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CAFR 06 30 2007 City of Livermore, California Comprehensive Annual Financial Report For the Year Ended June 30, 2007 Prepared By: Department of Finance Comprehensive Annual Financial Report FY 2006-2007 City of Livermore, California Comprehensive Annual Financial Report Year Ended June 30, 2007 Page i INTRODUCTORY SECTION Table of Contents....................................................................................................................i-iii Letter of Transmittal...............................................................................................................1-6 Elected Officials and Administrative Personnel........................................................................7 City Organization Chart.............................................................................................................8 GFOA Certificate of Achievement.............................................................................................9 FINANCIAL SECTION Independent Auditor’s Report on Basic Financial Statements................................................11 Management’s Discussion and Analysis Management’s Discussion and Analysis (Unaudited)........................................................13-32 Basic Financial Statements Government-Wide Financial Statements (Page 33) Statement of Net Assets..........................................................................................................34 Statement of Activities.............................................................................................................35 Fund Financial Statements (Page 37) Major Governmental Funds Balance Sheet-Governmental Funds.................................................................................38-40 Governmental Funds Balance Sheet-Continued (Reconciliation of Fund Balances to Net Assets of Governmental Activities)......................................................................40 Statement of Revenues, Expenditures, and Changes in Fund Balance- Governmental Funds.................................................................................................42-43 Reconciliation of the Net Change in Fund Balances of Governmental Funds with the Statement of Activities..............................................................................................44 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual General Fund................................................................................................45 Major Proprietary Funds (Page 47) Statement of Net Assets-Proprietary Funds......................................................................48-49 Statement of Revenues, Expenses and Changes in Fund Net Assets- Proprietary Funds......................................................................................................50-51 Statement of Cash Flows-Proprietary Funds.....................................................................52-53 Fiduciary Funds Statement of Net Assets-Fiduciary Funds..............................................................................54 Notes to Basic Financial Statements Note 1-Significant Accounting Policies....................................................................................55 A. Reporting Entity..........................................................................................................55 B. Basis of Presentation............................................................................................55-56 C. Major Funds..........................................................................................................56-58 D. Basis of Accounting..............................................................................................58-59 City of Livermore, California Comprehensive Annual Financial Report Year Ended June 30, 2007 Page ii E. Supplies.....................................................................................................................59 F. Compensated Absences.......................................................................................59-60 G. Property Tax Levy, Collection and Maximum Rates.................................................60 H. Revenue Recognition for Sewer and Operations......................................................60 I. Land Held for Redevelopment...................................................................................60 Note 2-Budgets and Budgetary Accounting............................................................................61 Note 3-Cash and Investments............................................................................................62-70 Note 4-Interfund Transactions............................................................................................70-73 Note 5-Notes Receivable...................................................................................................73-74 Note 6-Capital Assets.........................................................................................................74-78 Note 7-Long Term Debt.....................................................................................................78-83 Note 8-Special Assessment District Debt with No City Commitment................................83-84 Note 9-Net Assets and Fund Balances..............................................................................85-86 Note 10-PERS Pension Plan.............................................................................................87-88 Note 11-Deferred Compensation Plan....................................................................................89 Note 12-Joint Ventures.......................................................................................................89-90 Note 13-Health, General Liability and Workers Compensation Coverage........................90-91 Note 14-Commitments and Contingencies........................................................................92-96 Supplemental Information Major Capital Project Funds (Page 97-98) Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual: Redevelopment Agency Capital Projects Fund..................................................97 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual: Street Improvements Fund.................................................................................98 Non-major Governmental Funds (Page 99-101) Combining Balance Sheets............................................................................................102-107 Combining Statement of Revenues, Expenditures and Changes in Fund Balance..............................................................................108-113 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Actual.....................................................................114-122 Internal Service Funds (Page 123) Combining Statement of Net Assets..............................................................................124-125 Combining Statements of Revenues, Expenditures and Changes in Fund Net Assets..........................................................................126-127 Combining Statement of Cash Flows.............................................................................128-129 Fiduciary Funds (Page 130) Statement of Changes in Assets and Liabilities – Agency Funds........................................131 City of Livermore, California Comprehensive Annual Financial Report Year Ended June 30, 2007 Page iii STATISTICAL SECTION (Unaudited) Fund Information Net Assets by Component-Last Six Fiscal Years.................................................................133 Changes in Net Assets-Last Six Fiscal Years................................................................134-136 Fund Balances of Governmental Funds-Last Six Fiscal Years............................................137 Changes in Fund Balances of Governmental Funds-Last Six Fiscal Years..................138-139 Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years..........140 Direct and Overlapping Property Tax Rates-Last Ten Fiscal Years.....................................141 Principal Property Taxpayers-Last Ten Fiscal Years.....................................................142-144 Property Tax Levies and Collections-Last Ten Fiscal Years................................................145 Ratio of Outstanding Debt by Type-Last Ten Fiscal Years...................................................146 Ratios of General Bonded Debt Outstanding-Last Ten Fiscal Years...................................147 Direct and Overlapping Governmental Activities Debt as of June 30, 2007.........................148 Legal Debt Margin Information-Last Ten Fiscal Years.........................................................149 Pledged-Revenue Coverage-Last Ten Fiscal Years............................................................150 Demographic and Economic Statistics-Last Ten Fiscal Years.............................................151 Principal Employers-Current Year.........................................................................................152 Full-Time Equivalent City Government Employees by Function/Program-Last Ten Fiscal Years..................................................................................................................153 Operating Indicators by Function/Program-Last Ten Fiscal Years.......................................154 Capital Asset Statistics by Function/Program-Last Ten Fiscal Years...................................155 Continuing Disclosure 1998 Livermore Capital Projects Financing Authority –Authority Refunding Revenue Bonds............................................................................................................156 Special Tax Bonds Community Facilities District No. 99-1 - (Tri-Valley Technology Park), Series 2000........................................................................................................157 2001 Tax Allocation Bonds, Series A....................................................................................158 Special Tax Bonds Community Facilities District No. 2006-1 – (Shea Properties), Series 2006 .........................................................................................................................159 Comprehensive Annual Financial Report FY 2006-2007 INTEROFFICE MEMORANDUM Date: December 3, 2007 To: Mayor Marshall Kamena and Members of the City Council From: Monica T. Potter, Director of Finance I am pleased to transmit the City's Comprehensive Annual Financial Report for the fiscal year ended June 30, 2007. Responsibility for accuracy of the data and the fairness of presentation including all footnotes and disclosures rests with the City. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the City’s assets from loss and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with generally accepted accounting principles (GAAP). The data in this report is presented in a manner that is designed to fairly set forth the financial position and results of operations of the City. It contains the disclosures necessary to promote in-depth understanding of the City's financial affairs. The City’s financial statements have been audited by Maze & Associates Accountancy Corporation located in Pleasant Hill, California. The independent auditors concluded, based on the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of Livermore’s financial statements for the fiscal year ended June 30, 2007, are fairly presented in conformity with generally accepted accounting principles. The independent auditor’s report is presented as the first component of the financial section of this report. In addition to the financial audit, each year the City is required to undergo an audit in conformity with the provisions of the Single Audit Act Amendments of 1996 and the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. This report is issued as a separate document and is not included herein. The report includes the schedule of expenditures of federal financial awards, findings and recommendations, and the auditor's reports on the internal control structure and compliance with applicable laws and regulations. The City is in its sixth year of implementation of the provisions of Government Accounting Standard Board Statement 34, “Basic Financial Statements—and Management’s Discussion & Analysis—for State and Local Governments”. GASB 34 requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of MD&A. This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The MD&A is found immediately following the report of the independent auditors in the financial section of the CAFR. 1 December 3, 2007 Page 2 of 6 Overview of the Comprehensive Annual Financial Report This Comprehensive Annual Financial Report is in five parts: • Introductory section, which includes the Transmittal Letter and general information; • Management’s Discussion and Analysis; • The Basic Financial Statements, which include the Government-wide and the Fund financial statements, along with the Notes to these financial statements; • Combining Statements for Non-major Governmental Funds and Fiduciary Funds; • Statistical information. Reporting Entity and Its Services The financial statements presented in this report include the financial activity of the City of Livermore as well as two separate legal entities which are controlled by and are dependent upon the City. As of June 30, 2007 these entities are as follows: • City of Livermore Redevelopment Agency; and • Livermore Capital Projects Financing Authority. Financial information for these entities is included as a blended component unit in the City's financial statements in accordance with Statement 14, "The Financial Reporting Entity," issued by the Governmental Accounting Standards Board. The City Council serves as the governing board of the Livermore Redevelopment Agency, and the Livermore Capital Projects Financing Authority (LCPFA). The LCPFA is a joint powers authority between the City and the Livermore Redevelopment Agency. The City provides accounting services to these separate entities and performs all their administrative functions. Activities of the Livermore Redevelopment Agency are shown as a capital projects fund within the major Governmental Funds schedules. Resources to be used for the repayment of long-term debt are reported as a debt service fund located within the non-major governmental funds schedules. The low-moderate income set-aside funds are reported as a special revenue fund also within the non-major governmental funds statements. Construction and acquisition activities of the Livermore Capital Projects Financing Authority (LCPFA) are shown as capital projects funds within the non-major Governmental Funds statements as to the 2002 Certificates of Participation. Livermore was incorporated as a General Law city on April 1, 1876. A General Law city has the power to make and enforce ordinances and regulations with respect to municipal affairs to the extent expressly permitted or implied by the California constitution or specific legislation. The city government is organized under the Council-Manager form of local government. The five-member City Council is elected at large for overlapping four-year terms. The City Council includes an elected Mayor whose term of office is two years. The City Council appoints the City Manager and City Attorney to carry out its adopted policies. In addition, the City Council appoints members of advisory Commissions, Committees, and Boards. 2 December 3, 2007 Page 3 of 6 The City provides full services to its citizens. Services include police safety; fire safety and building inspection; street and park maintenance; street lighting; planning and public improvements; public library; general administrative services; water reclamation and water service; as well as a municipal airport and two golf courses. Recreation and leisure services are not included; however, they are provided to citizens through the Livermore Area Recreation and Park District (LARPD), a special district formed in 1947, governed by a separately elected board. Basis of Accounting and Budgetary Control The government-wide, proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis. Here revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. This basis of accounting is contrasted with the modified accrual basis that is used by all governmental funds. As explained in Note 1 to the Basic Financial Statements, this means that with specified exceptions, revenues are recorded when measurable and available, rather than received and expenditures are recorded when the liability is incurred, rather than paid. The exceptions for revenue are fines, licenses and permits. The exceptions for expenditures are certain employee leave amounts and principal and interest on general long-term debt which is recognized when due. The Livermore Municipal Code established the finance department and assigned specific duties and responsibilities for the provision of all fiscal and budgetary functions. Internal accounting controls have been developed to provide reasonable assurance regarding the safeguarding of assets and the reliability of financial records for preparing financial statements and maintaining asset accountability. Examples of accounting controls include separation of operational responsibilities from financial recordkeeping in the areas of payroll, accounts payable, and accounts receivable. In addition, physical custody of assets is separated from accounting or the authorization of related transactions. A two-year financial plan is adopted by the City Council on a basis consistent with generally accepted accounting principles except for proprietary funds that have budgets for capital outlay but not depreciation. Budgets for proprietary funds also differ from GAAP in that costs of issuing debt are not amortized over the life of the issue but are expensed at issuance. Legal budgetary control is maintained at the fund level. The City Council may amend the budget by resolution or minute order during the year. The City Manager may transfer appropriations from one activity to another within the same fund. Appropriations not expended during the first year of the two-year budget cycle may be carried over to the second year, but thereafter they lapse. 3 December 3, 2007 Page 4 of 6 Financial Highlights of Fiscal Year 2006-2007 $10,000,000 Community Facilities District No. 2006-1 (Shea Properties) Special Tax Bonds, Series 2006 On July 26, 2006, pursuant to the Mello-Roos Community Facilities District Act of 1982, special tax bonds were sold in the amount of $10,000,000 to construct and acquire new public improvements in the Shea Center Business Park. The net interest cost was 5.35%. $15,085,000 Certificates of Participation (Refunding and Capital Projects) On February 27, 2007 certificates of participation (COPs) were issued by the LCPFA in the amount of $15,085,000 to provide funds for $4.5 million of new capital projects and refund $12.0 million outstanding on the previous 1997 Certificates of Participation. The certificates were insured by XL Capital Assurance and rated AA- by Standard & Poor’s. The net interest cost of the fixed rate certificates was 3.62%. Impact of State Budget on Local Finances The State Budged for Fiscal Year 2006/2007 contained the following items of importance to cities: • Booking Fee Subventions-A reimbursement of $222,065 was received by the city for booking fees paid in the prior fiscal year. However, beginning July 1, 2007 SB 1805 provides for a new booking fee procedure that provides for direct payment from the state to local detention facilities. This reduces costs billed to cities, but also effectively eliminates future reimbursements. • State Mandates Reimbursements-A reimbursement of $288,908 was received by the city for mandate payments owed to the city that were deferred by the state prior to FYY 2004/05. The average level of mandate reimbursement is in the range of $30,000 per year. • Proposition 42 Transportation Funding Repayments-The city received $579,766 in repayment of FY 2003/04 and FY 2004/05 in repayment of state borrowings of those moneys in the prior fiscal years. These funds are designated to maintain local transportation infrastructure. Cash Management The city pools cash from all operating sources in order to facilitate the control of cash and the investment of idle funds. The Director of Finance manages the portfolio in accordance with the Investment Policy of the City Council and Government Code §53601 and §56535. Permitted investments include U.S. Treasury bills and notes, U.S. Government Agency securities, Bankers Acceptances, Time Certificates of Deposit, Repurchase Agreements, Commercial Paper, Medium Term Notes, Mutual Funds and State of California Local Agency Investment Fund. Maturities may range from overnight to five years. The total amount of interest earned on all funds was $7.0 million with an average yield of 4.22%. Other funds held by fiscal agents and trustees are invested according to the restrictions of the bond documents and the city's investment policy. 4 December 3, 2007 Page 5 of 6 Risk Management In 1986 the City became self-insured and joined a risk sharing pool for public liability, now called the California Joint Powers Risk Management Authority (CJPRMA). The pool provides coverage up to $40 million per occurrence above the self-insured retention of $500,000, effective July 1990. Claims are administered in the City Attorney’s office by the Risk Manager with the assistance of a third-party claims adjustment firm. In FY 2006-2007, the pool made its sixteenth distribution of excess assets. The amount distributed to the City of Livermore was $104,621, or about 26% of the amount of the deposit premium paid for FY 2005-2006. In March 1992 the City joined a risk sharing pool called the Local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX) for workers’ compensation and employer liability and provides coverage up to $24.75 million above the self-insured retention of $350,000. In FY 2006- 2007, the pool made a distribution of excess assets. The amount distributed to the City of Livermore was $2,162, or about 0.8% of the amount of the deposit premium paid for FY 2006- 2007. Community Development The City of Livermore is located on the southeasterly boundary of Alameda County near the intersection of I-580 and I-680. The City is situated approximately 50 miles east of San Francisco in the growing Tri-Valley area which contains the cities of Pleasanton, Livermore, Dublin, and San Ramon. The estimated population of Livermore is 82,845, as of January 1, 2007 and represents an increase of 1.7% compared to the prior year. The East Bay region of Alameda County that encompasses Livermore has experienced a slowing of job growth during September and October 2007. In September 2006 the unemployment rate in Alameda county was near historical lows at 4.2%. This year, the unemployment rate has risen to 4.6%, reflecting the effects of the subprime mortgage crisis. Job losses center in residential and specialty construction, credit services, and real estate. As reported by the Bay East Association of Realtors (BEAR), the median price for a single family residence (SFR) in Livermore in October 2007 was $629,000, up from $625,000 in October 2006. As of October 2007 there were 426 homes listed for sale representing 11 months of inventory. The average days on market is 62 days, up from approximately 42 days in October 2006. The City of Livermore occupies approximately 24.52 square miles of the 413 square miles in the valley. There were no annexations in FY 2006-2007. The current General Plan approved in February 2004 covers 55,000 acres and has the following use categories: General Plan Use Categories Planned Acres At June 30, 2007 Remaining to be Developed Total Developed Industrial Acreage 1,608 494 1,114 Commercial Acreage 673 109 564 Business Commercial 759 431 328 Residential Acreage 5,445 289 5,156 Totals 8,485 1,323 7,162 5 December 3, 2007 Page 6 of 6 Independent Audit Each year the Finance Department provides for an audit of the city's books of account, financial records and transactions of all operations. The contract for the services of an independent certified public accountant is approved by the City Council. The auditor's independent opinion is included in the Financial Section of this report. Achievement Award The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Livermore for its comprehensive annual financial report for the fiscal year ended June 30, 2006. This was the seventeenth consecutive year that the City of Livermore has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. Acknowledgments This report represents the culmination of the dedicated efforts by staff both inside and outside of the Finance Department. Sincere thanks go to Assistant Director of Finance Kathy Rooney, Financial Services Manager Evan Levy, Accountant Virginia Guider for her work on fixed assets and the statistical section, Reprographics Technician Carlos Ramirez for printing, Senior Administrative Accounting Technician Pam Dias; as well as the staff at Maze & Associates. I wish to express my appreciation to the office of the City Manager and the City Council for their support of excellence in financial reporting to the public. Very truly yours, Monica T. Potter Director of Finance 6 City of Livermore Comprehensive Annual Financial Report ELECTED OFFICIALS AND ADMINISTRATIVE PERSONNEL Elected Officials as of June 30, 2007 Dr. Marshall H. Kamena, Mayor John Marchand, Vice Mayor Lorraine Dietrich, Councilmember Marj Leider, Councilmember Tom Reitter, Councilmember Administrative Personnel Linda M. Barton, City Manager James W. Piper, Assistant City Manager John Pomidor, City Attorney Alice Calvert, City Clerk Marc Roberts, Director of Community Development Robert White, Director of Economic Development Monica T. Potter, Director of Finance Susan Gallinger, Director of Library Services Steve Harman, Director of Personnel Dan McIntyre, Director of Public Services Bill Cody, Fire Chief Steve Sweeney, Acting Police Chief 7 Comprehensive Annual Financial Report FY 2006-2007 Citizens of LivermoreMayor and City Council City Manager’s Dept. Linda B arto n, City Mg r City Attorn ey John Po midor Advisory Co mmissions and Bo ards Economic Development Rob White, Dir ector Fire Dept.Bill Cody, Ch ie f Co m mu nity De velopment. Dept. Ma rc Rob erts, Di r ector Library Dept. Su san G allin ger , Directo r City Clerk’s Dept. Alice Calvert, City Clerk Police De pt. Ste v e S w een ey, Acting Chie f Assistant City Manger Jim Piper, Asst Cit y Mgr Public Works Da n McIn tyre, Dir ector Human Resources S t eve Harm an, Dire c tor Information Technology Finance Dept. Mon i ca T. Po tter , Directo r Engineering Planning Building Housing Redevelopment Agency Ho rizo ns Youth Services Las Positas & Sp ring town Golf Courses Airp ort W at e r Re c la m at i o n/ St o r m Wa t er / WaterMainte nanc e Services Or ga niza tion Ch ar t 8 9 Comprehensive Annual Financial Report FY 2006-2007 10 11 Comprehensive Annual Financial Report FY 2006-2007 12 Comprehensive Annual Financial Report FY 2006-2007 MANAGEMENT’S DISCUSSION AND ANALYSIS The purpose of the Management’s Discussion and Analysis is to offer to the reader of the City’s financial statements a narrative overview and analysis of the financial activities of the City of Livermore for the fiscal year ended June 30, 2007. The reader is encouraged to consider the information presented here in conjunction with the additional information furnished in the letter of transmittal, which can be found on pages 1-6 of this report. (A) Financial Highlights Government-wide: • The City’s total assets were $704.3 million at June 30, 2007. Of this total, $464.1 million were Governmental assets and $240.2 million were Business-type assets. • Total liabilities were $151.4 million of which $133.3 million were governmental liabilities and $18.1 million were business-type liabilities. • City-wide revenues in fiscal 2007 were $174.6 million, of which $132.0 million was generated by governmental activities and $42.6 million was generated by business-type activities. • City-wide expenses were $148.2 million, of which $106.1 million was incurred by governmental activities and $42.1 million was incurred by business-type activities. Fund Level: • Governmental Fund balances increased to $110.7 million in fiscal 2007 from $96.1 million in fiscal 2006. • Governmental Fund revenues increased to $124.1 million in fiscal 2007, up $16.4 million from the prior year’s $107.7 million. • Governmental Fund expenditures decreased to $113.8 million in fiscal 2007, down $0.7 million from fiscal 2006’s level of $114.5 million. • Enterprise Fund total assets decreased $1.2 million to $241.1 million in fiscal 2007. This decrease was largely due to a decrease to prepaids for LAVWMA. • Enterprise Fund total liabilities decreased $1.6 million to $18.9 million in fiscal 2007. This decrease was due to the reduction of the 2002 Certificate of Participation through debt payment. • Enterprise Fund revenues increased $0.3 million to $37.4 million in fiscal 2007. • Enterprise Fund expenses increased $5.6 million to $41.4 million in fiscal 2007. (B) Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: government-wide financial statements, fund financial statements and notes to the basic financial statements. This report also contains supplementary information in addition to the basic financial statements. 13 Comprehensive Annual Financial Report FY 2006-2007 Government-wide Financial Statements The government-wide financial statements are designed to provide the reader with a broad overview of the City’s finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or declining. The statement of activities presents information showing how the City’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, e.g., uncollected property or sales taxes and earned but unused vacation leave. This is known as the full accrual basis of accounting. Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or most of their costs through user fees and charges (business-type activities). The governmental activities of the City include city council, city manager, city attorney, city clerk, finance, human resources, fire, police, public services, community development, economic development, library, and redevelopment. The business- type activities of the City include airport, water, water reclamation, and golf courses. The government-wide financial statements include not only the City itself (known as the primary government) but also the activities of two legally separate component units: the City of Livermore Redevelopment Agency and the Livermore Capital Projects Financing Authority (LCPFA). Because the City Council acts as the governing board for each of these component units and because they function as part of the City government, their activities are blended with those of the primary government. The government-wide financial statements can be found on pages 33-35 of this report. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been designated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. 14 Comprehensive Annual Financial Report FY 2006-2007 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. This information may be useful in evaluating the City’s near-term financial requirements. The basis of accounting in governmental funds is known as the modified accrual basis. The focus of fund financial statements is narrower than that of government-wide financial statements. It is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By so doing, the reader may better understand the long-term impact of the City’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 the comparison between governmental funds and governmental activities. This is required because the government-wide statements are prepared on the full accrual basis of accounting while the fund statements are prepared on the modified accrual basis of accounting. Proprietary Funds The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its airport, water, water reclamation, and golf course activities. Internal service funds are used to accumulate and allocate costs internally among the City’s various functions including public liability, workers compensation, fleet and equipment services, information technology and facilities rehabilitation. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for all six of the City’s enterprise funds, each of which is considered a major fund of the City. These funds are Airport, Water, Water Reclamation, LAVWMA, Los Positas Golf Course, and Springtown Golf Course. The City’s six internal service funds are combined into a single, aggregated presentation in the propriety fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements in the Supplemental Information section of this report. Fiduciary Statements The City is the agent for certain Assessment Districts in the City, holding amounts collected and disbursing these amounts as directed or required. The City’s fiduciary activities are reported in the separate Statements of Fiduciary Net Assets and the Agency Funds Statement of Changes in Assets and Liabilities. These activities are excluded from the City’s other financial statements because the City cannot use these assets to finance its own operations. 15 Comprehensive Annual Financial Report FY 2006-2007 Notes to the Basic Financial Statements The notes to the basic financial statements 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 basic financial Statements are found on pages 55-91. Supplemental Information The combining statements for non-major governmental funds are found on pages 95-118. Combining and individual fund statements and schedules for the internal service funds and fiduciary funds can be found on pages 119-127 of this report. (C) Government-wide Financial Analysis This analysis focuses on the net assets and changes in net assets of the City as a whole. Tables 1, 2 and 3 focus on the City’s Governmental Statement of Net Assets and Statement of Activities, while Tables 4 and 5 focus on the City’s Business-type Statement of Net Assets and Statement of Activities that follow. Governmental Activities Table 1 Governmental Net Assets at June 30 (in Millions) 2007 2006 Cash and investments $127.7$111.5 Other assets 77.867.3 Capital assets 258.6257.1 Total assets 464.1435.9 Long-term debt outstanding 103.3103.3 Other liabilities 30.027.7 Total liabilities 133.3131.0 Net assets: Invested in capital assets, net of debt 197.1187.3 Restricted 48.133.1 Unrestricted 85.684.5 Total net assets $330.8$304.9 16 Comprehensive Annual Financial Report FY 2006-2007 The City’s governmental net assets amounted to $330.8 million at June 30, 2007, an increase of $25.9 million over 2006. This increase is the Change in Net Assets reflected in the Governmental Activities column of the Statement of Activities shown in Table 2. The City’s net assets at June 30, 2007 comprised the following: • Cash and investments comprised $17.5 million of unspent projects funds from new debt issues, $3.1 million of debt service reserves and $107.1 million of pooled cash and investments available for operations. Substantially all of these amounts were held in short term investments in government securities, as detailed in Note 3 to the financial statements. • Accounts and interest receivable of $12.6 million, all current, along with notes receivable of $17.7 million that are due over longer periods of time, as explained in Note 5 to the financial statements. • Land held by the Redevelopment Agency for redevelopment purposes, valued at cost of $3.0 million, which is less than estimated market value. • Capital assets of $258.6 million, net of depreciation charges, which includes the City’s infrastructure as well as its other capital assets used in governmental activities. • Current liabilities, including accounts payable, claims and other amounts due currently, totaling $13.8 million. • Deposit payable of $16.2 million primarily represent developer performance deposits, which are refundable if the developer performs City required improvements. • Long-term debt of $103.3 million, of which $99.5 million is due in future years and $3.8 million is due currently. • Net assets invested in capital assets net of related debt of $197.1 million, representing the City’s investment in infrastructure and other capital assets used in Governmental activities, net of amounts borrowed to finance that investment. • Restricted net assets totaling $48.1 million, which may be used only to construct specified capital projects, for debt service, for redevelopment, special revenue programs or special assessment districts. The restrictions on these funds were placed there by outside agencies and are not subject to change by the City. • Unrestricted net assets, the part of net assets that can be used to finance day-to-day operations without constraints established by debt covenants or other legal requirements or restrictions. The City had $85.6 million of unrestricted net assets at June 30, 2007. 17 Comprehensive Annual Financial Report FY 2006-2007 Fiscal Year 2007 Government Activities As the Sources of Revenue Chart above shows, $20.3 million, or 15.4% of the City’s fiscal 2007 governmental activities revenue, came from sales taxes, while $23.5 million or 17.8% came from property tax, $10.5 million, or 7.9%, came from other taxes, $15.3 million, or 11.6%, came from charges for services, and $40.2 million, or 30.5%, came from grants and contributions. The remaining 16.8% came from a variety of sources, as shown above. The Functional Expenses Chart above includes only current year expenses; it does not include capital outlays, which are now added to the City’s capital assets. As the Chart shows, community development accounted for $20.9 million, or 19.7%, of total governmental expenses, police accounted for $24.1 million, or 22.7%, fire accounted for $13.9 million, or 13.1% and other governmental programs and functions accounted for the remaining 44.5%. Sources of Revenues Charges for Services 11.6% Grants & Contributions 30.5% Property taxes 17.8% Incremental property taxes 3.2% Sales taxes 15.4% Other taxes 7.9% Intergovernment 4.6% Interest 4.6% Misc & Transfers 4.5% Functional Expenses Fire 13% Library 8% Economic Development 0% Finance 6% Human Resources 1% Public Works 20% City Attorney 1%Interest 4% City Clerk 1% Community Development 20% City Council 0% Police 23% City Manager 1% Redevelopment 2% 18 Comprehensive Annual Financial Report FY 2006-2007 The Statement of Activities presents program revenues and expenses and general revenues in detail. All these are elements in the Changes in Governmental Net Assets summarized below. Table 2 Changes in Governmental Net Assets (in Millions) Governmental Activities 2007 2006 Expenses General Government $11.1$10.7 Fire 13.913.2 Police 24.123.7 Public Works 20.721.5 Community Development 20.915.2 Economic Development 0.30.5 Library 8.45.4 Redevelopment 2.02.3 Interest on long term debt 4.74.3 Total expenses 106.196.8 Revenues Program revenues: Charges for services 15.316.4 Operating contributions and grants 9.610.1 Capital grants and contributions 30.624.4 Total program revenues 55.550.9 General revenues: Property taxes 23.520.5 Incremental property taxes 4.23.9 Sales taxes 20.319.3 Other taxes 10.510.2 Intergovernmental 6.01.8 Interest 6.15.1 Miscellaneous 5.64.0 Gain on sale of property 0.00.0 Total general revenues 76.264.8 Surplus before transfers 25.618.9 Transfers, net 0.31.2 Changes in net assets $25.9$20.1 As Table 2 above show, $55.5 million or 42.1% of the City’s fiscal 2007 Governmental revenue, came from program revenues and $76.2 million or 57.9% came from general revenues such as taxes and interest. 19 Comprehensive Annual Financial Report FY 2006-2007 Program revenues were composed of charges for services of $15.3 million which include permit revenues, fees and charges used to fund expenses incurred in providing services; $9.6 million of operating grants and contributions which include gas tax revenues and housing and police grants and capital grants and contributions of $30.6 million which consist mainly of street project grants and developer impact fees restricted to capital outlay. General revenues are not allocable to programs. General revenues are used to pay for the net cost of governmental programs. Table 3 presents the net (expense) or revenue of each of the City’s governmental activities, including interest on long-term debt. Net expense is defined as total program cost less the revenues generated by those specific activities. Revenues generated by certain activities, such as Community Development, exceed the cost of that program. Revenues exceeded expenses for the Community Development activities because its programs were responsible for producing operating grants, capital grants and contributions amounting to $38.9 million. Table 3 Net Revenue (Expense) of Governmental Activities (in Millions) 2007 2006 City Council $0.0 ($0.1) City Manager (1.1)(1.1) City Attorney (1.2)(1.1) City Clerk (0.7)(1.0) Finance (6.6)(6.0) Human Resources (1.2)(1.3) Fire (12.4)(6.9) Police (21.4)(21.4) Public Works (20.1)(8.0) Community Development 29.1 13.2 Economic Development (0.3)(0.5) Library (8.0)(5.1) Redevelopment (2.0)(2.3) Interest on long term debt (4.7)(4.3) Totals ($50.6)($45.9) 20 Comprehensive Annual Financial Report FY 2006-2007 Business-type Activities The Statements of Net Assets and Statement of Activities present a summary of the City’s Business-type activities which are composed of the City’s enterprise funds. Table 4 Business-Type Net Assets at June 30 ( in Millions) Business-Type Activities 2007 2006 Cash and investments $76.2 $76.3 Other assets 1.5 3.2 Capital assets 162.5 162.5 Total assets 240.2 242 Long-term debt outstanding 15.8 17.4 Other liabilities 2.3 2.7 Total liabilities 18.1 20.1 Net assets: Invested in capital assets, net of debt 146.7 145.1 Unrestricted 75.4 76.8 Total net assets $222.1 $221.9 The net assets of business-type activities increased to $222.1 million in fiscal 2007, an increase of $0.2 million. Capital asset additions, discussed in the Capital Assets section and long-term debt retirements, discussed in the Debt Administration section, account for the increase. Table 5 Changes in Business-Type Net Assets (in Millions) Business-type Activities 2007 2006 Expenses Airport $5.3 $5.5 Water 8.6 8.1 Sewer 21.5 17.1 LAVWMA 3.7 2.5 Las Postas Golf Course 2.8 2.8 Springtown Golf Course 0.2 0.2 Total expenses $42.1 $36.2 21 Comprehensive Annual Financial Report FY 2006-2007 Revenues Program Revenues: Charges for Services $39.8 $34.6 Operating Grants and Contributions 0.1 0.1 Capital Grants and Contributions 2.7 9.6 Total Program Revenues 42.6 44.3 Transfers, net (0.3) (1.2) Changes in net assets $0.2 $6.9 Total program revenues of Business-type Activities were $42.6 million in fiscal 2007, down from $44.3 million in the prior year due primarily to a decrease of Capital Grants and Contributions. Program expenses increased $5.9 million to a total of $42.1 million. Net transfers increased expenses by $0.3 million. The City’s Fund Financial Statements Table 6 below summarizes Governmental Activity and balances at the fund level: Table 6 Financial Highlights at Fund Level at June 30 ( in Millions) 2007 2006 Governmental Funds Total assets 158.9 $143.6 Total liabilities 48.2 47.4 Total fund balances 110.7 96.1 Total revenues 124.1 107.7 Total expenditures 113.8 114.5 Total other financing sources (uses) and special items 4.2 2.9 At June 30, 2007, the City’s governmental funds reported combined fund balances of $110.7 million, which is an increase of $14.6 million over the prior year. Governmental fund revenues showed an increase of $16.4 million to $124.1 million, while expenditures decreased $0.7 million to a new total of $113.8 million. Expenditures included $8.0 million in debt service and capital outlays of $22.5 million. The decrease in expenditures was due primarily to a decrease in capital outlay expenditures. 22 Comprehensive Annual Financial Report FY 2006-2007 Analyses of Major Governmental Funds General Fund Revenues showed an increase of $5.0 million to $79.7 million in fiscal 2007 compared to the actual for fiscal 2006. Taxes and special assessments increased $3.2 million to $33.7 million in fiscal 2007 and intergovernmental revenue decreased $0.5 million in fiscal 2007. Expenditures showed an increase of $4.0 million to $75.8 million for fiscal 2007 compared to the actual for fiscal 2006. Of the total, Community Development costs showed an increase of $0.9 million, while Capital Projects showed an increase of $0.8 million for fiscal 2007. The following table shows the budgetary variances between the original two-year budget approved in 2006 versus the final amended budget for fiscal 2007 that was approved on June 25, 2007 and reflects the change in economic expectations between the two time periods. Table 7 General Fund Budgetary Variance Analysis Budget Approved June 26, 2006 Budget Approved June 25, 2007 Variance Final Budget Variance Final Budget Original Final Positive/(Negative) % Revenues: Property taxes $22,911,000 $23,461,000 $550,000 2.40% Sales taxes 21,493,000 20,400,000 (1,093,000) -5.09% Other taxes 10,747,000 10,453,000 (294,000) -2.74% Licenses and permits 2,906,000 2,047,000 (859,000) -29.56% Intergovernmental 7,289,000 7,800,000 511,000 7.01% Fines and forfeitures 706,000 750,000 44,000 6.23% Other in lieu taxes 495,000 495,000 0 0.00% Charges for current services 8,372,000 8,547,000 175,000 2.09% Use of money and property 3,713,000 3,819,000 106,000 2.85% Miscellaneous 878,000 1,388,000 510,000 58.09% Totals 79,510,000 79,160,000 (350,000) -0.44% Expenditures: City Council 167,580 191,570 23,990 14.32% City Manager 1,085,420 1,118,860 33,440 3.08% City Attorney 1,137,860 1,186,680 48,820 4.29% City Clerk 872,030 871,590 (440) -0.05% Finance 6,701,010 6,478,800 (222,210) -3.32% Human Resources 1,332,360 1,332,140 (220) -0.02% Fire 13,983,770 13,916,170 (67,600) -0.48% Police 23,368,980 23,456,210 87,230 0.37% Public Works 7,548,900 7,782,480 233,580 3.09% Community Development 14,497,820 14,076,520 (421,300) -2.91% Economic Development 636,750 608,070 (28,680) -4.50% Library 4,644,770 4,872,400 227,630 4.90% Capital projects 3,530,000 3,002,540 (527,460) -14.94% Totals $79,507,250 $78,894,030 ($613,220) -0.77% 23 Comprehensive Annual Financial Report FY 2006-2007 The following table shows the original budget approved in 2006 and the final amended budget approved on June 25, 2007 and the actual results as of June 30, 2007. The variances computed are between the final budget and actual results. In revenues, the largest contributor to the $0.5 million variance in the “Other Taxes” category was “Business License Tax Const.” at a negative $0.3 million. Property tax was also lower than expected with a $.2 million negative variance. As to expenditures, the largest negative variance was $1.1 million within the Capital projects and amounted to 38.3% of the approved budget. Overall revenues had a net positive variance and expenditures had a net negative variances. Table 8 General Fund Budgetary and Actual Variance Analysis Budget Approved June 26, 2006 Budget Approved June 25, 2007 As of June 30, 2007 Actual Variance Final Budget Variance Final Budget Original Final Budgetary Basis Positive/(Negative) % Revenues: Property taxes $22,911,000 $23,461,000 $23,239,095 ($221,905) -0.95% Sales taxes 21,493,000 20,400,000 20,304,090 (95,910) -0.47% Other taxes 10,747,000 10,453,000 9,958,918 (494,082) -4.73% Licenses and permits 2,906,000 2,047,000 2,256,120 209,120 10.22% Intergovernmental 7,289,000 7,800,000 7,790,386 (9,614) -0.12% Fines and forfeitures 706,000 750,000 762,058 12,058 1.61% Other in lieu taxes 495,000 495,000 493,567 (1,433) -0.29% Charges for current services 8,372,000 8,547,000 8,572,796 25,796 0.30% Use of money and property 3,713,000 3,819,000 5,065,694 1,246,694 32.64% Miscellaneous 878,000 1,388,000 1,263,336 (124,664) -8.98% Totals 79,510,000 79,160,000 79,706,060 546,060 0.69% Expenditures: City Council 167,580 191,570 181,535 (10,035) -5.2% City Manager 1,085,420 1,118,860 1,115,631 (3,229) -0.3% City Attorney 1,137,860 1,186,680 1,185,209 (1,471) -0.1% City Clerk 872,030 871,590 766,525 (105,065) -12.1% Finance 6,701,010 6,478,800 6,536,738 57,938 0.9% Human Resources 1,332,360 1,332,140 1,258,334 (73,806) -5.5% Fire 13,983,770 13,916,170 13,669,323 (246,847) -1.8% Police 23,368,980 23,456,210 23,303,879 (152,331) -0.6% Public Works 7,548,900 7,782,480 7,175,563 (606,917) -7.8% Community Development 14,497,820 14,076,520 13,697,160 (379,360) -2.7% Economic Development 636,750 608,070 360,741 (247,329) -40.7% Library 4,644,770 4,872,400 4,683,702 (188,698) -3.9% Capital projects 3,530,000 3,002,540 1,852,653 (1,149,887) -38.3% Totals $79,507,250 $78,894,030 $75,786,993 ($3,107,037) -3.9% 24 Comprehensive Annual Financial Report FY 2006-2007 Property tax revenues were lower than expected by $221,905. Most of this shortfall occurred in the current collections of assessments and was offset by an increase in current supplemental assessments. Redevelopment Agency Capital Projects Fund The Fund is used to account for redevelopment activities and acts as the primary operating fund for the Agency. Property tax increment revenues are recorded in this fund. Tax increment revenues used for debt service and the 20% low-and-moderate-income housing set-aside required by State law are transferred to other funds. Cash and Investments held by Trustee amount to $5.2 million and represent unspent 2001 Tax Allocation Bond proceeds to be used for redevelopment activities. Land held for redevelopment amounts to $3.0 million at June 30, 2007. The Agency has agreements with developers/owners that are summarized below. Additional details may be found in the Note 14 to the financial statements. 1. Livermore Senior Housing Continuum of Care Project Phase I The City and Agency have an agreement with a Developer and an Owner under which a 250 unit residential rental senior citizen housing Congregate Care/Assisted Living Facility (Phase I) and a Phase II Project since deemed unfeasible and changed to the new project discussed below. The Project was to be constructed on a site composed of formerly Agency owned land subdivided into two parcels, one for each Phase. In a prior year, the Agency sold the Phase I parcel to the owner. In addition, the Agency loaned the Developer $800,000 to partially finance City and County development fees. The loan bears interest at ten percent, is due in fifty-seven years and is secured by a subordinated deed of trust. Provided the project is in compliance with affordability covenants, the interest rate will drop to five percent beginning the seventeenth year of the note until maturity. If the project maintains compliance with affordability covenants through maturity, interest accrued at the five percent rate will be forgiven. As required under the agreement, the Agency sponsored the issuance of $29.8 million principal amount of Multifamily Housing Revenue Bonds proceeds, which were used by the Developer to acquire and construct the project. The Bonds are repayable solely from mortgage payments received from the Developer. The Agency is not obligated for repayment of the Bonds. As of June 30, 2005, the Agency sold the land for Phase I and construction was complete. In addition Agency funds transferred to the City’s Housing and Community Assistance Fund in fiscal 2001-2002 were used to finance the Developer Loan for $800,000, which has been recorded in that City Fund. 25 Comprehensive Annual Financial Report FY 2006-2007 2. Livermore Independent Living Associates Project (Valley Care Senior Housing Project) The Agency and City have an agreement under which a Developer will construct and operate a 130 senior rental housing project on a site composed of a parcel conveyed by the Agency to the Developer and a parcel the City has agreed to sell to Developer for $1.1 million. Fifty-five units are to be made affordable for lower income seniors. The Developer will also construct Iron Horse Trail Easement Improvements. This agreement replaces the Livermore Senior Housing Continuum of Care Project, Phase II. To assist in financing the project, the Agency has agreed to loan $2 million to the Developer. The loan bears an interest of 3% per annum and due in forty years. The loan is due in installments as follows: $989,000 is due in two subordinated payments from available remaining Bond Proceeds, and annual payments ranging from $33,000 to $175,000 per year are payable each March 1 from cash flows available from the operations of the project. In addition, the Agency agreed to a Property Tax Loan and an Additional Property Tax Deferment up to maximums specified in the agreement, which bear interest at three percent with annual repayments beginning in year eight from available cash flows of the project commencing after the project is complete. As of June 30, 2007, the Agency had disbursed $240,398 under this loan agreement. As required under the agreement, the Agency sponsored the issuance of $19 million principal amount of Multifamily Housing Revenue Bonds proceeds, which were used by the Developer to acquire and construct the project. The Bonds are repayable solely from mortgage payments received from the Developer. The Agency is not obligated for repayment of the Bonds. As of June 30, 2007, this project is complete. To assist the Agency in financing the Developer loan, the City signed a $1,500,000 loan agreement with the California Housing Finance Agency. Proceeds from this City debt along with $500,000 in other City funds were used to finance the loan during fiscal year 2006-2007. As of June 30 2007, the Developer owed $2,000,000 to the Agency which has been recorded as a note receivable, and the Agency owed $2,000,000 to the City which has been recorded as an advance from the City. 3. Maroon Bear Project The Agency has an agreement under which a Developer constructed and operates a 21,000 square foot 2-story building composed of 10,000 square feet of retail space and 10,000 square feet of office space. The building is located on a site the Developer purchased from the Agency for $800,000. The purchase price is evidenced by a note receivable due the Agency. The Developer remitted the first three installments on the loan and paid the remaining $200,000 to the Agency in May 2007. As of June 30, 2007, the construction of the project is complete. 26 Comprehensive Annual Financial Report FY 2006-2007 4. Signature Properties Multi-Family Residential Project (Station Square) The Agency has signed a Disposition and Development Agreement under which the Developer, Signature Properties, Inc., has agreed to construct a project consisting of a minimum of 119 attached multi-family housing units along with certain infrastructure improvements. The Project is to be located on an Agency owned site which was sold to the Developer for $5 million in fiscal 2004-2005. As of June 30, 2007, the project is under construction. 5. Cinema West Movie Theater Project The Agency signed an Agreement with a Developer under which a ten screen, 34,500 square foot movie theater complex will be constructed by the Developer on a site composed of Agency owned land. Pursuant to the Agreement, the Agency sold the site to the Developer for $840,000, net of closing costs. Of the sales price, $668,678 was paid to the Agency in March 2004 as part of the close of escrow. The $170,000 balance of the loan was repaid in fiscal year 2005-2006. As of June 30, 2007, the theater is complete. 6. Livermore Valley Center Retail Project East The Agency has an agreement with a Developer to construct a 40,000 square foot retail and office complex. The complex will be built on a .35 acre site adjacent to the Park Plaza and Movie Theater Project. The Agency owned site will be sold to the Developer for $462,669, payable in non-interest bearing installments as follows: $154,223 was paid at the close of escrow less a good faith deposit the Agency has and any interest earned, $154,223 was paid immediately upon issuance of the Certificate of Occupancy, $154,223 is due within the earlier of attainment of 90% occupancy of the site or one year after the issuance of the Certificate of Occupancy. Prior to occupancy by the Developer, the Developer shall pay the Agency $4,627 to acquire, construct and install a public art project within the Livermore Valley Center. As of June 30, 2007, construction was complete, but occupancy has not reached 90%. 7. Livermore Valley Center Retail Project West The Agency has an agreement under which a Developer will construct a three-story 45,000 square foot retail and office complex. The complex will be constructed on a site adjacent to the proposed Performing Arts Center and proposed Park Plaza in the Livermore Valley Center. The Agency owned site is approximately 0.56 acres and is to be sold to the Developer for $973,815. The purchase price is payable in non-interest bearing installments as follows: $324,605 was paid at the close of escrow less a good faith deposit the Agency has and any interest earned, $324,605 was paid immediately upon issuance of the Certificate of Occupancy, $324,605 is due within the earlier of attainment of 90% occupancy of the site or one year after the issuance of the Certificate of Occupancy. Prior to occupancy by the Developer, the Developer shall pay the Agency $9,738 to acquire, construct and install a public art project within the Livermore Valley Center. As of June 30, 2007, construction was complete, but occupancy has not reached 90%. 27 Comprehensive Annual Financial Report FY 2006-2007 8. Performing Arts Centers The Agency has an agreement with a Developer to construct two performing arts theaters. The first theater will have approximately 500 seats and will be designed and operated to support local performing arts and for smaller audiences. The second theater will have approximately 1,500 seats to support regional and traveling presenting groups as well as larger local performances. The theaters will be located on two sites that the Developer will lease from the Agency for one-dollar per year. Each lease shall be for a period of 25 years with three 5-year extensions at the option of the Developer. As of June 30, 2007, the 500 seat theater project is nearly complete with operations anticipated to begin in fiscal 07-08. 9. Savannah Terrace The Agency has an agreement with a Developer to construct an 8-unit single family residential housing unit consisting of a combination of affordable housing, live-work housing, and residential uses. Two of the units will be restricted to disabled low-income residents. The Project is to be located on an Agency owned site which is to be sold to the Developer for $650,000. Of the sales price, a deposit of $65,000 was paid into escrow in May 2007, the first installment of $65,000 was paid in June 2007, and the remaining $520,000 is to be loaned to the Developer which is repayable upon the sale of each individual housing unit. The loan bears 3% simple interest. As of June 30, 2007, the project was under construction but escrow had not closed. The Fund owes the City $7.1 million in advances, which were used to fund prior year redevelopment activities. The Agency plans to use $7.1 million of the 2001 Tax Allocation Bond proceeds to repay the advance due the City. The Fund’s fiscal 2007 revenues amounted to $5.0 million, which is an increase of $0.3 million from the prior year. Expenditures increased to $5.9 million, up $1.3 million from the prior year as a result of a increase in activity for the above projects. Other financing sources were a net ($2.4) million in fiscal 2007. Street Improvements Fund This Fund is used to account for the construction of major streets and interchanges. During fiscal 2007, capital outlay amounted to $6.3 million. Significant projects included the Greenville Road Widening and Railroad Bridge Replacement with expenditures of $2.2 million and Vasco Road/I580 Interchange project with expenditures of $2.7 million. The primary revenue source for this fund is developer impact fees, which increased $1.1 million in fiscal 2007, to a total of $4.3 million. This revenue source is dependant on development activity. 28 Comprehensive Annual Financial Report FY 2006-2007 This Fund had interfund receivable balances amounting to $1.2 million at June 30, 2007. Of this amount, $0.4 million was due from the Isabel/I580 Interchange, $0.1 million was due from the Bike Lane project, and $0.7 million was due from the Federal Street Projects Fund. Developer Deposits This fund accounts for performance deposits from developers, which are held on their behalf. Funds are returned if developers perform required provisions under agreements with the City. Funds used by the City to complete required provisions are recorded as revenues in other funds to the extent used. As of June 30, 2007 the City held $15.4 million in performance deposits on behalf of developers Other Governmental Funds These funds are not presented separately in the Basic Financial statements, but are individually presented as Supplemental Information. Analysis of Major Business-type Activities – Enterprise Funds Airport Fund Airport Fund net income amounted to $1.1 million in fiscal year 2007, up from ($0.4) million in fiscal year 2006. Water Fund Water Fund net income amounted to $3.5 million in fiscal year 2007, up from $3.3 million in fiscal year 2006. Operating revenues increased by $1.2 million in fiscal 2007. The increase in net income is due to an increase in sales with a moderate increase to expenses. Sewer Fund Sewer Fund net income amounted to ($2.3) million in fiscal 2007, down from $4.8 million in fiscal 2006. Operating Revenues decreased $1.7 million to $18.7 million in fiscal 2007. The decrease is the result of asset contributions dropping due to less development. During fiscal 2007, repairs to capital assets amounted to $5.6 million. Operating expenses increased $4.2 million to $21.2 million. The increase is mainly the result of an increase to repair and maintenance of capital assets. Transfers out amount to $2.7 million in fiscal 2007 and are composed primarily of a $2.5 million transfer to the LAVWMA Fund, which is discussed below 29 Comprehensive Annual Financial Report FY 2006-2007 LAVWMA Fund This fund accounts for contributions to the Livermore/Amador Valley Wastewater Authority (LAVWMA), a joint powers authority responsible for implementing a water quality management program involving wastewater treatment and disposal for the City and other municipal members of LAVWMA. The City contributes its share of operating and capital funds to LAVWMA, which uses those funds along with other members’ contributions to operate. The City is not entitled to assets nor responsible for liabilities of LAVWMA. Contributions to LAVWMA amounted to $2.5 million for the year and were funded by Sewer Fund transfers. Las Positas Golf Course Fund The Fund generated a net loss of $0.6 million up $0.3 million from fiscal 2006. Operating revenues were up by $0.2 million at $2.3 million in fiscal 2007. Operating expenses had a decrease of $0.1 million in fiscal 2007. Springtown Golf Course Fund This Fund generated a net loss for the year amounting to slightly more than $0.1 million for fiscal 2007. In fiscal 2002, the City turned over operation of the Springtown Golf Course to a third party operator which retains golf and other fee revenues and operates and maintains the Golf Course. The Operator then pays the City a fee as set forth in the agreement. (D) Capital Assets GASB 34 requires the City to record all its capital assets including infrastructure. Infrastructure includes roads, bridges, signals and similar assets used by the entire population. As allowed by GASB 34, the City had until fiscal 2005-2006 to record the cost and accumulated depreciation of infrastructure acquired in prior years. An audit of these assets was done three years ago and City staff has implemented these adjustments. 30 Comprehensive Annual Financial Report FY 2006-2007 At the end of fiscal 2007 the cost of capital assets recorded on the City’s financial statements was as shown in Table 9 below (further detail may be found in Note 6 to the financial statements): Table 9 Capital Assets at Year-end (in Millions) 2007 2006 Governmental Activities Land $16.5 $16.7 Construction in progress 25.4 16.8 Buildings 97.9 97.9 Equipment and vehicles 16.6 16.6 Infrastructure 238.8 228.3 Internal service fund equipment and vehicles 10.9 10.8 Less accumulated depreciation (105.7) (96.5) Totals $300.4 $290.6 Business-type Activities Land $13.9 $13.9 Construction in progress 8.5 4.3 Land Improvements 0.6 0.5 Buildings 22.2 22.2 Equipment and vehicles 4.1 4.0 Golf Course Infrastructure 7.5 7.5 Sewer Infrastructure 196.1 194.6 Water Infrastructure 30.4 29.2 Airport Infrastructure 11.1 11.1 Less accumulated depreciation (132.0) (124.8) Totals $162.4 $162.5 The principal additions for governmental activities in fiscal 2007 were to streets and roads. Business-type activity additions were primarily composed of Sewer and Water infrastructure improvements. Some projects in construction in progress in prior years were completed in fiscal 2007, such as the Park Plaza Commons. The City depreciates all its capital assets over their estimated useful lives, as required by GASB 34. The purpose of depreciation is to spread the cost of a capital asset over the years of its useful life so that an allocable portion of the cost of the asset is borne by all users. Additional information on depreciable lives may be found in Note 6. 31 Comprehensive Annual Financial Report FY 2006-2007 (E) Debt Administration Each of the City’s debt issues is discussed in detail in Note 7 to the financial statements. At June 30, 2006 and 2007 the City’s debt comprised: Table 10 Outstanding Debt (in Millions) 2007 2006 Governmental Activity Debt: Certificates of Participation $63.6 $63.1 Tax Allocation Bonds 34.8 35.5 Notes payable 4.9 4.6 Totals $103.3 $103.2 Business-type Activity Debt: Certificates of Participation $10.3 $11.1 State Water Reclamation Loans 5.3 5.9 Airport Loans Payable 0.0 0.0 Golf Equipment Lease 0.2 0.3 Totals $15.8 $17.3 In fiscal 2007, the City refunded a Certificate of Participation, increasing debt by $2.1 million. Governmental activities debt was reduced $2.4 for scheduled retirements. Business-type activity debt was reduced $1.6 million for scheduled retirements. (F) Special Assessment and Mello-Roos District Debt Special assessment and Mello-Roos districts in different parts of the City have issued tax- exempt debt to finance the construction of public improvements entirely in those districts. At June 30, 2007, a total of $52.8 million in special assessment district debt was outstanding, issued by four special assessment districts. This debt is secured only by special assessments on the real property in the district issuing the debt, and is not the City’s responsibility. The City does act as these Districts’ agent in the collection and remittance of assessments, and in the management of facilities construction. Further detail on these districts may be found in Note 8 to the financial statements. (G) Requests for Information The Comprehensive Annual Financial Report is intended to provide a general overview of the City’s finances for readers of the financial statements. Questions concerning any of the information in this report or requests for additional financial information should be addressed to the Director of Finance, 1052 South Livermore Avenue, Livermore, CA 94550-4899. 32 Comprehensive Annual Financial Report FY 2006-2007 Government-Wide Financial Statements Statement of Net Assets and Activities The Statement of Net Assets and the Statement of Activities summarize the entire City’s financial activities and financial position. They are prepared on the same basis as is used by most businesses, which means they include all the City’s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis—the effect of all the City’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between City funds have been eliminated. The Statement of Net Assets reports the difference between the City’s total assets and the City’s total liabilities, including all the City’s capital assets and all its long-term debt. The Statement of Net Assets presents similar information to the old balance sheet format, but presents it in a way that focuses the reader on the composition of the City’s net assets, by subtracting total liabilities from total assets. The Statement of Net Assets summarizes the financial position of all the City’s Governmental Activities in a single column, and the financial position of all the City’s Business-Type Activities in a single column; these columns are followed by a Total column that presents the financial position of the entire City. The City’s Governmental Activities include the activities of its General Fund, along with all its Special Revenue, Capital Projects and Debt Service Funds. Since the City’s Internal Service Funds service these Funds, their activities are consolidated with Governmental Activities, after eliminating inter-fund transactions and balances. The City’s Business Type Activities include all its Enterprise Fund activities. The Statement of Activities reports increases and decreases in the City’s net assets. It is also prepared on the full accrual basis, which means it includes all the City’s revenues and all its expenses, regardless of when cash changes hands. This differs from the “modified accrual” basis used in the Fund financial statements, which reflect only current assets, current liabilities, available revenues and measurable expenditures. The format of the Statement of Activities differs considerably from those used in the past. It presents the City’s expenses first, listed by program, and follows these with the expenses of its business-type activities. Program revenues—that is, revenues which are generated directly by these programs—are then deducted from program expenses to arrive at the net expense of each governmental and business-type program. The City’s general revenues are then listed in the Governmental Activities or Business-type Activities column, as appropriate, and the Change in Net Assets is computed and reconciled with the Statement of Net Assets. Both these Statements include the financial activities of the City, the Livermore Redevelopment Agency and the Livermore Capital Projects Financing Authority, which are legally separate but are component units of the City because they are controlled by the City, which is financially accountable for their activities. These financial statements along with the fund financial statements and footnotes are called Basic Financial Statements. 33 STATEMENT OF NET ASSETS JUNE 30, 2007 GovernmentalBusiness-Type ActivitiesActivitiesTotal ASSETS Cash and investments in City Treasury (Note 3) $107,119,128$76,191,995$183,311,123 Cash and investments with Trustees (Note 3) 20,571,01920,571,019 Accounts receivables (net of applicable allowance for uncollectibles)10,442,2242,360,03312,802,257 Interest receivable2,139,0282,139,028 Internal balances (Note 4D) 904,706(904,706) Prepaids, deposits and supplies1,803,537101,6051,905,142 Notes receivable (Note 5) 17,710,10917,710,109 Land held for redevelopment (Note 1I) 3,037,6103,037,610 Land & construction in progress (Note 6) 41,765,44022,998,31564,763,755 Capital assets (net of accumulated depreciation) (Note 6) 258,612,830139,473,822398,086,652 Total assets464,105,631240,221,064704,326,695 LIABILITIES Accounts payable and other accruals7,730,2351,567,6409,297,875 Accrued payroll and compensated absence3,602,013467,9364,069,949 Claims payable (Note 13B) 2,511,8532,511,853 16,156,129264,51516,420,644 Long-term debt (Note 7): 3,755,0001,647,4915,402,491 99,547,33914,142,878113,690,217 133,302,56918,090,460151,393,029 NET ASSETS (Note 9) 197,075,931146,681,768343,757,699 Restricted: 21,693,28921,693,289 3,093,2463,093,246 2,914,5442,914,544 11,152,62011,152,620 9,222,6549,222,654 Unrestricted85,650,77875,448,836161,099,614 $330,803,062$222,130,604$552,933,666 See accompanying notes to financial statements Special revenue grant programs Total net assets Total liabilities Capital projects Debt service Special assessment administration Redevelopment Due within one year Due in more than one year Deposit payable and unearned revenue Invested in Capital Assets, net of related debt Comprehensive Annual Financial Report FY 2006-2007 34 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2007 Net (Expense) Revenue and Program RevenuesChanges in Net Assets OperatingCapital Charges forGrants and Grants and Governmental Business-type Functions/ProgramsExpensesServicesContributionsContributionsActivitiesActivitiesTotal Governmental Activities: $181,376$195,717$14,341$14,341 1,118,005(1,118,005)(1,118,005) 1,158,163(1,158,163)(1,158,163) 743,797(743,797)(743,797) 6,678,870$114,420(6,564,450)(6,564,450) 1,230,107(1,230,107)(1,230,107) 13,911,0981,505,773(12,405,325)(12,405,325) 24,107,3722,028,445644,776(21,434,151)(21,434,151) 20,709,203288,150374,332(20,046,721)(20,046,721) 23,837,23311,070,8578,336,534$30,561,22026,131,37826,131,378 343,222(343,222)(343,222) 5,385,012292,554104,431(4,988,027)(4,988,027) 1,998,205(1,998,205)(1,998,205) 4,693,492(4,693,492)(4,693,492) Total Governmental Activities106,095,15515,300,1999,655,79030,561,220(50,577,946)(50,577,946) Business-type Activities: 5,338,0686,306,538$968,470968,470 8,572,76310,863,4641,193,4043,484,1053,484,105 21,455,74920,239,7391,545,320329,310329,310 3,750,222115,516(3,634,706)(3,634,706) 2,752,5512,259,064(493,487)(493,487) 245,444102,799(142,645)(142,645) Total Business-type Activities42,114,79739,771,604115,5162,738,724511,047511,047 Total$148,209,952$55,071,803$9,771,306$33,299,944(50,577,946)511,047(50,066,899) General revenues: Property taxes23,474,63623,474,636 Incremental property taxes4,166,0774,166,077 Sales taxes20,304,09020,304,090 Other taxes10,452,48510,452,485 Intergovernmental, unrestricted6,024,3536,024,353 Interest6,129,2386,129,238 Miscellaneous 5,639,6245,639,624 Transfers, net (Note 4B)294,196(294,196) Total general revenues and transfers76,484,699(294,196)76,190,503 Change in Net Assets25,906,753216,85126,123,604 Net Assets-Beginning304,896,309221,913,753526,810,062 Net Assets-Ending$330,803,062$222,130,604$552,933,666 See accompanying notes to financial statements Springtown Water Sewer LAVWMA Las Positas Redevelopment Interest on long term debt Airport Public Works Community Development Economic Development Library Finance Personnel Fire Police City Council City Manager City Attorney City Clerk Comprehensive Annual Financial Report FY 2006-2007 35 Comprehensive Annual Financial Report FY 2006-2007 36 Comprehensive Annual Financial Report FY 2006-2007 Fund Financial Statements Only individual major funds are presented in the Fund Financial Statements, while non- major funds are combined in a single column. Major funds are defined generally as having significant activities or balances in the current year. The funds described below were determined to be Major Funds by the City in fiscal 2007. Individual non-major funds may be found in the Supplemental section. GENERAL FUND The General Fund is used for all the general revenues of the City not specifically levied or collected for other City funds, and the related expenditures. REDEVELOPMENT AGENCY CAPITAL PROJECTS Established to account for the acquisition, demolition, relocation, and sales of land in the Livermore redevelopment area. Financing is provided by bond proceeds, loans from the general fund, property tax increments and transfers from the low-income housing fund and the community development fund. STREET IMPROVEMENTS Established to account for developer fees paid for construction of major streets and interchanges. DEVELOPER DEPOSITS Established to account for developer fees received pursuant to development agreements, performance deposits, and transportation development fees collected. 37 GOVERNMENTAL FUNDS BALANCE SHEET JUNE 30, 2007 Redevelopment AgencyStreet GeneralCapital ProjectsImprovements ASSETS Cash and investments in City Treasury (Note 3)$26,488,832$6,548,585$8,629,982 Cash and investments with Trustees (Note 3)5,197,253 Accounts receivables5,345,743295,51136,338 Interest receivable2,139,028 Due from other funds (Note 4A)1,464,8691,198,629 Advances to other funds (Note 4C)8,537,950729,830 Prepaids, deposits and supplies23,459 Notes receivable (Note 5)2,519,690 Land held for redevelopment (Note 1I)3,037,610 Total Assets$43,999,881$17,598,649$10,594,779 LIABILITIES Accounts payable and other accrued liabilities$3,255,191$671,165$180,837 Accrued payroll and benefits1,896,08511,763 Deposit payable586,815 Due to other funds (Note 4A)126,720490,503 Advance from other funds (Note 4C)7,130,105 Deferred rents and revenue843,950519,690729,830 Total Liabilities5,995,2268,459,4431,987,985 FUND BALANCES (Note 9) Reserved for: Capital outlay Low income housing Advance to other funds8,537,950 Prepaids, deposits and supplies23,459 Notes receivable2,000,000729,830 Land held for redevelopment3,037,610 Debt service Special assessment administration516,617 Unreserved: Designated for special projects14,196,364 Designated for operations13,526,000 Undesignated, reported in: General fund1,204,265 Special revenue funds Capital projects funds4,101,5967,876,964 TOTAL FUND BALANCES38,004,6559,139,2068,606,794 Total Liabilities and Fund Balances$43,999,881$17,598,649$10,594,779 See accompanying notes to financial statements Comprehensive Annual Financial Report FY 2006-2007 38 OtherTotal DeveloperGovernmentalGovernmental DepositsFundsFunds $13,581,675$35,056,206$90,305,280 15,373,76620,571,019 1,324,8023,156,83210,159,226 2,139,028 490,5033,154,001 2,582,32511,850,105 23,459 15,190,41917,710,109 3,037,610 $15,396,980$71,359,548$158,949,837 $10,998$2,510,545$6,628,736 41,1771,949,025 15,385,98215,972,797 1,664,2702,281,493 4,720,00011,850,105 7,469,4659,562,935 15,396,98016,405,45748,245,091 4,347,2204,347,220 2,013,4142,013,414 582,3259,120,275 23,459 8,000,00010,729,830 3,037,610 3,093,2463,093,246 516,617 14,196,364 13,526,000 1,204,265 25,015,90525,015,905 11,901,98123,880,541 54,954,091110,704,746 $15,396,980$71,359,548$158,949,837 Comprehensive Annual Financial Report FY 2006-2007 39 Comprehensive Annual Financial Report FY 2006-2007 GOVERNMENTAL FUNDS BALANCE SHEET - Continued JUNE 30, 2007 Amounts reported for Governmental Activities in the Statement of Net Assets are different from those reported in the Governmental Funds above because of the following: Amount reported in the Governmental Balance Sheet as Fund Balance$110,704,746 CAPITAL ASSETS Capital assets used in Governmental Activities are not current assets or financial resources and therefore are not reported in the Governmental Funds.300,378,270 ALLOCATION OF INTERNAL SERVICE FUND NET ASSETS Internal service funds are not governmental funds. However, they are used by management to charge the costs of certain activities, such as insurance and central services and maintenance, to individual governmental funds. The net current assets of the Internal Service Funds are therefore included in Governmental Activities in the following line items in the Statement of Net Assets. Cash and investments16,813,848 Accounts receivable282,998 Internal balances32,198 Prepaids, deposits and supplies298,015 Accounts payable and other accruals(351,499) Accrued payroll and compensated absences(39,058) Claims payable(2,511,853) ACCRUAL OF NON-CURRENT REVENUES AND EXPENSES Revenues which are deferred on the Fund Balance Sheets because they are not available currently are taken into revenue in the Statement of Activities.9,379,603 LONG-TERM ASSETS AND LIABILITIES The assets and liabilities below are not due and payable in the current period and therefore are not reported in the Funds: Unamortized bond issue costs1,482,063 Non-current portion of compensated absences(1,613,930) Long-term debt(103,302,339) Interest payable(750,000) NET ASSETS OF GOVERNMENTAL ACTIVITIES$330,803,062 See accompanying notes to financial statements 40 Comprehensive Annual Financial Report FY 2006-2007 41 GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2007 Redevelopment AgencyStreet GeneralCapital ProjectsImprovement REVENUES Taxes and special assessments$33,691,580 Sales Taxes20,304,090 Property tax increment$4,166,077 Licenses and permits2,256,120 Intergovernmental7,790,386 Contributions from outside sources40,000$55,593 Fines and forfeitures762,058 Charges for current services8,572,7964,314,298 Use of money and property5,065,694413,905390,050 Miscellaneous 1,263,336429,415 Total Revenues79,706,0605,049,3974,759,941 EXPENDITURES Current: City Council181,535 City Manager1,115,631 City Attorney1,185,209 City Clerk766,525 Finance6,536,738 Human Resources1,258,334 Fire13,669,323 Police23,303,879 Public Works7,175,563 Community Development13,697,160 Economic Development360,741 Library4,683,702 Redevelopment1,324,513 Capital Outlay Capital projects1,852,6534,496,619 6,307,309 Debt service Principal- Interest and fiscal charges105,705 Total Expenditures75,786,9935,926,8376,307,309 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 3,919,067(877,440)(1,547,368) OTHER FINANCING SOURCES (USES) Proceeds from long term debt (Note 7) Proceeds from sale of property678,828 Payment to bond escrow Transfers in (Note 4B)4,248,497315,222 Transfers (out) (Note 4B)(5,079,946)(3,110,780)(776,827) Total Other Financing Sources (Uses)(831,449)(2,431,952)(461,605) NET CHANGE IN FUND BALANCES3,087,618(3,309,392)(2,008,973) Fund balances at beginning of period34,917,03712,448,59810,615,767 FUND BALANCES AT END OF PERIOD$38,004,655$9,139,206$8,606,794 See accompanying notes to financial statements Comprehensive Annual Financial Report FY 2006-2007 42 OtherTotal DeveloperGovernmentalGovernmental DepositsFundsFunds $325,881$34,017,461 20,304,090 4,166,077 2,256,120 18,260,15126,050,537 11,834,62911,930,222 762,058 1,690,70814,577,802 1,725,8787,595,527 $168789,4822,482,401 16834,626,729124,142,295 181,535 1,115,631 1,185,209 766,525 6,536,738 1,258,334 13,669,323 738,26624,042,145 7,175,563 6,796,58420,493,744 360,741 44,9254,728,627 485,4881,810,001 9,809,89422,466,475 3,300,0003,300,000 4,557,3044,663,009 25,732,461113,753,600 1688,894,26810,388,695 15,393,20015,393,200 678,828 (12,026,398)(12,026,398) 13,278,35917,842,078 (8,745,548)(17,713,101) 7,899,6134,174,607 16816,793,88114,563,302 (168)38,160,21096,141,444 $54,954,091$110,704,746 Comprehensive Annual Financial Report FY 2006-2007 43 RECONCILIATION OF THE NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS WITH THE STATEMENT OF ACTIVITIES - FOR THE YEAR ENDED JUNE 30, 2007 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS$14,563,302 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. The capital outlay asset addition expenditures are therefore added back to fund balance11,171,353 Retirements are deducted from fund balance15,344 Depreciation expense is deducted from the fund balance (Depreciation expense is net of internal service fund depreciation of $935,791 which has already been allocated to serviced funds.)(8,537,884) Contributions of infrastructure and improvements by developers are capitalized in the Statement of Activities, but are not recorded in the Fund Statements because no cash changed hands.7,674,742 LONG TERM DEBT PROCEEDS AND PAYMENTS Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Assets. Repayment of bond principal is an expenditure in the governmental funds, but in the Statement of Net Assets the repayment reduces long-term liabilities. Repayment of debt principal is added back to fund balance3,300,000 Proceeds from issuance of long term debt are deducted from fund balance(15,393,200) Remove debt defeased12,055,000 ACCRUAL OF NON-CURRENT ITEMS The amounts below included in the Statement of Activities do not provide or (require) the use of current financial resources and therefore are not reported as revenue or expenditures in governmental funds (net change): Bond issue costs(59,085) Long-term compensated absences(166,917) Deferred revenue from loan receivable offset370,380 ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY Internal Service Funds are used by management to charge the costs of certain activities, such as equipment acquisition, maintenance, and insurance to individual funds. The portion of the net revenue (expense) of these Internal Service Funds arising out of their transactions with governmental funds is reported with governmental activities, because they service those activities. Change in Net Assets - All Internal Service Funds760,932 Change in Net Assets of Internal Service Funds reported with Business-Type Activities152,786 CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES$25,906,753 See accompanying notes to financial statements TheschedulebelowreconcilestheNetChangesinFundBalancesreportedontheGovernmentalFundsStatementof Revenues,ExpendituresandChangesinFundBalance,whichmeasuresonlychangesincurrentassetsandcurrentliabilities onthemodifiedaccrualbasis,withtheChangeinNetAssetsofGovernmentalActivitiesreportedintheStatementofActivities, which is prepared on the full accrual basis. Comprehensive Annual Financial Report FY 2006-2007 44 GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - FOR THE YEAR ENDED JUNE 30, 2007 Variance Budgeted AmountsFinal Budget Actual AmountsPositive Original FinalBudgetary Basis(Negative) Budgetary fund balance, July 1$34,917,037$34,917,037$34,917,037 Resources (inflows): Property taxes22,911,00023,461,00023,239,095($221,905) Sales taxes21,493,00020,400,00020,304,090(95,910) Other taxes10,747,00010,453,0009,958,918(494,082) Licenses and permits2,906,0002,047,0002,256,120209,120 Intergovernmental7,289,0007,800,0007,790,386(9,614) Fines and forfeitures706,000750,000762,05812,058 Other in lieu taxes495,000495,000493,567(1,433) Charges for current services8,372,0008,547,0008,572,79625,796 Use of money and property3,713,0003,819,0005,065,6941,246,694 Miscellaneous 878,0001,388,0001,263,336(124,664) Amounts available for appropriation79,510,00079,160,00079,706,060546,060 Charges to appropriations (outflows) Current: City Council167,580191,570181,53510,035 City Manager1,085,4201,118,8601,115,6313,229 City Attorney1,137,8601,186,6801,185,2091,471 City Clerk872,030871,590766,525105,065 Finance6,701,0106,478,8006,536,738(57,938) Human Resources1,332,3601,332,1401,258,33473,806 Fire13,983,77013,916,17013,669,323246,847 Police23,368,98023,456,21023,303,879152,331 Public Works7,548,9007,782,4807,175,563606,917 Community Development14,497,82014,076,52013,697,160379,360 Economic Development636,750608,070360,741247,329 Library4,644,7704,872,4004,683,702188,698 Capital Outlay Capital projects3,530,0003,002,5401,852,6531,149,887 Total charges to appropriations79,507,25078,894,03075,786,9933,107,037 OTHER FINANCING SOURCES (USES) Transfers in2,967,5002,967,5004,248,4971,280,997 Transfers (out)(4,717,140)(4,930,140)(5,079,946)(149,806) Total Other Financing Sources (Uses)(1,749,640)(1,962,640)(831,449)1,131,191 Budgetary fund balance, June 30$33,170,147$33,220,367$38,004,655$4,784,288 See accompanying notes to financial statements Comprehensive Annual Financial Report FY 2006-2007 45 Comprehensive Annual Financial Report FY 2006-2007 46 Comprehensive Annual Financial Report FY 2006-2007 Proprietary Funds Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges. The City has identified the funds below as major proprietary funds in fiscal 2007. AIRPORT FUND Established to account for the operations of the Livermore Municipal Airport. WATER FUND Established to account for the operations of the self-supporting municipal water service. Services are rendered on a user charge basis and impact fees are collected for future water storage needs. WATER RECLAMATION FUNDS (SEWER AND LAVWMA) Established to account for operations of the self-supporting wastewater disposal plant, the export pipeline, impact fees collected for sewer connections, and urban runoff fees. GOLF COURSES (LAS POSITAS AND SPRINGTOWN) Established to account for operations of the two self-supporting golf courses in Livermore. 47 PROPRIETARY FUNDS STATEMENT OF NET ASSETS JUNE 30, 2007 Business-type Activities-Enterprise Funds AirportWaterSewer ASSETS Cash and investments in City Treasury (Note 3)$1,369,550$17,206,498$55,812,578 Accounts receivables (net of allowable for uncollectibles)236,9571,606,745429,156 Prepaids, deposits and supplies101,605 Total current assets1,708,11218,813,24356,241,734 Capital assets (net of accumulated depreciation) (Note 6)5,315,40322,727,523104,429,119 Land & construction in progress12,920,4263,022,9356,275,745 Total noncurrent assets18,235,82925,750,458110,704,864 Total assets19,943,94144,563,701166,946,598 CURRENT LIABILITIES Accounts payable and other accruals264,158693,091504,478 Accrued payroll and benefits58,40953,533276,035 Deposit payable172,42163,894 Due to other funds (Note 4A) Total current liabilities494,988810,518780,513 NON-CURRENT LIABILITIES Claims payable Long-term debt (Note 7): Due within one year 508,889225,000693,538 Due in more than one year1,593,8895,905,0004,572,644 Total non-current liabilities2,102,7786,130,0005,266,182 Total liabilities2,597,7666,940,5186,046,695 NET ASSETS (Note 9) Invested in Capital Assets, net of related debt16,133,05119,620,458105,438,682 Unrestricted1,213,12418,002,72555,461,221 Total net assets$17,346,175$37,623,183$160,899,903 Some amounts reported for business-type activities in the Statement of Net Assets are different because certain internal service fund assets and liabilities are included with business-type activities. Net assets business-type activities See accompanying notes to financial statements Comprehensive Annual Financial Report FY 2006-2007 48 Governmental Activities- Internal Service LAVWMALas PositasSpringtownTotalsFunds $1,802,950$419$76,191,995$16,813,848 53,627$33,5482,360,033282,998 101,605298,015 1,802,95054,04633,54878,653,63317,394,861 6,643,719358,058139,473,8224,666,017 725,48453,72522,998,315 7,369,203411,783162,472,137 1,802,9507,423,249445,331241,125,77022,060,878 65,10440,8091,567,640351,499 79,208751467,93639,058 28,200264,515 722,104122,056844,16028,348 894,616163,6163,144,251418,905 2,511,853 220,0641,647,491 2,071,34514,142,878 2,291,40915,790,3692,511,853 3,186,025163,61618,934,6202,930,758 5,077,794411,783146,681,7684,666,017 1,802,950(840,570)(130,068)75,509,38214,464,103 $1,802,950$4,237,224$281,715222,191,150$19,130,120 (60,546) $222,130,604 Comprehensive Annual Financial Report FY 2006-2007 49 PROPRIETARY FUNDS STATEMENT OF REVENUE, EXPENSES AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED JUNE 30, 2007 Business-type Activities-Enterprise Funds AirportWaterSewer OPERATING REVENUES Charges for services$3,565,666$590,385$18,432,866 Sales2,125,8259,801,445142,681 Miscellaneous 174,94931,55475,902 Total Operating Revenues5,866,44010,423,38418,651,449 OPERATING EXPENSES Cost of sales, salaries and benefits3,359,5955,811,0444,517,643 Contracted services577,854634,3342,106,698 Insurance premiums Materials, supplies and others405,637959,6512,420,649 Utilities128,838134,397662,355 Depreciation388,835756,1285,870,586 Repairs & maintenance203,999138,8805,649,670 Claims expense Total Operating Expenses5,064,7588,434,43421,227,601 Operating Income (Loss)801,6821,988,950(2,576,152) NONOPERATING REVENUES (EXPENSES) Interest revenue26,940440,0801,588,290 Interest and fiscal charges (expense)(257,640)(115,346)(145,226) Gain on disposal and other413,158 Net Nonoperating Revenues (Expenses)182,458324,7341,443,064 Income (Loss) Before Transfers984,1402,313,684(1,133,088) Contributed assets1,193,4041,545,320 Transfers in (Note 4B)153,375 Transfers (out) (Note 4B)(9,115)(46,480)(2,734,550) Change in net assets1,128,4003,460,608(2,322,318) Total net assets-beginning16,217,77534,162,575163,222,221 Total net assets-ending$17,346,175$37,623,183$160,899,903 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 services. Net business-type activities reported on the Statement of Activities See accompanying notes to financial statements Comprehensive Annual Financial Report FY 2006-2007 50 Governmental Activities- Internal Service LAVWMALas PositasSpringtownTotalsFunds $2,214,322$24,803,239$9,147,593 12,069,951 $115,51644,742$102,799545,462 115,5162,259,064102,79937,418,6529,147,593 1,063,70551,24014,803,2272,225,724 3,750,222505,00786,5677,660,6821,223,468 699,686 383,32917,4514,186,7171,806,367 83,41959,7411,068,750 510,55826,6587,552,765938,003 100,7896,093,338715,537 926,903 3,750,2222,646,807241,65741,365,4798,535,688 (3,634,706)(387,743)(138,858)(3,946,827)611,905 2,055,310 (78,320)(596,532) 413,158(16,192) (78,320)1,871,936(16,192) (3,634,706)(466,063)(138,858)(2,074,891)595,713 2,738,724 2,500,0002,2222,655,597391,400 (157,426)(2,222)(2,949,793)(226,181) (1,134,706)(621,267)(141,080)369,637760,932 2,937,6564,858,491422,79518,369,188 $1,802,950$4,237,224$281,715$19,130,120 (152,786) $216,851 Comprehensive Annual Financial Report FY 2006-2007 51 PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2007 Business-type Activities-Enterprise Funds AirportWaterSewer CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers$5,824,955$9,930,839$18,701,637 Payments to suppliers(1,246,493)(2,048,192)(11,263,740) Payments to employees(3,344,146)(5,819,636)(4,485,440) Claims paid Net cash provided by operating activities1,234,3162,063,0112,952,457 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Payments to other funds Transfers in153,375 Transfers (out)(9,115)(46,480)(2,734,550) Cash Flows from Noncapital Financing Activities144,260(46,480)(2,734,550) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital asset additions(7,163)(588,604)(3,670,680) Long term debt: Repayments(488,889)(215,000)(675,305) Interest paid(257,640)(115,346)(145,226) Cash Flows from Capital and Related Financing Activities(753,692)(918,950)(4,491,211) CASH FLOWS FROM INVESTING ACTIVITIES Interest received26,940440,0801,588,290 Cash Flows from Investing Activities26,940440,0801,588,290 Net increase (decrease) in cash and cash equivalents651,8241,537,661(2,685,014) Cash and investments at beginning of period717,72615,668,83758,497,592 Cash and investments at end of period$1,369,550$17,206,498$55,812,578 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss)$801,682$1,988,950($2,576,152) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation388,835756,1285,870,586 Change in assets and liabilities: Accounts receivable(47,929)(400,884)50,188 Prepaids, deposits and supplies(39,176) Accounts payable and other accruals109,011(180,930)(424,368) Accrued payroll and compensated absences15,449(8,592)32,203 Deposits payable6,444(91,661) Net cash provided by operating activities$1,234,316$2,063,011$2,952,457 Capital Assets transferred from governmental activities$1,193,404$1,545,320 See accompanying notes to financial statements Comprehensive Annual Financial Report FY 2006-2007 52 Governmental Activities- Internal Service LAVWMALas PositasSpringtownTotalsFunds $115,516$2,251,072$72,557$36,896,576$9,149,312 ($2,204,327)(1,045,112)(126,136)(17,934,000)(4,383,500) (1,062,280)(51,159)(14,762,661)(2,221,076) (412,866) (2,088,811)143,680(104,738)4,199,9152,131,870 374,980106,959481,93928,348 2,500,0002,2222,655,597391,400 (157,426)(2,222)(2,949,793)(226,181) 2,500,000219,776104,737187,743193,567 (69,853)1(4,336,299)(447,047) (215,064)(1,594,258) (78,320)(596,532) (363,237)1(6,527,089)(447,047) 2,055,310 2,055,310 411,189219(84,121)1,878,390 1,391,76120076,276,11614,935,458 $1,802,950$419$76,191,995$16,813,848 ($3,634,706)($387,743)($138,858)($3,946,827)$611,905 510,55826,6587,552,765938,003 (26,192)(30,242)(455,059)1,719 1,545,8951,506,719(31,471) 27,43237,623(431,232)607,066 1,4258140,5664,648 18,200(67,017) ($2,088,811)$143,680($104,738)$4,199,915$2,131,870 $2,738,724 Comprehensive Annual Financial Report FY 2006-2007 53 FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET ASSETS JUNE 30, 2007 Agency Funds ASSETS Cash and investments in City Treasury (Note 3)$4,803,189 Cash and investments with Trustees (Note 3)5,153,361 Total Assets$9,956,550 LIABILITIES Due to special assessment districts$9,956,550 Total Liabilities$9,956,550 See accompanying notes to financial statements Comprehensive Annual Financial Report FY 2006-2007 54 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES The City of Livermore was incorporated April 1, 1876. The City operates under the Council-Manager form of government and provides the following services; public safety (police and fire), highways and streets, sewer, water, public improvements, planning and zoning, general administration services and redevelopment, through the Livermore Redevelopment Agency. The accounting policies of the City conform with generally accepted accounting principles in the United States of America as applicable to governments. The following is a summary of these policies: A. Reporting Entity The accompanying basic financial statements present the financial activity of the City, which is the primary government presented, along with the financial activities of its component units, which are entities for which the City is financially accountable. Although they are separate legal entities, blended component units are in substance part of the City’s operations and are reported as an integral part of the City’s financial statements. This City’s component units which are described below are all blended. COMPONENT UNITS INCLUDED IN THE REPORTING ENTITY: The Livermore Redevelopment Agency is a separate government entity whose purpose is to prepare and implement plans for improvement, rehabilitation, and development of certain areas within the City. The Agency is controlled by the City and has the same governing board as the City, which also performs all accounting and administrative functions for the Agency. The financial activities of the Agency have been included in these financial statements in the Redevelopment Low and Moderate Income Housing Special Revenue Fund, Redevelopment Agency Capital Projects Fund, and Redevelopment Debt Service Fund. Separate financial statements for the Agency may be obtained from the City’s Finance Department located in City Hall at 1052 South Livermore Avenue, Livermore, CA 94550. The Livermore Capital Projects Financing Authority provides financing assistance to the City and has been included in these financial statements in the Livermore Capital Projects Financing Authority Debt Service Funds, and as part of the Airport Enterprise Fund, the Sewer Enterprise Fund and the Las Positas Golf Course Enterprise Fund. The Authority is controlled by the City and has the same governing body as the City, which also performs all accounting and administrative functions for the Authority. B. Basis of Presentation The City’s basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America. 55 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) These Standards require that the financial statements described below be presented. Government-wide Statements: The Statement of Net Assets and the Statement of Activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Separate statements for each fund category—governmental, 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 nonmajor 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. C. Major Funds The City’s major governmental and business-type funds be identified and presented separately in the fund financial statements. All other funds, called non-major funds, are combined and reported in a single column, regardless of their fund-type. 56 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) Major funds are defined as funds that have either assets, liabilities, revenues or expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand total. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds. The City reported the following major governmental funds in the accompanying financial statements: General Fund - The general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Redevelopment Agency Capital Projects - Established to account for the acquisition, demolition, relocation, and sales of land in the Livermore redevelopment area. Financing is provided by bond proceeds, loans from the general fund, property tax increments and transfers from the low-income housing fund and the community development fund. Street Improvements - Established to account for developer fees paid for construction of major streets and interchanges. Developer Deposits - Established to account for developer fees received pursuant to development agreements, performance deposits, public park improvement fees and transportation development fees collected. Airport Fund - Established to account for the operations of the Livermore Municipal Airport. Water Fund - Established to account for the operations of the self-supporting municipal water service. Services are rendered on a user charge basis and impact fees are collected for future water storage needs. Water Reclamation Funds (Sewer and LAVWMA) - Established to account for operations of the self-supporting wastewater disposal plant, the export pipeline, impact fees collected for sewer connections, and urban runoff fees. Golf Course Funds (Las Positas and Springtown) - Established to account for operations of the two self-supporting golf courses in Livermore. 57 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) The City also reports the following fund types: Internal Service Funds - These funds are used to account for the financing of services and supplies provided by one City department to another on a cost-reimbursement basis. The City operates the Liability Insurance Fund, Workers Compensation Fund, Fleet and Equipment Services Fund, Information Technology Fund, Facilities Rehabilitation Fund Internal Service Funds. Fiduciary Funds - These funds are used to account for assets held by the City in a fiduciary capacity for special assessment districts. D. Basis of Accounting The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus and the full accrual basis. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Measurable means the amount of the transaction can be determined and available means the amount is collectible within the current period or soon enough thereafter (sixty days in the City’s case) to be used to pay liabilities of the current period. 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. Other revenues susceptible to accrual are property taxes, sales taxes, interest revenue and charges for services. Fines, license, and permit revenues are not susceptible to accrual because generally they are not measurable until received in cash. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred (generally thirty days). An exception to this general rule is principal and interest on governmental funds’ long-term debt which is recognized when due. Financial resources usually are appropriated in other funds for transfer to a debt service fund in the period in which maturing debt principal and interest must be paid. Such amounts thus are not current liabilities of the debt service fund as their settlement will not require expenditure of existing fund assets. 58 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) The City follows Statements and Interpretations of the Financial Accounting Standards Board statements and its predecessors issued on or before November 30, 1989, in accounting for its business-type activities, unless they conflict with Governmental Accounting Standards Board pronouncements. The City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net assets may 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. Certain indirect costs are included in program expenses reported for individual functions and activities. E. Supplies Supplies are valued at cost on an average cost basis. Supplies in the general fund consist of expendable supplies held for consumption. The cost is recorded as an expenditure in the general fund at the time individual supply items are consumed. Supplies in the enterprise funds consist principally of materials and supplies for utility operations and are expensed as consumed. F. Compensated Absences Compensated absences comprise unused vacation leave and certain compensated time off, which are accrued as earned. The City’s liability for compensated absences is recorded in various Governmental funds or Proprietary funds as appropriate. The liability for compensated absences is determined annually. For all governmental funds, amounts expected to be paid out for permanent liquidations due to terminations and retirements are recorded as fund liabilities; the long term portion is recorded in the Statement of Net Assets. Sick pay does not vest and is not accrued. The change in compensated absences was as follows at June 30, 2007: Business GovernmentalType ActivitiesActivitiesTotal Beginning balance$2,428,608$319,411$2,748,019 Additions2,706,771349,8133,056,584 Payments(2,387,359)(398,107)(2,785,466) Ending balance$2,748,020$271,117$3,019,137 Current portion$187,119$187,119 59 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) Compensated absences are liquidated by the fund that has recorded the liability. The long-term portion of governmental activities compensated absences is liquidated primarily by the General Fund. G. Property Tax Levy, Collection and Maximum Rates The State of California Constitution Article XIII (A) provides that the combined maximum property tax rate on any given property may not exceed one percent of its assessed value unless an additional amount for general obligation debt has been approved by voters. Assessed value is calculated at 100 percent of market value as defined by Article XIII(A), generally equivalent to the latest sale price, and may be adjusted by no more than two percent per year unless the property is sold or transferred. The State Legislature has determined the method of distribution of receipts from this tax levy among the counties, cities, school districts and other districts. Alameda County assesses properties and it bills for and collects property taxes and special assessments as follows: SecuredUnsecured Valuation Dates March 1 March 1 Lien/Levy Dates January 1 January 1 Due Dates 50% on November 1 July 1 50% on February 1 Delinquent as of December 10, (for November) August 31 April 10, (for February) The term "unsecured" refers to taxes on personal property other than real estate, land and buildings. These taxes are secured by liens on the property being taxed. H. Revenue Recognition for Sewer and Operations Revenues from residential sewer customers are based on annual billings collected on the tax rolls by Alameda County. Revenues for sewer services provided but not billed at the end of the fiscal year are estimated and accrued. I. Land Held for Redevelopment The Redevelopment Agency has purchased parcels of land as part of its efforts to develop or redevelop blighted properties within the Redevelopment areas. Such land parcels are accounted for as investments on the balance sheet at the lower of cost or net realizable value or agreed-upon sales price if a disposition agreement has been made with a developer. Individual parcels which have experienced a market value decline are written down to estimated current market value. No appreciation is recorded if the current market value of an individual parcel exceeds cost. 60 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2 - BUDGETS AND BUDGETARY ACCOUNTING A. Budgeting Procedures The City adopts a biennial operating budget on or before June 30 for each of the ensuing two fiscal years for all funds except the Fiduciary Funds. The operating budget takes the form of a two-year financial plan which is adopted in its entirety by the City Council by a resolution. A mid-period review is conducted in the off-year and appropriations are adjusted accordingly. The fiscal year begins on July 1 and ends on June 30 of the following year. Because Livermore is a general law city, it is not subject to a budgetary process prescribed by statute or charter. The operating budget is subject to supplemental appropriations throughout its term in order to provide flexibility to meet changing needs and conditions. A resolution approving a supplemental appropriation is necessary when the original total appropriations for that fund would be exceeded. Budget adjustments within the same fund may be approved by the City Manager. Unencumbered appropriations lapse at the end of each fiscal year. The operating budget is on a program basis. For governmental funds, the budget is prepared on a modified accrual basis consistent with generally accepted accounting principles (GAAP), except that land held for redevelopment is treated as an expenditure when purchased, proceeds from the disposition of this land is treated as revenue when measurable and available, and transfers (to) or from designations are treated as budgetary resources (uses). Budgetary fund balance includes only unreserved, undesignated fund balance. Organizational priorities which have been developed by City Council and city staff are implemented at the program level. B. Expenditures in Excess of Appropriations The funds below incurred expenditures and transfers out in excess of appropriations in the amounts below. These funds had sufficient fund balances or revenues to finance these expenditures. Fund Excess of Expenditures Over Appropriations Redevelopment Low & Moderate Income Housing $86,548 Special Revenue Fund Park Fee Special Revenue Fund660,487 2002 Variable Rate Cops Debt Service Fund3,708 61 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 - CASH AND INVESTMENTS The City pools cash from all sources and all funds except Cash and Investments held by Trustees so that it can be invested at the maximum yield consistent with safety and liquidity, while individual funds can make expenditures at any time. A. Policies 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 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. The City’s investments are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year. B. Classification Cash and investments 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. Cash and investments in City Treasury$183,311,123 Cash and investments with Trustees20,571,019 Total City cash and investments203,882,142 Cash and investments in Fiduciary Funds (Separate Statement) In City Treasury4,803,189 With Trustees5,153,361 Total cash and investments$213,838,692 Cash and Investments Available for Operations is used in preparing proprietary fund statements of cash flows because these assets are highly liquid and are expended to liquidate liabilities arising during the year. 62 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) 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 the City’s Investment Policy where is more restrictive. Authorized Investment Type Maximum Maturity Minimum Credit Quality Maximum Percentage of Portfolio Maximum Investment In One Issuer City of Livermore or other California Local Agency Bonds 5 years None None U.S. Treasury Bills and Notes 5 years None None Obligations issued by United States Government Agencies 5 years None None Bankers Acceptances 180 days 40% 30% Commercial Paper 270 days A1/P1/F1 25% (A) 10% Negotiable Certificates of Deposit 5 years A 30% None Repurchase Agreements and Reverse Repurchase Agreements 1 year 20% None Medium Term Corporate Notes 5 years A 30% (A) None Money Market Mutual Funds N/A Top rating category 15% None Collateralized Notes, Bonds, or Other Obligations Secured by First Priority Security Interest 5 years None None Certificates of Deposit 5 years None None California Local Agency Investment Fund N/A $40 million per account $40 million per account Passbook Savings Account None None None $100 million 63 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) Under the City’s Investment Policy, investments not described above are ineligible investments. In addition, the City may not invest any funds in inverse floaters, range notes, or interest only strips that are derived from a pool of mortgages in accordance with the California Government Code. With the exception of callable federal agency securities, any security that derives its value from another asset or index is prohibited. In addition, the City may not invest any funds in any security that could result in zero interest accrual if held to maturity. D. Investments Authorized by Debt Agreements The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with City resolutions, bond indentures or State statutes. The table below identifies the investment types that are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements: Authorized Investment Type Maximum Maturity Minimum Credit Quality Maximum % Allowed Issue Federal Agency Securities a, b, d,e,f Debentures of Federal Housing Admin. a, b, d Participation Certificates of Federal Home Loan Mortgage Corp. a Participation Certificates of Federal Home Loan Mortgage Corp. 3 years h Bonds & notes of Farm Credit Banks a, b Federal Home Loans Banks a, b Federal Home Loans Banks 3 years h Letter of Credit-backed issues of Student Loan Marketing Assoc. Not more than 10% of the proceeds a Federal funds, unsecured certificates of deposit, time deposits & bankers acceptances Not more than 365 days Highest Rating Category by Moody’s a,b Federal funds, unsecured certificates of deposit, time deposits & bankers acceptances Not more than 360 days A-1 or A-1+ by S&P and P-1 by Moody h Deposits (fully insured by FDIC) a 64 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) Authorized Investment Type Maximum Maturity Minimum Credit Quality Maximum % Allowed Issue Debt Obligations Equal to or better than existing Certificates by Moody’s a Commercial Paper Not more than 365 days Equal to or better than existing Certificates by Moody’s a Commercial Paper Not more than 270 days A-1 or A-1+ by S&P and P-1 by Moody h Money Market Funds Highest Rating Category by Moody’s a, b, h Repurchase Agreements 6 mo. or less Equal to or better than existing Certificates by Moody’s a, h Investment Agreements Equal to or better than existing Certificates by Moody’ a State of CA-Local Agency Investment Fund a,b,d,e ,f,h Commercial Paper Prime – 1 by Moody’s A-1+ or better by S & P b Municipal or State bonds/notes Rated in one of the two highest rating categories by Moody’s or S&P b Federal funds, unsecured certificates of deposit, time deposits & bankers acceptances Max term 1 yr Minimum rating of Prime-1 or A-3 by Moody’s or A-1+ by S&P c Prerefunded municipal bonds Aaa by Moody’s & AAA by S&P; if no Moody’s rating, then must have been pre-refunded with cash. c 65 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) Authorized Investment Type Maximum Maturity Minimum Credit Quality Maximum % Allowed Issue Direct obligations of the Export-Import Bank; participation certificates issued by the General Services Administration; mortgage backed bonds or pass-through obligations issued and guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, or the Federal Housing Administration; project notes issued by the US Dept. of Housing & Urban Development; public housing notes and bonds guaranteed by the USA. Unsecured short- term obligations of the bank are rated in the highest short-term category by any rating agency; demand or time deposits are fully insured by the FDIC d,e,f Interest-bearing demand or time deposits or deposit accounts in federal or state chartered savings and loan associations or in federal or State of California banks d,e,f Commercial Paper – issued by corporations organized and operating within the USA. 180 days Highest short-term rating category by any Rating Agency d,e,f Bankers Acceptances 270 days Highest short-term rating category by any Rating Agency or long-term obligations rated A or better d,e,f Obligations – interest excludable under Sec103 of the IRC; Rated “A” or better by any rating agency or fully secured as to the payment of principal & interest by Federal Securities d,e,f Obligations – Any corporation organized and operating within the USA having asset in excess of $500M Rated “A” or better by any rating agency d,e,f Money market funds which invest in Federal Securities Rated Am or better by S & P d,e,f 66 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) Authorized Investment Type Maximum Maturity Minimum Credit Quality Maximum % Allowed Issue Shares in a California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the California Government Code which invests exclusively in investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of the California Government Code including but not limited to the California Asset Management Program d,e,f Investment Agreements d,e,f Treasury Money Market funds h a 2002 Variable Rate Demand COP’s b 2001 RDA Tax Allocation Bonds c 2000 LCPFA Variable Rate Demand COP’s d 1998 LCPFA Refunding Revenue Bonds e CFD 99-1 f CARD 2002 g CAsRD 93-3 h 2007 Refunding and Capital Projects COP 67 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) E. Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City generally manages its interest rate risk by holding investments to maturity. Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity: 12 Months13 to 2425 to 60More than Investment Typeor lessMonthsMonths60 MonthsTotal U.S. Government-Sponsored Enterprise Agencies - Non-callable$90,256,900$37,218,825$127,475,725 California Local Agency Investment Fund45,167,37345,167,373 U.S. Government Money Market Funds5,916,3355,916,335 U.S. Government Money Market Funds- Sweep Account3,217,4013,217,401 Guaranteed Investment Contracts and Agreements8,221,495$911,508$6,368,46015,501,463 U.S. Treasury Notes16,249,1212,818,46419,067,585 Total Investments$169,028,625$40,037,289$911,508$6,368,460216,345,882 Cash deposits (overdraft) with banks and on hand(2,507,190) Total Cash and Investments$213,838,692 GASB Statement 31 requires governments to present investments at fair value. The total changes in the fair value of investments in the current fiscal year are not of material significance. The City does not adjust the carrying value of its investment to reflect the fair value at each fiscal year-end. F. Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of June 30, 2007 for each investment type as provided by Standard and Poor’s investment rating service. 68 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) Investment TypeAAATotal Rated: U.S. Government-Sponsored Enterprise Agencies $127,475,725$127,475,725 U.S. Government Money Market Funds5,916,3355,916,335 U.S. Government Money Market Funds- Sweep Account3,217,4013,217,401 Not rated: California Local Agency Investment Fund45,167,373 Guaranteed Investment Contracts and Agreements15,501,463 Exempt from credit rating disclosure: U.S. Treasury Notes19,067,585 Total Investments$136,609,461216,345,882 Cash deposits (overdraft) with banks and on hand(2,507,190) Total Cash and Investments$213,838,692 G. Local Agency Investment Fund 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 available for withdrawal 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, 2007, these investments matured in an average of 176 days. Money market funds and mutual funds are available for withdrawal on demand and at June 30, 2007, matured in an average of 90 days. 69 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) H. Concentration of Credit Risk Investments in the securities of any individual issuer, other than U. S. Treasury securities, mutual funds, and external investment funds that represent 5% or more of total Entity-wide investments are as follows at June 30, 2007: IssuerType of InvestmentsAmount Federal Farm Credit BankFederal Agency Securities$29,369,931 Federal Home Loan BankFederal Agency Securities78,606,320 Federal National Mortgage AssociationFederal Agency Securities19,247,900 CDC Funding GroupInvestment Contracts15,501,463 Investments in the securities of any individual issuers, other than U. S. Treasury securities, mutual funds, and external investment funds that represent 5% or more of total investments for major funds or non major funds in total at June 30, 2007 are as follows: Fund IssuerType of InvestmentsAmount Non-Major FundCDC Funding GroupInvestment Contracts$10,650,176 NOTE 4 - INTERFUND TRANSACTIONS A. Current Interfund Balances Current interfund balances arise in the normal course of business and represent short-term borrowings occurring as a result of expenditures which are paid prior to the receipt of revenues. 70 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4 - INTERFUND TRANSACTIONS (Continued) These balances are expected to be repaid shortly after the end of the fiscal year when revenues are received. Current amounts due from one fund to another at June 30, 2007 were as follows: Due from Other FundsDue To Other FundsAmount General FundSpecial Revenue Funds: Other Federal Grants$258,533 Horizons112,683 Capital Project Funds: Redevelopment Capital Project 126,720 Parking Lots70,517 Other Street and Trail Construction23,908 Enterprise Funds: Las Positas Golf722,104 Springtown Golf122,056 Internal Service Funds: Community Development28,348 Street Improvements Capital Projects Fund Special Revenue Funds: Street Projects1,076,566 Other Federal Grants122,063 Developer DepositsCapital Project Funds: Street Improvements490,503 $3,154,001 71 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4 - INTERFUND TRANSACTIONS (Continued) B. Transfers Between Funds With Council approval, resources may be transferred from one City fund to another. The purpose of the majority of transfers is to subsidize operations of programs and funds which are not self sustaining. Less often, a transfer may be made to open or close a fund. Interfund transfers for the year ended June 30, 2007 were as follows: Fund Receiving TransfersFund Making Transfers Amount Transferred General FundStreet Improvement Capital Projects Fu$242,000 Non-major Governmental Funds3,499,286 Water46,480 Sewer234,550 Internal Service Funds226,181 Street Improvement Capital Projects FundNon-Major Governmental Funds315,222 Non-Major Governmental FundsGeneral Fund4,965,946 RDA Capital Projects3,110,780 Street Improvement Capital Projects143,427 Non-Major Governmental Funds4,891,665 Airport9,115 Las Positas Golf157,426 AirportGeneral Fund114,000 Non-Major Governmental Funds39,375 LAVWMASewer2,500,000 Las Positas GolfSpringtown Golf2,222 Internal Service FundsStreet Improvement Capital Projects391,400 Total Interfund Transfers$20,889,075 C. Long-Term Interfund Advances The City’s General Fund made advances to partially finance Agency operations and to finance the Agency purchases of land costing $843,950. As of June 30, 2007, the Redevelopment Agency Capital Projects Fund owed a remaining balance of $ 3,817,950, which is expected to be repaid from proceeds of the 2001 Tax Allocation Bonds. During fiscal year ended June 30, 2007 the Agency repaid $85,000. 72 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4 - INTERFUND TRANSACTIONS (Continued) The City’s General Fund made an advance of $4,720,000 to the Street Projects Capital Projects Fund for downtown revitalization and the loan will be repaid to the General Fund as the fees are collected. The Redevelopment Agency has committed to pay Traffic Impact Fees to the City’s Street Improvements Fund on behalf of certain developers. These amounts are payable over seven years commencing January 1, 2005. Interest is accrued on the unpaid balance at 5%. The balance owed by the Redevelopment Agency Capital Projects Fund for these commitments as of June 30, 2007 is $729,830. See also Note 14B for details of the $2,000,000 advance from the City to the Redevelopment Agency Capital Projects Fund to finance the loan to the Valley Care Senior Housing Project developer. During fiscal 2006-2007, the City advanced $582,325 to the Agency which was used to acquire the Train Depot Structure. D. Internal Balances Internal balances are presented in the City-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 5 - NOTES RECEIVABLE Notes Receivables balances as of June 30, 2007: Deferred Second Mortgage Program$2,204,566 Rehabilitation Loan Program2,249,050 Eden Housing Project, net1,186,297 Livermore Independent Living Associates Project (See Note 14A)800,000 Livermore Independent Living Associates Project (See Note 14B)2,240,506 Livermore Valley Center Retail Project East (See Note 14F)154,223 Livermore Valley Center Retail Project West (See Note 14G)324,605 Depot Shopping Center 8,000,000 Livermore Housing Authority 510,000 Rental Assistance Loans40,862 Total Notes Receivables$17,710,109 73 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 5 - NOTES RECEIVABLE (Continued) The City administers the Deferred Second Mortgage Program using Low Income Housing Fund revenues and a Rehabilitation Loan Program using Community Development Block Grants. Under these Programs, individuals with incomes below a certain level are eligible to receive low interest loans, secured by second deeds of trust, to help purchase their home or rehabilitate it. Upon approval of loans, the City disburses the funds, arranges for and collects repayments. In fiscal 1992, the Agency loaned a developer $1,520,605 as part of the Eden Housing Project agreement, the proceeds of which were used for land acquisition and development of low and moderate income housing. As of June 30, 2007 the loans had an outstanding balance of $1,186,297. The land loan bears interest at 3% and the predevelopment loan bears interest at 9% which is due in 2049, and is subordinated to permanent bank loans. In fiscal year 2005 the City loaned a developer $8,000,000 to be used for the acquisition of the Depot Shopping Center located at 2009-2011 Railroad Avenue. The loan bears interest at 8.75% which is deferred until the end of the loan and is secured by a deed of trust. All principal and interest on the loan is due in November, 2006. In fiscal 2006, the City loaned Livermore Housing Authority $510,000 from the Housing Trust Fund to be used for the acquisition of six units for low-income individuals located at 2276-2280 Chestnut Street. The loan bears interest at 3.00%, per annum on the outstanding principal from the date of the closing of the permanent loan. The principal and all the interest will be due and payable on the earlier of the date the property is sold or the permanent loan is refinanced. In event of residual receipts, payments of principal and interest will commence on July 1, 2008 until the loan is paid in full or terminated. In addition to the above, the Agency is due note receivables from various developers. Details may be found in Note 14. NOTE 6 – 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’s policy is to capitalize infrastructure with a cost exceeding $100,000 and other capital assets with a cost exceeding $2,500 and with useful lives exceeding two years. With the implementation of GASB Statement 34, the City has recorded all its public domain (infrastructure) capital assets, which include roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems in its government–wide financial statements. Capital assets formerly in the Fixed Assets Account Group are now also recorded in the government-wide financial statements. 74 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 6 – CAPITAL ASSETS (Continued) GASB Statement 34 requires that all capital assets with limited useful lives be depreciated over their estimated useful lives. Alternatively, the “modified approach” may be used for certain capital assets. Depreciation is not provided under this approach, but all expenditures on these assets are expensed, unless they are additions or improvements. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of the assets. The amount charged to depreciation expense each year represents that year’s pro rata share of the cost of capital assets. Depreciation of all capital assets is charged as an expense against operations each year and the total amount of depreciation taken over the years, called accumulated depreciation, is reported on statement of net assets as a reduction in the book value of the fixed assets. Depreciation of fixed assets in service is provided using the straight line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. The City has assigned the useful lives listed below to capital assets. Buildings 25-50 years Improvements 10-20 years Equipment 3-10 years Infrastructure 50 years 75 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 6 – CAPITAL ASSETS (Continued) A. Capital Asset Additions and Retirements Capital assets at June 30 comprise the following: Balance atRetirementsBalance at June 30, 2006Additionsand TransfersJune 30, 2007 Governmental activities Governmental Fund Capital Assets Capital assets not being depreciated: Land$16,709,898($198,859)$16,511,039 Construction in progress16,762,311$7,765,665726,42525,254,401 Subtotal33,472,2097,765,665527,56641,765,440 Capital assets being depreciated, Cost: Office equipment44,2197,403,0147,447,233 Other equipment49,2317,062,4237,111,654 Library books2,062,3402,062,340 Infrastructure11,252,312227,500,297238,752,609 Buildings 97,931,794(2,600)97,929,194 Equipment and vehicles16,594,259(16,594,259) Land improvements and infrastructure228,251,408(228,251,408) Subtotal342,777,46111,345,762(820,193)353,303,030 Accumulated Depreciation: Office equipment(188,943)(5,583,628)(5,772,571) Other equipment(447,929)(988,488)(1,436,417) Library books(125,831)(1,371,941)(1,497,772) Infrastructure(6,035,438)(72,348,175)(78,383,613) Buildings(10,513,861)(1,957,597)205,614(12,265,844) Equipment and vehicles(7,991,389)7,991,389 Land improvements and infrastructure(72,355,721)72,355,721 Subtotal(90,860,971)(8,755,738)260,492(99,356,217) Net Governmental Fund Programs capital assets being depreciated$251,916,490$2,590,024($559,701)$295,712,253 Internal Service Fund Capital Assets Capital assets not being depreciated: Construction in progress$168,616$168,616 Subtotal168,616168,616 Capital assets being depreciated, Cost: Office equipment$9,0009,000 Other equipment33,407194,588227,995 Licensed Vehicles245,02410,377,51210,622,536 Equipment and vehicles$10,767,140(10,767,140) Subtotal10,767,140278,431(186,040)10,859,531 Accumulated Depreciation: Office equipment(900)(4,350)(5,250) Other equipment(14,366)(39,026)(53,392) Licensed Vehicles(922,737)(5,380,751)(6,303,488) Equipment and vehicles(5,593,976)5,593,976 Subtotal(5,593,976)(938,003)169,849(6,362,130) Net Internal Service Fund capital assets being depreciated5,173,164(659,572)(16,191)4,666,017 Governmental activity capital assets, net$290,561,863$9,864,733($48,326)$300,378,270 76 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 6 – CAPITAL ASSETS (Continued) Balance atRetirementsBalance at June 30, 2006Additionsand TransfersJune 30, 2007 Business-type activities Capital assets not being depreciated: Land$13,880,133$13,880,133 Land improvements$634,433634,433 Construction in progress4,312,743$4,088,79782,2098,483,749 Subtotal18,192,8764,088,797716,64222,998,315 Capital assets being depreciated: Office equipment365,415365,415 Other equipment133,9232,762,2852,896,208 Licensed Vehicles86,628791,103877,731 Airport infrastructure11,057,89111,057,891 Water infrastructure1,193,40429,190,91430,384,318 Sewer infrastructure1,582,117194,556,216196,138,333 Las Positas Golf Course infrastructure6,991,3676,991,367 Springtown GC infrastructure551,572551,572 Land improvements and infrastructure24,095,750(24,095,750) Golf courses10,191,822(10,191,822) Buildings 13,638,5748,531,14922,169,723 Sewer treatment plant, mains, pipes and other186,712,753(186,712,753) Water mains, pipelines and other21,486,819(21,486,819) Tarmacs, runways and other9,011,567(9,011,567) Equipment and vehicles4,090,671(4,090,671) Subtotal269,227,9562,996,072(791,470)271,432,558 Accumulated Depreciation: Office equipment(21,326)(177,786)(199,112) Other equipment(111,136)(1,619,644)(1,730,780) Licensed Vehicles(58,623)(464,973)(523,596) Airport infrastructure(256,959)(8,883,739)(9,140,698) Water infrastructure(697,822)(9,008,964)(9,706,786) Sewer infrastructure(5,618,690)(92,906,823)(98,525,513) Las Positas Golf Course infrastructure(326,980)(5,193,417)(5,520,397) Springtown GC infrastructure(17,835)(241,390)(259,225) Land improvements and infrastructure(9,310,884)9,310,884 Golf courses(5,510,171)5,510,171 Buildings (5,141,179)(443,394)(768,056)(6,352,629) Sewer treatment plant, mains, pipes and other(87,376,626)87,376,626 Water mains, pipelines and other(8,200,516)8,200,516 Tarmacs, runways ands other(7,834,059)7,834,059 Equipment and vehicles(1,510,676)1,510,676 Subtotal(124,884,111)(7,552,765)478,140(131,958,736) Net capital assets being depreciated144,343,845(4,556,693)(313,330)139,473,822 Business-type activity capital assets, net$162,536,721($467,896)$403,312$162,472,137 77 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 6 – CAPITAL ASSETS (Continued) B. Capital Asset Contributions Some capital assets may be acquired using Federal and State grant funds, or they may be contributed by developers or other governments. GASB 34 requires that these contributions be accounted for as revenues at the time the capital assets are contributed. C. Depreciation Allocation Depreciation expense was charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program were as follows: DepreciationDepreciation Governmental ActivitiesExpenseBusiness-Type ActivitiesExpense Governmental Fund ProgramsAirport$377,426 City Council$3,765Water700,206 City Manager16,907Sewer125,575 City Clerk3,236Las Positas15,211 Finance15,321Springtown6,334,347 Human Resources1,184 Fire199,922TOTAL$7,552,765 Police75,587 Public Works7,239,044 Community Development25,315 Information Technology10,957 Library700,648 Redevelopment463,852 Internal Service Funds938,003 TOTAL$9,693,741 NOTE 7 – LONG TERM DEBT The City’s debt comprises bonds, loans, notes and certificates of participation, or COPs. COPs are similar to debt; they allow investors to participate in a share of guaranteed payments, which are made by the City. Because they are similar to debt, the present value of the total of the payments to be made by the City is recorded as long-term debt. Details of the individual debt issues and transactions are set forth below: 78 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7 – LONG TERM DEBT (Continued) A. Long Term Debt Transactions and Balances: Balance atBalance atCurrent June 30, 2006AdditionsRetirementsJune 30, 2007Portion Governmental Activities Redevelopment Agency: 2001 Tax Allocation Bonds,$35,500,000$680,000$34,820,000$705,000 4.00-5.00%, 2032 Certificates of Participation: 2007, 3.5-3.7%, 2017$15,085,00015,085,0001,290,000 2002, varies, 202722,195,0001,055,000 21,140,0001,085,000 2000, varies, 203028,010,000650,000 27,360,000675,000 1997, 4.25-5.25%, 201712,940,00012,940,000 Notes Payable, varies, 2011-20174,619,139308,20030,0004,897,339 Total governmental activities debt$103,264,139$15,393,200$15,355,000$103,302,339$3,755,000 Business-type Activities Airport Certificates of Participation: 2002, varies, 2027$2,550,000$475,000$2,075,000$495,000 Revenue Loans, 6-6.94%, 200941,66713,889 27,77813,889 Water Certificates of Participation: 2002, varies, 20276,345,000215,000 6,130,000225,000 Sewer 1994 State Loan, 2.7%, 20145,941,487675,3055,266,182693,538 Las Positas Golf Course Certificates of Participation: 2002, varies, 20272,195,000125,0002,070,000130,000 Golf Equipment Lease, 4.1%, 2010311,47390,064221,40990,064 Total business-type activities debt$17,384,627$1,594,258$15,790,369$1,647,491 79 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7 – LONG TERM DEBT (Continued) B. Governmental Activities REDEVELOPMENT AGENCY On August 1, 2001, the Redevelopment Agency issued $36,775,000 of 2001 Tax Allocation Bonds, Series A . Proceeds were used to refund the above outstanding Livermore Redevelopment Project 1986 Tax Allocation Bonds Series A, and to provide funds to finance various redevelopment activities within the Project Area. Semiannual interest payments are due August 1 and February 1. Annual principal payments are due August 1, and are repayable from tax increment revenues of the Redevelopment Agency Project Area. CERTIFICATES OF PARTICIPATION On September 1, 1997, the City issued $19,395,000 principal amount of 1997 Certificates of Participation . Proceeds from these COPS were used to repay 1991 COPS which were used to finance the construction of a Maintenance Service Center used in maintaining City and Livermore Area Recreation and Park District (District) vehicles. The District has agreed to purchase 18% of the Center from the City under a Sublease Agreement which requires the District to make semiannual installments to a trustee for its share of the total debt service due on the Certificates of Participation. Title to the District's portion of the Center will be transferred to the District upon payment of all outstanding installments. Semiannual interest payments, due October 1 and April 1, and annual principal payments, due April 1, are repayable from District installments and General Fund revenues. The Maintenance Service Center is pledged as collateral for the COPs. In Fiscal Year 2007, the COPs were defeased and the liability for those obligations were removed from the City’s financial statements On November 30, 2000, $29,990,000 principal amount of 2000 Variable Rate Demand Certificates of Participation, (2000 COPs) were issued to finance the renovations and improvements for City Hall, construction of a replacement of Fire Station #7, construction of Fire Station #10, finance the City share of costs of constructing Livermore Pleasanton Fire Department Joint Headquarters building and other improvements and equipment. On June 2, 2002, $39,640,000 principal amount of 2002 Variable Rate Demand Certificates of Participation, (2002 COPs) were issued to finance the costs of acquiring and installing photo-voltaic energy systems on the roofs of the City Hall and Library Buildings, acquiring fire trucks and equipment for Livermore/Pleasanton Fire Department, furnishing the City’s new Civic Center Library, making improvements to various police and fire facilities, constructing water storage tanks, constructing certain City roadway improvements, acquiring land in downtown Livermore for a future City project and to refund the 1992 Refunding COPs, the 1993 COPS and the 1994 Refunding COPs. 80 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7 – LONG TERM DEBT (Continued) A portion of the proceeds from the 2002 COPS was used to advance refund outstanding the 1992 Refunding COPs, the 1993 COPS and the 1994 Refunding COPs (“Refunded Bonds”) by purchasing U.S. government securities which were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the Refunded Bonds. As a result, the Refunded Bonds were considered to be defeased and the liability for those obligations was removed along with the trust assets from the City’s financial statements. Interest rates on the City’s 2000 COPs and 2002 COPS are reset periodically, using the “put” mechanism described below. The 2000 and 2002 COPs are periodically subject to repurchase at par, referred to as a "put". Once a put occurs, a remarketing agent resells the 2000 COPs at par by setting new interest rates and repurchase dates. The City has obtained an irrevocable stand-by purchase agreement in the amount of $31,232,326 and $25,000,000 to be used in the event the remarketing agent is unable to resell any 2000 COPs or 2002 COPs, respectively, and to ensure the City will not be required to repurchase the 2000 or 2002 COPs before they mature. The purchase agreements related to the 2000 COPs and 2002 COPs expire November 30, 2007 and June 5, 2009, respectively. The City paid $34,965 in purchase agreement fees for the 2000 COPs during the year ended June 30, 2001 and $44,250 for 2002 COPs during the year ended June 30, 2002. The interest rate of the 2000 and 2002 COPs cannot exceed twelve percent per year and may be converted by the City to a fixed rate, subject to certain conditions defined in the indenture agreements. The 2000 and 2002 COPs may be prepaid at par at any time provided the interest rate has not been converted to a fixed rate. The 2000 and 2002 COPs are subject to optional prepayments, once the interest rate has been converted to a fixed or long-term rate, subject to certain conditions defined in the indenture. 2000 COPs still outstanding on or after October 1, 2002 and 2002 COPs still outstanding on or after May 1, 2003 are subject to mandatory serial prepayments at par. General fund resources of the City have been pledged for the repayment of debt service on the COPs. The interest rate as of June 30, 2007 for both of the 2000 and 2002 COPs was 3.63 percent. On April 1, 2007, $15,085,000 principal amount of 2007 Certificates of Participation, (2007 COPs) were issued to fund the construction of an elevated water storage tank, certain storm drain improvements, and to refund the 1997 COPs. Semiannual interest payments are due April 1 and October 1. Annual principal payments are due April 1. A portion of the proceeds from the 2007 COPs was used to refund all outstanding 1997 COPs by purchasing U.S. government securities, which were deposited into an irrevocable trust with an escrow agent to provide for all future debt service payments on the COPs. As a result, the COPs were considered to be defeased and the liability for those obligations was removed along with the trust assets from the City’s financial statements. 81 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7 – LONG TERM DEBT (Continued) CALIFORNIA HOUSING FINANCE AGENCY NOTES PAYABLE The City entered into six loan agreements with California Housing Finance Agency (CHFA): 1) $450,000 is to be utilized for a deferred second loan program for first-time homebuyers; 2) $1,080,000 is to be used to finance site acquisition, and bridge and construction loans to facilitate development of multifamily rental and ownership housing; 3) $450,000 is to be used for down-payment assistance directed to first-time homebuyers; 4) $1,500,000 is to be used as a revolving fund for an existing acquisition, bridge and construction loan program that will allow for the development of homeownership and multifamily rental projects; 5) $1,500,000 is to be used to assist with the development of 55 units in a 130-unit senior rental complex, and 6) $750,000, a new loan entered into in fiscal year 2007, is to be used to rehabilitate small multi-family rental housing complexes. As of June 30, 2007, the City drew down $260,000 from the first loan, $1,080,000 from the second loan, $418,875 from the third loan, $1,488,464 from the fourth loan, $1,500,000 from the fifth loan, and $150,000 from the sixth loan. All CHFA funds bear interest at a 3.0% simple rate and all payments of principal and interest are deferred for a ten year period. C. Business-type Activities AIRPORT DEBT The City used proceeds from five Revenue Loans to finance Airport improvements which are pledged as collateral for the repayment of these loans. Interest and principal are payable from operating revenues of the Airport Enterprise Fund. SEWER DEBT The State of California loaned the City $13,010,062 under the terms of a 1994 State Loan agreement. The proceeds from the Loan were used to partially repay the 1991 Variable Rate Demand Certificates of Participation. Annual principal and interest payments are due September 3, and are payable from Sewer Enterprise Fund connection fees and operating revenues. The City's water reclamation plant expansion, which was financed with proceeds from the 1991 COPs, is pledged as collateral. LAS POSITAS DEBT The City entered into a lease agreement for the purchase of golf equipment during fiscal year 2005. Since the City becomes the owner of the equipment at the end of the lease, the present value of the lease has been recorded as debt in the City’s financial statements. 82 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7 – LONG TERM DEBT (Continued) D. Debt Service Requirements Debt service requirements are shown below for all long-term debt including interest on variable rate COPs, based on a 3.63% rate. For the Year 30PrincipalInterestPrincipalInterest 2008$3,755,000$3,725,916$1,647,491$482,336 20093,895,0003,587,7741,691,212437,233 20104,295,0003,530,3121,672,779386,724 20115,270,0003,635,6721,686,245342,433 20126,202,3393,737,3241,166,528324,819 2013-201725,765,00013,730,6983,811,114838,755 2018-202217,375,0009,257,6422,185,000347,440 2023-202717,800,0005,939,8501,930,00061,926 2028-203216,635,0002,309,557 20332,310,00057,750 Total$103,302,339$49,512,495$15,790,369$3,221,666 Governmental ActivitiesBusiness-type Activities NOTE 8 - SPECIAL ASSESSMENT DISTRICT DEBT WITH NO CITY COMMITMENT Special assessment districts, including Mello Roos Districts, exist in various parts of the City to provide improvements to properties located in those districts. Properties are assessed for the cost of improvements; these assessments are payable over the term of the debt issued to finance the improvements and must be sufficient to repay this debt. The City acts solely as the collecting and paying agent for the special assessment district debt issues below, but it has no direct or contingent liability or moral obligation for the payment of this debt, which is not included in the general debt of the 83 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 8 - SPECIAL ASSESSMENT DISTRICT DEBT WITH NO CITY COMMITMENT (Continued) City. The outstanding balance of each of these issues as of June 30, 2007 is as follows: Consolidated Refunding Assessment Districts 1993-3T$75,000 1993-415,130,000 Community Facilities District No. 1 (Tri-Valley Technology Park) Special Tax Bonds Series 200020,810,000 Consolidated Reassessment and Refunding District 20026,785,000 Community Facilities District No. 2006-1 (Shea Properties) Special Tax Bonds Series 200610,000,000 Total$52,800,000 In December 1998, the Livermore Capital Projects Financing Authority (LCPFA) issued $26,675,000 principal amount of Marks-Roos Revenue Bonds to refinance the Consolidated Refunding Assessment District Bonds Series No. 1993-4. Proceeds from the Marks-Roos Bonds were used by a Trustee to purchase the 1993-4 Bonds which are held as an investment ($15,130,000 as of June 30, 2007) and collateral for the repayment of the Marks-Roos Bonds. District property owners pay assessments on their property under the 1993-4 Bond indenture to the Trustee as owner of the 1993- 4 Bonds. The Trustee then uses these assessments to pay debt service on the Marks-Roos Bonds. Neither the faith and credit nor the general taxing power of the City of Livermore have been pledged to the payment of the bonds. Therefore, the bonds have not been included in the accompanying financial statements. On July 18, 2000, the City sponsored the issuance of the Community Facilities District No. 1 (Tri-valley Technology Park) Special Tax Bonds, Series 2000. The Bonds were issued to refund a portion of the Consolidated Refunding Assessment District 1993-2 and all of the bonds outstanding for the Triad Series 90-1B and Triad Series 90-1C. The balance outstanding for these Bonds as of June 30, 2007 is $20,810,000. On May 29, 2002, the City sponsored the issuance of the Consolidated Reassessment and Refunding District Limited Obligation Refunding Improvement Bonds, Series 2002. The Bonds were issued to refund the remaining principal amount of the Limited Obligation Refunding Bonds for Consolidated Refunding District 1993-1 and 1993-2. The balance outstanding for these 2002 Bonds as of June 30, 2007 is $6,785,000. On September 1, 1006, the City sponsored the issuance of the Community Facilities District (CFD) No. 2006-1 (Shea Properties) Special Tax Bonds, Series 2006. The Bonds were issued to fund certain public infrastructure improvements within and adjacent to the CFD. The balance outstanding for these Bonds as of June 30, 2007 is $10,000,000. 84 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9 – NET ASSETS AND FUND BALANCES Net Assets is measured on the full accrual basis, while Fund Balance is measured on the modified accrual basis. A. Net Assets Net Assets is the excess of all the City’s assets over all its liabilities, regardless of fund. Net Assets are divided into three captions. These captions apply only to Net Assets, which is determined only at the Government-wide level, and are described below: Invested in Capital Assets, net of related debt describes the portion of Net Assets which is represented by the current net book value of the City’s capital assets, less the outstanding balance of any debt issued to finance these assets. Restricted describes the portion of Net Assets which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These restrictions principally include developer fees received for use on capital projects, debt service requirements and redevelopment funds restricted for low and moderate income purposes. Unrestricted describes the portion of Net Assets which is not restricted as to use. B. Fund Balances Fund balances are reserved as follows: Reserve for capital outlay is the portion of fund balance legally restricted for major capital projects. Reserve for low income housing is the portion of fund balance legally restricted for operating the City's Low Income Housing program. Reserve for advances to other funds, land held for redevelopment, prepaids and supplies is the portion of fund balance set aside to indicate that these items do not represent available, spendable resources even though they are a component of assets. Reserve for debt service is the portion of fund balance legally restricted to the payment of principal and interest on long term debt. Reserve for special assessment administration is the remaining portion of fund balance arising from special assessment district debt issues, which is legally restricted for the administration of special assessment districts. 85 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9 – NET ASSETS AND FUND BALANCES (Continued) Fund balances designated by City Council are as follows: Designated for special projects is the portion of fund balance to be used for special projects. Designated for operations is the portion of fund balance to be used in the event of economic uncertainty. C. Fund Deficits The following funds had GAAP basis fund deficits at June 30, 2007: Amount Special Revenue Funds: Horizons$34,258 Capital Projects Funds: Airport Construction1,772 Isabel Parkway151,721 Internal Service Funds: Community Development2,143 86 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10 - PERS PENSION PLANS A. CALPERS Safety and Miscellaneous Plans All employees meeting PERS membership requirements must participate in pension plans offered by California Public Employees Retirement System (CALPERS) an agent multiple employer defined benefit pension plan which acts as a common investment and administrative agent for its participating member employers. CALPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. The City’s employees participate in the separate Safety (police) and Miscellaneous (all other) Employee Plans. Benefit provisions under both Plans are established by State statute and City resolution. Benefits are based on years of credited service, equal to one year of full time employment. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CALPERS; the City must contribute these amounts. The Plans’ provisions and benefits in effect at June 30, 2007, are summarized as follows: Safety Miscellaneous Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life Retirement age 50 50 Monthly benefits, as a % of annual salary 3% 2.0% - 2.7% Required employee contribution rates 9% 8% Required employer contribution rates 26.150% 14.567% CALPERS determines contribution requirements using a modification of the Entry Age Normal Method. Under this method, the City’s total normal benefit cost for each employee from date of hire to date of retirement is expressed as a level percentage of the related total payroll cost. Normal benefit cost under this Method is the level amount the employer must pay annually to fund an employee’s projected retirement benefit. This level percentage of payroll method is used to amortize any unfunded actuarial liabilities. The actuarial assumptions used to compute contribution requirements are also used to compute the actuarial accrued liability. The City uses the actuarially determined percentages of payroll to calculate and pay contributions to CALPERS. This results in no net pension obligations or unpaid contributions. Annual Pension Costs, representing the payment of all contributions required by CALPERS, for the years ended June 30, 2007, 2006 and 2005 amounted to $6,597,877, $6,640,490, and $5,536,847 respectively. CALPERS uses the market related value method of valuing the Plan’s assets. An investment rate of return of 7.75% is assumed, including inflation at 3.0%. Annual salary increases are assumed to vary by duration of service. Changes in liability due to plan amendments, changes in actuarial assumptions, or changes in actuarial methods are amortized as a level percentage of payroll on a closed basis over twenty years. Investment gains and losses are accumulated as they are realized and amortized over a rolling thirty year period. 87 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10 - PENSION PLAN (Continued) The Miscellaneous Plan’s actuarial value (which differs from market value) and funding progress over the past three years is set forth below at their actuarial valuation date of June 30: Miscellaneous Plan: Actuarial Entry AgeUnfundedAnnualUnfunded ValuationAccruedValue of(Overfunded)FundedCovered(Overfunded) DateLiabilityAssetsLiabilityRatioPayrollas % of Payrol 2004$97,913,678$82,186,930$15,726,74883.9%$26,853,79258.6% 2005108,503,11190,442,79218,060,31983.4%28,240,56264.0% 2006118,438,151100,221,82118,216,33084.6%28,421,58264.1% As required by new State law, effective July 1, 2005, the City’s Safety Plan was terminated, and the employees in the plan were required by CALPERS to join a new State-wide pool. One of the conditions of entry was that the City true-up any unfunded liabilities or overfunded assets in the former Plan, either by paying cash or by increasing or decreasing its future contribution rates through a Side Fund offered by CALPERS. The Safety Plan was over-funded at June 30, 2006; the amount of this over-funding is accounted for separately and is to be used by CALPERS to reduce future City contributions to the Plan over the next 9 years. Audited annual financial statements and ten year trend information are available from CALPERS at P.O. Box 942709, Sacramento, CA 94229-2709. B. Social Security The Omnibus Budget Reconciliation Act of 1990 (OBRA) mandates that public sector employees who are not members of their employer’s existing system as of January 1, 1992 be covered by either Social Security or an alternative plan. The City’s temporary employees are covered under Social Security, which requires these employees and the City to each contribute 6.2% of the employees’ pay. Total contributions to Social Security during the year ended June 30, 2007 amounted to $45,016, of which the City paid half. 88 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 11 - DEFERRED COMPENSATION PLAN City employees may defer a portion of their compensation under a City sponsored Deferred Compensation Plan created in accordance with Internal Revenue Code Section 457. Under this plan, participants are not taxed on the deferred portion of their compensation until distributed to them; distributions may be made only at termination, retirement, death or in an emergency as defined by the Plan. The laws governing deferred compensation plan assets require plan assets to be held by a Trust for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under these plans are not the City’s property and are not subject to City control, they have been excluded from these financial statements. NOTE 12 - JOINT VENTURES The City participates in the joint venture activities described 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 organizations 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 venture is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective joint venture, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the Board. Assets and liabilities of the separate entities are not those of the City. The City’s sole financial responsibility is to fund annual contributions to each entity which are used along with other member contributions to finance each joint venture’s annual operations. A. Livermore-Amador Valley Water Management Agency Livermore-Amador Valley Water Management Agency was formed in 1974 by a joint exercise of powers agreement between the cities of Pleasanton and Livermore and the Dublin-San Ramon Services District for the purpose of implementing a water quality management program involving wastewater treatment and disposal. Financial statements for the Authority may be obtained from LAVWMA, 623 West Myrick Court, Clayton, CA 94517. B. Livermore-Amador Valley Transit Authority This Authority was formed in May 1985 by a joint exercise of powers agreement between the County of Alameda and the Cities of Livermore, Pleasanton and Dublin for the purpose of providing general public transportation under the business name "Wheels". Financial statements may be obtained from LAVTA, 1362 Rutan Court, Livermore, CA 94550. 89 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 12 - JOINT VENTURES (Continued) C. Tri-Valley Transportation Council The Tri-Valley Transportation Council was formed in 1991 by a joint exercise of powers agreement between the cities of Dublin, Livermore, Pleasanton, and San Ramon, the Town of Danville and the Counties of Alameda and Contra Costa for the purposes of preparing a transportation plan and providing transportation facilities within the Tri-Valley area. Financial statements may be obtained from the Town of Danville, 510 La Gonda Way, Danville, CA 94526-1740. D. Alameda County Congestion Management Program The Alameda County Congestion Management Program was formed in 1991 by a joint exercise of powers agreement between the County and cities of Alameda for the purpose of preparing, implementing and administering a traffic congestion management plan pursuant to California Government Code section 66531. Financial statements may be obtained from the Alameda County Congestion Management Agency at 1333 Broadway, Suite 220, Oakland, CA, 94612. E. Livermore - Pleasanton Fire Department Joint Powers Agreement On December 3, 1996, the cities of Livermore and Pleasanton signed a joint powers agreement to form a joint Fire Department covering both cities. The Department may not own physical assets nor enter into contracts with out approval of the governing board. The Department prepares its budget including contributions required from each City to fund operating and capital needs for the year. During the year ended June 30, 2007, the City contributed $12,864,191 to the Department representing its share of Department costs. The City of Pleasanton is Treasurer for the Department. No separate financial statements are prepared. NOTE 13 - HEALTH, GENERAL LIABILITY AND WORKERS COMPENSATION COVERAGE A. Risk Management California Joint Powers Risk Management Authority (CJPRMA) covers general liability claims in an amount up to $40,000,000. The City has a deductible or uninsured liability of up to $500,000 per claim. Once the City’s deductible is met, CJPRMA becomes responsible for payment of all claims up to the limit. During the fiscal year ended June 30, 2007 the City contributed $403,935 for current year coverage and received a refund of $104,621. The Local Agency Workers Compensation Excess Insurance Joint Powers Authority (LAWCX) covers workers compensation up to statutory limits. The City has a deductible or uninsured liability of up to $350,000 per claim. During the fiscal year ended June 30, 2007 the City contributed $258,171 for current year coverage. 90 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 13 - HEALTH, GENERAL LIABILITY AND WORKERS COMPENSATION COVERAGE (Continued) There were no significant reductions in insurance coverage nor were there settlements in excess of issuance coverage in any of the three prior fiscal years. Each risk pool is governed by a board consisting of representatives from member municipalities. The board controls the operations of each risk pool, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the Board. The City's contribution to each risk pool equals the ratio of the City's payroll to the total payrolls of all entities participating in the same layer of each program, in each program year. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating. CJPRMA’s financial statements may be obtained from CJPRMA at 2333 San Ramon Valley Blvd., Suite 250, San Ramon, CA 94583-4456. LAWCX’s financial statements may be obtained from Bickmore & Associates, 6371 Auburn Boulevard, Citrus Heights, CA 95621. B. Liability for Uninsured Claims The City’s liability for the uninsured portion of claims, including a provision for claims incurred but not reported, was computed as follows based on claims experience: Liability Insurance Reserve Internal Service Fund Workers’ Compensation Internal Service Fund Total Balance of claims payable at June 30, 2005$1,171,192$977,888$2,149,080 Increase in estimated claims liability132,807130,967263,774 Claims paid(93,894)(321,144)(415,038) Balance of claims payable at June 30, 20061,210,105787,7111,997,816 Change in estimated claims liability 538,342286,222 824,564 Claims paid (53,242)(257,285)(310,527) Balance of claims payable at June 30, 2007$1,695,205$816,648$2,511,853 91 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 14 - COMMITMENTS AND CONTINGENCIES The City has the following outstanding construction commitments at June 30, 2007: Greenville Road Widening and Bridge Replacement$617,909 Geographic Information System110,298 Isabel/Vallecitos Road Realignment87,676 Traffic Signal Install at Homes & Arroyo Mocho Trail Crossing78,700 Vasco ACE Parking Lot1,592,229 Zone 1 Water5,317,545 Downtown Sewer Improvement Phase II586,784 El Charro Infrastructure324,192 El Charro Road / I580 Ramp Modification178,343 El Charro Golf Course Redesign330,000 Brisa Storm Drain124,724 Other miscellaneous Commitments273,252 Total$9,621,652 The Cities of Dublin, Pleasanton and Livermore and the County of Alameda reached an agreement under which Alameda County constructed an animal shelter facility on County property. Under the agreement the entities share in the debt service costs of the project based on their use of the animal shelter. Livermore’s portion of the project fluctuates based on actual usage and represented 36.27 % in the fiscal 2006-07. Livermore’s share of the fiscal 2006-07 debt service was $115,081. The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney there is no pending litigation which is likely to have a material adverse effect on the financial position of the City. The City participates in several Federal and State grant programs. These programs have been audited by the City's independent accountants in accordance with the provisions of the Federal Single Audit Act amendments of 1996 and applicable State requirements. No cost disallowances were proposed as a result of these audits; however, these programs are still subject to further examination by the grantors and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial. The City and Agency have entered into a variety of development agreements with third parties to provide needed improvements and projects. Activities under agreements for which there are continuing commitments are disclosed below. The City and Agency have other agreements that entitle them to collect certain loans or notes receivables which are disclosed above in Note 5. 92 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 14 - COMMITMENTS AND CONTINGENCIES (Continued) A. Livermore Senior Housing Continuum of Care Project Phase I The City and Agency have an agreement with a Developer and an Owner under which a 250 unit residential rental senior citizen housing Congregate Care/Assisted Living Facility (Phase I) and a Phase II Project since deemed unfeasible and changed to the new project discussed below. The Project was to be constructed on a site composed of formerly Agency owned land subdivided into two parcels, one for each Phase. In a prior year, the Agency sold the Phase I parcel to the owner. In addition, the Agency loaned the Developer $800,000 to partially finance City and County development fees. The loan bears interest at ten percent, is due in fifty-seven years and is secured by a subordinated deed of trust. Provided the project is in compliance with affordability covenants, the interest rate will drop to five percent beginning the seventeenth year of the note until maturity. If the project maintains compliance with affordability covenants through maturity, interest accrued at the five percent rate will be forgiven. As required under the agreement, the Agency sponsored the issuance of $29.8 million principal amount of Multifamily Housing Revenue Bonds proceeds, which were used by the Developer to acquire and construct the project. The Bonds are repayable solely from mortgage payments received from the Developer. The Agency is not obligated for repayment of the Bonds. As of June 30, 2005, the Agency sold the land for Phase I and construction was complete. In addition Agency funds transferred to the City’s Housing and Community Assistance Fund in fiscal 2001-2002 were used to finance the Developer Loan for $800,000, which has been recorded in that City Fund. B. Livermore Independent Living Associates Project (Valley Care Senior Housing Project) The Agency and City have an agreement under which a Developer will construct and operate a 130 senior rental housing project on a site composed of a parcel conveyed by the Agency to the Developer and a parcel the City has agreed to sell to Developer for $1.1 million. Fifty-five units are to be made affordable for lower income seniors. The Developer will also construct Iron Horse Trail Easement Improvements. This agreement replaces the Livermore Senior Housing Continuum of Care Project, Phase II. To assist in financing the project, the Agency has agreed to loan $2 million to the Developer. The loan bears interest at 3% per annum and is due in forty years. The loan is due in installments as follows: $989,000 is due in two subordinated payments from available remaining Bond Proceeds, and annual payments ranging from $33,000 to $175,000 per year are payable each March 1 from cash flows available from the operations of the project. In addition, the Agency agreed to a Property Tax Loan and an Additional Property Tax Deferment up to maximums specified in the agreement, which bear interest at three percent, commencing after the project is complete. The Loan is payable in 55 years. As of June 30, 2007, the City had disbursed $240,506 under this loan agreement. 93 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 14 - COMMITMENTS AND CONTINGENCIES (Continued) As required under the agreement, the Agency sponsored the issuance of $19 million principal amount of Multifamily Housing Revenue Bonds proceeds, which were used by the Developer to acquire and construct the project. The Bonds are repayable solely from mortgage payments received from the Developer. The Agency is not obligated for repayment of the Bonds. As of June 30, 2007, the project is complete. To assist the Agency in financing the Developer loan, the City signed a $1,500,000 loan agreement with the California Housing Finance Agency. Proceeds from this City debt along with $500,000 in other City funds were used to finance the loan during fiscal year 2006-2007. As of June 30 2007, the Developer owed $2,000,000 to the Agency which has been recorded as a note receivable, and the Agency owed $2,000,000 to the City which has been recorded as an advance from the City. C. Maroon Bear Project The Agency has an agreement under which a Developer constructed and operates a 20,000 square foot 2-story building composed of 10,000 square feet of retail space and 10,000 square feet of office space. The building is located on a site the Developer purchased from the Agency for $800,000. The purchase price is evidenced by a note receivable due the Agency. As of June 30, 2005, the Developer remitted the first three installments on the loan and paid the remaining $200,000 to the Agency. As of June 30, 2007, the construction of the project is complete. D. Signature Properties Multi-Family Residential Project The Agency has signed a Disposition and Development Agreement under which the Developer, Signature Properties, Inc., has agreed to construct a project consisting of a minimum of 119 attached multi-family housing units along with certain infrastructure improvements. The Project is to be located on an Agency owned site which was sold to the Developer for $5 million in fiscal 2004-2005. As of June 30, 2007, the project is under construction. E. Cinema West Movie Theater Project The Agency signed an Agreement with a Developer under which a ten screen, 34,500 square foot movie theater complex will be constructed by the Developer on a site composed of Agency owned land. Pursuant to the Agreement, the Agency sold the site to the Developer for $840,000, net of closing costs. Of the sales price, $668,678 was paid to the Agency in March 2004 as part of the close of escrow. The balance of loan of $170,000 was repaid in fiscal year 2005-2006. As of June 30, 2007, the theater is complete. 94 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 14 - COMMITMENTS AND CONTINGENCIES (Continued) F. Livermore Valley Center Retail Project East The Agency has an agreement with a Developer to construct a 40,000 square foot retail and office complex. The complex will be built on a .35 acre site adjacent to the Park Plaza and Movie Theater Project. The Agency owned site will be sold to the Developer for $462,669, payable in non-interest bearing installments as follows: $154,223 was paid at the close of escrow less a good faith deposit the Agency has and any interest earned, $154,223 was paid immediately upon issuance of the Certificate of Occupancy, $154,223 is due within the earlier of attainment of 90% occupancy of the site or one year after the issuance of the Certificate of Occupancy. Prior to occupancy by the Developer, the Developer shall pay the Agency $4,627 to acquire, construct and install a public art project within the Livermore Valley Center. As of June 30, 2007, construction was complete, but occupancy has not reached 90%. G. Livermore Valley Center Retail Project West The Agency has an agreement under which a Developer will construct a three-story 45,000 square foot retail and office complex. The complex will be constructed on a site adjacent to the proposed Performing Arts Center and proposed Park Plaza in the Livermore Valley Center. The Agency owned site is approximately 0.56 acres and is to be sold to the Developer for $973,815. The purchase price is payable in non-interest bearing installments as follows: $324,605 was paid at the close of escrow less a good faith deposit the Agency has and any interest earned, $324,605 was paid immediately upon issuance of the Certificate of Occupancy, $324,605 is due within the earlier of attainment of 90% occupancy of the site or one year after the issuance of the Certificate of Occupancy. Prior to occupancy by the Developer, the Developer shall pay the Agency $9,738 to acquire, construct and install a public art project within the Livermore Valley Center. As of June 30, 2007, construction was complete, but occupancy has not reached 90%. H. Performing Arts Centers The Agency has an agreement with a Developer to construct two performing arts theaters. The first theater will have approximately 500 seats and will be designed and operated to support local performing arts and for smaller audiences. The second theater will have approximately 1,500 seats to support regional and traveling presenting groups as well as larger local performances. The theaters will be located on two sites that the Developer will lease from the Agency for one-dollar per year. Each lease shall be for a period of 25 years with three 5-year extensions at the option of the Developer. As of June 30, 2007, the 500 seat theater project is nearly complete with operations anticipated to begin in fiscal 07-08. 95 Comprehensive Annual Financial Report FY 2006-2007 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 14 - COMMITMENTS AND CONTINGENCIES (Continued) I. Savannah Terrace The Agency has an agreement with a Developer to construct an 8-unit single family residential housing unit consisting of a combination of affordable housing, live-work housing, and residential uses. Two of the units will be restricted to disabled low-income residents. The Project is to be located on an Agency owned site which was sold to the Developer for $650,000. Of the sales price, a deposit of $65,000 was paid into escrow in May 2007, the first installment of $65,000 was paid in June 2007, and the remaining $520,000 was loaned to the Developer which is repayable upon the sale of each individual housing unit. The loan bears 3% simple interest. As of June 30, 2007, the project was under construction. 96 Comprehensive Annual Financial Report FY 2006-2007 REDEVELOPMENT AGENCY CAPITAL PROJECTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - FOR THE YEAR ENDED JUNE 30, 2007 Variance with Budget Positive BudgetActual(Negative) Revenues Property tax increment$4,747,000$4,166,077($580,923) Interest and rentals132,000413,905281,905 Contributions from outside sources40,00040,000 Miscellaneous429,415429,415 Total Revenues4,879,0005,049,397170,397 Expenditures Current: Redevelopment1,903,8801,324,513579,367 Capital Outlay Capital projects4,861,8004,496,619365,181 Debt service Principal175,000175,000 Interest and fiscal charges40,000105,705(65,705) Total Expenditures6,980,6805,926,8371,053,843 OTHER FINANCING SOURCES (USES) Transfers (out)(5,014,370)(3,110,780)1,903,590 Total Other Financing Sources (Uses)(5,014,370)(3,110,780)1,903,590 SPECIAL ITEMS: Proceeds from sale of property2,599,000678,828(1,920,172) Total Special Items2,599,000678,828(1,920,172) Net change in budgetary fund balance($4,517,050)(3,309,392)$1,207,658 Fund balance, July 112,448,598 Fund balance, June 30$9,139,206 97 Comprehensive Annual Financial Report FY 2006-2007 STREET IMPROVEMENTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - FOR THE YEAR ENDED JUNE 30, 2007 Variance with Budget Positive BudgetActual(Negative) Revenues Contributions from outside sources$4,550,000$55,593($4,494,407) Charges for current services3,000,0004,314,2981,314,298 Use of money and property390,050390,050 Total Revenues7,550,0004,759,941(2,790,059) Expenditures Capital Outlay Capital projects15,062,1706,307,3098,754,861 Total Expenditures15,062,1706,307,3098,754,861 OTHER FINANCING SOURCES (USES) Transfers in3,836,020315,222(3,520,798) Transfers (out)(3,735,270)(776,827)2,958,443 Total Other Financing Sources (Uses)100,750(461,605)(562,355) Net change in budgetary fund balance($7,411,420)(2,008,973)$5,402,447 Budgetary fund balance, July 110,615,767 Budgetary fund balance, June 30$8,606,794 98 Comprehensive Annual Financial Report FY 2006-2007 Non Major Governmental Funds This section provides information on individual governmental funds, except for those major governmental funds reported in the basic financial statements. This section includes the following special revenue, debt service and capital projects funds: SPECIAL REVENUE REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND Established to account for the twenty (20) percent of low and moderate set aside as required under California law STREET PROJECTS FUNDS Established to account for the construction and maintenance of city streets. Financing is provided by city’s share of state gasoline taxes. LOW INCOME HOUSING Established to account for the receipt and disbursement of in-lieu low-income housing impact fees collected from developers. HOUSING AND COMMUNITY ASSISTANCE Established to account for outside resources and programs that can be used to create and expand affordable housing opportunities. HORIZONS Established to account for the receipt of grant funds for the youth diversion program. OTHER FEDERAL AND STATE GRANTS Used to account for grants from Federal Home Program, FEMA, library, community development, Transportation Development Act construction, recycling and public safety expenditures. SOLID WASTE MANAGEMENT Established to administer and participate in City/County planning programs to ensure compliance with the California Integrated Solid Waste Management Act, AB 939. MAINTENANCE DISTRICT Established to account for the receipt and disbursement of Lighting and Landscape District fees collected from developers and homeowners. 99 Comprehensive Annual Financial Report FY 2006-2007 Non Major Governmental Funds (Continued) SPECIAL REVENUE (Continued) AT&T BROADBAND GRANT Established to administer funds from the local cable franchisee for community cable programming. PARK FEE Established to administer the AB1600 funds received from developers to construct new parks in the city. DEBT SERVICE FUNDS REDEVELOPMENT AGENCY Established to accumulate money’s for payment of Redevelopment Agency tax allocation bonds. Debt service is financed from incremental property tax revenues. LIVERMORE CAPITAL PROJECTS FINANCING AUTHORITY (LCPFA) Established as a joint powers authority between city and the Livermore Redevelopment Agency • 2000 COPs were issued to provide for community capital projects financing. • 1997 COPs were issued to refinance prior COPs and provide financing for new community capital projects These COPs were refinanced and defeased by the 2007 COPs. • 2002 COPs were issued to refinance prior COPs and provide financing for new community capital projects • 2007 COPs were issued to refinance and defease prior COPs and provide financing for new community capital projects. CAPITAL PROJECTS FUNDS STORM DRAIN FUND Established to account for acquisition and construction of city storm drains. The source of financing is developer fees AIRPORT CONSTRUCTION Established to account for expansions of the protection zones, runways, and hangars. ASSESSMENT DISTRICT CONSTRUCTION FUND Established to account for construction and acquisition of land and public improvements in the College Avenue Assessment District are provided by assessment bond. ISABEL PARKWAY Established to account for the construction of roadway from Concannon Blvd. to E. Airway Blvd. 100 Comprehensive Annual Financial Report FY 2006-2007 Non Major Governmental Funds (Continued) CAPITAL PROJECTS FUNDS (Continued) PARKING LOTS Established to account for acquisition and construction of local parking lots for transit facilities. TVTC 20% FEE Established to account for receipts of Tri-Valley Transportation Council fees for specific capital improvement projects. LIVERMORE CAPITAL PROJECTS FINANCING AUTHORITY – 2007 COP’s Established to refund and defease the related leases of the 1997 COPs; to account for construction of an elevated water storage tank and a storm drain. OTHER STREET AND TRAIL CONSTRUCTION Established to account for receipts and expenditures for the improvement and construction of various street and trail projects in the city. 101 Comprehensive Annual Financial Report FY 2006-2007 NON-MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS JUNE 30, 2007 RedevelopmentLow Housing & Low and ModerateStreetIncomeCommunity Income HousingProjectsHousingAssistance ASSETS Cash and investments in City Treasury$2,041,874$10,283,012$7,203,015$2,747,189 Cash and investments with Trustees Accounts receivables (net of applicable allowable for uncollectibles)20,0001,134,76725,4845,370 Notes receivable1,426,80310,768,7882,400,138 Advances to other funds582,3252,000,000 Total Assets$3,488,677$11,417,779$18,579,612$7,152,697 LIABILITIES Accounts payable and other accruals$41,251$298,212$258,438 Accrued payroll 7,209617 Due to other funds1,076,566 Deferred rents and revenue1,426,80330,634$2,768,7882,400,138 Advances from other funds4,720,000 Total Liabilities1,475,2636,125,4122,768,7882,659,193 FUND EQUITY Reserved for: Capital outlay Low income housing2,013,414 Notes receivable8,000,000 Advances to other funds582,325 Debt service Unreserved, undesignated5,292,3677,228,4994,493,504 TOTAL FUND BALANCES (DEFICIT)2,013,4145,292,36715,810,8244,493,504 Total Liabilities and Fund Balances$3,488,677$11,417,779$18,579,612$7,152,697 SPECIAL REVENUE FUNDS 102 Comprehensive Annual Financial Report FY 2006-2007 SPECIAL REVENUE FUNDS Other SolidAT&T Federal andWasteMaintenanceBroadbandPark HorizonsState GrantsManagementDistrictGrantFee $3,985,372$627,112$2,500,942$107,692$1,371,907 $109,5311,007,19917,16315,51433,10849,455 594,690 $109,531$5,587,261$644,275$2,516,456$140,800$1,421,362 $1,805$423,004$23,256$118,529$546,904 29,3012,3671,683 112,683380,596 778,022 143,7891,583,98924,939118,529546,904 (34,258)4,003,272619,3362,397,927$140,800$874,458 (34,258)4,003,272619,3362,397,927140,800874,458 $109,531$5,587,261$644,275$2,516,456$140,800$1,421,362 (Continued) 103 Comprehensive Annual Financial Report FY 2006-2007 NON-MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS JUNE 30, 2007 DEBT SERVICE FUNDS Capital Projects Financing Authority Certificates of Participation Redevelopment Agency200019972007 ASSETS Cash and investments in City Treasury$109,602$65,865$85,000 Cash and investments with Trustees$2,498,278$249,86811,210 Accounts receivables (net of applicable allowable for uncollectibles) Notes receivable Advances to other funds Total Assets$2,498,278$359,470$65,865$96,210 LIABILITIES Accounts payable and other accruals$11,176 Accrued payroll Due to other funds Deferred rents and revenue Advances from other funds Total Liabilities11,176 FUND EQUITY Reserved for: Capital outlay Low income housing Notes receivable Advance to other funds Debt service$2,498,278$359,47054,689$96,210 Unreserved, undesignated TOTAL FUND BALANCES (DEFICIT)2,498,278359,47054,68996,210 Total Liabilities and Fund Balances$2,498,278$359,470$65,865$96,210 104 Comprehensive Annual Financial Report FY 2006-2007 DEBT SERVICE FUND Assessment 2002District Variable Rate Certificates of StormAirportCollege Isabel ParticipationDrainConstructionAvenueParkway $88,618$1,478,807$63,308$74,629$19,999 14,288 2,058264,266 $102,906$1,480,865$63,308$74,629$284,265 $18,307$48,290$435,986 $65,080 18,30748,29065,080435,986 84,599 1,432,575(1,772)$74,629(151,721) 84,5991,432,575(1,772)74,629(151,721) $102,906$1,480,865$63,308$74,629$284,265 (Continued) CAPITAL PROJECTS FUNDS 105 Comprehensive Annual Financial Report FY 2006-2007 NON-MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS JUNE 30, 2007 ParkingTVTC Lots20% Fee ASSETS Cash and investments in City Treasury$625,769 Cash and investments with Trustees Accounts receivables (net of applicable allowable for uncollectibles)$448,544735 Notes receivable Advances to other funds Total Assets$448,544$626,504 LIABILITIES Accounts payable and other accruals$28,625$87,877 Accrued payroll Due to other funds70,517 Deferred rents and revenue Advances from other funds Total Liabilities99,14287,877 FUND EQUITY Reserved for: Capital outlay Low income housing Notes receivable Advance to other funds Debt service Unreserved, undesignated349,402538,627 TOTAL FUND BALANCES (DEFICIT)349,402538,627 Total Liabilities and Fund Balances$448,544$626,504 106 Comprehensive Annual Financial Report FY 2006-2007 CAPITAL PROJECTS FUNDS Livermore CapitalTotal ProjectsNonmajor Financing AuthorityOther Street andGovernmental 2007 COPsTrail ConstructionFunds $1,576,494$35,056,206 $4,347,2208,252,90215,373,766 23,6383,156,832 15,190,419 2,582,325 $4,347,220$9,853,034$71,359,548 $18,444$150,441$2,510,545 41,177 23,9081,664,270 7,469,465 4,720,000 18,444174,34916,405,457 4,347,2204,347,220 2,013,414 8,000,000 582,325 3,093,246 (18,444)9,678,68536,917,886 4,328,7769,678,68554,954,091 $4,347,220$9,853,034$71,359,548 107 Comprehensive Annual Financial Report FY 2006-2007 NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2007 SPECIAL REVENUE FUNDS RedevelopmentLow Housing & Low and ModerateStreetIncomeCommunity Income HousingProjectsHousingAssistanceHorizons REVENUES Taxes and special assessments$325,881 Interest and rentals$56,190 Intergovernmental7,995,119$52,185$1,483,853$403,151 Contributions from outside sources Charges for services1,174,335 Use of money and property103,370323,530 Miscellaneous 66,86413,252 Total Revenues56,1908,424,3701,616,9141,483,853416,403 EXPENDITURES Current: Police738,266 Community development3,759,840 Library Redevelopment485,488 Capital Outlay Capital projects1,770,559 Debt service Principal retirement Interest and fiscal charges Total Expenditures485,4881,770,5593,759,840738,266 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(429,298)6,653,8111,616,914(2,275,987)(321,863) OTHER FINANCING SOURCES (USES) Proceeds from long term debt308,200 Payment to bond escrow Transfers in833,21510,855240,0002,252,670287,190 Transfers (out)(73,000)(1,468,828)(2,776,670)(4,435) Total Other Financing Sources (Uses)760,215(1,457,973)(2,536,670)2,556,435287,190 Net change in fund balances330,9175,195,838(919,756)280,448(34,673) Fund balances (deficits) at the beginning of year1,682,49796,52916,730,5804,213,056415 FUND BALANCES (DEFICITS) AT END OF YEAR$2,013,414$5,292,367$15,810,824$4,493,504($34,258) 108 Comprehensive Annual Financial Report FY 2006-2007 SPECIAL REVENUE FUNDS Other SolidAT&T Federal andWasteMaintenanceBroadbandPark State GrantsManagementDistrictGrantFee $3,118,922$662,482$2,556,673$133,050$1,790,145 379,435 16,82119,36785,91812,200 389,634 3,525,377681,8492,642,591133,0502,181,780 2,971,664 44,925 1,135,143550,541141,8381,380,487 3,016,5891,135,143550,541141,8381,380,487 508,788(453,294)2,092,050(8,788)801,293 171,116 (307,988)(1,458,671) (136,872)(1,458,671) 371,916(453,294)633,379(8,788)801,293 3,631,3561,072,6301,764,548149,58873,165 $4,003,272$619,336$2,397,927$140,800$874,458 (Continued) 109 Comprehensive Annual Financial Report FY 2006-2007 NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2007 DEBT SERVICE FUNDS Capital Projects Financing Authority Certificates of Participation Redevelopment Agency200019972007 REVENUES Taxes and special assessments Interest and rentals Intergovernmental Contributions from outside sources Charges for services Use of money and property$138,868$673$439,214$317 Miscellaneous Total Revenues138,868673439,214317 EXPENDITURES Current: Police Community development Library Redevelopment Capital Outlay Capital projects Debt service Principal retirement680,000650,000915,000 Interest and fiscal charges1,735,0811,042,226654,815278,717 Total Expenditures2,415,0811,692,2261,569,815278,717 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(2,276,213)(1,691,553)(1,130,601)(278,400) OTHER FINANCING SOURCES (USES) Proceeds from long term debt10,743,093 Payment to bond escrow(12,026,398) Transfers in2,277,5651,864,1891,132,4711,657,915 Transfers (out)(1,572,915) Total Other Financing Sources (Uses)2,277,5651,864,189(440,444)374,610 Net change in fund balances1,352172,636(1,571,045)96,210 Fund balances (deficits) at the beginning of year2,496,926186,8341,625,734 FUND BALANCES (DEFICITS) AT END OF YEAR$2,498,278$359,470$54,689$96,210 110 Comprehensive Annual Financial Report FY 2006-2007 DEBT SERVICE FUNDCAPITAL PROJECTS FUNDS 2002Assessment District Variable Rate Certificates of StormAirportCollege Isabel ParticipationDrainConstructionAvenueParkway $544,012 $516,373 $39644,850 $6,014 396561,2236,014544,012 $65,080 111,3451,865852,005 1,055,000 846,465 1,901,465111,34566,945852,005 (1,901,069)449,878(66,945)6,014(307,993) 1,760,2909,115772,688 (55,084)(39,375) 1,705,206(30,260)772,688 (195,863)449,878(97,205)6,014464,695 280,462982,69795,433$68,615(616,416) $84,599$1,432,575($1,772)$74,629($151,721) (Continued) 111 Comprehensive Annual Financial Report FY 2006-2007 NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2007 LivermoreLivermore Capital ProjectsCapital Projects Financing AuthorityFinancing AuthorityParking 2002 COPs2007 COPsLots REVENUES Taxes and special assessments Interest and rentals Intergovernmental$64,571 Contributions from outside sources22,056 Charges for services Use of money and property$81,700$5,313 Miscellaneous 313,718 Total Revenues81,7005,313400,345 EXPENDITURES Current: Police Community development Library Redevelopment Capital Outlay Capital projects802,96018,444 Debt service Principal retirement Interest and fiscal charges Total Expenditures802,96018,444 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(721,260)(13,131)400,345 OTHER FINANCING SOURCES (USES) Proceeds from long term debt4,341,907 Payment to bond escrow Transfers in395 Transfers (out)(977,727) Total Other Financing Sources (Uses)(977,332)4,341,907 Net change in fund balances(1,698,592)4,328,776400,345 Fund balances (deficits) at the beginning of year1,698,592(50,943) FUND BALANCES (DEFICITS) AT END OF YEAR$4,328,776$349,402 112 Comprehensive Annual Financial Report FY 2006-2007 CAPITAL PROJECTS FUNDS Total Nonmajor TVTCOther Street andGovernmental 20% FeeTrail ConstructionFunds $325,881 56,190 18,260,151 $158,665$10,730,46111,834,629 1,690,708 37,680359,4711,669,688 789,482 196,34511,089,93234,626,729 738,266 6,796,584 44,925 485,488 1,624,1921,420,5159,809,894 3,300,000 4,557,304 1,624,1921,420,51525,732,461 (1,427,847)9,669,4178,894,268 15,393,200 (12,026,398) 8,68513,278,359 (10,855)(8,745,548) (10,855)8,6857,899,613 (1,438,702)9,678,10216,793,881 1,977,32958338,160,210 $538,627$9,678,685$54,954,091 113 Comprehensive Annual Financial Report FY 2006-2007 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2007 REDEVELOPMENT LOW & MODERATE INCOME HOUSING STREET PROJECTS VarianceVariance PositivePositive BudgetActual(Negative)BudgetActual(Negative) REVENUES Taxes and special assessments$344,000$325,881($18,119) Interest and rentals$70,000$56,190($13,810) Intergovernmental7,605,0007,995,119390,119 Contributions from outside sources Charges for services Use of money and property236,000103,370(132,630) Miscellaneous Total Revenues$70,000$56,190($13,810)$8,185,000$8,424,370239,370 EXPENDITURES Current: Police Community Development Library Redevelopment398,940485,488(86,548) Capital Outlay Capital projects3,828,2801,770,5592,057,721 Debt service Principal Interest and fiscal charges Total Expenditures398,940485,488(86,548)3,828,2801,770,5592,057,721 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(328,940)(429,298)(100,358)4,356,7206,653,8112,297,091 OTHER FINANCING SOURCES (USES) Proceeds from long term debt Transfers in778,000833,21555,21512,00010,855(1,145) Transfers (out)(73,000)(73,000)(2,490,900)(1,468,828)1,022,072 Total Other Financing Sources (Use705,000760,21555,215(2,478,900)(1,457,973)1,020,927 Net change in fund balance$376,060330,917($45,143)$1,877,8205,195,838$3,318,018 Fund balances at beginning of year1,682,49796,529 Fund balances at end of year$2,013,414$5,292,367 114 Comprehensive Annual Financial Report FY 2006-2007 LOW INCOME HOUSINGHOUSING & COMMUNITY ASSISTANCEHORIZON VarianceVarianceVariance PositivePositivePositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) $52,185$52,185$1,811,000$1,483,853($327,147) $420,000$403,151($16,849) $420,0001,174,335754,335 125,000323,530198,530 50,00066,86416,86411,000(11,000) 595,0001,616,9141,021,9141,811,0001,483,853(327,147)431,000403,151(27,849) 750,730738,26612,464 5,385,2103,759,8401,625,370 5,385,2103,759,8401,625,370750,730738,26612,464 595,0001,616,9141,021,914(3,574,210)(2,275,987)1,298,223(319,730)(335,115)(15,385) 240,000240,0002,982,0002,252,670(729,330)270,000287,19017,190 (3,869,640)(2,776,670)1,092,970(4,435)(4,435) (3,629,640)(2,536,670)1,092,9702,982,0002,248,235(733,765)270,000287,19017,190 ($3,034,640)(919,756)$2,114,884($592,210)(27,752)$564,458($49,730)(47,925)$1,805 16,730,5804,213,056415 $15,810,824$4,185,304($47,510) (Continued) 115 Comprehensive Annual Financial Report FY 2006-2007 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2007 OTHER FEDERAL AND STATE GRANTSSOLID WASTE MANAGEMENT VarianceVariance PositivePositive BudgetActual(Negative)BudgetActual(Negative) REVENUES Taxes Interest and rentals Intergovernmental$11,231,000$3,118,922($8,112,078)$661,000$662,482$1,482 Contributions from outside sources Charges for services Use of money and property16,82116,82120,00019,367(633) Miscellaneous 380,000389,6349,634 Total Revenues11,611,0003,525,377(8,085,623)681,000681,849849 EXPENDITURES Current: Police Community Development3,777,4602,971,664805,796 Library160,00044,925115,075 Redevelopment Capital Outlay Capital projects1,271,7501,135,143136,607 Debt service Principal Interest and fiscal charges Total Expenditures3,937,4603,016,589920,8711,271,7501,135,143136,607 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES7,673,540508,788(7,164,752)(590,750)(453,294)137,456 OTHER FINANCING SOURCES (USES) Transfers in207,160171,116(36,044) Transfers (out)(526,000)(307,988)218,012 Total Other Financing Sources (Uses)(318,840)(136,872)181,968 Net change in fund balance$7,354,700371,916($6,982,784)($590,750)(453,294)$137,456 Fund balances at beginning of year3,631,3561,072,630 Fund balances at end of year$4,003,272$619,336 116 Comprehensive Annual Financial Report FY 2006-2007 MAINTENANCE DISTRICTAT&T BROADBAND GRANTPARK FEE VarianceVarianceVariance PositivePositivePositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) $2,333,000$2,556,673$223,673$145,000$133,050($11,950)$720,000$1,790,145$1,070,145 96,000379,435283,435 85,91885,91812,20012,200 2,333,0002,642,591309,591145,000133,050(11,950)816,0002,181,7801,365,780 718,310550,541167,769144,500141,8382,662720,0001,380,487(660,487) 718,310550,541167,769144,500141,8382,662720,0001,380,487(660,487) 1,614,6902,092,050477,360500(8,788)(9,288)96,000801,293705,293 (1,223,000)(1,458,671)(235,671) (1,223,000)(1,458,671)(235,671) $391,690633,379$241,689$500(8,788)($9,288)$96,000801,293$705,293 1,764,548149,58873,165 $2,397,927$140,800$874,458 (Continued) 117 Comprehensive Annual Financial Report FY 2006-2007 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2007 CAPITAL PROJECTS FINANCING AUTHORITY COPS REDEVELOPMENT AGENCY 2000 VarianceVariance PositiveFavorable BudgetActual(Negative)BudgetActual(Negative) REVENUES Taxes and special assessments Interest and rentals Intergovernmental Contributions from outside sources Charges for services Use of money and property$204,000$138,868($65,132)$673$673 Miscellaneous Total Revenues204,000138,868(65,132)673673 EXPENDITURES Current: Police Community Development Library Redevelopment Capital Outlay Capital projects Debt service Principal$680,000680,000$650,000650,000 Interest and fiscal charges1,735,0901,735,08191,055,0001,042,22612,774 Total Expenditures2,415,0902,415,08191,705,0001,692,22612,774 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(2,211,090)(2,276,213)(65,123)(1,705,000)(1,691,553)13,447 OTHER FINANCING SOURCES (USES) Transfers in2,536,3702,277,565(258,805)1,705,0001,864,189159,189 Transfers (out) Total Other Financing Sources (Uses)2,536,3702,277,565(258,805)1,705,0001,864,189159,189 Net change in fund balance$325,2801,352($323,928)172,636$172,636 Fund balances at beginning of the year2,496,926186,834 Fund balances at end of year$2,498,278$359,470 118 Comprehensive Annual Financial Report FY 2006-2007 CAPITAL PROJECTS FINANCING AUTHORITY COPS 19972002 VARIABLE RATE COPSSTORM DRAIN VarianceVarianceVariance PositiveFavorablePositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) $385,000$516,373$131,373 $439,214$439,214$396$39644,85044,850 439,214439,214396396385,000561,223176,223 365,840111,345254,495 $2,086,910915,0001,171,910$1,870,0001,055,000815,000 655,820654,8151,0051,280,000846,465433,535 2,742,7301,569,8151,172,9153,150,0001,901,4651,248,535365,840111,345254,495 (2,742,730)(1,130,601)1,612,129(3,150,000)(1,901,069)1,248,93119,160449,878430,718 1,117,0001,132,47115,4713,150,0001,760,290(1,389,710) (1,572,915)(1,572,915)(55,084)(55,084) 1,117,000(440,444)(1,557,444)3,150,0001,705,206(1,444,794) ($1,625,730)(1,571,045)$54,685(195,863)($195,863)$19,160449,878$430,718 1,625,734280,462982,697 $54,689$84,599$1,432,575 (Continued) 119 Comprehensive Annual Financial Report FY 2006-2007 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2007 COLLEGE AVENUE AIRPORT CONSTRUCTIONASSESSMENT DISTRICT VarianceVariance PositivePositive BudgetActual(Negative)BudgetActual(Negative) REVENUES Taxes and special assessments Interest and rentals Intergovernmental$95,000($95,000) Contributions from outside sources Charges for services Use of money and property Miscellaneous $6,014$6,014 Total Revenues95,000(95,000)6,0146,014 EXPENDITURES Current: Police Community Development$65,080(65,080) Library Redevelopment Capital Outlay Capital projects100,0001,86598,135 Debt service Principal Interest and fiscal charges Total Expenditures100,00066,94533,055 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(5,000)(66,945)(61,945)6,0146,014 OTHER FINANCING SOURCES (USES) Transfers in19,5909,115(10,475) Transfers (out)(39,375)(39,375) Total Other Financing Sources (Uses)19,590(30,260)(49,850) Net change in fund balance$14,590(97,205)($111,795)6,014$6,014 Fund balances at beginning of year95,43368,615 Fund balances at end of year($1,772)$74,629 120 Comprehensive Annual Financial Report FY 2006-2007 LIVERMORE CAPITAL PROJECTS FINANCING AUTHORITY ISABEL PARKWAY2002 COP CAPITAL PROJECTSPARKING LOT VarianceVarianceVariance PositivePositivePositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) $1,557,000$64,571($1,492,429) $544,012$544,01222,05622,056 $81,700$81,700 313,718313,718 544,012544,01281,70081,7001,557,000400,345(1,156,655) $20,860,000852,00520,007,995$1,519,580$802,960$716,6201,556,6701,556,670 20,860,000852,00520,007,9951,519,580802,960716,6201,556,6701,556,670 (20,860,000)(307,993)20,552,007(1,519,580)(721,260)798,320330400,345400,015 21,476,500772,688(20,703,812)39539551,000(51,000) (977,727)(977,727) 21,476,500772,688(20,703,812)(977,332)(977,332)51,000(51,000) $616,500464,695($151,805)($1,519,580)(1,698,592)($179,012)$51,330400,345$349,015 (616,416)1,698,592(50,943) ($151,721)$349,402 (Continued) 121 Comprehensive Annual Financial Report FY 2006-2007 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2007 OTHER STREET AND TVTC 20% FEETRAIL CONSTRUCTION VarianceVariance FavorablePositive BudgetActual(Unfavorable)BudgetActual(Negative) REVENUES Taxes and special assessments Interest and rentals Intergovernmental Contributions from outside sources$220,000$158,665($61,335)$12,286,000$10,730,461($1,555,539) Charges for services Use of money and property37,68037,680359,471 Miscellaneous Total Revenues220,000196,345(23,655)12,286,00011,089,932(1,555,539) EXPENDITURES Current: Police Community Development Library Redevelopment Capital Outlay Capital projects1,713,6001,624,19289,4083,242,1901,420,5151,821,675 Debt service Principal Interest and fiscal charges Total Expenditures1,713,6001,624,19289,4083,242,1901,420,5151,821,675 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(1,493,600)(1,427,847)65,7539,043,8109,669,417625,607 OTHER FINANCING SOURCES (USES) Transfers in1,900,0008,685(1,891,315) Transfers (out)(12,000)(10,855)1,145(1,900,000)1,900,000 Total Other Financing Sources (Uses)(12,000)(10,855)1,1458,6858,685 Net change in fund balance($1,505,600)(1,438,702)$66,898$9,043,8109,678,102$634,292 Fund balances at beginning of year1,977,329583 Fund balances at end of year$538,627$9,678,685 122 Comprehensive Annual Financial Report FY 2006-2007 Internal Service Funds Internal service funds are used to account for the financing of services and supplies provided by one city department to another on a cost reimbursement basis. The concept of major funds introduced by GASB 34 does not extend to internal service funds because they do not do business with outside parties. GASB 34 requires that for the Statement of Activities, the net revenues or expenses of each internal service fund be eliminated by netting against the operations of the other city departments which generated them. The remaining balance sheet items are consolidated with these same funds in the Statement of Net Assets. However, internal service funds are still presented separately in the Fund financial statements, including the funds below: LIABILITY INSURANCE FUND Established to account for the city’s public liability self-insured program. WORKERS COMPENSATION FUND Established to account for the city’s self-insured workers compensation program. FLEET AND EQUIPMENT SERVICES Established to account for the maintenance and acquisition of the city’s fleet and small equipment. INFORMATION TECHNOLOGY Established to account for the maintenance and acquisition of the city’s software and hardware. FACILITIES REHABILITATION Established to account for the repair and maintenance of city facilities. REPROGRAPHICS Established to account for city-wide reprographic costs. COMMUNITY DEVELOPMENT Established to account for services provided to the Livermore Area Recreation and Park District (LARPD), a special district. 123 Comprehensive Annual Financial Report FY 2006-2007 INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET ASSETS JUNE 30, 2007 Liability Fleet and InsuranceWorkersEquipment ReserveCompensationServices ASSETS Cash and investments in City Treasury$4,815,124$2,489,834$4,049,044 Accounts receivable (net of applicable allowance 6748,958 Prepaids, deposits and supplies 51,000247,015 Total current assets4,815,1912,540,8344,345,017 Capital assets (net of accumulated depreciation) 4,666,017 Total Assets4,815,1912,540,8349,011,034 LIABILITIES Accounts payable and other accruals 40,60213,92769,011 Accrued payroll and compensated absences 11,2721,62712,563 Due to other funds Total current liabilities51,87415,55481,574 Claims payable1,695,205816,648 Total liabilities1,747,079832,20281,574 NET ASSETS Invested in Capital Assets4,666,017 Unrestricted3,068,1121,708,6324,263,443 Total Net Assets (Deficit)$3,068,112$1,708,632$8,929,460 for uncollectibles) 124 Comprehensive Annual Financial Report FY 2006-2007 Facilities InformationRehabilitationCommunity TechnologyProjectsReprographicsDevelopmentTotal $3,569,024$1,760,808$130,014$16,813,848 207,768$26,205282,998 298,015 3,569,0241,968,576130,01426,20517,394,861 4,666,017 3,569,0241,968,576130,01426,20522,060,878 29,241191,7876,931351,499 6,3476,0141,23539,058 28,34828,348 35,588197,8018,16628,348418,905 2,511,853 35,588197,8018,16628,3482,930,758 4,666,017 3,533,4361,770,775121,848(2,143)14,464,103 $3,533,436$1,770,775$121,848($2,143)$19,130,120 125 Comprehensive Annual Financial Report FY 2006-2007 INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FOR THE FISCAL YEAR ENDED JUNE 30, 2007 Liability Fleet and InsuranceWorkersEquipment ReserveCompensationServices OPERATING REVENUES Charges for services$1,168,246$787,844$2,755,682 Total Operating Revenues1,168,246787,8442,755,682 OPERATING EXPENSES Salaries and benefits217,021121,462892,829 Contracted services219,855193,80134,304 Insurance premiums403,935260,44115,950 Materials, supplies and others40,78288,389192,915 Depreciation938,003 Repairs & maintenance235494,543 Claims expense538,342388,561 Total Operating Expenses1,420,1701,052,6542,568,544 Operating Income (Loss)(251,924)(264,810)187,138 NONOPERATING REVENUE (EXPENSES) Loss on Disposal(16,192) Transfer in391,400 Transfer out Total391,400 Change in Net Assets139,476(264,810)170,946 Net assets-beginning2,928,6361,973,4428,758,514 Net assets-ending (Deficit)$3,068,112$1,708,632$8,929,460 126 Comprehensive Annual Financial Report FY 2006-2007 Facilities InformationRehabilitationCommunity TechnologyProjectsReprographicsDevelopmentTotal $1,999,862$1,984,723$345,856$105,380$9,147,593 1,999,8621,984,723345,856105,3809,147,593 489,619413,56991,2242,225,724 500,277198,94776,2841,223,468 10,5907,1401,630699,686 240,3601,170,23973,1175651,806,367 938,003 22,869195,5782,312715,537 926,903 1,263,7151,985,473244,5675658,535,688 736,147(750)101,289104,815611,905 (16,192) 391,400 (226,181)(226,181) (226,181)165,219 736,147(750)101,289(121,366)760,932 2,797,2891,771,52520,559119,22318,369,188 $3,533,436$1,770,775$121,848($2,143)$19,130,120 127 Comprehensive Annual Financial Report FY 2006-2007 INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2007 Liability Fleet and InsuranceWorkersEquipment ReserveCompensationServices CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers$1,168,381$787,844$2,751,707 Payments to suppliers(681,611)(540,060)(718,282) Payments to employees(213,483)(121,365)(892,155) Claims paid(53,242)(359,624) Net cash provided (used) by operating activities220,045(233,205)1,141,270 CASH FLOWS FROM NON CAPITAL FINANCING ACTIVITIES Payments to other funds Transfer in391,400 Transfer (out) Cash Flow from Non Capital Financing Activities391,400 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital asset additions, net(447,047) Cash Flows from Capital and Related Financing Activities(447,047) Net Cash Flows611,445(233,205)694,223 Cash and investments at beginning of period4,203,6792,723,0393,354,821 Cash and Investment at end of period$4,815,124$2,489,834$4,049,044 Reconciliation of operating income to net cash provided by operating activities: Operating income($251,924)($264,810)$187,138 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation938,003 Change in assets and liabilities: Accounts receivable135(3,975) Prepaids, deposits and supplies(31,471) Accounts payable(16,804)2,57150,901 Accrued liabilities3,53897674 Claims payable485,10028,937 Net cash provided (used) by operating activities$220,045($233,205)$1,141,270 128 Comprehensive Annual Financial Report FY 2006-2007 Facilities InformationRehabilitationCommunity TechnologyProjectsReprographicsDevelopmentTotal $1,999,862$1,959,595$345,856$136,067$9,149,312 (779,887)(1,475,243)(187,852)(565)(4,383,500) (489,768)(413,132)(91,173)(2,221,076) (412,866) 730,20771,22066,831135,5022,131,870 28,34828,348 391,400 (226,181)(226,181) (197,833)193,567 (447,047) (447,047) 730,20771,22066,831(62,331)1,878,390 2,838,8171,689,58863,18362,33114,935,458 $3,569,024$1,760,808$130,014$16,813,848 $736,147($750)$101,289$104,815$611,905 938,003 (25,128)30,6871,719 (31,471) (5,791)96,661(34,509)93,029 (149)437514,648 514,037 $730,207$71,220$66,831$135,502$2,131,870 129 Comprehensive Annual Financial Report FY 2006-2007 Fiduciary Funds Fiduciary funds are used to account for assets held by the city for other entities and individuals. Such funds are operated to carry out the specific actions of trust agreements, ordinances, and other governing regulations. GASB 34 requires that fiduciary funds the city has be presented separately from the Government-wide and Fund financial statements. Agency Funds are custodial in nature and do not involve measurement of results of operations. 130 Comprehensive Annual Financial Report FY 2006-2007 AGENCY FUNDS STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2007 BalanceBalance June 30, 2006AdditionsDeductionsJune 30, 2007 Assessment Districts Cash and investments in City Treasury$4,506,122$297,067$4,803,189 Cash and investments with Trustees4,305,618847,7435,153,361 Total Assets$8,811,740$1,144,810$9,956,550 Accounts payable$64,245$64,245 Due to special assessment districts8,747,495$1,144,810(64,245)$9,956,550 Total Liabilities$8,811,740$1,144,810$9,956,550 131 Comprehensive Annual Financial Report FY 2006-2007 132 Comprehensive Annual Financial Report FY 2006-2007 200220032004200520062007 Governmental activitiesInvested in capital assets, net of related debt$25,588,364$39,654,874$72,943,727$165,218,739$187,297,724$197,075,931Restricted72,647,51158,710,72041,804,17537,940,46833,104,09648,076,353Unrestricted45,323,36964,399,75569,248,96681,050,46884,494,48985,650,778Total governmental activities net assets$143,559,244$162,765,349$183,996,868$284,209,675$304,896,309$330,803,062Business-type activitiesInvested in capital assets, net of related debt$61,362,263$70,315,521$73,044,827$141,496,317$145,152,094$146,681,768Unrestricted46,462,31054,527,07868,065,41173,558,95176,761,65975,448,836Total business-type activities net assets$107,824,573$124,842,599$141,110,238$215,055,268$221,913,753$222,130,604Primary governmentInvested in capital assets, net of related debt$86,950,627$109,970,395$145,988,554$306,715,056$332,449,818$343,757,699Restricted72,647,51158,710,72041,804,17537,940,46833,104,09648,076,353Unrestricted91,785,679118,926,833137,314,377154,609,419161,256,148161,099,614Total primary government net assets$251,383,817$287,607,948$325,107,106$499,264,943$526,810,062$552,933,666The City of Livermore implemented GASB 34 for the fiscal year ended June 30, 2002. Information prior to the implementation of GASB 34 is not available. Fiscal Year Net Assets by Component, Last Six Fiscal Years (accrual basis of accounting) 133 Comprehensive Annual Financial Report FY 2006-2007 200220032004200520062007 ExpensesGovernmental activities:City Council$203,045$211,376$251,493$265,398$166,068$181,376City Manager1,122,575724,539782,010911,6001,139,3391,118,005City Attorney730,244793,474887,074898,9711,088,2921,158,163City Clerk788,728873,1701,157,543942,167955,941743,797Finance6,397,4017,397,0746,057,8225,032,3596,099,6196,678,870Human Resources1,045,4781,061,3651,186,7621,199,2861,277,3701,230,107Fire10,077,26111,162,22411,291,28212,400,50913,213,64613,911,098Police17,597,27119,995,28221,161,67521,951,22523,709,22224,107,372Public Works4,193,0455,562,7208,876,91615,969,10821,530,79020,709,203Community Development20,365,60916,647,06619,184,28016,541,56515,214,10220,865,569Economic Development620,494332,990369,204360,962445,402343,222Library3,388,7213,337,3843,976,1855,152,3255,352,0008,356,676Redevelopment855,2061,169,6602,318,7383,234,5902,328,3271,998,205Interest on long term debt6,827,5703,745,0813,531,8683,627,3694,283,4704,693,492Total governmental activities expenses74,212,64873,013,40581,032,85288,487,43496,803,588106,095,155Business-type activities:Airport3,617,6073,579,2273,848,7894,537,1295,463,6585,338,068Water5,862,9966,054,8266,908,7667,091,0558,101,4288,572,763Sewer11,226,22812,285,48810,810,48914,449,22717,073,35621,455,749LAVWMA2,215,1182,455,2162,559,5642,432,6172,469,1013,750,222Las Positas2,161,2212,193,9082,505,8652,538,5032,827,2962,752,551Springtown324,034119,498184,558217,610258,208245,444 Total business-type activities expenses25,407,20426,688,16326,818,03131,266,14136,193,04742,114,797Total primary government expenses$99,619,852$99,701,568$107,850,883$119,753,575$132,996,635$148,209,952(Continued) Fiscal Year Changes in Net AssetsLast Six Fiscal Years (accrual basis of accounting) 134 Comprehensive Annual Financial Report FY 2006-2007 200220032004200520062007Fiscal Year Changes in Net AssetsLast Six Fiscal Years (accrual basis of accounting) Program RevenuesGovernmental activities:Charges for services:City Clerk$- $- $- $269,638$- $- Finance117,246- - - 55,331114,420Fire1,182,049997,4491,403,0255,312,8826,307,5001,505,773Police1,539,4751,743,2721,521,9301,764,1201,676,0072,028,445Public Works74,85969,943314,288373,659191,365288,150Community Development6,855,5187,350,9885,701,9195,632,4627,983,36111,070,857Library88,65889,27798,478130,748160,910292,554 Operating grants and contributions6,914,3037,574,2364,790,6247,983,60110,078,8989,655,790Capital grants and contributions23,401,04720,045,14426,250,44435,118,92824,471,14730,561,220Total governmental activities program revenues40,173,15537,870,30940,080,70856,586,03850,924,51955,517,209Business-type activities:Charges for services:Airport3,992,4983,939,7354,317,7454,679,4605,290,3216,306,538Water8,516,0118,419,68710,022,6088,972,5239,314,81210,863,464Sewer15,102,60815,546,26516,838,34117,253,74317,809,00120,239,739LAVWMA- - - - - - Las Positas2,586,8362,478,3922,397,2582,108,7992,093,0002,259,064Springtown234,74781,010134,98179,292109,257102,799Operating grants and contributions209,864113,900- 401,28680,172115,516Capital grants and contributions6,504,9386,803,7159,707,6557,177,1299,580,6792,738,724Total business-type activities program revenues37,147,50237,382,70443,418,58840,672,23244,277,24242,625,844Total primary government program revenues$77,320,657$75,253,013$83,499,296$97,258,270$95,201,761$98,143,053Net (Expense) RevenueGovernmental activities$(34,039,493)$(35,143,096)$(40,952,144)$(31,901,396)$(45,879,069)$(50,577,946)Business-type activities11,740,29810,694,54116,600,5579,406,0918,084,195511,047Total primary government net expenses $(22,299,195)$(24,448,555)$(24,351,587)$(22,495,305)$(37,794,874)$(50,066,899)(Continued) 135 Comprehensive Annual Financial Report FY 2006-2007 200220032004200520062007Fiscal Year Changes in Net AssetsLast Six Fiscal Years (accrual basis of accounting) General Revenues and Other Changes in Net Asset s Governmental activities:TaxesProperty taxes14,252,92515,561,01917,165,50518,073,34020,461,29223,474,636Incremental property taxes1,939,0252,172,7052,333,4723,049,9033,944,6484,166,077Sales taxes16,561,04816,400,39317,783,55319,353,51619,256,96620,304,090Other taxes10,183,8899,895,32310,640,94410,464,87510,244,38910,452,485Intergovernmental4,199,4114,385,9543,558,832645,2301,813,3056,024,353Interest6,042,7086,238,0415,538,9834,110,8835,094,8986,129,238Miscellaneous3,345,7816,019,2514,829,4565,449,7053,984,4955,639,624Transfers (net)(2,140,742)(6,323,485)332,9188,754,0151,225,710294,196Gain on sale of land held for redevelopment905,639- - 3,267,560- - Loss on refunding of debt(233,896)- - - - - Total governmental activities55,055,78854,349,20162,183,66373,169,02766,025,70376,484,699Business-type activities:Transfers (net)2,140,7426,323,485(332,918)(8,754,015)(1,225,710)(294,196)Loss on refunding of debt(377,167)- - - - Total business-type activities1,763,5756,323,485(332,918)(8,754,015)(1,225,710)(294,196)Total primary government activities$56,819,363$60,672,686$61,850,745$64,415,012$64,799,993$76,190,503Change in Net AssetsGovernmental activities$21,016,295$19,206,105$21,231,519$41,267,631$20,146,634$25,906,753Business-type activities13,503,87317,018,02616,267,639652,0766,858,485216,851Total primary governmen t $34,520,168$36,224,131$37,499,158$41,919,707$27,005,119$26,123,604The City of Livermore implemented GASB 34 for the fiscal year ended June 30, 2002. Information prior to the implementation of GASB 34 is not available. 136 Comprehensive Annual Financial Report FY 2006-2007 200220032004200520062007 General FundReserved$5,451,570$5,241,756$9,765,567$9,575,127$9,329,690$9,078,026Unreserved28,001,21728,203,55324,260,69723,849,12825,587,34728,926,629Total general fund$33,452,787$33,445,309$34,026,264$33,424,255$34,917,037$38,004,655All Other Governmental FundsReserved$31,486,882$24,269,211$13,848,036$9,879,776$13,013,138$23,803,645Unreserved, reported in:Special revenue funds16,003,43219,122,03434,572,47628,679,80025,731,86725,015,905Capital projects funds45,042,17437,251,42714,331,54228,038,22422,479,40223,880,541Total all other governmental funds$92,532,488$80,642,672$62,752,054$66,597,800$61,224,407$72,700,091 capital projects. A reserve was established in the Low Income Housing Fund in FY 06-07 for a $8,000,000 loan. Note: All other governmental fund balances declined in FY 2004 due to street projects, water improvements and communityThe City of Livermore has elected to show only six years of data for this schedule. Fiscal YearFund Balances of Governmental Funds,Last Six Fiscal Years (modified accrual basis of accounting) 137 Comprehensive Annual Financial Report FY 2006-2007 200220032004200520062007 RevenuesTaxes and special assessments$24,574,002$25,581,558$27,924,855$28,647,685$30,805,535$34,017,461Sales taxes16,561,04816,400,39317,783,55318,953,51619,256,96620,304,090Property tax increment1,939,0252,172,7052,333,4723,049,9033,944,6484,166,077Licenses and permits2,194,6852,154,1862,521,7872,566,2772,215,9562,256,120Intergovernmental19,739,50714,911,71415,133,50021,598,36127,074,24525,012,771Contributions from outside sources6,080,8759,191,5149,874,2761,178,717758,29611,930,222Fines and forfeitures604,227719,087750,465733,561687,841762,058Charges for current services16,726,84315,918,99317,707,78616,364,59915,456,87914,577,802Use of money and property7,973,3856,926,3576,843,2425,339,7096,204,1427,595,527Miscellaneous848,5273,160,8331,164,5422,201,2311,300,6343,520,167Total revenues97,242,12497,137,340102,037,478100,633,559107,705,142124,142,295ExpendituresGeneral government9,968,23010,051,9309,450,7179,195,21310,492,01011,043,972Fire9,896,53710,979,6581088414612,091,53212,927,45713,669,323Police17,546,72019,881,68720,687,90421,542,55823,445,94424,042,145Public Works4,722,6125,341,9626,402,0957,152,9126,874,5747,175,563Community Development17,547,09516,439,12619,178,56117,185,78517,003,46517,522,080Economic Development336,796341,505359,692367,093450,603360,741Library3,343,0573,231,8613,757,9894,422,2184,626,6887,700,291Redevelopment830,3641,134,0502,484,8011,739,8461,968,1181,810,001Capital outlay42,446,29339,080,04737,825,40519,662,41229,276,21222,466,475Debt service fundsPrincipal4,575,000955,0003,331,6913,010,0003,165,0003,300,000Interest and fiscal charges6,077,5703,685,9963,472,7833,568,2844,224,3854,663,009 Total Expenditures117,290,274111,122,822117,835,78499,937,853114,454,456113,753,600Fiscal YearChanges In Fund Balances of Governmental Funds,Last Six Fiscal Years (modified accrual basis of accounting) 138 Comprehensive Annual Financial Report FY 2006-2007 200220032004200520062007Fiscal YearChanges In Fund Balances of Governmental Funds,Last Six Fiscal Years (modified accrual basis of accounting) Excess of Revenuesover (under)expenditures(20,048,150)(13,985,482)(15,798,306)695,706(6,749,314)10,388,695Other FinancingSources (Uses)Proceeds from sale of property303,652200,000- 3,267,560- 678,828 Loss on sale of property- - - (958,789)- - Proceeds from long term debt72,481,446120,000- - 1,715,47915,393,200 Payment to refunded bond escrow agent(15,258,896)- - - - (12,026,398) Transfers in13,531,20611,865,95616,528,57317,974,46719,470,36117,842,078Transfers out(12,982,850)(10,097,768)(16,195,655)(17,735,207)(18,317,137)(17,713,101)Transfers from capital assets- - 1,868,075- - - Transfers to capital assets- - (3,712,350)- - - Total other financingsources (uses)58,074,5582,088,188(1,511,357)2,548,0312,868,7034,174,607Net change infund balances$38,026,408$(11,897,294)$(17,309,663)$3,243,737$(3,880,611)$14,563,302Debt service as apercentage of noncapitalexpenditures14.2%6.4%8.5%8.2%8.7%8.7%Note: GASB 34 was implemented for the fiscal year ended June 30, 2002. The City of Livermore has elected to show only six years of data for this shedule. 139 Comprehensive Annual Financial Report FY 2006-2007 TotalTotal TaxableDirectCommonPublicUnsecuredAssessedTax Fiscal YearPropertyUtility (1)ValuationValuationRate*1997-1998 4,577,617,96721,242,013218,419,0604,817,279,0401.0000 % 1998-1999 5,081,310,58720,442,380254,526,5995,356,279,5661.0000 % 1999-2000 5,670,408,639 21,082,975 320,058,529 6,011,550,143 1.0000 % 2000-2001 6,368,838,762 21,272,186 350,715,587 6,740,826,535 1.0000 % 2001-2002 7,245,227,238 20,133,153 436,455,320 7,701,815,711 1.0000 % 2002-2003 8,033,552,508 20,592,353 490,112,403 8,544,257,264 1.0000 % 2003-2004 8,910,812,867 20,127,230 478,349,928 9,409,290,145 1.0000 % 2004-2005 9,766,713,53421,615,982457,302,03810,245,631,5541.0000 % 2005-2006 10,973,496,80221,615,196552,379,69411,547,491,6921.0000 % 2006-2007 12,145,332,15920,308,948553,745,57712,719,386,6841.0000 % Note:* Direct tax rate is per $1,000 of assessed value.Source: Alameda County Office of the Auditor-Controller.Assessed Value and Estimated Actual Value of Taxable PropertyLast Ten Fiscal Years In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflati on factor" (limited to a maximum increase of 2%). With few exceptions, property is only reassessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchese price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is sub ject to the limitations described above. 140 Comprehensive Annual Financial Report FY 2006-2007 LivermoreEast BayFloodPleasantonCountywideBay AreaCommunityValley JointRegionalZone 7UnifiedAppliedRapidCollegeUnified SchoolParkStateSchoolFiscal Yearto CityTransitDistrictDistrict AuthorityDistrictWaterBonds1998 10.02200.1438 1999 10.01670.1438 2000 10.00000.1438 2001 1 0.00000.0863$0.0065$0.0145$0.0942 2002 1 0.00000.08200.00720.01570.0870 2003 1 0.00000.09550.00650.01580.0759 2004 1 0.00000.0793*0.0145* 2005 1 0.0000$0.01860.07930.00570.01140.0935 2006 10.00480.01580.08300.00570.01300.0854 2007 10.00500.01590.06920.00850.01510.0721 Note: Tax rates are stated as a percentage of full value of taxable property. * Information not availableSource: Alameda County Office of the Auditor-Controller. Direct and Overlapping Property Tax RatesLast Ten Fiscal Years property owners. For an overlapping rate to apply, the property has to be located within that district's geographic boundary. a Overlapping rates are those of local and county governments that apply to property owners within the City of Livermore. Not al l overlapping rates apply to all Overlapping Rates a City Direct Rate 141 Comprehensive Annual Financial Report FY 2006-2007 Principal Property Taxpayers Current Year and Nine Years Ago TaxablePercentageTaxablePercentageTaxablePercentageTaxablePercentage Assessedof Total CityAssessedof Total CityAssessedof Total CityAssessedof Total CityValueTaxableValueTaxableValueTaxableValueTaxable Secured/AssessedSecured/AssessedSecured/AssessedSecured/AssessedTaxpayerUnsecuredRankValueUnsecuredRankValueUnsecuredRankValueUnsecuredRankValueKaiser Foundation Hospitals$95,899,07010.75%$70,436,49411.46%$72,675,81711.36%$92,873,73111.55%KLA Tencor Corporation86,089,70320.68%Form Factor Inc.80,262,81030.63%Shea Center Livermore LLC43,924,71440.34%Hospital Committee For Livermore Pleasant o 42,543,66350.33%16,013,19160.33%Marathon Drive buildings LLC40,220,19360.32%Valley Care Senior Housing, Inc.34,930,10770.27%Arroyo Livermore Business Park30,457,64280.24%Vineyard Management Company30,309,20090.24%Calwest Industrial Properties LLC29,402,748100.23%Walter A. & Dorothy J. Anderson14,675,00080.30%Mill Springs Park Apartments LLC15,788,59470.33%Patrician Assoc. Inc. & Principal Mutual40,114,50020.83%40,114,50030.75%44,934,07920.75%Tele Vue Systems Inc. 27,044,76350.56%19,905,54780.37%22,567,82680.38% Joseph & Eda Pell Trust 28,985,40340.60%31,871,05550.60%35,191,02730.59% Kayberg Limited Partnership 10,370,34090.22%Thirty Fifty Five Triad Drive Corp.34,325,29330.71%Stephen B. & Sandra H. & Bisio Ro Bley6,036,850100.13%$165,319,8901.30%$177,340,7433.68%$254,071,1614.75%$256,388,5744.27%2000 1999 1998 2007 Source: Alameda County Office of the Treasurer and Tax Collector 142 Comprehensive Annual Financial Report FY 2006-2007 Principal Property Taxpayers Current Year and Nine Years Ago TaxpayerKaiser Foundation HospitalsKLA Tencor CorporationForm Factor Inc.Shea Center Livermore LLCHospital Committee For Livermore Pleasant o Marathon Drive buildings LLCValley Care Senior Housing, Inc.Arroyo Livermore Business ParkVineyard Management CompanyCalwest Industrial Properties LLCWalter A. & Dorothy J. AndersonMill Springs Park Apartments LLCPatrician Assoc. Inc. & Principal MutualTele Vue Systems Inc.Joseph & Eda Pell TrustKayberg Limited PartnershipThirty Fifty Five Triad Drive Corp.Stephen B. & Sandra H. & Bisio Ro Bley TaxablePercentageTaxablePercentageTaxablePercentage Assessedof Total CityAssessedof Total CityAssessedof Total CityValueTaxableValueTaxableValueTaxable Secured/AssessedSecured/AssessedSecured/AssessedUnsecuredRankValueUnsecuredRankValueUnsecuredRankValue$102,180,50111.52%$115,129,08811.49%$107,443,60411.25%76,954,26920.90%26,938,95190.31%26,099,30380.34%31,523,83250.37%27,526,69070.32%39,038,20040.46%45,971,54420.68%46,936,85920.61%47,875,69130.56%27,373,67570.41%28,170,02150.36%27,400,40880.32%41,977,13830.62%46,334,15030.60% $267,790,0794.07%$256,493,6213.32%$196,554,0992.29%2001 2003 2002 Source: Alameda County Office of the Treasurer and Tax Collector 143 Comprehensive Annual Financial Report FY 2006-2007 Principal Property Taxpayers Current Year and Nine Years Ago TaxpayerKaiser Foundation HospitalsKLA Tencor CorporationForm Factor Inc.Shea Center Livermore LLCHospital Committee For Livermore Pleasant o Marathon Drive buildings LLCValley Care Senior Housing, Inc.Arroyo Livermore Business ParkVineyard Management CompanyCalwest Industrial Properties LLCWalter A. & Dorothy J. AndersonMill Springs Park Apartments LLCPatrician Assoc. Inc. & Principal MutualTele Vue Systems Inc.Joseph & Eda Pell TrustKayberg Limited PartnershipThirty Fifty Five Triad Drive Corp.Stephen B. & Sandra H. & Bisio Ro Bley TaxablePercentageTaxablePercentageTaxablePercentage Assessedof Total CityAssessedof Total CityAssessedof Total CityValueTaxableValueTaxableValueTaxable Secured/AssessedSecured/AssessedSecured/AssessedUnsecuredRankValueUnsecuredRankValueUnsecuredRankValue$90,760,97710.96%$100,879,46310.98%$90,345,63510.81%79,814,81120.85%78,458,23420.76%81,510,24820.73%25,552,993100.25%60,276,66030.54%40,248,66540.43%34,095,76350.33%35,266,91470.32%38,701,13940.38%29,060,24460.28%29,641,34180.27%27,681,80570.29%28,554,68670.28%29,316,93890.26%27,673,89680.29%28,190,50980.27%28,826,339100.26%48,983,16130.52%49,897,43030.49%50,895,33640.46%$216,317,3302.28%$163,210,8841.59%$213,237,7731.92%2006 2005 2004 Source: Alameda County Office of the Treasurer and Tax Collector 144 Comprehensive Annual Financial Report FY 2006-2007 FiscalYearTaxes LeviedCollections Endedfor thePercentagein SubsequentPercentageJune 30,Fiscal YearAmount of LevyYearsAmountof Levy1998 8,721,864 $ 8,274,368$ 94.9%358,335$ 8,632,703$ 99.0% 1999 9,713,7309,295,55495.7%220,6929,516,24698.0% 2000 11,159,362 10,690,170 95.8%269,789 10,959,95998.2% 2001 12,345,286 12,142,730 98.4%208,783 12,351,513100.1% 2002 14,426,794 13,748,006 95.3%265,699 14,013,70597.1% 2003 16,113,551 14,876,582 92.3%349,932 15,226,51494.5% 2004 16,933,716 16,422,725 97.0%438,531 16,861,25699.6% 2005 17,846,59117,252,11896.7%442,81017,694,92899.2% 2006 19,774,02019,641,12399.3%355,88619,997,009101.1% 2007 22,760,38322,655,21399.5%402,16023,057,373101.3% Source: Alameda County Office of the Auditor-Controller and City of Livermore Finance Department.Fiscal Year of the LevyCollected within the Total Collections to Date Property Tax Levies and CollectionsLast Ten Fiscal Years 145 Comprehensive Annual Financial Report FY 2006-2007 CertificatesCertificatesTotalPercentageFiscalof RedevelopmentNoteso f RevenueStateCapitalPrimar y of PersonalPer Yea r ParticipationBondsPayableParticipationLoansLoanLeaseGovernmentIncome*Capita 1998 $ 35,800,000 $ 3,335,000$95,000$14,630,000$761,792$17,132,199$- $71,753,9910.04%$1,013 1999 34,735,0003,220,00065,0008,470,000619,85716,451,599- 63,561,4560.05%863 2000 33,625,0003,095,000835,0007,675,000454,37415,637,344- 61,321,7180.06%825 2001 62,455,0002,965,000570,0006,875,000269,76914,800,852- 87,935,6210.04%1,169 2002 80,846,44636,775,0001,250,0005,013,554165,9268,469,773- 132,520,6990.03%1,728 2003 79,891,44636,775,0001,370,0005,013,554135,2377,862,728- 131,047,9650.03%1,680 2004 76,559,75536,775,0001,370,0004,730,24559,5487,239,301- 126,733,8490.03%1,612 2005 65,660,00036,150,0001,327,50011,880,00055,5566,599,038401,733122,073,8270.03%1,512 2006 63,140,00035,500,0004,589,13911,090,00041,6675,941,487311,473120,613,7660.03%1,481 2007 63,580,00034,820,0004,897,33910,275,00027,7785,266,182221,409119,087,7080.04%1,437 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. * Personal income is income for Alameda County. The last three years are estimates.Governmental ActivitiesBusiness-Type ActivitiesRatios of Outstanding Debt by TypeLast Ten Fiscal Years 146 Comprehensive Annual Financial Report FY 2006-2007 Percentage o f Actual Taxable FiscalRedevelopment Value of Pe r Yea r BondsTotalPropertyCapita 199819992000 $3,095,000$3,095,0000.05%$42.00 2001 2,965,0002,965,0000.04%39.00 2002 36,775,00036,775,0000.48%479.00 2003 36,775,00036,775,0000.43%471.00 2004 36,775,00036,775,0000.39%468.00 2005 36,150,00036,150,0000.35%448.00 2006 35,500,00035,500,0000.31%436.00 2007 34,820,00034,820,0000.27%420.00 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statementOutstanding General BondedDebtRatios of General Bonded Debt OutstandingLast Ten Fiscal Years 147 Comprehensive Annual Financial Report FY 2006-2007 City Assessed Valuation$12,557,594,462Redevelopment Agency Incremental Valuation382,979,419Total Assessed Valuation$12,940,573,881 Estimatedshare of PercentageOutstandingOverlapping Governmental Unit Applicable 1 Debt 6/30/07Debt Overlapping Debt Repaid with Property Taxes:Bay Area Rapid Transit District3.087% $ 87,185,000$2,691,401 Chabot-Las Positas Community College District16.574%488,944,22681,037,616Livermore Valley Joint Unified School District92.140%122,100,000112,502,940City of Livermore 1915 Act Bonds100.000%21,990,00021,990,000City of Livermore Community Facilities District No. 99-1100.000%20,810,00020,810,000City of Livermore Community Facilities District No. 2006-1100.000%10,000,00010,000,000East Bay Regional Park District0.015%166,295,00024,944Total overlapping debt repaid with property taxes 917,324,226249,056,901 Overlapping Other Debt:Alameda County Gen. Fund Obligations & Coliseum Authority7.764%462,174,00035,883,189Alameda County Pension Obligations7.764%254,826,84319,784,756Alameda County Board of Education Public Facilities Corp.7.764%490,00038,044Chabot-Las Positas Community College Discrict COP16.574%5,145,000852,732Total overlapping other debt 722,635,84356,558,721 Total overlapping debt $ 722,635,843$305,615,622 City direct debt 73,860,000 Total direct and overlapping debt $379,475,622 Notes:1 For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value.Direct and Overlapping Governmental Activities DebtAs of June 30, 2007 Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule e stimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and the refore responsible for repaying the debt, of each overlapping government. 148 Comprehensive Annual Financial Report FY 2006-2007 Common Property Assessed Valuation-Secured Roll 12,145,332,159$ Government Code Sec. 43605 Debt Limit 15% of Assessed Valuation 1,821,799,824 $ Amount of debt applicable to the limit 0 Legal debt margin 1,821,799,824$ Percent of debt limit authorized and issued 0.00% Debt limit$ 686,642,695$762,196,588$850,561,296$955,325,814$1,086,784,086$1,205,032,876$1,336,621,930$1,465,007,030$1,646,024,520$1,821,799 ,824 Total net debt applicable to limit 0000000000 Legal debt margin$ 686,642,695$762,196,588$850,561,296$955,325,814$1,086,784,086$1,205,032,876$1,336,621,930$1,465,007,030$1,646,024,520$1,821,799 ,824 Total net debt applicable to the limitas a percentage of debt limit 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00% Source: City of Livermore Finance Department Alameda County Office of the Auditor-Controller Legal Debt Margin Information Last Ten Fiscal Years Fiscal Years 19981999200020012002200320042005Legal Debt Margin Calculation for Fiscal Year 200720062007 149 Comprehensive Annual Financial Report FY 2006-2007 Airpor t Less:NetSewerLess:NetServiceOperatingAvailabl e ServiceOperating A vailable ChargesExpensesRevenuePrincipalInterestCoverageChargesExpensesRevenuePrincipalInterestCoverage 1998 $2,720,341$2,587,448$132,893$139,737$0.95$11,820,824$7,924,180$3,896,644$531,332$304,3934.66 1999 2,714,1282,424,419289,709141,9352.0413,295,4979,483,4603,812,037680,601290,0473.93 2000 2,980,1192,601,941378,178165,48332,4881.9114,914,4438,053,2476,861,196814,254275,3146.30 2001 3,738,9243,453,078285,846184,60525,8761.3618,858,5076,796,17912,062,328836,493260,18311.00 2002 3,939,1283,286,910652,218103,84319,2645.3020,611,84610,879,2969,732,5506,331,079244,6431.48 2003 3,939,6743,591,794347,88030,6899,7928.5921,616,68012,188,8029,427,878607,041228,68411.28 2004 4,317,7453,782,149535,59675,68910,6356.2024,719,17910,513,38614,205,793623,431212,29417.00 2005 4,679,4604,479,739199,72130,6895,7585.4821,210,17714,296,2846,913,893640,264195,4618.27 2006 5,290,3215,341,239(50,918)16,8003,741(2.48)20,341,11716,987,8323,353,285657,551178,1744.01 2007 5,866,4405,064,758801,68213,8892,80548.0218,651,44921,227,601 (2,576,152) 675,305160,420 (3.08) Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest, depreciation, or amortization expenses. Pledged-Revenue CoverageLast Ten Fiscal Years Debt Service Debt ServiceAirport Revenue BondsSewer Revenue Bonds 150 Comprehensive Annual Financial Report FY 2006-2007 Demographic and Economic Statistics,Last Ten Calendar Years Year Population (1) Per Capita Personal Income (2) Unemployment Rate (3) A lameda County 1998 70,863 31,574$ NA 1999 73,631 33,856$ NA 2000 74,303 38,466$ 2.4% 2001 75,200 38,172$ 2.9% 2002 76,700 37,788$ 4.3% 2003 78,000 38,583$ 4.7% 2004 78,600 40,920$ 3.9% 2005 80,328 Est. $ 41,493 3.3% 2006 81,443 Est. $ 42,074 3.0% 2007 82,845 Est. $ 42,956 2.8% Note:1. Data Source: State of California, Department of Finance, E-1 City/County Population Estimates - City of Livermore 2. Data Source: State of California, Employment Development Department, Labor Market Information - Measures of Income - Alameda County 1997-2005; State of California, Department of Transportation - Alameda County Economic Forecast 2006-2007 3. Data Source: State of California , Employment Development Department, Labor Market Information - Unemployment Rates - City of Livermore 151 Comprehensive Annual Financial Report FY 2006-2007 Principal EmployersCurrent Year 2007 Percentageof Total City Employer Employees Rank Employment Form Factor, Inc. 973 1 5.00% Alliant Foodservices, Inc. 654 2 3.40% Comcast of CA/Co/Tx/Wa, Inc. 561 3 2.90% Activant Solutions, Inc. 372 4 1.90% Topcon Positioning Systems, Inc. 350 5 1.80% Costco Wholesale #146 250 6 1.30% Pacific Medical, Inc. 228 7 1.20% Wal Mart Inc. 1972 220 8 1.10% Safeway, Inc 1257 191 9 1.00% Valmark Industries, Inc. 170 10 0.90% Source: City of LivermoreFinance Department 152 Comprehensive Annual Financial Report FY 2006-2007 1998 1999 2000 2001 2002 2003 200 4 2005 2006 2007 Function/ProgramGeneral governmentCity Council1 1111- - City Manager8999.759.7510.2510.2510.2510.2510.25City Attorney 77777888.58.59.5City Clerk6777.57.58.58.58.58.58.5Finance12121216.516.51717.518.518.518.5Personnel7997.57.57.58.58.18.18.1 Fire606060606363.563.563.566.566.5Police116121124137.75140.75147.75152.25151.25152.25152.75Public Works 1 9810710850526364646463 Community Development56676785.4585.4593.3594.8594.8593.693.1Economic Development 555664.54.51.31.31.3Library212223262933.539.539.540.2540.25Redevelopment 3.23.23.2Airport6.56.577789Water13.7514.7514.75151515.2515.25Sewer38.7547.2545.2545.2546.2546.2546.25LAVWMALas Positas Golf Course13.513.5141414.714.713.7Springtown Golf Course - - 0.30.30.3 Total396426431486.95507.45538.85553.6555.7559.45559.45Note: Prior to fiscal year 2001, Public works included the enterprise funds' employees. Prior to fiscal year 2005 Redevelopment employees were included with Economic Development.Source: City Budget Full-time Equivalent employees as of June 30Full-time Equivalent City Government Employees by Function/ProgramLast Ten Fiscal Years 153 Comprehensive Annual Financial Report FY 2006-2007 * Operating Indicators by Function/Program,Last Ten Fiscal Years Fiscal Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Function/ProgramPolicePhysical arrests 2,613 2,276 2,780 2,278 2,443 2,830 2,912 2,825 3,189 3,292 Parking violations 933 1,208 1,413 1,290 1,313 1,497 1,681 1,774 2,762 3,821 Traffic violations 5,093 5,103 7,676 9,522 10,293 13,418 14,721 13,274 12,279 9,774 Fire Emergency responses 3,761 3,976 4,226 4,552 4,907 5,142 5,375 5,672 5,948 6,454 Fires extinguished 263 278 296 319 343 360 376 397 416 444 Inspections 1,450 ** 1,471 ** 1,613 ** 1,732 ** 1,008 ** 1,031 *** 1,230 *** 1,326 *** 1,028 *** 1,110 *** Annual fire inspection program 56 12 241 226 295 1166 50 407 Public WorksStreet resurfacing (miles) 2.9 2.7 2.5 2.4 4.1 2.9 3.8 3.3 3.2 3.2 Potholes repaired 165 135 337 340 407 169 Maintenance of Landscaping (acres) N/A * 65 78 83 95 105 110 120 137 144 LibraryVolumes in collection 231,098 231,098 236,130 244,344 220,429 231,610 238,652 258,618 258,450 269,626 Total volumes borrowed 761,844 761,844 777,040 728,626 789,945 788,846 815,150 979,660 954,499 951,082 WaterNew connections 687 574 352 434 222 209 423 261 276 93 Water mains breaks 13 23 Other water breaks & leaks 12 15 20 26 Average Daily Consumption 4.123 4.924 5.552 5.837 5.736 5.821 5.961 5.579 6.082 6.618 (millions of gallons) Peak daily consumption 6.75 8.082 8.881 9.514 9.587 10.18 9.908 9.562 10.088 10.674 (millions of gallons)WastewaterAverage daily sewage treatment 5.5 5.5 5.5 6.5 6.2 6.3 6.5 6.6 7.4 7.2 (millions of gallons)Municipal AirportNumber of tenant aircraft 556 556 580 596 604 591 604 592 640 644 Total landings & takeoffs 233,000 233,000 253,000 238,000 215,000 208,130 196,654 181,710 173,800 177,330 Gallons of fuel pumped 620,000 620,000 633,540 778,000 856,760 868,830 879,112 922,582 935,367 860,429 Las Positas Municipal Golf CourseRounds Played 118,965 118,965 114,000 115,000 106,914 95,706 94,152 78,299 85,284 91,222 Springtown Municipal Golf CourseRounds Played 52,581 52,581 45,530 46,530 40,555 40,945 36,126 32,674 28,306 24,276 * No data available ** Date is reported on a calendar year basis*** Data is reported on a fiscal year basisSources: Various city departments. 154 Comprehensive Annual Financial Report FY 2006-2007 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Function/ProgramPoliceStations 1111111111Patrol units38333141403937444543Fire stations 4445555555 Public WorksStreets (miles)N/A*N/A*N/A*N/A*270.4273.5273.9278.4278.9283.2StreetlightsN/A*N/A*N/A*N/A*N/A*N/A*6,6136,6706,8076,867Traffic SignalsN/A*N/A*N/A*N/A*N/A*N/A*86899095Flashing CrosswalksN/A*N/A*N/A*N/A*N/A*N/A*N/A*N/A*47WaterWater mains (miles)Potable water45.245.245.2113.9113.9113.9113.9113.9113.9113.9Recycled water14.914.914.914.914.914.914.9Fire hydrants2,7502,7502,7503,2003,3733,3733,4493,4493,4493,479Average daily consumptionPotable water4.464.464.466.815.745.825.965.586.086.62Recycled water0.510.610.470.730.560.780.79(millions of gallons)WastewaterSanitary sewers (miles)217217217250255255255255267267Storm sewers (miles) 171Treatment capacity8.58.58.58.58.58.58.58.58.58.5(millions of gallons)Municipal AirportLength of longest runway in feet5,2505,2505,2555,2555,2555,2555,2555,2555,2555,255Length of longest taxiway in feet5,2505,2505,2555,2555,2555,2555,2555,2555,2555,255Total acreage650650643643643643643643643643Number of hangars392392393393393393393393393393Las Positas Municipal Golf CourseTotal acreage205205205205205205205205205205Length of 18-hole course in yards6,7256,7256,7256,7256,7256,7256,7256,7256,7256,725Length of 9-hole executive course in yards2,0342,0342,0342,0342,0342,0342,0342,0342,0342,034Springtown Municipal Golf CourseTotal acreage90909090909090909090Length of 9-hole course in yards2,9412,9412,9412,9412,9412,9412,9412,9412,9412,941* No data availableSources: Various city departments. Fiscal YearCapital Asset Statistics by Function/Program,Last Ten Fiscal Years 155 Comprehensive Annual Financial Report FY 2006-2007 ANNUAL REPORT OF CONTINUING DISCLOSURE 1998 LIVERMORE CAPITAL PROJECTS FINANCING AUTHORITY AUTHORITY REFUNDING REVENUE BONDS AS OF JUNE 30, 2007 This Continuing Disclosure Annual Report is provided by the Livermore Capital Projects Financing Authority (“Authority”) through Union Bank of California, N.A. as dissemination agent pursuant to a Continuing Disclosure Agreement dated December 9, 1998 executed and delivered by the Authority and the Dissemination Agent in connection with the issuance of $26,675,000 refunding revenue bonds (“the Bonds”). The Bonds were issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985 under an Indenture dated as of December 1, 1998. The proceeds of the Bonds are to refund the 1993 Livermore Capital Projects Financing Authority Revenue Bonds. The Annual Report is made pursuant to the requirements of Section 3(a) of the Disclosure Agreement with respect to the fiscal year of the Authority, which ended on June 30, 2007. The Authority hereby reports the following: 1. The audited financial statements of the City for the fiscal year ended June 30, 2007 comprise the book in which this report is included. 2. During the time period beginning on December 9, 1998 and ending on the date of this Annual Report, the Authority has not given or caused to be given notice of the occurrence of any of the following events, if material with respect to the Bonds: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the security; 7. Modifications to rights of security holders; 8. Contingent or unscheduled Certificate calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the securities; or 11. Rating changes. The Authority hereby confirms the appointment of the Dissemination Agent and requests the Agent to provide each Repository this Annual Report not later than 270 days after June 30, 2007 in accordance with the terms of the Disclosure Agreement. Source: City of Livermore Finance Department. 156 Comprehensive Annual Financial Report FY 2006-2007 ANNUAL REPORT OF CONTINUING DISCLOSURE SPECIAL TAX BONDS COMMUNITY FACILITIES DISTRICT NO. 99-1 (TRI-VALLEY TECHNOLOGY PARK) , SERIES 2000 AS OF JUNE 30, 2007 This Continuing Disclosure Annual Report is provided by the City of Livermore through Union Bank of California, N.A. as dissemination agent pursuant to a Continuing Disclosure Agreement dated July 27, 2000 executed and delivered by the City and the Dissemination Agent in connection with the issuance of $24,030,000 Special Tax Bonds, Community Facilities District No. 99-1, Series 2000 Bonds (“the Bonds”). The Bonds were issued pursuant to an Indenture dated as of July 1, 2000 from the City. The proceeds of the Bonds are to refund the Special Tax Bonds, Triad Center Community Facilities District No. 90-1, Series 90-1B and Special Tax Bonds, Triad Center Community Facilities District No. 90-1 Series 90-1C and to fund certain public improvements. The Annual Report is made pursuant to the requirements of Section 3(a) of the Disclosure Agreement with respect to the fiscal year of the City which ended on June 30, 2007. The City hereby reports the following: 1. The audited financial statements of the City for the fiscal year ended June 30, 2007 comprise the book in which this report is included. 2. During the time period beginning on July 27, 2000 and ending on the date of this Annual Report, the City has not given or caused to be given notice of the occurrence of any of the following events, if material with respect to the Bonds: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the security; 7. Modifications to rights of security holders; 8. Contingent or unscheduled Certificate calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the securities; or 11. Rating changes. The City hereby confirms the appointment of the Dissemination Agent and requests the Agent to provide each Repository this Annual Report not later than 270 days after June 30, 2007 in accordance with the terms of the Disclosure Agreement. Source: City of Livermore Finance Department. 157 Comprehensive Annual Financial Report FY 2006-2007 ANNUAL REPORT OF CONTINUING DISCLOSURE 2001 TAX ALLOCATION BONDS, SERIES A AS OF JUNE 30, 2007 This Continuing Disclosure Annual Report is provided by the Redevelopment Agency of the City of Livermore through Union Bank of California, N.A. as dissemination agent pursuant to a Continuing Disclosure Agreement dated August 16, 2001 executed and delivered by the Agency and the Dissemination Agent in connection with the issuance of $36,775,000 2001 Tax Allocation Bonds. The bonds were issued pursuant to an indenture of trust dated as of August 1, 2001. The proceeds of the bonds are for the use of the Agency’s downtown redevelopment activities and refunding of the 1986 Tax Allocation Bonds, Series A. The Annual Report is made pursuant to the requirements of Section 3(a) of the Disclosure Agreement with respect to the fiscal year of the Agency, which ended on June 30, 2007. The Agency hereby reports the following: 1. The audited financial statements of the Agency for the fiscal year ended June 30, 2007 comprise the book in which this report is included. 2. During the time period beginning on August 1, 2001 and ending on the date of this Annual Report, the Agency has not given or caused to be given notice of the occurrence of any of the following events, if material with respect to the Certificates: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the security; 7. Modifications to rights of security holders; 8. Contingent or unscheduled Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the securities; or 11. Rating changes. The Agency hereby confirms the appointment of the Dissemination Agent and requests the Agent to provide each Repository this Annual Report not later than 270 days after June 30, 2007 in accordance with the terms of the Disclosure Agreement. Source: City of Livermore Finance Department. 158 Comprehensive Annual Financial Report FY 2006-2007 ANNUAL REPORT OF CONTINUING DISCLOSURE SPECIAL TAX BONDS COMMUNITY FACILITIES DISTRICT NO. 2006-1 (SHEA PROPERTIES), SERIES 2006 AS OF JUNE 30, 2007 This Continuing Disclosure Annual Report is provided by the City of Livermore through Union Bank of California, N.A. as dissemination agent pursuant to a Continuing Disclosure Agreement dated July 26, 2006 executed and delivered by the City and the Dissemination Agent in connection with the issuance of $10,000,000 Special Tax Bonds, Community Facilities District No. 2006-1, Series 2006 Bonds (“the Bonds”). The Bonds were issued pursuant to an Indenture dated as of August 1, 2006 from the City. The proceeds of the Bonds are to finance the acquisition of certain public improvements, fund a debt service reserve fund and pay costs related to the issuance of the Bonds. The Annual Report is made pursuant to the requirements of Section 3(a) of the Disclosure Agreement with respect to the fiscal year, which ended on June 30, 2007. The City hereby reports the following: 1. The audited financial statements of the City for the fiscal year ended June 30, 2007 comprise the book in which this report is included. 2. During the time period beginning on August 1, 2006 and ending on the date of this Annual Report, the Agency has not given or caused to be given notice of the occurrence of any of the following events, if material with respect to the Certificates: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the security; 7. Modifications to rights of security holders; 8. Contingent or unscheduled Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the securities; or 11. Rating changes. The Agency hereby confirms the appointment of the Dissemination Agent and requests the City to provide each Repository this Annual Report not later than 270 days after June 30, 2007 in accordance with the terms of the Disclosure Agreement. Source: City of Livermore Finance Department. 159 Comprehensive Annual Financial Report FY 2006-2007 160