HomeMy WebLinkAboutFin Financial Reports FY2014-15CITY OF� I .I' .
Agenda Item No: 3.d
Meeting Date: November 2, 2015
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: FINANCE
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Prepared by: Mark Moses City Manager Approval:
Finance Director
TOPIC: CITY'S YEAR-END FINANCIAL STATEMENTS AND RELATED AUDIT
REPORTS
SUBJECT: FISCAL YEAR 2014-2015 ANNUAL FINANCIAL REPORT; SINGLE
AUDIT; GANN APPROPRIATIONS LIMIT; MEMORANDUM ON
INTERNAL CONTROL; AND CHILD DEVELOPMENT PROGRAM
RECOMMENDATIONS: ACCEPT THE FISCAL YEAR 2014-2015 ANNUAL
FINANCIAL REPORT, THE SINGLE AUDIT REPORT,
THE GANN APPROPRIATIONS LIMIT REPORT, THE
MEMORANDUM ON INTERNAL CONTROL, AND 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 2014-2015. Their
work was completed in accordance with generally accepted auditing standards; Government
Auditing Standards. issued by the Comptroller General of the United States; and the provisions
of Office of Management and Budget Circular A-133, Audits of State and Local Government and
Non -Profit Organizations.
The federal Single Audit Act requires that any local agency expending $500,000 or more in
combined federal grant funds, either directly or indirectly in a fiscal year, is subject to a separate
audit on those programs and a separate Single Audit Report is issued. This threshold amount did
occur in fiscal year 2014-2015; therefore, this separate audit was required.
The requirements of Section 1.5 of Article XIIIB of the California Constitution are met with an
agreed-upon procedure report applied to the Gann Appropriation Limit calculated for the year
ending June 30, 2016. A Memorandum on Internal Control is also prepared by the auditors to
identify areas that could improve the City's organization and controls over its financial activities.
These reports are also attached to this staff report.
FOR CITY CLERK ONLY
File No.: 19-1 tit Vf%','T � 61-3- AO
Council Meeting: (i 1 a) 3.cv5
Disposition: -1;JBL.GD 1..41BjP ME:E�7--wu& .
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Pau: 2
Finally, as part of the fiscal year-end closing activities, the Finance and Community Services
departments worked with Maze and Associates to complete the annual audit of the City's
childcare program, as required by the State of California.
These five reports were presented to the City Council's Finance Committee on October 20, 2015,
at which time they were reviewed and the results discussed. These reports will also be the subject
of a study session scheduled prior to the City Council meeting of November 2, at which time a
representative from Maze and Associates will be present.
ANALYSIS:
Overview
The Fiscal Year 2014-2015 was a milestone year for the City's fiscal recovery. For the first time
in ten years, the City's General Fund Emergency Reserves meet the target level of ten percent of
operating expenses established by City Council Policy. This performance caps a recovery from
just five years ago, at which time the General Fund's available balances dropped to less than 10
days general fund expenditures and the City's auditors raised questions regarding the City's
status as a going concern. Although the City's year ending fund balances are the strongest they
have been in many years, critical needs have accumulated, as a result of the past, multi-year
deferral of various capital improvement, maintenance and technology support projects and
initiatives. The potential uses of these fund balances were considered by the City Council during
its open special study session of October 26, 2015.
Fiscal year 2014-2015 also marks the implementation of the new pension accounting standard
issued by the Governmental Accounting Standards Board (GASB) known as GASB 68. The new
requirements, which affect all public agencies with defined benefit pension programs, are
designed to enhance the comparability of financial statements by requiring the measurement of
pension -related assets and liabilities at fair value, using a consistent and more detailed definition
of fair value and accepted valuation techniques. The net impact of implementing GASB 68
lowers the City's net position to $96 million from a reporting perspective. The full funding of the
City's pension costs have been incorporated into the adopted fiscal year 2015-2016 budget;
therefore, there is no negative impact on City operations or services resulting from the
implementation of this new reporting standard.
Consistent with the policy adopted by the City Council upon the implementation of Measure E
transactions and use tax (TUT) in April 2014, the City has set-aside the portion of the Measure E
that exceeds the former Measure S TUT (i.e., one-quarter of one percent from the three-quarter of
one percent tax) for public safety facilities construction and improvements. The accumulated
balance grew from $892,000 as of July 1, 2014, to $4,389,470 by June 30, 2015. During the year
$235,197 was expended on architectural and planning work to prepare for the upcoming major
construction.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paye: 3
Fiscal Year 2014-15 Annual Financial Report — Citvwide Financial Results
The actual results of the City's financial activities are presented in the attached Comprehensive
Annual Financial Report. The report includes Government -wide financial statements with
governmental activities and business -type activities presented separately. Net position is one
indicator of the City's financial position. At the end of the fiscal year, net position of the City
governmental activities was $141.7 million, an increase of $19.0 million from the prior year
adjusted balance. This increase is largely attributable to the accumulation of funds for specific
purposes — e.g., public safety facility construction and improvements, and emergency and cash
flow reserve. In addition, a long-term receivable of $4.5 million from the San Rafael Sanitation
District (SRSD) is now being recognized for the District's share of employee pension and OPEB
liabilities. The Parking Fund, reported as a business -type activity, ended the fiscal year with a net
position of $9.8 million, an increase of $498 thousand from the prior year.
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 $95.2 million exceeded
the $80.6 million in expenditures by $14.6 million. This performance was positively affected by
the new reporting methodology (under GASB 68) for reporting pension expenses.
Additional 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 financial activities for the year.
Financial Results: General Fund
The final operating results for the General Fund exceeded the projections made at the time the
budget was adopted for fiscal year 2014-2015 by approximately $2.4 million. This variance was
driven by positive performance in the areas of property tax, sales tax and transient occupancy tax,
coupled with the earlier -than -expected receipt of reimbursements from the State for mandated
activities. General Fund revenues exceeded expenditures and net transfers by $7.0 million. Of
this amount, $3.5 million was assigned to the Measure E — Public Safety Facility Reserve,
$1.4 million was added to the Emergency Cash Flow reserve; $0.3 million was added to the
General Plan / Long Range Planning reserve; and $0.2 million was used to establish an
infrastructure reserve.
Sinele Audit
The City incurred a total of $1,771,397 in federal expenditures during fiscal year 2014-2015 that
fell under the parameters of this audit. The auditor identified the following two major programs
to be audited:
1. U.S Department of Transportation -Highway Planning and Construction — $765,332
supported street improvements, transit center connector, safe routes to schools, and
downtown transit/parking studies.
2. State and Community Highway Safety — $196,755 supported intersection modifications
and traffic enforcement.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Pa2e: 4
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.
Gann Appropriations Limit
The Agreed -Upon Procedures report for the Gann Appropriations Limit required three
procedures to be performed including testing the accuracy of the calculations and comparison of
information presented. No exceptions were noted in these procedures for compliance with the
Proposition 111 fiscal year 2015-2016 Appropriations Limit calculation.
Memorandum on Internal Control
The auditors are required to communicate to the City Council matters that come to their attention
relating to the audit in a report entitled Memorandum on Internal Control and Required
Communications. For this report, there were two areas that the auditors considered to be internal
control deficiencies. One pertained to the review of changes made to employee benefit records,
and the other to the review of City tax assessments collected through the County tax rolls. The
City's management responses to these two items describe the corrective measures, including
process and procedural changes that the City is undertaking.
This communication included references to a few new pronouncements issued by the
Governmental Accounting Standards Board (GASB) which become effective in upcoming fiscal
years. The most notable of these pronouncements is GASB Statement No. 75, which becomes
effective in fiscal year 2017-2018. This Statement introduces new reporting requirements for
other post -employment benefits (e.g., retiree medical) similar to those just implemented for
defined benefit pension plans.
Child Development Program (Childcare) Audit
The Childcare Program had positive operating results, with $4.0 million in total revenues and
$3.7 million in expenditures for the fiscal year. Some of the residual funds have been
accumulated for capital improvements. The audit resulted in no adverse findings.
FISCAL IMPACT: No fiscal impact occurs by the City Council's acceptance of these reports.
The fiscal year 2014-2015 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: htti3:Hdocs.eitvofsanrafael.orv-/Finance/reilortinv-/FY14-15-CAFR.ndf
htti)://docs.citvofsanrafael.or2/Finance/rei)ortinoFY 14-15-SinjzleAudit.r)df
htti):Hdocs.citvofsanrafael.orQ/Finance/reiiortiniz/FY 14-15-GANN.r)df
httn://docs.citvofsanrafael.ora/Finance/rer)ortinia/FY 14 -15 -MGIC. pdf
httr)://docs.citvofsanrafael.orvJFinance/reDortina/FY 14-15-Childcare.r)df
WACouncil Material\StaffReports\2015\City\YE-Financial-Audit Reports FY14-15.doc
ROUTING SLIP / APPROVAL FORM
INSTRUCTIONS: Use this cover sheet with each submittal of a staff report before approval
by the City Council. Save staff report (including this cover sheet) along
with all related attachments in the Team Drive (T:) 4 CITY COUNCIL
AGENDA ITEMS 4 AGENDA ITEM APPROVAL PROCESS 4 [DEPT -
AGENDA TOPIC]
Agenda Item #
Date of Meeting: 11/2/2015
From: Mark Moses
Department: Finance
Date: 10/26/2015
Topic: PRESENTATION OF CITY'S YEAR-END FINANCIAL STATEMENTS AND
RELATED AUDIT REPORTS FOR FISCAL YEAR 2014-2015
Subject: FISCAL YEAR 2014-2015 ANNUAL FINANCIAL REPORT; SINGLE AUDIT;
GANN APPROPRIATIONS LIMIT; MEMORANDUM ON INTERNAL CONTROL; AND CHILD
DEVELOPMENT PROGRAM
Type: ❑ Resolution ❑ Ordinance
❑ Professional Services Agreement ® Other: Discussion Item
APPROVALS
® Finance Director
Remarks: Self -approved (Cristine has reviewed this, as well.)
® City Attorney
Remarks: LG -N/A
® Author, review and accept City Attorney / Finance changes
Remarks:
j City Manager
Remarks:
FOR CITY CLERK ONLY
File No.:
Council Meeting:
Disposition:
J\J M A�ZTE
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED UPON PROCEDURES FOR
COMPLIANCE WITH THE PROPOSITION 111
2015-2016 APPROPRIATIONS LIWT INCREMENT
Honorable Mayor and Members of the City Council
City of San Rafael, California
We have performed the procedures below to the Appropriations Limit Worksheet which were agreed to by
the City of San Rafael for the year ended June 30, 2015. These procedures, which were suggested by the
League of California Cities and presented in their Article )= Appropriations Limitation Uniform
Guidelines, were performed solely to assist you in meeting the requirements of Section 1.5 of Article XM
of the California Constitution. Management is responsible for the Appropriations Limit Worksheet. This
agreed-upon procedures engagement was conducted in accordance with attestation standards established by
the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the
responsibility of the City. Consequently, we make no representation regarding the sufficiency of the
procedures described below either for the purpose for which this report has been requested or for any other
purpose.
The procedures you requested us to perform and our findings were as follows:
A. We obtained the Appropriations Limit Worksheet and determined that the 2015-2016
Appropriations Limit of $117,140,576 and annual adjustment factors were adopted by Resolution of
the City Council. We also determined that the population and inflation options were selected by a
recorded vote of the City Council.
B. We recomputed the 2015-2016 Appropriations Limit by multiplying the 2014-2015 Prior Year
Appropriations Limit by the Total Growth Factor and then reducing the amount by $4,743,389,
representing the effect of Measure I revenue. The provision of Measure I that provided for the
inclusion of its revenues in the Appropriation Limit Calculation expired at the end of 2015. We
recomputed the Total Growth Factor by multiplying the cost of living option by the population
option.
C. For the Appropriations Limit Worksheet, we agreed the Per Capita Income, City Population and
County Population Factors to California State Department of Finance Worksheets.
We were not engaged to, and did not, conduct an audit, the objective of which would be the expression of an
opinion on the Appropriations Limit Worksheet. Accordingly, we do not express such an opinion. Had we
performed additional procedures, other matters might have come to our attention that would have been
reported to you.
This report is intended solely for the information and use of management and the City Council; however,
this restriction is not intended to limit the distribution of this report, which is a matter of public record.
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September 30, 2015
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COMPREHENSIVE ANNUAL
FINANCIAL REPORT
For the Fiscal Year Ended
June 30, 2015
City of San Rafael, California
1400 Fifth Avenue
San Rafael, California 94901
Prepared by the Finance Department of the City of San Rafael
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CITY OF SAN RAFAEL, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2015
Table of Contents
INTRODUCTORY SECTION
TABLE OF CONTENTS
Letterof Transmittal.....................................................................................................................................v
Mission Statement and Vision Statement.....................................................................................................x
CityCouncil and Staff................................................................................................................................ xi
LocationMap.................................................................................................................
OrganizationalChart ......................................................................................................
Certificate of Achievement for Excellence in Financial Reporting ................................
FINANCIAL SECTION I
Independent Auditor's Report..................................................................................
Management's Discussion and Analysis...................................................................
Basic Financial Statements:
........................... xii
.................... xiii
.................... xiv
...........................1
...........................5
Government -wide Financial Statements:
Statementof Net Position..............................................................................................................25
Statementof Activities..................................................................................................................26
Fund Financial Statements:
Major Governmental Funds:
BalanceSheet............................................................................................................................30
Balance Sheet - Reconciliation of Governmental Fund Balances to
Net Position of Governmental Activities...............................................................................31
Statement of Revenues, Expenditures, and Changes in Fund Balances....................................32
Reconciliation of the Net Change in Fund Balances - Total Governmental
Funds with the Statement of Activities..................................................................................33
Proprietary Funds:
Statement of Net Position..........................................................................................................36
Statement of Revenues, Expenses, and Changes in Fund Net Position.....................................37
Statementof Cash Flows...........................................................................................................3 8
11
CITY OF SAN RAFAEL, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2015
Table of Contents
I FINANCIAL SECTION (Continued) I
Fiduciary Funds:
Statement of Fiduciary Net Position..........................................................................................40
Statement of Changes in Fiduciary Net Position.......................................................................41
Notes to Basic Financial Statements..................................................................................................43
Required Supplementary Information:
Schedule of the City's Proportionate Share of the Net Pension Liability.....................................88
Schedule of Contributions — Last 10 Years...................................................................................89
Schedules of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual -
Budgetary Basis
GeneralFund..............................................................................................................................92
Traffic and Housing Mitigation Special Revenue Fund............................................................93
Gas Tax Special Revenue Fund.................................................................................................94
Supplementary Information:
Non -major Governmental Funds:
Combining Balance Sheets..........................................................................................................100
Combining Statements of Revenues, Expenditures, and Changes
inFund Balance...................................................................................................................106
Budgeted Non -major Government Funds:
Combining Schedules of Revenues, Expenditures, and Changes
in Fund Balances — Budget and Actual.......................................................................112
Internal Service Funds:
Combining Statements of Net Position.......................................................................................122
Combining Statements of Revenues, Expenses and Changes in Fund Net Position...................124
Combining Statements of Cash Flows........................................................................................126
Agency Funds:
Combining Statements of Changes in Assets and Liabilities ......................................................130
CITY OF SAN RAFAEL, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2015
Table of Contents
STATISTICAL SECTION I
Financial Trends:
Net Position by Component — Last Ten Fiscal Years............................................................................. 134
Changes in Net Position — Last Ten Fiscal Years................................................................................... 136
Fund Balances of Governmental Funds — Last Ten Fiscal Years........................................................... 140
Changes in Fund Balance of Governmental Funds — Last Ten Fiscal Years .......................................... 142
Revenue Capacity:
Assessed and Estimated Actual Value of Taxable Property — Last Ten Fiscal Years ............................144
Property Tax Rates - All Overlapping Governments— Last Ten Fiscal Years ........................................145
Principal Property Tax Payers — Current Year and Nine Years Ago ......................................................146
Property Tax Levies and Collections — Last Ten Fiscal Years...............................................................147
Debt Capacity:
Ratio of Outstanding Debt by Type — Last Ten Fiscal Years.................................................................148
Computation of Direct and Overlapping Debt........................................................................................149
Computation of Legal Bonded Debt Margin...........................................................................................150
Revenue Bond Coverage Parking Facility — Last Ten Fiscal Years .......................................................151
Demographic and Economic Information:
Demographic and Economic Statistics — Last Ten Fiscal Years.............................................................152
Principal Employers — Last Seven Calendar Years.................................................................................153
Operating Information:
Full -Time Equivalent City Government Employees by Function
— Last Ten Fiscal Years.......................................................................................................................155
Operating Indicators by Function/Program — Last Ten Fiscal Years ......................................................156
Capital Asset Statistics by Function/Program — Last Ten Fiscal Years ..................................................158
Im
CITY OF
September 30, 2015
Honorable Mayor, Members of the City Council and Residents of San Rafael:
The Comprehensive Annual Financial Report ("CAFR") of the City of San Rafael ("City") for the year
ended June 30, 2015, is hereby submitted as required by local ordinances, state statutes and bond
covenants. This financial report has been prepared in conformance with Generally Accepted Accounting
Principles as promulgated by the Governmental Accounting Standards Board and includes the report of the
independent certified public accounting firm, Maze and Associates Accountancy Corporation, which has
issued an unqualified, or "clean" opinion on the City's financial statements for -the fiscal year ended
June 30, 2015.
The independent audit of the financial statements is part of a broader, federally mandated examination
known as a "Single Audit", which is designed to meet the needs of federal grantor agencies. The standards_
governing Single Audits require the independent auditor to report on the audited agency's internal controls
and compliance with legal requirements, with special emphasis on such controls and requirements
involving the administration of federal funding. These reports will be available in the City's separately
issued Single Audit Report.
City Management is responsible for both the data accuracy, and the completeness and fairness of the
presentation of this report. To the best of our knowledge and belief, the data presented is accurate in all
material respects and is reported in a manner that presents fairly the financial position and results of
operations of the various funds and component units of the City. Further, the CAFR is prepared in
accordance with procedures and policies set by the Government Finance Officers Association. The analysis
of the financial condition and the result of operations can be found in the financial section of the
Management's Discussion and Analysis document. The CAFR is organized into three sections:
1. Introductory section, which is unaudited, includes this letter of transmittal, an organizational chart and a
list of the City's elected and appointed officials.
2. Financial section, includes the general-purpose financial statements, related footnote disclosures, and
the combining and individual fund and account group financial statements and schedules, as well as the
independent auditors' report.
3. Statistical section, which is unaudited, includes selected 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.
1900 5TH AVENUE . SAN RAFAEL, CA 94901
WWW.CITY0FSANRAFAEL.0RG
v
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 19 city parks, 393 acres of developed parkland, city and county open space,
and China Camp State Park. San Rafael is close to other attractions, including the Golden Gate Bridge,
Muir Woods, Point Reyes National Seashore, Mount Tamalpais, multiple state parks, San Francisco,
Oakland and the Sonoma and Napa wine country.
In 1874, the City of San Rafael became the first incorporated city in the county, later becoming a charter
city in 1913 by vote of City residents. The City Council comprises five members; four are elected at -large
to four-year terms while the mayor is elected separately to a four-year term. The City's land area is 22
square miles, including seventeen square miles of land and 5 of water and .tidelands. San Rafael's
population on January 1, 2015 was 59,214, an increase of 1.1% from the January 1, 2014 population of
58,566.
Downtown San Rafael is the location of many community events, including the May Madness Classic Car
Parade, Thursday night Farmers Market Festivals six months out of the year, Second Friday Art Walks, the
Twilight Criterium Bike Race, Mill Valley Film Festival, Winter Wonderland/Parade of Lights, and many
more. San Rafael is also the heart of the County's cultural activities with venues such as the Marin Center,
which presents numerous ballets, concerts, speaking engagements as well as the award winning Marin
County Fair; the Falkirk Cultural Center, providing art exhibits and children's programming; the
Christopher B. Smith Film Center, and a host of other diverse dining and entertainment venues. The City is
also home to the distinguished Dominican University of California.
The City of San Rafael provides a full range of municipal services required by statute or charter, namely:
police and fire protection, construction and maintenance of streets, parks, 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, and now conducts its economic development activities with funding from its General
Fund.
The City and California Municipal Finance Authority compose the San Rafael Joint Powers Financing
Authority, 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 Note 1 Summary of Significant Accounting Policies in the
Financial Section of the CAFR.
M
CAFR TRANSMITTAL LETTER
The City participates in various organizations through formally organized and separate entities
established under the Joint Exercise of Powers Act of the State of California. As separate legal entities,
these agencies exercise full powers and authorities within the scope of the related Joint Powers
Agreement including the preparation of annual budgets, accountability for all funds, and the power to
make and execute contracts. Obligations and liabilities of the separate entities are not those of the City.
For a further explanation of these separate entities, refer to Note 12 Jointly Governed Organizations in the
CAFR.
ECONOMIC FACTORS
The City has a diversified economic base, which includes an assortment of high-tech, financial, service -
based, entertainment and industrial businesses. Downtown San Rafael provides a mix of restaurants, retail
shops and financial institutions. The City's varied economic base is reflected also in its diverse property tax
base, which is 77% residential, 18% commercial, 2% industrial, 1% unsecured and others. The top 50 sales
tax producers provide 61% of overall sales tax revenues.
Fiscal year 2014-2015, marked the first full year of the Measure E Transaction Use Tax (TUT). This 0.75%
tax took effect in April 2014, supplanting the former TUT (Measure S) of 0.50%. The revenue from this
tax is projected to reach $11.5 million, with one-third of the funds allocated to public safety facilities
construction and improvements. Total Measure E revenues account for 16% of General Fund Revenues.
Property -related taxes are projected to increase by approximately 5%. All other revenues, including
business tax, franchise tax, charges for services and permit fees are expected to experience modest
increases.
It is anticipated that the economy will continue to grow during the upcoming year, but job gains will be
limited. The City continues to fund current year operating expenses without the use of one-time revenues or
reserves. In addition, significant resources have been added over the past year to the general fund operating
reserves, and other uses such as: technology to support City operations, facilities and open space
maintenance, and to reduce retiree benefit -related pension and health liabilities.
Demographic Data
The following is a sample of demographic and economic attributes that make San Rafael an exceptional
place to live and work.
0 Economic development organizations in San Rafael include the San Rafael Chamber of Commerce,
Downtown Business Improvement District, and the Marin Economic Forum.
El Marin County's top 10 employers include Kaiser Permanente, Marin General Hospital, Bio'Vlarin
Pharmaceutical, Autodesk, Dominican University of California, Bradley Real Estate, Macy's, Wells
Fargo, FICO, and W Bradley Electric.
0 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).
1E The top three sales tax categories in 2014 for San Rafael were: 1. Autos and Transportation (30%), 2.
General Consumer Goods (18%), and 3. Building and Construction (15%).
X11
CAFR TRANSMITTAL LETTER
E 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 787.
El 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 $1,700 to $2,500, while two bedroom
apartments go for $2,200 to $3,700. The median home value in San Rafael is $836,900.
Recent P-rowth and economic vibrancv:
• BioMarin Pharmaceutical recently completed a new research and development building (86,000
sq. ft.) along with a 600 space parking garage.
• BioMarin Pharmaceutical is seeking entitlements for a new office building (72,000 sq. ft.) along
with the second phase of the parking garage (an additional 300 parking spaces). Should this project
be approved, the BioMarin corporate headquarters facility will include a total of 473,000 sq. ft. at
its campus.
• Construction is proceeding for various infrastructure projects related to the SMART (Sonoma
Marin Area Rapid Transit) train. Train tracks, platforms and related infrastructure for the
Downtown and Civic Center Stations are all under construction. Train service is anticipated to start
in 2016.
• A newl6-unit apartment building was built at 1867 Lincoln Avenue.
• A new 10,000 sq. ft. office building (DaVita Dialysis) was built at 1415 Third Street.
• A new Sprouts Market (24,000 sq. ft.) opened in early 2015.
• A 40 -unit apartment building at 815 B Street is proceeding with its entitlements the current status
is that environmental documents were released for public review.
• Whistlestop has submitted an application to build a 40 -unit senior apartment building -along with a
senior services center at its current location at 930 Tainalpais Avenue.
FINANCIAL INFORMATION
The City's management is responsible for establishing and maintaining internal controls to ensure that the
City's assets are adequately protected from loss, theft or misuse. In addition, management controls ensure
that proper 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.
vin
CAFR TRANSMITTAL LETTER
The City develops a budget based upon City Council priorities and department objectives. The Finance
Department maintains a traditional line item budget by major function. Budget control is accomplished at
the functional or division level within each fund. This budget creates a comprehensive management and
fiscal system aimed at achieving the objectives of each operating level consistent with those that have been
set for the community by the City Council. Each department director is responsible for accomplishing goals
within his or her functional area and monitoring the use of her or his budget allocations consistent with
policies set by the City Council and monitored by the City Manager.
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; Carl Tregner,
Accountant; and Francis Law, 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 fourth consecutive year that the City received the award.
Lastly, we appreciate the ongoing leadership and support from the Mayor, City Councilmembers and the
City Council Finance Committee. Their strong commitment to financial accountability and stewardship
provide inspiration to the organization for a high level of achievement.
Respectfully submitted,
r
Jun Schutz \
i Manager
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Mark Moses
Finance Director
r,~ CITY OF
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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
x
rlCITY OF11A ij,let
City Council and Staff
City Council
Gary O. Phillips, Mayor
Andrew McCullough, Vice Mayor
Maribeth Bushey, Councilmember
Kate Colin, Councilmember
John Gambhn, Councilmember
Elected Officials
Rob Epstein, City Attorney
Esther Beirne, City Clerk
Executive Team
Nancy Mackle, City Manager
Jim Schutz, Assistant City Manager
Diana Bishop, Chief of Police
Deirdre Dolan, Human Resources Director
Chris Gray, Fire Chief
Sarah Houghton, Library Director
Paul Jensen, Community Development Director
Stephanie Lovette, Economic Development Manager
Kevin McGowan, Acting Director of Public Works
Carlene McCart, Community Services Director
Mark Moses, Finance Director
Doris Toy, District Manager/ Engineer- SRSD
CAFR Team
Mark Moses, Finance Director
Van Bach, Accounting Manager
Francis Law, Senior Accountant
Carl Tregner, Accountant
Kil
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Assistant
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_ Human
Information Resources
Technology
Volunteer &
— Sustainability
Parking _ Programs
Services
Economic
Development
Division
City of San Rafael
Organizational Chart
Electorate
City Attorney Mayor & City Council City Clerk
Boards &
City Manager
Commissions
Police Fire
Department Department
Community
Services
Department
Community
Development
Department
Department of Finance
Library
Public Works Department
G�
Government Finance Officers Association
Certificate of
Achievement
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Presented to
City of San Rafael
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2014
Executive Director/CEO
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A Ll I IN FA MF -64412 " I [ 0
N MAZE
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 financial statements of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the City of San Rafael (City), California, as of
and for the year ended June 30, 2015, 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 component unit financial statements of the San Rafael Sanitation District, which represents 17%, 27%,
and 14%, respective, of the assets, net position, and revenue of the entity -wide reporting entity. These
component unit financial statements were audited by other auditors, whose report thereon has been
furnished to us and our opinion, insofar as it relates to the amounts included for the San Rafael Sanitation
District, is based solely on the report of these auditors. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the 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 1 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, 2015, and the respective changes in
financial position and, where applicable, cash flows thereof for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
Emphasis of Matters
Management adopted the provisions of the following Governmental Accounting Standards Board
Statements, which became effective during the year ended June 30, 2015 that had material effects on the
financial statements, as discussed in Note 1 to the financial statements:
• Statement No. 68, Accounting and Financial Reporting for Pensions - an amendment of GASB
Statement No. 27.
• Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date -
an amendment of GASB Statement No. 68.
In addition, as discussed in Note 1P, the City made prior period adjustments to the beginning net positions
of the Equipment Replacement Fund.
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 required supplementary information 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.
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 September 30,
2015, 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.
6
Pleasant Hill, California
September 30, 2015
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
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, 2015. Please read it in conjunction with the basic financial statements
and the accompanying notes to those basic financial statements.
FINANCIAL HIGHLIGHTS
Government -wide:
In the fiscal year ended June 30, 2015, the City of San Rafael implemented Governmental Accounting
Standards Board Statement No. 68, Accounting and Financial Reporting for Pensions. The implementation
of this pronouncement required a prior period adjustment and reduced the City's net position as of July 1,
2014, by $108.3 million of which $104.8 million was for governmental activities and $3.5 million was for
business -type activities.
• Net Position -The assets of the City exceeded its liabilities as of June 30, 2015 by $151.5 million.
• Activities - During the fiscal year the City's total revenues of $104.4 million were greater than expenses
for governmental and business -type activities of $84.8 million by $19.6 million.
Changes in Net Position The City's total net position increased by $19.6 million in fiscal year 2014-
2015. Net position of governmental activities increased by $19.1 million, while net position of the
business -type activities increased by $0.5 million.
Fund Level:
• Governmental Funds As of the close of fiscal year 2014-2015, the City's governmental funds reported
combined ending fund balances of $47.8 million, an increase of $7.9 million from the adjusted fund
balance of the prior year. Of this total amount, $0.4 million is nonspendable, $31.8 million is restricted,
$0.9 million is committed, $13.1 million is assigned, and $1.6 million is unassigned.
• Governmental fund revenues were $95.6 million, an increase of $2.0 million from fiscal year 2014-2015.
This increase was primarily driven by the Measure E TUT revenues, which were in effect for their first full
fiscal year.
• Governmental fund expenditures increased by $0.5 million to $89.0 million, from $88.5 million in the
prior year, due primarily to expenditure increases in the General Fund.
• Enterprise fund operating revenue increased by $0.7 million to $5.2 million, from $4.5 million in the prior
year. This was attributable to an increase in parking rates that became effective in February 2014 and,
therefore, were in effect for the entire fiscal year. Enterprise fund operating expenses were $4.1 million, a
modest increase of $0.2 million from the prior fiscal year.
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
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
This discussion and analysis is intended to serve as an introduction to the City's basic financial statements, which
have three components: 1) Government -wide Financial Statements, 2) Fund Financial Statements, and 3) Notes to
the Basic Financial Statements.
The basic financial statements include the City (primary government) and all legally separate entities (component
units) for which the government is financially accountable. This report also contains other supplementary
information in addition to the basic financial statements for further information and analysis.
Government -wide Financial Statements
The government -wide financial statements present the financial picture of the City and provide readers with a
broad view of the City's finances. These statements present governmental activities and business -type activities
separately and include all assets of the City (including infrastructure) as well as all liabilities (including long-term
debt). Additionally, certain interfund receivables, payables, and other interfund activity have been eliminated as
prescribed by Governmental Accounting Standards Board (GASB) Statement No. 34.
The Statement of Net Position and the Statement of Activities and Changes in Net Position report information
about the City as a whole. These statements include all assets and liabilities of the City using the accrual basis of
accounting, which is similar to the accounting used by most private -sector companies. All of the current year's
revenues and expenses are taken into account, regardless of when cash is received or paid.
The Statement of Net Position presents information on all of the City's assets and liabilities, with the difference
between the two reported as net position. Over time, increases in net position may serve as a useful indicator of
whether the financial position of the City is improving or deteriorating.
The Statement of Activities and Changes in Net Position presents information showing how the City's net position
changed during the year. All changes in net position are reported as soon as the underlying event giving rise to the
change occurs, regardless of timing of related cash flows.
Tn the Statement of Net Position and the Statement of Activities and Changes in Net Position, City activities are
separated as follows:
Governmental Activities — Most of the City's basic services are reported in this category, including Public Safety,
Public Works and Parks, Community Development, Cultural and Recreation, and Government Administration
(finance, human resources, legal, City Clerk and City Manager operations). Property tax, sales and use taxes, user
fees, interest income, franchise fees, hotel taxes, business licenses, and property transfer taxes, plus state and
federal grants fmance 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 25 through 27 of this report.
0
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
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 in
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 100 through 119 of this report.
Governmental Funds — Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government -wide financial statements. However, unlike the government -wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable
resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information
may be useful in evaluating a government's near-term financial capacity.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is
useful to compare the information presented for government funds with similar information presented for
governmental activities in the government -wide financial statements. By doing so, readers may better understand
the long-term impact of the government's near-term financing decisions. Both the governmental fund balance
sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities. These
reconciliations are presented on the page immediately following each governmental fund financial statement.
The City has thirty-one governmental funds, of which three 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 three major funds are: the General
Fund, Gas Tax, and Traffic and Housing Mitigation. Data from the other twenty-eight governmental funds are
combined into a single, aggregated presentation. The basic governmental fund financial statements can be found
on pages 30 through 33 of this report. Individual fund data for each of these non -major governmental funds is
provided in the form of combining statements on pages 100 through 119 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;
vehicle, equipment and computer replacement; workers' compensation; general liability; self-insured dental
program; other employee and retiree benefits programs. Because these services predominantly benefit
governmental rather than business -type functions, they have been included within governmental activities in the
government -wide financial statements.
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.
7
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
The basic proprietary fund financial statements can be found on pages 36 through 38 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
40 through 41 of this report.
Notes to lite Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government -wide and fund financial statements. The notes to the financial statements can be found on pages 43
through 85 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 88 through 94 of this report.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
Statement of Net Position
For financial statements beginning with the year ended June 30, 2015, the City has implemented GASB 68,
Accounting and Financial Reporting for Pensions—an amendment of GASB Statement No. 27. The intention of
this Statement is to improve the decision-making usefulness of information in employer and governmental non -
employer contributing entity financial reports and enhance its value for assessing accountability and inter -period
equity by requiring recognition of the entire net pension liability and a more comprehensive measure of pension
expense.
Net position is one indicator of the City's financial position. During this fiscal year, the net position of the City
was $141.7 million from Governmental Activities and $9.8 million from Business -type Activities, for a total of
$151.5 million. This represents an increase of $19.6 million from the prior year, restated net position.
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
The following is the condensed Statement of Net Position for the fiscal years ended June 30, 2015 and 2014.
Summary of Net Position
June 30, 2015 & 2014 (in thousands)
Current and other liabilities
Noncurrent liabilities
Total liabilities
Deferred inflows related to pension (Note 9)
Net Position:
Net investment in capital assets
Restricted
Unrestricted
Change due to Implementation of GASB 68
& GASB 71 (See Note 1)
Total net position
10,664
Governmental Activities
Increase
1
Business -Type Activities
Increase
124
2015
2014
(Decrease)
2015
2014
(Decrease)
Current and other assets
$80,056
$67,001
$13,055
$2,679
$2,289
$390
Capital assets
191,074
190,815
259
16,742
17,035
(293)
Total assets
271,130
257,816
13,314
19,421
19,324
97
Deferred outflows related to pension (Note 9)
21,622
0
21,622
734
0
734
Current and other liabilities
Noncurrent liabilities
Total liabilities
Deferred inflows related to pension (Note 9)
Net Position:
Net investment in capital assets
Restricted
Unrestricted
Change due to Implementation of GASB 68
& GASB 71 (See Note 1)
Total net position
10,664
7,901
2,763
509
385
124
94,916
22,486
72,430
8,294
6,103
2,191
105,580
30,387
75,193
8,803
6,488
2,315
45,498
0
45,498
1,546
0
1,546
190,621
190,286
335
10,745
10,786
(41)
33,389
37,339
(3,950)
0
0
0
(82,336)
(196)
(82,140)
(939)
2,050
(2,989)
0
(104,830)
104,830
0
(3,528)
3,528
$141,674
$122,599
$19,075
$9,806
$9,308
$498
Governmental assets increased by $13.3 million, primarily due to increases in cash accumulated from positive
operating results and set aside for specific purposes (e.g., public safety facility construction and improvements,
emergency and cash flow reserve, and childcare reserve). In addition, a long-term receivable of $4.5 million from
San Rafael Sanitation District is now being recognized for the District's share of pension and OPEB liabilities.
Current and other liabilities increased by approximately $2.8 million, primarily due to accrual of large invoices at
the close of the year, coupled with an increase in liability claims payable (Note 13).
The net position in business -type activities, which reflects the activity of the Parking Services program, increased
by $498 thousand from the previous year due to the first full fiscal year of operations since the parking meter rates
were increased in February 2014.
At June 30, 2015, the largest portion of net position in the amount of $201.4 million consisted of the City's
investment in capital assets net of related debt. This component represents the total amount of funds required to
acquire capital assets less any related debt used for such acquisition that is still outstanding. The City uses these
assets to provide services to residents. The capital assets of the City are not sources of income for repayment of
debt as most assets are not revenue generating and generally are not liquidated to repay debt. Therefore, debt
service payments are funded from other sources available to the City.
V
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
A portion of the City's net position of $33.4 million is subject to external restrictions, and their use is determined
by those restrictions whether legal or by covenant. The remaining portion, unrestricted negative $83.3 million,
represents the extent to which the net investment in capital assets and restricted net position exceed total assets.
Net Position as of 6/30/2015
Total = $ 151,480 (in thousands)
Invested in Capital Assets (net)
Restricted
Unrestricted
Total Net Position
10
$201,366
33,389
(83,275)
$151,480
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
Statement of Activities - Governmental
The following is the condensed Statement of Activities and Changes in Net Position for the fiscal years ended
June 30, 2015 and 2014:
11
Governmental Activities
Increase
2015
2014
(Decrease)
REVENUES
Program revenues:
Charges for services
$19,758
$24,651
($4,893)
Operating grants and contributions
4,186
4,698
(512)
Capital grants and contributions
1,308
763
545
Total program revenues
25,252
30,112
(4,860)
General revenues:
Property taxes
19,039
18,440
599
Sales taxes
32,270
27,759
4,511
Paramedic tax
3,820
3,816
4
Transient occupancy tax
2,662
2,332
330
Franchise tax
3,272
3,261
11
Business license tax
2,670
2,589
81
Other taxes
3,296
3,452
(156)
Investment earnings
216
184
32
Miscellaneous
2,255
1,141
1,114
Total general revenues
69,500
62,974
6,526
TOTAL REVENUES
94,752
93,086
1,666
EXPENSES
General government
9,100
9,086
14
Public safety
39,969
43,800
(3,831)
Public works and parks
16,893
22,126
(5,233)
Community/economic development
3,128
3,451
(323)
Culture and recreation
11,198
11,847
(649)
Interest on long-term debt
284
327
(43)
TOTAL EXPENSES
80,572
90,637
(10,065)
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENSES
14,180
2,449
11,731
OTEER FINANCING SOURCES (USES)
Transfers in
433
450
(17)
Total Other Financing Sources (Uses)
433
450
(17)
Special Item (See Note 41-1)
4,462
0
4,462
Net Change in Net Position
19,075
2,899
16,176
Beginning Net Position as of 7/1/2014
122,599
224,530
(101,931)
Change due to implementation of
GASB 68 & 71 (See Note 1P)
-
(104,830)
104,830
Ending Net Position as of6/30/2015
$141,674
$122,599
$19,075
11
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
The City's governmental activities net position increased by $19.1 million during fiscal year 2014-2015. Charges
for services were approximately $4.9 million lower than those of the previous year. A significant portion of the
drop, $2.7 million, is due the change in the method of accounting for those of personnel reimbursements from the
San Rafael Sanitation District (SRSD), a discretely presented component unit. In previous years, the City treated
the reimbursements as charges for services; beginning in fiscal year 2014-2015, the reimbursements offset a
receivable that was established for this activity.
Meanwhile, the City recorded a $4.5 million year -over -year increase in Sales taxes, $2.8 million of which was due
to the fact that this was the first full year of the Measure E transactions and use tax. Property taxes and transient
occupancy taxes registered year -over year increases of $0.6 million and $0.3 million, respectively. Miscellaneous
revenues were up $1.1 million, led by approximately $0.8 million in delayed reimbursements of State -mandated
costs.
The fiscal year 2014-2015 governmental expenditures were $10 million less than those of the previous fiscal year.
This drop results from: 1) the implementation of GASB 68, which changed the methodology by which current
period pension expenses are reported; and 2) the change in the treatment of the SRSD personnel costs, which are
no longer reported as City expenditures.
The following graph shows governmental revenues by source:
67,02
Revenues by Source
Governmental Activities
Total - $94,751
(in thousands)
-f1 c 7 7SS
1.2
13 Charges for services
4,186
■ Operating grants and
contributions
_1,308 Capital grants and contributions
e Taxes
Investment earnings
C. Miscellaneous
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
Expenses and Program Revenues
Governmental Activities
■ Program Revenue a Expenses
Total expenses for governmental activities were $80.6 million (excluding interest on long-term debt of $284
thousand). Program revenues offset total expenditures as follows:
• Those who directly benefited from programs contributed $19.8 million in charges for services.
• A total of $5.5 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
$69.9 million.
Functional expenses for the year ended June 30, 2015 were as follows:
Expenses by Function
For the fiscal year ended June 30, 2015 (in thousands)
Function
Amount
Percent of Total
General government
$9,100
Q
Public safety
39,969
49.6%
Public works and parks
0Ca`
OCA
Community development
3,128
0
Culture and recreation
G
e5
Interest on debt
e�
\ct
QJ
■ Program Revenue a Expenses
Total expenses for governmental activities were $80.6 million (excluding interest on long-term debt of $284
thousand). Program revenues offset total expenditures as follows:
• Those who directly benefited from programs contributed $19.8 million in charges for services.
• A total of $5.5 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
$69.9 million.
Functional expenses for the year ended June 30, 2015 were as follows:
Expenses by Function
For the fiscal year ended June 30, 2015 (in thousands)
Function
Amount
Percent of Total
General government
$9,100
11.3%
Public safety
39,969
49.6%
Public works and parks
0Ca`
OCA
Community development
3,128
3.9%
Culture and recreation
G
e5
Interest on debt
e�
\ct
■ Program Revenue a Expenses
Total expenses for governmental activities were $80.6 million (excluding interest on long-term debt of $284
thousand). Program revenues offset total expenditures as follows:
• Those who directly benefited from programs contributed $19.8 million in charges for services.
• A total of $5.5 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
$69.9 million.
Functional expenses for the year ended June 30, 2015 were as follows:
Expenses by Function
For the fiscal year ended June 30, 2015 (in thousands)
Function
Amount
Percent of Total
General government
$9,100
11.3%
Public safety
39,969
49.6%
Public works and parks
16,893
21.0%
Community development
3,128
3.9%
Culture and recreation
11,198
13.9%
Interest on debt
284
0.3%
Total expenses
$80,572
100%
13
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
Statement of Activities — Business -type
Summary of Changes in Net Position
June 30, 2015 & 2014 (in thousands)
Business -Type Activities
2015 2014
Revenues
Program revenues:
Charges for services
Total program revenues
General revenues:
Miscellaneous
Total general revenues
TOTAL REVENUES
Expenses
General government
TOTAL EXPENSES
EXCESS (DEFICIENCY) OF REVENUES
OVER(UNDER)EXPENSES
OTHER FINANCING SOURCES (USES)
Transfers out
Total Other Financing sources (uses)
Net Change in Net Position
Net Position, Beginning
Change due to implementation of
GASB 68 & 71 (See Note IP)
Net Position, Ending
Increase
(Decrease)
$5,174
$4,485
$689
5,174
4,485
689
7
4
3
7
4
3
5,181
4,489
692
4,250
4,125
125
4,250
4,125
125
931
364
567
(433)
(450)
17
498
(86)
584
9,308
12,922
(3,614)
-
(3,528)
3,528
$9,806
$9,308
$498
The net position for business -type activities was increased by $584 thousand in fiscal year 2015 from the prior
fiscal year. Due to the implementation of GASB 68 and 71, the beginning fund balance was reduced by $3.53
million (See Note 1P).
Parking services is the City's only business -type activity with income derived from program revenues of $5.2
million. Program revenues include parking meter coin income of $1.9 million and parking garage hourly and
monthly parking income of $1.3 million. Revenues also include parking and non -vehicle code fines totaling $2.0
million. Total expenses for parking services were $4.3 million and transfers out to general fund and non -major
governmental fund for support totaled $433 thousand during the fiscal year 2014-2015.
14
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
FINANCIAL ANALYSIS OF INDIVIDUAL FUNDS
Governmental Funds
Fund Balance Classifications
In February 2009, the Governmental Accounting Standards Board issued Statement No. 54 (GASB 54), Fund
Balance Reporting and Governmental Fund Type Definitions. The objective of GASB 54 was to enhance the
usefulness of fund balance information by providing clearer fund balance classifications that can be applied. Under
GASB 54, fund balances are classified in five categories: nonspendable, restricted, committed, assigned, and
unassigned based on hierarchy of constraint. Further details on fund balance classifications can be found in Note
8B.
The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances
of spendable resources. Such information is useful in assessing the City's financial capacity. In particular,
unassigned fund balance may serve as a useful measure of a government's net resources available for spending at
the end of the fiscal year.
As of June 30, 2015, the City reported a combined ending fund balance of $47.8 million of all its total
governmental funds (an increase of $7.9 million from the prior year): $0.4 million is non -spendable, $31.7 million
is restricted, $0.9 million is committed, $12.9 million is assigned and $1.8 million is unassigned.
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, 2015 was $14.4 million (an increase of
$7 million from the adjusted prior year balance): $0.4 million is non -spendable, $12.2 million is assigned, and
$1.8 million is unassigned. The assigned portion of the balance includes $6.5 million for emergency and cash flow
needs, which represents a 27 percent increase from the prior year and now exceeds the minimum target reserve of
ten percent of operating expenditures.
General Fund Budaetary Hiahli2hts:
The original adopted General Fund budget projected total revenue of $68.2 million and transfers -in of $1.3 million
for total resources of $69.5 million. The budget appropriated expenditures of $62.9 million and transfers -out of
$1.7 million for a total appropriation of $64.6 million.
Actual revenues, at $70.7 million, exceeded the original budgeted revenues by $2.5 million. This positive
performance was driven by tax revenues (property tax, sales tax, and transient occupancy tax) that exceeded budget
projections, coupled with the receipt of delayed SB -90 State Mandate Costs reimbursements that were not
expected to be received until later in the following fiscal year.
Fiscal year 2014-2015 General Fund revenues exceeded expenditures and net transfers by $7.0 million. Of this
amount, $3.5 million was assigned to Measure E — Public Safety Facility reserve; $1.4 million was added to the
Emergency Cash Flow reserve; $0.3 million was added to the General Plan / Long Range Planning reserve; $0.2
million was used to establish an Infrastructure reserve; and $1.6 million was retained in Unassigned General Fund
balance.
15
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
Summary of General Fund Budget and Actual
For the fiscal year ended June 30, 2015 (in thousands)
Traffic and Housing Mitigation Fund — The City uses this fund to collect developer contributions to be used for
major street improvement and housing infrastructure projects. During the year, the fund balance decreased from
$12.6 million to $12.3 million. Revenues totaled $0.3 million, while $0.6 million was charged against this fund to
support the maintenance of the City-wide traffic model. The balance in the fund is being held in anticipation of
major street projects identified in the General Plan 2020 and other qualifying expenditures.
Gas Tax Fund The City uses this fund to manage its allocation of State gasoline taxes and local funding for
street maintenance projects. Gas tax revenues exceeded expenditures and net transfers by $621 thousand in fiscal
year 2014-2015 and the ending fund balance increased from $7.0 million as of June 30, 2014, to $7.6 million as of
June 30, 2015.
Major expenditures during fiscal year 2014-2015 include $1.7 million for H Street roadway improvements, $1.1
million annual resurfacing of the City's most severely worn roadways, $337 thousand for the Downtown rail
readiness project, and $516 thousand for Traffic Signal Controller Upgrades and Traffic Signal LED Relamping.
The largest sources of revenues included $1.7 million from State gasoline taxes, $809 thousand in local Measure A
funds, $1.5 million in development impact fees, and $697 thousand in reimbursements.
Non -major Governmental Funds The City's non -major funds are presented in the basic financial statements in
the aggregate. At June 30, 2015, non -major funds had a total fund balance of $13.5 million, a $.6 million increase
from the previous year. The increase resulted from a $378 thousand increase to the childcare operating and capital
reserves, a $474 thousand increase in Library reserves, $529 thousand increase in Parkland dedication reserves,
and $601 thousand decrease in capital project set-aside.
Of the ending total non -major fund balances of $13.5 million: $11.9 million (88%) is legally restricted for specific
purposes by external funding source providers, $0.9 million (7%) is committed for special purposes by the City
Council, and $ 0.7 million (5 %) is assigned. Additional information about these aggregated non -major funds is
presented in the combining statements which immediately follow the required supplementary information.
16
Adopted Budget
Revised Budget
Actual
Revenues
$68,153
$69,106
$70,747
Transfers in
1,290
1,290
1,039
Total resources
69,443
70,396
71,786
Expenditures
62,854
$63,286
63,096
Transfers out
1,650
1,698
1,698
Total uses
64,504
64,984
64,794
Net Operating Results
$4,939
$5,412
$6,992
Traffic and Housing Mitigation Fund — The City uses this fund to collect developer contributions to be used for
major street improvement and housing infrastructure projects. During the year, the fund balance decreased from
$12.6 million to $12.3 million. Revenues totaled $0.3 million, while $0.6 million was charged against this fund to
support the maintenance of the City-wide traffic model. The balance in the fund is being held in anticipation of
major street projects identified in the General Plan 2020 and other qualifying expenditures.
Gas Tax Fund The City uses this fund to manage its allocation of State gasoline taxes and local funding for
street maintenance projects. Gas tax revenues exceeded expenditures and net transfers by $621 thousand in fiscal
year 2014-2015 and the ending fund balance increased from $7.0 million as of June 30, 2014, to $7.6 million as of
June 30, 2015.
Major expenditures during fiscal year 2014-2015 include $1.7 million for H Street roadway improvements, $1.1
million annual resurfacing of the City's most severely worn roadways, $337 thousand for the Downtown rail
readiness project, and $516 thousand for Traffic Signal Controller Upgrades and Traffic Signal LED Relamping.
The largest sources of revenues included $1.7 million from State gasoline taxes, $809 thousand in local Measure A
funds, $1.5 million in development impact fees, and $697 thousand in reimbursements.
Non -major Governmental Funds The City's non -major funds are presented in the basic financial statements in
the aggregate. At June 30, 2015, non -major funds had a total fund balance of $13.5 million, a $.6 million increase
from the previous year. The increase resulted from a $378 thousand increase to the childcare operating and capital
reserves, a $474 thousand increase in Library reserves, $529 thousand increase in Parkland dedication reserves,
and $601 thousand decrease in capital project set-aside.
Of the ending total non -major fund balances of $13.5 million: $11.9 million (88%) is legally restricted for specific
purposes by external funding source providers, $0.9 million (7%) is committed for special purposes by the City
Council, and $ 0.7 million (5 %) is assigned. Additional information about these aggregated non -major funds is
presented in the combining statements which immediately follow the required supplementary information.
16
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
Proprietary Funds
The City's proprietary funds are presented in the basic financial statements in a manner similar to that found in the
government -wide financial statements, but in more detail. As noted in the Summary of Changes in Net Position —
Business -type Activities at page 14, the City's proprietary fund net position was increased by $498 thousand
during the fiscal year. The Parking Services Fund is the City's sole business -type (Enterprise) activity.
Proprietary fund operating revenue increased by $0.7 million in fiscal year 2014-2015 to $5.2 million from $4.5
million in the prior year. This was attributable to an increase in parking rates from $1.00 per hour to $1.50 per hour
implemented in February 2014, and thus in effect for the entire fiscal year. The Enterprise fund operating
expenses were $4.1 million in fiscal year 2014-2015, a modest increase of $0.2 million from the prior fiscal year at
which time the parking meters were replaced.
The City's Internal Service Funds are also reported in this Proprietary Fund classification. In fiscal year 2014-
2015, the Internal Services Funds were comprised of Building Maintenance, Employee Benefits, Liability
Insurance, Workers' Compensation, Dental Insurance, Employee Retirement, and OPEB/Retiree Medical. The
following two funds have now been reclassified into Internal Service Funds:
Vehicle Replacement Fund — In prior years, this fund was part of the equipment replacement fund under the major
Capital Project Fund. Effective in fiscal year 2014-2015, the city separated out the vehicle portion and established
the Vehicle Replacement Fund to manage the replacement of vehicles. In addition, this fund was reclassified from
a Capital Project Fund to an Internal Service Fund. As of June 30, 2015, the Vehicle Replacement Fund had a total
fund balance of $7.2 million, with $2.4 million available for vehicle replacement.
Equipment Replacement Fund — In prior years, this fund was part of the equipment replacement fund under the
major Capital Project Fund. Effective in fiscal year 2014-2015, the City separated out the equipment portion and
established the Equipment Replacement Fund to manage the replacement of equipment, including computer
systems and technology. In addition, this fund was reclassified from a Capital Project Fund to an Internal Service
Fund. As of June 30, 2015, the Equipment Replacement fund had a total fund balance of $3.0 million, with $0.7
million available for fire equipment replacement, $1.3 million for technology, and $0.2 million for police -
equipment replacement.
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, 2015
amounts to $207.8 million, net of accumulated depreciation of $155.2 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 net additions to the City's
investment in capital assets for the current fiscal year was $6.1 million, offset by accumulated depreciation of $6.1
million, resulting in no net change to Capital Assets.
Additions to capital assets during fiscal year 2014-2015 included:
Land acquisition: 1309 5 1 Avenue, San Rafael - $0.8 million
17
i i ninumm u
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
Construction in Progress: $2.2 million:
• H Street Drainage & Reconstruction - $1.7 million
• Downtown Rail Readiness - $0.5 million
➢ Infrastructure: $1.0 million
• Pt. San Pedro Resurfacing - $0.6 million
• Safe Routes to School: Davidson - $0.4 million
A Building & structures: $1.2 million for the City Hall Improvements (HVAC renovation)
➢ Machinery & Equipment: $0.8 million:
• $0.6 million net increase in vehicles
• $0.2 million net increase in equipment
The City's Capital Assets for the fiscal years ending June 30, 2015 and 2014 were as follows:
Summary of Capital Assets
June 30, 2015 & 2014 (in thousands)
Business -type Activities
Land
2015
2014
Governmental Activities
10,714
10,714
Land
$83,261
$82,464
Construction in progress
4,506
2,301
Land improvements
8,789
8,789
Buildings and structures
41,486
40,300
Machinery and equipment
18,927
18,102
Infrastructure
185,529
184,508
Less accumulated depreciation
(151,423)
(145,649)
Subtotal Governmental Activities
191,075
190,815
Business -type Activities
Land
8,621
8,621
Buildings and structures
10,714
10,714
Machinery and equipment
1,185
1,179
Less accumulated depreciation
(3,778)
(3,479)
Subtotal Business -type Activities
16,742
17,035
Total Capital Assets
$207,817
$207,850
Additional information on the City's capital assets can be found in Note 5 on pages 60 through 62 of this report.
18
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
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 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 ending June 30, 2015 and 2014 were as follows:
Summary of Long -Term Debt
June 30, 2015 & 2014 (in thousands)
2015 2014
Governmental Activity Debt:
2010 Taxable Pension Obligation Bonds $4,490 $4,490
PG & E City Hall HVAC Retrofit Note Payable 279 312
PG & E Street Light Retrofit Note Payable 175 217
Subtotal Governmental Activity Debt 4,944 5,019
Business -type Debt:
PG & E Parking Lot Lighting Retrofit Note Payable
55
62
2012 Authority Lease Revenue refunding Bonds, as adjusted
5,942
6,186
Subtotal Business -type Debt
5,997
6,248
Total Long -Term Obligations
$10,941
$11,267
19
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
ECONOMIC CLIMATE AND NEXT YEAR'S BUDGET
Six years after the official end of the Great Recession, the City's revenues have finally broken through their pre -
recession peak. As the City looks ahead to fiscal year 2015-2016, management is encouraged by indicators that the
local economy will remain vibrant. However, relatively strong growth in the regional economy is tempered by
persistent uncertainty at the state, national, and international levels.
The nation continues to bounce back slowly, fueled by a resurgent housing market and consistent job growth.
While elements of the national economy are on the mend, there are many longer-term issues the nation must
address, including funding changes to the national healthcare system, long-term underemployment and
unemployment, and resolving underfunded federal entitlements and state and local pensions.
The California economy continues to rebound from the recession. Although the 6.2% unemployment rate remains
above the national average of 5.3%, it continues to fall and remains on a convergent track with the national
average. Personal income has rebounded over the past few years, and the State continues to prosper from the flow
of capital into the technology companies who are attracted to California. Notwithstanding the State's current
$8 billion surplus, major challenges persist. The "wall of debt" which, when pension and retiree medical liabilities
are considered, reaches into the hundreds of billions of dollars and managing the impact of the severe drought
affecting all 58 counties are likely to burden the State for several years.
Locally, the 3.3% Marin County unemployment rate is the second lowest in the State. According to the Marin
Economic Forum, the County added 2,600 payroll jobs and gained approximately 200 payroll businesses in 2014.
Real personal income is projected to grow at an average rate of just over 2% over the next year, and Marin
County's taxable sales per capita are the third highest in the State. Marin County median home prices now hover
around $1 million and continue to rise, while the recovery of commercial real estate has led to stable rents
averaging $2.60 per square foot.
The City's general fund is fueled by the momentum of three consecutive years of strong operating results. Service
levels have increased moderately over the past few years, with additional resources being allocated to homeless
issues, massage ordinance enforcement, open space management, and deferred maintenance. At the same time, the
City is fully funding its actuarially -determined, required contributions for both pension and retiree medical (OPEB)
obligations.
The City enters fiscal year 2015-2016 with approximately $4.4 million accumulated from a dedicated portion of its
Measure E transactions and use tax (TUT) for public safety facilities construction and improvements. One-third of
this twenty-year San Rafael three-quarter cent TUT, which became effective April 1, 2014, has been set aside by
City Council direction for this purpose.
Reductions in staffing and service levels, coupled with deferred maintenance of City facilities during past
economic downturns means that, although currently the City is able to maintain and, in some cases, improve on its
level of services and make some strategic investments for the City's future, there will still be critical, unfunded
capital and maintenance needs.
The trends for sales tax and the transactions and use tax (Measure E), which combined represent the City's largest
tax revenue generators, suggest continued, but moderate growth. For fiscal year 2015-2016, these taxes are
projected to increase by approximately four percent. During this year, the City also expects to receive
approximately $1.2 million in delayed sales tax disbursements associated with the termination of the Triple Flip.
(The Triple Flip was a 10 -year structural change to the manner in which sales tax was distributed by the State.)
XII
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2015
The City's second largest tax generator is property tax. The City is expecting the fiscal year 2015-2016 tax roll to
increase by approximately five percent over the previous year. Other tax and non -tax revenues are expected to
grow moderately, in the range of two to four percent.
The City's largest expenditure relates to personnel costs. Salaries and benefits are tied to the labor agreements
with each bargaining group. With the exception of SEIU-Childcare, which has a two-year contract terminating on
October 31, 2015, the City's labor units are all operating under contracts that expire on June 30, 2016. Negotiated
compensation increases in effect through June 30, 2016 range between 3.0 and 3.5% for the year.
In the bond markets, the San Rafael name is recognized as a high credit municipal entity given both the City's
financial strength and solid financial management. Because the City's bonds are highly sought by investors and are
fairly competitive in the marketplace, the City can borrow funds at reasonably attractive rates. The City maintains
a AA- issuer credit rating with Standard & Poor's Ratings Services.
General Fund ending balances are anticipated to grow in the near term providing the City Council with options to
increase reserves or to fund one-time needs in the future. These reserves are important to ensure the stability and
reliability of City services.
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.
21
CITY OF SAN RAFAEL
STATEMENT OF NET POSITION AND
STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire City's financial
activities and financial position. They are also referred to as Government -wide financial statements.
The Statement of Net Position reports the difference between the City's total assets and the City's total
liabilities, including all the City's capital assets and all its long-term debt. The Statement of Net Position
focuses the reader on the composition of the City's net position, by subtracting total liabilities from total
assets.
The Statement of Net Position summarizes the financial position of all of the City's Governmental Activities
in a single column, and the financial position of all the City's Business -type Activities in a single column;
these columns are followed by a total column which presents the financial position of the entire City.
The City's Governmental Activities include the activities of its General Fund, along with all its Special
Revenue, Capital Projects and Debt Service Funds. Since the City's Internal Service Funds service these
Funds, their activities are consolidated with Governmental Activities, after eliminating inter -fund
transactions and balances. The City's Business -type Activities include all its Enterprise Fund activities.
The Statement of Activities reports increases and decreases in the City's net position. It is also prepared on
the full accrual basis, which means it includes all the City's revenues and all its expenses, regardless of
when cash changes hands. This differs from the "modified accrual" basis used in the Fund financial
statements, which reflect only current assets, current liabilities, available revenues and measurable
expenditures.
The Statement of Activities presents the City's expenses first, listed by program, and follows these with
the expenses of its business -type activities. Program revenues - that is, revenues which are generated
directly by these programs - are then deducted from program expenses to arrive at the net expense of each
governmental and Business -type program. The City's general revenues are then listed in the
Governmental Activities or Business -type Activities column, as appropriate, and the Change in Net
Position is computed and reconciled with the Statement of Net Position.
Both these Statements include the financial activities of the City and the San Rafael Joint Powers
Financing Authority which are legally separate but are considered to be component units of the City
because they are controlled by the City, which is financially accountable for their activities. The balances
and the activities of the San Rafael Sanitation District, a discretely presented component unit, are
included in these statements in a separate column.
23
CITY OF SAN RAFAEL
STATEMENT OF NET POSITION
JUNE 30, 2015
25
Component
Unit
Primary Government
San Rafael
Governmental
Business -type
Sanitation
Activities
Activities
Total
District
ASSETS
Cash and investments available for operations (Note 2)
$63,237,818
$2,591,915
$65,829,733
$22,797,010
Restricted cash and investments (Note 2)
76,511
76,511
Receivables:
Accounts
2,271,117
29,963
2,301,080
171,107
Taxes
6,304,844
6,304,844
Grants
1,413,862
12,967
1,426,829
Interest
88,756
88,756
Loans (Note 4)
653,654
653,654
Long-term receivable from the Successor Agency (Note 15D)
1,533,103
1,533,103
Long-term receivable from San Rafael Sanitation District (Note 4H)
4,462,815
4,462,815
Internal balances (Note 3B)
(41,417)
41,417
Prepaid expenses and others
54,990
2,815
57,805
54,209
Capital assets (Note 5):
Nondepreciable
87,767,431
8,620,853
96,388,284
706,633
Depreciable, net
103,307,321
8,121,247
111,428,568
38,485,196
Total Assets
271,130,805
19,421,177
290,551,982
62,214,155
DEFERRED OUTFLOWS
Deferred outflows related to pension (Note 9)
21,621,747
734,769
22,356,516
Total Deferred Outflows
21,621,747
734,769
22,356,516
LIABILITIES
Accounts payable
6,993,900
185,681
7,179,581
1,643,501
Deposits payable
301,941
301,941
Interest payable
50,372
50,372
Developer deposits payable
457,413
457,413
Unearned revenue
362,356
362,356
Claims payable (Note 13):
Due in one year
1,945,792
1,945,792
Due in more than one year
5,373,626
5,373,626
Compensated absences (Note 1K):
Due in one year
528,049
16,215
544,264
Due in more than one year
3,696,341
113,508
3,809,849
Long-term debt (Note 6):
Due in one year
75,172
256,816
331,988
Due in more than one year
4,868,495
5,740,332
10,608,827
Long-term payable to the City of San Rafael (Note 4H)
4,462,815
Net OPEB liability (Note 11)
9,164,000
9,164,000
Net Pension Liability (Note 9)
71,813,362
2,440,425
74,253,787
Total Liabilities
105,580,447
8,803,349
114,383,796
6,106,316
DEFERRED INFLOWS
Deferred inflows related to pension (Note 9)
45,498,330
1,546,164
47,044,494
Total Deferred Inflows
45,498,330
1,546,164
47,044,494
NET POSITION (Note 8):
Net investment in capital assets
190,621,085
10,744,952
201,366,037
39,191,829
Restricted for.
Special revenue projects:
Housing and street improvements
20,785,243
20,785,243
Stormwater
1,715,857
1,715,857
Emergency medical services
1,187,276
1,187,276
Other
7,538,627
7,538,627
Capital projects
1,996,249
1,996,249
Debt service
165,972
165,972
Total Restricted Net Position
33,389,224
33,389,224
Unrestricted
(82,336,534)
(938,519)
(83,275,053)
16,916,010
Total Net Position
$141,673,775
$9,806,433
$151,480,208
$56,107,839
See accompanying notes to financial statements
25
CITY OF SAN RAFAEL
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2015
26
Program Revenues
Operating
Capital
Charges for
Grants and
Grants and
Functions/Programs
Expenses Services
Contributions
Contributions
Primary Government
Governmental Activities:
General government
$9,099,858 $1,379,523
$284,762
Public safety
39,968,631 4,966,251
920,694
Public works and parks
16,893,164 3,078,267
2,670,155
$1,308,027
Community development
3,128,373 3,796,684
Culture and recreation
11,198,151 6,537,646
309,839
Interest on long-term debt and fiscal charges
284,288
Total Governmental Activities
80,572,465 19,758,371
4,185,450
1,308,027
Business -type Activities
Parking services
4,249,597 5,173,557
-
-
Total Business -type Activities
4,249,597 5,173,557
-
-
Total Primary Government
$84,822,062 $24,931,928
$4,185,450
$1,308,027
Component Unit
San Rafael Sanitation District
$11,375,239 $14,629,758
General revenues:
Taxes:
Property
Sales:
Sales and Use
Measure E half -cents sales tax
Measure E quarter -cents sales tax
Measure S
Paramedic
Transient occupancy
Franchise
Business license
Other
Investment earnings
Miscellaneous
Aid from other governmental agencies
Transfers (Note 3A)
Total general revenues and transfers
Special Item (Note 4M
Change in Net Position
Net Position, beginning of year, as adjusted (Note 1P)
Net Position, end of year
See accompanying notes to financial statements
26
Net (Expenses) Revenues and Changes in Net Position
Component
27
Primary Government
Unit
San Rafael
Governmental
Business -type
Sanitation
Activities
Activities
Total
District
($7,435,573)
($7,435,573)
(34,081,686)
(34,081,686)
(9,836,715)
(9,836,715)
668,311
668,311
(4,350,666)
(4,350,666)
(284,288)
(284,288)
(55,320,617)
(55,320,617)
-
$923,960
923,960
-
923,960
923,960
(55,320,617)
923,960
(54,396,657)
$3,254,519
19,039,443
19,039,443
1,319,852
21,056,482
21,056,482
7,702,530
7,702,530
3,498,470
3,498,470
12,433
12,433
3,820,240
3,820,240
2,661,878
2,661,878
3,272,390
3,272,390
2,670,071
2,670,071
3,295,751
3,295,751
216,066
7,008
223,074
171,804
2,254,901
2,254,901
35,090
432,630
(432,630)
69,933,285
(425,622)
69,507,663
1,526,746
4,462,815
-
4,462,815
(4,462,815)
19,075,483
498,338
19,573,821
318,450
122,598,292
9,308,095
131,906,387
55,789,389
$141,673,775
$9,806,433
$151,480,208
$56,107,839
27
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 year 2014-2015.
GENERAL FUND
Established to account for all financial resources necessary to carry out basic governmental activities of
the City which are not accounted for in another fund. The General Fund supports essential City services
such as police and fire protection, building and street maintenance, libraries, recreation, parks and open
space maintenance.
TRAFFIC AND ROUSING NUTIGATION 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.
29
CITY OF SAN RAFAEL
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2015
ASSETS
Cash and investments available for operations (Note 2)
Restricted cash and investments (Note 2)
Receivables:
Accounts
Taxes
Grants
Interest
Loans (Note 4)
Long-term receivable from the
Successor Agency (Note 15D)
Prepaids
Total Assets
LIABILITIES
Accounts payable
Deposits payable
Developer deposits payable
Unearned revenue
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - SB90 reimbursement receivable
Unavailable revenue - long-term receivable from Successor Agency
Total Deferred Inflows of Resources
Fund Balances (Note 8):
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of Resources
and Fund Balances
Special Revenue Funds
Traffic and
Housing
General Mitigation Gas Ta
Other Total
Governmental Governmental
Funds Funds
$11,912,244
$12,208,886 $8,250,560
$12,534,207
$44,905,897
$5,613,292
86,477
76,511
76,511
1,212,870
36,967
855,237
2,105,074
5,906,885
157,965
239,994
6,304,844
7,940
101,879
1,304,043
1,413,862
88,654
21,098
102
88,756
350,282
51,430
230,066
631,778
1,533,103
1,092,071
1,533,103
1,533,103
49,017
2,359
51,376
$21,060,995 $12,260,316 $8,547,371 $15,242,519 $57,111,201
$3,531,630
$946,426
$1,135,236
$5,613,292
86,477
$21,098
194,366
301,941
455,913
1,500
457,413
362,356
362,356
4,074,020
21,098
946,426
1,693,458
6,735,002
1,092,071
1,092,071
1,533,103
1,533,103
2,625,174
2,625,174
399,299
2,359
401,658
12,239,218
7,600,945
11,902,021
31,742,184
931,871
931,871
12,374,002
712,810
13,086,812
1,588,500
1,588,500
14,361,801
12,239,218
7,600,945
13,549,061
47,751,025
$21,060,995 $12,260,316 $8,547,371 $15,242,519 $57,111,201
See accompanying notes to basic financial statements
30
CITY OF SAN RAFAEL
GOVERNMENTAL FUNDS
BALANCE SHEET - RECONCILIATION OF GOVERNMENTAL
FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES
JUNE 30, 2015
Total fund balances reported on the governmental funds balance sheet
Amounts reported for Governmental Activities in the Statement of Net Position are
different from those reported in the Governmental Funds because of the following:
Capital assets used in Governmental Activities are not financial resources and,
therefore, are not reported in the Governmental Funds.
Internal service funds are used by management to 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.
Interest payable on long-term debt does not require the use of current financial
resources and, therefore, are not reported in the Governmental Funds.
Long-term liabilities, including bonds payable, are not due and payable in the current
period and, therefore, are not reported in the Governmental Funds.
Compensated absences
Unavailable revenue
Long-term receivables from San Rafael Sanitation District
Deferred outflow related to pension
Net pension liability
Deferred inflow related to pension
Net position of governmental activities
See accompanying notes to financial statements
01
$47,751,025
184,061,860
7,630,903
(4,943,667)
(4,224,390)
2,625,174
4,462,815
21,621,747
(71,813,362)
(45,498,330)
$141,673,775
CITY OF SAN RAFAEL
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2015
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:
Principal
Interest and fiscal charges
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3A)
Transfers out (Note 3A)
Total Other Financing Sources (Uses)
Net Change in Fund Balances
FUND BALANCES, BEGINNING OF YEAR
AS ADJUSTED (NOTE 1P) 7,369,487 12,575,394 6,980,090
FUND BALANCES, END OF YEAR $14,361,801 $12,239,218 $7,600,945
See accompanying notes to financial statements
9,530,931
36,564,699
10,392,192
3,416,859
2,801,488
30,676
75,172
284,288
63,096,305
7,650,828
1,039,150
(1,697,664)
(658,514)
6,992,314
21,473 651,283
7,389,816
1,582,658 783,793
8,815,289
2,465,703 2,033,221
132,053 307,538 1,716,719
132,053 4,377,372 21,390,121
192,659 917,020
528,835
(528,835) (825,000)
(528,835) (296,165)
(336,176) 620,855
32
10,203,687
43,954,515
12,758,643
3,416,859
11,616,777
4,498,924
2,186,986
75,172
284,288
88,995,851
(2,137,177) 6,623,330
2,780,164
Special Revenue Funds
(3,051,499)
2,780,164
Traffic and
642,987
Other
Total
39,831,045
Housing
$47,751,025
Governmental
Governmental
General
Mitigation
Gas Tax
Funds
Funds
$56,541,604
$5,262,624
$61,804,228
2,456,820
2,456,820
505,029
51,047
556,076
290,103
$35,984
$22,785
95,885
444,757
7,846,436
3,028,659
2,358,408
13,233,503
2,660,869
288,728
1,513,798
10,883,399
15,346,794
446,272
729,150
601,581
1,777,003
70,747,133
324,712
5,294,392
19,252,944
95,619,181
9,530,931
36,564,699
10,392,192
3,416,859
2,801,488
30,676
75,172
284,288
63,096,305
7,650,828
1,039,150
(1,697,664)
(658,514)
6,992,314
21,473 651,283
7,389,816
1,582,658 783,793
8,815,289
2,465,703 2,033,221
132,053 307,538 1,716,719
132,053 4,377,372 21,390,121
192,659 917,020
528,835
(528,835) (825,000)
(528,835) (296,165)
(336,176) 620,855
32
10,203,687
43,954,515
12,758,643
3,416,859
11,616,777
4,498,924
2,186,986
75,172
284,288
88,995,851
(2,137,177) 6,623,330
2,780,164
4,348,149
(3,051,499)
2,780,164
1,296,650
642,987
7,919,980
12,906,074
39,831,045
$13,549,061
$47,751,025
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, 2015
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $7,919,980
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.
this is the amount by which capital outlays exceeded depreciation expense in the current period. (1,488,520)
Long -Term Debt Proceeds and Payments
Repayments on long-term debt principal are expenditures in the governmental
funds, but in the Statement of Net Position the repayments reduce long-term liabilities. 75,172
Accrual of Non -Current Items
The amount below included in the Statement of Activities does not require the use of current financial resources
and therefore is not reported as revenue or expenditures in governmental funds (net change):
Compensated absences 45,033
Unavailable revenue (1,017,979)
Long-term receivable from San Rafael Sanitary District 4,462,815
Net Pension Liability Transactions
Governmental funds record pension expense as it is paid. However,
in the Statement of Activities those costs are reversed as deferred outflows/(inflows)
and an increase/(decrease) in net pension liability. 8,140,355
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. 938,627
Change in Net Position of Governmental Activities $19,075,483
See accompanying notes to financial statements
33
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.
PARKING SERVICES FUND
Established to maintain parking garages, lots and spaces in the Downtown Parking District, and to pay for
parking enforcement and meter collection.
INTERNAL SERVICE FUNDS
Established to account for department services and financing performed for other departments within the
same governmental jurisdiction. Funding comes from charges assessed to the departments benefiting
from the service.
35
CITY OF SAN RAFAEL
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2015
ASSETS
Current Assets:
Cash and investments available for operations (Note 2)
Receivable:
Accounts
Loans
Grants
Prepaids
Total Current Assets
Noncurrent Assets:
Capital assets (Note 5):
Nondepreciable
Depreciable, net
Total Noncurrent Assets
Total Assets
DEFERRED OUTFLOWS
Deferred outflows related to pension (Note 9)
Total Deferred Outflows
LIABILITIES
Current Liabilities:
Accounts payable
Interest payable
Compensated absences, due in one year (Note 1K)
Claims payable, due in one year (Note 13)
Long-term debt, due in one year (Note 6)
Total Current Liabilities
Noncurrent Liabilities:
Compensated absences (Note 1K)
Claims payable (Note 13)
Long-term debt (Note 6)
Net OPEB liability (Note 11)
Net Pension Liability (Note 9)
Total Noncurrent Liabilities
Total Liabilities
DEFERRED INFLOWS
Deferred inflows related to pension (Note 9)
Total Deferred Inflows
NET POSITION (Note 8):
Net investment in capital assets
Unrestricted
Total Net Position
Some amounts reported for business -type activities in the
Statement of Net Position are different because certain internal
service fund assets and liabilities are included with business -type
activities.
Net position business -type activities
See accompanying notes to financial statements
36
Business -type
Activities -
Enterprise Funds
Parking
Services
$2,591,915
29,963
12,967
2,815
2,637,660
Governmental
Activities
Internal
Service Funds
$18,331,921
166,043
21,876
3,614
18,523,454
8,620,853
204,136
8,121,247
6,808,756
16,742,100
7,012,892
19,379,760
25,536,346
734,769
734,769
185,681 1,380,608
50,372
16,215
1,945,792
256,816
509,084 3,326,400
113,508
5,373,626
5,740,332
9,164,000
2,440,425
8,294,265
14,537,626
8,803,349
17,864,026
1,546,164
1,546,164
10,744,952
(979,936)
9,765,016
41,417
$9,806,433
7,012,892
659,428
$7,672,320
CITY OF SAN RAFAEL
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED ]UNE 30, 2015
* 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
37
$489,120
9,218
$498,338
Business -type
Activities -
Governmental
Enterprise Funds
Activities
Parking
Internal
Services
Service Funds
OPERATING REVENUES
Charges for current services
$3,134,849
$10,873,971
Other operating revenues
2,038,708
1,022,167
Total Operating Revenues
5,173,557
11,896,138
OPERATING EXPENSES
Personnel
1,931,672
170,597
Insurance premiums and claims
6,281,991
Maintenance and repairs
41,222
475,593
Depreciation (Note 5)
299,122
844,108
General and administrative
1,781,636
2,463,285
Total Operating Expenses
4,053,652
10,235,574
Operating Income
1,119,905
1,660,564
NONOPERATING REVENUES (EXPENSES)
Investment income
7,008
53,880
Interest expense
(205,163)
Miscellaneous income
87,421
Total Nonoperating Revenues (Expenses)
(198,155)
141,301
Income Before Transfers
921,750
1,801,865
CONTRIBUTIONS
10,000
TRANSFERS OUT (Note 3A)
(432,630)
(864,020)
Change in Net Position
489,120 *
947,845
NET POSITION, BEGINNING OF YEAR, AS ADJUSTED (NOTE 1P)
9,275,896
6,724,475
NET POSITION, END OF YEAR
$9,765,016
$7,672,320
* 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
37
$489,120
9,218
$498,338
CITY OF SAN RAFAEL
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2015
Business -type
Activities -
Governmental
Enterprise Funds
Activities
Parking
Internal
Services
Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers/other funds
$3,134,849
$10,983,679
Cash payments to suppliers for goods and services
(1,705,714)
(7,323,673)
Cash payments to employees for salaries and benefits
(2,200,722)
(170,597)
Other operating revenues
2,020,556
1,022,167
Payment to OPEB Trust
(132,000)
Cash Flows from Operating Activities
1,248,969
4,379,576
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Contributions
10,000
Interfund payments
(432,630)
(864,020)
Cash Flows from Noncapital
Financing Activities
(432,630)
(854,020)
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Principal payments on revenue bonds
(251,091)
Interest expenses and fiscal charges
(206,388)
Acquisition of capital assets
(6,392)
(2,592,268)
Proceeds from sale of property
87,421
Cash Flows from Capital and
Related Financing Activities
(463,871)
(2,504,847)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
7,008
53,880
Cash Flows from Investing Activities
7,008
53,880
NET INCREASE IN CASH AND CASH EQUIVALENTS
359,476
1,074,589
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
2,232,439
17,257,332
CASH AND CASH EQUIVALENTS, END OF YEAR
$2,591,915
$18,331,921
Reconciliation of operating income to net cash
provided by operating activities:
Operating income
$1,119,905
$1,660,564
Adjustments to reconcile operating income
to cash flows from operating activities:
Depreciation
299,122
844,108
Net change in assets and liabilities:
Accounts receivable
(18,152)
98,770
Loans receivable
10,938
Prepaids and deposits
(2,815)
(3,509)
Net OPEB liabilities
(132,000)
Accounts payable
119,959
1,170,993
Compensated absence obligations
7,583
(Decrease) increase in due to retirement system
(276,633)
Claims payable
729,712
Net Cash Provided by Operating Activities
$1,248,969
$4,379,576
See accompanying notes to basic financial
statements
38
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 financial activities of such funds are excluded from the Government -wide financial statements and
presented in fund statements that consist of a Statement of Net Position.
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY — PRIVATE PURPOSE
TRUST FUND
Established to account for the activities of the Successor Agency to the San Rafael Redevelopment
Agency.
PT. SAN PEDRO ROAD ASSESSMENT DISTRICT AGENCY FUND
Established to accumulate funds for payment of principal and interest for Pt. San Pedro Road Median
Landscaping Assessment District bonds.
39
CITY OF SAN RAFAEL
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2015
NET POSITION (DEFICIT)
Held in trust for private purpose
($20,288,326)
See accompanying notes to financial statements
011
Successor Agency
to the
Redevelopment
Agency
Private -Purpose
Agency
Trust Fund
Funds
ASSETS
Cash and investments (Note 2)
$2,486,284
Restricted cash and investments (Note 2)
23,843
$294,330
Receivable:
Taxes
2,923,853
1,134
Interest
504
Prepaids
304
Total Assets
$5,434,788
$295,464
LIABILITIES
Accounts payable
$6,792
Interest payable
31,169
$28,726
Other long-term obligations (Note 15D)
1,533,103
Due to bondholders
266,738
Long-term debt (Note 15C):
Due within one year
2,800,000
Due more than one year
21,352,050
Total Liabilities
25,723,114
$295,464
NET POSITION (DEFICIT)
Held in trust for private purpose
($20,288,326)
See accompanying notes to financial statements
011
CITY OF SAN RAFAEL
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2015
Successor Agency
to the
Redevelopment Agency
Private -Purpose
Trust Fund
ADDITIONS
Property taxes $3,337,015
Use of money and property 1,902
Other revenue 319,803
Total Additions 3,658,720
DEDUCTIONS
General government 286,450
Interest expense 1,114,886
Total Deductions 1,401,336
Change in Net Position 2,257,384
NET POSITION HELD IN TRUST FUND
FOR OTHER PURPOSES
Beginning of year (22,545,710)
End of year ($20,288,326)
See accompanying notes to financial statements
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES I
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.
Activities of the Authority are reported in the Parking Services Enterprise Funds. Separate
financial statements are not prepared for the Authority.
C. Description of Discretely Presented Component Unit
San Rafael Sanitation District — The San Rafael Sanitation District (District) was formed in
1947 under Section 4700 of the California Health and Safety Code to provide wastewater
transmission over the southern two-thirds of the City and adjacent unincorporated areas.
The District is governed by a three-member Board of Directors who are appointed to four-year
terms. The City Council of the City appoints two out of the three board members and has the
ability to remove the two board members at will.
The City contracts with the District to maintain the collection systems in the City and surrounding
unincorporated areas. These employees are paid through the City's payroll department and
participate in the City's cost-sharing multiple -employer defined benefit pension plan administered
by the Marin County Employees' Retirement Association (Association). These costs are the
obligation of the District and not the City. As discussed in Note 4H, a receivable from the District
has been established.
43
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
I NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
The District's activities are reported as a discretely presented component unit in a separate
column in the basic financial statements which includes the District's assets, liabilities, revenues,
expenses, results of operations and cash flows. The District's fiscal year ends on June 30 and its
separately issued component unit financial statements can be obtained at the San Rafael
Sanitation District, 111 Morphew Street, San Rafael, California 94901.
D. Basis of Presentation
Government -wide Statements - The Statement of Net Position and the Statement of Activities
display information about the primary government (the City) and its component units. These
statements include the financial activities of the overall City government, except for fiduciary
activities. Interfund transfers and amounts owed between funds within the primary government
have been eliminated from the statements. Amounts representing interfund services and uses
remain in the statements. These statements distinguish between the governmental and business -
type activities of the City. Governmental activities generally are financed through taxes,
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 fiduciaryfunds and blended component units. Separate statements for each fund
category — governmental, proprietary, and fiduciary — are presented. The emphasis of fund
financial statements is on major individual governmental and enterprise funds, each of which is
displayed in a separate column. All remaining governmental and enterprise funds are aggregated
and reported as non -major funds.
Proprietary fund operating revenues, such as charges for services, result from exchange
transactions associated with the principal activity of the fund. Exchange transactions are those in
which each party receives and gives up essentially equal values. Nonoperating revenues, such as
subsidies and investment earnings, result from nonexchange transactions or ancillary activities.
E. Major Funds and Other Reported Funds
Major funds are defined as funds that have either assets, liabilities, revenues or
expenditures/expenses equal to ten percent of their fund -type total and five percent of the grand
total. The General Fund is always a major fund. The City may also select other funds it believes
should be presented as major funds.
44
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
The City reported the following major governmental funds in the accompanying financial
statements:
General Fund — Established to account for all financial resources necessary to carry out basic
governmental activities of the City which are not accounted for in another fund.
Traffic and Housing Mitigation Special Revenue Fund — Established to maintain long-term
developer contributions for major housing and street improvement projects.
Gas Tax Special Revenue Fund - Established to receive and expend the City's allocation of the
State gasoline taxes.
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; vehicle, equipment and
computer replacement; employee benefits; liability insurance; workers' compensation; dental
insurance; employee retirement; and retiree medical (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. Agency funds are
custodial in nature (assets equal liabilities) and do not involve measurement of results of
operations.
45
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) N
Governmental funds are reported using the current financial resources measurement focus and
the modified accrual basis of accounting. Under this method, revenues are recognized when
measurable and available. The City considers all revenues reported in the governmental funds to
be available if the revenues are collected within sixty days after year-end with the exception of
sales and use tax revenues which are reported as available if collected within ninety days of year-
end. Expenditures are recorded when the related fund liability is incurred, except for principal
and interest on long-term debt, claims and judgments, and compensated absences, which are
recognized as expenditures to the extent they have matured. General capital asset acquisitions are
reported as expenditures in governmental funds. Proceeds from long-term debt and acquisitions
under capital leases are reported as other financing sources.
Those revenues susceptible to accrual are property and sales taxes, certain intergovernmental
revenues, interest revenue, charges for services, fines and forfeitures. Other receipts and taxes are
recognized as revenue when the cash is received.
Non-exchange transactions, in which the City gives or receives value without directly, receiving
or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the
accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or
assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in
which all eligibility requirements have been satisfied. Under the terms of grant agreements, the
City may fund certain programs with a combination of cost -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. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position or balance sheet will sometimes report a
separate section for deferred outflows of resources. This separate financial statement element,
deferred outflows of resources, represents a consumption of net position that applies to a future
period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until
then.
46
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
In addition to liabilities, the statement of financial position or balance sheet will sometimes report
a separate section for deferred inflows of resources. This separate financial statement element,
deferred inflows of resources, represents an acquisition of net position or fund balance that
applies to a future period(s) and so will not be recognized as an inflow of resources (revenue)
until that time. Unavailable revenue, a type of deferred inflow of resources, is reported in the
governmental funds balance sheet. The governmental funds report unavailable revenues from
three sources: taxes receivable, interest on interfund advances and loans receivable. These
amounts are deferred and recognized as an inflow of resources in the period that the amounts
become available.
H Budgets, Budgetary Accounting, and Encumbrances
The City adopts an annual budget which is effective July 1 for the ensuing fiscal year. The budget
reflects estimated revenues and expenditures, except for the capital projects funds and the Peacock
Gap Assessment District Debt Service Fund. Appropriations and spending authorizations for
projects in the capital projects funds and some special revenue funds are approved by the City
Council on a multi-year basis. From the effective date of the budget, which is adopted at the
department level, the amounts stated therein as proposed expenditures become appropriations to the
various City departments. The City Council may amend the budget by resolution during the fiscal
year in order to respond to emerging needs, changes in resources, or shifting priorities.
Expenditures may not exceed appropriations at the fund level, which is the legal level of control.
The City Manager is authorized to transfer budgeted amounts between accounts, departments or
funds; the Council must approve any increase in the City's operating expenditures as well as any
appropriations for capital projects.
Budgets are adopted on a basis consistent with Generally Accepted Accounting Principles for the
General Fund and Special Revenue Funds.
The following funds incurred expenditures in excess of appropriations during the fiscal year*:
Fund Amount
Recreation Revolving Special Revenue $117,378
Household Hazmat Facility Special Revenue 9,507
*Sufficient resources were available within the funds to support the additional expenditures
Encumbrance accounting, under which purchase orders for expenditures are recorded in order to
reserve that portion of the applicable appropriation, is employed as an extension of the budgetary
process. All unencumbered appropriations lapse at year end.
EVA
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
L 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.
J. 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 exceed
$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
S. 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 financial 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.
48
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
I NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
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)
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
M. 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.
49
Governmental
Business -Type
Activities
Activities
Total
Beginning Balance
$4,269,695
$122,140
$4,391,835
Additions
3,728,859
107,325
3,836,184
Payments
(3,774,164)
(99,742)
(3,873,906)
Ending Balance
$4,224,390
$129,723
$4,354,113
Current Portion
$528,049
$16,215
$544,264
L. Property Tax Levy, Collection and Maximum Rates
State of California Constitution Article XIII A provides that the combined maximum property tax
rate on any given property may not exceed 1% of its assessed value unless an additional amount for
general obligation debt has been approved by voters. Assessed value is calculated at 100% of market
value as defined by Article XIII A and may be adjusted by no more than 2% per year unless the
property is sold, transferred, or substantially improved. The State Legislature has determined the
method of distribution of receipts from a 1% tax levy among the counties, cities, school districts and
other districts. Marin County assesses properties, bills for and collects property taxes on the schedule
that follows:
Secured Unsecured
Valuation/lien dates January 1 January 1
Levy dates July 1 July 1
Due dates (delinquent as of) 50% on November 1 (December 10) July 1 (August 31)
50% on February 1 (April 10)
The term "unsecured" refers to taxes on personal property other 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
M. 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.
49
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
N. Measurement of Risk Management Internal Service Fund Liabilities
In Fiscal Year 2014-2015, the City adopted a new methodology for determining the liabilities in
the Worker's Compensation and General Liability fund liabilities. Previously, the City used the
expected values (50% confidence level) of outstanding losses in calculating these liabilities. The
new methodology employs a 70% confidence level for the value of outstanding losses as well as
an allowance for unallocated loss adjustment expenses and other measurable financial exposure.
O. Implementation of Accounting Standards
GASB Statement No. 68 — In June 2012, GASB issued Statement No. 68, Accounting and
Financial Reporting for Pensions -an amendment of GASB Statement No. 27. The intention of
this Statement is to improve the decision -usefulness of information in employer and
governmental non -employer contributing entity financial reports and enhance its value for
assessing accountability and inter -period equity by requiring recognition of the entire net pension
liability and a more comprehensive measure of pension expense.
GASB Statement No. 71 — In November 2013, GASB issued Statement No. 71, Pension
Transition for Contributions Made Subsequent to the Measurement Date— an amendment of
GASB Statement No. 68. The intension of this Statement is to eliminate the source of a potential
significant understatement of restated beginning net position and expense in the first year of
implementation of Statement 68 in the accrual -basis financial statements of employers and non -
employer contributing entities.
A Prior Period Adjustments
Implementation of Accounting Standards:
The implementation of GASB Statements No. 68 and No. 71 required the City to make prior
period adjustments. As a result, the beginning net positions of the Governmental Activities and
Business -Type Activities were reduced by $104,830,300 and $3,528,453, respectively. The
beginning net position of the Parking Services Fund and Employee Retirement Fund were also
reduced by $3,528,453 and $1,000,000, respectively, as part of this implementation. See Note 9
for additional information.
Equipment Replacement Funds Recategorization
In fiscal year 2014-2015, the City contributed fixed assets to the Building Replacement Fund from
the fixed asset account group. It also reclassified the Equipment Replacement Fund, Technology
Replacement Fund, Fire Equipment Replacement Fund and Police Equipment Replacement Fund
from Governmental Capital Project Funds to Internal Service Funds.
50
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
As a result of these changes, the July 1, 2014 balances were restated as follows:
Classifications
Net Fosition/Fund Balance:
Balances as previously reported
Increase (Decrease) in
Net Position/Fund Balance
Reclassification ofEquipment Replacement Fund
Capital Assets
Implementation of GASB 68 and 71
Total Recategorirations
Net Position/Fund Balance:
As adjusted
Fund Level Entity -wide Level
Internal Service Enterprise Governmental Business -type Governmental
Funds Fund Funds Activities Activities
($1,464,687) $12,804,349 $44,708,628 $12,836,548 $227,428,592
4,877,583 (4,877,583)
4,311,579
(1,000,000) (3,528,453)
8,189,162 (3,528,453) (4,877,583)
$6,724,475 $9,275,896 $39,831,045
NOTE 2 - CASH AND INVESTMENTS I
A. Policies
Total
Activities
$240,265,140
(3,528,453) (104,830,300) ($108,358,753)
(3,528,453) (104,830,300) (108,358,753)
$9,308,095 $122,598,292 $131,906,387
The City maintains an investment policy that emphasizes safety, liquidity and reasonable market
yield. This policy is reviewed and approved by the City Council annually.
The City invests in individual investments and in investment pools. Individual investments are
evidenced by specific identifiable securities instruments, or by an electronic entry registering the
owner in the records of the institution issuing the security, called the book entry system. In order to
increase security, the City employs the trust department of a bank as the custodian of certain City
managed investments, regardless of their form.
California Law requires banks and savings and loan institutions to pledge government securities
with a market value of 110% of the City's cash on deposit, or first trust deed mortgage notes with a
market value of 150% of the deposit, as collateral for these deposits. Under California Law this
collateral is held in a separate investment pool by another institution in the City's name and places
the City ahead of general creditors of the institution.
The City's investments are carried at fair value, as required by generally accepted accounting
principles. The City adjusts the carrying value of its investments to reflect their fair value at each
fiscal year end, and it includes the effects of these adjustments in income for that fiscal year.
51
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 2 - CASH AND INVESTMENTS I
B. Classification
Cash and investments as of June 30, 2015, are classified in the financial statements as shown below,
based on whether or not their use is restricted under the terms of City debt instruments or agency
agreements.
Statement ofNet Position:
City of San Rafael:
Cash and investments available for operations $65,829,733
Restricted cash and investments 76,511
Total Primary Government Cash and Investments 65,906,244
San Rafael Sanitation District (Component Unit)
Cash and investments available for operations 22,797,010
Total San Rafael Sanitation District Cash and Investments 22,797,010
Statement of Fiduciary Net Position (separate statement):
Successor Agency to the Redevelopment Agency:
Cash and investments available for operations 2,486,284
Restricted cash and investments 23,843
Total Successor Agency Cash and Investments 2,510,127
Pt San Pedro Road Assessment District Agency Fund 294,330
Total Fiduciary Cash and Investments 2,804,457
Total Cash and Investments $91,507,711
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.
52
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 2 - CASA AND INVESTMENTS (Continued) I
C. Investments Authorized by the California Government Code and the City's Investment Policy
The City's investment policy and the California Government Code allow the City to invest in the
following provided the credit ratings of the issuers .are acceptable to the City, and approved
percentages and maturities are not exceeded. The table below also identifies certain provisions of
the California Government Code, or the City's Investment Policy where it is more restrictive:
Authorized Investment Type
U.S. Government Obligation
U.S. Agency Securities and Instruments
Repurchase Agreements
Prime Commercial Paper
Bankers' Acceptances
Medium -Term Corporate Notes
Negotiable Certificates of Deposit
Non-negotiable Certificates of Deposit
Local Agency Investment Fund
Money Market Mutual Funds
Limited Obligation Improvement Bonds related to
Special Assessment Districts and Special Tax
Districts
The San Rafael Sanitation District maintains all of its cash in the County of Marin pooled
investment fund for the purpose of increasing interest earnings through pooled investment
activities.
The County Pool includes both voluntary and involuntary participation from external entities.
The District is a voluntary participant. The State of California statutes require certain special
districts and other governmental entities to maintain their cash surplus with the County Treasurer.
The District has approved by resolution, the investment policy of the County of Marin which
complies with the California Government Code.
53
Minimum
Maximum
Maximum
Maximum
Credit
Percentage
Investment in
of
Maturity
Quality
Portfolio
One Issuer
5 years
N/A
No limit
No link
5 years
AAA
No limit
No limit
1 year
A-1
No limit
No limit
270 days
A-1
25%
10% of total outstanding
commercial paper
180 days
A-1
40%
$2,000,000
5 years
A
30%
5% of portfolio
5 years
A-1
30%
5% of portfolio
5 years
N/A
30%
5% of portfolio
N/A
N/A
N/A
N/A
N/A
AAA
10%
N/A
30 years
N/A
N/A
N/A
The San Rafael Sanitation District maintains all of its cash in the County of Marin pooled
investment fund for the purpose of increasing interest earnings through pooled investment
activities.
The County Pool includes both voluntary and involuntary participation from external entities.
The District is a voluntary participant. The State of California statutes require certain special
districts and other governmental entities to maintain their cash surplus with the County Treasurer.
The District has approved by resolution, the investment policy of the County of Marin which
complies with the California Government Code.
53
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
I NOTE 2 - CASH AND INVESTMENTS (Continued) I
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:
(A) Guaranteed Investment Contracts must be fully collateralized with U.S.
Treasury Obligations or U.S. Agency Obligations.
54
Maximum
Maximum
Percentage of
Authorized Investment Type
Maturity
Minimum Credit Quality
Portfolio
U.S. Treasury Obligations
5 years to no
N/A
No Limit
maximum
U.S. Agency Securities
3 - 5 years
N/A
No Limit
U.S. Agency Instruments
5 years
AAA
No Limit
Repurchase Agreements
1 year
A-1
No Limit
Bankers' Acceptances
360 days
Highest Category Rating
No Limit
Money Market Funds
N/A
Highest Category Rating
No Limit
Prime Commercial Paper
270 days
Highest Category Rating
No Limit
Guaranteed Investment Contracts (fully
collateralized) (A)
N/A
Highest Category Rating
No Limit
Municipal Obligations
N/A
Two Highest Category 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.
54
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 2 - CASK AND INVESTMENTS (Continued) I
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:
Fiduciary:
Money Market Mutual Funds 23,843 23,843
Local Agency Investment Fund 712,859 712,859
Total Investments 736,702 736,702
Cash in banks and on hand 2,067,755
Total Fiduciary Cash and Investments 2,804,457
Total City and Fiduciary Cash and Investments 68,710,701
San Rafael Sanitary District:
Cash in banks and County Investment Pool 22,797,010
Total District's Cash and Investments 22,797,010
Total Cash and Investments $91,507,711
55
12 Months
More than
Type of Investment
orless
12 Months
Total
City and Fiduciary:
Money Market Mutual Funds
$582,543
$582,543
Local Agency Investment Fund
28,761,550
28,761,550
U.S. Treasury Notes
$4,761,738
4,761,738
U.S. Agency Securities and Instruments
500,985
7,015,038
7,516,023
Medium -Term Corporate Notes
2,577,550
2,577,550
Investment in Pt. San Pedro Bonds
1,641,500
1,641,500
Total Investments
$29,845,078
$15,995,826
45,840,904
Cash in banks and on hand
20,065,340
Total City and Investments
65,906,244
Fiduciary:
Money Market Mutual Funds 23,843 23,843
Local Agency Investment Fund 712,859 712,859
Total Investments 736,702 736,702
Cash in banks and on hand 2,067,755
Total Fiduciary Cash and Investments 2,804,457
Total City and Fiduciary Cash and Investments 68,710,701
San Rafael Sanitary District:
Cash in banks and County Investment Pool 22,797,010
Total District's Cash and Investments 22,797,010
Total Cash and Investments $91,507,711
55
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 2 - CASH AND INVESTMENTS (Continued) I
The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California
Government Code Section 16429 under the oversight of the Treasurer of the State of California. The
City reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as
the value of the pool share. The balance is available for withdrawal on demand, and is based on the
accounting records maintained by LAIF, which are recorded on an amortized cost basis.
Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage-backed
securities, other asset-backed securities, loans to certain state funds, and floating rate securities
issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and
Bills, and corporations. At June 30, 2015, these investments matured in an average of 239 days.
Money Market Mutual Funds are available for withdrawal on demand. The investment portfolio of
the Money Market Mutual Fund had an average maturity of 34 days at June 30, 2015.
The County's investment pool is not registered with the Securities and Exchange Commission as an
investment company. The pool has a credit rating of "AAAN1." Investments made by the
Treasurer are regulated by the California Government Code and by the County's investment policy.
The objectives of the policy are in order of priority, safety, liquidity, yield, and public trust. The
County has established a treasury oversight committee to monitor and review the management of
public funds maintained in the investment pool in accordance with Article 6 Section 27131 of the
California Government Code. The oversight committee and the Board of Supervisors review and
approve the investment policy annually. The County Treasurer prepares and submits a
comprehensive investment report to the members of the oversight committee and the investment
pool participants every month. The report covers the types of investments in the pool, maturity
dates, par value, actual costs and fair value.
56
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 2 - CASH AND INVESTMENTS (Continued) N
F.
G.
Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the
investment. This is measured by the assignment of a rating by a nationally recognized statistical
rating organization. Presented below is the actual rating as of June 30, 2015, for each of the Primary
Government's investment types as provided by Standard and Poor's or Moody's investment rating
systems, except as noted:
Type of Investment A AA- AA AA+ Aaa/AAA AAANl Total
City (except Fiduciary Funds):
Money Market Mutual Funds $582,543 $582,543
U.S. Agency Securities and Instruments 7,516,023 7,516,023
Medium -Term Corporate Notes $504,745 $1,055,545 $501,475 $515,785 2,577,550
Total rated investments $504,745 $1,055,545 $501,475 $515,785 $8,098,566 10,676,116
Not rated:
Local Agency Investment Fund
U.S. Treasury Notes
Investment in Pt. San Pedro Bonds
Cash in banks and on hand
Total City Cash and Investments
Fiduciary:
Money Market Mutual Funds
Total rated investments
Not rated:
Local Agency Investment Fund
Cash in banks and on hand
Total Fiduciary Cash and Investments
Total City and Fiduciary Cash and Investments
Component Unit
San Rafael Sanitary District:
Investment in County Pool (Rated AAA/VI)
Total District's Cash and Investments
Total Cash and Investments
Concentration Risk
28,761,550
4,761,738
1,641,500
20,065,340
65,906,244
$23,843 23,843
$23,843 23,843
712,859
2,067,755
2,804,457
68,710,701
$22,797,010 22,797,010
22,797,010 22,797,010
$91,507,711
The City's investments with any one issuer that are greater than five percent of the total investments
are in either an external investment pool or mutual funds and are therefore exempt.
57
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 3 - INTER -FUND TRANSACTIONS I
A. Transfers
Resources may be transferred from one City fund to another. Transfers routinely fund capital
projects or capital outlays, lease or debt service payments, and operating expenses.
Transfers between funds during the fiscal year ended June 30, 2015, were as follows:
From Fund
To Fund
Amount
General Fund
Non -Major Governmental Funds
$1,697,664
(A)
Traffic and Housing M itigation Fund
Gas Tax Fund
528,835
(B)
Gas Tax Fund
General Fund
400,000
(C)
Non -major Governmental Funds
425,000
(D)
Internal Service Funds
General Fund
276,520
(E)
Non -Major Governmental Funds
587,500
(A)
Parking Services Enterprise Fund
Non -Major Governmental Funds
70,000
(A)
General Fund
362,630
(E)
$4,348,149
(A) Transfers to the Non -Major Governmental Funds were for administrative costs, program support, capital projects,
and grant matching.
(B) Transfer to Gas Tax Fund for Downtown Rail Readiness Project.
(C) Transfers to the General Fund were for street maintenance support, administrative costs, and engineering support.
(D) Transfer to Capital Improvement Fund for the Puerto Suello Transit Center Connector.
(E) Transfers to General Fund were for the purpose of reimbursing administrative costs and debt service.
B. Internal Balances
GASB 34 requires internal balances to be presented in the Government -wide financial statements
only. They represent the net interfund receivables and payables remaining after the elimination of all
such balances within governmental and business -type activities.
NOTE 4 — LOANS RECEIVABLE I
A. Summary of Loans Receivable
The City has identified the portion of fund balance represented by these loans as nonspendable or
restricted as discussed in Note 8. At June 30, 2015, these loans totaled:
Employee Loans $5,857
Centertown Associates 230,066
One "H" Street Associates 51,430
Fire Chief Loan 344,425
Town of Ross 21,876
Total $653,654
58
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
I NOTE 4 — LOANS RECEIVABLE (Continued) I
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. As of June 30, 2015, the balance of the employee loans receivable was $5,857.
C. Centertown Associates Loan
On August 20, 1990, the former Redevelopment Agency loaned Centertown Associates, Ltd,
$303,000 at 3% interest due semiannually. The loan was made for the construction of a 60 -unit
affordable Centertown apartment complex and is fully secured by a deed of trust. The final payment is
due on July 31, 2065. With the dissolution of the Redevelopment Agency effective February 1, 2012,
the assets of the Agency's Low and Moderate Income Housing fund, including the Centertown
Associates loan, were assumed by the City's Low and Moderate Income Housing Special Revenue
Fund. As of June 30, 2015, the balance of the loan was $230,066.
D. One "H" Street Associates Loan
On January 18, 1994, the City loaned One "H" Street Associates $100,000 at zero percent interest
with annual payments of $2,857 and with a final payment due January 18, 2034. As of June 30, 2015,
the balance of this loan was $51,430.
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, 2015, the balance of the loan
was $344,425.
F. Marin Housing Authority Loans
On May 15, 2014, the City made a loan of $102,500 to Marin Housing Authority for a low and
moderate income unit. As with other loans made under this program, this loan became due upon the
sale of the unit. This loan was paid off during this fiscal year 2014-2015, leaving a zero balance as of
June 30, 2015.
D.
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 4 — LOANS RECEIVABLE (Continued) I
G. Town of Ross Loan
In September 2013, the City Council authorized the sale of a police vehicle to the Town of Ross. The
terms of the sale included a total sales price of $39,614 to be paid in installment payments. The
balance of this loan was $21,876 as of June 30, 2015. Payments of $10,938 will be due on November
1, 2015 and 2016.
H. Other Receivables
The City provides staffing to San Rafael Sanitation District (District) under a contractual arrangement
originated in 1987 that requires the District to pay all related employee costs incurred by the City on
its behalf. Accordingly, the cost of providing pension and post -employment health benefits incurred
by the City for the District staff but not yet funded are reflected by the District as a noncurrent
liability, and by the City as a noncurrent receivable. The obligation as of June 30, 2015 is $4,462,815,
and is composed of the following:
Long-term receivable from San Rafael Sanitation District:
Defined benefit pension liability allocation (GASB 68) $3,388,815
Other post -employment benefit liability allocation (GASB 45) 263,000
Other post -employment benefit liability in excess of GASB 45 allocation 811,000
Total long-term receivable from San Rafael Sanitation District $4,462,815
I NOTE 5 - CAPITAL ASSETS I
Changes in capital assets during the fiscal year consisted of:
Balance Balance
June 30, 2014 Additions Retirements Transfers June 30, 2015
Governmental Activities
Capital assets not being depreciated:
Land
Construction in progress
Total capital assets not being depreciated
Capital assets being depreciated:
Land improvements
Building, and structures
Machinery and equipment
Infastructure
Total capital assets being depreciated
Less accumulated depreciation for.
Land improvements
Buildings and structures
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total net capital assets being depreciated
Total governmental activity capital assets
$82,464,364
$789,569
$7,235
$83,261,168
2,300,968
3,872,714
(1,667,419)
4,506,263
84,765,332
4,662,283
(1,660,184)
87,767,431
8,788,985
8,788,985
40,299,541
237,355
948,874
41,485,770
18,101,851
2,234,653
($1,409,436)
18,927,068
184,507,959
309,447
711,310
185,528,716
251,698,336
2,781,455
(1,409,436)
1,660,184
254,730,539
(5,259,973)
(270,056)
(5,530,029)
(14,701,882)
(1,188,882)
(15,890,764)
(13,070,169)
(980,047)
1,407,463
(12,642,753)
(112,616,530)
(4,743,142)
(117,359,672)
(145,648,554)
(7,182,127)
1,407,463
(151,423,218)
106,049,782
(4,400,672)
(1,973)
1,660,184
103,307,321
$190,815,114
$261,611
($1,973)
$191,074,752
60
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 5 - CAPITAL ASSETS (Continued) I
Business -type Activities
Capital assets not being depreciated:
Land
Total capital assets not being depreciated
Capital assets being depreciated:
Buildings and structures
Machinery and equipment
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings and structures
Machinery and equipment
Total accumulated depreciation
Total net capital assets being depreciated
Total business -type activity capital assets
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 cap ital assets being depreciated
Less accumulated depreciation for:
Subsurface lines
Sewage collection facilities
General plant and administration
Total accumulated depreciation
Total net capital assets being depreciated
Total District's capital assets
Balance
June 30, 2014
$8,620,853
8,620,853
10,713,814
1,178,770
11,892,584
(2,483,870)
(994,737)
(3,478,607)
8,413,977
$17,034,830
Balance
June 30, 2014
$115,329
377,960
493,289
22,260,272
36,644,328
1,435,480
60,340,080
(9,949,215)
(15,962,746)
(698,072)
(26,610,033)
33,730,047
$34,223,336
61
Balance
Additions June 30, 2015
$8,620,853
8,620,853
10,713,814
$6,392 1,185,162
6,392 11,898,976
(205,363)
(2,689,233)
(93,759)
(1,088,496)
(299,122)
(3,777,729)
(292,730)
8,121,247
($292,730)
$16,742,100
Transfers &
Balance
Additions
Retirements Adjustments
June 30, 2015
$115,329
$6,071,040
($5,857,696)
591,304
6,071,040
(5,857,696)
706,633
65,579
3,334,178
25,660,029
23,458
2,523,518
39,191,304
180,259
1,615,739
269,296
5,857,696
66,467,072
(410,041)
(10,359,256)
(831,046)
(16,793,792)
(130,756)
(828,828)
(1,371,843)
(27,981,876)
(1,102,547)
5,857,696
38,485,196
$4,968,493
$39,191,829
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 5 - CAPITAL ASSETS (Continued) I
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
$113,631
Public safety
792,793
Public works and parks
5,469,173
Community development/redevelopment
52,164
Culture and recreation
754,366
Total Governmental Activities $7,182,127
Business -type Activities
Parking services $299,122
Total Business -type Activities $299,122
I NOTE 6 — LONG TERM DEBT I
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, 2015, are as follows:
Authorized
Balance
Balance
Current
and Issued
June 30, 2014 Additions
Retirements
June 30, 2015
Portion
Governmental Activities:
2010 Taxable Pension Obligation Bonds
6.00%-6.25%,due l/1/2025
$4,490,000
$4,490,000
$4,490,000
Total Pension Obligation Bonds
4,490,000
4,490,000
PG & E City Hall HVAC Retrofit Note Payable
0.000/c, due 11/30/2023
334,585
312,398
$33,280
279,118
$33,280
PG & E Street Light Retrofit Note Payable
0.00°/x, due 8/312019
233,896
216,441
41,892
174,549
41,892
Total Governmental Long-term Debt
$5,018,839
$75,172
$4,943,667
$75,172
Business -type Activities
PG & E Parking Lot Lighting Retrofit Note Payable
0.00%, due 11/3012023
$66,380
$61,836
$6,816
$55,020
$6,816
2012 Authority Lease Revenue Refunding Bonds
2.00-4.00°/n, due 4/12033
6,750,000
6,200,000
245,000
5,955,000
250,000
Less: unamortized bond discount
(13,597)
(725)
(12,872)
Total Enterprise Fund Debt
$6,248,239
$251,091
$5,997,148
$256,816
M
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
INOTE 6 - LONG-TERM DEBT (Continued) I
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. Pacific Gas and Electric Note Payable
On September 30, 2013, the City executed a note payable agreement with Pacific Gas and
Electric (PG&E) in the amount of $634,861, bearing no interest. The debt was assumed as a
means to finance energy-efficient retrofit projects which include updating existing heating,
ventilation and air conditioning (HVAC) unit in City Hall and converting the street and parking
lot light to light emitting diode (LED). $334,585 of the loan is for the 13VAC projects and
$300,276 of the loan is for the LED projects. Repayment of the loan commenced in December
2013, and is due monthly until paid in full in 2023.
C. 2012 Authority Lease Revenue Refunding Bonds
On August 7, 2012, the Authority issued 2012 Authority Lease Revenue Refunding Bonds in the
amount of $6,750,000 bearing interest at rates from 2.00% to 4.00%. 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. The rights to these
lease payments have been irrevocably transferred by the Authority to the Trustee. Activities
related to the Series 2012 Bonds are reported in the Parking Services Enterprise Fund. Principal
payments are due annually on April 1 and interest is payable semiannually on October 1 and
April 1. The Bonds maturing on or prior to April 1, 2022 are not subject to optional redemption
prior to their maturity. The Bonds maturing on or after April 1, 2023 are 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.
GX3
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
INOTE 6 - LONG-TERM DEBT (Continued) I
D. Future Debt Service
Future debt service requirements, including interest, at June 30, 2015, are as follows:
For the Year
Ended June 30
2016
2017
2018
2019
2020
2021-2025
2026-2030
2031-2034
Totals
Reconciliation of Longterm debt:
Less: unamortized discount
Governmental Activities
Principal
Interest
$75,172
$276,512
175,172
273,512
280,172
264,362
495,172
245,612
485,261
219,662
2,792,718
637,530
640,000
20,006
$4,943,667 $1,937,196
INOTE 7 — DEBT WITHOUT CITY COMMITMENT I
Business -type Activities
Principal
Interest
$256,816
$201,488
266,816
193,988
276,816
186,188
281,816
178,088
291,816
169,838
1,570,940
716,040
1,810,000
447,042
1,255,000
100,588
6,010,020 $2,193,260
(12,872)
$5,997,148
The City has sponsored the issuance of the following debt, for which the City is not liable for
repayment but acts as an agent for the property owners and bondholders:
64
Project
Original
Outstanding
Description
Amount
June 30, 2015
San Rafael Redevelopment Agency
162-175 Belvedere
Multifamily Housing Revenue Bonds -2000A
Apartments
$3,590,529
$1,161,535
California Statewide Communities
Development Authority Revenue Bonds -2002
St. Marks School
5,605,000
4,125,000
San Rafael Redevelopment Agency
Variable Rate Demand Multifamily
55 Fairfax
Housing Revenue Bonds -2001A
Apartments
3,000,000
2,300,000
San Rafael Redevelopment Agency
San Rafael Commons
Multifamily Housing Revenue Bonds -2001
Apartments
6,100,000
5,155,000
City of San Rafael
Kaiser Foundation
Variable Rate Revenue Bonds -2001 Series C
Hospitals
200,000,000
120,630,000
San Rafael Redevelopment Agency
M artinelli House
Multifamily Housing Revenue Bonds -2007 Series A
Project
6,000,000
2,031,633
Multifamily Housing Revenue Bonds -2007 Series B
Martinelli House
1,000,000
232,740
Pt. San Pedro Road Median Landscaping
Pt. San Pedro Road
Assessment District Limited Obligation Bonds -2012
Median Landscaping
1,750,000
1,641,500
64
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 8 — NET POSITION AND FUND BALANCE I
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 is divided into three captions. These captions apply
only to Net Position, which is determined only at the Government -wide level and business type
activity and are described below:
Net Investment in Capital Assets describes the portion of Net Position which is represented by the
current net book value of the City's capital assets, less the outstanding balance of any debt issued to
finance these assets.
Restricted describes the portion of Net Position which is restricted to use by the terms and conditions of
agreements with outside parties, governmental regulations, laws, or other restrictions which the City
cannot unilaterally alter.
Unrestricted describes the portion of Net Position which is not restricted to use.
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. Nonspendable amounts subject to restrictions are included along with spendable resources.
Committed fund balances have constraints imposed by resolution of the City Council which may be
altered only by resolution of the City Council. Nonspendable amounts subject to council
commitments are included along with spendable resources.
Assigned fund balances are amounts constrained by the City's intent that they be used for a specific
purpose, but are neither restricted nor committed. Intent is expressed by the City Manager as
designated by the City Council and may be changed at the discretion of the City Council or City
Manager. This authorization is given through Resolution No. 13173 which adopts the City's Fund
Balance Policy. This category includes nonspendables, when it is the City's intent to use proceeds or
collections for a specific purpose; and residual fund balances, if any, of Special Revenue, Capital
Projects and Debt Service Funds which have not been restricted or committed.
65
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
(NOTE S - NET POSITION AND FUND BALANCE (Continued) I
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
Detailed classifications of the City's fund balances, as of June 30, 2015, are below:
66
Special Revenue Funds
Traffic and
Other
Housing
Governmental
General Fund
Mitigation Gas Tax
Funds
Total
Fund balances:
Nonspendable:
Loans receivable $350,282
$350,282
Prepaids 49,017
$2,359
51,376
Total Nonspendable 399,299
2,359
401,658
Restricted for:
Assessment District capital projects
300,478
300,478
Baypoint Lagoons Assessment District
217,912
217,912
Bedroom tax capital projects
51,090
51,090
Business improvement
3,484
3,484
Childcare
897,286
897,286
Development services
999,395
999,395
Emergency medical services
1,185,463
1,185,463
1997 financing authority revenue bonds debt service
146,524
146,524
Gastax
$7,600,945
7,600,945
Grants
1,036,902
1,036,902
Household hazmat facility
259,758
259,758
Library
636,909
636,909
Library assessment
657,427
657,427
Loch Lomond Assessment District
669,018
669,018
Low and Moderate Income Housing
945,080
945,080
Mariposa Assessment District debt service
16,573
16,573
Measure A Open Space
345,312
345,312
Parkland dedication
1,416,360
1,416,360
Peacock Gap Assessment District debt service
2,875
2,875
Public safety
170,834
170,834
Pt. San Pedro - Maintenance Portion
168,660
168,660
Recreation revolving
27,573
27,573
Sewer Maintenance
31,496
31,496
Storm water
1,715,857
1,715,857
Traffic and housing mitigation
$12,239,218
12,239,218
Total Restricted
12,239,218 7,600,945
11,902,266
31,742,429
(Continued)
66
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 8 — NET POSITION AND FUND BALANCE (Continued) I
Committed to:
Capital improvement capital projects
Equipment replacement capital projects
Park capital projects
Total Committed
Assigned to:
Contractual commitments
Emergency and cash flow
Infrastructure reserve
General plan / long range planning
Measure E - Public Safety Facility
Open space capital projects
Radio replacement capital projects
Telephone replacement capital projects
Total Assigned
Unassigned to:
General Fund
Total Fund Balances
NOTE 9 — PENSION PLANS
A. Plan Description
Special Revenue Funds
Traffic and
Housing
General Fund Mitigation Gas Tax
$115,665
6,500,000
200,000
1,168,867
4,389,470
12,374,002
1,588,500
1,588,500
$14,361,801 $12,239,218 $7,600,945
Other
Governmental
Funds Total
$904,122 $904,122
27,749 27,749
931,871 931,871
$115,665
6,500,000
200,000
1,168,867
4,389,470
123,337 123,337
395,110 395,110
194,363 194,363
712,810 13,086,812
1,588,500
1,588,500
$13,549,306 $47,751,270
The City's retirement plan is administered by the Marin County Employees' Retirement Association
(MCERA). All full-time and permanent part-time employees who work at least 75% of a full time
position are eligible to participate.
MCERA is a cost-sharing multiple -employer retirement system governed by the 1937 Act of the
California Government Code. MCERA acts as a common administrative and investment agent for
defined benefit retirement plan for various local governmental agencies within the County of Marin.
MCERA 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 MCERA's annual financial reports, which
include required supplementary information for each participant in the plan, may be obtained from the
Marin County Employees' Retirement Association, One McInnis Parkway, Suite 100, San Rafael,
California 94903.
67
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
INOTE 9 — PENSION PLANS (Continued) I
B. Funding Policy
The funding policy of MCERA provides for actuarially determined periodic contributions by the City at
rates such that sufficient assets will be available to pay plan benefits when due. The employer rates for
normal cost are determined using the Entry Age Normal Actuarial Cost Method, which takes into
account those benefits that are expected to be earned in the future as well as those already accrued.
The actual rate of return on investments during the year was 13.89%. 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 smoothed return yielded 7.61%. MCERA uses a 17 -year
level percentage, open method to amortize the unfimded actuarial liability. The City uses the actuarially
determined percentages of payroll to calculate and pay contributions to MCERA. The required
contributions were determined as part of the actuarial valuation performed as of June 30, 2013.
Contributions to the plan from the City were $17,802,358 for the year ended June 30, 2015, based on a
total payroll of $38,294,270, of which $31,073,560 represented the basis for the pian contributions. Of
the total payroll subject to plan contributions, $1,297,149 is attributable to the San Rafael Sanitation
District (SRSD), a component unit of the City.
The City contribution rates for the year ended June 30, 2015 were as follows:
Employer Employee
C. Pension Liability and Pension Expense
At June 30, 2015, the City reported a liability of $74,253,787 for its proportionate share of the net
pension liability, deferred inflows of $47,044,494, deferred outflows, due to the change of assumptions,
of $4,554,158, and deferred outflows of $17,802,358 from pension contributions made after the
measurement date. Consequently, the net impact on the City's Statement of Net Position before
allocations is $98,941,765. After allocations to the San Rafael Sanitation District, the net impact on the
City's Statement of Position is $95,552,950.
The proportionate share of the annual pension expense is $9,356,796, or 29.77% of payroll.
68
Contribution Rate
Contribution Rate
Benefit
Basis
City of San Rafael Misc Tier 1
46.00%
0.001/1.- 15.83%
2.7% @ 55
Highest year
City of San Rafael Misc Tier 2
42.93%
6.91% -11.64%
2.0% @ 55
Highest year
City of San Rafael Fire Tier I
71.89%o
0.00% -18.58%
3.0% @ 50
Highest year
City of San Rafael Fire Tier 2
67.84%
10.73%-13.50%
3.0% @ 55
Highest year
City of San Rafael Safety Police Tier 1
70.76%
0.00% -18.97%
3.0% @ 50
Highest year
City of San Rafael Safety Police Tier 2
74.04%
11.25%-16.77%
3.0% @ 55
Highest year
PEPRA Misc
38.040/a
8.59% - 9.59%
2.0% @ 62
Average three highest years
PEPRA Safety
62.71%
13.11%
2.75/6 @ 57
Average three highest years
C. Pension Liability and Pension Expense
At June 30, 2015, the City reported a liability of $74,253,787 for its proportionate share of the net
pension liability, deferred inflows of $47,044,494, deferred outflows, due to the change of assumptions,
of $4,554,158, and deferred outflows of $17,802,358 from pension contributions made after the
measurement date. Consequently, the net impact on the City's Statement of Net Position before
allocations is $98,941,765. After allocations to the San Rafael Sanitation District, the net impact on the
City's Statement of Position is $95,552,950.
The proportionate share of the annual pension expense is $9,356,796, or 29.77% of payroll.
68
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 9 — PENSION PLANS (Continued) I
The table below provides a summary of the key results during this reporting period.
Summary of Results
Projection of Total Pension Liability and Net Pension Liability
Total Pension Liability (TPL) is the actuarial present value of projected benefit payments attributed to
past periods of employee service. For the purposes of Governmental Accounting Standards Board
Statement No. 68 (GASB 68), MCERA and the City have adopted a measurement date of
June 30, 2014. The beginning of year measurement of TPL is based on the actuarial valuation as of
June 30, 2013. The TPL at the end of the measurement year, June 30, 2014, is also measured as of the
valuation date of June 30, 2013, and projected to June 30, 2014. There were no significant events during
the projection period, therefore only the addition of service cost and interest cost offset by actual benefit
payments contribute to the change in TPL. (In future years, both the beginning and end of year TPL will
be measured as of a valuation date one year prior and projected to the appropriate date).
The Plan Fiduciary Net Position (FNP) is the fair or market value of assets. The FNP at the beginning of
the year is based on the actuarial valuation as of June 30, 2013. The FNP at the end of the measurement
year, June 30, 2014, is also measured as of the valuation date of June 30, 2013, and projected to
June 30, 2014. There were no significant events during the projection period, therefore only the
employer and employee contributions, net investment income, benefit payments and administrative
costs contribute to the change in FNP. (In future years, both the beginning and end of year FNP will be
measured as of a valuation date one year prior and projected to the appropriate date).
.e
Measurement Date
Description
6/30/2014
6/30/2013
Net Pension Liability
$74,253,787
$124,935,549
Deferred Inflows
47,044,494
Deferred Outflows
(4,554,158)
Additional Deferred Outflows - Actual FY 14-15 Contributions
(17,802,358)
Impact on Statement of Net Position before Allocations
98,941,765
124,935,549
Allocation of NPL to SRSD
2,543,237
4,279,119
Allocation of Deferred Inflows (measurement date) to SRSD
1,611,302
Allocation of Deferred Outflows (measurement date) to SRSD
(155,983)
Allocation of Additional Deferred Outflows (contributions) to SRSD
(609,741)
Net Impact on Statement of Net Position, net of receivable from
SRSD (see Note 411)
95,552,950
120,656,430
Pension Expense ($ Amount)
9,356,796
N/A
Covered Payroll ($Amount)
31,429,178
Pension Expense (% of Payroll)
29.77%
N/A
Projection of Total Pension Liability and Net Pension Liability
Total Pension Liability (TPL) is the actuarial present value of projected benefit payments attributed to
past periods of employee service. For the purposes of Governmental Accounting Standards Board
Statement No. 68 (GASB 68), MCERA and the City have adopted a measurement date of
June 30, 2014. The beginning of year measurement of TPL is based on the actuarial valuation as of
June 30, 2013. The TPL at the end of the measurement year, June 30, 2014, is also measured as of the
valuation date of June 30, 2013, and projected to June 30, 2014. There were no significant events during
the projection period, therefore only the addition of service cost and interest cost offset by actual benefit
payments contribute to the change in TPL. (In future years, both the beginning and end of year TPL will
be measured as of a valuation date one year prior and projected to the appropriate date).
The Plan Fiduciary Net Position (FNP) is the fair or market value of assets. The FNP at the beginning of
the year is based on the actuarial valuation as of June 30, 2013. The FNP at the end of the measurement
year, June 30, 2014, is also measured as of the valuation date of June 30, 2013, and projected to
June 30, 2014. There were no significant events during the projection period, therefore only the
employer and employee contributions, net investment income, benefit payments and administrative
costs contribute to the change in FNP. (In future years, both the beginning and end of year FNP will be
measured as of a valuation date one year prior and projected to the appropriate date).
.e
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 9 —PENSION PLANS (Continued) I
The Net Pension Liability (NPL) is the City liability for benefits provided through its defined benefit
plan administered by MCERA. It is calculated by reducing the TPL by the FNP.
Actuarial assumptions:
As noted on the previous page, both the TPL as of June 30, 2013, and the TPL as of June 30, 2014, were
based upon the same data, actuarial methods and assumptions, and plan provisions as were used in the
actuarial valuation as of June 30, 2013. The actuarial assumptions were based on the results of an
actuarial experience study for the period of July 1, 2008 - June 30, 2011. The key assumptions in the
valuation were:
• Inflation: 3.25%
• Amortization growth rate: 3.25%
• Salary increases: 3.25% plus merit component
• COLA increases:
0 3.0% for those with a 4% COLA cap,
0 2.7% for those with a 3% COLA cap, and
0 1.9% for those with a 2% COLA cap
• Investment rate of return: 7.5% net of investment expense
• Post -Retirement Mortality: Sex distinct RP -2000 Combined Mortality, projected to 2010
using Scale AA, with ages set back one year for male and two years for female members
Because the same actual valuation was used for both the beginning and ending TPLs, there was no
change in TPL attributable to assumption changes.
The investment income exceeded the service cost, interest cost and administrative expense, which,
coupled with employer and employee contributions, resulted in a decrease in the Net Pension Liability
(NPL) of approximately $50.7 million. The NPL as of June 30, 2014, is approximately $74.3 million.
Asset Allocation Policy and Expected Long-term Rate of Return by Asset Class
The MCERA Board of Retirement has adopted an Investment Policy Statement CIPS), which provides
the framework for the management of MCERA's investments. The IPS establishes MCERA's
investment objectives and defines the principal duties of the Retirement Board, the custodian bank, and
the investment managers. The asset allocation plan is an integral part of the IPS and is designed to
provide an optimum and diversified mix of asset classes with return expectations to satisfy expected
liabilities while minimizing risk exposure. MCERA currently employs external investment managers to
manage its assets subject to the provisions of the policy. Plan assets are managed on a total return basis
with a long term objective of achieving and maintaining a fully funded status for the benefits provided
through the Plan. The following was the Retirement Board's adopted asset allocation policy as of June
30,2014:
Asset Class Target Allocation Long -Term Expected Real Rate of Return
Domestic Equity
32%
5.35%
International Equity
22%
5.50%
Fixed Income
23%
0.75%
Real Estate
15%
3.90%
Private Equity
8%
6.25%
Total
100%
70
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
INOTE 9 — PENSION PLANS (Continued) I
Determination of Discount Rate
The discount rate used to measure the Total Pension Liability was 7.5%. Related to the discount rate is
the funding assumption that employees will continue to contribute to the plan at the required rates and
employers will continue the historical and legally required practice of contributing to the plan based on
an actuarially determined contribution, reflecting a payment equal to annual normal cost, a portion of
the expected administrative expenses, an amortization payment for the extraordinary losses from 2008
amortized over a closed period (25 years remaining as of the June 30, 2013 actuarial valuation) and an
amount necessary to amortize the remaining Unfunded Actuarial Liability as a level percentage of
payroll over a closed period (17 years remaining as of the June 30, 2013 actuarial valuation).
A change in the discount rate would affect the measurement of the TPL. A lower discount rate results in
a higher TPL and higher discount rates results in a lower TPL. Because the discount rate does not affect
the measurement of assets, the percentage change in the NPL can be very significant for a relatively
small change in the discount rate. A one percent decrease in the discount rate increases the TPL by
approximately 13% and increases the NPL by approximately 114%. A one percent increase in the
discount rate decreases the TPL by approximately 10% and decreases the NPL by approximately 95%.
The table below shows the sensitivity of the NPL to a one percent decrease and a one percent increase in
the discount rate:
Sensitivity of Net Pension Liability to Changes in Discount Rate
Description
Total Pension Liability
Fiduciary Net Position
Net Pension Liability
Fiduciary Net Position as a Percentage of the Total Pension Liability
1% Discount 1%
Decrease Rate Increase
6.50% 7.50% 8.50%
$762,606,311 $677,753,566 $607,192,271
603,499,779 603,499,779 603,499,779
$159,106,532 $74,253,787 $3,692,492
79.1% 89.0% 99.4%
Pension Expense, and Deferred Ou flows of Resources and Deferred Inflows of Pension Resources
The impact of experience gains or losses and assumption changes on the Total Pension Liability (TPL)
are recognized in the proportionate share of the pension expense over the average expected remaining
service life of all active and inactive members of the plan. As of the measurement date, this recognition
period was 4 years.
During the measurement year, the City of San Rafael's proportionate share of the Net Pension Liability
increased by $6,072,211. Of this amount, $1,518,053 was recognized in the current year, leaving a
balance of $4,554,158 to be reported as a deferred outflow that will be recognized in future years.
During the measurement year, the City of San Rafael's proportionate share of the total contributions
was $4,804,506 less than its actual contribution. Of this amount, $1,201,127 was recognized in the
current year, leaving a balance of $3,603,379 to be reported as a deferred inflow that will be recognized
in future years.
71
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 9 —PENSION PLANS (Continued) I
The impact of investment gains and losses is recognized over a period of five years. During the
measurement year, there was an investment gain of approximately $54.3 million. Approximately
$10.9 million of that gain was recognized in the current year, leaving a balance of $43.4 million of
deferred inflows to be recognized at an equivalent amount over each of the next four years.
The following tables show the current balance and sources of deferred outflows and inflows related to
the City's defined benefit retirement plan, and the scheduled recognition of these deferred amounts:
$17,802,358 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended
June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized as pension expense as follows:
Year ended June 30,
2016
2017
2018
2019
72
Increase
(Decrease) of
Pension Expense
(10,543,353)
(10,543,353)
(10,543,352)
(10,860,278)
Deferred
Deferred
Outflows of
Inflows of
Description
Resources
Resources
Changes in assumptions
$4,554,158
Changes in proportion and difference between City
contributions and proportionate share of contributions
$3,603,379
Actual FY 14-15 contributions (post measurement date)
17,802,358
Net difference between projected and actual earnings
on pension plan investments
43,441,115
Deferred Inflows and Outflows Before Allocations
$22,356,516
$47,044,494
Allocation to SRSD
Allocation of Deferred Inflows (measurement date)
$1,611,302
Allocation of Deferred Outflows (measurement date)
$155,983
Allocation of Additional Deferred Outflows (contributions)
609,741
Net Deferred Inflows and Outflows
$21,590,792
$45,433,192
$17,802,358 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended
June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized as pension expense as follows:
Year ended June 30,
2016
2017
2018
2019
72
Increase
(Decrease) of
Pension Expense
(10,543,353)
(10,543,353)
(10,543,352)
(10,860,278)
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
(NOTE 9 — PENSION PLANS (Continued) I
For the year ended June 30, 2015, the City recognized a pension expense of $9,356,796. This expense is
allocated to Governmental activities by function, as well as to the Parking Fund. The table below
presents the sources of the pension expense.
Pension Expense for the year ended June 30, 2015
Operating Expenses
Service cost $14,726,661
Employee contributions (5,569,237)
Administrative expenses 1,353,194
Sub -total 10,510,618
Financing Expenses
Interest cost 47,928,856
Expected return on assets (38,539,325)
Sub -total 9,389,531
Changes
Benefit changes -
Recognition of assumption changes 316,926
Recognition of liability gains and losses -
Recognition of investment gains and losses (10,860,279)
Sub -total (10,543,353)
Pension Expense $9,356,796
Pension Expense as % of Payroll 29.77%
73
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
(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. No forfeitures were noted during the current period.
During the year, the City and employees each contributed $79,438. The total covered payroll of
employees participating in the plan for the year ended June 30, 2015, was $2,118,345. The total payroll
for the year was $38,294,270.
Additionally, the City participates in a 401(a) tax qualified plan for eligible executive management and
mid -management employees, and elected officials. This program is separate from the Marin County
Employees' Retirement Association. Under this plan, the percent amount of contribution which can
range from 3% to 4.6% of base salary of participating employees. During the year, the City contributed
$217,298 to the plan on behalf of these employees.
74
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
INOTE 11— POST -EMPLOYMENT HEALTH CARE BENEFITS I
The City provides certain health care benefits for retired employees and their spouses under a cost
sharing defined benefit plan. The benefit provisions were established under the authority of the 1937
Act, Section 31450, et. seq. of the Government Code. Employees who meet the vesting criteria become
eligible for these benefits if they receive a retirement benefit from the Marin County Employees'
Retirement Association within 120 days of retirement from City employment. At June 30, 2015, 323
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,
2015, 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
- Age 70
- Disability Retirement
Benefit Hired < 1/1/09 Full premium/cap Hired < 1/1/10 Up to cap
Hired> 1/1/09 PEMHCA Min lHired > 1/1/10 PEMHCA Min
Surviving Spouse Benefit Continuation to surviving spouse
Medicare Part B Hired < 4/1/07 Full reimbursement None
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, 2013 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) 4.00% investment rate of return and (b) 3.25% of general inflation increase,
and (c) a healthcare trend of declining annual increases ranging from 8.30% in 2015 to 5.00% for the
years starting 2021. In addition, the fixed dollar benefit amounts are assumed to be held flat in the
future and the premium related benefits are assumed to increase with the healthcare trend rate.
Projections of benefits for 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 21 -year fixed
(closed) period for June 30, 2014 in its June 30, 2013 actuarial valuation.
75
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 11— POST -EMPLOYMENT HEALTH CARE BENEFITS (Continued) I
Funding Progress and Funded Status
During the fiscal year ended June 30, 2015, the City has recorded a Net OPEB Liability in the
Statements of Net Position, representing the difference between the ARC and actual contributions, as
presented below:
Amounts
(in thousands)
Annual required contribution (ARC) $2,112
Interest on net OPEB obligation 705
Adjustment to annual required contribution (699)
Annual OPEB cost 2,118
Contributions made:
Benefits payment 2,100
Additional contribution to OPEB Trust 150
Total contributions 2,250
Change in net OPEB obligation/(asset) (132)
Net OPEB Obligation (Asset) at June 30, 2014 9,296
Net OPEB Obligation (Asset) at June 30, 2015 $9,164
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 and withdrawals from a 401(h) account held and administered by the
MCERA were made by the City in prior years and included in actuarial valuations prior to June 30,
2013. On June 25, 2013, the assets were transferred from the 401(h) account to an irrevocable trust
under the California Employers' Retiree Benefit Trust Fund (CERBT) managed by CalPERS. As of
June 30, 2015, the account balance in the CERBT was $15,607,756.
76
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 11— POST -EMPLOYMENT HEALTH CARE BENEFITS (Continued) I
For the past three fiscal years, the City has calculated and recorded Net OPEB Obligation,
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 last three actuarial studies is presented below:
Annual
Overfunded
Required
Annual
Contribution
OPEB Cost
Actual
Percentage
Net OPEB
Fiscal Year
(ARC)
(AOC)
Contribution
ofAOC
Obligation (Asset)
Ended
(001Ys omitted)
(00(Ys omitted)
(000"s omitted)
Contributed
(00(Ys omitted)
June 30, 2013
$2,434
$2,495
$2,573
103%
$9,516
June 30, 2014
2,496
2,380
2,600
109°/0
9,296
June 30, 2015
2,112
2,118
2,250
106%
9,164
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 last three actuarial studies is presented below:
NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS
The City participates in the jointly governed organizations discussed below through formally organized
and separate entities established under the Joint Exercise of Powers Act of the State of California. As
separate legal entities, these entities exercise full powers and authorities within the scope of the related
Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the
power to make and execute contracts and the right to sue and be sued. Each joint organization is
governed by a board consisting of representatives from member municipalities. Each board controls the
operations of the respective joint organization, including selection of management and approval of
operating budgets, independent of any influence by member municipalities beyond their representation
on that board. Obligations and liabilities of this joint organization are not the City's responsibility and
the City does not have an equity interest in the assets of each joint organization except upon dissolution
of the joint organization.
A. The Marin County Integrated On -Line Library System (System)
The MARINet Library Consortium was formed to provide for the procurement, ownership, operation,
maintenance, and governance of shared library services among the libraries, public and academic, in
Marin County. Current services shared and paid for on a 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 16.40 % or $193,729 for the year ended June 30, 2015. Financial statements of the
System can be obtained from the County Librarian, Marin County Free Library, Marin County Civic
Center, 3501 Civic Center Drive, San Rafael, California 94903.
77
Overfunded
(Underfunded)
Actuarial
Actuarial
Unfunded
Annual
Liability as
Value of
Accrued
Accrued
Covered
a Percentage of
Valuation
Assets
Liability
Liability
Funded
Payroll
Covered
Date
(000's omitted)
(000's omitted)
(000's omitted)
Ratio
(009s omitted)
Payroll
6/30/2009
$12,773
$56,262
($43,489)
23%
$36,470
(119%)
6/30/2011
9,861
35,156
(25,295)
28%
31,692
(80%)
6/30/2013
12,505
33,549
(21,044)
370/a
31,429
(670/6)
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 MARINet Library Consortium was formed to provide for the procurement, ownership, operation,
maintenance, and governance of shared library services among the libraries, public and academic, in
Marin County. Current services shared and paid for on a 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 16.40 % or $193,729 for the year ended June 30, 2015. Financial statements of the
System can be obtained from the County Librarian, Marin County Free Library, Marin County Civic
Center, 3501 Civic Center Drive, San Rafael, California 94903.
77
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS (Continued) I
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
$3,170 for the year ended June 30, 2015. Financial statements of the MGSA can be obtained at 555
Northgate Drive, Suite 230, San Rafael, California 94903.
C. The Marin Emergency Radio Authority (MER,4)
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 $287,327 of the Authority's operation and debt service for the fiscal year ended
June 30, 2015. 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 $119,231 for the year ended June 30, 2015. Financial
statements of the Agency can be obtained at 555 Northgate Drive, Suite 230, San Rafael, California
94903.
78
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
(NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS (Continued) I
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 $15,750 for the year ended June 30, 2015. Financial statements of the Authority can be obtained
at 3501 Civic Center Drive, San Rafael, California 94903.
NOTE 13 - RISK MANAGEMENT I
The City is exposed to various exposures related to torts; theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The City established the Risk
Management Internal Service Fund to account for and finance its uninsured risks of loss. The City
manages risk by participating in a public entity risk pool (described below), purchasing insurance and
by retaining certain risks.
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 $99,471,049. 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, 2015, the City contributed $248,844 for
coverage during the current year and received a refund of $44,876 of prior year excess contributions.
Five years after settlement of all claims for a program year, CJPRMA retroactively adjusts premium
deposits for any excess or deficiency in deposits related to paid claims and reserves. Financial
statements for the risk pools may be obtained from CJPRMA at 3201 Doolan Road, Suite 285,
Livermore, California 94551.
Workers' Compensation Coverage
The City purchases insurance for workers' compensation through Safety National Casualty Corporation
Excess Workers' Compensation and Employers Liability Insurance with coverage up to statutory limits.
The City is self-insured up to $1,000,000 for each worker's compensation claim.
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.
79
C�1 �Z�7 �7.Y�►i7���i1
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 13 - RISK MANAGEMENT (Continued) I
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, 2015:
The claims settlements have not exceeded insurance coverage for the past three years.
NOTE 14 - COMMITMENTS AND CONTINGENCIES I
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 August 2004, the City of San Rafael entered into a ten-year 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). At the City's request, the Settlement
Agreement was revised in 2013, and now expires in February 2019.
The original Settlement Agreement called for the construction of 797ADA compliant curb ramps
throughout San Rafael. The Department of Justice has approved the City's request to reduce this
number to 765 ramps. As of June 30, 2015, the City had constructed 400 ramps.
80
General
Workers'
Totals, as of June 30
Liability
Compensation
2015
2014
Balance, beginning of year
$1,128,436
$5,461,270
$6,589,706
$5,915,349
Current year claims and changes
in estimates
724,471
2,012,974
2,737,445
2,545,591
Claims paid
(525,867)
(1,481,866)
(2,007,733)
(1,871,234)
Balance, end of year
$1,327,040
$5,992,378
$7,319,418
$6,589,706
Due in one year
$544,399
$1,401,393
$1,945,792
$2,079,523
Due in more than one year
782,641
4,590,985
5,373,626
4,510,183
Total claim liabilities
$1,327,040
$5,992,378
$7,319,418
$6,589,706
The claims settlements have not exceeded insurance coverage for the past three years.
NOTE 14 - COMMITMENTS AND CONTINGENCIES I
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 August 2004, the City of San Rafael entered into a ten-year 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). At the City's request, the Settlement
Agreement was revised in 2013, and now expires in February 2019.
The original Settlement Agreement called for the construction of 797ADA compliant curb ramps
throughout San Rafael. The Department of Justice has approved the City's request to reduce this
number to 765 ramps. As of June 30, 2015, the City had constructed 400 ramps.
80
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE -
PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES
A. Redevelopment Dissolution
In an effort to mitigate its budget deficit, the State of California adopted 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 AB1484 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. ABxl 26 requires the establishment of an Oversight Board to oversee the activities of the
Successor Agency and one was established on April 2, 2012. The activities of the Successor
Agency are subject to review and approval of the Oversight Board, which is comprised of seven
members.
The activities of the Successor Agency are reported in the Successor Agency to the Redevelopment
Agency Private -Purpose Trust Fund as the activities are under the control of the Oversight Board.
The City provides administrative services to the Successor Agency to wind down the affairs of the
former Redevelopment Agency.
Pursuant to the dissolution of the City of San Rafael Redevelopment Agency, certain assets of the
Redevelopment Agency 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.
81
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE -
PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES (Continued)
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 ABxI 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.
Finding of Completion and Long Range Property Management Plan
On November 24, 2014, the City of San Rafael received a finding of completion from the California
Department of Finance. The finding of completion enables the Successor Agency to place loan
agreements between the former redevelopment agency and the sponsoring entity on the Recognized
Obligations Payments Schedule (BOPS), as an enforceable obligation, provided the Oversight Board
makes a finding that the loan was for legitimate purposes in accordance with the Health and Safety
Code.
On May 24, 2015, in accordance with Health and Safety Code Section 34191.5(b), the City submitted
its Long -Range Property Management Plan (LRPMP) to the California Department of Finance. The
LRPMP was approved by the Oversight Board on May 18, 2015 by Resolution 2015-6.
The final resolution of the Long -Range Property Management plan is uncertain, and will be
dependent upon future actions taken by the State. The properties subject to the plan are currently
reflected in the City's fixed assets and may be subject to transfer back to the Successor Agency. The
City does not believe that these adjustments, if required, will be material.
82
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
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.
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.
83
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE -
PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES (Continued)
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 $28.7 million in remaining debt service on the Bonds,
which is scheduled to occur in 2023. For fiscal year June 30, 2015, 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, 2015:
Debt Service Requirements
Annual debt service requirements are shown below:
For the Year
Authorized
Balance
Principal
Balance
Current
$2,800,000
and Issued
June 30, 2014
Additions Retirements
June 30, 2015
Portion
San Rafael Redevelopment Agency
484,026
2019
3,229,081
370,676
2020
1999 Tax Allocation Bonds
297,019
2021-2023
10,380,354
371,494
Totals
Capital Appreciation Bonds
$2,924,417
Reconciliation of long-term debt:
Less unaccreted discount
5.581/-5.61/., due 12/1/1022
$2,389,004
$5,439,725
$308,442
$5,748,167
2002 Tax Allocation Refunding Bonds
2.00%5.251/*, due 12/1/2021
25,020,000
9,455,000
$1,655,000
7,800,000
$1,740,000
2009 Tax Allocation Refunding Bonds
3.001/, 5.00°/q due 12/1/1022
14,660,000
10,985,000
1,020,000
9,965,000
1,060,000
Add: deferred bond premium costs
718,744
79,861
638,883
Total Successor Agency Long-term Debt
$26,598,469
$308,442 $2,754,861
$24,152,050
$2,800,000
Debt Service Requirements
Annual debt service requirements are shown below:
For the Year
Governmental Activities
Ended June 30
Principal
Interest
2016
$2,800,000
$766,926
2017
2,930,000
634,276
2018
3,080,000
484,026
2019
3,229,081
370,676
2020
3,309,082
297,019
2021-2023
10,380,354
371,494
Totals
25,728,517
$2,924,417
Reconciliation of long-term debt:
Less unaccreted discount
(2,215,350)
Add deferred bond premium costs
638,883
$24,152,050
84
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2015
NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE- I
PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES (Continued)
W
E.
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, 2015:
Unfunded Pension Liability
Unfunded OPEB Liability
Total Long Term Obligations
Commitment and Contingencies
Approved
Balance
Balance
Amount
June 30, 2014
Additions Retirements
June 30, 2015
$1,904,431
$1,333,102
$190,443
$1,142,659
502,000
446,222
55,778
390,444
$1,779,324
$246,221
$1,533,103
State Approval of Enforceable Obligation
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, 2015, the Successor Agency had prepared eight 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.
85
REQUIRED SUPPLEMENTAL INFORMATION
87
CITY OF SAN RAFAEL
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended June 30, 2015
Schedule of the City's Proportionate Share of the Net Pension Liability
Last 10 years*
6/30/2015
City's proportionate share 30.0453%
Proportionate share of total pension liability $677,753,565
Proportionate share of fiduciary net position 603,499,779
Proportionate share of the net pension liability $74,253,786
Plan fiduciary net position as a percentage of the total pension liability 89.04%
Covered employee payroll $31,429,178
Net pension liability as a percentage of covered employee payroll 236.26%
* - The fiscal year ended June 30, 2015 was the first year of implementation, therefore only one year is shown
88
CITY OF SAN RAFAEL
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended June 30, 2015
Schedule of Contributions
City of San Rafael, an Agent Multiple -Employer Defined Benefit Pension
As of June 30, 2015
Last 10 years (subject to available information: first year of implementation was Fiscal Year ended June 30, 2015;
2015
Contractually required contribution $ 17,802,358
Contributions in Relation to the
Contractually required contribution 17,802,358
Contribution Deficiency/ (Excess)
Covered employee payroll $ 31,073,560
Contributions as a percentage of
covered employee payroll 57.29%
Notes to Schedule
Valuation Date / Timing 6/30/2013 (for contributions made in FY2014-2015)
Kev Methods and Assumptions Used to Determine Contribution Rates (for FY2014-15):
Actuarial cost method Entry Age Normal Cost Method
Amortization method Level percentage of payroll with separate period for Extraordinary Actuarial Loss from 2009
Remaining Amortization period Unfunded liability -17 years / Extraordinary Actuarial Loss - 25 years
Asset valuation method 5 -year smoothed market, 80% /120% corridor around market
Inflation 3.25%
Salary increases 3.25% plus merit component based on employee classification and years of service
Investment Rate of Return 7.50%
Retirement Age Classic Tiers: Safety - 50, Miscellaneous - 55; PEPRA Tiers: Safety - 57, Miscellaneous - 62
Healthy Mortality Sex distinct RP -2000 Combined Mortality projected to 2010 using Scale AA
with ages set back one year for male members / two years for female members
Disabled Mortality Sex distinct RP -2000 Combined Mortality projected to 2010 using Scale AA
with ages set forward three years for all members
89
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.
VE
CITY OF SAN RAFAEL
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2015
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes and special assessments
$55,766,400
$56,302,761
$56,541,604
$238,843
Licenses and permits
1,883,000
2,083,000
2,456,820
373,820
Fines and forfeitures
463,368
463,368
505,029
41,661
Use of money and properties
269,474
269,474
290,103
20,629
Intergovernmental
6,968,712
7,084,898
7,846,436
761,538
Charges for services
2,255,000
2,355,000
2,660,869
305,869
Other revenue
547,299
547,299
446,272
(101,027)
Total Revenues
68,153,253
69,105,800
70,747,133
1,641,333
EXPENDITURES
Current:
General government
9,543,140
9,333,799
9,530,931
(197,132)
Public safety
36,741,618
36,755,281
36,564,699
190,582
Public works and parks
10,452,515
10,391,313
10,392,192
(879)
Community development
3,305,736
3,428,738
3,416,859
11,879
Culture and recreation
2,811,278
2,879,917
2,801,488
78,429
Capital outlay
130,000
130,000
Capital improvement/special projects
15,522
30,676
(15,154)
Debt service:
Principal
75,172
(75,172)
Interest and fiscal charges
351,685
284,288
67,397
Total Expenditures
62,854,287
63,286,255
63,096,305
189,950
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
5,298,966
5,819,545
7,650,828
1,831,283
OTHER FINANCING SOURCES (USES)
Transfers in
1,290,207
1,290,207
1,039,150
(251,057)
Transfers out
(1,650,000)
(1,697,664)
(1,697,664)
Total Other Financing Sources (Uses)
(359,793)
(407,457)
(658,514)
(251,057)
Net Change in Fund Balances
$4,939,173
$5,412,088
6,992,314
$1,580,226
FUND BALANCES, BEGINNING OF YEAR
7,369,487
FUND BALANCES, END OF YEAR
$14,361,801
92
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, 2015
REVENUES
Use of money and properties
Charges for services
Total Revenues
EXPENDITURES
Capital improvement/special projects
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER(UNDER)EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
$50,400
M
(528,835)
(528,835)
($778,435)
(528,835)
(528,835)
(336,176)
12,575,394
$12,239,218
$442,259
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
$20,400
$20,400
$35,984
$15,584
30,000
30,000
288,728
258,728
50,400
50,400
324,712
274,312
300,000
132,053
167,947
3 00, 000
13 2, 053
167,947
50,400
(249,600)
192,659
442,259
$50,400
M
(528,835)
(528,835)
($778,435)
(528,835)
(528,835)
(336,176)
12,575,394
$12,239,218
$442,259
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, 2015
94
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Use of money and properties
$9,000
$9,000
$22,785
$13,785
Intergovernmental
2,147,763
2,400,265
3,028,659
628,394
Charges for services
843,600
843,600
1,513,798
670,198
Other revenue
762,625
729,150
(33,475)
Total Revenues
3,000,363
4,015,490
5,294,392
1,278,902
EXPENDITURES
Current:
General government
21,027
21,027
21,473
(446)
Public works and parks
3,571,934
5,279,963
1,582,658
3,697,305
Capital outlay
4,171,575
2,465,703
1,705,872
Capital improvement/special projects
1,771,917
307,538
1,464,379
Total Expenditures
3,592,961
11,244,482
4,377,372
6,867,110
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(592,598)
(7,228,992)
917,020
8,146,012
OTHER FINANCING SOURCES (USES)
Transfers in
528,835
528,835
Transfers out
(400,000)
(825,000)
(825,000)
Total Other Financing Sources (Uses)
(400,000)
(296,165)
(296,165)
Net Change in Fund Balances
($992,598)
($7,525,157)
620,855
$8,146,012
FUND BALANCES, BEGINNING OF YEAR
6,980,090
FUND BALANCES, END OF YEAR
$7,600,945
94
SUPPLEMENTARY INFORMATION
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 adjacent diked salt marsh.
Household Hazmat Facility Fund - Established to account for State mandated hazardous materials
information, collection, and reporting. Expenditures include inspection of businesses for compliance
with regulations. This fund also serves as the depository for countywide Household Hazardous Waste
Program.
Childcare Fund — Established to administer and account for childcare programs at ten sites
throughout the City.
Loch Lomond Assessment District Fund — Established to provide maintenance for stormwater and
geotechnical mitigation facilities. A Mello Roos District was formed to fund this maintenance.
Library Fund — Established to account for restricted library activities that are intended to be self -
funding.
Library Assessment Fund — Established to account for a special parcel tax dedicated to public
library services and facilities, equipment, and technology improvements.
Public Safety Fund — Established for special police services, which are intended to be self -funding.
Stormwater Fund — Established to provide for self -funding storm drain maintenance program plus
separate programs through the County and Bay Area to educate residents about urban runoff
pollution.
Development Services Fund — Established to account for development activities that are supported
by external sources of funds. This fund does not account for the operating costs of building,
planning, and engineering, which are located in the General Fund.
Grants Fund — Established to account for grants for the Library, Childcare, Police and Falkirk
Cultural Center.
Parkland Dedication Fund — Established to account for long-term developer deposits used to
enhance and maintain the park structure within City limits.
Emergency Medical Services Fund — Established to account for the Emergency Medical Services
and Transportation program that provides services to all segments of the community.
97
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.
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.
98
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 (NdERA) 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.
CITY OF SAN RAFAEL
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEETS
JUNE 30, 2015
I=IABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $142,178 $12,960 $224,408 $30,944
Deposits payable
Developer deposits payable
Unearned revenue 362,356
Total Liabilities 504,534 12,960 224,408 30,944
Fund Balances:
Nonspendable 421
Restricted 27,573 $217,912 259,758 911,808 $669,018
Committed
Assigned
Total Fund Balances 27,994 217,912 259,758 911,808 669,018
Total Liabilities and Fund Balances $532,528 $230,872 $484,166 $942,752 $669,018
100
SPECIAL REVENUE FUNDS
Baypoint
Lagoons
Household
Loch Lomond
Recreation
Assessment
Hazmat
Assessment
Revolving
District
Facility
Childcare
District
ASSETS
Cash and investments
$338,887
$230,682
$235,555
$922,930
$668,901
Restricted cash and investments
Receivables:
Accounts
193,220
248,611
Taxes
190
117
Grants
19,822
Interest
Loans
Prepaids
421
Total Assets
$532,528
$230,872
$484,166
$942,752
$669,018
I=IABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $142,178 $12,960 $224,408 $30,944
Deposits payable
Developer deposits payable
Unearned revenue 362,356
Total Liabilities 504,534 12,960 224,408 30,944
Fund Balances:
Nonspendable 421
Restricted 27,573 $217,912 259,758 911,808 $669,018
Committed
Assigned
Total Fund Balances 27,994 217,912 259,758 911,808 669,018
Total Liabilities and Fund Balances $532,528 $230,872 $484,166 $942,752 $669,018
100
t
SPECIAL REVENUE FUNDS
Library Public Development Parkland
Library Assessment Safety Stormwater Services Grants Dedication
$637,418 $666,443 $163,328 $1,773,547 $995,225 $967,524 $1,419,687
8,650 45,000 737
5,763
284,166
125
$637,543 $666,443 $171,978 $1,779,310 $1,040,225 $1,252,427 $1,419,687
$509 $9,261 $1,145 $43,453 $16,267
20,000 23,063
1,500
509 9,261 1,145 63,453 40,830
$91,950 $3,327
138,096
230,046 3,327
125
636,909 657,182 170,833 1,715,857 999,395 1,022,381 1,416,360
637,034 657,182 170,833 1,715,857 999,395 1,022,381 1,416,360
$637,543 $666,443 $171,978 $1,779,310 $1,040,225 $1,252,427 $1,419,687
(Continued)
101
CITY OF SAN RAFAEL
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEETS
JUNE 30, 2015
ASSETS
Cash and investments
Restricted cash and investments
Receivables:
Accounts
Taxes
Grants
Interest
Loans
Prepaids
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Deposits payable
Developer deposits payable
Unearned revenue
Total Liabilities
Fund Balances:
Nonspendable
Restricted
Committed
Assigned
Total Fund Balances
Total Liabilities and Fund Balances
$18,351 $151,356 $16,446 $5,818
$13,207
18,351 13,207 151,356 16,446 5,818
1,813
1,185,463 3,484 31,496 $168,660 945,080
1,187,276 3,484 31,496 168,660 945,080
$1,205,627 $16,691 $182,852 $185,106 $950,898
102
SPECIAL REVENUE FUNDS
Low and
Emergency
Pt. San Pedro
Moderate
Medical
Business
Sewer
Maintenance
Income
Services
Improvement
Maintenance
Portion
Housing
$848,757
$16,691
$182,852
$184,558
$629,585
251,096
91,145
26,906
548
77,055
102
230,066
1,813
$1,205,627
$16,691
$182,852
$185,106
$950,898
$18,351 $151,356 $16,446 $5,818
$13,207
18,351 13,207 151,356 16,446 5,818
1,813
1,185,463 3,484 31,496 $168,660 945,080
1,187,276 3,484 31,496 168,660 945,080
$1,205,627 $16,691 $182,852 $185,106 $950,898
102
SPECIAL
REVENUE
FUNDS
DEBT SERVICE FUNDS
CAPITAL PROJECT FUNDS
1997
Peacock Gap
Mariposa
Financing
Measure A
Assessment
Assessment
Authority
Capital Bedroom Assessment
Open Space
District
District
Revenue Bonds
Improvement Tax Districts
$242,499
$2,875
$16,573
$146,524
$201,085 $51,090 $223,967
76,511
16,778
206,470
923,000
$448,969 $2,875 $16,573 $146,524 $1,140,863 $51,090 $300,478
$103,657 $236,741
103,657 236,741
345,312 $2,875 $16,573 $146,524 $51,090 $300,478
904,122
345,312 2,875 16,573 146,524 904,122 51,090 300,478
$448,969 $2,875 $16,573 $146,524 $1,140,863 $51,090 $300,478
(Continued)
103
CITY OF SAN RAFAEL
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEETS
JUNE 30, 2015
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $26,465 $1,135,236
Deposits payable 194,366
Developer deposits payable 1,500
Unearned revenue 362,356
Total Liabilities 26,465 1,693,458
Fund Balances:
Nonspendable 2,359
Restricted 11,902,021
Committed $27,749 931,871
Assigned $123,337 $395,110 194,363 712,810
Total Fund Balances 27,749 123,337 395,110 194,363 13,549,061
Total Liabilities and Fund Balances $27,749 $123,337 $395,110 $220,828 $15,242,519
104
CAPITAL PROJECT FUNDS
Total
Park
Non -Major
Capital
Open
Radio
Telephone
Governmental
Projects
Space
Replacement
Replacement
Funds
ASSETS
Cash and investments
$27,749
$123,337
$395,110
$220,828
$12,534,207
Restricted cash and investments
76,511
Receivables:
Accounts
855,237
Taxes
239,994
Grants
1,304,043
Interest
102
Loans
230,066
Prepaids
2,359
Total Assets
$27,749
$123,337
$395,110
$220,828
$15,242,519
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $26,465 $1,135,236
Deposits payable 194,366
Developer deposits payable 1,500
Unearned revenue 362,356
Total Liabilities 26,465 1,693,458
Fund Balances:
Nonspendable 2,359
Restricted 11,902,021
Committed $27,749 931,871
Assigned $123,337 $395,110 194,363 712,810
Total Fund Balances 27,749 123,337 395,110 194,363 13,549,061
Total Liabilities and Fund Balances $27,749 $123,337 $395,110 $220,828 $15,242,519
104
CITY OF SAN RAFAEL
COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
106
SPECIAL REVENUE FUNDS
Baypoint
Lagoons
Household
Loch Lomond
Recreation
Assessment
Hazmat
Assessment
Revolving
District
Facility
Childcare
District
REVENUES
Taxes and special assessments
$25,368
$15,606
Fines and forfeitures
Use of money and properties
$25,687
667
$551
$2,176
1,947
Intergovernmental
17,595
281,001
Charges for services
2,725,379
145,795
3,751,090
Other revenue
15,664
1,407
3,895
Total Revenues
2,784,325
26,035
147,753
4,038,162
17,553
EXPENDITURES
Current:
General government
Public safety
155,625
Public works and parks
23,503
2,810
Culture and recreation
4,237,745
3,685,473
Capital outlay
Capital improvement/special projects
28,272
350
Total Expenditures
4,266,017
23,503
155,975
3,685,473
2,810
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(1,481,692)
2,532
(8,222)
352,689
14,743
OTHER FINANCING SOURCES (USES)
Transfers in
1,375,000
25,000
Total Other Financing Sources (Uses)
1,375,000
25,000
Net Change in Fund Balances
(106,692)
2,532
(8,222)
377,689
14,743
Fund Balance, Beginning
134,686
215,380
267,980
534,119
654,275
Fund Balance, Ending
$27,994
$217,912
$259,758
$911,808
$669,018
106
SPECIAL REVENUE FUNDS
Public Development
Safety Stormwater Services
$221 $5,256
70,000
2,200 778,048
79,916
152,337 783,304
Library
Library
Assessment
933,899
$867,181
$1,420
1,838
29,335
838,325
6,701
24,469
463,733
537,034
501,189
869,019
SPECIAL REVENUE FUNDS
Public Development
Safety Stormwater Services
$221 $5,256
70,000
2,200 778,048
79,916
152,337 783,304
107
Parkland
Grants Dedication
$20,533
$51,047
$33,174
2,710
251,625
933,899
49,399
456,115
16,446
838,325
987,656
24,469
41,905
537,034
443,371
58,351
838,325
251,625
899,486
442,838
30,694
(99,288)
(116,182)
44,318
70,000
32,356
1,223,930
82,675
70,000
(236,274)
442,838
30,694
(29,288)
(116,182)
194,196
626,488
200,121
1,832,039
$637,034
$657,182
$170,833
$1,715,857
107
Parkland
Grants Dedication
$20,533
$51,047
$33,174
2,710
3,936
933,899
49,399
82,573
987,656
24,469
32,356
537,034
603,938
37,300
38,640
44,318
45,375
32,356
1,223,930
82,675
50,217
(236,274)
(58,206)
297,664
587,500
297,664
587,500
50,217
61,390
529,294
949,178
960,991
887,066
$999,395
$1,022,381
$1,416,360
(Continued)
CITY OF SAN RAFAEL
COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
SPECIAL REVENUE FUNDS
Low and
Emergency Pt. San Pedro - Moderate
Medical Business Sewer Maintenance Income
Services Improvement Maintenance Portion Housing
REVENUES
Taxes and special assessments
$3,820,240
$73,077
Fines and forfeitures
Use of money and properties
1,921
509
$8,273
Intergovernmental
77,055
Charges for services
2,341,127
Otherrevenue
14,963
Total Revenues
6,240,343
73,586
23,236
EXPENDITURES
Current:
General government
81,893
Public safety
6,273,859
Public works and parks
83,626
Culture and recreation
Capital outlay
Capital improvement/special projects
Total Expenditures
6,273,859
83,626
81,893
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(33,516)
(10,040)
(58,657)
OTHER FINANCING SOURCES (USES)
Transfers in
Total Other Financing Sources (Uses)
Net Change in Fund Balances
(33,516)
(10,040)
(58,657)
Fund Balance, Beginning
1,220,792
$3,484 $31,496 178,700
1,003,737
Fund Balance, Ending
$1,187,276
$3,484 $31,496 $168,660
$945,080
108
SPECIAL
REVENUE
FUND
DEBT SERVICE FUNDS
CAPITAL PROJECT FUNDS
1997
322,508
1,994,581
Peacock Gap Mariposa Financing
100,097
Measure A
Assessment Assessment Authority
Capital
Bedroom Assessment
Open Space
District District Revenue Bonds
Improvement
Tax Districts
$422,004
$18,615
601
$429
$2,679
$140
(600,601)
18,615
949,523
245,215
$2,875 $16,573 146,095
1,504,723
16,778
300,338
422,605
429
968,980
18,615 140
104,769
217,739
109
1,994,581
322,508
1,994,581
100,097
429
(1,025,601)
18,615
140
425,000
425,000
100,097
429
(600,601)
18,615
140
245,215
$2,875 $16,573 146,095
1,504,723
32,475
300,338
$345,312
$2,875 $16,573 $146,524
$904,122
$51,090
$300,478
(Continued)
109
CITY OF SAN RAFAEL
COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
110
CAPITAL PROJECT FUNDS
Total
Park
Non -Major
Capital
Open
Radio
Telephone
Governmental
Projects
Space
Replacement
Replacement
Funds
REVENUES
Taxes and special assessments
$5,262,624
Fines and forfeitures
51,047
Use of money and properties
$364
$710
$676
95,885
Intergovernmental
2,358,408
Charges for services
648,660
435,000
10,883,399
Other revenue
$5,225
601,581
Total Revenues
5,225
364
649,370
435,676
19,252,944
EXPENDITURES
Current:
General government
651,283
Public safety
7,389,816
Public works and parks
783,793
Culture and recreation
8,815,289
Capital outlay
2,033,221
Capital improvement/special projects
313
4,056
646,191
462,568
1,716,719
Total Expenditures
313
4,056
646,191
462,568
21,390,121
EXCESS (DEFICIENCY) OF REVENUES
OVER(UNDER)EXPENDITURES
4,912
(3,692)
3,179
(26,892)
(2,137,177)
OTHER FINANCING SOURCES (USES)
Transfers in
2,780,164
Total Other Financing Sources (Uses)
2,780,164
Net Change in Fund Balances
4,912
(3,692)
3,179
(26,892)
642,987
Fund Balance, Beginning
22,837
127,029
391,931
221,255
12,906,074
Fund Balance, Ending
$27,749
$123,337
$395,110
$194,363
$13,549,061
110
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, 2015
REVENUES
Taxes and special assessments
Licenses and permits
Fines and forfeitures
Use of money and properties
Intergovernmental
Charges for services
Otherrevenue
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)
FUND BALANCES, BEGINNING OF YEAR
AND OTHER SOURCES AND USES OVER
(UNDER) EXPENDITURES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
4,113,608
4,237,745
SPECIAL REVENUE FUNDS
35,031
28,272
6,759
Recreation Revolving
Baypoint Lagoons Assessment District
(117,378)
(1,179,446)
Variance
(302,246)
1,300,000
Variance
Final
1,300,000
Positive
Final
Positive
Budget
Actual
(Negative)
Budget
Actual
(Negative)
$25,500
$25,368
($132)
$25,250
$25,687
$437
280
667
387
29,363
17,595
(11,768)
2,885,830
2,725,379
(160,451)
28,750
15,664
(13,086)
2,969,193
2,784,325
(184,868)
25,780
26,035
255
4,113,608
4,237,745
(124,137)
35,031
28,272
6,759
4,148,639
4,266,017
(117,378)
(1,179,446)
(1,481,692)
(302,246)
1,300,000
1,375,000
75,000
1,300,000
1,375,000
75,000
$120,554 (106,692) ($227,246)
134,686
$27,994
112
40,871
23,503
17,368
40,871
23,503
17,368
(15,091)
2,532
17,623
($15,091) 2,532
215,380
$217,912
$17,623
113
SPECIAL REVENUE FUNDS
Household
Hazmat Facility
Childcare
Loch Lomond Assessment District
Variance
Variance
Variance
Final
Positive
Final
Positive
Final
Positive
Budget
Actual
(Negative)
Budget
Actual
(Negative)
Budget
Actual
(Negative)
$15,610
$15,606
($4)
$160
$551
$391
$300
$2,176
$1,876
800
1,947
1,147
272,691
281,001
8,310
145,788
145,795
7
3,520,095
3,751,090
230,995
1,000
1,407
407
3,895
3,895
146,948
147,753
805
3,793,086
4,038,162
245,076
16,410
17,553
1,143
145,468
155,625
(10,157)
37,836
2,810
35,026
3,866,867
3,685,473
181,394
1,000
350
650
146,468
155,975
(9,507)
3,866,867
3,685,473
181,394
37,836
2,810
35,026
480
(8,222)
(8,702)
(73,781)
352,689
426,470
(21,426)
14,743
36,169
100,000
25,000
(75,000)
100,000
25,000
(75,000)
$480
(8,222)
($8,702)
$26,219
377,689
$351,470
($21,426)
14,743
$36,169
267,980
534,119
654,275
$259,758
$911,808
$669,018
(Continued)
113
114
CITY OF SAN RAFAEL
BUDGETED NONMAJOR GOVERNMENTAL FUNDS
COMBR41NG SCHEDULES OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2015
SPECIAL REVENUE FUNDS
Library
Library Assessment
Variance
Variance
Final Positive Final
Positive
Budget Actual (Negative) Budget
Actual
(Negative)
REVENUES
Taxes and special assessments
$875,000
$867,181
($7,819)
Licenses and permits
Fines and forfeitures
Use of money and properties
$20,540 $1,420 ($19,120) 850
1,838
988
Intergovernmental
25,800 29,335 3,535
Charges for services
7,038 6,701 (337)
Other revenue
463,733 463,733
Total Revenues
53,378 501,189 447,811 875,850
869,019
(6,831)
EXPENDITURES
Current:
General government
Public safety
Public works and parks
Culture and recreation
16,446 (16,446) 875,648
838,325
37,323
Capital outlay
Capital improvement/special projects
66,183 41,905 24,278
Total Expenditures
66,183 58,351 7,832 875,648
838,325
37,323
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
(12,805) 442,838 455,643 202
30,694
30,492
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES AND USES OVER
(UNDER) EXPENDITURES
($12,805) 442,838 $455,643 $202
30,694
$30,492
FUND BALANCES, BEGINNING OF YEAR
194,196
626,488
FUND BALANCES, END OF YEAR
$637,034
$657,182
114
SPECIAL REVENUE FUNDS
Public Safety Stormwater Development Services
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative)
$221
$70,000 70,000
2,200
75,000 79,916
145,000 152,337
278,372 251,625
26,747
$5,000
($5,000)
456,115
369,755
$221
2,200 $5,256
3,056
$31,600
$33,174
$1,574
2,200
772,800 778,048
5,248
1,500
49,399
47,899
4,916
5,000
(5,000)
70,000
7,337
785,000 783,304
(1,696)
33,100
82,573
49,473
($63,372)
(29,288)
$34,084 ($1,179,414)
90,000
32,356
57,644
26,747
115
90,000 32,356 57,644
(56,900) 50,217 $107,117
($56,900) 50,217 $107,117
949,178
$999,395
(Continued)
825,870
456,115
369,755
1,138,544
443,371
695,173
278,372
251,625
26,747 1,964,414
899,486
1,064,928
(133,372)
(99,288)
34,084 (1,179,414)
(116,182)
1,063,232
70,000
70,000
70,000
70,000
($63,372)
(29,288)
$34,084 ($1,179,414)
(116,182)
$1,063,232
200,121
1,832,039
$170,833
$1,715,857
115
90,000 32,356 57,644
(56,900) 50,217 $107,117
($56,900) 50,217 $107,117
949,178
$999,395
(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, 2015
SPECIAL REVENUE FUNDS
Grants Parkland Dedication
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Taxes and special assessments $20,533 $20,533
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
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)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES AND USES OVER
(UNDER) EXPENDITURES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
$70,000
$51,047
($18,953)
1,180
2,710
1,530
1,173,566
933,899
(239,667)
197,000
617,300
(197,000)
1,441,746
987,656
(454,090)
682,600
605,976
225,000
39,334
288,320
1,841,230
(399,484)
297,664
297,664
537,034
603,938
38,640
44,318
1,223,930
(236,274)
297,664
297,664
($101,820) 61,390
960,991
$1,022,381
116
$1,200 3,936 2,736
1,200 24,469 23,269
145,566
2,038
225,000
694
244,002
1,036,994
617,300
1,036,994
163,210
(1,035,794)
587,500
587,500
$163,210 ($448,294)
37,300
45,375
82,675
(58,206)
587,500
587,500
529,294
887,066
$1,416,360
(37,300)
991,619
954,319
977,588
$977,588
117
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)
$3,816,506
$3,820,240
$3,734
500
1,921
1,421
I74,371
77,055
(97,316)
2,535,000
2,341,127
(193,873)
$251,057
($251,057)
6,526,377
6,240,343
(286,034)
251,057
(251,057)
6,596,635
6,273,859
322,776
6,596,635
6,273,859
322,776
(70,258)
(33,516)
36,742
251,057
(251,057)
(251,057)
251,057
(251,057)
251,057
($70,258)
(33,516)
$36,742
1,220,792
$3,484
$31,496
$1,187,276
$3,484
$31,496
(Continued)
117
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, 2015
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)
REVENUES
Taxes and special assessments $88,600 $73,077 ($15,523)
Licenses and permits
Use of money and properties 240 509 269 $250 $8,273 $8,023
Intergovernmental
Charges for services
Other revenue
Total Revenues
EXPENDITURES
Current:
General goverment
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)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES AND USES OVER
(UNDER) EXPENDITURES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
88,840 73,586 (15,254)
86,000 83,626 2,374
70,000 14,963 (55,037)
70,250 23,236 (47,014)
305,000 81,893 223,107
86,000
83,626
2,374
305,000
81,893
223,107
2,840
(10,040)
(12,880)
(234,750)
(58,657)
176,093
$2,840 (10,040) ($12,880) ($234,750) (58,657) $176,093
178,700 1,003,737
$168,660 $945,080
118
SPECIAL REVENUE FUNDS
Measure A
Variance
Final
Positive
Budget
Actual
(Negative)
$350,000
$422,004
$72,004
210
601
391
350,210 422,605 72,395
145,030 104,769 40,261
325,000 217,739 107,261
470,030 322,508 147,522
(1I9,820) 100,097 219,917
($119,820) 100,097 $219,917
245,215
$345,312
DEBT SERVICE FUNDS
Mariposa Assessment District 1997 Financing Authority Revenue Bonds
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
$16,573
$16,573
119
$200 $429 $229
200 429 229
200 429
$200 429
146,095
$146,524
229
$229
INTERNAL SERVICE FUNDS
Internal service funds account for department services and financing performed for other departments
within the same governmental jurisdiction. Funding comes from charges assessed to the departments
benefiting from the service.
Building Maintenance Fund - Established to account for construction projects and cyclical large
dollar maintenance tasks (roof, painting) completed on City owned buildings.
Vehicle Replacement Fund — Established to provide for the replacement of vehicles.
Equipment Replacement Fund — Established to provide for the replacement of computers and
equipment.
Employee Benefits Fund - This fund is utilized for the payment of retiree benefits, unemployment
insurance, accumulated leave requirements and other negotiated benefits not tied to a specific
department.
Liability Insurance Fund - Established to maintain sufficient reserves for outstanding claims. All
costs associated with liability premiums are paid from this fund.
Workers' Compensation Fund - Established to maintain sufficient reserves for injury claims. All
costs associated with workers compensation, including safety training, wellness programs, claim
expenses and insurance premiums are paid from this fund.
Dental Insurance Fund - Set up to maintain sufficient reserves for dental claims. All costs associated
with dental claims and administrations are paid from this fund.
Employee Retirement Fund — Established to maintain sufficient reserves to fund debt service
payments on the 2010 Taxable Pension Obligation Bonds and other pension related obligations.
OPEB/Retiree Medical Fund — Established to account for activities related to the funding,
administration and procurement of retiree medical benefits.
121
CITY OF SAN RAFAEL
INTERNAL SERVICE FUNDS
COMBINING STATEMENTS OF NET POSITION
JUNE 30, 2015
122
Building
Vehicle
Equipment
Employee
Liability
Maintenance
Replacement
Replacement
Benefits
Insurance
ASSETS
Current Assets:
Cash and investments
$1,252,318
$3,363,615
$2,361,733
$708,522
$1,384,731
Accounts receivable
44,175
44,876
Loans receivable
21,876
Prepaids
765
2,849
Capital assets:
Nondepreciable assets
204,136
Depreciable assets, net
1,247,349
4,693,475
867,932
Total Assets
2,703,803
8,123,141
3,230,430
708,522
1,432,456
LIABILITIES
Current Liabilities:
Accounts payable
254,128
915,557
188,037
8,320
Claims payable - due in one year
544,399
Non-current Liabilities:
Claims payable - due in more than one year
782,641
OPEB liability
Total Liabilities
254,128
915,557
188,037
8,320
1,327,040
NET POSITION:
Net investment in capital assets
1,451,485
4,693,475
867,932
Unrestricted
998,190
2,514,109
2,174,461
700,202
105,416
Total Net Position
$2,449,675
$7,207,584
$3,042,393
$700,202
$105,416
122
OPEB/
Workers' Dental Employee Retiree
Compensation Insurance Retirement Medical Total
$6,418,746 $128,267 $2,284,238 $429,751 $18,331,921
76,992 166,043
21,876
3,614
204,136
6,808,756
6,418,746 128,267 2,284,238 506,743 25,536,346
10,953 3,613 1,380,608
1,401,393 1,945,792
4,590,985 5,373,626
9,164,000 9,164,000
6,003,331 3,613 9,164,000 17,864,026
7,012,892
415,415 124,654 2,284,238 (8,657,257) 659,428
$415,415 $124,654 $2,284,238 ($8,657,257) $7,672,320
123
CITY OF SAN RAFAEL
INTERNAL SERVICE FUNDS
COMBINING STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2015
124
Building
Vehicle
Equipment
Employee
Liability
Maintenance
Replacement
Replacement
Benefits
Insurance
OPERATING REVENUES
Charges for current services
$700,000
$1,350,481
$2,272,424
$775,000
$914,880
Other operating revenues
27,850
44,876
Total Operating Revenues
700,000
1,350,481
2,272,424
802,850
959,756
OPERATING EXPENSES
Personnel
166,162
4,435
Insurance premiums and claims
861,089
Maintenance and repairs
426,448
38,000
11,145
General and administrative
1,559,098
619,762
170,513
Depreciation expense
3,375
746,971
93,762
Total Operating Expenses
429,823
784,971
1,830,167
624,197
1,031,602
Operating Income (Loss)
270,177
565,510
442,257
178,653
(71,846)
NONOPERATING REVENUES (EXPENSES)
Investment income
3,458
8,809
4,982
6,232
4,452
Miscellaneous Income
87,421
Total Nonoperating
Revenues (Expenses)
3,458
96,230
4,982
6,232
4,452
Net income (loss) before transfers
273,635
661,740
447,239
184,885
(67,394)
CONTRIBUTIONS
10,000
TRANSFERS OUT
(587,500)
Change in Net Position
(313,865)
661,740
457,239
184,885
(67,394)
NET POSITION, BEGINNING OF YEAR,
AS ADJUSTED
2,763,540
6,545,844
2,585,154
515,317
172,810
NET POSITION, END OF YEAR
$2,449,675
$7,207,584
$3,042,393
$700,202
$105,416
124
125
OPEB/
Workers'
Dental
Employee
Retiree
Compensation
Insurance
Retirement
Medical
Total
$1,686,340
$399,223
$450,000
$2,325,623
$10,873,971
2,644
946,797
1,022,167
1,686,340
401,867
450,000
3,272,420
11,896,138
170,597
1,790,808
408,628
3,221,466
6,281,991
475,593
110,570
3,342
2,463,285
844,108
1,901,378
408,628
3,342
3,221,466
10,235,574
(215,038)
(6,761)
446,658
50,954
1,660,564
19,108
557
6,283
(1)
53,880
87,421
19,108
557
6,283
(1)
141,301
(195,930)
(6,204)
452,941
50,953
1,801,865
10,000
(276,520)
(864,020)
(195,930)
(6,204)
176,421
50,953
947,845
611,345
130,858
2,107,817
(8,708,210)
6,724,475
$415,415
$124,654
$2,284,238
($8,657,257)
$7,672,320
125
CITY OF SAN RAFAEL
INTERNAL SERVICE FUNDS
COMBINING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers/other funds
Cash payments to suppliers for goods and services
Cash payments to employees for salaries and benefits
Other operating revenues
Payment to OPEB Trust
Cash Flows from Operating Activities
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Contributions
Interfund payments
Cash Flows from Noncapital
Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition and construction of capital assets
Proceeds from sale of property
Cash Flows from Investing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Cash Flows from Investing Activities
Net increase (decrease)in cash and cash equivalents
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)
Adjustments to reconcile operating income
to cash flows from operating activities:
Depreciation
Net change in assets and liabilities:
Accounts receivable
Loans receivable
Prepaids and deposits
Net OPEB Liability
Accounts payable
Claims payable
Net Cash Provided by (Used in) Operating Activities
126
Building
Vehicle
Equipment
Employee
Liability
Maintenance
Replacement
Replacement
Benefits
Insurance
$700,000
$1,317,244
$2,272,424
$775,000
$950,696
(189,557)
786,041
(1,456,575)
(627,274)
(836,013)
(443,543)
(1,566,677)
(166,162)
(4,435)
3,458
8,809
4,982
27,850
44,876
510,443
2,103,285
649,687
171,141
159,559
10,000
(587,500)
(587,500)
10,000
(443,543)
(1,654,098)
(494,627)
87,421
(443,543)
(1,566,677)
(494,627)
3,458
8,809
4,982
6,232
4,452
3,458
8,809
4,982
6,232
4,452
(517,142)
545,417
170,042
177,373
164,011
1,769,460
2,818,198
2,191,691
531,149
1,220,720
$1,252,318
$3,363,615
$2,361,733
$708,522
$1,384,731
$270,177
$565,510
$442,257
$178,653
($71,846)
3,375
746,971
93,762
(44,175)
35,816
10,938
(765)
(2,849)
236,891
824,041
114,433
(7,512)
(166)
198,604
$510,443
$2,103,285
$649,687
$171,141
$159,559
127
OPEB/
Workers'
Dental
Employee
Employee
Compensation
Insurance
Retirement
Retirement
Total
$1,686,873
$399,223
$450,000
$2,432,219
$10,983,679
(1,366,200)
(408,659)
(3,342)
(3,222,094)
(7,323,673)
(170,597)
2,644
946,797
1,022,167
(132,000)
(132,000)
320,673
(6,792)
446,658
24,922
4,379,576
10,000
(276,520)
(864,020)
(276,520)
(854,020)
(2,592,268)
87,42I
(2,504,847)
19,108
557
6,283
(1)
53,880
19,108
557
6,283
(1)
53,880
339,781
(6,235)
176,421
24,921
1,074,589
6,078,965
134,502
2,107,817
404,830
17,257,332
$6,418,746
$128,267
$2,284,238
$429,751
$18,331,921
($215,038)
($6,761)
$446,658
$50,954
$1,660,564
844,108
533
106,596
98,770
10,938
105
(3,509)
(132,000)
(132,000)
4,070
(31)
(733)
1,170,993
531,108
729,712
$320,673
($6,792)
$446,658
$24,922
$4,379,576
127
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.
129
CITY OF SAN RAFAEL
AGENCY FUNDS
COMBINING STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED JUNE 30, 2015
Pt. San Pedro Road Assessment District
Assets
Restricted cash and investments
Taxes receivable
Total Assets
Liabilities
Interest payable
Due to bondholders
Total Liabilities
Total Agency Fund
Balance Balance
June 30, 2014 Additions Deductions June 30, 2015
$297,808
$1,210
$4,688
$294,330
1,210
1,134
1,210
1,134
$299,018
$2,344
$5,898
$295,464
$29,704
1,210
$978
$28,726
269,314
$2,344
4,920
266,738
$299,018
$2,344
$5,898
$295,464
Balance
Interest payable
$29,704
Balance
June 30, 2014
Additions
Deductions
June 30, 2015
Assets
Restricted cash and investments
$297,808
$1,210
$4,688
$294,330
Taxes receivable
1,210
1,134
1,210
1,134
Total Assets
$299,018
$2,344
$5,898
$295,464
Liabilities
Interest payable
$29,704
$978
$28,726
Due to bondholders
269,314
$2,344
4,920
266,738
Total Liabilities
$299,018
$2,344
$5,898
$295,464
130
we-
allAMR
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TL I -Q,
It
STATISTICAL SECTION
This part of the City's Comprehensive Annual Financial Report presents detailed information as a context for
understanding what the information in the financial statements, note disclosures, and required supplementary information
says about the City's overall financial health. In contrast to the financial section, the statistical section information is not
subject to independent audit.
Financial Trends
These schedules contain trend information to help the reader understand how the City's financial performance and well-
being have changed over time:
1. Net Position by Component
2. Changes in Net Position
3. Fund Balances of Governmental Funds
4. Changes in Fund Balance of Governmental Funds
Revenue Capacity
These schedules contain information to help the reader assess the City's most significant local revenue source, the
property tax:
1. Assessed and Estimated Actual Value of Taxable Property
2. Property Tax Rates, All Overlapping Governments
3. Principal Property Taxpayers
4. Property Tax Levies and Collections
Debt Capacity
These schedules present information to help the reader assess the affordability of the City's current levels of outstanding
debt and the City's ability to issue additional debt in the future:
1. Ratio of Outstanding Debt by Type
2. Computation of Direct and Overlapping Debt
3. Computation of Legal Bonded Debt Margin
4. Revenue Bond Coverage Parking Facility
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which
the City's 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.
133
CITY OF SAN RAFAEL
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
$260,000
$210,000
$160,0007
i
$110,000
$60,000
$10,000
($40,000)
($90,000)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Governmental activities
Net investment in capital assets
Restricted
Unrestricted
Total governmental activities net position
Business -type activities
Net investment in capital assets
Unrestricted
Total business -type activities net position
Primary government
CNet of Related Debt ORmtricted MUnrestticted
2009
$178,744,119
25,721,231
(700,985)
$203,764,365
$11,243,637
1,936,958
$13,180,595
Net investments in capital assets $185,625,535
As of June 30
$186,855,149 $189,987,756
2006
2007
2008
$175,806,100
$171,849,149
$176,724,820
620,889
31,124,935
26,848,900
32,739,318
4,499,136
4,273,937
$209,166,307
$207,473,220
$207,847,657
$9,819,435
$9,717,501
$10,130,329
2,113,659
2,226,838
2,471,117
$11,933,094
$I1,944,339
$12,601,446
2009
$178,744,119
25,721,231
(700,985)
$203,764,365
$11,243,637
1,936,958
$13,180,595
Net investments in capital assets $185,625,535
$181,566,650
$186,855,149 $189,987,756
Restricted 620,889
31,124,935
26,848,900 25,721,231
Unrestricted 34,852,977
6,725,974
6,745,054 1,235,973
Total primary government net position $221,099,401
$219,417,559
$220,449,103 $216,944,960
(a) The City adjusted certain beginning balances during fiscal years 2013-2014
and 2014-2015.
Financial data shown for
proceeding years were not adjusted for the presentation.
134
2010
2011
2012
2013
2014
2015 (a)
$173,536,144
$174,281,922
$192,361,245
$193,222,791
$190,286,275
$190,621,085
26,150,254
21,322,937
24,693,205
35,780,412
37,339,141
33,389,224
(4,631,276)
(8,170,324)
10,652,263
11,151,318
(196,824)
(82,336,534)
$195,055,122
$187,434,535
$227,706,713
$240,154,521
$227,428,592
$141,673,775
$10,950,825
$10,793,592
$10,650,558
$10,670,190
$10,786,591
$10,744,952
2,017,354
1,948,447
2,495,889
2,501,498
2,049,957
(938,519)
$12,968,179
$12,742,039
$13,146,447
$13,171,688
$12,836,548
$9,806,433
$184,486,969
$185,075,514
$203,011,803
$203,892,981
$201,072,866
$201,366,037
26,150,254
21,322,937
24,693,205
35,780,412
37,339,141
33,389,224
(2,613,922)
(6,221,877)
13,148,152
13,652,816
1,853,133
(83,275,053)
$208,023,301
$200,176,574
$240,853,160
$253,326,209
$240,265,140
$151,480,208
135
CITY OF SAN RAFAEL
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Business -Type Activities
Parking services
2,761,511
Fiscal Year Ended June 30,
3,282,235
3,563,235
2006
2007
2008
2009
Expenses
Total Primary Government Expenses
$80,166,080
$86,586,284
$92,955,744
Governmental Activities:
Component Unit:
$191,858
$1,201,484
$1,275,669
General government
$6,252,533
$8,908,433
$8,621,079
$8,075,344
Public safety
33,178,537
37,271,272
40,845,347
42,708,538
Public works and parks
23,401,246
20,998,749
22,105,367
23,036,676
Community development
4,194,249
4,384,408
5,811,866
5,759,171
Culture and recreation
8,652,445
9,729,485
10,300,230
11,505,896
Interest on long -tern debt and fiscal charges
1,725,559
2,183,683
1,989,620
1,907,229
Total Governmental Activities Expenses
77,404,569
83,476,030
89,673,509
92,992,854
Business -Type Activities
Parking services
2,761,511
3,110,254
3,282,235
3,563,235
Total Business -Type Activities Expenses
2,761,511
3,110,254
3,282,235
3,563,235
Total Primary Government Expenses
$80,166,080
$86,586,284
$92,955,744
$96,556,089
Component Unit:
$191,858
$1,201,484
$1,275,669
$1,423,670
San Rafael Sanitation District
$6,148,915
$6,656,432
$8,090,636
$9,143,977
Program Revenues
Governmental Activities:
Charges for services:
General govemment
$402,094
$1,512,814
$1,494,784
$1,738,685
Public safety
5,085,679
5,279,785
5,562,072
5,906,445
Public works and parks
3,799,861
4,030,060
4,983,288
4,753,817
Community development
3,190,832
2,815,009
3,247,024
2,915,872
Culture and recreation
4,368,274
4,521,004
4,870,884
5,253,683
Operating grants and contributions
2,745,570
3,701,901
3,463,616
3,544,248
Capital grants and contributions
3,936,474
2,786,761
3,239,509
7,311,173
Total Government Activities Program Revenues
23,528,784
24,647,334
26,861,177
31,423,923
Business -Type Activities:
Charges for services:
Parking services
3,025,380
3,242,046
4,161,936
4,454,490
Total Business -Type Activities Program Revenues
3,025,380
3,242,046
4,161,936
4,454,490
Total Primary Government Program Revenues
$26,554,164
$27,889,380
$31,023,113
$35,878,413
Component Unit:
Charges for services:
San Rafael Sanitation District
$6,340,773
$7,857,916
$9,366,305
$10,567,647
Net (Expeuse)/Revenue
Governmental Activities
($53,875,785)
($58,828,696)
($62,812,332)
($61,568,931)
Business -Type Activities
263,869
131,792
879,701
891,255
Total Primary Government Net Expense
($53,611,916)
($58,696,904)
($61,932,631)
($60,677,676)
Component Unit Activities
$191,858
$1,201,484
$1,275,669
$1,423,670
136
2010
2011
2012
2013
2014
2015
$8,396,759
$8,269,846
$10,171,332
$10,202,530
$9,085,672
$9,099,858
42,752,033
44,735,486
39,876,910
41,966,065
43,800,158
39,968,631
17,401,923
17,408,038
17,423,033
17,695,164
22,125,336
16,893,164
6,738,873
7,804,650
4,587,557
3,403,158
3,451,244
3,128,373
11,139,225
11,487,999
11,020,663
11,330,058
11,846,818
11,198,151
2,200,024
1,621,605
1,224,991
283,805
327,350
284,288
88,628,837
91,327,624
84,304,486
84,880,780
90,636,578
80,572,465
4,016,198
3,785,751
3,446,482
3,545,387
4,125,476
4,249,597
4,016,198
3,785,751
3,446,482
3,545,387
4,125,476
4,249,597
$92,645,035
$95,113,375
$87,750,968
$88,426,167
$94,762,054
$84,822,062
$9,087,354
$9,677,630
$10,185,779
$10,169,082
$11,378,055
$11,375,239
$1,665,460
$1,636,542
$1,986,791
$2,655,749
$2,838,940
$1,379,523
6,308,912
6,167,925
7,122,396
6,478,321
6,014,034
4,966,251
3,916,874
4,141,103
5,214,267
7,837,472
6,101,460
3,078,267
2,830,179
2,676,663
3,255,367
3,984,204
3,279,251
3,796,684
5,280,458
5,362,497
5,873,147
6,075,129
6,417,003
6,537,646
3,721,055
3,651,902
3,158,281
4,085,073
4,698,142
4,185,450
2,116,906
1,857,670
2,705,696
5,876,993
762,719
1,308,027
25,839,844
25,494,302
29,315,945
36,992,941
30,111,549
25,251,848
4,244,404
4,011,333
3,901,175
3,990,706
4,485,394
5,173,557
4,244,404
4,011,333
3,901,175
3,990,706
4,485,394
5,173,557
$30,084,248
$29,505,635
$33,217,120
$40,983,647
$34,596,943
$30,425,405
$11,559,549
$12,223,779
$12,368,889
$12,413,123
$13,732,496
$14,629,758
($62,788,993)
($65,833,322)
($54,988,541)
($47,887,839)
($60,525,029)
($55,320,617)
228,206
225,582
454,693
445,319
359,918
923,960
($62,560,787)
($65,607,740)
($54,533,848)
($47,442,520)
($60,165,111)
($54,396,657)
$2,472,195
$2,546,149
$2,183,110
$2,244,041
$2,354,441
$3,254,519
137
CITY OF SAN RAFAEL
CHANGES IN NET POSITION
(continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
General Revenues and Other Changes in Net Position
Governmental Activities:
Taxes:
Property
Sales
Special assessments
Paramedic
Motor vehicles
Transient occupancy
Franchise
Business license
Other
Investment earnings
Gain (Loss) on disposal of assets
Miscellaneous
Special item - Court fines repayment
Transfers
Total Government Activities
Business -Type Activities:
Investment earnings
Aid from other government agencies
Transfers
Total Business -Type Activities
Total Primary Government
Component Unit:
San Rafael Sanitation District
Property Taxes
Investment earnings
Miscellaneous
Aid from other governmental agencies
Total Component Unit
Special Item
Governmental Activities
Component Unit Activities
Change in Net Position
Governmental Activities
Business -Type Activities
Total Primary Government
Change in Net Position
Component Unit Activities
Fiscal Year Ended June 30,
2006 2007 2008 2009
$20,848,887
$20,360,475
$22,195,606
$21,978,859
18,188,524
24,484,356
25,764,457
21,970,262
3,017,488
2,998,925
3,503,555
($3,504,143)
$1,254,347
$2,665,776
$3,001,178
3,210,317
372,726
331,620
257,320
197,989
1,678,912
2,941,149
2,405,934
6,963,448
8,830,955
9,242,241
1,561,835
1,248,409
1,669,181
1,583,056
717,968
36I,195
491,488
296,454
461,224
(1,133,458)
201,191
212,170
344,080
361,190
51,201,868
58,245,712
63,186,769
57,485,639
44,536
91,623
I21,486
49,084
1,309,893
(201,191)
(212,170)
(344,080)
(361,190)
1,153,238
(120,547)
(222,594)
(312,106)
$52,355,106
$58,125,165
$62,964,175
$57,173,533
$179,479
$755,763
$803,071
$855,511
237,206
367,887
341,032
206,752
3,546
3,540
645,804
340,642
577,860
381,144
$1,062,489
$1,464,292
$1,725,509
$1,446,947
($2,673,917)
($582,984)
$374,437
($4,083,292)
1,417,107
11,245
657,107
579,149
($1,256,810)
($571,739)
$1,031,544
($3,504,143)
$1,254,347
$2,665,776
$3,001,178
$2,870,617
138
2010 2011 2012 2013 2014 2015
$21,684,131
$21,632,733
$20,107,637
$17,317,772
$18,439,619
$19,039,443
19,055,124
21,623,445
22,355,749
24,262,282
27,758,971
32,269,915
3,489,494
3,661,064
3,807,545
3,804,985
3,816,070
3,820,240
171,518
297,425
1,558,243
1,644,262
1,866,575
2,185,287
2,332,277
2,661,878
2,868,332
2,990,539
3,076,094
3,331,160
3,260,958
3,272,390
2,317,664
2,296,460
2,332,146
2,507,785
2,588,728
2,670,071
1,411,583
1,930,531
3,574,918
2,929,915
3,452,171
3,295,751
302,180
176,502
205,413
991,762
184,171
216,066
221,791
541,390
1,496,174
542,816
2,580,882
1,140,743
2,254,901
458,300
463,600
57,960
423,817
449,917
432,630
54,079,750
58,212,735
57,926,853
60,335,647
63,423,625
69,933,285
17,678
11,878
7,675
3,739
4,375
7,008
(458,300)
(463,600)
(57,960)
(423,817)
(449,917)
(432,630)
(440,622)
(451,722)
(50,285)
(420,078)
(445,542)
(425,622)
$53,639,128
$57,761,013
$57,876,568
$59,915,569
$62,978,083
$69,507,663
$823,187
$1,214,519
$1,192,566
$1,177,469
$1,345,018
$1,319,852
93,274
59,265
38,191
25,591
151,729
171,804
415,391
6,499
9,613
56,589
22,125
35,090
$1,331,852
$1,280,283
$1,240,370
$1,259,649
$1,518,872
$1,526,746
($8,709,243)
($7,620,587)
(212,416)
(226,140)
($8,921,659)
($7,846,727)
$3,804,047
$3,826,432
$2,938,312
$12,447,808
404,408
25,241
$3,342,720
$12,473,049
$3,423,480
$3,503,690
139
$4,462,815
($4,462,815)
$2,898,596 $19,075,483
(85,624) 498,338
$2,812,972 $19,573,821
$3,873,313 $318,450
$55,000 f
$45,000
M
$35,000
A $25,000
1-4
$15,000
$5,000
($5,000)
2006
CITY SAN RAFAEL
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2007 2008
v
'i
2009 2010 2011 2012 2013 2014 2015
17 Total Fund Balance
As of June 30
2006 2007 2008 2009
General Fund
Pre -GASB 54 Presentation:
Reserved
$2,335,391
$905,068
$2,196,153
$2,225,775
Unreserved
3,362,151
5,016,929
4,022,612
1,670,455
GASB 54 Presentation:
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total General Fund
$5,697,542
$5,921,997
$6,218,765
$3,896,230
All Other Governmental Funds
Pre -GASB 54 Presentation:
Reserved
$21,603,724
$20,773,760
$17,599,142
$16,680,568
Unreserved, reported in:
Special Revenue Funds
7,168,753
8,107,477
7,413,808
8,641,239
Capital Project Funds
35,430
(1,030,293)
Debt Service Funds
4,734,986
3,315,764
3,360,540
Expendable Trust Fund
GASB 54 Presentation:
Nonspendable
Restricted
Committed
Assigned
Total all other governmental funds
$28,772,477
$33,616,223
$28,364,144
$27,652,054
(a) The change in total fund balance for the
General Fund and
other governmental funds
is explained in Management's Discussion and Analysis.
(b) The City adjusted certain beginning balances during fiscal
years 2013-2014 and 2014-2015.
Financial data shown
for preceding years were not adjusted for the presentation.
140
2010
$1,763,622
5,038,173
$6,801,795
$15,352,723
8,778,027
4,527,627
$28,658,377
2011
2012
2013
2014
2015
$589,833
$527,509
$527,235
$503,338
$399,299
200,238
76,188
555,561
651,121
800,876
5,439,879
1,516,644
2,476,676
6,866,149
12,374,002
1,588,500
$6,785,511
$2,771,462
$3,804,787
$7,369,487 (a)
$14,361,801 (a)
$377,180
$788,031
$51,521
$8,719
$2,359
19,289,367
16,856,959
20,769,546
30,185,064
31,742,184
3,864,322
5,135,257
8,447,495
2,185,825
931,871
4,124,029
5,283,559
6,511,850
4,959,533
712,810
$27,654,898
$28,063,806
$35,780,412
$37,339,141
$33,389,224
141
142
CITY OF SAN RAFAEL
CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Fiscal Year Ended June 30,
2006
2007
2008
2009
2010
Revenues
Taxes and special assessments
$44,901,544
$52,472,246
$56,129,195
$51,019,143
$47,678,541
Licenses and permits
1,175,030
1,157,981
1,489,748
1,472,913
1,518,819
Fines and forfeitures
622,494
515,528
797,081
660,338
787,411
Use of money and properties
1,316,558
1,744,688
1,584,508
847,120
433,874
Intergovernmental
11,705,917
12,760,496
12,081,968
17,518,670
13,001,703
Charges for services
13,104,572
13,504,621
15,607,460
16,384,265
15,787,325
Other revenue
1,475,078
1,468,743
815,704
759,320
716,760
Total Revenues
74,301,193
83,624,303
88,505,664
88,661,769
79,924,433
Expenditures
Current:
General government
6,200,338
8,188,999
8,288,170
8,059,526
7,997,067
Public safety
33,321,967
36,264,321
40,299,862
41,209,972
39,574,091
Public works and parks
10,622,585
11,972,537
13,641,665
12,926,646
10,731,669
Community development
4,184,084
4,319,042
5,786,661
5,572,079
4,398,594
Culture and recreation
8,409,833
9,005,370
9,820,365
10,233,361
9,605,684
Capital outlay
60,411
6,716,630
6,243,517
5,048,044
1,890,559
Capital improvement! special projects
13,200,872
1,189,613
5,124,091
6,606,857
3,436,608
Debt service:
Capitalized lease obligation
130,315
Principal
2,525,000
2,287,255
2,504,370
2,714,358
2,804,258
Interest and fiscal charges
1,878,265
1,829,091
1,776,354
1,683,240
1,979,372
Total Expenditures
80,533,670
81,772,858
93,485,055
94,054,083
82,417,902
Excess (deficiency) of revenues over
(under) expenditures
(6,232,477)
1,851,445
(4,979,391)
(5,392,314)
(2,493,469)
Other Financing Sources (Uses)
Issuance of debt
14,660,000
Payment to refunded bonds
(14,315,000)
Bond premiums
1,038,185
Capital lease for equipment acquisition
318,000
Proceeds from PG&E loans
Proceeds from sale of capital asset
221,791
Transfers in
6,925,107
6,812,260
6,353,216
8,972,495
7,494,560
Transfers (out)
(6,672,916)
(6,958,046)
(6,329,136)
(6,614,806)
(6,411,150)
Total other financing sources (uses)
252,191
172,214
24,080
2,357,689
2,688,386
Extraordinary Item
Transfer to Successor Agency
Net Change in fund balances
($5,980,286)
$2,023,659
($4,955,311)
($3,034,625)
$194,917
Debt service as a percentage of
noncapital expenditures
6.7%
5.6%
5.2%
5.3%
6.2%
142
2011
2012
2013
2014
2015
$51,448,130
$51,395,116
$51,549,306
$56,686,142
$61,804,228
1,416,772
1,648,890
1,929,387
1,934,755
2,456,820
862,820
801,758
734,005
669,553
556,076
380,720
315,561
325,043
363,089
444,757
11,864,127
10,537,396
11,869,889
11,953,308
13,233,503
15,888,750
19,649,433
23,575,374
19,949,333
15,346,794
1,026,845
870,957
4,092,411
2,045,407
1,777,003
82,888,164
85,219,111
94,075,415
93,601,587
95,619,181
6,863,142
8,783,873
10,529,480
8,678,833
10,203,687
40,967,352
39,311,551
41,377,062
41,900,762
43,954,515
10,666,176
11,518, 822
12,002,448
13,697,957
12,758,643
4,527,351
3,755,504
2,961,275
3,296,375
3,416,859
10,067,822
10,345,673
10,591,057
11,106,367
11,616,777
1,745,483
1,312,383
4,009,454
2,154,900
4,498,924
6,240,861
3,604,171
5,284,720
7,168,776
2,186,986
2,530,338
2,518,320
208,642
75,172
1,448,910
735,221
283,805
327,350
284,288
85,057,435
81,885,518
87,039,301
88,539,962
88,995,851
(2,169,271)
3,333,593
7,036,114
5,061,625
6,623,330
568,481
5,806,834
4,539,646
8,425,474
3,655,302
4,348,149
(4,657,326)
(4,864,293)
(6,711,657)
(3,053,865)
(3,051,499)
1,149,508
(324,647)
1,713,817
1,169,918
1,296,650
(2,352,584)
($1,019,763)
$3,008,946
$6,397,347
$6,231,543
$7,919,980
5.2%
4.2%
0.4%
0.7%
0.4%
143
CITY OF SAN RAFAEL
ASSESSED AND ESTIMATED ACTUAL
VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
s12,0or
S10,0oo
s8,000
s4,00D
$2,000
CA so is — — — Ib T_
2006 2007 2008 2009 2010 2011 2012 2013 2014 zols
�W�Unsecured Pmperty �O�Secured Prap"
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)L Tax Rate (b)
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 I0,164,376,932 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,M2,014 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%
2014 7,558,708,224 2,009,718,415 245,674,195 130,594,237 9,944,695,071 402 261,887 10,346,956,958 10,346,956,958 0.11985%
2015 7,991,2224,952 2,120,065,908 249,864,918 115,675,852 10,476,831,630 417,217,272 10,894,048,902 10,894,048,902 0.11657%
(a) The Slate 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
144
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
2006
0.154
0.295
0.6828
0.0461
1.1775
2007
0.I54
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
2014
0.154
0.295
0.7890
0.0461
1.2838
2015
0.154
0.295
0.7651
0.0461
1.2599
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 2005/06 - 2014/15 Tax Rate Tables
145
CITY OF SAN RAFAEL
PRINCIPAL PROPERTY TAX PAYERS
CURRENT YEAR AND NINE YEARS AGO
Taxpayer
Northgate Mall Associates
California Corporate Center AC
Sutter Health
Regency Center II Associates LP
Northbay Properties 11
Bay Apartment Communities Inc.
Barbara Fasken 1995 Trust Etal
Marin Sanitary Service
North Associates LLC
WB Associates LLC
AMG Realty Partners LP
San Rafael Corporate Center LLC
Lucas Digital
Rafael Town Center Investors LLC
BIT Holdings Forty Five Inc.
Subtotal
Total Net Assessed Valuation:
Fiscal Year 2014-2015
Fiscal Year 2005-2006
2014-2015
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Value Value
$136,547,395
113,704,290
50,853,957
43,760,844
43,428,710
41,597,687
41,017,922
39,428,530
37,581,141
36,320,878
$584,241,354
$10,894,048,902
$8,312,743,278
146
2005-2006
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Value Value
1.25%
$82,427,151
0.99%
1.04%
0.47%
0.40%
38,494,662
0.46%
0.40%
31,882,488
0.38%
0.38%
32,579,948
0.39%
0.38%
0.36%
30,374,668
0.37%
0.34%
0.33%
5.36%
68,689,210
46,989,710
34,968,499
30,662,293
30,030,209
$427,098,838
0.83%
0.57%
0.42%
0.37%
0.36%
5.14%
CITY OF SAN RAFAEL
PROPERTY TAX LEVIES AND COLLECTIONS (i)
LAST TEN FISCAL YEARS
$25
w
c
0
$22
$19
— -
I
"+ '—Allocations
$16
jl
—0 --Apportionments
$12
$9
—
- -- —
—
$6
-
2006
2007
2008 2009
2010
2011 2012 2013
2014
2015
Delinquent taxer
Fiscal
as a Percent of
Year
Rate
Levies
Allocations
Collections Apportionments
Delinquencies
Allocations
2006
1.00
(2)
$20,848,887
(2)
$20,848,887
(2)
0.0%
2007
1.00
(2)
20,360,475
(2)
20,360,475
(2)
0.0%
2008
1.00
(2)
22,195,606
(2)
22,195,606
(2)
0.0%
2009
1.00
(2)
21,978,859
(2)
21,978,859
(2)
0.0%
2010
1.00
(2)
21,702,536
(2)
21,702,536
(2)
0.0%
2011
1.00
(2)
21,632,731
(2)
21,632,731
(2)
0.0%
2012
1.00
(2)
20,704,368
(2)
20,704,368
(2)
0.0%
2013
1.00
(2)
20,883,041
(2)
20,883,041
(2)
0.0%
2014
1.00
(2)
22,001,357
(2)
22,001,357
(2)
0.0%
2015
1.00
(2)
22,376,457
(2)
22,376,457
(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 Status Reports
147
$45
c
$40
$35 —
$30 -
$25
$20 —
$15
$10
$5
$0
2006
CITY OF SAN RAFAEL
RATIO OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
13 Total Governmental oTotal Business
2007 2008 2009 2010
2011 2012
I ECEt
2013 2014 2015
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: Cityof San Rafael
State of California, Department of Finance (population)
U.S. Department of commerce, Bureau of the Census (income)
(a) See Schedule of Demographic and Economic Statistics for personal income and population data.
148
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
2006
$40,849,107
$1,155,000
$169,000
-
$412,441
-
$42,585,548
2007
39,217,501
950,000
169,000
$1,029,717
596,927
-
41,963,145
2008
37,537,161
780,000
169,000
816,119
401,155
-
39,703,435
2009
35,793,692
455,000
169,000
594,100
198,816
-
37,210,608
2010
35,355,988
0
169,000
363,328
135,330
-
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
2014
0
0
528,839
0
0
4,490,000
5,018,839
2015
0
0
453,667
0
0
4,490,000
4,943,667
Business -Type Activities
Parking
Total
Percentage
Fiscal
Services
Note
Primary
of Personal
Per
Year
Bonds
Payable
Total
Government
Income (a)
Capita (a)
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
0.46%
190.45
2013
6,445,000
6,445,000
11,104,000
0.44%
190.85
2014
6,186,403
$61,836
6,248,239
11,267,078
0.43%
192.38
2015
5,942,128
55,020
5,997,148
10,940,815
n/a
184.77
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: Cityof San Rafael
State of California, Department of Finance (population)
U.S. Department of commerce, Bureau of the Census (income)
(a) See Schedule of Demographic and Economic Statistics for personal income and population data.
148
CITY OF SAN RAFAEL
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
June 30, 2015
2012-13 Assessed Valuation:
Redevelopment Incremental Valuation:
Adjusted Assessed Valuation:
$10,894,048,902
2,360,528,567
$8,533,520,335
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Marin County Certificates of Participation
Total Debt
17.509%
City's Share of
OVERLAPPING TAX AND ASSESSMENT DEBT:
6/30/2015
%Applicable (1)
Debt 6/30/15
Marin Community College District
$218,635,000
17.540%
$38,348,579
San Rafael High School District
42,595,315
78.319%
33,360,225
Tamalpais Union High School District
132,610,000
0.080%
106,088
Dixie School District
20,335,810
66.291%
13,480,812
Ross School District
19,799,941
1.516%
300,167
Ross Valley School District
40,269,071
0.014%
5,638
San Rafael School District
50,234,835
83.604%
42,073,575
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT
5,997,148
$127,675,084
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Marin County Certificates of Participation
$68,906,897
17.509%
$12,064,909
Marin County Pension Obligations
103,195,000
17.509%
18,068,413
Marin County Transit District General Fund Obligations
150,627
17.509%
26,373
Marin Municipal Water District General Fund Obligations
122,544
22.432%
27,489
Marin Community College District Certification of Participation
2,600,834
17.540%
456,186
San Rafael School District Certificates of Participation
3,650,000
83.604%
3,051,546
City of San Rafael General Fund Obligations
8,609,376
100.000%
8,609,376 (2)
City of San Rafael Pension Obligations
4,490,000
100.000%
4,490,000
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT
$46,794,292
Less: City of San Rafael lease revenue bonds supported by parking revenues
5,997,148
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT
40,797,144
OVERLAPPING TAX INCREMENT DEBT (Successor Agency)
20,154,004
100.000%
20,154,004
TOTAL GROSS DIRECT DEBT
$13,099,376
TOTAL NET DIRECT DEBT
$7,102,228
TOTAL OVERLAPPING DEBT
$181,524,004
GROSS COMBINED TOTAL DEBT
$194,623,380 (3)
NET COMBINED TOTAL DEBT
$188,626,232
(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 and $508,687 PG&E notes.
(3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non -
bonded capital lease obligations.
Ratios to 2014-15 Assessed Valuation:
Total Overlapping Tax and Assessment Debt
1.17%
Total Gross Direct Debt ($13,009,376)
0.12%
Total Net Direct Debt ($7,102,228)
0.07%
Gross Combined Total Debt
1.79%
Net Combined Total Debt
1.73%
Ratios to Redevelopment Incremental Valuation ($2,360,528,567):
Total Overlapping Tax Increment Debt 0.85%
Source: MuniServices
149
CITY OF SAN RAFAEL
COMPUTATION OF LEGAL BONDED DEBT MARGIN
June 30, 2015
ASSESSED VALUATION:
BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a)
LESS AMOUNT OF DEBT SUBJECT TO LIMIT:
LEGAL BONDED DEBT MARGIN
$10,894,048,902
408,526,834
4,943,667
$403,583,167
Source: City of San Rafael's Finance Department
150
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
2006
$311,727,085
$42,585,548
$269,141,537
15.82%
2007
337,021,287
41,963,145
295,058,142
14.22%
2008
357,440,434
39,703,435
317,736,999
12.50%
2009
376,420,238
37,210,608
339,209,630
10.97%
2010
381,164,135
36,023,646
345,140,489
10.44%
2011
376,057,576
38,150,819
337,906,757
11.29%
2012
378,920,952
4,659,000
374,261,952
1.24%
2013
374,950,995
4,659,000
370,291,995
1.26%
2014
388,010,886
5,018,839
382,992,047
1.31%
2015
408,526,834
4,943,667
403,583,167
1.22%
NOTE: (a) California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted prior to the
change in basing assessed value to
full market value when it was previously
25% of market value. Thus, the limit
shown as 3.75%
is one-fourth
Source: City of San Rafael's Finance Department
150
CITY OF SAN RAFAEL
REVENUE BOND COVERAGE
PARKING FACILITY
LAST TEN FISCAL YEARS
4.00
3.00
2.00
1.00
0.00
2006 2007 2008 2009 2010 2011 2012 2013
1 Coverage r
2014 2015
Source: San Rafael Finance Department Revenue and Expenditure Status Reports
151
Debt Service Requirements
Net Revenue
Fiscal
Gross
Operating
Available for
Year
Revenue (1)
Expenses (2)
Debt Service
Principal
Interest
Total
Coverage
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
3,994,446
3,121,964
872,481
310,000
240,012
550,012
1.59
2014
4,489,769
3,716,552
773,217
245,000
210,063
455,063
1.70
2015
5,180,554
4,031,161
1,149,393
245,000
205,163
450,163
2.55
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: San Rafael Finance Department Revenue and Expenditure Status Reports
151
CITY OF SAN RAFAEL
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
23.00%
22.50%
22.00%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
■ City Population as a % of County Population
$50
N
'O
C
N $45 -
0
0
$40
$35
$30
+— Per Capita Personal Income (2) 1
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
10.00%
7.50%
5.00%
2.50% -
0.06%
. ;:2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
p Personal Income (2) (in thousands
■ 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) 2006-2009 Income Data—Demographic Estimates are based on the last available census. Projections are developed
by incorporating all of the prior census data released to date.
2010 and later- Income - US Census Bureau, most recent American Community Survey
(3) Unemployment Data: California Employment Development Department
152
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
2006
57,349
$2,544,221
$44,400
4.20%
253,341
22.64%
2007
58,047
2,663,922
46,152
4.40%
255,982
22.68%
2008
58,235
2,703,213
46,557
5.60%
257,406
22.62%
2009
58,363
2,642,978
45,288
9.30%
258,618
22.57%
2010
58,822
2,317,704
39,402
9.80%
260,651
22.57%
2011
58,136
2,389,222
40,978
8.80%
254,692
22.83%
2012
58,305
2,438,291
41,908
5.50%
254,790
22.88%
2013
58,182
2,538,895
43,351
4.70%
254,007
22.91%
2014
58,566
2,621,228
44,531
4.50%
255,846
22.89%
2015
59,214
n/a
n/a
n/a
258,972
22.87%
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) 2006-2009 Income Data—Demographic Estimates are based on the last available census. Projections are developed
by incorporating all of the prior census data released to date.
2010 and later- Income - US Census Bureau, most recent American Community Survey
(3) Unemployment Data: California Employment Development Department
152
CITY OF SAN RAFAEL
PRINCIPAL EMPLOYERS
FISCAL YEAR 2014-2015
LAST SEVEN CALENDAR YEARS
# - Number of employees
(A) percentage of total employment
Note: Total employment in the City of San Rafael as of June 2015 was 32,700
*-'Me number of total employment for the City is available for the last seven fiscal years only.
Source: State of Califomia, Employment Development Department, Labor Market Information Division
North Bay Business Journal, Annual Book of Lists
153
2015*
2014*
2013*
2012*
2011*
2010*
2009*
Employer
_ #
(A)
#
(A)
#
(A)
#
(A)
#
(A)
#
(A)
#
(A)
Kaiser Permanente
1,575
4.82%
1,637
5.26%
1,756
5.74%
1,803
6.68%
1,330
4.93%
1,311
4.88%
2,267
8.15%
Autodesk, Inc
763
2.33%
1,095
3.52%
1,000
3.27%
878
3.25%
928
3.44%
1,028
3.83%
1,200
4.32%
Golden Gate Bridge Highway & Transp. Dist
-
-
-
-
-
-
-
-
-
-
-
-
828
2.98%
San Rafael Elementary/High Schools Dist(s)
650
1.99%
600
1.93%
600
1.96%
600
2.22%
600
2.22%
600
223%
575
2.07%
City of San Rafael
581
1.78%
666
2.14%
643
2.10%
521
1.93%
592
2.19%
630
2.34%
633
2.28%
MHN
-
350
1.14%
350
1.30%
350
1.30%
350
130%
-
-
Dominican University of California
422
1.29%
354
1.14%
347
1.13%
346
1.28%
336
1.24%
370
1.38%
508
1.83%
Bradley Real Estate
418
1.28%
385
1.24%
369
1.21%
376
1.39%
350
1.30%
-
-
-
-
Macy's
380
1.16%
380
122%
380
1.24%
380
1.41%
450
1.67%
445
1.66%
-
-
Wells Fargo Bank
306
0.94%
308
0.99%
334
1.09%
-
-
-
-
-
-
-
Fair Issac Corp
300
0.92%
300
0.96%
-
-
-
-
-
-
-
350
1.26%
Community Action Marin
225
0.69%
300
0.96%
300
0.98%
-
-
-
-
-
-
-
Safeway
-
-
-
-
-
-
841
3.11%
452
1.67%a
452
1.68%
-
Comcast
-
-
620
2.30%
619
2.29%
619
2.30%
-
-
Guide Dogs for the Blind
-
-
-
-
-
-
287
1.07%
-
-
YMCA
-
-
-
-
348
1.25%
San Rafael City High School District
-
-
-
-
-
-
250
0.90%
Ghilotti Bros.
-
-
-
-
-
240
0.86%
Totals
5,620
17.19%
6,025
19.37%
6,079
19.87%
6,715
24.87%
6,007
22.25%
6,092
22.67%
7,199
25.90%
# - Number of employees
(A) percentage of total employment
Note: Total employment in the City of San Rafael as of June 2015 was 32,700
*-'Me number of total employment for the City is available for the last seven fiscal years only.
Source: State of Califomia, Employment Development Department, Labor Market Information Division
North Bay Business Journal, Annual Book of Lists
153
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
W
w 200.00
150.00
100.00
50.00
0.00
Function
General Government
Public Safety
Public Works and Parks
Community Development
Culture and Recreation
Total
IJ
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source; City of San Rafael's Finance Department
❑ General Government ■ Public Safety
• Public Works and Parks ❑ Community Development
® Culture and Recreation
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
53.71 59.38 59.88 58.88 56.88 54.35 55.23 53.23 55.11 58.11
188.86 189.00 186.00 183.00 165.00 166.00 162.00 163.00 168.00 171.75
74.80 76.80 78.80 78.80 60.80 62.80 62.00 60.00 61.00 62.00
26.43 31.00 34.50 34.50 26.75 26.75 18.25 18.25 17.80 17.80
77.49 80.22 85.90 85.90 83.49 89.82 81.56 80.76 83.66 84.23
421.29 436.40 445.08 441.08 392.92 399.72 379.04 375.24 385.57 393.89
155
CITY OF SAN RAFAEL
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Function/Program
Public safety:
Fire:
Inspection permit issued
Police:
Police calls for service
Law violations:
Part I crimes
Physical arrests (adult and juvenile)
Traffic violations
Parking violations
Public works
Street resurfacing (miles) (Eng Div)
Potholes repaired (square miles)
Asphalt used for street repairs (tons)
Culture and recreation:
Recreation class participants
Items in collection (thousands)
Library:
Items in collection (thousands)
Total items borrowed (thousands)
Note: N/A denotes information not available.
2006 2007 2008 2009
N/A
143
217
196
N/A
43,480
43,488
42,227
N/A
2,557
2,314
2,352
N/A
3,809
4,182
4,487
N/A
5,197
9,241
5,777
33,610
36,228
42,481
44,913
1.08
N/A
4.95
2.77
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
8,000
8,000
8,000
8,000
123.12
124.46
N/A
124.40
333.15
359.41
N/A
N/A
156
2010 2011 2012 2013 2014 2015
307
294
282
307
261
282
42,227
39,512
39,537
42,707
51,261
55,805
2,352
2,180
2,101
2,523
2,289
2,533
4,487
3,102
2,981
2,951
3,227
3,450
5,777
8,190
4,048
3,448
4,498
4,168
42,806
34,590
32,492
30,881
38,814
36,398
2.77
7.40
N/A
2.70
9.00
6.40
N/A
N/A
N/A
N/A
N/A
N/A
N/A
10,809
178.9
7,500
10,700
11,000
9,524
9,000
12,075
7,082
9,857
10,023
151.88
158.30
159.18
125.92
168.62
127.76
371.12
435.66
366.46
392.23
478.96
443.64
157
CITY OF SAN RAFAEL
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
2006 2007 2008
Function/Program
Public safety:
Fire stations
Police stations
Police Fleet
Public works
Miles of streets
Street lights
Parking District lights
Traffic Signals
Culture and recreation:
Community services:
City parks
City parks acreage
Playgrounds
City trails
Community gardens
Community centers
Senior centers
Sports centers
Performing arts centers
Swimming pools
Tennis courts
Basketball Courts
Baseball/softball diamonds
Soccer/football fields
Library:
City Libraries
Wastewater:
Miles of sanitary sewers
(1) Source: City of San Rafael's Finance Department
158
2009
6
6
6
6
1
1
1
1
173
173
173
173
4,435
4,435
4,435
4,435
89
89
89
89
19
19
20
20
41
41
42
42
13
13
14
14
15
20
20
20
1
1
1
1
4
4
4
4
0
0
0
0
0
0
0
0
0
0
0
0
1
1
1
1
10
10
10
10
5
5
5
5
5
5
5
5
2
2
2
2
1
1
1
2
179
179
179
179
2010 2011 2012 2013 2014 2015
6 6 6 6 6 6
1 1 1 1 1 1
173
173
173
173
173
173
4,435
4,435
4,435
4,435
4,435
4,435
89
89
89
89
89
89
20
20
20
20
20
20
42
42
42
42
42
42
14
14
14
14
14
14
20
20
20
20
20
20
1
1
1
1
1
1
4
4
4
4
4
4
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
1
1
1
1
1
10
10
10
10
10
10
5
5
5
5
5
5
5
5
5
5
5
5
2
2
2
2
2
2
2
2
2
2
2
2
179
179
179
179
145
145
159
CITY OF SAN RAFAEL
SINGLE AUDIT REPORT
FOR THE YEAR ENDED JUNE 30, 2015
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CITY OF SAN RAFAEL
SINGLE AUDIT REPORT
For The Year Ended June 30, 2015
TABLE OF CONTENTS
Page
Schedule of Findings and Questioned Costs.............................................................................. 1
Section I - Summary of Auditor's Results........................................................................... 1
Section II — Financial Statement Findings........................................................................... 2
Section III — Federal Award Findings and Questioned Costs ............................................. 2
Section IV - Status of Prior Year Findings
and Questioned Costs.................................................................................................... 2
Schedule of Expenditures of Federal Awards............................................................................ 4
Notes to Schedule of Expenditures of Federal Awards............................................................. 7
Independent Auditor's Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on An Audit Of Financial
Statements Performed in Accordance with Government Auditing Standards ....................... 9
Independent Auditor's Report on Compliance for Each Major Federal Program;
Report on Internal Control Over Compliance; and Report On The
Schedule of Expenditures of Federal Awards Required By OMB Circular A-133 ...........11
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CITY OF SAN RAFAEL
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For The Year Ended June 30, 2015
SECTION I—SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued: Unmodified
Internal control over financial reporting:
• Material weakness(es) identified? Yes X No
None
• Significant deficiency(ies) identified? X Yes Reported
Noncompliance material to financial statements noted? Yes X No
Federal Awards
Type of auditor's report issued on compliance for major
programs: Unmodified
Internal control over major programs:
• Material weakness(es) identified? Yes X No
None
• Significant deficiency(ies) identified? Yes X Reported
Any audit findings disclosed that are required to be reported
in accordance with section 510(a) of OMB Circular A-133? Yes X No
Identification of major programs:
CFDA#(s) Name of Federal Program or Cluster
20.205 Highway Planning and Construction
20.600 State and Community Highway Safety
Dollar threshold used to distinguish between type A and type B programs: $300.000
Auditee qualified as low-risk auditee? X Yes No
1
SECTION II — FINANCIAL STATEMENT FINDINGS
Our audit disclosed significant deficiencies, but no material weaknesses or instances of noncompliance material
to the basic financial statements. We have also issued a separate Memorandum on Internal Control dated
September 30, 2015 which is an integral part of our audits and should be read in conjunction with this report.
SECTION III — FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
Our audit did not disclose any fmdings or questioned costs required to be reported in accordance with
section 510(a) of OMB Circular A-133.
SECTION IV - STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
Financial Statement Prior Year Findings
There were no prior year Financial Statement Findings reported.
FederalAward Prior Year Findings and Ouestioned Costs
There were no prior year Federal Award Findings and Questioned Costs reported.
2
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CITY OF SAN RAFAEL
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2015
Federal Grantor/
Pass -Through Grantor/Program or Cluster Title
U.S. Department of Housing and Urban Development, Pass -Through Program
Pass -Through County of Marin, California
Community Development Block Grants/ Entitlement Grants
Childcare
ADA / DOJ Compliance - Curb Ramps
ADA / DOJ Compliance - Curb Ramps
Total U.S. Department of Housing and Urban Development
U.S. Department of Health and Human Services, Pass -Through Program
Pass -Through State of Califomia Health and Human Services Agency
Medical Assistance Program
Department of Health Care Services - Ground Emergency Medical Transportation
Pass -Through County of Marin, California
Special Programs for the Aging Title III,
Part B - Grants for Supportive Services and Senior Centers
Substance Abuse and Mental Health Services Projects of Regional and National Significance
Strategic Prevention Framework State Incentive Grant - Alcohol Compliance Team
Total U.S. Department of Health and Human Services
U.S. Department of Transportation, Pass -Through Programs
Pass -Through State of California Department of Transportation
Highway Planning and Construction
Francisco Boulevard East Improvements
Puerto Suello Transit Center Connector
SR Downtown Integrated Transit Center Study
SR Downtown Parking and Wayfinding Study
Safe Routes to School - Davidson School FY13
Subtotal for Highway Planning and Construction
Metropolitan Transportation Planning and State and Non -Metropolitan Planning and Research
Del Presidio Blvd. - Pt. San Pedro Resurfacing
State and Community Highway Safety
2nd Street at Grand Ave Intersection Modification
Pass -Through California Office of Traffic Safety
State and Community Highway Safety
Selective Traffic Enforcement Program FY2014
Selective Traffic Enforcement Program FY2015
Subtotal for State and Community Highway Safety
Pass -Through Califomia Office of Traffic Safety
Minimum Penalties for Repeat Offenders for Driving While Intoxicated
Sobriety Checkpoint Grant FY13-14
Avoid Grant FY13-14
Avoid Grant FY14-15
Sub -total for Minimum Penalties for Repeat Offenders for Driving While Intoxicated
Total U.S. Department of Transportation
El
Federal Pass -Through
CFDA Identifying Federal
Number Number Expenditures
14.218 HUD -04527-01-14 $16,200
14.218 HUD -04536-01-08 210,642
14.218 HUD -04536-01-13 54,826
281,668
93.778 SFY 2013/14 77,055
93.044 10-204 8,332
93.243 2117 82,664
168,051
20.205
04 -5043R -013-N
24,936
20.205
04 -5043R -017-N
332,084
20.205
RSTPL-6406(014)
47,135
20.205
RSTPL-6406(014)
12,967
20.205
SRTSL 5043 (034)
348,210
765,332
20.505 STPL-5043 (035) 43,565
20.600 HISPL-5043 (037) 51,633
20.600 PT1499 12,033
20.600 PT1585 133,089
196,755
20.608 SC14381 22,496
20.608 AL1456 67,599
20.608 AL1505 113,474
203,569
1,209,221
(Continued)
CITY OF SAN RAFAEL
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2015
G1
Federal
Pass -Through
Federal Grantor/
CFDA
Identifying
Federal
Pass -Through Grantor/Program or Cluster Title
Number
Number
Expenditures
U.S. Department of Justice, Direct Programs
Edward Byrne Memorial Justice Assistance Grant (JAG) Program
Gang Enforcement Grant 2011
16.738
11,799
Bulletproof Vest Partnership (BVP) Grant Program
PD Vest Grant 2014
16.607
3,894
Total U.S. Department of Justice
15,693
U.S. Department of Homeland Security, Pass -Through Programs
Pass -Through County of Marin, California
Homeland Security Grant Program
Marin County CERT 2013
97.067
2013-001110
24,144
Marin County CERT 2014
97.067
2014-00093
18,175
Mobile ALPR
97.067
2014-00093
38,640
Total U.S. Department of Homeland Security
80,959
National Endowment for the Humanities, Pass -Through Programs
Museums for America
Pass -Through California State Library
EnvisionZing a New Library
45.310
40-8435
15,805
Total Federal Expenditures
$1,771,397
G1
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CITY OF SAN RAFAEL
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For The Year Ended June 30, 2015
NOTE 1 -REPORTING ENTITY
The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal awards for
the City of San Rafael, California, and its component units as disclosed in the notes to the Basic
Financial Statements, except for federal awards of the San Rafael Sanitation District (District). Federal
awards expended by this entity, if any, are excluded from the Schedule and are subject to a separate
Single Audit performed by other auditors.
NOTE 2 -BASIS OF ACCOUNTING
Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts
and reported in the financial statements, regardless of the measurement focus applied. All governmental
funds and agency funds are accounted for using the modified accrual basis of accounting. All proprietary
funds are accounted for using the accrual basis of accounting. Expenditures of Federal Awards reported on
the Schedule are recognized when incurred.
NOTE 3 -DIRECT AND INDIRECT (PASS-THROUGH) FEDERAL AWARDS
Federal awards may be granted directly to the City by a federal granting agency or may be granted to other
government agencies which pass-through federal awards to the City. The Schedule includes both of these
types of Federal award programs when they occur.
This Page Left Intentionally Blank
U/, MAZE
INDEPENDENT AUDITOR'S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENTAUDITING STANDARDS
To the Honorable Members of the City Council
City of San Rafael, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the basic financial statements of the City of San
Rafael, as of and for the year ended June 30, 2015, and the related notes to the financial statements, and
have issued our report thereon dated September 30, 2015. Our report included an emphasis of a matter
paragraph disclosing the implementation of new accounting principles and prior period adjustments.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered City's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of City's internal control. Accordingly, we do not
express an opinion on the effectiveness of City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the City's financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may
exist that were not identified. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified. We identified certain deficiencies in internal
control, we consider to be significant deficiencies as listed on the Schedule of Significant Deficiencies
included as part of our separately issued Memorandum on Internal Control dated September 30, 2015
which is an integral part of our audits and should be read in conjunction with this report.
T 925.930.0902
Accountancy Corporation F 925.930.0135
3478 Buskirk Avenue, Suite 215 e maze@mazeassociates.com
Pleasant Hill, CA 94523 q w mazeassociates.com
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
City's response to the findings identified in our audit are described in our separately issued
Memorandum on Internal Control dated September 30, 2015 which is an integral part of our audits and
should be read in conjunction with this report. City's response was not subjected to the auditing
procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control and compliance. Accordingly,
this communication is not suitable
for any other purpose.
Pleasant Hill, California
September 30, 2015
10
U/, M A&ASCZTE
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL
PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON
THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY OMB
CIRCULAR A-133
To the Honorable Members of the City Council
City of San Rafael, California
Report on Compliance for Each Major Federal Program
We have audited City of San Rafael's compliance with the types of compliance requirements described in
the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of
the City's major federal programs for the year ended June 30, 2015. The City's major federal programs
are identified in the summary of auditor's results section of the accompanying schedule of findings and
questioned costs.
Management's Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and
grants applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the City's major federal programs
based on our audit of the types of compliance requirements referred to above. We conducted our audit of
compliance in accordance with auditing standards generally accepted in the United States of America;
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations. Those standards and OMB Circular A-133 require that we
plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the City's compliance
with those requirements and performing such other procedures as we considered necessary in the
circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major
federal program. However, our audit does not provide a legal determination of the City's compliance.
Opinion on Each Major Federal Program
In our opinion, the City complied, in all material respects, with the types of compliance requirements
referred to above that could have a direct and material effect on each of its major federal programs for
the year ended June 30, 2015.
T 925.930.0902
Accountancy Corporation F 925.930.0135
3478 Buskirk Avenue, Suite 215 E maze@mazeassociates.com
Pleasant Hill, CA 94523 11 w mazeassociates.com
Report on Internal Control Over Compliance
Management is responsible for establishing and maintaining effective internal control over compliance with
the types of compliance requirements referred to above. In planning and performing our audit of
compliance, we considered the City's internal control over compliance with the types of requirements that
could have a direct and material effect on each major federal program to determine the auditing procedures
that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each
major federal program and to test and report on internal control over compliance in accordance with OMB
Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control
over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal
control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a deficiency,
or combination of deficiencies, in internal control over compliance, such that there is a reasonable
possibility that material noncompliance with a type of compliance requirement of a federal program will not
be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type
of compliance requirement of a federal program that is less severe than a material weakness in internal
control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing
of internal control over compliance and the results of that testing based on the requirements of OMB
Circular A-133. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures ofFederalAwards Required by OMB Circular A-133
We have audited the basic financial statements of the City as of and for the year ended June 30, 2015, and
have issued our report thereon dated September 30, 2015, which contained an unmodified opinion on those
financial statements. Our audit was conducted for the purpose of forming an opinion on the financial
statements as a whole. The accompanying schedule of expenditures of federal awards is presented for
purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the
financial statements. Such information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the financial statements. The
information has been subjected to the auditing procedures applied in the audit of the financial statements
and certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the financial statements or to the financial
statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is
fairly stated in all material respects in relation to the financial statements as a whole.
Y(A Jt- , 'M.C�
Pleasant Hill, California
September 30, 2015
12
M ACZTE
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED UPON PROCEDURES FOR
COMPLIANCE WITH THE PROPOSITION 111
2015-2016 APPROPRIATIONS LE IIT INCREMENT
Honorable Mayor and Members of the City Council
City of San Rafael, California
We have performed the procedures below to the Appropriations Limit Worksheet which were agreed to by
the City of San Rafael for the year ended June 30, 2015. These procedures, which were suggested by the
League of California Cities and presented in their Article XIlIB Appropriations Limitation Uniform
Guidelines, were performed solely to assist you in meeting the requirements of Section 1.5 of Article )=
of the California Constitution. Management is responsible for the Appropriations Limit Worksheet. This
agreed-upon procedures engagement was conducted in accordance with attestation standards established by
the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the
responsibility of the City. Consequently, we make no representation regarding the sufficiency of the
procedures described below either for the purpose for which this report has been requested or for any other
purpose.
The procedures you requested us to perform and our findings were as follows:
A. We obtained the Appropriations Limit Worksheet and determined that the 2015-2016
Appropriations Limit of $117,140,576 and annual adjustment factors were adopted by Resolution of
the City Council. We also determined that the population and inflation options were selected by a
recorded vote of the City Council.
B. We recomputed the 2015-2016 Appropriations Limit by multiplying the 2014-2015 Prior Year
Appropriations Limit by the Total Growth Factor and then reducing the amount by $4,743,389,
representing the effect of Measure I revenue. The provision of Measure I that provided for the
inclusion of its revenues in the Appropriation Limit Calculation expired at the end of 2015. We
recomputed the Total Growth Factor by multiplying the cost of living option by the population
option.
C. For the Appropriations Limit Worksheet, we agreed the Per Capita Income, City Population and
County Population Factors to California State Department of Finance Worksheets.
We were not engaged to, and did not, conduct an audit, the objective of which would be the expression of an
opinion on the Appropriations Limit Worksheet. Accordingly, we do not express such an opinion. Had we
performed additional procedures, other matters might have come to our attention that would have been
reported to you.
This report is intended solely for the information and use of management and the City Council; however,
this restriction is not intended to limit the distribution of this report, which is a matter of public record.
Pleasant Hill, California
September 30, 2015
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
T 925.930.0902
F 925.930.0135
E maze@mazeassociates.com
w mazeassociates.com
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
AND
REQUIRED COMMUNICATIONS
FOR THE YEAR ENDED JUNE 30, 2015
This Page Left Intentionally Blank
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
AND
REQUIRED COMMUNICATIONS
For The Year Ended June 30, 2015
Table of Contents
Page
Memorandum on Internal Control................................................................................................... 1
Schedule of Significant Deficiencies...................................................................................... 3
Schedule of Other Matters....................................................................................................... 7
Required Communications..............................................................................................................11
Significant Audit Findings..........................................................................................................11
AccountingPolicies..............................................................................................................11
Unusual Transactions, Controversial or Emerging Areas..................................................12
Estimates................................................................................................................................12
Disclosures.............................................................................................................................13
Difficulties Encountered in Performing the Audit..............................................................13
Corrected and Uncorrected Misstatements..........................................................................13
Disagreements with Management...................................................................
Management Representations................................................................................................13
Management Consultations with Other Independent Accountants....................................13
Other Audit Findings or Issues..............................................................................................14
Other Information Accompanying the Financial Statements.....................................................14
This Page Left Intentionally Blank
M ACZTE
MEMORANDUM ON INTERNAL CONTROL
To the City Council of
the City of San Rafael, California
We have audited the basic financial statements of the City of San Rafael for the year ended June 30, 2015,
and have issued our report thereon dated September 30, 2015. Our opinions on the basic financial
statements and this report, insofar as they relate to San Rafael Sanitation District (District), are based
solely on the report of other auditors. In planning and performing our audit of the basic financial
statements of the City of San Rafael, in accordance with auditing standards generally accepted in the
United States of America, we considered the City's internal control over financial reporting (internal
control) as a basis for designing our auditing procedures that are appropriate in the circumstances for the
purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on
the effectiveness of the City's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist and that
were not identified. In addition, because of inherent limitations in internal control, including the
possibility of management override of controls, misstatements due to error or fraud may occur and not be
detected by such controls. However, as discussed below, we identified certain deficiencies in internal
control that we consider to be significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the City's financial statements will not be prevented, or detected and corrected on a timely basis. We
did not identify any deficiencies in internal control that we consider to be material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance. We consider the deficiencies in internal control included on the Schedule of Significant
Deficiencies to be significant deficiencies.
Included in the Schedule of Other Matters are recommendations not meeting the above definitions that we
believe are opportunities for strengthening internal controls and operating efficiency.
Management's written responses included in this report have not been subjected to the audit procedures
applied in the audit of the financial statements and, accordingly, we express no opinion on them.
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
T 925.930.0902
F 925.930.0135
E maze@mazeassociates.com
w mazeassociates.com
This communication is intended solely for the information and use of management, City Council, others
within the organization, and agencies and pass-through entities requiring compliance with Government
Auditing Standards, and is not intended to be and should not be used by anyone other than these specified
parties.
na C
Pleasant Hill, California
September 30, 2015
2
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCFIEDULE OF SIGNIFICANT DEFICIENCIES
2015-1: Accuracy of Special Assessment Tag Rolls
Criteria: Currently, there are seven special assessments applicable to the City. On behalf of the City, the
County maintains a database for each of these assessments. These assessments are included in the
applicable tax bills sent to the property owners served by the City. The City is responsible for ensuring
that tax revenue is correctly calculated, charged, and received.
Condition: In June of 2015, during the Finance Department's review of the senior exemptions for the
Library Parcel, it was discovered that there were errors in certain commercial properties tax assessments.
Subsequently in July 2015, the Finance Department conducted a comprehensive review of the tax roll
information provided by the County for the fiscal year 2015-16 assessment. The review focused
primarily on commercial and industrial properties that had not been charged. During the review, the
Finance staff found that there were inconsistencies (missing or conflicting data) among its tax rolls. In
addition, it was discovered that some properties were undercharged due to new or existing developments
which were not reflected on the tax rolls or properties which were miscoded and or listed as vacant.
Effect: The City submitted the following corrections to the County, for the fiscal year 2015-16
assessment:
Cause: Once a week, the City provides building permits, plans and related information regarding parcel
changes or updates to the County. It is assumed that the County uses the information to update the City's
various tax rolls. Every July, the County sends the City the Preliminary Tax Roll report for the coming
assessment. The City has approximately thirty days to submit corrections of the tax roll to the County.
Due to limited staff resources and the format of the Preliminary Tax Roll prior to 2015, the City had not
comprehensively verified information on the Preliminary Tax Roll in prior years.
Recommendation: The City should review all if its special assessments collected through the County tax
rolls for accuracy.
Since most of the changes in assessments are triggered by modification or improvement of the parcels, the
City should establish interdepartmental procedures so that a centralized log is kept to keep track of parcel
changes or updates. This log should be used as supplemental information to the permits and building
plans that are already provided in the regular dissemination of information to the County. Annually, the
City should review the Preliminary Tax Roll report sent by the County. As part of the review,
information on the Tax Roll should be compared to the centralized log to ensure that changes are made
throughout the various tax rolls. In addition, if the City does not have resources to verify all information
on the Preliminary Tax Roll report, a representative sample should be pulled every year to ensure that
information on the report is consistent with the City's records of the properties.
Total Assessment
Corrections
%
2015/16
Submitted
Change
San Rafael Paramedic
$3,860,412
$474,278
12.29%
CSA #13 Paramedic
52,841
-
0.00%
CSA #19 Paramedic
226,322
-
0.00%
Marinwood Paramedic
155,454
-
0.00%
Run Off Fee
866,077
88,263
10.19%
Inspection Fees
345,959
9,921
2.87%
Library Parcel
869,409
(4,572)
-0.53%
$6,376,474
$567,890
8.91%
Cause: Once a week, the City provides building permits, plans and related information regarding parcel
changes or updates to the County. It is assumed that the County uses the information to update the City's
various tax rolls. Every July, the County sends the City the Preliminary Tax Roll report for the coming
assessment. The City has approximately thirty days to submit corrections of the tax roll to the County.
Due to limited staff resources and the format of the Preliminary Tax Roll prior to 2015, the City had not
comprehensively verified information on the Preliminary Tax Roll in prior years.
Recommendation: The City should review all if its special assessments collected through the County tax
rolls for accuracy.
Since most of the changes in assessments are triggered by modification or improvement of the parcels, the
City should establish interdepartmental procedures so that a centralized log is kept to keep track of parcel
changes or updates. This log should be used as supplemental information to the permits and building
plans that are already provided in the regular dissemination of information to the County. Annually, the
City should review the Preliminary Tax Roll report sent by the County. As part of the review,
information on the Tax Roll should be compared to the centralized log to ensure that changes are made
throughout the various tax rolls. In addition, if the City does not have resources to verify all information
on the Preliminary Tax Roll report, a representative sample should be pulled every year to ensure that
information on the report is consistent with the City's records of the properties.
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF SIGNIFICANT DEFICIENCIES
2015-1: Accuracy of Special Assessment Tax Rolls (Continued)
Management's Response: Management agrees with the characterization of this issue and the
recommendations. City staff is continuing with the analysis and correction of assessments for the current
tax year (FY2015-16).
The City will collaborate with the County to identify the optimal process for updating property types (Use
Codes) and square footage metrics in a real-time manner that ensures that this information is properly
incorporated into the City's special assessments, and accurate upon the preparation of the Preliminary Tax
Rolls. The ongoing process will evaluate whether changes to parcels have occurred, including status of
parcel (vacant, residential, commercial, etc.), number of living units, and building/land square footage.
Finance staff will review the Preliminary Tax Rolls annually, using information provided by Community
Development and Public Works, to verify that changes that have taken place during the past year have
been correctly applied to the assessments. Staff will also sample parcels that have not undergone changes,
in order to verify the continued accuracy of City tax assessments on these parcels.
2015 -- 2: Internal Control over Employee Benefits and Claims Activities
Criteria: Changes made to employee benefits in the City's Financial System, Eden, should be reviewed
by a second employee who has the specialty to conduct such review. New benefit line items created in
Eden should also be reviewed for accurate coding. In addition, payments processed by a third -party
administrator (TPA) should be reviewed and reconciled for proper authorization and accuracy.
Condition: During our audit, we noted that the City has not established formal review procedures for
employee benefit changes made to the personnel database in Eden. The Human Resources Department
(HR) is responsible for making changes to employee benefits in the personnel database in Eden. Once
changes are made, HR sends a memo, along with employee Personnel Actions Forms, and other relevant
data, to the Finance Department. Finance Department then uses the information to process payroll.
Occasionally, when Finance notices any discrepancies between what is reported in Eden and the
employees benefit information during payroll processing, HR will be notified. However, the City's
current practice does not require a qualified employee to review data changed in the personnel database.
In addition, when a new line item is set up in the personnel database, such as a new benefit, the City does
not have any procedures established requiring a review by a qualified employee to ensure that the
appropriate categories, such as tax exempt status, have been selected.
Furthermore, the City contracts with TPAs to administer transactions of the Workers' Compensation,
General Liability, Dental, and 125 Flexible Employee Benefits activities. Payments relating to these
activities are processed by the TPAs. Monthly, the Finance Department performs reconciliations to
ensure that activities reported to the City by the TPAs reconciles with the related bank accounts.
However, this reconciliation only verifies the existence of these activities, not their validity. In addition
to the monthly bank reconciliation, certain control procedures are performed by City staff:
For Workers' Compensation, HR reviews reports from the TPA on a monthly basis and checks
for any unusual items. Any unusual items are followed up with the TPA. Monthly report is then
forwarded to Finance. Final claim settlements are traced to City's authorization.
4
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF SIGNIFICANT DEFICIENCIES
2015--2: Internal Control over Employee Benefits and Claims Activities (Continued)
• For General Liability, reports from TPA are reviewed by the City Attorney's Office. Any
discrepancies are followed up with the TPA. Final claim settlements are traced to City's
authorization.
• For Dental and 125 Flexible Benefits, City staff verifies whether the claimants stated on the TPA
reports are current City employees.
Although various control activities are performed by the City to monitor activities in these accounts, the
City does not verify the validity of each transaction processed by these TPAs.
Effect: Without a proper review of changes made to personnel database, errors may not be detected in a
timely manner.
For the Workers' Compensation, General Liability, Dental, and 125 Flexible Employee Benefits accounts,
the procedures used by these TPAs are outside the scope of City oversight and staff review, nor are these
controls part of the scope of an audit of the City's financial statements. Without, procedures to gain
comfort that these TPAs are performing their functions in a prudent manner, errors made by the TPAs
many not be detected in a timely manner.
Cause: Assumptions were made amongst departments that changes in Eden were reviewed.
Additionally, City staff was unaware that their current procedures in monitoring the Workers'
Compensation, General Liability, Dental, and 125 Flexible Employee Benefits activities managed by the
TPAs are insufficient.
Recommendation: The City should develop review procedures for changes made to the personnel
database. A qualified City employee who has knowledge of human resources rules and regulations
should be designated to conduct the review. When discrepancies or errors in payroll processing are
brought to the City's attention, we recommend the City consider performing sampling tests to determine
if the discrepancy is an isolated incident, or needs to be investigated further as a system -wide error.
Additionally, we recommend the City establish review procedures to ensure that Workers' Compensation,
General Liability, Dental, and 125 Flexible Employee Benefits payments processed by TPAs are valid.
The City can achieve this in several ways. It can review each transaction to ensure that the transaction is
either authorized by the City (such as claim settlement) or reasonable in nature. Alternative, special
audits can be performed, either by City staff or a consultant, to determine adequacy of controls and to
verify the data produced. A third option is to review Service Auditor's Reports of these TPAs. A Service
Auditor's Report contains information regarding the service organization's controls and the effectiveness
of those controls. In the case of a Service Auditor's (Type H) Report, a user organization, such as the
City, receives a detailed description of the service organization's controls and an independent assessment
of whether the controls were placed in operation, suitably designed, and operating effectively specifically
to that user organization.
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF SIGNIFICANT DEFICIENCIES
2015--2: Internal Control over Employee Benefits and Claims Activities (Continued)
Management Response: The City will establish a new process whereby all employee record/master data
changes (e.g., initial employee set-up, benefits, bargaining unit/MOUs, salary schedules) that are entered
into the payroll system will be reviewed and approved by qualified staff to ensure the accuracy of the
payroll calculation and all requisite tax reporting requirements. HR and Finance Payroll staff will be
trained to qualify them to review these types of changes. Any discrepancies or errors in payroll
processing will be brought to the attention of the Human Resources Director and/or Finance Director, and
sampling tests will be performed to determine the scope of the discrepancy and necessary corrective
actions.
In addition, the City is undergoing a review of benefit administration processes in an effort to improve
internal controls. The City expects that changes will be made to the internal control processes as a result
of this effort.
In addition to reviewing the TPA's monthly reports, the City will institute the following additional review
procedures for Workers' Compensation and General Liability payments processed by its third party
claims administrator:
• Verify that claim settlement payments are consistent with the written authorization provided by
the City of San Rafael.
• Twice per year, select a representative sample of claims payments to review for accuracy.
• Review the Service Auditor's Type II Report to ensure the Workers Compensation TPA has
appropriate and effective internal controls.
In addition to verifying that all claimants reported by the TPA are eligible City employees, the City will
institute the following additional review procedures for Dental and Section 125 Flexible Benefits
payments processed by a third party claims administrator:
• Review the Service Auditor's Type H Report to ensure the TPA has appropriate and effective
internal controls.
0
10 131 U • � o_ ►I_I JU_ • 1� • �,Me
SCHEDULE OF OTHER MATTERS
2015 -- 3: Receivable from San Rafael Sanitary District
The San Rafael Sanitary District has no regular full-time employees. Through an original agreement
dated November 5, 1969 and various amendments, the City provides the District certain maintenance
service, general engineering services and general administrative services. In retum, the District
reimburses the City for such costs. Both entities believe that such costs should include all payroll cost of
those City staff providing services for the District, such as benefits, workers' compensation, and
contributions for pension and post -employment benefit (OPEB) trusts.
During fiscal year 2015, the City implemented two accounting pronouncements, Governmental
Accounting Statement Board Statements 68 and 71, resulting in the recognition of unfunded pension
liability on the City's financial statements. Since portion of this liability was accrued by City staff
providing services to the District, it was deemed necessary that a receivable/payable be established to
recognized the District's share of the pension liability. In addition, management of both the City and the
District determined that a receivable/payable should also be established to reflect the District's share of
the unfunded OPEB liability accrued by the same group of employees. As of June 30, 2015, the City
reported a receivable of $4,462,815 from the District for pension and OPEB related costs.
Both entities believe that the cost reimbursement described in the original agreement includes the cost of
contributions to the pension and OPEB trusts. However, due to the significant amounts involved, it is
crucial that such commitment be formalized with documented approvals from both the City Council and
the District Board. We understand that the City and the District are currently working together to
formalize the commitment. We will follow up on the progress during the next audit.
Management Response: The City agrees that commitments related to the obligation of the District with
respect to pension and OPEB costs, including the allocation of related liabilities, should be formalized. In
the course of preparing for the implementation of GASB No. 68, the City Finance Committee and the
District Board were informed of the need to measure and allocate these costs from the City to the District.
The City and District have prepared an administrative -level agreement that documents the mutual
understanding and agreement as to how these amounts are to calculated for financial reporting purposes.
The City will work with the District to revise its City Council and District Board approved operating
agreement to explicitly describe and recognize the full range of allocable personnel -related costs to the
District.
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
NEW GASB PRONOUNCEMENTS OR PRONOUNCEMENTS NOT YET EFFECTIVE
The following comment represents new pronouncements taking effect in the next few years. We have
cited them here to keep you abreast of developments:
Effective in fiscal year 2015-16
GASB 72 — Fair Value Measurement and Application
This Statement addresses accounting and financial reporting issues related to fair value measurements.
The definition of fair value is the price that would be received to sell an asset or pay to transfer a liability
in an orderly transaction between market participants at the measurement date. This Statement provides
guidance for determining a fair value measurement for financial reporting purposes. This Statement also
provides guidance for applying fair value to certain investments and disclosures related to all fair value
measurements.
GASB 76 - The Hierarchv of Generallv Accepted Accountine Principles for State and Local
Governments
The objective of this Statement is to identify, in the context of the current governmental financial
reporting environment, the hierarchy of generally accepted accounting principles (GAAP). The "GAAP
hierarchy" consists of the sources of accounting principles used to prepare financial statements of state
and local governmental entities in conformity with GAAP and the framework for selecting those
principles. This Statement reduces the GAAP hierarchy to two categories of authoritative GAAP and
addresses the use of authoritative and non -authoritative literature in the event that the accounting
treatment for a transaction or other event is not specified within a source of authoritative GAAP. This
Statement supersedes Statement No. 55, The Hierarchy of Generally Accepted Accounting Principles for
State and Local Governments.
Effective in fiscal year 2016-17:
GASB 73 —Accountine and Financial Reportine for Pensions and Related Assets That Are Not within
the Scope of GASB Statement 68
This Statement establishes requirements for defined benefit pensions that are not within the scope of
Statement No. 68, Accounting and Financial Reporting for Pensions, as well as for the assets
accumulated for purposes of providing those pensions. In addition, it establishes requirements for defined
contribution pensions that are not within the scope of Statement 68. It also amends certain provisions of
Statement No. 67, Financial Reporting for Pension Plans, and Statement 68 for pension plans and
pensions that are within their respective scopes.
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 74 —Financial Reportine for Post -employment Benefit Plans Other Than Pension Plans
The objective of this Statement is to improve the usefulness of information about post -employment
benefits other than pensions (other post -employment benefits or OPEB) included in the general purpose
external financial reports of state and local governmental OPEB plans for making decisions and assessing
accountability. This Statement results from a comprehensive review of the effectiveness of existing
standards of accounting and financial reporting for all post -employment benefits (pensions and OPEB)
with regard to providing decision -useful information, supporting assessments of accountability and inter -
period equity, and creating additional transparency.
GASB 77 — Tax Abatement Disclosures
This Statement establishes financial reporting standards for tax abatement agreements entered into by
state and local governments. The disclosures required by this Statement encompass tax abatements
resulting from both (a) agreements that are entered into by the reporting government and (b) agreements
that are entered into by other governments and that reduce the reporting government's tax revenues.
Effective in fiscal year 2017-18:
GASB 75 Accountink- and Financial Reportine for Post -employment Benefits Other Than Pensions
The primary objective of this Statement is to improve accounting and financial reporting by state and
local governments for post -employment benefits other than pensions (other post -employment benefits or
OPEB). It also improves information provided by state and local governmental employers about financial
support for OPEB that is provided by other entities. This Statement results from a comprehensive review
of the effectiveness of existing standards of accounting and financial reporting for all post -employment
benefits (pensions and OPEB) with regard to providing decision -useful information, supporting
assessments of accountability and inter -period equity, and creating additional transparency.
This Page Left Intentionally Blank
REQUIRED COMMUNICATIONS
September 30, 2015
To the City Council of
the City of San Rafael, California
U/, MAZE
We have audited the basic financial statements of the City of San Rafael for the year ended June 30, 2015.
Professional standards require that we communicate to you the following information related to our audit
under generally accepted auditing standards and, Government Auditing Standards and OMB Circular A-
133.
Significant Audit Findings
Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City of San Rafael are described in Note 1 to the financial statements. No
new accounting policies were adopted and the application of existing policies was not changed during the
year, except as follows:
The following Governmental Accounting Standards Board (GASB) pronouncements became effective,
but did not have a material effect on the financial statements:
GASB Statements No. 69 — Government Combinations and Disposals of Government
Operations
The following pronouncements became effective, and as disclosed in Note 1 to the financial statements
required a prior period restatement for the cumulative effect on the financial statements.
GASB Statement No. 68 — Accounting and Financial Reporting for Pensions. an Amendment
of GASB Statement No. 27
This Statement establishes standards for measuring and recognizing liabilities, deferred outflows
of resources, and deferred inflows of resources, and expense/expenditures. For defined benefit
pensions, this Statement identifies the methods and assumptions that should be used to project
benefit payments, discount projected benefit payments to their actuarial present value, and
attribute that present value to periods of employee service.
Note disclosure and required supplementary information requirements about pensions also are
addressed. Distinctions are made regarding the particular requirements for employers based on
the number of employers whose employees are provided with pensions through the pension plan
and whether pension obligations and pension plan assets are shared.
T 925.930.0902
Accountancy Corporation F 925.930.0135
3478 Buskirk Avenue, Suite 215 e maze@mazeassociates.com
Pleasant Hill, CA 94523 1 1 w mazeassociates.com
In addition, this Statement details the recognition and disclosure requirements for employers with
liabilities (payables) to a defined benefit pension plan and for employers whose employees are
provided with defined contribution pensions. This Statement also addresses circumstances in
which a non -employer entity has a legal requirement to make contributions directly to a pension
plan.
GASB Statement No. 71 — Pension Transition for Contributions Made Subseauent to the
Measurement Date, an Amendment of GASB Statement No. 68
The objective of this Statement is to address an issue regarding application of the transition
provisions of Statement No. 68, Accounting and Financial Reporting for Pensions. The issue
relates to amounts associated with contributions, if any, made by a state or local government
employer or non -employer contributing entity to a defined benefit pension plan after the
measurement date of the government's beginning net pension liability.
As disclosed in Note 1N to the financial statements, in fiscal year 2015, the City adopted a new
methodology for determining the liabilities in the Worker's Compensation and General Liability fund
liabilities. Previously, the City used the expected values (50% confidence level) of outstanding losses in
calculating these liabilities. The new methodology employs a 70% confidence level for the value of
outstanding losses as well as an allowance for unallocated loss adjustment expenses and other measurable
financial exposure.
Unusual Transactions, Controversial or Emerging Areas
We noted no transactions entered into by the City during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's knowledge and experience about past and current events and assumptions about
future events. Certain accounting estimates are particularly sensitive because of their significance to the
financial statements and because of the possibility that future events affecting them may differ
significantly from those expected. The most sensitive estimate(s) affecting the City's financial statements
was (were):
Estimated Net Pension Liabilities and Pension -Related Deferred Outflows and Inflows of
Resources: Management's estimate of the net pension liabilities and deferred outflows/inflows of
resources are disclosed in Note 9 to the financial statements and are based on actuarial studies
determined by a consultant, which are based on the experience of the City. We evaluated the key
factors and assumptions used to develop the estimate and determined that it is reasonable in
relation to the basic financial statements taken as a whole.
Management's estimate of the depreciation: is based on useful lives determined by management.
These lives have been determined by management based on the expected useful life of assets as
disclosed in Note 1 to the financial statements. We evaluated the key factors and assumptions
used to develop the depreciation estimate and determined that it is reasonable in relation to the
basic financial statements taken as a whole.
12
Estimated Fair Value of Investments: As of June 30, 2015, cash and investments were measured
by fair value. Fair value is essentially market pricing in effect as of June 30, 2015. These fair
values are not required to be adjusted for changes in general market conditions occurring
subsequent to June 30, 2015.
Disclosures
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are clearly trivial, and communicate them to the appropriate level of
management. Management has corrected all/certain such misstatements. In addition, none of the
misstatements detected as a result of audit procedures and corrected by management were material, either
individually or in the aggregate, to each opinion unit's financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor's report. We are pleased to report that no such disagreements arose during the
course of our audit.
Management Representations
We have requested certain representations from management that are included in a management
representation letter dated September 30, 2015.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves
application of an accounting principle to the City's financial statements or a determination of the type of
auditor's opinion that may be expressed on those statements, our professional standards require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our
knowledge, there were no such consultations with other accountants.
13
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the governmental unit's auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses were
not a condition to our retention.
Other Information Accompanying the Financial Statements
With respect to the supplementary information accompanying the financial statements, we made certain
inquiries of management and evaluated the form, content, and methods of preparing the information to
determine that the information complies with accounting principles generally accepted in the United
States of America, the method of preparing it has not changed from the prior period, and the information
is appropriate and complete in relation to our audit of the financial statements. We compared and
reconciled the supplementary information to the underlying accounting records used to prepare the
financial statements or to the financial statements themselves.
With respect to the required supplementary information accompanying the financial statements, we
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 did not express an opinion nor 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.
The Introductory and Statistical Sections included as part of the Comprehensive Annual Financial Report
have not been subjected to the auditing procedures applied in the audit of the basic financial statements and,
accordingly, we did not express an opinion nor provide any assurance on them.
This information is intended solely for the use of City Council and management and is not intended to be,
and should not be, used by anyone other than these specified parties.
Very truly yours,
*IJ& 4 �4d 0 ��
Pleasant Hill, California
September 30, 2015
14
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2015
This Page Left Intentionally Blank
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
FOR THE YEAR ENDED JUNE 30, 2015
Table of Contents
INTRODUCTORY SECTION:
Page
Tableof Contents............................................................................................................................................i
FINANCIAL SECTION:
IndependentAuditor's Report...................................................................................................................1
Basic Financial Statements
BalanceSheet..........................................................................................................................................3
Statement of Revenue, Expenditures and Changes in
FundBalance........................................................................................................................................4
Notes to Basic Financial Statements......................................................................................................5
Supplementary Information
Scheduleof Awards..............................................................................................................................10
Combining Statement of Revenues, Expenditures and Changes in
FundBalance................................................................................................................................ 11
Schedule of Expenditures by State Categories....................................................................................12
Schedule of Reimbursable Administrative Costs................................................................................13
Schedule of Equipment Expenditures Utilizing Contract Funds......................................................14
Schedule of Renovation and Repair Expenditures Utilizing Contract Funds.....................................14
Audited Attendance and Fiscal Reports/Audited Fiscal Reports:
CSPP4259 — California State Preschool Programs............................................................................15
Audited Reserve Account Activity Report .......................................................................................17
Compliance Report
Independent Auditor's Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with GovernmentAuditing Standards........................................................................19
This Page Left Intentionally Blank
N M A�ZTE
INDEPENDENT AUDITOR'S REPORT
To the Honorable Members of the City Council
City of San Rafael, California
Report on Financial Statements
We have audited the accompanying financial statements of the City of San Rafael Child Development
Program (Program) of the City of San Rafael as of and for the year ended June 30, 2015, and the related
notes to the financial statements, which collectively comprise the Program's basic financial statements as
listed in the Table of Contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of the financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the Program's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Program's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
T 925.930.0902
F 925.930.0135
E maze@mazeassociates.com
w mazeassociates.com
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the Program as of June 30, 2015, and changes in financial position for the year then
ended in conformity with accounting principles generally accepted in the United States of America.
Other Matters
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Program's basic financial statements as a whole. The Supplementary Information as listed
in the Table of Contents are presented for purposes of additional analysis and are not required parts of the
basic financial statements.
The Supplementary Information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and in conformity with the CDE Audit Guide, issued by the California Department of
Education, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, the Supplementary Information is fairly stated, in all
material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated September 30,
2015, on our consideration of the Program's internal control over financial reporting and on our tests of
its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the Program's internal control over
financial reporting and compliance.
G e 4 /AA06.I ,&
Pleasant Hill, California
September 30, 2015
2
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
BALANCESHEET
JUNE 30, 2015
ASSETS
Cash (Note 3) $922,930
Grants receivable (Note 4) 19,822
Total Assets $942,752
LIABILITIES AND FUND BALANCE
Accounts payable $30,944
Total Liabilities 30,944
Fund balance, unassigned (Note 5) 911,808
Total Liabilities and Fund Balance $942,752
See accompanying notes to financial statements
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 2015
REVENUES
State grants:
Current year grants
CDBG after school grant
First five school readiness grants
Local grant
Interest
Parent fees
Other
Total Revenues
EXPENDITURES
Certified salaries
Classified Salaries
Employee benefits
Training and instruction
Office supplies
Books and supplies
Utilities and housekeeping services
Travel and conference
Rentals
Services and other operating expenditures
Equipment
Insurance
Renovation and repair
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES
TRANSFERS
Transfers from other City funds
CHANGE IN FUND BALANCE
FUND BALANCE,
Beginning of year
End of year
See accompanying notes to financial statements
0
$173,480
16,200
86,321
5,000
2,176
3,751,090
3,895
4,038,162
1,856,329
62,768
1,320,242
2,606
1,127
119,838
32,539
5,066
18,284
209,303
21,903
32,318
3,150
3,685,473
352,689
25,000
377,689
534,119
$911,808
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financials Statements
For the Year Ended June 30, 2015
NOTE 1- ORGANIZATION I
The City of San Rafael operates the Child Development Program encompassing nine childcare
centers within the City of San Rafael. One of these centers provides day care services to subsidized
families under the Child Development Program funded by the California Department of Education,
which includes the Preschool program. The City is financially accountable for the activities of the
Program. The Program has no employees and substantially all staff services which it requires are
performed by the City's personnel. Costs incurred by the City to provide such services including
compensation, retirement, and other benefit costs are reimbursed by the Program. These basic
financial statements present only the activities of the Program and are not intended to present the
financial position of the City of San Rafael, California, or the results of its operations. The
financial statements of the Program are included as a Special Revenue Fund in the City's financial
statements.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Basis ofAccounting
The accounting and reporting treatment applied to a fund is determined by its measurement focus.
Governmental funds are accounted for on a spending or "current financial resources" measurement
focus. Accordingly, only current assets and current liabilities generally are included on the balance
sheets. Operating statements of governmental funds present increases (revenues and other financial
sources) and decreases (expenditures and other financial uses) in net current assets.
The Program's financial activities are accounted for using the modified accrual basis of accounting.
Under this method, revenues are recognized when measureable and available. The City considers
all revenues reported in the governmental funds to be available if the revenues are collected within
sixty days after year-end. Expenditures are recorded when the related fund liability is incurred.
Revenues considered susceptible to accrual include charges for services, federal and state grants,
and interest. Expenditures are recognized in the accounting period in which the liability is incurred,
if measurable.
B. Fund Balance
Fund Balance is the excess of all the Program's assets over all its liabilities.
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financials Statements
For the Year Ended June 30, 2015
I NOTE 3 - CASH AND INVESTMENTS I
The Program's cash is included in a City-wide cash and investment pool, the details of which are
presented in the City's basic financial statements. The Program pools cash from all sources with the
City of San Rafael so that it can be invested at the maximum yield, consistent with safety and
liquidity, while individual funds can make expenditures at any time. The City's investment policy
and the California Government Code permit investments in Securities of the U.S. Government or its
agencies, Certificates of Deposit, Negotiable Certificates of Deposit, Banker's Acceptances,
Commercial Paper, the State of California Local Authority Investment Fund (LAIF Pool), Repurchase
Agreements, Medium -Term Corporate Notes, Limited Obligation Improvement Bonds related to
special assessment districts and special tax districts, and Money Market/Mutual Funds.
NOTE 4 — GRANTS RECEIVABLE I
The Program has the following grants receivable at June 30, 2015:
Agency Grant Amount
Marin County First 5 Grant $19,822
Total $19,822
NOTE 5 — FUND BALANCES I
Governmental fund balances represent the net current assets of each fund. Net current assets
generally represent a fund's cash and receivables, less its liabilities.
The City's fund balances are classified based on spending constraints imposed on the use of
resources. For programs with multiple funding sources, the City prioritizes and expends funds in
the following order: Restricted, Committed, Assigned, and Unassigned. Each category in the
following hierarchy is ranked according to the degree of spending constraint.
Nonspendable represents balances set aside to indicate items do not represent available, spendable
resources even though they are a component of assets. Fund balances required to be maintained
intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids,
notes receivable, and land held for redevelopment are included. However, if proceeds realized from
the sale or collection of nonspendable assets are restricted, committed or assigned, then
Nonspendable amounts are required to be presented as a component of the applicable category.
N,
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financials Statements
For the Year Ended June 30, 2015
NOTE 5 — FUND BALANCES (Continued) I
Restricted fund balances have external restrictions imposed by creditors, grantors, contributors,
laws, regulations, or enabling legislation which requires the resources to be used only for a specific
purpose. Nonspendable amounts subject to restrictions are included along with spendable resources.
Committed fund balances have constraints imposed by formal action of the City Council which may
be altered only by formal action of the City Council. Nonspendable amounts subject to council
commitments are included along with spendable resources.
Assigned fund balances are amounts constrained by the City's intent to be used for a specific
purpose, but are neither restricted nor committed. Intent is expressed by the City Council or its
designee and may be changed at the discretion of the City Council or its designee. This category
includes nonspendables, when it is the City's intent to use proceeds or collections for a specific
purpose, and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service
Funds which have not been restricted or committed.
Unassigned fund balance represents residual amounts that have not been restricted, committed, or
assigned. This includes the residual general fund balance and residual fund deficits, if any, of other
governmental funds.
NOTE 6 — CONTINGENCIES AND COMMITMENTS I
The Program participates in Federal, State and County grant programs that are fully or partially
funded by grants received from other governmental units. Expenditures financed by grants are
subject to audit by the appropriate grantor government. If expenditures are disallowed due to
noncompliance with grantor program regulations, the City may be required to reimburse the grantor
government. As of June 30, 2015, some amounts of grant expenditures have not been audited, but
the City believes that disallowed expenditures, if any, based on subsequent audits will not have a
material effect on any individual governmental funds or the overall financial condition of the City.
V/
This Page Left Intentionally Blank
SUPPLEMENTARY INFORMATION
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF AWARDS
FOR THE YEAR ENDED JUNE 30, 2015
Program
Federal Awards
US Department of Housing and Urban Development,
Passed -through the County of Marin
Community Development Block Grant
Total Federal Awards
State Awards
State of California Department of Education
Child Development Division
State Preschool Program FY2015
Total State Awards
County Award
County of Marin
First Five - Preschool
Local Award
Marin Child Care Council
Total Local Awards
Total State, Federal Awards, and Local
Pass -Through Award
CFDA # Grantor # Amount
14.218 HUD -04527-01-14 $16,200
$16,200
10
Revenue Expenditures
$16,200
$16,200
CSPP-4259 $173,480 $173,480
$173,480 $173,480
$16,200
$16,200
$258,273
$258,273
CSRI-21-009-11 $86,321
$86,321
$86,321
N/A $5,000
$5,000
$5,000
$5,000
$5,000
$5,000
$281,001
$281,001
$365,794
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 2015
REVENUES
State grants:
Current year grants
CDBG after school grant
First Five school readiness grants
Local grant
Interest
Parent fees - noncertified children
Other
Total Revenues
EXPENDITURES
Certified salaries
Classified salaries
Employee benefits
Training and instruction
Office supplies
Books and supplies
Utilities and housekeeping services
Travel and conference
Rentals
Services and other operating expenditures
Equipment
Insurance
Renovation and repair
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES
TRANSFERS
Transfers in from other City funds
CHANGE IN FUND BALANCE
State Preschool
Program Total CDE Non-CDE
(CSPP 4259) CD Contracts Programs
11
$173,480
5,000
178,480
63,373
62,768
108,964
9,896
$173,480
5,000
178,480
63,373
62,768
108,964
9,896
13,272 13,272
258,273
258,273
(79,793)
(79,793)
25,000
25,000
($54,793)
($54,793)
Total
$173,480
$16,200
16,200
86,321
86,321
5,000
2,176
2,176
3,751,090
3,751,090
3,895
3,895
3,859,682
4,038,162
1,792,956
1,856,329
62,768
1,211,278
1,320,242
2,606
2,606
1,127
1,127
109,942
119,838
32,539
32,539
5,066
5,066
18,284
18,284
196,031
209,303
21,903
21,903
32,318
32,318
3,150
3,150
3,427,200 3,685,473
432,482 352,689
25,000
$432,482 $377,689
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF EXPENDITURES BY STATE CATEGORIES
FOR THE YEAR ENDED JUNE 30, 2015
We have examined the claims filed for reimbursement and the original records supporting the transactions
recorded under the contracts listed above to an extent considered necessary to assure ourselves that the
amounts claimed by the contractor were eligible for reimbursement, reasonable, necessary, and adequately
supported, according to governing laws, regulations, and contract provisions.
12
CSPP-4259
State Preschool
Program
Totals
EXPENDITURES:
11000 Certified personnel salaries
$63,373
$63,373
1100 Teachers' salaries
63,373
63,373
1200 Administration
1300 Supervisors' salaries
1600 Infant educators
12001 Classified personnel salaries
$62,768
$62,768
2100 Instructional aides' salaries
62,768
62,768
2300 Clerical and other office salaries
2400 Maintenance and operations salaries
2500 Food services salaries
2600 Transportation salaries
13000 Employee benefits
$108,964'
$108,964
3200 Payroll taxes (Medicare)
1,938
1,938
3300 Other benefits
32,152
32,152
3400 Health and welfare
1,817
1,817
3600 Workers' compensation insurance
73,057
73,057
14000 Books and supplies
$9,896
$9,896
4200 Other books
4300 Instructional materials and supplies
9,896
9,896
4500 Other supplies
4600 Food supplies
15000 Services and other operating expenditures
$13,272
$13,272
5100 Lecturer
5200 Travel and conferences
5300 Memberships and dues
5400 Insurance
1,985
1,985
5500 Utilities and housekeeping services
5600 Rentals, leases and repairs
712
712
5700 Audit expense
5800 Other direct services & admin.
10,575
10,575
16000 Capital Outlay
6100 Sites and improvements of sites
6200 Buildings and improvements of buildings
6400 Equipment (program -related)
6500 Equipment replacement (program related)
Depreciation
Costs capitalized as Fixed Assets
OF REIMBURSABLE AND
ITOTAL
NONREIMBURSABLE EXPENDITURES
$258,273
$258,273
We have examined the claims filed for reimbursement and the original records supporting the transactions
recorded under the contracts listed above to an extent considered necessary to assure ourselves that the
amounts claimed by the contractor were eligible for reimbursement, reasonable, necessary, and adequately
supported, according to governing laws, regulations, and contract provisions.
12
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF REIMBURSABLE ADMINISTRATIVE COSTS
FOR THE YEAR ENDED JUNE 30, 2015
CSPP-4259
State Preschool
Program
Administrative Costs (Salaries) $0
Total Administrative Costs $0
13
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF EQUIPMENT EXPENDITURES UTILIZING CONTRACT FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
Expenditures Under $7,500 Expenditures Over $7,500 Expenditures Over $7,500
Unit Cost Unit Cost with CDD Approval Unit Cost Without CDD Approval
Cost Item Cost Item Cost Item
None None None
SCHEDULE OF RENOVATION AND REPAIR EXPENDITURES UTILIZING CONTRACT FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
Expenditures Under $10,000 Expenditures Over $10,000 Expenditures Over $10,000
Unit Cost Unit Cost with CDD Approval Unit Cost Without CDD Approval
Cost Item Cost Item Cost Item
None
14
None
None
AUDITED ATTENDANCE AND FISCAL REPORT
for California State Preschool Programs
Agency Name: City of San Rafael Child Development Program Vendor No. 21-2193
Fiscal Year Ended: June 30, 2015 Contract No. CSPP 4259
Independent Auditor's Name: Maze & Associates
Q NO NONCEREFIED CHILDREN - Check this box, omit page 2, and continue to Section III if no noncertified children were
Comments - If necessary, attach additional sheets to explain adjustments:
AUD 8501, Page 1 of (FY 2014-15)
15
California Department of Education
COLUMN A COLUMN B
i COLUMN C
COLUMN D
COLUMN E
SECTION I - CERTIFIED CHILDREN
CUMULATIVE
ADJUSTED DAYS
DAYS OF ENROLLMENT
i AUDIT
: FISCAL YEAR PERI
CUMULATIVE FISCAL i
ADJUSTMENT
OF ENROLLMENT
ADJUSTMENTS
FORM CDFS 8501
YEAR PER AUDIT
FACTOR
PER AUDIT
Three and Four Year Olds
Full -time -plus
-
-
1.1800
-
Full-time
-
-
1.0000
-
Three -quarters -time
-
-
0.7500
-
One -half-time
8,815
8,815
0.6172
5,440.618
Exceptional Needs
Full -time -plus
-
-
1.4160
-
Full-time
- I
-
1.2000
I -
Three -quarters -time
I - I
- I
0.9000
I -
One -half-time
I -
I -
0.6172
I -
Limited and Non-English Proficient
I
I
Full -time -plus
-
-
1.2980
-
Full-time
I -
I
I - I
1.1000
-
Three -quarters -time
I -
Ij
I - I
0.8250
I -
One -half-time
- I
I - I
0.6172
I
At Risk of Abuse or Neglect
Full -time -plus
-
-
1.2980
-
Full-time
I - I
I - I
1.1000
I -
Three -quarters -time
I -
- I
0.8250
I -
One -half-time
Il
- I
-
0.6172
-
Severely Disabled
I
Full -time -plus
-
-
1.7700
-
Full-time
I
-
I
- I
1.5000
I -
Three -quarters -time
li
- I I
- I
1.1250
-
One -half-time
I - I I
- I
0.6172
-
TOTAL DAYS OF CEMENT
� 8,875 I
i
8,875 �
� 5,440.618
DAYS OF OPERATION
-
DAYS OF ATTENDANCE
8,815 -
8,815
Q NO NONCEREFIED CHILDREN - Check this box, omit page 2, and continue to Section III if no noncertified children were
Comments - If necessary, attach additional sheets to explain adjustments:
AUD 8501, Page 1 of (FY 2014-15)
15
California Department of Education
AUDITED ATTENDANCE AND FISCAL REPORT
for California State Preschool Programs
Agency Name: City of San Rafael Child Development Program
Fiscal Year End: June 30, 2015
SECTION III - REVENUE
RESTRICTED INCOME
Child Nutrition Programs
County Maintenance of Effort (EC § 8279)
Other (Specify):
Transfer from Reserve
Family Fees for Certified Children
Interest Earned on Apportionments
(UNRESTRICTED INCOME
Family Fees for Noncertified Children
Head Start Program (EC § 8235(b))
Other (Specify):
SECTION IV - REIMBURSABLE EXPENSES
1000 Certificated Salaries
2000 Classified Salaries
Subtotal I
Contract #
Contract #
Contract # I
Contract # I
Contract # i
Contract #
Vendor No. 21-2193
Contract No. CSPP 4259
COLUMN A COLUMN B COLUMN C
CUMULATIVE AUDIT
FISCAL YEAR PER ADJUSTMENT CUMULATIVE FISCAL YEAR
FORM CDFS 8501 INCREASE OR PER AUDIT
(DECREASE)
$0
$0
$0
I
I
$o,I
I
I
$0
0
0
$0
0
0
$0
0
0
0
I I I 0
I I I o
I I I 0
TOTAL REVENUE( $0 I $0 I $0
3000 Employee Benefits
4000 Books and Supplies
I 5000 Services and Other Operating Expenses
6100/6200 Other Approved Capital Outlay
6400 New Equipment (program -related)
6500 Replacement Equipment (program -related)
Depreciation or Use Allowance
Start -Up Expenses (service level exemption)
Budget Impasse Credit
Indirect Costs. Rate: 0.00% (Rate is Self -Calculating)
TOTAL EXPENSES CLAIMED FOR REIMBURSEMENT(
ITOTAL ADMINISTRATIVE COSTS (Included in section IV above)
IFOR CDE-A&I USE ONLY:
$63,373
62,768
108,964
9,896
13,272
$258,273
$0
$0
$0
Independent Auditor's Assurances on Agency's compliance with Contract Funding Terms and Conditions and Program
Requirements of the California Department of Education, Child Development Division:
Eligibility, enrollment, and attendance records are being maintained as
required (check YES or NO): COMMENTS - If necessary, attach additional sheets to explain adjustments:
7 YES
❑ NO - Explain any discrepancies.
$63,373
62,768
108,964
9,896
13,272
0
0
0
0
0
0
0
$258,273
$0
Reimbursable expenses claimed above are eligible for reimbursement,
reasonable, necessary, and adequately supported (check YES or NO):
Q YES
❑ NO - Explain any
Q NO SUPPLEMENTAL REVENUES OR EXPENSES - Check this box and omit page 4 if there are no supplemental revenues or expenses to report.
AU D 8501, Page 3 cf 4 (FY 2014-15) California Department of Education
16
AUDITED RESERVE ACCOUNT ACTIVITY REPORT
Agency Name: City of San Rafael Child Development Program
Fiscal Year End: June 30, 2015 Vendor No. 21-2193
Independent Auditor's Name: Maze & Associates
RESERVE ACCOUNT TYPE (Check One):
COLUMN A
COLUMN B
COLUMN C
Center Based
PER
AUDIT ADJUSTMENT
8 Resource and Referral
AGENCY
INCREASE OR
PER AUDIT
Alternative Payment
(DECREASE)
LAST YEAR:
I. Beginning Balance (must equal ending balance from Last Year's AUD 9530-A)
$0
$0
$0
2. Plus Transfers from Contracts to Reserve Account (based on
last year's post -audit CDFS 9530, Section IV):
Contract No. CSPP-3262
$0
$0
$0
Contract No.
0
Contract No.
0
Contract No.
0
Contract No.
0
Contract No.
0
Total Transferred from Contracts to Reserve Account
0 I
0
0
3. Less Excess Reserve to be Billed (enter
as a positive amount any excess amount calculated by CDFS on last year's post -audit
CDFS 9530)
$0
$0
I4. Ending Balance on Last Year's Post -Audit CDFS 9530
$0
$0
$0
THIS YEAR:
5. Plus Interest Earned This Year on Reserve Funds
(column A must agree with this year's CDFS 9530-A, Section 11)
$0
$0
$0
6. Less Transfers to Contracts from Reserve Account
(column A amounts must agree with this year's CDFS 9530-A, Section 111; and column C
amounts must be reported on this year's AUD forms for respective contracts):
Contract No. CSPP-4259
$0
$0
$0
Contract No.
0
Contract No.
0
Contract No.
0
Contract No.
0
Contract No.
0
Total Transferred to Contracts from Reserve Account
0
0
0
7. Ending Balance or June 30, 2015
(column A must agree with this year's CDFS 9530-A, Section IV)
$0
$0
$0
COMMENTS - If necessary, attach additional sheets to explain adjustments:
AUD 9530-A, Page 1 of 1 (FY 2014-15) California Department of Education
17
This Page Left Intentionally Blank
F/, MAZE
INDEPENDENT AUDITOR'S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENTAUDITINGSTANDARDS
To the Honorable Members of the City Council
City of San Rafael, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the basic financial statements of the City of San
Rafael Child Development Program (Program), as of and for the year ended June 30, 2015, and the related
notes to the financial statements, and have issued our report thereon dated September 30, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Program's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of Program's internal control. Accordingly, we do
not express an opinion on the effectiveness of Program's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the Program's financial statements will not be prevented, or detected and corrected on a timely basis.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
T 925.930.0902
Accountancy Corporation F 925.930.0135
3478 Buskirk Avenue, Suite 215 e maze@mazeassociates.com
Pleasant Hill, CA 94523 19 w mazeassociates.com
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Program's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the Program's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the Program's internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
ale -
Pleasant
e -Pleasant Hill, California
September 30, 2015
20