632,588 1,964,713 667,875 - $431,958 $431,958 1.55 2006 3,069,915 2,155,435 914,480 $150,000 344,441 494,441 1.85 2007 3,331,754 2,344,285 987,469 155,000 339,904 494,904 2.00 2008 4,089,112 2,692,086 1,397,026 160,000 335,216 495,216 2.82 2009 4,425,813 2,980,083 1,445,730 165,000 330,379 495,379 2.92 2010 4,262,082 3,343,680 918,402 170,000 325,285 495,285 1.85 2011 4,023,211 3,101,411 921,800 175,000 319,391 494,391 1.86 2012 3,908,664 2,870,718 1,037,946 185,000 312,291 497,291 2.09 2013 3,994,445 2,970,238 1,024,207 305,000 240,012 545,012 1.88 Notes: On March 26, 2003, the City Financing Authority issued lease revenue bonds for the design and construction of a new parking facility. On August 12,2012 , the City Financing Authority refunded the series 2003 lease revenue bonds with series 2012 lease revenue refunding bonds to take advantage of lower interest rates. (1) Includes all Parking Facility Operating Revenues and Non-operating Interest Revenue (2) Includes all Parking Facility Operating Expenses less Depreciation and Interest Source: City of San Rafael Annual Financial Statements 141 CITY OF SAN RAFAEL DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 23.00% 22.00% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ■ City Population as a % of County Population $50 N G N $45 - 0 $40 $35 - $30 rLoz �� zc� • Per Capita Personal Income.. $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 e e e 4" e e ,y010 1 §0111 1Q1'11 1�\, ■ Personal Income (2) (in thousands) 10.00% 7.50% - 5.00% - 2.50% - 0.00% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ■ Unemployment Rate (%) Source (1) State of California, Department of Finance - Demographic Research Unit. The data represents the City's population as of January 1, of each year. (2) Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of Commerce. Data is Marin county -wide rate. (3) Employment Development Department, Labor Market Information Division. Data represents Marin county -wide rate only and is not seasonally adjusted. 142 Personal Per Capita Average Marin City Fiscal City Income (2) Personal Unemployment County Population Year Population (1) (in thousands) Income (2) Rate (3) Population % of County 2004 57,182 $2,282,733 $39,991 4.40% 251,330 22.75% 2005 57,224 2,382,096 41,765 3.90% 252,485 22.66% 2006 57,349 2,544,221 44,400 3.50% 253,341 22.64% 2007 58,047 2,663,922 46,152 3.70% 255,982 22.68% 2008 58,235 2,703,213 46,557 4.60% 257,406 22.62% 2009 58,363 2,642,978 45,288 7.60% 258,618 22.57% 2010 58,822 2,317,704 39,402 9.90% 260,651 22.57% 2011 58,136 2,389,222 40,978 9.60% 254,692 22.83% 2012 58,305 n/a n/a 7.70% 254,790 22.88% 2013 58,182 n/a n/a 6.30% 254,007 22.91% Source (1) State of California, Department of Finance - Demographic Research Unit. The data represents the City's population as of January 1, of each year. (2) Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of Commerce. Data is Marin county -wide rate. (3) Employment Development Department, Labor Market Information Division. Data represents Marin county -wide rate only and is not seasonally adjusted. 142 CITY OF SAN RAFAEL PRINCIPAL EMPLOYERS LAST FIVE CALENDAR YEARS # - Number of employees (A) percentage of total employment Source: State of California, Employment Development Department, Labor Market Information Division San Francisco Business Times, Annual Book of Lists Note: Total employment in the City of San Rafael as of June 2013 was 30,600 *- The number of total employment for the City is available for the last five fiscal years only. 143 2013* 2012* 2011* 2010* 2009* Employer # (A) # (A) # (A) # (A) # (A) Kaiser Permanente 1,756 5.74% 1,803 6.68% 1,330 4.93% 1,311 4.88% 2,267 8.15% Autodesk, Inc. 1,000 3.27% 878 3.25% 928 3.44% 1,028 3.83% 1,200 4.32% City of San Rafael 643 2.10% 521 1.93% 592 2.19% 630 2.34% 633 2.28% San Rafael Elementary/High Schools Dist(s) 600 1.96% 600 2.22% 600 2.22% 600 2.23% 575 2.07% Macy's 380 1.24% 380 1.41% 450 1.67% 445 1.66% - - Bradley Real Estate 369 1.21% 376 1.39% 350 1.30% - - - - MHN 350 1.14% 350 1.30% 350 1.30% 350 1.30% - - Dominican University of California 347 1.13% 346 1.28% 336 1.24% 370 1.38% 508 1.83% Wells Fargo Bank 334 1.09% - - - - - - - - Community Action Marin 300 0.98% - - - - - - - - Ghilotti Bros. - - - - - - - - 240 0.86% Safeway - - 841 3.11% 452 1.67% 452 1.68% - - Comcast - - 620 2.30% 619 2.29% 619 2.30% - - Guide Dogs for the Blind - - - - - - 287 1.07% - - Golden Gate Bridge Highway & Transp. Dist. - - - - - - - - 828 2.98% Fair Issac Corp - - - - - - - - 350 1.26% YMCA - - - - - - - - 348 1.25% San Rafael City Elementary School District - - - - - - - - 0 0.00% San Rafael City High School District - - - - - - - - 0 0.00% Totals 6,079 19.87% 6,715 24.87% 6,007 22.25% 6,092 22.67% 6,949 25.00% # - Number of employees (A) percentage of total employment Source: State of California, Employment Development Department, Labor Market Information Division San Francisco Business Times, Annual Book of Lists Note: Total employment in the City of San Rafael as of June 2013 was 30,600 *- The number of total employment for the City is available for the last five fiscal years only. 143 t., CITY OF SAN RAFAEL FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 450.00 400.00 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 * General Government 0 Public Safety Public Works and Parks * Community Development u Culture and Recreation Source: City of San Rafael 144 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Function General Government 49.27 47.02 53.71 59.38 59.88 58.88 56.88 54.35 55.23 53.23 Public Safety 201.63 193.13 188.86 189.00 186.00 183.00 165.00 166.00 162.00 163.00 Public Works and Parks 76.70 72.80 74.80 76.80 78.80 78.80 60.80 62.80 62.00 60.00 Community Development 28.75 26.75 26.43 31.00 34.50 34.50 26.75 26.75 18.25 18.25 Culture and Recreation 83.26 79.73 77.49 80.22 85.90 85.90 83.49 89.82 81.56 80.76 Total 439.61 419.43 421.29 436.40 445.08 441.08 392.92 399.72 379.04 375.24 Source: City of San Rafael 144 This Page Left Intentionally Blank CITY OF SAN RAFAEL OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS As of June 30 2004 2005 2006 2007 2008 Function/Program 800 124.46 N/A 359.41 N/A Public safety: Fire: Inspection permit issued N/A N/A N/A 143 217 Police: Police calls for service N/A N/A N/A 43,480 43,488 Law violations: Part I crimes N/A N/A N/A 2,557 2,314 Physical arrests (adult and juvenile) N/A N/A N/A 3,809 4,182 Traffic violations N/A N/A N/A 5,197 9,241 Parking violations 301946 39,421 33,610 36,228 42,481 Public works Street resurfacing (miles) (Eng Div) 5.70 6.80 1.08 N/A 4.95 Potholes repaired (square miles) N/A N/A N/A N/A N/A Asphalt used for street repairs (tons) N/A N/A N/A N/A N/A Culture and recreation: Recreation class participants 7,000 7,000 8,000 Items in collection (thousands) Library: Items in collection (thousands) 118.24 121.81 123.12 Total items borrowed (thousands) 332.33 299.30 333.15 Wastewater Residential connections Commercial connections Other connections Average daily sewage treatment (millions of gallons) 6.976 Note: N/A denotes information not available. 146 800 800 124.46 N/A 359.41 N/A 6.976 6.976 6.976 6.976 2009 2010 2011 2012 2013 196 307 294 282 307 42,227 42,227 39,512 39,537 42,707 2,352 2,352 2,180 2,101 2,523 4,487 4,487 3,102 2,981 2,951 5,777 5,777 8,190 4,048 3,448 44,913 42,806 34,590 32,492 3001 2.77 2.77 7.40 N/A 2.70 N/A N/A N/A N/A N/A N/A N/A 10,809 178.9 7,500 8,000 9,524 9,000 12,075 702 124.40 151.88 158.30 159.18 125.92 N/A 371.12 435.66 366.46 392.23 6.976 6.976 6.976 6.976 6.976 147 CITY OF SAN RAFAEL CAPTIAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS As of June 30 2004 2005 2006 2007 2008 Function/Program Public safety: Fire stations 6 6 6 6 6 Police stations 1 1 1 1 1 Police Fleet Public works Miles of streets 172 172 173 173 173 Street lights 4,333 4,333 4,435 4,435 4,435 Parking District lights Traffic Signals 85 85 89 89 89 Culture and recreation: Community services: City parks 19 19 19 19 20 City parks acreage 41 41 41 41 42 Playgrounds 13 13 13 13 14 City trails 15 15 15 20 20 Community gardens 2 2 1 1 1 Community centers 4 4 4 4 4 Senior centers 0 0 0 0 0 Sports centers 0 0 0 0 0 Performing arts centers 0 0 0 0 0 Swimming pools 1 1 1 1 1 Tennis courts 10 10 10 10 10 Basketball Courts 5 5 5 5 5 Baseball/softball diamonds 5 5 5 5 5 Soccer/football fields 2 2 2 2 2 Library: City Libraries 1 1 1 1 1 Wastewater Miles of sanitary sewers 179.15 179.15 179.15 179.15 179.15 57.60 57.60 57.60 57.60 57.60 Number of treatment plants 1 1 1 1 1 (1) Source: City of San Rafael 148 2009 2010 2011 2012 2013 6 6 6 6 6 1 1 1 1 1 173 173 173 173 173 4,435 4,435 4,435 4,435 4,435 89 89 89 89 89 20 20 20 20 20 42 42 42 42 42 14 14 14 14 14 20 20 20 20 20 1 1 1 1 1 4 4 4 4 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 10 10 10 10 10 5 5 5 5 5 5 5 5 5 5 2 2 2 2 2 2 2 2 2 2 179.15 179 179 179 179 57.60 58 58 58 58 1 1 1 1 1 149 This Page Left Intentionally Blank