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Livermore Final CAFR Book - 2008 GFOA1Comprehensive Annual Finance Report For the Year Ended June 30, 2008 Prepared By: Department of Finance Comprehensive Annual Financial Report FY 2007-2008 City of Livermore, California Comprehensive Annual Financial Report For the Year Ended June 30, 2008 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..........................................................................................................56-57 D. Basis of Accounting...................................................................................................58 City of Livermore, California Comprehensive Annual Financial Report For the Year Ended June 30, 2008 Page ii E. Supplies.....................................................................................................................59 F. Compensated Absences............................................................................................59 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............................................................................................62-71 Note 4-Interfund Transactions............................................................................................72-74 Note 5-Notes Receivable........................................................................................................74 Note 6-Capital Assets.........................................................................................................76-80 Note 7-Long Term Debt.....................................................................................................81-85 Note 8-Special Assessment District Debt with No City Commitment................................86-87 Note 9-Net Assets and Fund Balances..............................................................................87-88 Note 10-PERS Pension Plan.............................................................................................88-93 Note 11-Deferred Compensation Plan....................................................................................93 Note 12-Joint Ventures.......................................................................................................94-95 Note 13-Health, General Liability and Workers Compensation Coverage........................95-96 Note 14-Commitments and Contingencies........................................................................96-99 Supplemental Information Major Capital Project Funds (Page 101-103) Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual: Redevelopment Agency Capital Projects Fund................................................101 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual: Street Improvements Fund...............................................................................102 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual: Street Projects.................................................................................................103 Non-major Governmental Funds (Page 104-119) Combining Balance Sheets............................................................................................104-113 Combining Statement of Revenues, Expenditures and Changes in Fund Balance..............................................................................114-119 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Actual.....................................................................120-128 Internal Service Funds (Page 129-135) Combining Statement of Net Assets..............................................................................129-131 Combining Statements of Revenues, Expenditures and Changes in Fund Net Assets..........................................................................132-133 Combining Statement of Cash Flows.............................................................................134-135 Fiduciary Funds (Page 136-137) Statement of Changes in Assets and Liabilities – Agency Funds........................................137 City of Livermore, California Comprehensive Annual Financial Report For the Year Ended June 30, 2008 Page iii STATISTICAL SECTION (Unaudited)...........................................................................................139 Fund Information Net Assets by Component-Last Seven Fiscal Years............................................................140 Changes in Net Assets-Last Seven Fiscal Years..........................................................141-143 Fund Balances of Governmental Funds-Last Seven Fiscal Years.......................................144 Changes in Fund Balances of Governmental Funds-Last Seven Fiscal Years.............145-146 Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years..........147 Direct and Overlapping Property Tax Rates-Last Ten Fiscal Years.....................................148 Principal Property Taxpayers-Last Ten Fiscal Years.....................................................149-154 Property Tax Levies and Collections-Last Ten Fiscal Years................................................155 Ratio of Outstanding Debt by Type-Last Ten Fiscal Years...................................................156 Ratios of General Bonded Debt Outstanding-Last Ten Fiscal Years...................................157 Direct and Overlapping Governmental Activities Debt as of June 30, 2008.........................158 Legal Debt Margin Information-Last Ten Fiscal Years.........................................................159 Pledged-Revenue Coverage-Last Ten Fiscal Years............................................................160 Demographic and Economic Statistics-Last Ten Calendar Years........................................161 Population Demographics.....................................................................................................162 Principal Employers-Last Three Fiscal Years.......................................................................163 Full-Time Equivalent City Government Employees by Function/Program-Last Ten Fiscal Years..................................................................................................................164 Operating Indicators by Function/Program-Last Ten Fiscal Years.......................................165 Capital Asset Statistics by Function/Program-Last Ten Fiscal Years...................................166 Schedule of Insurance....................................................................................................167-168 Continuing Disclosure 1998 Livermore Capital Projects Financing Authority –Authority Refunding Revenue Bonds............................................................................................................169 Special Tax Bonds Community Facilities District No. 99-1 - (Tri-Valley Technology Park), Series 2000........................................................................................................170 2001 Tax Allocation Bonds, Series A....................................................................................171 Special Tax Bonds Community Facilities District No. 2006-1 – (Shea Properties), Series 2006 .........................................................................................................................172 Comprehensive Annual Financial Report FY 2007-2008 Date: December 8, 2008 To: Honorable Mayor and Members of the City Council City of Livermore, California 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, 2008. 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, 2008, 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. 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, 2008 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. 1 Honorable Mayor and Members of the City Council December 8, 2008 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 and the 2007 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. 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. 2 Honorable Mayor and Members of the City Council December 8, 2008 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. Financial Highlights of Fiscal Year 2007-2008 There was no new financing activity undertaken in Fiscal Year 2007/2008. Impact of State Budget on Local Finances The State Budget for Fiscal Year 2007/2008 was adopted in August 2007 and contained the following items of importance to cities: • Booking Fees-The budget provided $35 million to county sheriffs for local detention facilities. With this funding, counties are prohibited from charging jail “booking fees” to cities or other local agencies. However, counties do have the authority to charge a new “jail access fee” for bookings in excess of an agency’s 3-year average of bookings for low-level offenses. The City paid $14,274 for jail access fees in FY 2007/08 compared to an average annual level of booking fees paid in the previous 5 years of $273,000. • Citizen Options for Public Safety/Juvenile Justice Grants-The budget provided $238 million divided equally between the programs. The City received $159,303 under the COPS program for local law enforcement. This was an increase of 0.5% compared to the prior year. • State Mandated Cost Reimbursements-The budget did not include funding for mandate claims incurred by cities in FY 2007/08. The average level of mandate claims is about $30,000 per year. • Proposition 1B Highway Safety, Traffic Reduction, Air Quality and Port Security Bond Act of 2006-The City received $1,332,505 in payment of its FY 2007/08 allocation from the Local Street and Road Program. 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 $7.5 million with an average yield of 4.3%. Other funds held by fiscal agents and trustees are invested according to the restrictions of the bond documents and the city's investment policy. 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 3 Honorable Mayor and Members of the City Council December 8, 2008 City Attorney’s office by the Risk Manager with the assistance of a third-party claims adjustment firm. In FY 2007-2008, the pool made its seventeenth distribution of excess assets. The amount distributed to the City of Livermore was $119,282, or about 28% of the amount of the deposit premium paid for FY 2007-2008. 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 statutory unlimited coverage above the self-insured retention of $350,000. In FY 2007-2008, the pool provided a premium adjustment in the amount of $7,517, or about 2.8% of the amount of the deposit premium paid for FY 2007- 2008. Long-Term Financial Planning In 2000 the City Council adopted a policy establishing operating reserves that will help maintain the City’s creditworthiness, as well as provide funds for economic uncertainties, contingencies and cash flow requirements. The General Fund operating reserve was intially set at 10% of operating expenditures plus debt service and recurring transfers, with the goal of increasing the reserve to a level of 20% by FY 2009-2010. As of June 30, 2008 the operating reserve was 16.6% compared to a target level of 18%. As noted in the Long- Term Financial Plan for FY 2008-2015, in FY 2007-2008 the annual contribution was temporarily suspended due to the unexpected reduction of sales taxes that occurred in 2008. 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 83,604, as of January 1, 2008 and represents an increase of 0.9% compared to the prior year. The East Bay region of Alameda County that encompasses Livermore is reflecting the effects of the current economic downturn in a slowing of job growth. Between September and October 2008, the East Bay added 1,500 payroll jobs, San Francisco added 1,400 and San Jose added 2,700. Unfortunately, these gains were not sufficient to compensate for recent job losses in the East Bay. A comparison with October 2007 showed the East Bay’s payrolls to have 22,500 fewer jobs, while San Francisco added 1,400 and San Jose added 2,700. In October 2008 the unemployment rate in East Bay was 7.1% up from 6.7% in September 2008. This compares with an unadjusted unemployment rate of 8.0% for California and 6.1% for the nation during the same period. As reported by the Bay East Association of Realtors (BEAR), the median price for a single family residence (SFR) in Livermore in November 2008 was $420,000, down from $589,000 in November 2007. As of November 2008 there were 306 homes listed for sale representing 4 months of inventory. The average days on market is 75 days, down from approximately 82 days in November 2007. 4 Honorable Mayor and Members of the City Council December 8, 2008 The City of Livermore occupies approximately 24.52 square miles of the 413 square miles in the valley. There were no annexations in FY 2007-2008. 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, 2008 Remaining to be Developed Total Developed Industrial Acreage 1,590 481 1,109 Commercial Acreage 691 129 562 Business Commercial 778 410 368 Residential Acreage 5,442 3255,117 Totals 8,501 1,345 7,156 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, 2007. This was the eighteenth 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, Administrative Accounting Technician Amy Walker and Reprographics Technician Carlos Ramirez for document production and publication, 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 5 Comprehensive Annual Financial Report FY 2007-2008 6 City of Livermore Comprehensive Annual Financial Report ELECTED OFFICIALS AND ADMINISTRATIVE PERSONNEL Elected Officials as of June 30, 2008 Dr. Marshall H. Kamena, Mayor John Marchand, Vice Mayor Marj Leider, Councilmember Doug Horner, Councilmember Jeff Williams, 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, Police Chief 7 Citizens of LivermoreMayor and City CouncilCity Manager’sDept. Linda Barton, City Mgr City AttorneyJohn Pomidor Advisory Commissionsand Boards Economic Development Kevin Roberts,Director Fire Dept. Bill Cody, Chief Community Development. Dept.Marc Roberts,Director Library Dept. Susan Gallinger, Director City Clerk’s Dept. Alice Calvert, City Clerk Police Dept. Steve Krull,Chief Assistant City Manger Jim Piper, Asst City Mgr Public Works Dan McIntyre, Director Human ResourcesSteve Harman, Director InformationTechnology Finance Dept. Monica T. Potter, Director EngineeringPlanningBuilding Housing RedevelopmentAgency Horizons YouthServices Las Positas& Springtown Golf CoursesAirport Water Reclamation/Storm Water/Water MaintenanceServices Organization Chart Steve SweeneyActing Chief Rob White, Director Comprehensive Annual Financial Report FY 2007-2008 8 9 Comprehensive Annual Financial Report FY 2007-2008 10 11 12 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, 2008. 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 $725.4 million at June 30, 2008. Of this total, $479.2 million were Governmental assets and $246.2 million were Business-type assets. • Total liabilities were $149.4 million of which $132.3 million were governmental liabilities and $17.0 million were business-type liabilities. • City-wide revenues in fiscal 2008 were $175.8 million, of which $127.9 million was generated by governmental activities and $47.9 million was generated by business-type activities. • City-wide expenses were $152.1 million, of which $111.9 million was incurred by governmental activities and $40.2 million was incurred by business-type activities. Fund Level: • Governmental Fund balances decreased to $97.9 million in fiscal 2008 from $110.7 million in fiscal 2007. • Governmental Fund revenues decreased to $112.1 million in fiscal 2008, down $12.0 million from the prior year’s $124.1 million. • Governmental Fund expenditures increased to $125.9 million in fiscal 2008, up $12.1 million from fiscal 2007’s level of $113.8 million. • Enterprise Fund total assets increased $7.0 million to $248.1 million in fiscal 2008. This increase was largely due to an increase to Construction in progress for Water and Sewer. • Enterprise Fund total liabilities decreased $0.3 million to $18.6 million in fiscal 2008. This decrease was due to the reduction of the 2002 Certificate of Participation through debt payment. • Enterprise Fund revenues remained consistent at $37.4 million in fiscal 2008. • Enterprise Fund expenses decreased $2.9 million to $38.5 million in fiscal 2008. (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. 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. Comprehensive Annual Financial Report FY 2007-2008 13 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. 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. Comprehensive Annual Financial Report FY 2007-2008 14 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. 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 55-99. 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 100-136 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. Comprehensive Annual Financial Report FY 2007-2008 15 Governmental Activities Table 1 Governmental Net Assets at June 30 (in Millions) 2008 2007 Cash and investments $112.0 $127.7 Other assets 39.2 36.0 Capital assets 328.0 300.4 Total assets 479.2 464.1 Long-term debt outstanding 99.6 103.3 Other liabilities 32.7 30.0 Total liabilities 132.3 133.3 Net assets: Invested in capital assets, net of debt 228.3 197.1 Restricted 28.7 48.1 Unrestricted 89.9 85.6 Total net assets $346.9 $330.8 The City’s governmental net assets amounted to $346.9 million at June 30, 2008, an increase of $16.1 million over 2007. This is mainly due to an increase of $10.9 million to Land held for redevelopment and a decrease of $2.0 million in Deposit payable and unearned revenue. 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, 2008 comprised the following: • Cash and investments comprised $11.6 million of unspent projects funds from debt issues, $2.9 million of debt service reserves and $97.5 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 $10.5 million, all current, along with notes receivable of $11.0 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, has been adjusted to an estimated market value of $14.0 million. • Capital assets of $276.5 million, net of depreciation charges, which includes the City’s infrastructure as well as its other capital assets used in governmental activities. Land and construction in progress of $51.5 million. • Current liabilities, including accounts payable, claims and other amounts due currently, totaling $15.3 million. Comprehensive Annual Financial Report FY 2007-2008 16 • Deposit payable of $14.1 million, primarily represent developer performance deposits, which are refundable if the developer performs City required improvements. • Long-term debt of $99.6 million, of which $95.7 million is due in future years and $3.9 million is due currently. • Net assets invested in capital assets net of related debt of $228.3 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 $28.7 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 $89.9 million of unrestricted net assets at June 30, 2008. Fiscal Year 2008 Government Activities Sources of RevenuesFunctional Expenses Charges for Services 7.7% Grants & Contributions 30.0% Property taxes 19.3% Incremental property taxes 3.8% Sales taxes 15.1% Other taxes 8.1% Intergovernment 4.9% Interest 5.1% Misc & Transfers 5.9% Fire 14.2% Library 5.2% Economic Development 0.3% Finance 6.8% Human Resources 1.2% Public Works 17.1% City Attorney 1.2% Interest 3.6% Community Development 21.1% City Clerk 0.9% City Council 0.2% Police 24.0% City Manager 1.2% Redevelopment 3.1% As the Sources of Revenue Chart above shows, $19.3 million, or 15.1% of the City’s fiscal 2008 governmental activities revenue, came from sales taxes, while $24.7 million or 19.3% came from property tax, $10.4 million, or 8.1%, came from other taxes, $9.9 million, or 7.7%, came from charges for services, and $38.4 million, or 30.0%, came from grants and contributions. The remaining 19.8% 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 $23.6 million, or 21.1%, of total governmental expenses, police accounted for $26.8 million, or 24.0%, fire accounted for $16.0 million, or 14.2% and other governmental programs and functions accounted for the remaining 40.7%. Comprehensive Annual Financial Report FY 2007-2008 17 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 2008 2007 Expenses General Government $12.8$11.1 Fire 15.913.9 Police 26.824.1 Public Works 19.220.7 Community Development 23.620.9 Economic Development 0.30.3 Library 5.88.4 Redevelopment 3.52.0 Interest on long term debt 4.04.7 Total expenses 111.9106.1 Revenues Program revenues: Charges for services 9.915.3 Operating contributions and grants 11.09.6 Capital grants and contributions 27.430.6 Total program revenues 48.355.5 General revenues: Property taxes 24.723.5 Incremental property taxes 4.94.2 Sales taxes 19.320.3 Other taxes 10.410.5 Intergovernmental 6.36.0 Interest 6.56.1 Miscellaneous 6.95.6 Gain on sale of property 0.00.0 Total general revenues 79.076.2 Surplus before transfers 15.425.6 Transfers, net 0.60.3 Changes in net assets $16.0$25.9 As Table 2 above show, $48.3 million or 37.8% of the City’s fiscal 2008 Governmental revenue, came from program revenues and $79.6 million or 62.2% came from general revenues such as taxes and interest. Program revenues were composed of charges for services of $9.9 million which include permit revenues, fees and charges used to fund expenses incurred in providing services; $11.0 million of operating grants and contributions which include gas tax revenues and housing and police Comprehensive Annual Financial Report FY 2007-2008 18 grants and capital grants and contributions of $27.4 million which consist mainly of street project grants and developer impact fees restricted to capital outlay. Charges for services were down $5.4 million. This is largely due to a $4.7 million reduction in development fees. 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 $36.7 million . Table 3 Net Revenue (Expense) of Governmental Activities (in Millions) 2008 2007 City Council $0.1 $0.0 City Manager (1.3)(1.1) City Attorney (1.3)(1.2) City Clerk (1.0)(0.7) Finance (7.6)(6.6) Human Resources (1.4)(1.2) Fire (14.4)(12.4) Police (24.1)(21.4) Public Works (18.7)(20.1) Community Development 19.4 29.1 Economic Development (0.3)(0.3) Library (5.5)(8.0) Redevelopment (3.5)(2.0) Interest on long term debt (4.0)(4.7) Totals ($63.6)($50.6) Comprehensive Annual Financial Report FY 2007-2008 19 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 2008 2007 Cash and investments $75.1 $76.2 Other assets 2.6 2.5 Capital assets 170.4 162.5 Total assets 248.1 241.2 Long-term debt outstanding 14.0 15.8 Other liabilities 4.6 3.1 Total liabilities 18.6 18.9 Net assets: Invested in capital assets, net of debt 156.4 146.7 Unrestricted 73.1 75.4 Total net assets $229.5 $222.1 The net assets of business-type activities increased to $229.5 million in fiscal 2008, an increase of $7.4 million. An increase in Invested in capital assets, net of debt 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 2008 2007 Expenses Airport $6.0 $5.3 Water 8.4 8.6 Sewer 18.8 21.5 LAVWMA 2.7 3.7 Las Positas Golf Course 3.7 2.8 Springtown Golf Course 0.6 0.2 Total expenses $40.2 $42.1 Revenues Program Revenues: Charges for Services $39.4 $39.8 Operating Grants and Contributions 0.0 0.1 Capital Grants and Contributions 8.4 2.7 Total Program Revenues 47.8 42.6 Transfers, net (0.6) (0.3) Changes in net assets $7.0 $0.2 Comprehensive Annual Financial Report FY 2007-2008 20 Total program revenues of Business-type Activities were $47.8 million in fiscal 2008, up from $42.6 million in the prior year due primarily to an increase of Capital Grants and Contributions. Program expenses decreased $1.9 million to a total of $40.2 million. Net transfers increased expenses by $0.6 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) 2008 2007 Governmental Funds Total assets $145.0 $158.9 Total liabilities 47.1 48.2 Total fund balances 97.9 110.7 Total revenues 112.1 124.1 Total expenditures 125.9 113.8 Total other financing sources (uses) and special items 1.1 4.2 At June 30, 2008, the City’s governmental funds reported combined fund balances of $97.9 million, which is a decrease of $12.8 million under the prior year. Governmental fund revenues showed a decrease of $12.0 million to $112.1 million, while expenditures increased $12.1 million to a new total of $125.9 million. Expenditures included $7.9 million in debt service and capital outlays of $32.2 million. The increase in expenditures was due primarily to an increase in capital outlay expenditures. Comprehensive Annual Financial Report FY 2007-2008 21 Analyses of Major Governmental Funds General Fund Revenues showed an increase of $0.1 million to $79.8 million in fiscal 2008 compared to the actual for fiscal 2007. Taxes and special assessments increased $1.2 million to $34.9 million in fiscal 2008 and intergovernmental revenue decreased $0.2 million in fiscal 2008. Expenditures showed an increase of $3.6 million to $79.4 million for fiscal 2008 compared to the actual for fiscal 2007. Of the total, Community Development costs showed an increase of $0.1 million, while Capital Projects showed a decrease of $0.8 million for fiscal 2008. The following table shows the budgetary variances between the original two-year budget approved in 2006 versus the final amended budget for fiscal 2008 that was approved on June 23, 2008 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 23, 2008 Variance Final Budget Variance Final Budget Original Final Positive/(Negative) % Revenues: Property taxes $24,744,000 $25,220,000 $476,000 1.92% Sales taxes $22,783,000 $19,235,000 ($3,548,000) -15.57% Other taxes $11,197,000 $10,352,000 ($845,000) -7.55% Licenses and permits $3,063,000 $2,308,000 ($755,000) -24.65% Intergovernmental $7,614,000 $7,755,000 $141,000 1.85% Fines and forfeitures $742,000 $710,000 ($32,000) -4.31% Other in lieu taxes $519,000 $519,000 $0 0.00% Charges for current services $8,302,000 $8,314,000 $12,000 0.14% Use of money and property $3,939,000 $5,026,000 $1,087,000 27.60% Miscellaneous $671,000 $838,000 $167,000 24.89% Totals $83,574,000 $80,277,000 ($3,297,000) -3.95% Expenditures: City Council $168,210 $208,810 $40,600 24.14% City Manager $1,148,080 $1,332,700 $184,620 16.08% City Attorney $1,191,020 $1,266,100 $75,080 6.30% City Clerk $1,041,900 $1,076,630 $34,730 3.33% Finance $9,139,040 $7,991,620 ($1,147,420) -12.56% Human Resources $1,392,210 $1,383,090 ($9,120) -0.66% Fire $14,291,660 $14,918,390 $626,730 4.39% Police $23,970,380 $24,625,110 $654,730 2.73% Public Works $8,035,240 $7,425,970 ($609,270) -7.58% Community Development $14,962,880 $14,201,040 ($761,840) -5.09% Economic Development $482,710 $493,030 $10,320 2.14% Library $4,804,880 $4,899,960 $95,080 1.98% Capital projects $700,000 $1,103,990 $403,990 57.71% Totals $81,328,210 $80,926,440 ($401,770) -0.49% Comprehensive Annual Financial Report FY 2007-2008 22 The following table shows the original budget approved in 2006 and the final amended budget approved on June 23, 2008 and the actual results as of June 30, 2008. 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 $0.2 million. Property tax was also lower than expected with a $.7 million negative variance. As to expenditures, the largest negative variance was $0.4 million within Finance and amounted to 5.6% of the approved budget. Overall revenues had a net negative variance and expenditures had a net negative variance. Table 8 General Fund Budgetary and Actual Variance Analysis Budget Approved June 26, 2006 Budget Approved June 23, 2008 As of June 30, 2008 Actual Variance Final Budget Variance Final Budget Original Final Budgetary Basis Positive/(Negative) % Revenues: Property taxes $24,744,000 $25,220,000 $24,511,974 ($708,026) -2.81% Sales taxes $22,783,000 $19,235,000 $19,338,334 $103,334 0.54% Other taxes $11,197,000 $10,352,000 $9,863,971 ($488,029) -4.71% Licenses and permits $3,063,000 $2,308,000 $2,324,087 $16,087 0.70% Intergovernmental $7,614,000 $7,755,000 $7,629,992 ($125,008) -1.61% Fines and forfeitures $742,000 $710,000 $680,340 ($29,660) -4.18% Other in lieu taxes $519,000 $519,000 $486,623 ($32,377) -6.24% Charges for current services $8,302,000 $8,314,000 $8,371,836 $57,836 0.70% Use of money and property $3,939,000 $5,026,000 $5,432,735 $406,735 8.09% Miscellaneous $671,000 $838,000 $1,200,203 $362,203 43.22% Totals $83,574,000 $80,277,000 $79,840,095 ($436,905) -0.54% Expenditures: City Council $168,210 $208,810 $170,463 ($38,347) -18.4% City Manager $1,148,080 $1,332,700 $1,236,072 ($96,628) -7.3% City Attorney $1,191,020 $1,266,100 $1,264,382 ($1,718) -0.1% City Clerk $1,041,900 $1,076,630 $959,200 ($117,430) -10.9% Finance $9,139,040 $7,991,620 $7,546,976 ($444,644) -5.6% Human Resources $1,392,210 $1,383,090 $1,296,682 ($86,408) -6.2% Fire $14,291,660 $14,918,390 $14,976,861 $58,471 0.4% Police $23,970,380 $24,625,110 $24,731,718 $106,608 0.4% Public Works $8,035,240 $7,425,970 $7,175,388 ($250,582) -3.4% Community Development $14,962,880 $14,201,040 $13,838,255 ($362,785) -2.6% Economic Development $482,710 $493,030 $315,836 ($177,194) -35.9% Library $4,804,880 $4,899,960 $4,859,894 ($40,066) -0.8% Capital projects $700,000 $1,103,990 $1,009,144 ($94,846) -8.6% Totals $81,328,210 $80,926,440 $79,380,871 ($1,545,569) -1.9% Property tax revenues were lower than expected by $708,026 due to lower property tax collections by Alameda County. Comprehensive Annual Financial Report FY 2007-2008 23 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 $5.1 million and represent unspent 2001 Tax Allocation Bond proceeds to be used for redevelopment activities. Land held for redevelopment amounts to $2.6 million at June 30, 2008. The Agency has seven agreements with developers/owners, which impacted fiscal 2006-2007. They are summarized below but additional details may be found in Note 4 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. 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 Comprehensive Annual Financial Report FY 2007-2008 24 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, 2008, the Agency had disbursed $381,146 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, 2008, 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 2008, 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. 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, 2008, the project is under construction. 4. 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 Comprehensive Annual Financial Report FY 2007-2008 25 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, 2008, construction was complete, but occupancy has not reached 90%. 5. 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, 2008, construction was complete, but occupancy has not reached 90%. 6. 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, 2008, the 500 seat theater project is complete, and operations began in fiscal 07-08. 7. 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 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, 2008, the project is complete, and no units have been sold. The Capital Project Fund owes the City $7.8 million in advances part of which funded prior years’ redevelopment activities. The Agency plans to use 2001 Bond proceeds to repay the advance. Comprehensive Annual Financial Report FY 2007-2008 26 Revenues for the Capital Project Fund amount to $5.5 million, which is an increase of $0.5 million from the prior year. Expenditures increased $0.6 million, due to pre-construction activities for the above projects having been completed in the prior year. Other financing sources decreased to a $3.5 million as a result of transfers of tax increment to the Debt Service Fund and Special Revenue Fund. Street Improvements Fund This Fund is used to account for the construction of major streets and interchanges. During fiscal 2008, capital outlay amounted to $2.5 million. Significant projects included the completion of the Greenville Road Widening and Railroad Bridge Replacement with expenditures of $0.3 million, Vasco Road/I580 Interchange project with expenditures of $0.9 million and Traffic Impact Fee Reimbursements with expenditures of $0.6 million. The primary revenue source for this fund is developer impact fees, which decreased $1.1 million in fiscal 2008, to a total of $3.2 million. This revenue source is dependant on development activity. This Fund had interfund receivable balances amounting to $2.9 million at June 30, 2008. Of this amount, $1.5 million was due from the Isabel/I580 Interchange, $0.8 million was due from the Measure B Isabel Interchange project, and $0.3 million was due from the El Charro Infrastructure Project 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, 2008 the City held $13.7 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. Comprehensive Annual Financial Report FY 2007-2008 27 Analysis of Major Business-type Activities – Enterprise Funds Airport Fund Airport Fund net income amounted to $0.1 million in fiscal year 2008, down from ($1.1) million in fiscal year 2007. Water Fund Water Fund net income amounted to $4.5 million in fiscal year 2008, up from $3.5 million in fiscal year 2007. Operating revenues decreased by $0.4 million in fiscal 2008. The increase in net income is due to an increase to Contributed assets. Sewer Fund Sewer Fund net income amounted to $4.4 million in fiscal 2008, up from ($2.3) million in fiscal 2007. Operating Revenues decreased $0.3 million to $18.4 million in fiscal 2008. The decrease is the result of lower Charges for Services for new residential units due to less development. During fiscal 2008, repairs to capital assets amounted to $2.8 million. Operating expenses decreased $2.8 million to $18.5 million. The decrease is mainly the result of a decrease to repair and maintenance of capital assets. Transfers out amount to $2.7 million in fiscal 2008 and are composed primarily of a $2.5 million transfer to the LAVWMA Fund, which is discussed below. 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 $1.1 million which is an increased loss compared to the loss of $0.6 million from fiscal 2007. Operating revenues were up by $0.4 million at $2.6 million in fiscal 2008. Operating expenses had an increase of $0.2 million in fiscal 2008. Comprehensive Annual Financial Report FY 2007-2008 28 Springtown Golf Course Fund This Fund generated a net loss for the year amounting to $0.3 million for fiscal 2008. In fiscal 2008, the City hired a contractor to oversee the operations of the Springtown Golf Course. The contractor will receive a monthly payment for this service. The City will retain golf and other fee revenues generated by the Golf Course. (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 four years ago and City staff has implemented these adjustments. At the end of fiscal 2008 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) 2008 2007 Governmental Activities Land $16.5 $16.5 Construction in progress 34.8 25.4 Buildings 97.9 97.9 Equipment and vehicles 16.9 16.6 Infrastructure 264.1 238.8 Internal service fund equipment and vehicles 11.5 10.9 Less accumulated depreciation (113.8) (105.7) Totals $327.9 $300.4 Business-type Activities Land $13.9 $13.9 Construction in progress 16.3 8.5 Land Improvements 0.6 0.6 Buildings 22.2 22.2 Equipment and vehicles 2.9 4.1 Golf Course Infrastructure 7.3 7.5 Sewer Infrastructure 198.7 196.1 Water Infrastructure 32.3 30.4 Airport Infrastructure 10.9 11.1 Less accumulated depreciation (134.7) (132.0) Totals $170.4 $162.4 The principal additions for governmental activities in fiscal 2008 were to streets and roads. Business-type activity additions were primarily composed of Sewer and Water infrastructure Comprehensive Annual Financial Report FY 2007-2008 29 improvements. Some projects in construction in progress in prior years were completed in fiscal 2008, such as the Greenville Road Widening and Railroad Bridge Replacement. 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. (E) Debt Administration Each of the City’s debt issues is discussed in detail in Note 7 to the financial statements. At June 30, 2007 and 2008 the City’s debt comprised: Table 10 Outstanding Debt (in Millions) 2008 2007 Governmental Activity Debt: Certificates of Participation $60.5 $63.6 Tax Allocation Bonds 34.1 34.8 Notes payable 4.9 4.9 Totals $99.5 $103.3 Business-type Activity Debt: Certificates of Participation $9.4 $10.3 State Water Reclamation Loans 4.6 5.3 Airport Loans Payable 0.0 0.0 Golf Equipment Lease 0.0 0.2 Totals $14.0 $15.8 In fiscal 2008, Governmental activities debt was reduced $3.8 for scheduled retirements. Business-type activity debt was reduced $1.8 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, 2008, a total of $50.3 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. Comprehensive Annual Financial Report FY 2007-2008 30 (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. Comprehensive Annual Financial Report FY 2007-2008 31 Comprehensive Annual Financial Report FY 2007-2008 32 Comprehensive Annual Financial Report FY 2007-2008 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 of the City’s Governmental Activities in a single column, and the financial position of all the City’s Business-Type Activities in a single column; these columns are followed by a Total column 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 Comprehensive Annual Financial Report FY 2007-2008 STATEMENT OF NET ASSETS JUNE 30, 2008 GovernmentalBusiness-Type Activities Activities Total ASSETS 97,471,119$ 75,103,411$ 172,574,530$ 14,500,67714,500,677 8,980,8452,455,14311,435,988 1,505,4761,505,476 1,942,343(1,942,343) 1,838,083138,7221,976,805 10,952,81510,952,815 13,972,01513,972,015 51,454,14330,824,02382,278,166 276,539,914139,624,181416,164,095 Total assets479,157,430246,203,137725,360,567 LIABILITIES 9,533,7102,122,57911,656,289 768,304125,622893,926 1,134,780191,3461,326,126 1,748,267196,4291,944,696 2,519,6212,519,621 2,928,8432,928,843 14,126,619388,47414,515,093 3,895,0001,601,1525,496,152 95,687,33912,410,381108,097,720 Total liabilities132,342,48317,035,983149,378,466 NET ASSETS (Note 9) Invested in Capital Assets, net of related debt 228,275,975156,436,671384,712,646 Restricted: Capital projects10,378,72510,378,725 Debt service2,929,5932,929,593 3,155,0723,155,072 Redevelopment6,783,3976,783,397 Special revenue grant programs5,475,6255,475,625 Unrestricted89,816,56072,730,483162,547,043 Total net assets346,814,947$ 229,167,154$ 575,982,101$ See accompanying notes to financial statements Due in more than one year Special assessment administration Net OPEB obligation (Note 10) Deposit payable and unearned revenue Long-term debt (Note 7): Due within one year Accrued compensated absences (Note 1F): Due within one year Due in more than one year Claims payable (Note 13B) - due in more than one year Land & construction in progress (Note 6) Capital assets (net of accumulated depreciation) (Note 6) Accounts payable and other accruals Accrued payroll Internal balances (Note 4D) Prepaids, deposits and supplies Notes receivable (Note 5) Land held for redevelopment (Note 1I) Cash and investments in City Treasury (Note 3) Cash and investments with Trustees (Note 3) Accounts receivables (net of applicable allowance for uncollectibles) Interest receivable 34 Comprehensive Annual Financial Report FY 2007-2008 Net (Expense) Revenue and Program RevenuesChanges in Net Assets OperatingCapital Charges forGrants and Grants and Governmental Business-type Functions/ProgramsExpensesServicesContributionsContributionsActivitiesActivitiesTotal Governmental Activities: City Council187,508$ 314,537$ 127,029$ 127,029$ City Manager1,300,794(1,300,794)(1,300,794) City Attorney1,297,039(1,297,039)(1,297,039) City Clerk994,675(994,675)(994,675) Finance7,608,817(7,608,817)(7,608,817) Human Resources 1,344,311(1,344,311)(1,344,311) Fire15,930,7801,544,589$ (14,386,191)(14,386,191) Police26,817,0521,785,743910,187(24,121,122)(24,121,122) Public Works19,203,29264,340429,351(18,709,601)(18,709,601) Community Development23,590,2076,335,2019,275,20627,407,661$ 19,427,86119,427,861 Economic Development335,741(335,741)(335,741) Library5,775,103124,630107,242(5,543,231)(5,543,231) Redevelopment3,518,910(3,518,910)(3,518,910) Interest on long term debt 4,020,988(4,020,988)(4,020,988) Total Governmental Activities 111,925,2179,854,50311,036,52327,407,661(63,626,530)(63,626,530) Business-type Activities: Airport6,019,3656,102,03982,674$ 82,674 Water8,438,48510,512,3232,589,0204,662,8584,662,858 Sewer18,757,89119,968,1575,769,4956,979,7616,979,761 LAVWMA2,664,961(2,664,961)(2,664,961) Las Positas3,672,9952,649,027(1,023,968)(1,023,968) Springtown604,666258,354(346,312)(346,312) Total Business-type Activities 40,158,36339,489,9008,358,5157,690,0527,690,052 Total152,083,580$ 49,344,403$ 11,036,523$ 35,766,176$ (63,626,530)7,690,052(55,936,478) General revenues: Property taxes24,743,46324,743,463 Incremental property taxes 4,850,9654,850,965 Sales taxes19,338,33419,338,334 Business license tax3,870,8463,870,846 Transient occupancy and franchise taxes 6,479,7486,479,748 Intergovernmental, unrestricted6,292,7386,292,738 Interest6,514,8556,514,855 Miscellaneous 6,893,9646,893,964 Transfers, net (Note 4B)653,502(653,502) Total general revenues and transfers 79,638,415(653,502)78,984,913 Change in Net Assets16,011,8857,036,55023,048,435 Net Assets-Beginning330,803,062222,130,604552,933,666 Net Assets-Ending346,814,947$ 229,167,154$ 575,982,101$ See accompanying notes to financial statements STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2008 35 Comprehensive Annual Financial Report FY 2007-2008 36 Comprehensive Annual Financial Report FY 2007-2008 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 2008. 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. STREET PROJECTS Established to account for monies received from other governmental agencies to fund street projects. 37 Comprehensive Annual Financial Report FY 2007-2008 Redevelopment AgencyStreet GeneralCapital ProjectsImprovements ASSETS 23,204,412$ 3,178,337$ 6,481,625$ 5,052,409 4,876,31615,13669,221 1,505,476 1,947,8792,941,839 8,452,950541,211 30,390 3,035,480 2,557,581 Total Assets40,017,423$ 13,838,943$ 10,033,896$ LIABILITIES 1,293,064$ 850,424$ 76,330$ 702,7294,956 586,815 7,844,569 843,950515,480541,212 2,839,7439,215,4291,204,357 Reserved for: 8,452,950 30,390 2,520,000 2,557,581 343,617 Unreserved: 8,252,800 13,752,000 Undesignated, reported in: 6,345,923 (454,067)8,829,539 37,177,6804,623,5148,829,539 40,017,423$ 13,838,943$ 10,033,896$ See accompanying notes to financial statements Special revenue funds Capital projects funds TOTAL FUND BALANCES Total Liabilities and Fund Balances Special assessment administration Designated for special projects Designated for operations General fund Prepaids, deposits and supplies Notes receivable Land held for redevelopment Debt service Capital outlay Low income housing Advance to other funds Advance from other funds (Note 4C) Deferred rents and revenue Total Liabilities FUND BALANCES (Note 9) Accounts payable and other accrued liabilities Accrued payroll and benefits Deposit payable Due to other funds (Note 4A) Advances to other funds (Note 4C) Prepaids, deposits and supplies Notes receivable (Note 5) Land held for redevelopment (Note 1I) Cash and investments with Trustees (Note 3) Accounts receivables Interest receivable Due from other funds (Note 4A) GOVERNMENTAL FUNDS BALANCE SHEET JUNE 30, 2008 Cash and investments in City Treasury (Note 3) 38 Comprehensive Annual Financial Report FY 2007-2008 OtherTotal DeveloperStreet GovernmentalGovernmental DepositsProjectsFundsFunds 13,699,581$ 8,866,157$ 22,592,190$ 78,022,302$ 9,448,26814,500,677 32,0481,997,2591,597,1288,587,108 1,505,476 11,7874,901,505 3,570,40812,564,569 30,390 7,917,33510,952,815 11,414,43413,972,015 13,731,629$ 10,863,416$ 56,551,550$ 145,036,857$ 3,207$ 29,470$ 3,888,882$ 6,141,377$ 22,431730,116 13,728,42214,315,237 1,754,8701,523,4243,278,294 4,720,00012,564,569 8,165,74610,066,388 13,731,6296,504,34013,600,48347,095,981 3,352,3403,352,340 2,159,8832,159,883 3,570,40812,023,358 30,390 11,414,43413,934,434 2,557,581 2,929,5932,929,593 343,617 8,252,800 13,752,000 6,345,923 14,589,10914,589,109 4,359,0764,935,30017,669,848 4,359,07642,951,06797,940,876 13,731,629$ 10,863,416$ 56,551,550$ 145,036,857$ 39 Comprehensive Annual Financial Report FY 2007-2008 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 Balance97,940,876$ CAPITAL ASSETS Capital assets used in Governmental Activities are not current assets or financial resources and therefore are not reported in the Governmental Funds.327,994,057 ALLOCATION OF INTERNAL SERVICE FUND NET ASSETS 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 investments19,448,817 Accounts receivable393,737 Internal balances319,132 Prepaids, deposits and supplies266,545 Accounts payable and other accruals(2,686,799) Accrued payroll(38,188) Accrued compensated absences(457,635) Net pension obligation(2,928,843) Claims payable(2,519,621) ACCRUAL OF NON-CURRENT REVENUES AND EXPENSES into revenue in the Statement of Activities.10,255,006 LONG-TERM ASSETS AND LIABILITIES reported in the Funds: Unamortized bond issue costs1,541,148 Non-current portion of compensated absences(2,425,412) Long-term debt(99,582,339) Interest payable(705,534) NET ASSETS OF GOVERNMENTAL ACTIVITIES346,814,947$ See accompanying notes to financial statements Revenues which are deferred on the Fund Balance Sheets because they are not available currently are taken The assets and liabilities below are not due and payable in the current period and therefore are not GOVERNMENTAL FUNDS BALANCE SHEET - Continued JUNE 30, 2008 Internal service funds are not governmental funds. However, they are used by management to charge the 40 Comprehensive Annual Financial Report FY 2007-2008 41 Comprehensive Annual Financial Report FY 2007-2008 Redevelopment AgencyStreet GeneralCapital ProjectsImprovement REVENUES 34,862,568$ 19,338,334 4,850,965$ 2,324,087 7,629,992 7,82647,965$ 680,340 8,371,83675,0003,182,733 5,432,735463,529397,136 1,200,203117,84512,500 79,840,0955,515,1653,640,334 EXPENDITURES Current: 170,463 1,236,072 1,264,382 959,200 7,546,976 1,296,682 14,976,861 24,731,718 7,175,388 13,838,255 315,836 4,859,894 1,896,043 1,009,1444,509,967 2,531,690 - 95,507 79,380,8716,501,5172,531,690 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES459,224(986,352)1,108,644 3,411,461125,405 (4,697,660)(3,529,340)(1,011,304) (1,286,199)(3,529,340)(885,899) NET CHANGE IN FUND BALANCES(826,975)(4,515,692)222,745 38,004,6559,139,2068,606,794 FUND BALANCES AT END OF PERIOD37,177,680$ 4,623,514$ 8,829,539$ Total Other Financing Sources (Uses) Fund balances at beginning of period See accompanying notes to financial statements Total Expenditures OTHER FINANCING SOURCES (USES) Transfers in (Note 4B) Transfers (out) (Note 4B) Capital projects Debt service Principal Interest and fiscal charges Economic Development Library Redevelopment Capital Outlay Fire Police Public Works Community Development City Attorney City Clerk Finance Human Resources Miscellaneous Total Revenues City Council City Manager Contributions from outside sources Fines and forfeitures Charges for current services Use of money and property Sales Taxes Property tax increment Licenses and permits Intergovernmental GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2008 Taxes and special assessments 42 Comprehensive Annual Financial Report FY 2007-2008 OtherTotal DeveloperStreetGovernmentalGovernmental DepositsProjectsFundsFunds 976,027$ 35,838,595$ 19,338,334 4,850,965 2,324,087 4,652,09710,339,559$ 22,621,648 2,398,9662,454,757 680,340 136,7601,347,83613,114,165 457,4341,185,2967,936,130 1,582,1182,912,666 6,222,31816,853,775112,071,687 170,463 1,236,072 1,264,382 959,200 7,546,976 1,296,682 14,976,861 838,08325,569,801 7,175,388 4,276,94818,115,203 315,836 35,9174,895,811 396,0572,292,100 3,885,329 20,302,92232,239,052 3,755,0003,755,000 4,029,0324,124,539 3,885,32933,633,959125,933,366 2,336,989(16,780,184)(13,861,679) 41,68716,084,06319,662,616 (3,311,967)(6,014,536)(18,564,807) (3,270,280)10,069,5271,097,809 (933,291)(6,710,657)(12,763,870) 5,292,36749,661,724110,704,746 4,359,076$ 42,951,067$ 97,940,876$ 43 Comprehensive Annual Financial Report FY 2007-2008 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS(12,763,870)$ CAPITAL ASSETS TRANSACTIONS 23,698,444 (1,956,372) (9,526,511) 15,372,290 LONG TERM DEBT PROCEEDS AND PAYMENTS 3,755,000 (35,000) ACCRUAL OF NON-CURRENT ITEMS 59,085 44,466 (811,482) 875,403 ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY (3,005,840) 306,272 CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES16,011,885$ See accompanying notes to financial statements of their transactions with governmental funds is reported with governmental activities, because they service those activities. Change in Net Assets - All Internal Service Funds Change in Net Assets of Internal Service Funds reported with Business-Type Activities Deferred revenue from loan receivable offset 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 governmental funds (net change): Bond issue costs Interest payable Long-term compensated absences Repayment of debt principal is added back to fund balance Proceeds from issuance of long term debt are deducted from fund balance 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 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. $920,995 which has already been allocated to serviced funds.) Contributions of infrastructure and improvements by developers are capitalized in the Statement of Activities, but are not recorded in the Fund Statements because no cash changed hands. The capital outlay asset addition expenditures are therefore added back to fund balance Retirements are deducted from fund balance Depreciation expense is deducted from the fund balance (Depreciation expense is net of internal service fund depreciation of are different because of the following: Governmental Funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense. TheschedulebelowreconcilestheNetChangesinFundBalancesreportedontheGovernmentalFundsStatementof Revenues,ExpendituresandChangesinFundBalance,whichmeasuresonlychangesincurrentassetsandcurrent liabilitiesonthemodifiedaccrualbasis,withtheChangeinNetAssetsofGovernmentalActivitiesreportedintheStatement of Activities, which is prepared on the full accrual basis. RECONCILIATION OF THE NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS WITH THE STATEMENT OF ACTIVITIES - FOR THE YEAR ENDED JUNE 30, 2008 Amounts reported for governmental activities in the Statement of Activities 44 Comprehensive Annual Financial Report FY 2007-2008 Variance Budgeted AmountsFinal Budget Actual AmountsPositive Original FinalBudgetary Basis(Negative) Fund balance, July 133,170,147$ 33,220,367$ 38,004,655$ 4,784,288$ Resources (inflows): Property taxes24,744,00025,220,00024,511,974($708,026) Sales taxes22,783,00019,235,00019,338,334103,334 Other taxes11,197,00010,352,0009,863,971(488,029) Licenses and permits3,063,0002,308,0002,324,08716,087 Intergovernmental7,614,0007,755,0007,629,992(125,008) Fines and forfeitures742,000710,000680,340(29,660) Other in lieu taxes519,000519,000486,623(32,377) Charges for current services8,302,0008,314,0008,371,83657,836 Use of money and property3,939,0005,026,0005,432,735406,735 Miscellaneous 671,000838,0001,200,203362,203 Amounts available for appropriation83,574,00080,277,00079,840,095(436,905) Charges to appropriations (outflows) Current: City Council168,210208,810170,46338,347 City Manager1,148,0801,332,7001,236,07296,628 City Attorney1,191,0201,266,1001,264,3821,718 City Clerk1,041,9001,076,630959,200117,430 Finance9,139,0407,991,6207,546,976444,644 Human Resources1,392,2101,383,0901,296,68286,408 Fire14,291,66014,918,39014,976,861(58,471) Police23,970,38024,625,11024,731,718(106,608) Public Works8,035,2407,425,9707,175,388250,582 Community Development14,962,88014,201,04013,838,255362,785 Economic Development482,710493,030315,836177,194 Library4,804,8804,899,9604,859,89440,066 Capital Outlay Capital projects700,0001,103,9901,009,14494,846 Total charges to appropriations81,328,21080,926,44079,380,8711,545,569 OTHER FINANCING SOURCES (USES) Transfers in3,473,5003,812,5003,411,461(401,039) Transfers (out)(4,697,280)(4,557,000)(4,697,660)(140,660) Total Other Financing Sources (Uses)(1,223,780)(744,500)(1,286,199)(541,699) Fund balance, June 3034,192,157$ 31,826,427$ 37,177,680$ 5,351,253$ See accompanying notes to financial statements GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - FOR THE YEAR ENDED JUNE 30, 2008 45 Comprehensive Annual Financial Report FY 2007-2008 46 Comprehensive Annual Financial Report FY 2007-2008 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 2008. 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 Comprehensive Annual Financial Report FY 2007-2008 Business-type Activities-Enterprise Funds AirportWaterSewer ASSETS Current Assets: Cash and investments in City Treasury (Note 3)1,457,679$ 15,799,797$ 56,207,527$ Accounts receivables (net of allowable for uncollectibles)245,4511,397,086434,111 Prepaids, deposits and supplies138,722 1,841,85217,196,88356,641,638 Noncurrent Assets: 4,722,30424,246,739104,911,417 12,920,4267,961,8759,162,513 17,642,73032,208,614114,073,930 Total assets19,484,58249,405,497170,715,568 LIABILITIES Current Liabilities: 253,2941,152,435515,683 14,20025,85482,204 16,65132,148118,323 172,979147,163 457,1241,357,600716,210 Noncurrent Liabilities: 21,75711,972129,065 523,889230,000712,263 1,070,0005,675,0003,860,381 1,615,6465,916,9724,701,709 2,072,7707,274,5725,417,919 NET ASSETS (Note 9) 16,048,84126,303,614109,501,286 Unrestricted1,362,97115,827,31155,796,363 17,411,812$ 42,130,925$ 165,297,649$ PROPRIETARY FUNDS STATEMENT OF NET ASSETS JUNE 30, 2008 Total current assets Capital assets (net of accumulated depreciation) (Note 6) Land & construction in progress Total noncurrent assets Accounts payable and other accruals Accrued payroll and benefits Accrued compensated absences (Note 1F): Deposit payable Due to other funds (Note 4A) Total current liabilities Accrued compensated absences (Note 1F): Claims payable Net pension obligation Long-term debt (Note 7): Due within one year Due in more than one year Total non-current liabilities Total net assets Net assets business-type activities Total liabilities Invested in Capital Assets, net of related debt 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. See accompanying notes to financial statements 48 Comprehensive Annual Financial Report FY 2007-2008 Governmental Activities- Internal Service LAVWMALas PositasSpringtownTotalsFunds 1,637,989$ 419$ 75,103,411$ 19,448,817$ 344,93633,559$ 2,455,143393,737 138,722266,545 1,637,989345,35533,55977,697,27620,109,099 5,477,459266,262139,624,1814,558,210 725,48453,72530,824,023135,743 6,202,943319,987170,448,2044,693,953 1,637,9896,548,298353,546248,145,48024,803,052 172,50528,6622,122,5792,686,799 2,574790125,62238,188 24,224191,346457,635 68,332388,474 1,194,425381,1001,575,52547,686 1,462,060410,5524,403,5463,230,308 33,635196,429 2,519,621 2,928,843 135,0001,601,152 1,805,00012,410,381 1,973,63514,207,9625,448,464 3,435,695410,55218,611,5088,678,772 4,262,943319,987156,436,6714,693,953 1,637,989(1,150,340)(376,993)73,097,30111,430,327 1,637,989$ 3,112,603$ (57,006)$ 229,533,97216,124,280$ (366,818) 229,167,154$ 49 Comprehensive Annual Financial Report FY 2007-2008 Business-type Activities-Enterprise Funds AirportWaterSewer OPERATING REVENUES 3,817,823$ 17,039,878$ 2,204,38610,018,432$ 206,916 51,72027,4611,109,003 6,073,92910,045,89318,355,797 OPERATING EXPENSES 3,644,9756,215,3634,861,497 546,725726,5482,011,477 461,7671,078,3472,470,982 128,106192,859648,650 617,2861,069,8045,625,203 260,887(1,038,720)2,847,275 5,659,7468,244,20118,465,084 414,1831,801,692(109,287) NONOPERATING REVENUES (EXPENSES) 28,110466,4301,612,360 (328,206)(148,213)(126,582) (300,096)318,2171,485,778 114,0872,119,9091,376,491 2,589,0205,769,495 810,302368,320 (858,752)(569,507)(2,748,240) 65,6374,507,7424,397,746 Total net assets-beginning17,346,175 37,623,183 160,899,903 Total net assets-ending17,411,812$ 42,130,925$ 165,297,649$ PROPRIETARY FUNDS STATEMENT OF REVENUE, EXPENSES AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED JUNE 30, 2008 Charges for services Sales Miscellaneous Total Operating Revenues Cost of sales, salaries and benefits Contracted services Insurance premiums Materials, supplies and others Utilities Depreciation Repairs & maintenance Claims expense Total Operating Expenses Operating Income (Loss) Interest revenue Interest and fiscal charges (expense) Loss on disposal and other Net Nonoperating Revenues (Expenses) Income (Loss) Before Transfers Contributed assets Transfers in (Note 4B) services. Net business-type activities reported on the Statement of Activities See accompanying notes to financial statements Transfers (out) (Note 4B) Change in net assets 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 50 Comprehensive Annual Financial Report FY 2007-2008 Governmental Activities- Internal Service LAVWMALas PositasSpringtownTotalsFunds 2,329,949$ 254,154$ 23,441,804$ 14,208,773$ 12,429,734 319,0784,200 1,511,462 2,649,027258,35437,383,00014,208,773 978,31177,48315,777,62910,180,382 2,664,961$ 736,096300,0406,985,8471,038,748 817,562 441,82663,1784,516,1002,525,384 86,69439,1891,095,498 537,94841,4077,891,648920,264 87,20043,0392,199,681359,007 821,712 2,664,9612,868,075564,33638,466,40316,663,059 (2,664,961)(219,048)(305,982)(1,083,403)(2,454,286) 2,106,900 (115,576)(718,577) (634,372)(32,739)(667,111)(107,247) (749,948)(32,739)721,212(107,247) (2,664,961)(968,996)(338,721)(362,191)(2,561,533) 8,358,515 2,500,000212,8073,891,429 (368,432)(4,544,931)(444,307) (164,961)(1,124,621)(338,721)7,342,822(3,005,840) 1,802,950 4,237,224 281,715 19,130,120 1,637,989$ 3,112,603$ (57,006)$ 16,124,280$ (306,272) 7,036,550$ 51 Comprehensive Annual Financial Report FY 2007-2008 Business-type Activities-Enterprise Funds AirportWaterSewer CASH FLOWS FROM OPERATING ACTIVITIES 6,065,993$ 10,338,821$ 18,350,842$ Payments to suppliers(1,445,466)(499,690)(7,967,179) Payments to employees(3,650,776)(6,198,922)(4,807,940) Claims paid Net cash provided by operating activities 969,7513,640,2095,575,723 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Receipts from other funds Transfers in810,302368,320 Transfers (out)(858,752)(569,507)(2,748,240) Cash Flows from Noncapital Financing Activities (48,450)(201,187)(2,748,240) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital asset additions(24,187)(4,938,940)(3,224,774) Long term debt: Repayments(508,889)(225,000)(693,538) Interest paid(328,206)(148,213)(126,582) Cash Flows from Capital and Related Financing Activities(861,282)(5,312,153)(4,044,894) CASH FLOWS FROM INVESTING ACTIVITIES Interest received28,110466,4301,612,360 Cash Flows from Investing Activities 28,110466,4301,612,360 Net increase (decrease) in cash and cash equivalents 88,129(1,406,701)394,949 Cash and investments at beginning of period 1,369,55017,206,49855,812,578 Cash and investments at end of period 1,457,679$ 15,799,797$ 56,207,527$ Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss)414,183$ 1,801,692$ (109,287)$ Adjustments to reconcile operating income to net cash provided by operating activities Depreciation617,2861,069,8045,625,203 Change in assets and liabilities Accounts receivable(8,494)209,659(4,955) Prepaids, deposits and supplies (37,117) Net pension obligation Accounts payable and other accruals (10,864)459,34411,205 Accrued payroll (5,801)16,44153,557 Accrued compensated absences Deposits payable55883,269 Net cash provided by operating activities 969,751$ 3,640,209$ 5,575,723$ Capital Assets contributed 2,589,020$ 5,769,495$ See accompanying notes to financial statements PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2008 Receipts from customers 52 Comprehensive Annual Financial Report FY 2007-2008 Governmental Activities- Internal Service LAVWMALas PositasSpringtownTotalsFunds 2,397,850$ 258,343$ 37,411,849$ 14,100,026$ ($2,664,961)(1,244,415)(457,593)(14,279,304)(4,693,150) (997,086)(77,444)(15,732,168)(4,477,547) (813,944) (2,664,961)156,349(276,694)7,400,3774,115,385 472,321259,044731,36519,338 2,500,000212,8073,891,429 (368,432)(4,544,931)(444,307) 2,500,000316,696259,04477,863(424,969) (6,060)17,650(8,176,311)(1,055,447) (351,409)(1,778,836) (115,576)(718,577) (473,045)17,650(10,673,724)(1,055,447) 2,106,900 2,106,900 (164,961)(1,088,584)2,634,969 1,802,95041976,191,99516,813,848 1,637,989$ 419$ 75,103,411$ 19,448,817$ (2,664,961)$ (219,048)$ (305,982)$ (1,083,403)$ (2,454,286)$ 537,94841,4077,891,648920,264 (291,309)(11)(95,110)(110,739) (37,117)31,470 2,928,843 107,401(12,147)554,9392,343,068 (18,775)3945,461(870) 457,635 40,132123,959 (2,664,961)$ 156,349$ (276,694)$ 7,400,377$ 4,115,385$ 8,358,515$ 53 Comprehensive Annual Financial Report FY 2007-2008 FIDUCIARY FUNDS Agency Funds ASSETS Cash and investments in City Treasury (Note 3)5,111,265$ Cash and investments with Trustees (Note 3)5,144,172 Total Assets10,255,437$ LIABILITIES Due to special assessment districts10,255,437$ Total Liabilities10,255,437$ See accompanying notes to financial statements STATEMENT OF FIDUCIARY NET ASSETS JUNE 30, 2008 54 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. Comprehensive Annual Financial Report FY 2007-2008 55 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. 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. Comprehensive Annual Financial Report FY 2007-2008 56 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. Street Projects – Established to account for the construction and maintenance of city streets. Financing is provided by city’s share of state gasoline taxes. The City reported all of its business-type funds as major funds in the accompanying financial statements. 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. 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 Reserve Fund, Workers Compensation Fund, Fleet and Equipment Services Fund, Information Technology Fund, Facilities Rehabilitation Projects Fund, Reprographics Fund, Community Development Fund, and Employee Payroll 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. Comprehensive Annual Financial Report FY 2007-2008 57 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. 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. Comprehensive Annual Financial Report FY 2007-2008 58 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) 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, 2008: Governmental Activities Business Type Activities Total Beginning balance Additions Payments $2,748,020 2,796,653 (2,661,626) $271,117 543,379 (426,721) $3,019,137 3,340,032 (3,088,347) Ending balance $2,883,047$387,775$3,270,822 Current Portion $1,134,780$191,346$1,326,126 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. Comprehensive Annual Financial Report FY 2007-2008 59 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. Comprehensive Annual Financial Report FY 2007-2008 60 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). All governmental funds are budgeted except for the 2002 and 2007 Capital Projects Funds for the Financing Authority. 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 Horizons Special Revenue Fund $34,983 City Street Sweeping Special Revenue Fund 14,915 1997 Financing Authority COPs Capital Projects Fund 23,521 Isabel Parkway Capital Projects Fund 6,229,532 TVTC 20% Fee Capital Projects Fund 10,739 Comprehensive Annual Financial Report FY 2007-2008 61 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 $172,574,530 Cash and investments with Trustees 14,500,677 Total City cash and investments 187,075,207 Cash and investments in Fiduciary Funds (Separate Statement) In City Treasury 5,111,265 With Trustees 5,144,172 Total cash and investments $197,330,644 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. Comprehensive Annual Financial Report FY 2007-2008 62 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 yearsNoneNone U.S. Treasury Bills and Notes 5 yearsNoneNone Obligations issued by United States Government Agencies 5 yearsNoneNone Bankers Acceptances 180 days40%30% Commercial Paper 270 daysA1/P1/F125% (A)10% Negotiable Certificates of Deposit 5 yearsA30%None Repurchase Agreements and Reverse Repurchase Agreements 1 year20%None Medium Term Corporate Notes 5 yearsA30% (A)None Money Market Mutual Funds N/ATop rating category 15%None Collateralized Notes, Bonds, or Other Obligations Secured by First Priority Security Interest 5 yearsNoneNone Certificates of Deposit 5 yearsNoneNone California Local Agency Investment Fund N/A$40 million per account $40 million per account Passbook Savings Account NoneNoneNone$100 million 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. Comprehensive Annual Financial Report FY 2007-2008 63 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) 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 Comprehensive Annual Financial Report FY 2007-2008 64 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 lessEqual 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 Comprehensive Annual Financial Report FY 2007-2008 65 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) Authorized Investment Type Maximum Maturity Minimum Credit Quality Maximum % Allowed Issue 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 yrMinimum 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 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 Comprehensive Annual Financial Report FY 2007-2008 66 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) Authorized Investment Type Maximum Maturity Minimum Credit Quality Maximum % Allowed Issue 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 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 Comprehensive Annual Financial Report FY 2007-2008 67 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) Authorized Investment Type Maximum Maturity Minimum Credit Quality Maximum % Allowed Issue 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 Comprehensive Annual Financial Report FY 2007-2008 68 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$60,487,575$7,558,575$22,764,569$90,810,719 California Local Agency Investment Fund78,436,99778,436,997 U.S. Government Money Market Funds9,542,6459,542,645 U.S. Government Money Market Funds- Sweep Account2,141,0002,141,000 Guaranteed Investment Contracts and Agreements$7,279,9687,279,968 U.S. Treasury Notes2,893,1502,893,150 Commercial Paper7,832,0607,832,060 Total Investments$161,333,427$7,558,575$22,764,569$7,279,968198,936,539 Cash deposits (overdraft) with banks and on hand(1,605,895) Total Cash and Investments$197,330,644 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. Comprehensive Annual Financial Report FY 2007-2008 69 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) F. Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of June 30, 2008 for each investment type as provided by Standard and Poor’s investment rating service. Investment TypeAAAAAAmA-1 +Total Rated: U.S. Government-Sponsored Enterprise Agencies $90,810,719$90,810,719 U.S. Government Money Market Funds$9,542,6459,542,645 U.S. Government Money Market Funds- Sweep Account2,141,0002,141,000 Commercial Paper$7,832,0607,832,060 Not rated: California Local Agency Investment Fund78,436,997 Guaranteed Investment Contracts and Agreements7,279,968 Exempt from credit rating disclosure: U.S. Treasury Notes2,893,150 Total Investments$90,810,719$11,683,645$7,832,060198,936,539 Cash deposits (overdraft) with banks and on hand(1,605,895) Total Cash and Investments$197,330,644 Comprehensive Annual Financial Report FY 2007-2008 70 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 – CASH AND INVESTMENTS (Continued) 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, 2008, these investments matured in an average of 212 days. Money Market funds and mutual funds are available for withdrawal on demand and at June 30, 2008, matured in an average of 48 days. 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, 2008: Issuer Type of Investments Amount Federal Farm Credit Bank Federal Agency Securities $45,114,900 Federal Home Loan Mortgage Association Federal Agency Securities 15,100,800 Federal Home Loan Bank Federal Agency Securities 15,105,450 Comprehensive Annual Financial Report FY 2007-2008 71 NOTES TO BASIC FINANCIAL STATEMENTS 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. 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, 2008 were as follows: Due from Other Funds Due To Other Funds Amount General Fund Special Revenue Funds Horizons $138,017 Other Federal Grants 24,100 Street Sweeping 19,832 Capital Projects Funds Other Streets & Trails Construction 123,490 LCPFA 2007 COP 19,230 Enterprise Funds Las Positas 1,194,425 Springtown 381,100 Internal Service Funds Community Development 47,686 Special Revenue Fund Special Revenue Fund Low Income Housing Other Fed Grants 11,787 Special Revenue Fund Capital Projects Fund Street Projects 1,754,870 Street Improvements Other Federal Grants 842,259 Capital Projects Funds El Charro 344,709 Total $4,901,505 Comprehensive Annual Financial Report FY 2007-2008 72 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, 2008 were as follows: Fund Receiving Transfers Fund Making Transfers Amount Transferred General Fund RDA Capital Projects Fund Street Improvements Street Projects Non-Major Governmental Funds Water Sewer Internal Service Funds $175,240 155,000 357,500 2,010,544 102,630 166,240 444,307 Street Improvements Street Projects 125,405 Street Projects Non-Major Governmental Funds Non-Major Governmental Funds General Fund Street Projects Street Improvements RDA Capital Projects Fund Non-Major Governmental Funds Airport Water Sewer Las Positas 4,697,660 2,829,062 856,304 3,354,100 2,570,876 858,752 466,877 82,000 368,432 Airport Non-Major Governmental Funds810,302 Water Non-Major Governmental Funds368,320 LAVWMA Sewer 2,500,000 Las Positas Non-Major Governmental Funds212,807 Total Interfund Transfers $23,554,045 Comprehensive Annual Financial Report FY 2007-2008 73 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4 - INTERFUND TRANSACTIONS (Continued) 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, 2008, the Redevelopment Agency Capital Projects Fund owed a remaining balance of $3,732,950, which is expected to be repaid from proceeds of the 2001 Tax Allocation Bonds. During fiscal year ended June 30, 2008 the Agency repaid $85,000. 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, 2008 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 $582,235 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. Comprehensive Annual Financial Report FY 2007-2008 74 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 5 - NOTES RECEIVABLE Notes Receivables balances as of June 30, 2008: Deferred Second Mortgage Program Rehabilitation Loan Program Eden Housing Project, net Livermore Independent Living Associates Project (See Note 14A) Livermore Independent Living Associates Project (See Note 14B) Livermore Valley Center Retail Project East (See Note 14D) Livermore Valley Center Retail Project West (See Note 14E) Savannah Terrace Project Livermore Housing Authority Rental Assistance Loans $3,353,904 1,685,988 1,186,297 800,000 2,381,146 154,223 324,605 520,000 510,000 36,652 Total Notes Receivables $10,952,815 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, 2008 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 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. As of June 30, 2008, the City guarantees $1,230,612 in low income housing K&B loans. These loans are issued by a bank for the purchase of low income housing properties for a lower than market price. The City then issues a promissory not stating that they will guarantee the difference between the market and lower affordable price to the bank. If a property owner sells the home for a price above the market value, he/she will owe the difference to the City. Comprehensive Annual Financial Report FY 2007-2008 75 NOTES TO BASIC FINANCIAL STATEMENTS 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. 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 capital 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 Improvements Equipment Infrastructure 25-50 years 10-20 years 3-10 years 50 years Comprehensive Annual Financial Report FY 2007-2008 76 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 at June 30, 2007Additions Retirements and Transfers Balance at June 30,2008 Governmental activities Capital assets not being depreciated Land Construction in progress: $16,511,039 25,254,401 $19,567,177 ($10,014,217) $16,511,039 34,807,361 Subtotal 41,765,440 19,567,177 (10,014,217) 51,318,400 Capital assets being depreciated, cost: Office equipment Other equipment Library books Infrastructure Buildings 7,447,233 7,111,654 2,062,340 238,752,609 97,929,194 255,247 19,271,337 6,078,446 7,702,480 7,111,654 2,062,340 264,102,392 97,929,194 Subtotal 353,303,030 19,526,584 6,078,446 378,908,060 Accumulated Depreciation: Office equipment Other equipment Library books Infrastructure Buildings (5,772,571) (1,436,417) (1,497,772) (78,383,613) (12,265,844) (582,203) (452,571) (163,016) (6,558,939) (1,892,813) 2,079,403 (6,354,774) (1,888,988) (1,660,788) (82,863,149) (14,158,657) Subtotal (99,356,217) (9,649,542) 2,079,403 (106,926,356) Net Governmental Fund Programs Capital assets being depreciated $253,946,813 $9,877,042 $8,157,849 $271,981,704 Comprehensive Annual Financial Report FY 2007-2008 77 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 6 – CAPITAL ASSETS (Continued) Balance at June 30, 2007Additions Retirements and Transfers Balance at June 30,2008 Internal Service Fund Capital Assets Capital assets not being depreciated Construction in progress: $168,616 $121,970 ($154,843) $135,743 Subtotal 168,616 121,970 (154,843) 135,743 Capital assets being depreciated, cost: Office equipment Other equipment Licensed Vehicles 9,000 227,995 10,622,536 6,394 927,083 (303,297) 9,000 234,389 11,246,322 Subtotal 10,859,531 933,477 (303,297) 11,489,711 Accumulated Depreciation: Office equipment Other equipment Licensed Vehicles (5,250) (53,392) (6,303,488) (900) (17,711) (902,384) 351,624 (6,150) (71,103) (6,854,248) Subtotal (6,362,130) (920,995) 351,624 (6,931,501) Net Internal Service Fund capital assets being depreciated 4,497,401 12,482 48,327 4,558,210 Governmental activity capital assets, net $300,378,270 $29,578,671 ($1,962,884) $327,994,057 Comprehensive Annual Financial Report FY 2007-2008 78 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 6 – CAPITAL ASSETS (Continued) Balance at June 30, 2007Additions Retirements and Transfers Balance at June 30,2008 Business-type activities Capital assets not being depreciated Land Land improvements Construction in progress $13,880,133 634,433 8,483,749 $8,004,673 ($178,965) $13,880,133 634,433 16,309,457 Subtotal 22,998,315 8,004,673 (178,965) 30,824,023 Capital assets being depreciated: Office equipment Other equipment Licensed Vehicles Airport infrastructure Water infrastructure Sewer infrastructure Las Positas GC infrastructure Springtown GC infrastructure Buildings 365,415 2,896,208 877,731 11,057,891 30,384,318 196,138,333 6,991,367 551,572 22,169,723 6,060 24,186 2,589,021 5,952,679 (1,269,468) (195,114) (636,513) (3,375,390) (124,236) (91,171) 365,415 1,632,800 901,917 10,862,777 32,336,826 198,715,622 6,867,131 460,401 22,169,723 Subtotal 271,432,558 8,571,946 (303,297) 274,312,612 Accumulated Depreciation: Office equipment Other equipment Licensed Vehicles Airport infrastructure Water infrastructure Sewer infrastructure Las Positas GC infrastructure Springtown GC infrastructure Buildings (199,112) (1,730,780) (523,596) (9,140,698) (9,706,786) (98,525,513) (5,520,397) (259,225) (6,352,629) (15,211) (126,305) (67,297) (483,936) (1,056,730) (5,367,799) (348,478) (32,584) (393,308) 710,380 195,114 636,512 3,404,091 124,236 91,170 (214,323) (1,146,255) (590,893) (9,429,520) (10,127,004) (100,489,221) (5,744,639) (200,639) (6,745,937) Subtotal (131,958,736) (7,891,648) 5,161,953 (134,688,431) Net capital assets being depreciates 139,473,822 680,298 (529,939) 139,624,181 Business-type activity capital assets, net $162,472,137 $8,684,971 ($708,904) $170,448,204 Comprehensive Annual Financial Report FY 2007-2008 79 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 was as follows: Governmental Activities Depreciation Expense Business-Type Activities Depreciation Expense Governmental Fund Programs City Council City Manager City Clerk Finance Human Resources Fire Police Public Works Community Development Information Technology Library Redevelopment Internal Service Funds $3,766 16,380 3,564 15,321 1,184 198,682 79,455 7,800,410 338,294 18,439 724,529 449,518 920,995 Airport Water Sewer Las Positas Springtown TOTAL $420,743 985,953 5,932,615 524,038 28,299 $7,891,648 TOTAL $10,570,537 Comprehensive Annual Financial Report FY 2007-2008 80 Comprehensive Annual Financial Report FY 2007-2008 NOTES TO BASIC FINANCIAL STATEMENTS 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: A. Long Term Debt Transactions and Balances: Balance at June 30, 2007 Additions Retirements Balance at June 30, 2008Current Portion Governmental Activities Redevelopment Agency: 2001 Tax Allocation Bonds, 4.00-5.00%, 2032 Certificates of Participation: 2007,3.5-3.7%, 2017 2002, varies, 2027 2000, varies, 2030 Notes Payable, varies, 2011-2017 $34,820,000 15,085,000 21,140,000 27,360,000 4,897,339$35,000 $705,000 1,290,000 1,085,000 675,000 $34,115,000 13,795,000 20,055,000 26,685,000 4,932,339 $730,000 1,330,000 1,125,000 710,000 Total governmental activities debt $103,302,339$35,000$3,755,000$99,582,339$3,895,000 Business-type Activities Airport Certificates of Participation: 2002,varies, 2027 Revenue Loans, 6-6.94%, 2009 Water Certificates of Participation: 2002,varies, 2027 Sewer 1994 State Loan, 2.7%, 2014 Las Positas Golf Course Certificates of Participation: 2002, varies, 2027 Golf Equipment Lease, 4.1%, repaid in 2008 $2,075,000 27,778 6,130,000 5,266,182 2,070,000 221,409 $495,000 13,889 225,000 693,538 130,000 221,409 $1,580,000 13,889 5,905,000 4,572,644 1,940,000 $510,000 13,889 230,000 712,263 135,000 Total business-type activities debt $15,790,369$1,778,836$14,011,533$1,601,152 NOTES TO BASIC FINANCIAL STATEMENTS 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: A. Long Term Debt Transactions and Balances: Balance at June 30, 2007 Additions Retirements Balance at June 30, 2008Current Portion Governmental Activities Redevelopment Agency: 2001 Tax Allocation Bonds, 4.00-5.00%, 2032 Certificates of Participation: 2007,3.5-3.7%, 2017 2002, varies, 2027 2000, varies, 2030 Notes Payable, varies, 2011-2017 $34,820,000 15,085,000 21,140,000 27,360,000 4,897,339$35,000 $705,000 1,290,000 1,085,000 675,000 $34,115,000 13,795,000 20,055,000 26,685,000 4,932,339 $730,000 1,330,000 1,125,000 710,000 Total governmental activities debt $103,302,339$35,000$3,755,000$99,582,339$3,895,000 Business-type Activities Airport Certificates of Participation: 2002,varies, 2027 Revenue Loans, 6-6.94%, 2009 Water Certificates of Participation: 2002,varies, 2027 Sewer 1994 State Loan, 2.7%, 2014 Las Positas Golf Course Certificates of Participation: 2002, varies, 2027 Golf Equipment Lease, 4.1%, repaid in 2008 $2,075,000 27,778 6,130,000 5,266,182 2,070,000 221,409 $495,000 13,889 225,000 693,538 130,000 221,409 $1,580,000 13,889 5,905,000 4,572,644 1,940,000 $510,000 13,889 230,000 712,263 135,000 Total business-type activities debt $15,790,369$1,778,836$14,011,533$1,601,152 81 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. The pledge of future tax increment revenues ends upon repayment of the $59.747 million in remaining debt service on the Agency’s long term debt which is scheduled to occur in 2032. As disclosed in the originating offering documents, pledged future tax increment revenues were expected to provide coverage of 1.75 times debt service over the life of the debt. For fiscal year 2008, tax increment revenues amounted to $3.88 million which represented coverage of 1.61 times the $2.41 million in debt service. CERTIFICATES OF PARTICIPATION 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. 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. Comprehensive Annual Financial Report FY 2007-2008 82 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7 – LONG TERM DEBT (Continued) 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, 2008 for both of the 2000 and 2002 COPs was 10.00 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. Comprehensive Annual Financial Report FY 2007-2008 83 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, 2008, 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, $1,500,00 from the fifth loan, and $185,000 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. The pledge of future Airport Revenues ends upon repayment of the $14,824 in remaining debt service on the loans which is scheduled to occur in 2009. For fiscal year 2008, Airport Revenues including operating revenues and non-operating interest earnings amounted to $6.10 million and operating costs include operating expenses, but not interest, depreciation or amortization and amounted to $5.04 million. Net Revenues available for debt service amounted to $1.06 million which represented coverage of 66.25 times the $16 thousand in debt service. 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. The pledge of future Sewer Revenues ends upon repayment of the $5.014 million in remaining debt service on the loans which is scheduled to occur in 2014. For fiscal year 2008, Sewer Revenues including operating revenues and non-operating interest earnings amounted to $19.97 million and operating costs include operating expenses, but not interest, depreciation or amortization and amounted to $12.84 million. Net Revenues available for debt service amounted to $7.13 million which represented coverage of 8.59 times the $836 thousand in debt service. Comprehensive Annual Financial Report FY 2007-2008 84 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7 – LONG TERM DEBT (Continued) 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. D. Debt Service Requirements Debt service requirements are shown below for all long-term debt, including interest on variable rate COPs, based on a 10.00% rate. Governmental Activities Business-type Activities For the Year Ending June 30 Principal Interest Principal Interest 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 2029-2033 $3,895,000 4,295,000 5,270,000 6,202,339 4,450,000 24,955,000 17,020,000 17,920,000 15,575,000 $6,077,872 5,916,679 5,914,089 5,903,681 3,007,814 21,168,706 14,104,428 7,960,373 2,012,625 $1,601,152 1,631,494 1,686,245 1,166,528 1,207,360 3,088,754 2,060,000 1,570,000 $955,196 869,528 795,094 506,341 180,344 2,047,413 30,256,153 79,410 Total $99,582,339 $72,066,267$14,011,533 $35,689,479 TAX AND REVENUE ANTICIPATION NOTES On November 2, 2008, the City will issue $10,850,000 principal amount of 2008 Tax and Revenue Anticipation Notes. Proceeds from these notes will be used to pay 2008/09 current expenses, capital expenditures, and the discharge of other obligations or indebtedness. The principal of the Notes, together with the interest thereon, will be payable from taxes, revenue and other unrestricted moneys which are received by the City allocable to fiscal year 2008-09 which are not otherwise pledged to the repayment of other obligations of the City, or, if the City so elects, from any other legally available cash of the City. Comprehensive Annual Financial Report FY 2007-2008 85 NOTES TO BASIC FINANCIAL STATEMENTS 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 City. The outstanding balance of each of these issues as of June 30, 2008 is as follows: Assessment Districts 1993-3T 1993-4 Community Facilities District No. 1(Tri-Valley Technology Park) Special Tax Bonds Series 2000 Consolidated Reassessment and Refunding District 2002 Community Facilities District No. 2006-1 (Shea Properties) Special Tax Bonds Series 2006 $60,000 13,970,000 20,390,000 5,895,000 10,000,000 Total $50,315,000 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 ($13,970,000 as of June 30, 2008) 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, 2008 is $20,390,000. 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, 2008 is $5,895,000. Comprehensive Annual Financial Report FY 2007-2008 86 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 8- SPECIAL ASSESSMENT DISTRICT DEBT WITH NO CITY COMMITMENT (Continued) On September 1, 2006, 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, 2008 is $10,000,000. 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, notes receivable, land held for redevelopment, prepaids, deposits 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. . Comprehensive Annual Financial Report FY 2007-2008 87 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9 – NET ASSETS AND FUND BALANCES (Continued) 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 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, 2008: Amount Special Revenue Funds: Horizons City Street Sweeping Capital Projects Funds: Isabel Parkway Internal Service Funds: Retiree Health Proprietary Funds: Springtown $34,660 682 2,091,085 3,119,408 57,006 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, 2008, are summarized as follows: Comprehensive Annual Financial Report FY 2007-2008 88 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10 - PENSION PLAN (Continued) SafetyMiscellaneous Benefit vesting schedule5 years service5 years service Benefit paymentsmonthly for lifemonthly for life Retirement age5050 Monthly benefits, as a % of annual salary3%2.0% - 2.7% Required employee contribution rates9%8% Required employer contribution rates26.863%15.113% 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, 2008, 2007 and 2006 amounted to $7,229,828, $6,597,877, and $6,640,490 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. 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: Valuation Date Entry Age Accrued Liability Value of Assets Unfunded (Overfunded) Liability Funded Ratio Annual Covered Payroll Unfunded (Overfunded) as % of Payroll 2005 2006 2007 $108,503,111 118,438,151 129,987,818 $90,442,792 100,221,821 112,065,123 $18,060,319 18,216,330 17,922,695 83.4% 84.6% 86.2% $28,240,562 28,421,582 30,567,390 64.0% 64.1% 58.6% 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 8 years. Comprehensive Annual Financial Report FY 2007-2008 89 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10 - PENSION PLAN (Continued) The Safety Plan actuarial value funding programs over the past three years is set forth below for all members of the cost sharing pool at June 30th: Entry AgeUnfundedAnnualUnfunded ValuationAccruedValue of(Overfunded)FundedCovered(Overfunded) DateLiabilityAssetsLiabilityRatioPayrollas % of Payroll 2005$6,367,049,264$5,595,150,375$771,898,88987.9%$664,147,796116.2% 20067,278,049,8346,102,615,5671,175,434,26783.8%754,730,438155.7% 20077,986,055,1766,826,599,4591,159,455,71785.5%754,730,438153.6% Audited annual financial statements and ten year trend information are available from CALPERS at P.O. Box 942709, Sacramento, CA 94229-2709. B. Other Post Employment Benefits During fiscal year 2008, the City implemented the provisions of Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This Statement establishes uniform financial reporting standards for employers providing postemployment benefits other than pensions (OPEB). The provisions of this statement are applied prospectively and do affect prior years financial statements. Required disclosures are presented below. Comprehensive Annual Financial Report FY 2007-2008 90 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10 - PENSION PLAN (Continued) By Council resolution and through agreements with its labor units, the City provides certain health care benefits for retired employees (spouse and dependents are not included) under third-party insurance plans. A summary of eligibility and retiree contribution requirements are shown below by bargaining unit: • Eligibility • Retire directly from the City under CalPERS with 5 years Service, or • Industrial disability retirement for Police safety • Benefit • City contributes up to a percentage of the Kaiser Plan A 2-party active premium • (early retiree premium for Police Lieutenants hired before 5/30/06 and LPOA), subject to a cap that varies by bargaining group. • City reimburses Medicare A & B if required for medical coverage • Percentage based on bargaining group and CalPERS service: Executive Mgmt Mid Mgmt & Confidential MEAN LPOA Police Lieutenant PERS Service Percent PERS ServicePercent PERS Service Percent 10 15 20 25+ 75% 80% 90% 100% 10 15 20 25+ 70% 80% 90% 100% 15 20 25+ 75% 85% 100% • Cap • Orig DOH Before 1/10/05: No Cap • Orig DOH on or after 1/10/05: medical cap • DOH before 2/1/06: No Cap • DOH on or after 2/1/06: No benefit, RHSA instead • Employees promoted from other units after 2/1/06 are eligible for retiree medical benefit • DOR before 10/3/03: $200 benefit • DOH before 4/1/07 & DOR on or after 1/1/06: Active medical cap • DOH on or after 4/1/07: No benefit, RHSA instead • DOH Before 2/1/07: Active medical cap • DOH on or after 2/1/07: No benefit, RHSA instead • Tier 1 (PL/Cpt DOH before 9/1/04): No Cap • Tier 2 (DOH 9/1/04-5/29/06): Active medical cap • Tier 3 (DOH on or after 5/2/06): Active medical cap • Tier 4 Promoted EE’s stay with RHSA if RHSA was prior benefit As of June 30, 2008, approximately 140 participants were eligible to receive benefits. Comprehensive Annual Financial Report FY 2007-2008 91 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10 - PENSION PLAN (Continued) Funding Policy and Actuarial Assumptions The annual required contribution (ARC) was determined as part of a January 1, 2007 actuarial valuation using the entry age normal actuarial cost method. This is a projected benefit cost method, which takes into account those benefits that are expected to be earned in the future as well as those already accrued. The actuarial assumptions included (a) 5.75% investment rate of return, (b) 3.0% projected annual salary increase, and (c) 5% health inflation increases. The actuarial methods and assumptions used include techniques that smooth the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial calculations reflect a long-term perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to revision at least biannually as results are compared to past expectations and new estimates are made about the future. The City’s OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll using a 30 year amortization period. In accordance with the City’s budget, the annual required contribution (ARC) is to be funded through out the year as a percentage of payroll. Concurrent with implementing Statement No. 45, the City Council passed a resolution to participate the California Employers Retirees Benefit Trust (CERBT), an irrevocable trust established to fund OPEB. CERBT is administrated by CalPERS, and is managed by an appointed board not under the control of City Council. This Trust is not considered a component unit by the City and has been excluded from these financial statements. Separately issued financial statements for CERBT may be obtained from CALPERS at P.O. Box 942709, Sacramento, CA 94229-2709. Comprehensive Annual Financial Report FY 2007-2008 92 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10 - PENSION PLAN (Continued) Funding Progress and Funded Status Generally accepted accounting principles permits contributions to be treated as OPEB assets and deducted from the Actuarial Accrued Liability when such contributions are placed in an irrevocable trust or equivalent arrangement. During the fiscal year ended June 30, 2008, the City made contributions toward the ARC amounting to $1,894,157 to the Plan which represented 5% of the $33.5 million of covered payroll. As a result, the City has recorded the Net OPEB, representing the difference between the ARC, the amortization of the Net OPEB Asset and actual contributions, as presented below: Annual required contribution (ARC) and Annual OPEB cost $4,823,000 Contributions made: City portions of current year premiums paid Additional contributions to CERBT 705,557 1,188,600 Total contributions 1,894,157 Contributions less than the ARC 2,928,843 Net OPEB obligation at June 30, 2007 Net OPEB obligation at June 30, 2008 $2,928,843 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, 2008 amounted to $56,292, of which the City paid half. 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. Comprehensive Annual Financial Report FY 2007-2008 93 NOTES TO BASIC 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. 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. Comprehensive Annual Financial Report FY 2007-2008 94 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 12 - JOINT VENTURES (Continued) 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, 2008, the City contributed $13,488,310 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, 2008 the City contributed $119,282 for current year coverage and received a refund of $425,016. 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, 2008 the City contributed $265,506 for current year coverage. 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. Comprehensive Annual Financial Report FY 2007-2008 95 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 13 - HEALTH, GENERAL LIABILITY AND WORKERS COMPENSATION COVERAGE (Continued) 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, 2006 Increase in estimated claims liability Claims paid $1,210,105 538,342 (53,242) $787,711 286,222 (257,285) $1,997,816 824,564 (310,527) Balance of claims payable at June 30, 2007 Change in estimated claims liability Claims paid 1,695,205 43,236 (65,366) 816,648 295,404 (265,506) 2,511,853 338,640 (330,872) Balance of claims payable at June 30, 2008 $1,673,075$846,546$2,519,621 NOTE 14 - COMMITMENTS AND CONTINGENCIES The City has the following outstanding construction commitments at June 30, 2008: Water Reclamation Plant Project Zone 1 Water Tank Recycled Water Tank Isabel Interchange Downtown Sewer Improvement Hi-Speed Rail & BART to Livermore El Charro Specific Plan Infrastructure, CIP Other Miscellaneous Commitments $1,280,957 759,165 1,066,972 1,185,522 101,126 88,905 2,331,754 83,486 Total $6,897,887 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 36.69% in the fiscal 2007-08. Livermore’s share of the fiscal 2007-08 debt service was $116,438. Comprehensive Annual Financial Report FY 2007-2008 96 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 14 - COMMITMENTS AND CONTINGENCIES (Continued) 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. 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 an interest of 3% per annum and due in forty years. Comprehensive Annual Financial Report FY 2007-2008 97 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 14 - COMMITMENTS AND CONTINGENCIES (Continued) 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, 2008, the Agency had disbursed $381,146 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, 2008, 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 2008, 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. 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, 2008, the project is under construction. D. 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, 2008, construction was complete, but occupancy has not reached 90%. Comprehensive Annual Financial Report FY 2007-2008 98 NOTES TO BASIC FINANCIAL STATEMENTS NOTE 14 - COMMITMENTS AND CONTINGENCIES (Continued) E. 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, 2008, construction was complete, but occupancy has not reached 90%. F. 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, 2008, the 500 seat theater project is complete, and operations began in fiscal 07-08. G. 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 $520,000 is to be loaned to the Developer which is repayable upon the sale of each individual housing unit. The loan bears 3% simple interest. As of June 30, 2008, the project is complete, and no units have been sold. Comprehensive Annual Financial Report FY 2007-2008 99 Comprehensive Annual Financial Report FY 2007-2008 100 Comprehensive Annual Financial Report FY 2007-2008 Variance with Budget Positive BudgetActual(Negative) Revenues Property tax increment4,823,000$ 4,850,965$ 27,965$ Interest and rentals144,000463,529319,529 Contributions from outside sources7,8267,826 Charges for current services75,00075,000 Miscellaneous117,845117,845 Total Revenues4,967,0005,515,165548,165 Expenditures Current: Redevelopment2,081,0901,896,043185,047 Capital Outlay Capital projects5,389,0104,509,967879,043 Debt service Principal175,000175,000 Interest and fiscal charges40,00095,507(55,507) Total Expenditures7,685,1006,501,5171,183,583 OTHER FINANCING SOURCES (USES) Transfers (out)(3,144,000)(3,529,340)(385,340) Total Other Financing Sources (Uses)(3,144,000)(3,529,340)(385,340) Net change in budgetary fund balance(5,862,100)$ (4,515,692)1,346,408$ Fund balance, July 19,139,206 Fund balance, June 304,623,514$ REDEVELOPMENT AGENCY CAPITAL PROJECTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - FOR THE YEAR ENDED JUNE 30, 2008 101 Comprehensive Annual Financial Report FY 2007-2008 Variance with Budget Positive BudgetActual(Negative) Revenues Contributions from outside sources19,982,000$ 47,965$ (19,934,035)$ Charges for current services4,794,0003,182,733(1,611,267) Use of money and property376,000397,13621,136 Miscellaneous12,50012,500 Total Revenues25,152,0003,640,334(21,511,666) Expenditures Capital Outlay Capital projects4,252,5502,531,6901,720,860 Total Expenditures4,252,5502,531,6901,720,860 OTHER FINANCING SOURCES (USES) Transfers in601,000125,405(475,595) Transfers (out)(21,531,000)(1,011,304)20,519,696 Total Other Financing Sources (Uses)(20,930,000)(885,899)20,044,101 Net change in budgetary fund balance(30,550)$ 222,745253,295$ Budgetary fund balance, July 18,606,794 Budgetary fund balance, June 308,829,539$ STREET IMPROVEMENTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - FOR THE YEAR ENDED JUNE 30, 2008 102 Comprehensive Annual Financial Report FY 2007-2008 Variance with Budget Positive BudgetActual(Negative) Revenues Taxes and special assessments953,000$ 976,027$ 23,027$ Contributions from outside sources5,658,0004,652,097(1,005,903) Charges for current services170,000136,760(33,240) Use of money and property46,000457,434411,434 Total Revenues6,827,0006,222,318(604,682) Expenditures Capital Outlay Capital projects4,641,2203,885,329755,891 Total Expenditures4,641,2203,885,329755,891 OTHER FINANCING SOURCES (USES) Transfers in11,00041,68730,687 Transfers (out)(3,582,500)(3,311,967)270,533 Total Other Financing Sources (Uses)(3,571,500)(3,270,280)301,220 Net change in budgetary fund balance(1,385,720)$ (933,291)452,429$ Budgetary fund balance, July 15,292,367 Budgetary fund balance, June 304,359,076$ STREET PROJECTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - FOR THE YEAR ENDED JUNE 30, 2008 103 Comprehensive Annual Financial Report FY 2007-2008 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. 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. 104 Comprehensive Annual Financial Report FY 2007-2008 Non Major Governmental Funds (Continued) SPECIAL REVENUE (Continued) MAINTENANCE DISTRICT Established to account for the receipt and disbursement of Lighting and Landscape District fees collected from developers and homeowners. AT&T BROADBAND GRANT Established to administer funds from the local cable franchisee for community cable programming. CITY STREET SWEEPING Established to administer funds received through solid waste collection fees and Alameda County Clean Water Program for city street sweeping services. 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. • 2007 COPs were issued to refinance and defease prior COPs and provide financing for new community capital projects. • 2002 COPs were issued to refinance prior COPs and provide financing for new community capital projects 105 Non Major Governmental Funds (Continued) 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. I SABEL PARKWAY Established to account for the construction of roadway from Concannon Blvd. to E. Airway Blvd. LIVERMORE CAPITAL PROJECTS FINANCING AUTHORITY – 2002 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. 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. Comprehensive Annual Financial Report FY 2007-2008 106 Comprehensive Annual Financial Report FY 2007-2008 107 Comprehensive Annual Financial Report FY 2007-2008 RedevelopmentLow Housing & Low and ModerateIncomeCommunity Income HousingHousingAssistanceHorizons ASSETS Cash and investments in City Treasury2,183,440$ 4,890,824$ 1,713,341$ Cash and investments with Trustees Accounts receivables (net of applicable allowable for uncollectibles)20,0004,260118,070$ Notes receivable1,567,4431,024,3663,460,705 Land held for redevelopment9,139,9342,274,500 Due from other funds11,787 Advances to other funds582,3252,988,083 Total Assets3,770,883$ 15,649,236$ 10,440,889$ 118,070$ LIABILITIES Accounts payable and other accruals42,490$ 3,330$ 117,216$ 2,761$ Accrued payroll 1,0671611,952 Due to other funds138,017 Deferred rents and revenue1,567,4431,024,3663,460,704 Total Liabilities1,611,0001,027,6963,577,936152,730 FUND EQUITY Reserved for: Capital outlay Low income housing2,159,883 Land held for redevelopment9,139,9342,274,500 Advances to other funds582,3252,988,083 Debt service Unreserved, undesignated4,899,2811,600,370(34,660) TOTAL FUND BALANCES (DEFICIT)2,159,88314,621,5406,862,953(34,660) Total Liabilities and Fund Balances3,770,883$ 15,649,236$ 10,440,889$ 118,070$ SPECIAL REVENUE FUNDS NON-MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS JUNE 30, 2008 108 Comprehensive Annual Financial Report FY 2007-2008 SPECIAL REVENUE FUNDS Other SolidAT&T Federal andWasteMaintenanceBroadbandCity StreetPark State GrantsManagementDistrictGrantSweepingFee 3,781,639$ 414,104$ 2,812,198$ 114,765$ 1,632,798$ 621,479120,31971,62932,57122,887$ 1,864,821 6,267,939$ 534,423$ 2,883,827$ 147,336$ 22,887$ 1,632,798$ 90,690$ 16,241$ 72,372$ 212$ 230,050$ 2,1213,7503,525 878,14619,832 2,048,153 3,019,11019,99172,37223,569230,050 3,248,829514,4322,811,455$147,336(682)1,402,748 3,248,829514,4322,811,455147,336(682)1,402,748 6,267,939$ 534,423$ 2,883,827$ 147,336$ 22,887$ 1,632,798$ (Continued) 109 Comprehensive Annual Financial Report FY 2007-2008 DEBT SERVICE FUNDS Capital Projects Financing Authority Certificates of Participation Redevelopment Agency200019972007 ASSETS Cash and investments in City Treasury88,941$ 974$ Cash and investments with Trustees2,497,214$ 277,1521,000 Accounts receivables (net of applicable allowable for uncollectibles) Notes receivable Land held for redevelopment Due from other funds Advances to other funds Total Assets2,497,214$ 366,093$ 1,974$ LIABILITIES Accounts payable and other accruals5,997$ Accrued payroll Due to other funds Deferred rents and revenue Total Liabilities5,997 FUND EQUITY Reserved for: Capital outlay Low income housing Notes receivable Advance to other funds Debt service2,497,214$ 360,0961,974$ Unreserved, undesignated TOTAL FUND BALANCES (DEFICIT)2,497,214360,0961,974 Total Liabilities and Fund Balances2,497,214$ 366,093$ 1,974$ COMBINING BALANCE SHEETS NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2008 110 Comprehensive Annual Financial Report FY 2007-2008 DEBT SERVICE FUND Assessment 2002District Variable Rate Certificates of StormAirportCollege Isabel ParticipationDrainConstructionAvenueParkway 96,056$ 1,269,961$ 80,643$ 536,975$ 91,635$ 264,266 96,056$ 1,269,961$ 91,635$ 80,643$ 801,241$ 25,747$ 34,295$ 6$ 2,892,326$ 65,080 25,74734,29565,0862,892,326 70,309 1,235,66626,549$80,643(2,091,085) 70,3091,235,66626,54980,643(2,091,085) 96,056$ 1,269,961$ 91,635$ 80,643$ 801,241$ (Continued) CAPITAL PROJECTS FUNDS 111 Comprehensive Annual Financial Report FY 2007-2008 NON-MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS JUNE 30, 2008 Livermore Capital Projects ParkingTVTCFinancing Authority Lots20% Fee2002 COPs ASSETS Cash and investments in City Treasury167,603$ 646,524$ Cash and investments with Trustees140$ Accounts receivables (net of applicable allowable for uncollectibles) Notes receivable Land held for redevelopment Due from other funds Advances to other funds Total Assets167,603$ 646,524$ 140$ LIABILITIES Accounts payable and other accruals Accrued payroll Due to other funds Deferred rents and revenue Total Liabilities FUND EQUITY Reserved for: Capital outlay140$ Low income housing Notes receivable Advance to other funds Debt service Unreserved, undesignated$167,603$646,524 TOTAL FUND BALANCES (DEFICIT)167,603646,524140 Total Liabilities and Fund Balances167,603$ 646,524$ 140$ CAPITAL PROJECTS FUNDS 112 Comprehensive Annual Financial Report FY 2007-2008 Livermore CapitalTotal ProjectsNonmajor Financing AuthorityOther Street andGovernmental 2007 COPsTrail ConstructionFunds 2,161,404$ 22,592,190$ $3,371,4303,301,3329,448,268 19,230210,7821,597,128 7,917,335 11,414,434 11,787 3,570,408 3,390,660$ 5,673,518$ 56,551,550$ 19,230$ 335,919$ 3,888,882$ 22,431 19,230468,1991,523,424 8,165,746 38,460804,11813,600,483 3,352,2003,352,340 2,159,883 11,414,434 3,570,408 2,929,593 4,869,40019,524,409 3,352,2004,869,40042,951,067 3,390,660$ 5,673,518$ 56,551,550$ 113 Comprehensive Annual Financial Report FY 2007-2008 RedevelopmentLow Housing & Low and ModerateIncomeCommunity Income HousingHousingAssistanceHorizons REVENUES Interest and rentals67,760$ Intergovernmental325,269$ 329,991$ Contributions from outside sources435,557$ Charges for services1,073,193 Use of money and property 278,25087,883 Miscellaneous 4,573588,083114,690 Total Revenues72,3331,787,0001,001,235444,681 EXPENDITURES Current: Police838,083 Community development777,070 Library Redevelopment396,057 Capital Outlay Capital projects1,015,548 Debt service Principal retirement Interest and fiscal charges Total Expenditures396,0571,015,548777,070838,083 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(323,724)771,452224,165(393,402) OTHER FINANCING SOURCES (USES) Transfers in970,19320,7572,295,284393,000 Transfers (out)(500,000)(1,981,493)(150,000) Total Other Financing Sources (Uses)470,193(1,960,736)2,145,284393,000 Net change in fund balances146,469(1,189,284)2,369,449(402) Fund balances (deficits) at the beginning of year 2,013,41415,810,8244,493,504(34,258) FUND BALANCES (DEFICITS) AT END OF YEAR2,159,883$ 14,621,540$ 6,862,953$ (34,660)$ NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE SPECIAL REVENUE FUNDS FOR THE YEAR ENDED JUNE 30, 2008 114 Comprehensive Annual Financial Report FY 2007-2008 Other SolidAT&T Federal andWasteMaintenanceBroadbandCity StreetPark State GrantsManagementDistrictGrantSweepingFee 3,788,585$ 680,474$ 2,602,147$ 130,874$ 1,180,991$ 262,360 274,643$ 18,60310,180102,36034,890 370,097 4,177,285690,6542,704,507130,874274,6431,478,241 2,008,8421,133,711357,325 35,917 1,370,927795,558124,338949,951 3,415,686795,5581,133,711124,338357,325949,951 761,599(104,904)1,570,7966,536(82,682)528,290 51,49382,000 (1,567,535)(1,157,268) (1,516,042)(1,157,268)82,000 (754,443)(104,904)413,5286,536(682)528,290 4,003,272619,3362,397,927140,800874,458 3,248,829$ 514,432$ 2,811,455$ 147,336$ (682)$ 1,402,748$ (Continued) 115 Comprehensive Annual Financial Report FY 2007-2008 DEBT SERVICE FUNDS Capital Projects Financing Authority Certificates of Participation Redevelopment Agency200019972007 REVENUES Interest and rentals Intergovernmental Contributions from outside sources356,404$ Charges for services Use of money and property 136,940$ 626$ 1,645 Miscellaneous Total Revenues136,940626358,049 EXPENDITURES Current: Police Community development Library Redevelopment Capital Outlay Capital projects Debt service Principal retirement705,000675,0001,290,000 Interest and fiscal charges1,707,3811,054,17123,521537,182 Total Expenditures2,412,3811,729,17123,5211,827,182 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(2,275,441)(1,728,545)(23,521)(1,469,133) OTHER FINANCING SOURCES (USES) Transfers in2,274,3771,729,1711,386,000 Transfers (out)(31,168)(11,103) Total Other Financing Sources (Uses)2,274,3771,729,171(31,168)1,374,897 Net change in fund balances(1,064)626(54,689)(94,236) Fund balances (deficits) at the beginning of year 2,498,278359,47054,68996,210 FUND BALANCES (DEFICITS) AT END OF YEAR2,497,214$ 360,096$ 1,974$ NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2008 116 Comprehensive Annual Financial Report FY 2007-2008 DEBT SERVICE FUNDCAPITAL PROJECTS FUNDS Assessment 2002District Variable Rate Certificates of StormAirportCollege Isabel ParticipationDrainConstructionAvenueParkway 91,635$ 466$ 55,610$ 498,6616,014$ 466554,27191,6356,014 418,734111,7646,229,532$ 1,085,000 706,777 1,791,777418,734111,7646,229,532 (1,791,311)135,537(20,129)6,014(6,229,532) 1,777,48748,4504,290,168 (466)(332,446) 1,777,021(332,446)48,4504,290,168 (14,290)(196,909)28,3216,014(1,939,364) 84,5991,432,575(1,772)74,629(151,721) 70,309$ 1,235,666$ 26,549$ 80,643$ (2,091,085)$ (Continued) 117 Comprehensive Annual Financial Report FY 2007-2008 CAPITAL PROJECTS Livermore Capital Projects Financing AuthorityParkingTVTC 2002 COPsLots20% Fee REVENUES Interest and rentals Intergovernmental 1,209,593$ Contributions from outside sources 238,463$ Charges for services Use of money and property 1,044$ 24,330 Miscellaneous Total Revenues1,0441,209,593262,793 EXPENDITURES Current: Police Community development Library Redevelopment Capital Outlay Capital projects1,541,39263,209 Debt service Principal retirement Interest and fiscal charges Total Expenditures1,541,39263,209 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES1,044(331,799)199,584 OTHER FINANCING SOURCES (USES) Transfers in466150,000 Transfers (out)(1,370)(91,687) Total Other Financing Sources (Uses)(904)150,000(91,687) Net change in fund balances140(181,799)107,897 Fund balances (deficits) at the beginning of year 349,402538,627 FUND BALANCES (DEFICITS) AT END OF YEAR140$ 167,603$ 646,524$ NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2008 118 Comprehensive Annual Financial Report FY 2007-2008 CAPITAL PROJECTS FUNDS LivermoreTotal Capital ProjectsNonmajor Financing AuthorityOther Street andGovernmental 2007 COPsTrail ConstructionFunds 67,760$ 10,339,559 1,106,182$ 2,398,966 1,347,836 137,952$ 226,7571,117,536 1,582,118 137,9521,332,93916,853,775 838,083 4,276,948 35,917 396,057 1,125,6306,556,33920,302,922 3,755,000 4,029,032 1,125,6306,556,33933,633,959 (987,678)(5,223,400)(16,780,184) 11,102604,11516,084,063 (190,000)(6,014,536) 11,102414,11510,069,527 (976,576)(4,809,285)(6,710,657) 4,328,7769,678,68549,661,724 3,352,200$ 4,869,400$ 42,951,067$ 119 Comprehensive Annual Financial Report FY 2007-2008 REDEVELOPMENT LOW & MODERATE INCOME HOUSING LOW INCOME HOUSING VarianceVariance PositivePositive BudgetActual(Negative)BudgetActual(Negative) REVENUES Interest and rentals70,000$ 67,760$ (2,240)$ Intergovernmental Contributions from outside sources400,000$ 435,557$ 35,557$ Charges for services1,100,0001,073,193(26,807) Use of money and property323,000278,250(44,750) Miscellaneous 4,5734,573 Total Revenues70,00072,3332,3331,823,0001,787,000(36,000) EXPENDITURES Current: Police Community Development Library Redevelopment1,063,180396,057667,123 Capital Outlay3,588,0001,015,5482,572,452 Capital projects Debt service Principal Interest and fiscal charges Total Expenditures1,063,180396,057667,1233,588,0001,015,5482,572,452 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(993,180)(323,724)669,456(1,765,000)771,4522,536,452 OTHER FINANCING SOURCES (USES) Transfers in905,000970,19365,19320,75720,757 Transfers (out)(500,000)(500,000)(1,389,000)(1,981,493)(592,493) Total Other Financing Sources (Uses)905,000470,193(434,807)(1,389,000)(1,960,736)(571,736) Net change in fund balance(88,180)$ 146,469234,649$ (3,154,000)$ (1,189,284)1,964,716$ Fund balances at beginning of year2,013,41415,810,824 Fund balances at end of year2,159,883$ 14,621,540$ BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2008 120 Comprehensive Annual Financial Report FY 2007-2008 HOUSING & COMMUNITY ASSISTANCEHORIZONS VarianceVariance PositivePositive BudgesActual(Negative)BudgetActual(Negative) 248,000$ 325,269$ 77,269$ 325,269$ 329,991$ 4,722$ 112,00087,883(24,117) 588,083588,08396,000114,69018,690 360,0001,001,235641,235421,269444,68123,412 803,100838,083(34,983) 1,911,500777,0701,134,430 1,911,500777,0701,134,430803,100838,083(34,983) (1,551,500)224,1651,775,665(381,831)(393,402)(11,571) 1,374,0002,295,284921,284370,000393,00023,000 (352,000)(150,000)202,000 1,022,0002,145,2841,123,284370,000393,00023,000 (529,500)$ 2,369,4492,898,949$ (11,831)$ (402)11,429$ 4,493,504(34,258) 6,862,953$ (34,660)$ (Continued) 121 Comprehensive Annual Financial Report FY 2007-2008 OTHER FEDERAL AND STATE GRANTSSOLID WASTE MANAGEMENT VarianceVariance PositivePositive BudgetActual(Negative)BudgetActual(Negative) REVENUES Interest and rentals Intergovernmental4,224,000$ 3,788,585$ (435,415)$ 572,000$ 680,474$ 108,474$ Contributions from outside sources Charges for services Use of money and property18,60318,60312,00010,180(1,820) Miscellaneous 514,000370,097(143,903) Total Revenues4,738,0004,177,285(560,715)584,000690,654106,654 EXPENDITURES Current: Police Community Development2,877,0902,008,842868,248875,760795,55880,202 Library202,00035,917166,083 Redevelopment Capital Outlay Capital projects1,435,8201,370,92764,893 Debt service Principal Interest and fiscal charges Total Expenditures4,514,9103,415,6861,099,224875,760795,55880,202 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES223,090761,599538,509(291,760)(104,904)186,856 OTHER FINANCING SOURCES (USES) Transfers in1,00051,49350,493 Transfers (out)(1,029,000)(1,567,535)(538,535) Total Other Financing Sources (Uses)(1,028,000)(1,516,042)(488,042) Net change in fund balance(804,910)$ (754,443)50,467$ (291,760)$ (104,904)186,856$ Fund balances at beginning of year4,003,272619,336 Fund balances at end of year3,248,829$ 514,432$ BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2008 122 Comprehensive Annual Financial Report FY 2007-2008 MAINTENANCE DISTRICTAT&T BROADBAND GRANTCITY STREET SWEEPINGPARK FEE VarianceVarianceVarianceVariance PositivePositivePositivePositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) 2,415,000$ 2,602,147$ 187,147$ 131,000$ 130,874$ (126)$ 1,268,000$ 1,180,991$ (87,009)$ 262,360262,360 275,000$ 274,643$ (357)$ 86,000102,36016,36012,00034,89022,890 2,501,0002,704,507203,507131,000130,874(126)275,000274,643(357)1,280,0001,478,241198,241 1,339,2201,133,711205,509342,410357,325(14,915) 135,000124,33810,6621,310,000949,951360,049 1,339,2201,133,711205,509135,000124,33810,662342,410357,325(14,915)1,310,000949,951360,049 1,161,7801,570,796409,016(4,000)6,53610,536(67,410)(82,682)(15,272)(30,000)528,290558,290 82,00082,000 (1,430,000)(1,157,268)272,732 (1,430,000)(1,157,268)272,73282,00082,000 (268,220)$ 413,528681,748$ (4,000)$ 6,53610,536$ 14,590$ (682)(15,272)$ (30,000)$ 528,290558,290$ 2,397,927140,800874,458 2,811,455$ 147,336$ (682)$ 1,402,748$ (Continued) 123 Comprehensive Annual Financial Report FY 2007-2008 FINANCING AUTHORITY COPS REDEVELOPMENT AGENCY 2000 VarianceVariance PositiveFavorable BudgetActual(Negative)BudgetActual(Negative) REVENUES Interest and rentals Intergovernmental Contributions from outside sources Charges for services Use of money and property204,000$ 136,940$ (67,060)$ 1,000$ 626$ (374)$ Miscellaneous Total Revenues204,000136,940(67,060)1,000626(374) EXPENDITURES Current: Police Community Development Library Redevelopment Capital Outlay Capital projects Debt service Principal705,000705,000675,000675,000 Interest and fiscal charges1,707,3901,707,38191,054,6601,054,171489 Total Expenditures2,412,3902,412,38191,729,6601,729,171489 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(2,208,390)(2,275,441)(67,051)(1,728,660)(1,728,545)115 OTHER FINANCING SOURCES (USES) Transfers in2,142,0002,274,377132,3771,782,0001,729,171(52,829) Transfers (out) Total Other Financing Sources (Uses)2,142,0002,274,377132,3771,782,0001,729,171(52,829) EXPENDITURES AND OTHER USES(66,390)$ (1,064)65,326$ 53,340$ 626(52,714)$ Fund balances at beginning of the year2,498,278359,470 Fund balances at end of year2,497,214$ 360,096$ FOR THE FISCAL YEAR ENDED JUNE 30, 2008 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL 124 Comprehensive Annual Financial Report FY 2007-2008 FINANCING AUTHORITY COPS 19972002 VARIABLE RATE COPSSTORM DRAIN VarianceVarianceVariance PositiveFavorablePositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) 1,000$ 466$ (534)$ 45,000$ 55,610$ 10,610$ 555,000498,661(56,339) 1,000466(534)600,000554,271(45,729) 433,500418,73414,766 1,935,0001,085,000850,000 23,521$ (23,521)$ 1,258,000706,777551,223 23,521(23,521)3,193,0001,791,7771,401,223433,500418,73414,766 (23,521)(23,521)(3,192,000)(1,791,311)1,400,689166,500135,537(30,963) 3,125,0001,777,487(1,347,513) (16,000)$ (31,168)(15,168)(466)(466)(412,000)(332,446)79,554 (16,000)(31,168)(15,168)3,125,0001,777,021(1,347,979)(412,000)(332,446)79,554 (16,000)$ (54,689)(38,689)$ (67,000)$ (14,290)52,710$ (245,500)$ (196,909)48,591$ 54,68984,5991,432,575 70,309$ 1,235,666$ (Continued) 125 Comprehensive Annual Financial Report FY 2007-2008 COLLEGE AVENUE AIRPORT CONSTRUCTIONASSESSMENT DISTRICT VarianceVariance PositivePositive BudgetActual(Negative)BudgetActual(Negative) REVENUES Interest and rentals Intergovernmental100,000$ 91,635$ (8,365)$ Contributions from outside sources Charges for services Use of money and property Miscellaneous 6,014$ 6,014$ Total Revenues100,00091,635(8,365)6,0146,014 EXPENDITURES Current: Police Community Development Library Redevelopment Capital Outlay Capital projects113,140111,7641,376 Debt service Principal Interest and fiscal charges Total Expenditures113,140111,7641,376 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(13,140)(20,129)(6,989)6,0146,014 OTHER FINANCING SOURCES (USES) Transfers in15,00048,45033,450 Transfers (out) Total Other Financing Sources (Uses)15,00048,45033,450 EXPENDITURES AND OTHER USES1,860$ 28,32126,461$ 6,0146,014$ Fund balances at beginning of year(1,772)74,629 Fund balances at end of year26,549$ 80,643$ BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2008 126 Comprehensive Annual Financial Report FY 2007-2008 FINANCING AUTHORITY ISABEL PARKWAY2002 COP CAPITAL PROJECTSPARKING LOT VarianceVarianceVariance PositivePositivePositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) 1,374,000$ 1,209,593$ (164,407)$ 1,044$ 1,044$ 1,0441,0441,374,0001,209,593(164,407) $6,229,532($6,229,532)1,723,2001,541,392181,808 6,229,532(6,229,532)1,723,2001,541,392181,808 (6,229,532)(6,229,532)1,0441,044(349,200)(331,799)17,401 23,400,000$ 4,290,168(19,109,832)466466155,000150,000(5,000) (1,370)(1,370) 23,400,0004,290,168(19,109,832)(904)(904)155,000150,000(5,000) 23,400,000$ (1,939,364)(25,339,364)$ 140140$ (194,200)$ (181,799)12,401$ (151,721)349,402 (2,091,085)$ 140$ 167,603$ (Continued) 127 Comprehensive Annual Financial Report FY 2007-2008 COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2008 OTHER STREET AND TVTC 20% FEETRAIL CONSTRUCTION VarianceVariance FavorablePositive BudgetActual(Unfavorable)BudgetActual(Negative) REVENUES Interest and rentals Intergovernmental Contributions from outside sources203,000$ 238,463$ 35,463$ 1,770,000$ 1,106,182$ (663,818)$ Charges for services Use of money and property36,00024,330(11,670)240,000226,757(13,243) Miscellaneous Total Revenues239,000262,79323,7932,010,0001,332,939(677,061) EXPENDITURES Current: Police Community Development Library Redevelopment Capital Outlay Capital projects52,47063,209(10,739)9,651,5506,556,3393,095,211 Debt service Principal Interest and fiscal charges Total Expenditures52,47063,209(10,739)9,651,5506,556,3393,095,211 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES186,530199,58413,054(7,641,550)(5,223,400)2,418,150 OTHER FINANCING SOURCES (USES) Transfers in2,004,000604,115(1,399,885) Transfers (out)(61,000)(91,687)(30,687)(849,000)(190,000)659,000 Total Other Financing Sources (Uses)(61,000)(91,687)(30,687)1,155,000414,115(740,885) EXPENDITURES AND OTHER USES125,530$ 107,897(17,633)$ (6,486,550)$ (4,809,285)1,677,265$ Fund balances at beginning of year538,6279,678,685 Fund balances at end of year646,524$ 4,869,400$ 128 Comprehensive Annual Financial Report FY 2007-2008 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 PROJECTS 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. EMPLOYEE PAYROLL Established to account for the city’s employees’ benefits. 129 Comprehensive Annual Financial Report FY 2007-2008 Liability Fleet and InsuranceWorkersEquipmentInformation ReserveCompensationServicesTechnology ASSETS Current Assets: Cash and investments in City Treasury 5,182,555$ 1,813,905$ 3,996,316$ 4,038,408$ for uncollectibles)51,00059,040 Prepaids, deposits and supplies 266,545 Total current assets5,182,5551,864,9054,321,9014,038,408 Noncurrent Assets: Land and construction135,743 4,558,210 Total noncurrent assets4,693,953 Total Assets5,182,5551,864,9059,015,8544,038,408 LIABILITIES Current Liabilities Accounts payable and other accruals 32,15645,473112,15551,893 Accrued payroll 2,8512,85115,1487,957 Accrued compensated absences 10,003 Due to other funds Total current liabilities 45,01048,324127,30359,850 Noncurrent Liabilities Claims payable 1,673,075846,546 Net OPEB obligation Total noncurrent liabilities 1,673,075846,546 Total liabilities1,718,085894,870127,30359,850 NET ASSETS Invested in Capital Assets 4,558,210 Unrestricted3,464,470970,0354,330,3413,978,558 Total Net Assets (Deficit) 3,464,470$ 970,035$ 8,888,551$ 3,978,558$ Capital assets (net of accumulated depreciation) INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET ASSETS JUNE 30, 2008 Accounts receivable (net of applicable allowance 130 Comprehensive Annual Financial Report FY 2007-2008 Facilities RehabilitationCommunityEmployee ProjectsReprographicsDevelopmentPayrollTotal 1,406,746$ 217,585$ 2,793,302$ 19,448,817$ 234,01947,686$ 1,992393,737 266,545 1,640,765217,58547,6862,795,29420,109,099 135,743 4,558,210 4,693,953 1,640,765217,58547,6862,795,29424,803,052 116,6329,2712,319,2192,686,799 7,9181,46338,188 447,632457,635 47,68647,686 124,55010,73447,6862,766,8513,230,308 2,519,621 2,928,8432,928,843 2,928,8435,448,464 124,55010,73447,6865,695,6948,678,772 4,558,210 1,516,215206,851(2,900,400)11,566,070 1,516,215$ 206,851$ (2,900,400)$ 16,124,280$ 131 Comprehensive Annual Financial Report FY 2007-2008 Liability Fleet and InsuranceWorkersEquipmentInformation ReserveCompensationServicesTechnology OPERATING REVENUES Charges for services 1,372,392$ 1,030,569$ 2,740,771$ 1,922,640$ Total Operating Revenues 1,372,3921,030,5692,740,7711,922,640 OPERATING EXPENSES Salaries and benefits 250,088163,666946,445520,013 Contracted services 217,539123,30513,667397,491 Insurance premiums 431,526275,95649,86032,460 Materials, supplies and others 33,64565,763711,283358,048 Depreciation 920,264 Repairs & maintenance 32,914169,506 Claims expense 43,236778,476 Total Operating Expenses 976,0341,407,1662,674,4331,477,518 Operating Income (Loss) 396,358(376,597)66,338445,122 NONOPERATING REVENUE (EXPENSES) Loss on disposal(107,247) TRANSFERS OUT(362,000) Change in Net Assets 396,358(738,597)(40,909)445,122 Net assets-beginning3,068,1121,708,6328,929,4603,533,436 Net assets-ending (Deficit) 3,464,470$ 970,035$ 8,888,551$ 3,978,558$ INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS JUNE 30, 2008 132 Comprehensive Annual Financial Report FY 2007-2008 Facilities RehabilitationCommunity Employee ProjectsReprographicsDevelopmentBenefitsTotal 1,870,344$ 336,142$ 84,472$ 4,851,443$ 14,208,773$ 1,870,344336,14284,4724,851,44314,208,773 452,03696,2917,751,84310,180,382 210,06976,6771,038,748 22,6405,120817,562 1,283,57273,051222,525,384 920,264 156,587359,007 821,712 2,124,904251,139227,751,84316,663,059 (254,560)85,00384,450(2,900,400)(2,454,286) (107,247) (82,307)(444,307) (254,560)85,0032,143(2,900,400)(3,005,840) 1,770,775121,848(2,143)19,130,120 1,516,215$ 206,851$ (2,900,400)$ 16,124,280$ 133 Comprehensive Annual Financial Report FY 2007-2008 Liability Fleet and InsuranceWorkersEquipmentInformation ReserveCompensationServicesTechnology CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 1,372,459$ 979,569$ 2,730,689$ 1,922,640$ Payments to suppliers(691,156)(382,478)(784,110)(934,853) Payments to or on behalf of employees (248,506)(162,442)(943,860)(518,403) Claims paid(65,366)(748,578) Net cash provided (used) by operating activities 367,431(313,929)1,002,719469,384 CASH FLOWS FROM NON CAPITAL FINANCING ACTIVITIES Receipts from other funds Transfer (out)(362,000) Cash Flow from Non Capital Financing Activities (362,000) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital asset additions, net (1,055,447) Cash Flows from Capital and Related Financing Activities (1,055,447) Net Cash Flows367,431(675,929)(52,728)469,384 Cash and investments at beginning of period 4,815,1242,489,8344,049,0443,569,024 Cash and Investment at end of period 5,182,555$ 1,813,905$ 3,996,316$ 4,038,408$ Reconciliation of operating income to net cash provided by operating activities Operating income396,358$ (376,597)$ 66,338$ 445,122$ Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation920,264 Change in assets and liabilities Accounts receivable67(51,000)(10,082) Prepaids, deposits and supplies 51,000(19,530) Net pension obligation Accounts payable(8,446)31,54643,14422,652 Accrued liabilities(8,421)1,2242,5851,610 Accrued compensated absences10,003 Claims payable (22,130)29,898 Net cash provided (used) by operating activities 367,431$ (313,929)$ 1,002,719$ 469,384$ INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2008 134 Comprehensive Annual Financial Report FY 2007-2008 Facilities RehabilitationCommunityEmployee ProjectsReprographicsDevelopmentPayrollTotal 1,844,093$ 336,142$ 62,991$ 4,851,443$ 14,100,026$ (1,748,023)(152,508)(22)(4,693,150) (450,132)(96,063)(2,058,141)(4,477,547) (813,944) (354,062)87,57162,9692,793,3024,115,385 19,33819,338 (82,307)(444,307) (62,969)(424,969) (1,055,447) (1,055,447) (354,062)87,5712,793,3022,634,969 1,760,808130,01416,813,848 1,406,746$ 217,585$ 2,793,302$ 19,448,817$ (254,560)$ 85,003$ 84,450$ (2,900,400)$ (2,454,286)$ 920,264 (26,251)(21,481)(1,992)(110,739) 31,470 2,928,8432,928,843 (75,155)2,3402,319,2192,335,300 1,904228(870) 447,632457,635 7,768 (354,062)$ 87,571$ 62,969$ 2,793,302$ 4,115,385$ 135 Comprehensive Annual Financial Report FY 2007-2008 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. 136 Comprehensive Annual Financial Report FY 2007-2008 BalanceBalance June 30, 2007AdditionsDeductionsJune 30, 2008 Assessment Districts Cash and investments in City Treasury4,803,189$ 8,556,849$ 8,248,773$ 5,111,265$ Cash and investments with Trustees5,153,3619,1895,144,172 Total Assets9,956,550$ 8,556,849$ 8,257,962$ 10,255,437$ Due to special assessment districts9,956,550$ 8,556,849$ 8,257,962$ 10,255,437$ Total Liabilities9,956,550$ 8,556,849$ 8,257,962$ 10,255,437$ AGENCY FUNDS STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2008 137 Comprehensive Annual Financial Report FY 2007-2008 138 Comprehensive Annual Financial Report FY 2007-2008 STATISTICAL SECTION This part of the City of Livermore’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the government’s financial performance and well being have changed over time. 140-146 Revenue Capacity These schedules contain information to help the reader assess the government’s most significant local revenue source, the property tax. 147-156 Debt Capacity These schedules present information to help the reader assess the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future. 157-160 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place. 161-163 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs. 164-168 Continuing Disclosures 1998 Livermore Capital Projects Financing Authority Authority Refunding Revenue Bonds Special Tax Bonds Community Facilities District No. 99-1 (Tri- Valley Technology Park), Series 2000 2001 Tax Allocation Bonds, Series A Special Tax Bonds Community Facilities District No. 2006-1 (Shea Properties), Series 2006 169-172 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 139 Comprehensive Annual Financial Report FY 2007-2008 2002200320042005200620072008 Governmental activitiesInvested in capital assets, net of related debt$25,588,364$39,654,874$72,943,727$165,218,739$187,297,724$197,075,931$228,275,97 5Restricted72,647,51158,710,72041,804,17537,940,46833,104,09648,076,35328,722,412Unrestricted45,323,36964,399,75569,248,96681,050,46884,494,48985,650,77889,816,560 Total governmental activities net assets$143,559,244$162,765,349$183,996,868$284,209,675$304,896,309$330,803,062$346,814,947Business-type activitiesInvested in capital assets, net of related debt$61,362,263$70,315,521$73,044,827$141,496,317$145,152,094$146,681,768$156,436,67 1Unrestricted46,462,31054,527,07868,065,41173,558,95176,761,65975,448,83672,730,483 Total business-type activities net assets$107,824,573$124,842,599$141,110,238$215,055,268$221,913,753$222,130,604$229,167,154Primary governmentInvested in capital assets, net of related debt$86,950,627$109,970,395$145,988,554$306,715,056$332,449,818$343,757,699$384,712, 646Restricted72,647,51158,710,72041,804,17537,940,46833,104,09648,076,35328,722,412Unrestricted91,785,679118,926,833137,314,377154,609,419161,256,148161,099,614162,547,043Total primary government net assets$251,383,817$287,607,948$325,107,106$499,264,943$526,810,062$552,933,666$575,982,101The 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 Seven Fiscal Years (accrual basis of accounting) 140 Comprehensive Annual Financial Report FY 2007-2008 2002200320042005200620072008 ExpensesGovernmental activities:City Council$203,045$211,376$251,493$265,398$166,068$181,376$187,508City Manager1,122,575724,539782,010911,6001,139,3391,118,0051,300,794City Attorney730,244793,474887,074898,9711,088,2921,158,1631,297,039City Clerk788,728873,1701,157,543942,167955,941743,797994,675Finance6,397,4017,397,0746,057,8225,032,3596,099,6196,678,8707,608,817Human Resources1,045,4781,061,3651,186,7621,199,2861,277,3701,230,1071,344,311Fire10,077,26111,162,22411,291,28212,400,50913,213,64613,911,09815,930,780Police17,597,27119,995,28221,161,67521,951,22523,709,22224,107,37226,817,052Public Works4,193,0455,562,7208,876,91615,969,10821,530,79020,709,20319,203,292Community Development20,365,60916,647,06619,184,28016,541,56515,214,10220,865,56923,590,207Economic Development620,494332,990369,204360,962445,402343,222335,741Library3,388,7213,337,3843,976,1855,152,3255,352,0008,356,6765,775,103Redevelopment855,2061,169,6602,318,7383,234,5902,328,3271,998,2053,518,910Interest on long term debt6,827,5703,745,0813,531,8683,627,3694,283,4704,693,4924,020,988 Total governmental activities expenses74,212,64873,013,40581,032,85288,487,43496,803,588106,095,155111,925,217Business-type activities:Airport3,617,6073,579,2273,848,7894,537,1295,463,6585,338,0686,019,365Water5,862,9966,054,8266,908,7667,091,0558,101,4288,572,7638,438,485Sewer11,226,22812,285,48810,810,48914,449,22717,073,35621,455,74918,757,891LAVWMA2,215,1182,455,2162,559,5642,432,6172,469,1013,750,2222,664,961Las Positas2,161,2212,193,9082,505,8652,538,5032,827,2962,752,5513,672,995Springtown324,034119,498184,558217,610258,208245,444604,666 Total business-type activities expenses25,407,20426,688,16326,818,03131,266,14136,193,04742,114,79740,158,363Total primary government expenses$99,619,852$99,701,568$107,850,883$119,753,575$132,996,635$148,209,952$152,083,580(Continued) Fiscal Year Changes in Net Assets Last Seven Fiscal Years (accrual basis of accounting) 141 Comprehensive Annual Financial Report FY 2007-2008 2002200320042005200620072008Fiscal Year Changes in Net Assets Last Seven Fiscal Years (accrual basis of accounting) Program RevenuesGovernmental activities:Charges for services:City Clerk$- $- $- $269,638$- $- $- Finance117,246- - - 55,331114,420- Fire1,182,049997,4491,403,0255,312,8826,307,5001,505,7731,544,589Police1,539,4751,743,2721,521,9301,764,1201,676,0072,028,4451,785,743Public Works74,85969,943314,288373,659191,365288,15064,340Community Development6,855,5187,350,9885,701,9195,632,4627,983,36111,070,8576,335,201Library88,65889,27798,478130,748160,910292,554124,630 Operating grants and contributions6,914,3037,574,2364,790,6247,983,60110,078,8989,655,79011,036,523Capital grants and contributions23,401,04720,045,14426,250,44435,118,92824,471,14730,561,22027,407,661 Total governmental activities program revenues40,173,15537,870,30940,080,70856,586,03850,924,51955,517,20948,298,687Business-type activities:Charges for services:Airport3,992,4983,939,7354,317,7454,679,4605,290,3216,306,5386,102,039Water8,516,0118,419,68710,022,6088,972,5239,314,81210,863,46410,512,323Sewer15,102,60815,546,26516,838,34117,253,74317,809,00120,239,73919,968,157LAVWMA- - - - - - - Las Positas2,586,8362,478,3922,397,2582,108,7992,093,0002,259,0642,649,027Springtown234,74781,010134,98179,292109,257102,799258,354Operating grants and contributions209,864113,900- 401,28680,172115,5160 Capital grants and contributions6,504,9386,803,7159,707,6557,177,1299,580,6792,738,7248,358,515 Total business-type activities program revenues37,147,50237,382,70443,418,58840,672,23244,277,24242,625,84447,848,415Total primary government program revenues$77,320,657$75,253,013$83,499,296$97,258,270$95,201,761$98,143,053$96,147,102Net (Expense) RevenueGovernmental activities$(34,039,493)$(35,143,096)$(40,952,144)$(31,901,396)$(45,879,069)$(50,577,946)$(63,626,530)Business-type activities11,740,29810,694,54116,600,5579,406,0918,084,195511,0477,690,052Total primary government net expenses$(22,299,195)$(24,448,555)$(24,351,587)$(22,495,305)$(37,794,874)$(50,066,899)$(55,936,478 ) (Continued) 142 Comprehensive Annual Financial Report FY 2007-2008 2002200320042005200620072008Fiscal Year Changes in Net Assets Last Seven Fiscal Years (accrual basis of accounting) General Revenues and Other Changes in Net AssetsGovernmental activities:TaxesProperty taxes14,252,92515,561,01917,165,50518,073,34020,461,29223,474,63624,743,463Incremental property taxes1,939,0252,172,7052,333,4723,049,9033,944,6484,166,0774,850,965Sales taxes16,561,04816,400,39317,783,55319,353,51619,256,96620,304,09019,338,334Other taxes10,183,8899,895,32310,640,94410,464,87510,244,38910,452,48510,350,594Intergovernmental4,199,4114,385,9543,558,832645,2301,813,3056,024,3536,292,738Interest6,042,7086,238,0415,538,9834,110,8835,094,8986,129,2386,514,855Miscellaneous3,345,7816,019,2514,829,4565,449,7053,984,4955,639,6246,893,964Transfers (net)(2,140,742)(6,323,485)332,9188,754,0151,225,710294,196653,502Gain on sale of land held for redevelopment905,639- - 3,267,560- - - Loss on refunding of debt(233,896)- - - - - - Total governmental activities55,055,78854,349,20162,183,66373,169,02766,025,70376,484,69979,638,415Business-type activities:Transfers (net)2,140,7426,323,485(332,918)(8,754,015)(1,225,710)(294,196)(653,502)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)(653,502)Total primary government activities$56,819,363$60,672,686$61,850,745$64,415,012$64,799,993$76,190,503$78,984,913Change in Net AssetsGovernmental activities$21,016,295$19,206,105$21,231,519$41,267,631$20,146,634$25,906,753$16,011,885Business-type activities13,503,87317,018,02616,267,639652,0766,858,485216,8517,036,550Total primary governmen t $34,520,168$36,224,131$37,499,158$41,919,707$27,005,119$26,123,604$23,048,435The 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. 143 Comprehensive Annual Financial Report FY 2007-2008 2002200320042005200620072008 General FundReserved$5,451,570$5,241,756$9,765,567$9,575,127$9,329,690$9,078,026$8,826,957Unreserved28,001,21728,203,55324,260,69723,849,12825,587,34728,926,62928,350,723Total general fund$33,452,787$33,445,309$34,026,264$33,424,255$34,917,037$38,004,655$37,177,680All Other Governmental FundsReserved$31,486,882$24,269,211$13,848,036$9,879,776$13,013,138$23,803,645$28,504,239Unreserved, reported in:Special revenue funds16,003,43219,122,03434,572,47628,679,80025,731,86725,015,90514,589,109Capital projects funds45,042,17437,251,42714,331,54228,038,22422,479,40223,880,54117,669,848Total all other governmental fund s $92,532,488$80,642,672$62,752,054$66,597,800$61,224,407$72,700,091$60,763,196 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 seven years of data for this schedule.Fund Balances of Governmental Funds,Last Seven Fiscal Years (modified accrual basis of accounting)Fiscal Year 144 Comprehensive Annual Financial Report FY 2007-2008 2002200320042005200620072008 RevenuesTaxes and special assessments$24,574,002$25,581,558$27,924,855$28,647,685$30,805,535$34,017,461$35,838,595Sales taxes16,561,04816,400,39317,783,55318,953,51619,256,96620,304,09019,338,334Property tax increment1,939,0252,172,7052,333,4723,049,9033,944,6484,166,0774,850,965Licenses and permits2,194,6852,154,1862,521,7872,566,2772,215,9562,256,1202,324,087Intergovernmental19,739,50714,911,71415,133,50021,598,36127,074,24525,012,77122,621,648Contributions from outside sources6,080,8759,191,5149,874,2761,178,717758,29611,930,2222,454,757Fines and forfeitures604,227719,087750,465733,561687,841762,058680,340Charges for current services16,726,84315,918,99317,707,78616,364,59915,456,87914,577,80213,114,165Use of money and property7,973,3856,926,3576,843,2425,339,7096,204,1427,595,5277,936,130Miscellaneous848,5273,160,8331,164,5422,201,2311,300,6343,520,1672,912,666Total revenues97,242,12497,137,340102,037,478100,633,559107,705,142124,142,295112,071,687ExpendituresGeneral government9,968,23010,051,9309,450,7179,195,21310,492,01011,043,97212,473,775Fire9,896,53710,979,6581088414612,091,53212,927,45713,669,32314,976,861Police17,546,72019,881,68720,687,90421,542,55823,445,94424,042,14525,569,801Public Works4,722,6125,341,9626,402,0957,152,9126,874,5747,175,5637,175,388Community Development17,547,09516,439,12619,178,56117,185,78517,003,46517,522,08018,115,203Economic Development336,796341,505359,692367,093450,603360,741315,836Library3,343,0573,231,8613,757,9894,422,2184,626,6887,700,2914,895,811Redevelopment830,3641,134,0502,484,8011,739,8461,968,1181,810,0012,292,100Capital outlay42,446,29339,080,04737,825,40519,662,41229,276,21222,466,47532,239,052Debt service fundsPrincipal4,575,000955,0003,331,6913,010,0003,165,0003,300,0003,755,000Interest and fiscal charges6,077,5703,685,9963,472,7833,568,2844,224,3854,663,0094,124,539 Total Expenditures117,290,274111,122,822117,835,78499,937,853114,454,456113,753,600125,933,366Excess of Revenuesover (under)expenditures(20,048,150)(13,985,482)(15,798,306)695,706(6,749,314)10,388,695(13,861,679)Fiscal YearChanges In Fund Balances of Governmental Funds,Last Seven Fiscal Years (modified accrual basis of accounting) 145 Comprehensive Annual Financial Report FY 2007-2008 2002200320042005200620072008Fiscal YearChanges In Fund Balances of Governmental Funds,Last Seven Fiscal Years (modified accrual basis of accounting) Other 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- - 1,715,47915,393,2000 Payment to refunded bond escrow agent(15,258,896)- - - - (12,026,398) - Transfers in13,531,20611,865,95616,528,57317,974,46719,470,36117,842,07819,662,616Transfers out(12,982,850)(10,097,768)(16,195,655)(17,735,207)(18,317,137)(17,713,101)(18,564,807)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)2,548,0312,868,7034,174,6071,097,809Net change infund balances$38,026,408$(11,897,294)$(17,309,663)$3,243,737$(3,880,611)$14,563,302$(12,763,870)Debt service as apercentage of noncapitalexpenditures14.2%6.4%8.5%8.2%8.7%8.7%8.4%Note: GASB 34 was implemented for the fiscal year ended June 30, 2002. The City of Livermore has elected to show only seven years of data for this shedule. 146 Comprehensive Annual Financial Report FY 2007-2008 TotalTotal TaxableDirectCommonPublicUnsecuredAssessedTax Fiscal YearPropertyUtility (1)ValuationValuationRate*1998-1999 5,081,310,587 $ 20,442,380$ 254,526,599$ 5,356,279,566$ 1.0000 % 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 % 2007-2008 13,180,062,58717,462,826616,286,51313,813,811,9261.0000 % 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 "inflation fa ctor" (limited to a maximum increase of 2%). With few exceptions, property is only reassessed at the time that it is sold to a new o wner. 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 subject to the limitations described above. 147 Comprehensive Annual Financial Report FY 2007-2008 LivermoreEast BayFloodPleasantonCountywideBay AreaCommunityValley JointRegionalZone 7UnifiedAppliedRapidCollegeUnified SchoolParkStateSchoolFiscal Yearto CityTransitDistrictDistrict AuthorityDistrictWaterBonds1999 1 $ 0.0167$ 0.1438$ 2000 10.00000.1438 2001 1 0.00000.08630.0065$ 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 2008 10.00760.01640.06260.00800.01500.0756 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 148 Comprehensive Annual Financial Report FY 2007-2008 Principal Property Taxpayers Current Year and Nine Years Ago TaxablePercentageTaxablePercentageTaxablePercentageTaxablePercentage Assessedof Total CityAssessedof Total CityAssessedof Total CityAssessedof Total CityValueTaxableValueTaxableValueTaxableValueTaxable Secured/AssessedSecured/AssessedSecured/AssessedSecured/AssessedTaxpayerUnsecuredRankValueUnsecuredRankValueUnsecuredRankValueUnsecuredRankValueForm Factor Inc.$153,56210.65%Kaiser Foundation Hospitals142,06020.60%$72,675,81711.36%$92,873,73111.55%$102,180,50111.52%BNP Paribas Leasing Corp.114,12230.48%Marathon Drive Buildings LLC80,22040.34%Shea Center Livermore LLC72,87750.31%Catellus Development Corp71,85860.30%22,236,25260.42%Arroyo Livermore Business Park64,37770.27%Golden Bears II LLC61,39680.26%Gould Livermore LLC60,60890.26%23,500,00070.39%20,432,00090.38%Balch Enterprises, Inc.59,964100.25%KLA Tencor CorporationHospital Committee For Livermore PleasantonValley Care Senior Housing, Inc.Vineyard Management CompanyCalwest Industrial Properties LLCPatrician Assoc. Inc. & Principal Mutual40,114,50030.75%44,934,07920.75%45,971,54420.68%Altamont Associates LLCTriad Camput LLCPell Development CompanyTriValley Technology Park LLCLivermore National Insustrial ParkOpus West Corportation 2001 2000 1999 2008 Source: Alameda County Office of the Treasurer and Tax Collector 149 Comprehensive Annual Financial Report FY 2007-2008 Principal Property Taxpayers Current Year and Nine Years Ago TaxablePercentageTaxablePercentageTaxablePercentageTaxablePercentage Assessedof Total CityAssessedof Total CityAssessedof Total CityAssessedof Total CityValueTaxableValueTaxableValueTaxableValueTaxable Secured/AssessedSecured/AssessedSecured/AssessedSecured/AssessedTaxpayerUnsecuredRankValueUnsecuredRankValueUnsecuredRankValueUnsecuredRankValue2001 2000 1999 2008 Tele Vue Systems Inc. 19,905,54780.37%22,567,82680.38%27,373,67570.41% Joseph & Eda Pell Trust 31,871,05550.60%35,191,02730.59%41,977,13830.62% Spieker Properties Limited Partnership 27,483,86950.41% Valley Memorial Hospital 21,186,724100.33% Centrex HomesBEP Livermore 30,235,26650.50% Triad Park LLC 48,105,73020.90%33,079,00440.55%33,110,60440.49% Hexcel Corporation 27,235,34560.45%27,410,18360.41% Bank of America 19,281,038100.36%19,758,083100.33%22,844,34280.34% Hoover Universal Inc. 19,887,94490.33% US Windpower Inc. 32,848,52040.61%Orchard Livermore Assosicates20,322,71370.38%Costco Wholesale Corporation19,385,80690.36%$120,5720.51%$231,834,9094.33%$256,388,5744.27%$267,790,0794.07% Source: Alameda County Office of the Treasurer and Tax Collector 150 Comprehensive Annual Financial Report FY 2007-2008 Principal Property Taxpayers Current Year and Nine Years Ago TaxpayerForm Factor Inc.Kaiser Foundation HospitalsBNP Paribas Leasing Corp.Marathon Drive Buildings LLCShea Center Livermore LLCCatellus Development CorpArroyo Livermore Business ParkGolden Bears II LLCGould Livermore LLCBalch Enterprises, Inc.KLA Tencor CorporationHospital Committee For Livermore Pleasanto n Valley Care Senior Housing, Inc.Vineyard Management CompanyCalwest Industrial Properties LLCPatrician Assoc. Inc. & Principal MutualAltamont Associates LLCTriad Camput LLCPell Development CompanyTriValley Technology Park LLCLivermore National Insustrial ParkOpus West Corportation TaxablePercentageTaxablePercentageTaxablePercentage Assessedof Total CityAssessedof Total CityAssessedof Total CityValueTaxableValueTaxableValueTaxable Secured/AssessedSecured/AssessedSecured/AssessedUnsecuredRankValueUnsecuredRankValueUnsecuredRankValue$26,938,95190.31% $115,129,08811.49%107,443,60411.25%$90,760,97710.96%26,099,30380.34%31,523,83250.37%40,248,66540.43%25,940,64090.34% 76,954,26920.90%79,814,81120.85%27,526,69070.32%27,681,80570.29%39,038,20040.46%27,673,89680.29%46,936,85920.61%47,875,69130.56%48,983,16130.52%27,776,29260.32%29,549,05450.31%27,710,73060.29%26,936,818100.31%27,475,55590.29%27,243,129100.29%2004 2003 2002 Source: Alameda County Office of the Treasurer and Tax Collector 151 Comprehensive Annual Financial Report FY 2007-2008 Principal Property Taxpayers Current Year and Nine Years Ago TaxpayerTele Vue Systems Inc.Joseph & Eda Pell TrustSpieker Properties Limited PartnershipValley Memorial HospitalCentrex HomesBEP LivermoreTriad Park LLCHexcel CorporationBank of AmericaHoover Universal Inc.US Windpower Inc.Orchard Livermore AssosicatesCostco Wholesale Corporation TaxablePercentageTaxablePercentageTaxablePercentage Assessedof Total CityAssessedof Total CityAssessedof Total CityValueTaxableValueTaxableValueTaxable Secured/AssessedSecured/AssessedSecured/AssessedUnsecuredRankValueUnsecuredRankValueUnsecuredRankValue2004 2003 2002 28,170,02150.36%27,400,40880.32%46,334,15030.60%29,900,54640.39%27,180,40360.35%26,600,97870.34%25,430,024100.33% $256,493,6213.32%$273,508,3683.19%$296,132,1413.13% Source: Alameda County Office of the Treasurer and Tax Collector 152 Comprehensive Annual Financial Report FY 2007-2008 Principal Property Taxpayers Current Year and Nine Years Ago TaxpayerForm Factor Inc.Kaiser Foundation HospitalsBNP Paribas Leasing Corp.Marathon Drive Buildings LLCShea Center Livermore LLCCatellus Development CorpArroyo Livermore Business ParkGolden Bears II LLCGould Livermore LLCBalch Enterprises, Inc.KLA Tencor CorporationHospital Committee For Livermore Pleasanto n Valley Care Senior Housing, Inc.Vineyard Management CompanyCalwest Industrial Properties LLCPatrician Assoc. Inc. & Principal MutualAltamont Associates LLCTriad Camput LLCPell Development CompanyTriValley Technology Park LLCLivermore National Insustrial ParkOpus West Corportation TaxablePercentageTaxablePercentageTaxablePercentage Assessedof Total CityAssessedof Total CityAssessedof Total CityValueTaxableValueTaxableValueTaxable Secured/AssessedSecured/AssessedSecured/AssessedUnsecuredRankValueUnsecuredRankValueUnsecuredRankValue$25,552,993100.25%$60,276,66030.54%$80,262,81030.63%100,879,46310.98%90,345,63510.81%95,899,07010.75%40,220,19360.32%34,095,76350.33%35,266,91470.32%43,924,71440.34%29,060,24460.28%29,641,34180.27%30,457,64280.24%27,508,01590.27%78,458,23420.76%81,510,24820.73%86,089,70320.68%38,701,13940.38%42,543,66350.33%34,930,10770.27%28,554,68670.28%29,316,93890.26%30,309,20090.24%28,190,50980.27%28,826,339100.26%29,402,748100.23%49,897,43030.49%50,895,33640.46%37,431,88850.34%37,125,93160.33%2006 2005 2007 Source: Alameda County Office of the Treasurer and Tax Collector 153 Comprehensive Annual Financial Report FY 2007-2008 Principal Property Taxpayers Current Year and Nine Years Ago TaxpayerTele Vue Systems Inc.Joseph & Eda Pell TrustSpieker Properties Limited PartnershipValley Memorial HospitalCentrex HomesBEP LivermoreTriad Park LLCHexcel CorporationBank of AmericaHoover Universal Inc.US Windpower Inc.Orchard Livermore AssosicatesCostco Wholesale Corporation TaxablePercentageTaxablePercentageTaxablePercentage Assessedof Total CityAssessedof Total CityAssessedof Total CityValueTaxableValueTaxableValueTaxable Secured/AssessedSecured/AssessedSecured/AssessedUnsecuredRankValueUnsecuredRankValueUnsecuredRankValue2006 2005 2007 $251,310,0132.45%$265,106,6802.38%$223,275,4211.75% Source: Alameda County Office of the Treasurer and Tax Collector 154 Comprehensive Annual Financial Report FY 2007-2008 FiscalYearTaxes LeviedCollections Endedfor thePercentagein SubsequentPercentageJune 30,Fiscal YearAmount of LevyYearsAmountof Levy1999 9,713,730 $ 9,295,554$ 95.7%220,692$ 9,516,246$ 98.0% 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% 2008 24,259,23323,617,16397.4%894,81124,511,974101.0% 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 155 Comprehensive Annual Financial Report FY 2007-2008 CertificatesCertificatesTotalPercentageFiscalof Redevelopmen t Notesof Revenu e StateCapitalPrimar y of PersonalPe r Yea r ParticipationBondsPayable ParticipationLoansLoanLeaseGovernment Income*Capita 1999 34,735,000 $ 3,220,000$ 65,000$ 8,470,000$ 619,857$ 16,451,599$ 63,561,456$ 0.05%863$ 2000 33,625,0003,095,000835,0007,675,000454,37415,637,34461,321,7180.06%825 2001 62,455,0002,965,000570,0006,875,000269,76914,800,85287,935,6210.04%1,169 2002 80,846,44636,775,0001,250,0005,013,554165,9268,469,773132,520,6990.03%1,728 2003 79,891,44636,775,0001,370,0005,013,554135,2377,862,728131,047,9650.03%1,680 2004 76,559,75536,775,0001,370,0004,730,24559,5487,239,301126,733,8490.03%1,612 2005 65,660,00036,150,0001,327,50011,880,00055,5566,599,038401,733$ 122,073,8270.03%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 2008 60,535,00034,115,0004,932,3399,425,00013,8894,572,6440113,593,8720.04%1,359 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 Activitie s Business-Type Activitie s Ratios of Outstanding Debt by TypeLast Ten Fiscal Years 156 Comprehensive Annual Financial Report FY 2007-2008 Percentage o f Actual Taxable FiscalRedevelopment Value of Pe r Yea r BondsTotalPropertyCapita 19992000 $3,095,000$3,095,0000.06%$42.00 2001 2,965,0002,965,0000.05%39.00 2002 36,775,00036,775,0000.55%479.00 2003 36,775,00036,775,0000.48%471.00 2004 36,775,00036,775,0000.43%468.00 2005 36,150,00036,150,0000.38%448.00 2006 35,500,00035,500,0000.35%436.00 2007 34,820,00034,820,0000.30%420.00 2008 34,115,00034,115,0000.27%408.00 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 157 Comprehensive Annual Financial Report FY 2007-2008 City Assessed Valuation$13,027,985,041Redevelopment Agency Incremental Valuation447,644,637Total Assessed Valuation$13,475,629,678 Estimatedshare of PercentageOutstandingOverlapping Governmental Unit Applicable 1 Debt 6/30/08Debt Overlapping Debt Repaid with Property Taxes:Bay Area Rapid Transit District3.068% $ 467,320,000$14,337,378Chabot-Las Positas Community College District16.481%476,514,22678,534,310Livermore Valley Joint Unified School District91.974%117,055,000107,660,166City of Livermore 1915 Act Bonds100.000%19,925,00019,925,000City of Livermore Community Facilities District No. 99-1100.000%20,390,00020,390,000City of Livermore Community Facilities District No. 2006-1100.000%10,000,00010,000,000East Bay Regional Park District0.016%149,445,00023,911Total overlapping debt repaid with property taxes 1,260,649,226250,870,765 Overlapping Other Debt:Alameda County Gen. Fund Obligations & Coliseum Authority7.765%568,388,00044,135,328Alameda County Pension Obligations7.765%228,520,12217,744,587Alameda County Board of Education Public Facilities Corp.7.765%250,00019,413Chabot-Las Positas Community College Discrict COP16.481%4,990,000822,402Total overlapping other debt 802,148,12262,721,730 Total overlapping debt $ 802,148,122$313,592,495 City direct debt 73,860,000 Total direct and overlapping debt $387,452,495 Notes:1 For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value.Direct and Overlapping Governmental Activities DebtAs of June 30, 2008 Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule e stimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and the refore responsible for repaying the debt, of each overlapping government. 158 Comprehensive Annual Financial Report FY 2007-2008 Common Property Assessed Valuation-Secured Roll 13,180,062,587$ Government Code Sec. 43605 Debt Limit 15% of Assessed Valuation 1,977,009,388 $ Amount of debt applicable to the limit 0 Legal debt margin 1,977,009,388$ Percent of debt limit authorized and issued 0.00% Debt limit $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$1,977, 009,388 Total net debt applicable to limit 0000000000 Legal debt margin$ 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$1,977,0 09,388 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 2006 Legal Debt Margin Calculation for Fiscal Year 200820072008 Legal Debt Margin InformationLast Ten Fiscal Years Fiscal Years 1999200020012002200320042005 159 Comprehensive Annual Financial Report FY 2007-2008 AirportLess:NetSewerLess:Net ServiceOperatingAvailableServiceOperatingAvailable ChargesExpensesRevenuePrincipalInterestCoverageChargesExpensesRevenuePrincipalInterestCoverage 1999 2,714,128 $ 2,424,419$ 289,709$ 141,935$ 2.0413,295,497$ 9,483,460$ 3,812,037$ 680,601$ 290,047$ 3.93 2000 2,980,1192,601,941378,178165,48332,488$ 1.9114,914,4438,053,2476,861,196814,254275,3146.30 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) 2008 6,073,9295,659,746414,18313,8891,87026.2818,355,79718,465,084 (109,287) 693,538142,187 (0.13) 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 Service Airport Revenue Bonds Sewer Revenue Bonds 160 Comprehensive Annual Financial Report FY 2007-2008 - Demographic and Economic Statistics,Last Ten Calendar Years Year Population (1) Per Capita Personal Income (2) Total Personal Income (2) Unemployment Rate (3) Median Income (4) Alameda County A lameda County US A lameda County Livermore % of US 1999 73,631 33,856$ 2,492,851,136$ NA 2000 74,303 38,466$ 2,858,139,198$ 2.4% 2001 75,200 38,172$ 2,870,534,400$ 2.9% 2002 76,700 37,788$ 2,898,339,600$ 4.3% 2003 78,000 38,583$ 3,009,474,000$ 4.7% 200 4 78,600 40,920$ 3,216,312,000$ 3.9% 2005 80,328 Est. $ 41,493 3,333,049,704$ 3.3% 2006 81,443 Est. $ 42,074 3,426,632,782$ 3.0% 2007 82,845 Est. $ 42,956 3,558,689,820$ 2.8% 2008 83,604 Est. $ 45,689 3,819,783,156$ 4.0% 51,412$ 69,823$ 94,006$ 182.8% 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 20062007 3. Data Source: State of California , Employment Development Department, Labor Market Information - Unemployment Rates - City of Livermore 4. Data Source: Muni Net Guide (2000 U.S. Census data, adjusted for inflation) 161 Comprehensive Annual Financial Report FY 2007-2008 A geNumberPercent of Population Under 5 years5,6507.7%5 to 9 years6,2278.5%10 to 14 years5,7287.8%15 to 19 years4,6676.4%20 to 24 years3,5934.9%25 to 34 years10,86814.8%35 to 44 years14,87820.3%45 to 54 years10,30014.0%55 to 59 years3,6154.9%60 to 64 years2,3033.1%65 to 74 years3,1564.3%75 to 84 years1,7982.5%85 years and over5620.8%Total Population73,345100.0%Note:1. Year 2000Data Source: U.S. Census BureauPopulation Demographics 162 Comprehensive Annual Financial Report FY 2007-2008 Principal Employers Last Three Fiscal Years 2008 2007 2006 Percentage Percentage Percentage of Total City of Total City of Total City Employer Type of Business Employees Ran k Employment Employees Ran k Employment Employees Ran k Employment Form Factor, Inc. Manufacturer 979 1 4.50% 973 1 5.00% 816 1 4.10% Comcast of CA/Co/Tx/Wa, Inc. Cable TV 515 2 2.40% 561 3 2.90% 396 2 2.00% Activant Solutions, Inc. Manufacturer 422 3 1.90% 372 4 1.90% 302 4 1.50% Sunrise Medical HHG, Inc. Medical Suppier 371 4 1.70% 0.00% Topcon Positioning Systems, Inc. GPS Software Development 350 5 1.60% 350 5 1.80% 250 5 1.30% Johnson Controls Inc. Manufacturer 319 6 1.50% 333 3 1.70% Safeway, Inc 1257 Grocery 266 7 1.20% 191 9 1.00% 0.00% Costco Wholesale #146 Retail 243 8 1.10% 250 6 1.30% 247 6 1.20% Wal Mart Inc. 1972 Retail 240 9 1.10% 220 8 1.10% 250 5 1.30% Target Stores T-828 Retail 221 10 1.00% 232 7 1.20% US Food Service (Alliant), Inc. Wholesale 654 2 3.40% Pacific Medical, Inc. Wholesale 228 7 1.20% 190 10 1.00% Valmark Industries, Inc. Manufacturer 170 10 0.90% Peninsula Floors, Inc. Contractor 200 8 1.00% Kraft Foods - Facilities Mgmt Admin Office 195 9 1.00% Source: City of Livermore Finance Department 163 Comprehensive Annual Financial Report FY 2007-2008 1999 2000 2001 2002 2003 200 4 2005 2006 2007 2008 Function/ProgramGeneral governmentCity Council11111- - - City Manager999.759.7510.2510.2510.2510.2510.2510.25City Attorney 7777888.58.59.59.5City Clerk777.57.58.58.58.58.58.58.5Finance121216.516.51717.518.518.518.518.5Personnel997.57.57.58.58.18.18.18.1 Fire6060606363.563.563.566.566.566.5Police121124137.75140.75147.75152.25151.25152.25152.75154.75Public Works 1 1071085052636464646364 Community Development676785.4585.4593.3594.8594.8593.693.193.1Economic Development 55664.54.51.31.31.31.3Library2223262933.539.539.540.2540.2541.25Redevelopment 3.23.23.23.2 Airport6.56.5 777899Water13.7514.7514.75151515.2515.2515.25Sewer38.7547.2545.2545.2546.2546.2546.2546.25LAVWMALas Positas Golf Course13.513.5141414.714.713.713.7Springtown Golf Course- - 0.30.30.30.3 Total426431486.95507.45538.85553.6555.7559.45559.45563.45Note: 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 164 Comprehensive Annual Financial Report FY 2007-2008 * * Operating Indicators by Function/Program,Last Ten Fiscal Years Fiscal Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Function/ProgramPolicePhysical arrests 2,276 2,780 2,278 2,443 2,830 2,912 2,825 3,189 3,292 3,181 Parking violations 1,208 1,413 1,290 1,313 1,497 1,681 1,774 2,762 3,821 4,805 Traffic violations 5,103 7,676 9,522 10,293 13,418 14,721 13,274 12,279 9,774 10,324 Fire Emergency responses 3,976 4,226 4,552 4,907 5,142 5,375 5,672 5,948 6,454 6,325 Fires extinguished 278 296 319 343 360 376 397 416 444 438 Inspections 1,471 ** 1,613 ** 1,732 ** 1,008 ** 1,031 ** 1,230 *** 1,326 *** 1,028 *** 1,110 *** 1,280 *** Annual fire inspection program 56 12 241 226 295 1166 50 407 326 Public WorksStreet resurfacing (miles) 2.7 2.5 2.4 4.1 2.9 3.8 3.3 3.2 3.2 5.3 Potholes repaired 165 135 337 340 407 169 308 Maintenance of Landscaping (acres) 65 78 83 95 105 110 120 137 144 158 LibraryVolumes in collection 231,098 236,130 244,344 220,429 231,610 238,652 258,618 258,450 269,626 264,821 Total volumes borrowed 761,844 777,040 728,626 789,945 788,846 815,150 979,660 954,499 951,082 956,872 WaterNew connections 574 352 434 222 209 423 261 276 93 34 Water mains breaks 1 323 0 Other water breaks & leaks 12 15 20 26 134 Average Daily Consumption 4.924 5.552 5.837 5.736 5.821 5.961 5.579 6.082 6.618 6.441 (millions of gallons) Peak daily consumption 8.082 8.881 9.514 9.587 10.18 9.908 9.562 10.088 10.674 10.021 (millions of gallons)WastewaterAverage daily sewage treatment 5.5 5.5 6.5 6.2 6.3 6.5 6.6 7.4 7.2 7.1 (millions of gallons)Municipal AirportNumber of tenant aircraft 556 580 596 604 591 604 592 640 644 551 Total landings & takeoffs 233,000 253,000 238,000 215,000 208,130 196,654 181,710 173,800 177,330 174,503 Gallons of fuel pumped 620,000 633,540 778,000 856,760 868,830 879,112 922,582 935,367 860,429 790,578 Las Positas Municipal Golf CourseRounds Played 118,965 114,000 115,000 106,914 95,706 94,152 78,299 85,284 91,222 89,294 Springtown Municipal Golf CourseRounds Played 52,581 45,530 46,530 40,555 40,945 36,126 32,674 28,306 24,276 27,596 * No data available ** Date is reported on a calendar year basis*** Data is reported on a fiscal year basisSources: Various city departments. 165 Comprehensive Annual Financial Report FY 2007-2008 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Function/ProgramPoliceStations 1111111111Patrol units33314140393744454344Fire stations 4455555555 Public WorksStreets (miles)N/A*N/A*N/A*270.4273.5273.9278.4278.9283.2294.02StreetlightsN/A*N/A*N/A*N/A*N/A*6,6136,6706,8076,8677,004Traffic SignalsN/A*N/A*N/A*N/A*N/A*86899095107Flashing CrosswalksN/A*N/A*N/A*N/A*N/A*N/A*N/A*479WaterWater mains (miles)Potable water45.245.2113.9113.9113.9113.9113.9113.9113.9149.6Recycled water14.914.914.914.914.914.914.920.5Fire hydrants2,7502,7503,2003,3733,3733,4493,4493,4493,4791,326Fire hydrants (recycled)N/A*N/A*N/A*N/A*N/A*N/A*N/A*N/A*N/A*100Average daily consumptionPotable water4.464.466.815.745.825.965.586.086.626.44Recycled water0.510.610.470.730.560.780.790.95(millions of gallons)WastewaterSanitary sewers (miles)217217250255255255255267267285.6Storm sewers (miles) 171201.9 Treatment capacity8.58.58.58.58.58.58.58.58.58.5(millions of gallons)Municipal AirportLength of longest runway in feet5,2505,2555,2555,2555,2555,2555,2555,2555,2555,255Length of longest taxiway in feet5,2505,2555,2555,2555,2555,2555,2555,2555,2555,255Total acreage650643643643643643643643643643Number of hangars392393393393393393393393393393Las 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 166 Comprehensive Annual Financial Report FY 2007-2008 COVERAGEBROKERCOVERAGEPOLICY NOLIMITSTERMGeneral Liability Primary Layer City of LivermoreFollowing CJPRMA Memorandum of Coverage Not applicable$500,000 Self Insured Retention. 7/1/07-6/30/08 General Liability Excess Coverage First Layer California Joint Powers Risk Management Authority (CJPRMA) / Bodily Injury, Property Damage, Personal Injury, Public Officials Errors & Omissions, Employment Practices, Mold, Sexual Abuse at day care, terrorism, Pollution Not applicable$500,000. CJPRMA jointly indemnifies members from SIR to $5MM 7/1/07-6/30/08 General Liability Excess Coverage Second Layer Marsh Risk and Insurance Services (MARSH) - CJPRMA / American RE (part of the Munich RE Group) A.B. Best Rating A++:XV Following CJPRMA Memorandum of Coverage 009368489$40,000,000 per occurrence excess of $5,000,000 per occurrence for Bodily Injury / Property Damage / Personal Injury / Public Officials E&O 7/1/07-6/30/08 Primary PropertyMARSH – CJPRMA / St. Paul Insurance Cos. (Discover Reinsurance Co.) A.M. Best Rating A-:VII Real and Personal Property / Business Interruption / Extra Expense / Rental Coverage D003Z00030$25,000 deductible with $5,000,000 per occurrence 7/1/07-6/30/08 Coverage is on a replacement cost basis.Automatic coverage for new or additional locations. Excess Property Damage / Time Element MARSH – CJPRMA / Chubb Group of Insurance Cos. (Federal Insurance Company) A.M.Best Rating A++:XV All Risks, excluding Earthquake and Flood – follows primary coverage 660-74-94Coverage is for $295,000,000 per occurrence excess of $5,000,000 per occurrence primary coverage 7/1/07-7/1/08 Boiler and MachineryMARSH – CJPRMA / Hartofrd Steam Boiler A.M. Best Raing A+:X Comprehensive coverage, including production machinery and public utility equipment / 24hr Business Interrupt / Extra Expense FBP4909988Coverage is $20,000,000 Property Damage, $5,000 per accident deductible. Various sub-limits apply 7/1/07-7/1/08 SCHEDULE OF INSURANCEAS OF JUNE 30, 2008 167 Comprehensive Annual Financial Report FY 2007-2008 Public Employee Blanket Bond MARSH – CJPRMA / Hartford Fire Insurance A+:XV Faithful performance, any dishonest act, including forgery, alteration, & theft 57BPEAX8604Deductible is $5,000 per loss 7/1/07-6/30/08 Covers all employees statutorily required to maintain bonding. Coverage is $500,000 per loss Airport LiabilityMARSH – CJPRMA/ ACE (part of ACE INA Group) A: XIII Airport liability / Hangerkeeper’s / Advertising / Vehicles / Non-owned aircraft / Fire Legal Liability / Products and Completed Operations / Premises AAPN00983044Coverage is from first dollar. $50,000,000 per occurrence 7/1/07-6/30/08 Workers’ Compensation and Employer Liability Primary Layer City of LivermoreState Mandated workers’ compensation coverage for miscellaneous and safety member employees, including volunteers. Also covers employer liability not covered under statutory workers’ compensation coverage. Not applicableSelf Insured retention of $350,000 7/1/07-6/30/08 Workers’ Compensation and Employer Liability Excess Coverage First Layer Local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX) State mandated workers’ compensation coverage for miscellaneous and safety member employees, including volunteers. Also covers employer liability not covered under statutory workers’ compensation coverage. Not applicableLAWCX group indemnifies to $5 million per claim 7/1/07-6/30/08 Worker’s Compensation and Employer Liability Reinsurance and Excess Coverage Second Layer CSAC-EIA, Reinsurance from Axis Specialty Limited, Lancashire Insurance Company Limited, Lloyds of London, Renaissance Reinsurance limited, and Excess from National Union fire Insurance of Pittsburg, PA State mandated workers’ compensation coverage for miscellaneous and safety member employees, including volunteers. Also covers employer liability not covered under statutory workers’ compensation coverage. 464-2158$5 million to $300 million7/1/07-6/30/08 168 Comprehensive Annual Financial Report FY 2007-2008 ANNUAL REPORT OF CONTINUING DISCLOSURE 1998 LIVERMORE CAPITAL PROJECTS FINANCING AUTHORITY AUTHORITY REFUNDING REVENUE BONDS AS OF JUNE 30, 2008 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, 2008. The Authority hereby reports the following: 1. The audited financial statements of the City for the fiscal year ended June 30, 2008 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, 2008 in accordance with the terms of the Disclosure Agreement. Source: City of Livermore Finance Department. 169 Comprehensive Annual Financial Report FY 2007-2008 ANNUAL REPORT OF CONTINUING DISCLOSURE SPECIAL TAX BONDS COMMUNITY FACILITIES DISTRICT NO. 99-1 (TRI-VALLEY TECHNOLOGY PARK) , SERIES 2000 AS OF JUNE 30, 2008 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, 2008. The City hereby reports the following: 1. The audited financial statements of the City for the fiscal year ended June 30, 2008 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, 2008 in accordance with the terms of the Disclosure Agreement. Source: City of Livermore Finance Department. 170 Comprehensive Annual Financial Report FY 2007-2008 ANNUAL REPORT OF CONTINUING DISCLOSURE 2001 TAX ALLOCATION BONDS, SERIES A AS OF JUNE 30, 2008 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, 2008. The Agency hereby reports the following: 1. The audited financial statements of the Agency for the fiscal year ended June 30, 2008 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, 2008 in accordance with the terms of the Disclosure Agreement. Source: City of Livermore Finance Department. 171 Comprehensive Annual Financial Report FY 2007-2008 ANNUAL REPORT OF CONTINUING DISCLOSURE SPECIAL TAX BONDS COMMUNITY FACILITIES DISTRICT NO. 2006-1 (SHEA PROPERTIES), SERIES 2006 AS OF JUNE 30, 2008 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, 2008 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, 2008 in accordance with the terms of the Disclosure Agreement. Source: City of Livermore Finance Department. 172