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FINAL CAFR Year Ended June 30, 2009 Comprehensive Annual Finance Report For the Year Ended June 30, 2009 Prepared By: Administrative Services Department Finance Division Comprehensive Annual Financial Report FY 2008-2009 City of Livermore, California Comprehensive Annual Financial Report For the Year Ended June 30, 2009 Page i INTRODUCTORY SECTION Table of Contents .................................................................................................................... i-iii Letter of Transmittal ............................................................................................................... 1-7 Elected Officials and Administrative Personnel ........................................................................ 9 City Organization Chart ........................................................................................................... 10 GFOA Certificate of Achievement ........................................................................................... 11 FINANCIAL SECTION Independent Auditor’s Report on Basic Financial Statements........................................... 13-14 Management’s Discussion and Analysis Management’s Discussion and Analysis (Unaudited) ........................................................ 15-32 Basic Financial Statements Government-Wide Financial Statements Statement of Net Assets.......................................................................................................... 34 (Page 33) Statement of Activities ............................................................................................................. 35 Fund Financial Statements (Page 37) Balance Sheet-Governmental Funds ................................................................................. 38-39 Major Governmental Funds 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 Statement of Net Assets-Proprietary Funds ...................................................................... 48-49 (Page 47) Statement of Revenues, Expenses and Changes in Fund Net Assets- Proprietary Funds ...................................................................................................... 50-51 Statement of Cash Flows-Proprietary Funds ..................................................................... 52-53 Statement of Net Assets-Fiduciary Funds .............................................................................. 54 Fiduciary Funds Note 1-Significant Accounting Policies .................................................................................... 55 Notes to Basic Financial Statements A. Reporting Entity .......................................................................................................... 55 B. Basis of Presentation ............................................................................................ 55-56 C. Major Funds .......................................................................................................... 56-57 City of Livermore, California Comprehensive Annual Financial Report For the Year Ended June 30, 2009 Page ii D. Basis of Accounting ................................................................................................... 58 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 ............................................................................................ 72-75 Note 5-Notes Receivable ........................................................................................................ 76 Note 6-Capital Assets ......................................................................................................... 77-81 Note 7-Long Term Debt ..................................................................................................... 82-86 Note 8-Special Assessment District Debt with No City Commitment ................................ 87-88 Note 9-Net Assets and Fund Balances .............................................................................. 88-89 Note 10-PERS Pension Plan ............................................................................................. 89-95 Note 11-Deferred Compensation Plan .................................................................................... 95 Note 12-Joint Ventures....................................................................................................... 96-97 Note 13-Health, General Liability and Workers Compensation Coverage ........................ 97-98 Note 14-Commitments and Contingencies ...................................................................... 98-101 Note 15-Subsequent Events ................................................................................................. 102 Supplemental Information Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual: Redevelopment Agency Capital Projects Fund ................................................ 103 Major Capital Project Funds (Page 103-105) Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual: Street Improvements Fund ............................................................................... 104 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual: Street Projects ................................................................................................. 105 Non-major Governmental Funds Combining Balance Sheets ............................................................................................ 110-115 (Page 106-130) Combining Statement of Revenues, Expenditures and Changes in Fund Balance .............................................................................. 116-121 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Actual..................................................................... 122-130 Internal Service Funds Combining Statement of Net Assets .............................................................................. 132-133 (Page 131-138) Combining Statements of Revenues, Expenditures and Changes in Fund Net Assets .......................................................................... 134-135 Combining Statement of Cash Flows ............................................................................. 136-137 City of Livermore, California Comprehensive Annual Financial Report For the Year Ended June 30, 2009 Page iii Fiduciary Funds Statement of Changes in Assets and Liabilities – Agency Funds ........................................ 139 (Page 138-139) STATISTICAL SECTION (Unaudited) .......................................................................................... 141 Net Assets by Component-Last Eight Fiscal Years .............................................................. 142 Fund Information Changes in Net Assets-Last Eight Fiscal Years ............................................................ 143-145 Fund Balances of Governmental Funds-Last Eight Fiscal Years ......................................... 146 Changes in Fund Balances of Governmental Funds-Last Eight Fiscal Years ............... 147-148 Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years .......... 149 Direct and Overlapping Property Tax Rates-Last Ten Fiscal Years ..................................... 150 Principal Property Taxpayers-Last Ten Fiscal Years ..................................................... 151-156 Property Tax Levies and Collections-Last Ten Fiscal Years ................................................ 157 Ratio of Outstanding Debt by Type-Last Ten Fiscal Years ................................................... 158 Ratios of General Bonded Debt Outstanding-Last Ten Fiscal Years ................................... 159 Direct and Overlapping Governmental Activities Debt as of June 30, 2008 ......................... 160 Legal Debt Margin Information-Last Ten Fiscal Years ......................................................... 161 Pledged-Revenue Coverage-Last Ten Fiscal Years ............................................................ 162 Demographic and Economic Statistics-Last Ten Calendar Years ........................................ 163 Population Demographics ..................................................................................................... 164 Principal Employers-Last Four Fiscal Years ......................................................................... 165 Full-Time Equivalent City Government Employees by Function/Program-Last Ten Fiscal Years .................................................................................................................. 166 Operating Indicators by Function/Program-Last Ten Fiscal Years ....................................... 167 Capital Asset Statistics by Function/Program-Last Ten Fiscal Years ................................... 168 Schedule of Insurance.................................................................................................... 169-170 1998 Livermore Capital Projects Financing Authority –Authority Refunding Revenue Bonds ............................................................................................................ 171 Continuing Disclosure Special Tax Bonds Community Facilities District No. 99-1 - (Tri-Valley Technology Park), Series 2000 ........................................................................................................ 172 2001 Tax Allocation Bonds, Series A .................................................................................... 173 Special Tax Bonds Community Facilities District No. 2006-1 – (Shea Properties), Series 2006 ......................................................................................................................... 174 Comprehensive Annual Financial Report FY 2008-2009 Date: January 25, 2010 To: Honorable Mayor and Members of the City Council City of Livermore, California From: Holly Brock-Cohn, Administrative Services Director I am pleased to transmit the City's Comprehensive Annual Financial Report for the fiscal year ended June 30, 2009. 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, 2009, 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 seventh year of implementation of the provisions of Government Accounting Standard Board Statement 34, “Basic Financial Statements—and Management’s Discussion & Analysis—for State and Local Governments”. GASB 34 requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of MD&A. This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The MD&A is found immediately following the report of the independent auditors in the financial section of the CAFR. 1 Honorable Mayor and Members of the City Council January 25, 2010 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, 2009 these entities are as follows: • City of Livermore Redevelopment Agency; and • Livermore Capital Projects Financing Authority. Financial information for these entities is included as a blended component unit in the City's financial statements in accordance with Statement 14, "The Financial Reporting Entity," issued by the Governmental Accounting Standards Board. The City Council serves as the governing board of the Livermore Redevelopment Agency, and the Livermore Capital Projects Financing Authority (LCPFA). The LCPFA is a joint powers authority between the City and the Livermore Redevelopment Agency. The City provides accounting services to these separate entities and performs all their administrative functions. Activities of the Livermore Redevelopment Agency are shown as a capital projects fund within the major Governmental Funds schedules. Resources to be used for the repayment of long-term debt are reported as a debt service fund located within the non-major governmental funds schedules. The low-moderate income set-aside funds are reported as a special revenue fund also within the non-major governmental funds statements. Construction and acquisition activities of the Livermore Capital Projects Financing Authority (LCPFA) are shown as capital projects funds within the non-major Governmental Funds financial statements, specifically as the 2000 Certificates of Participation (COPs) fund and the 2008 Certificates of Participation (COPs) fund. The 2000 Certificates were refunded on November 5, 2008. The refunding was financed using proceeds from the 2008 Variable Rate Demand Certificates of Participation (COPs) issued the same day. 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. 2 Honorable Mayor and Members of the City Council January 25, 2010 Basis of Accounting and Budgetary Control The government-wide, proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis. Here revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. This basis of accounting is contrasted with the modified accrual basis that is used by all governmental funds. As explained in Note 1 to the Basic Financial Statements, this means that with specified exceptions, revenues are recorded when measurable and available, rather than received and expenditures are recorded when the liability is incurred, rather than paid. The exceptions for revenue are fines, licenses and permits. The exceptions for expenditures are certain employee leave amounts and principal and interest on general long-term debt which is recognized when due. The Livermore Municipal Code established the finance department and assigned specific duties and responsibilities for the provision of all fiscal and budgetary functions. Internal accounting controls have been developed to provide reasonable assurance regarding the safeguarding of assets and the reliability of financial records for preparing financial statements and maintaining asset accountability. Examples of accounting controls include separation of operational responsibilities from financial recordkeeping in the areas of payroll, accounts payable, and accounts receivable. In addition, physical custody of assets is separated from accounting or the authorization of related transactions. A two-year financial plan is adopted by the City Council on a basis consistent with generally accepted accounting principles except for proprietary funds that have budgets for capital outlay but not depreciation. Budgets for proprietary funds also differ from GAAP in that costs of issuing debt are not amortized over the life of the issue but are expensed at issuance. Legal budgetary control is maintained at the fund level. The City Council may amend the budget by resolution or minute order during the year. The City Manager may transfer appropriations from one activity to another within the same fund. Appropriations not expended during the first year of the two-year budget cycle may be carried over to the second year, but thereafter they lapse. Financial Highlights of Fiscal Year 2008-2009 New financing activity undertaken in Fiscal Year 2008-2009 included the early refunding or retirement of certain Certificates of Participation (COPs) debt and the issuance of $63,000,000 principal amount of 2008 Variable Rate Demand Certificates of Participation debt on November 5, 2008. Note 7 of the Basic Financial Statements provides a more in- depth analysis of FY 2008-2009 financing activities and the capital projects that are being funded by the COPs issue as well as other capital projects with other debt funding. Impact of State Budget on Local Finances The State Budget for Fiscal Year 2008-2009 as adopted contained the following items of importance to cities: 3 Honorable Mayor and Members of the City Council January 25, 2010 • Citizen Options for Public Safety/Juvenile Justice Grants-The FY 2008-2009 State budget provided grants that were divided equally between the two programs. The City received $100,000 under the COPS program for local law enforcement. This was a $59,303 decrease compared to the $159,303 received in FY 2007-2008. • State Mandated Cost Reimbursements-As in FY 2007-2008, the budget did not include funding for mandate claims incurred by cities in FY 2008-2009. The average level of mandate claims is about $30,000 per year. • Highway User Tax (Gas Tax) revenues due the City on a monthly basis were instead deferred and retained by the State and used to address its own cash flow problems; City resources had to be used temporarily for street and road program expenditures until the State released the Gas Tax revenues. The State ended up retaining the interest income made on these amounts instead of the City, also. • Proposition 1B Highway Safety, Traffic Reduction, Air Quality and Port Security Bond Act of 2006. City resources were used for the design phase of certain street and road projects ultimately intended to be financed from the Proposition 1B Bond program. Proposition 1B Bond program grants were deferred due the State’s inability to sell the Bonds in the bond market during FY 2008-2009. The construction phase of several street and road projects were delayed to FY 2009-2010 due to this snafu in Sacramento in administering the Proposition 1B Bond 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 Administrative Services Director 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 $5.6 million with an average yield of 3.4%. 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 City Attorney’s office by the Risk Manager with the assistance of a third-party claims adjustment firm. In FY 2008-2009, the pool made its eighteenth distribution of excess assets. The amount distributed to the City of Livermore was $110,060, or 49.7% of the amount of the deposit premium paid for FY 2008-2009. 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 4 Honorable Mayor and Members of the City Council January 25, 2010 of $350,000. In FY 2008-2009, the pool provided a premium adjustment in the amount of $14,750, or about 6% of the amount of the deposit premium paid for FY 2008-2009. 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 initially 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. The amounts designated for economic uncertainty of $7,400,000 and designated for future operations of $11,651,090 in the General Fund provide a $19,051,090 total operating reserve at June 30, 2009, and exceed the Council’s target level of 20% of expenditures, which was to be attained by June 30, 2010. Without including the $7,400,000 economic uncertainty amount, the operating reserve would be less than 20% of expenditures. The City’s Long-Term Financial Plan for FY 2008-2015 contains a forecast of financial resources and program costs by fund. The Plan provides economic and fiscal planning information for the Council and Executive Management. As the City faces changing economic conditions and the ability of the State of California to borrow city resources as partial solutions of its own budget problems, this Plan is a valuable fiscal tool. 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 84,409, as of January 1, 2009 and represents an increase of 1.1% compared to the prior year. The East Bay region of Alameda County that encompasses Livermore is reflecting the effects of the current economic downturn with an overall decline in the number of jobs in the region. According to information supplied by the East Bay Economic Development Alliance that can be found at its www.eastbayeda.org website, between November 2008 and November 2009, the total number of jobs in the East Bay receded by 34,700 or 3.4% compared to the previous twelve months. Trade, transportation and utilities decreased by 8,500 jobs over the twelve months, with more than half of those losses concentrated in retail trade. Construction fell by 6,100 jobs, while government cut back 5,200 jobs. Professional and business services recorded a net loss of 4,800 jobs, with the largest cutbacks occurring in employment services (down 1,500 jobs); services to buildings and dwellings (down 900 jobs); and architectural, engineering, and related services (down 800 jobs). On the plus side, private schools (up 300 jobs), private health care (up 200 jobs), and farming (up 200 jobs) each expanded over the twelve months. 5 Honorable Mayor and Members of the City Council January 25, 2010 In November 2009 the unemployment rate in the East Bay was 11.2%, up significantly from the 7.2% rate reported in November 2008. This compares with an unadjusted unemployment rate of 12.2% for California and 9.4% for the nation during the same period. In comparison to the East Bay, San Francisco’s unemployment rate was 9.2% in November 2009, significantly higher than the November 2008 rate of 5.7%. The unemployment rate in San Jose was 11.8% in November 2009, up from 7.1% in November 2008. As reported by MDA DataQuick and the San Francisco Chronicle, the median sales price for a residence in Livermore in November 2009 was $405,000, up 2.27% from the $396,000 median sales price in November 2008. Between November 2008 and November 2009 there were 102 homes sold in Livermore. 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 January 15, 2010 Remaining to be Developed Total Developed Industrial Acreage 1,508 412 1,096 Commercial Acreage 633 114 519 Business Commercial 712 351 361 Residential Acreage 5,094 297 4,797 Totals 7,947 1,174 6,773 Independent Audit Each year the Finance Division of the Administrative Services 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, 2008. This was the nineteenth 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. 6 Honorable Mayor and Members of the City Council January 25, 2010 Acknowledgments This report represents the culmination of the dedicated efforts by staff both inside and outside of the Finance Division of the Administrative Services Department. Sincere thanks go to Interim Finance Manager Jud Norrell, Financial Services Manager Evan Levy, and Accountant Virginia Guider for her work on the financial and statistical sections, Administrative Accounting Technician Amy Walker and Reprographics Technician Carlos Ramirez for document production and publication; as well as Cory Biggs and his 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, Holly Brock-Cohn Administrative Services Director 7 Comprehensive Annual Financial Report FY 2008-2009 8 City of Livermore Comprehensive Annual Financial Report ELECTED OFFICIALS AND ADMINISTRATIVE PERSONNEL Elected Officials as of June 30, 2009 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 Troy Brown, 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 Holly Brock-Cohn, Director of Personnel Dan McIntyre, Director of Public Services Bill Cody, Fire Chief Steve Sweeney, Police Chief 9 Citizens of LivermoreMayor and City CouncilCity Manager’s Dept. Linda Barton, City Mgr City AttorneyJohn Pomidor Advisory Commissions and Boards Economic Development Rob White, 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 Sweeney, Acting Chief Assistant City Manger Troy Brown, Asst City Mgr Public Works Dan McIntyre, Director Human Resources Holly Brock-Cohn, Director Information Technology Finance Dept. Monica T. Potter, Director EngineeringPlanningBuilding Housing Redevelopment Agency Horizons Youth Services Las Positas & Springtown Golf CoursesAirport Water Reclamation/Storm Water/Water Maintenance Services Organization ChartComprehensive Annual Financial ReportFY 2008-2009 10 11 Comprehensive Annual Financial Report FY 2008-2009 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, 2009. 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 $737.5 million at June 30, 2009. Of this total, $487.7 million were Governmental assets and $249.8 million were Business-type assets. • Total liabilities were $172.1 million of which $152.2 million were governmental liabilities and $19.9 million were business-type liabilities. • City-wide revenues in fiscal 2009 were $145.9 million, of which $103.2 million was generated by governmental activities and $42.7 million was generated by business-type activities. • City-wide expenses were $155.7 million, of which $114.5 million was incurred by governmental activities and $41.2 million was incurred by business-type activities. Fund Level: • Governmental Fund balances increased to $99.3 million in fiscal 2009 from $97.9 million in fiscal 2008. • Governmental Fund revenues decreased to $104.5 million in fiscal 2009, down $7.6 million from the prior year’s $112.1 million. • Governmental Fund expenditures decreased to $116.4 million in fiscal 2009, down $9.5 million from fiscal 2008’s level of $125.9 million. • Enterprise Fund total assets increased $4.1 million to $252.2 million in fiscal 2009. This increase was largely due to an increase to Cash for LAVWMA due to an adjustment to the allocation of agency contributions to the O&M and capital funds. • Enterprise Fund total liabilities increased $3.2 million to $21.8 million in fiscal 2009. This increase was due to the refinancing of the 2000 & 2002 Certificates of Participation. • Enterprise Fund revenues increased to $39.2 million in fiscal 2009 due to the $2.3 million contribution adjustment to LAVWMA. • Enterprise Fund expenses increased $1.9 million to $40.4 million in fiscal 2009 due to an increase to the Water Department’s repairs and maintenance. (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 2008-2009 15 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 31-33 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 2008-2009 16 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 53-100. 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 101-139 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 2008-2009 17 Governmental Activities Table 1 Governmental Net Assets at June 30 (in Millions) 2009 2008 Cash and investments $117.4 $112.0 Other assets 44.4 39.2 Capital assets 325.9 328.0 Total assets 487.7 479.2 Long-term debt outstanding 104.3 99.6 Other liabilities 47.9 32.7 Total liabilities 152.2 132.3 Net assets: Invested in capital assets, net of debt 221.3 228.3 Restricted 35.3 28.7 Unrestricted 78.9 89.9 Total net assets $335.5 $346.9 The City’s governmental net assets amounted to $335.5 million at June 30, 2009, a decrease of $11.4 million over 2008. This is mainly due to an increase of $10.9 million to Note payable. This decrease 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, 2009 comprised the following: • Cash and investments comprised $13.6 million of unspent projects funds from debt issues, $2.7 million of debt service reserves and $101.0 million of pooled cash and investments available for operations. Substantially all of these amounts were held in short term investments in government securities, as detailed in Note 3 to the financial statements. • Accounts and interest receivable of $12.1 million, all current, along with notes receivable of $11.2 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 $17.0 million. • Capital assets of $266.9 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 $59.1 million. • Current liabilities, including accounts payable, claims and other amounts due currently, totaling $12.5 million. • Deposit payable of $18.0 million, primarily represent developer performance deposits, which are refundable if the developer performs City required improvements. Comprehensive Annual Financial Report FY 2008-2009 18 • Long-term debt of $104.3 million, of which $100.8 million is due in future years and $3.5 million is due currently. • Net assets invested in capital assets net of related debt of $221.3 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 $35.3 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 $78.8 million of unrestricted net assets at June 30, 2009. Fiscal Year 2009 Government Activities As the Sources of Revenue Chart above shows, $15.7 million, or 15.2% of the City’s fiscal 2009 governmental activities revenue, came from sales taxes, while $25.6 million or 24.9% came from property tax, $9.1 million, or 8.8%, came from other taxes, $9.7 million, or 9.4%, came from charges for services, and $17.7 million, or 17.1%, came from grants and contributions. The remaining 24.6% 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 $23.0 million, or 20.1%, of total governmental expenses, police accounted for $28.5 million, or 24.9%, fire accounted for $16.7 million, or 14.6% and other governmental programs and functions accounted for the remaining 40.4%. Charges for Services 9.4% Grants & Contributions 17.1% Property taxes 24.9% Incremental property taxes 5.1% Sales taxes 15.2% Other taxes 8.8% Intergovernment 6.2% Interest 4.6% Misc & Transfers 8.7% Sources of Revenues Fire 14.6% City Clerk 0.7% Library 5.3% Economic Development 0.4% Finance 5.9% Human Resources 1.3% Public Works 14.5% City Attorney 1.2%Interest 4.9% Community Development 20.1% City Council 0.2% Police 24.9% City Manager 1.2% Redevelopme nt 4.7% Functional Expenses Comprehensive Annual Financial Report FY 2008-2009 19 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 2009 2008 Expenses General Government $12.0 $12.8 Fire 16.7 15.9 Police 28.5 26.8 Public Works 16.7 19.2 Community Development 23.0 23.6 Economic Development 0.5 0.3 Library 6.1 5.8 Redevelopment 5.4 3.5 Interest on long term debt 5.6 4.0 Total expenses 114.5 111.9 Revenues Program revenues: Charges for services 9.7 9.9 Operating contributions and grants 10.6 11.0 Capital grants and contributions 7.1 27.4 Total program revenues 27.4 48.3 General revenues: Property taxes 25.6 24.7 Incremental property taxes 5.3 4.9 Sales taxes 15.7 19.3 Other taxes 9.1 10.4 Intergovernmental 6.4 6.3 Interest 4.7 6.5 Miscellaneous 8.3 6.9 Gain on sale of property 0.0 0.0 Total general revenues 75.1 79.0 Surplus before transfers -12.0 15.4 Transfers, net 0.7 0.6 Changes in net assets -$11.3 $16.0 As Table 2 above show, $27.4 million or 26.7% of the City’s fiscal 2009 Governmental revenue, came from program revenues and $75.1 million or 73.3% came from general revenues such as taxes and interest. Program revenues were composed of charges for services of $9.7 million which include permit revenues, fees and charges used to fund expenses incurred in providing services; $10.6 million of operating grants and contributions which include gas tax revenues and housing and police grants and capital grants and contributions of $7.1 million which consist mainly of street project grants and Comprehensive Annual Financial Report FY 2008-2009 20 developer impact fees restricted to capital outlay. Capital Grants and Contributions were down $20.3 million. This is largely due to a delay in State grant funding for capital projects. 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 City Council, exceed the cost of that program. Revenues for Community Development activities did not exceed expenses for 2009 because of the delay in receiving State capital grants . Table 3 Net Revenue (Expense) of Governmental Activities (in Millions) 2009 2008 City Council $0.2 $0.1 City Manager (1.4) (1.3) City Attorney (1.4) (1.3) City Clerk (0.8) (1.0) Finance (6.8) (7.6) Human Resources (1.4) (1.4) Fire (14.6) (14.4) Police (25.6) (24.1) Public Works (16.2) (18.7) Community Development (2.5) 19.4 Economic Development (0.5) (0.3) Library (5.6) (5.5) Redevelopment (4.9) (3.5) Interest on long term debt (5.6) (4.0) Totals ($87.1) ($63.6) Comprehensive Annual Financial Report FY 2008-2009 21 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 2009 2008 Cash and investments $80.9 $75.1 Other assets 2.1 2.6 Capital assets 166.8 170.4 Total assets 249.8 248.1 Long-term debt outstanding 16.7 14.0 Other liabilities 3.2 4.6 Total liabilities 19.9 18.6 Net assets: Invested in capital assets, net of debt 152.5 156.4 Unrestricted 77.4 73.1 Total net assets $229.9 $229.5 The net assets of business-type activities increased to $229.9 million in fiscal 2009, an increase of $0.4 million. An increase in cash and investments was due to an agency adjustment for LAVWMA account for the increase. Table 5 Changes in Business-Type Net Assets (in Millions) Business-type Activities 2009 2008 Expenses Airport $5.3 $6.0 Water 11.1 8.4 Sewer 19.8 18.8 LAVWMA 2.1 2.7 Las Positas Golf Course 2.4 3.7 Springtown Golf Course 0.5 0.6 Total expenses $41.2 $40.2 Revenues Program Revenues: Charges for Services $38.4 $39.4 Operating Grants and Contributions 2.3 0.0 Capital Grants and Contributions 1.9 8.4 Total Program Revenues 42.6 47.8 Transfers, net (0.7) (0.6) Changes in net assets $0.7 $7.0 Comprehensive Annual Financial Report FY 2008-2009 22 Total program revenues of Business-type Activities were $42.6 million in fiscal 2009, down from $47.8 million in the prior year due primarily to a decrease of Capital Grants and Contributions. Program expenses increased $1.0 million to a total of $41.2 million. Net transfers increased expenses by $0.7 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) 2009 2008 Governmental Funds Total assets $163.9 $145.0 Total liabilities 64.7 47.1 Total fund balances 99.3 97.9 Total revenues 104.5 112.1 Total expenditures 116.4 125.9 Total other financing sources (uses) and special items 13.3 1.1 At June 30, 2009, the City’s governmental funds reported combined fund balances of $99.3 million, which is an increase of $1.4 million from the prior year. Governmental fund revenues showed a decrease of $7.6 million to $104.5 million, while expenditures also decreased $9.5 million to a total of $116.4 million. Expenditures included $9.3 million in debt service and capital outlays of $17.4 million. The decrease in expenditures was due primarily to a decrease in capital outlay expenditures. Comprehensive Annual Financial Report FY 2008-2009 23 Analyses of Major Governmental Funds General Fund Revenues showed a decrease of $3.5 million to $76.3 million in fiscal 2009 compared to the actual for fiscal 2008. Taxes Sales tax revenue decreased $3.6 million in fiscal 2009. Expenditures showed an increase of $0.5 million to $79.9 million for fiscal 2009 compared to the actual for fiscal 2008. Of the total, Public Safety costs showed an increase of $1.5 million, while Capital Projects showed a decrease of $0.8 million for fiscal 2009. The following table shows the budgetary variances between the original two-year budget approved in 2008 versus the final amended budget for fiscal 2009 that was approved on June 8, 2009 and reflects the change in economic expectations between the two time periods. Table 7 General Fund Budgetary Variance Analysis Budget Approved June 23, 2008 Budget Approved June 8, 2009 Variance Final Budget Variance Final Budget Original Final Positive/(Negative) % Revenues: Property taxes $26,482,000 $25,722,000 ($760,000) -2.87% Sales taxes $18,281,000 $17,427,000 ($854,000) -4.67% Other taxes $10,852,000 $10,357,000 ($495,000) -4.56% Licenses and permits $2,710,000 $2,076,000 ($634,000) -23.39% Intergovernmental $8,041,000 $7,860,000 ($181,000) -2.25% Fines and forfeitures $746,000 $746,000 $0 0.00% Other in lieu taxes $575,000 $575,000 $0 0.00% Charges for current services $8,813,000 $8,099,000 ($714,000) -8.10% Use of money and property $3,783,000 $3,826,000 $43,000 1.14% Miscellaneous $803,000 $1,050,000 $247,000 30.76% Totals $81,086,000 $77,738,000 ($3,348,000) -4.13% Expenditures: City Council $208,270 $193,300 ($14,970) -7.19% City Manager $1,374,930 $1,294,890 ($80,040) -5.82% City Attorney $1,325,970 $1,332,660 $6,690 0.50% City Clerk $923,600 $778,730 ($144,870) -15.69% Finance $8,112,730 $7,676,110 ($436,620) -5.38% Human Resources $1,422,110 $1,362,860 ($59,250) -4.17% Fire $15,135,470 $15,008,480 ($126,990) -0.84% Police $25,333,310 $25,980,900 $647,590 2.56% Public Works $7,963,620 $7,717,480 ($246,140) -3.09% Community Development $15,137,490 $14,126,760 ($1,010,730) -6.68% Economic Development $496,660 $461,680 ($34,980) -7.04% Library $5,044,390 $5,062,070 $17,680 0.35% Capital projects $669,890 $509,890 ($160,000) -23.88% Totals $83,148,440 $81,505,810 ($1,642,630) -1.98% Comprehensive Annual Financial Report FY 2008-2009 24 The following table shows the original budget approved in 2008 and the final amended budget approved on June 8, 2009 and the actual results as of June 30, 2009. The variances computed are between the final budget and actual results. In revenues, the largest contributor to the ($1.8) million variance in the “Other Taxes” category was a combination of “Transient Occupancy Tax” at a negative $0.4 million, “Business License Tax Const.” at a negative $0.4 million and “Industrial Const. Tax” at a negative $0.3 million. Sales tax was also lower than expected with a $1.7 million negative variance. As to expenditures, the largest negative variance was $1.1 million within Finance and amounted to 14.2% 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 23, 2008 Budget Approved June 8, 2009 As of June 30, 2009 Actual Budgetary Variance Final Budget Variance Final Budget Original Final Basis Positive/(Negative) % Revenues: Property taxes $26,482,000 $25,722,000 $25,409,601 ($312,399) -1.21% Sales taxes $18,281,000 $17,427,000 $15,692,177 ($1,734,823) -9.95% Other taxes $10,852,000 $10,357,000 $8,559,271 ($1,797,729) -17.36% Licenses and permits $2,710,000 $2,076,000 $1,690,189 ($385,811) -18.58% Intergovernmental $8,041,000 $7,860,000 $7,663,997 ($196,003) -2.49% Fines and forfeitures $746,000 $746,000 $599,111 ($146,889) -19.69% Other in lieu taxes $575,000 $575,000 $494,996 ($80,004) -13.91% Charges for current services $8,813,000 $8,099,000 $8,837,758 $738,758 9.12% Use of money and property $3,783,000 $3,826,000 $3,708,973 ($117,027) -3.06% Miscellaneous $803,000 $1,050,000 $3,693,583 $2,643,583 251.77% Totals $81,086,000 $77,738,000 $76,349,656 ($1,388,344) -1.79% Expenditures: City Council $208,270 $193,300 $160,973 ($32,327) -16.7% City Manager $1,374,930 $1,294,890 $1,314,310 $19,420 1.5% City Attorney $1,325,970 $1,332,660 $1,352,432 $19,772 1.5% City Clerk $923,600 $778,730 $708,848 ($69,882) -9.0% Finance $8,112,730 $7,676,110 $6,583,668 ($1,092,442) -14.2% Human Resources $1,422,110 $1,362,860 $1,338,912 ($23,948) -1.8% Fire $15,135,470 $15,008,480 $15,457,071 $448,591 3.0% Police $25,333,310 $25,980,900 $25,760,137 ($220,763) -0.8% Public Works $7,963,620 $7,717,480 $7,729,713 $12,233 0.2% Community Development $15,137,490 $14,126,760 $13,775,397 ($351,363) -2.5% Economic Development $496,660 $461,680 $456,422 ($5,258) -1.1% Library $5,044,390 $5,062,070 $5,057,367 ($4,703) -0.1% Capital projects $669,890 $509,890 $202,157 ($307,733) -60.4% Totals $83,148,440 $81,505,810 $79,897,407 ($1,608,403) -2.0% Property tax revenues were lower than expected by $312,399 due to lower property tax collections by Alameda County. Comprehensive Annual Financial Report FY 2008-2009 25 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 $5.0 million and represent unspent 2001 Bond proceeds to be used for redevelopment activities. Land held for redevelopment amounts to $14.8 million, which is an increase of $2.2 million from the prior year, due primarily to the purchase of the Lucky’s shopping center site. The Agency has six agreements with developers/owners, which impacted fiscal 2008-2009. 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 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 2008-2009 26 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, 2009, the Agency had disbursed $533,751 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, 2009, 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, 2009, 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 110 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, 2009, 70 units have completed construction while the remaining 40 units are still undergoing 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 was paid within 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, 2009, construction was complete and the Developer had repaid all of the above installments. 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 Comprehensive Annual Financial Report FY 2008-2009 27 $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 was paid within 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, 2009, construction was complete, and the Developer had repaid all of the above installments. 6. 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, 2009, the project is complete, 2 units have been sold, and the remaining balance of the loan is $390,000. The Capital Project Fund owes the City $14.9 million in advances part of which funded prior years’ redevelopment activities. The Agency plans to use property tax increment and proceeds from the sale of Agency owned land to repay the advance. Revenues for the Capital Project Fund amounted to $6.2 million, which was an increase of $0.7 million from the prior year. Expenditures decreased $0.3 million, due to pre-construction activities for the above projects having been completed in the prior year. Other financing sources increased to $4.4 million as a result of transfers of tax increment to the Debt Service Fund and Special Revenue Fund and to fund the purchase of land. Street Improvements Fund This Fund is used to account for the construction of major streets and interchanges. During fiscal 2009, capital outlay amounted to $2.2 million. Significant projects included Holmes, Murietta and 4th Street Intersection with expenditures of $0.5 million, El Charro Infrastructure project with expenditures of $0.3 million and Traffic Impact Fee Reimbursements with expenditures of $0.7 million. The primary revenue source for this fund is developer impact fees, which were non-existent in fiscal 2009. This revenue source is dependent on development activity. This Fund had interfund receivable balances amounting to $1.7 million at June 30, 2009. Of this amount, $1.3 million was due from the Isabel/I580 Interchange and $0.3 million was due from the El Charro Infrastructure Project Fund. Comprehensive Annual Financial Report FY 2008-2009 28 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, 2009 the City held $14.6 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 2008-2009 29 Analysis of Major Business-type Activities – Enterprise Funds Airport Fund Airport Fund net income amounted to $0.6 million in fiscal year 2098, up from $0.1 million in fiscal year 2008. Water Fund Water Fund net income amounted to ($0.6) million in fiscal year 2009, down from $4.5 million in fiscal year 2008. Operating revenues decreased by $0.1 million in fiscal 2009. The decrease in net income is due to an increase to Operating expenses. Sewer Fund Sewer Fund net income amounted to ($1.7) million in fiscal 2009, down from $4.4 million in fiscal 2008. Operating Revenues increased $0.8 million to $19.1 million in fiscal 2009. The increase is the result of higher Charges for Services for due a rate increase July 8, 2008. During fiscal 2009, repairs to capital assets amounted to $2.6 million. Operating expenses increased $1.1 million to $19.6 million. The increase is mainly the result of an increase to Cost of Sales, Materials & Supplies and Depreciation expense. Transfers out amount to $2.9 million in fiscal 2009 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. An adjustment to the allocation of agency contributions to the O&M and capital funds increased revenues in fiscal 2009 by $2.3 million. Las Positas Golf Course Fund The Fund generated a net loss of $0.3 million which is a decreased loss compared to the loss of $1.1 million from fiscal 2008. Operating revenues were down by $0.4 million at $2.2 million in fiscal 2009. Operating expenses had a decrease of $0.6 million in fiscal 2009. Comprehensive Annual Financial Report FY 2008-2009 30 Springtown Golf Course Fund This Fund generated a net loss for the year amounting to $0.2 million for fiscal 2009. In fiscal 2009, the City hired a contractor to oversee the operations of the Springtown Golf Course. The contractor will pay the City $6,000 per year in exchange of retaining 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 five years ago and City staff has implemented these adjustments. At the end of fiscal 2009 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) 2009 2008 Governmental Activities Land $17.1 $16.5 Construction in progress 41.6 34.8 Buildings 97.9 97.9 Equipment and vehicles 17.1 16.9 Infrastructure 264.4 264.1 Internal service fund equipment and vehicles 12.0 11.5 Less accumulated depreciation (124.5) (113.8) Totals $325.6 $327.9 Business-type Activities Land $13.9 $13.9 Construction in progress 15.9 16.3 Land Improvements 0.6 0.6 Buildings 22.2 22.2 Equipment and vehicles 2.9 2.9 Golf Course Infrastructure 7.3 7.3 Sewer Infrastructure 204.9 198.7 Water Infrastructure 32.9 32.3 Airport Infrastructure 10.9 10.9 Less accumulated depreciation (142.2) (134.7) Totals $169.3 $170.4 The principal additions for governmental activities in fiscal 2009 were to construction in progress. Business-type activity additions were primarily composed of Construction in Progress. Comprehensive Annual Financial Report FY 2008-2009 31 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, 2008 and 2009 the City’s debt comprised: Table 10 Outstanding Debt (in Millions) 2009 2008 Governmental Activity Debt: Certificates of Participation $61.0 $60.5 Tax Allocation Bonds 33.4 34.1 Notes payable 9.9 4.9 Totals $104.3 $99.5 Business-type Activity Debt: Certificates of Participation $12.8 $9.4 State Water Reclamation Loans 3.9 4.6 Airport Loans Payable 0.0 0.0 Golf Equipment Lease 0.0 0.0 Totals $61.0 $60.5 In fiscal 2009, Governmental activities debt was reduced $3.5 million for scheduled retirements and $49.8 million through refinancing. Business-type activity debt was reduced $1.4 million for scheduled retirements and $9.4 through refinancing. (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, 2009, a total of $47.1 million in special assessment district debt was outstanding, issued by four special assessment districts. This debt is secured only by special assessments on the real property in the district issuing the debt, and is not the City’s responsibility. The City does act as these Districts’ agent in the collection and remittance of assessments, and in the management of facilities construction. Further detail on these districts may be found in Note 8 to the financial statements. (G) Requests for Information The Comprehensive Annual Financial Report is intended to provide a general overview of the City’s finances for readers of the financial statements. Questions concerning any of the information in this report or requests for additional financial information should be addressed to the Administrative Services Director, 1052 South Livermore Avenue, Livermore, CA 94550-4899. Comprehensive Annual Financial Report FY 2008-2009 32 Government-Wide Financial Statements Statement of Net Assets and Activities The Statement of Net Assets and the Statement of Activities summarize the entire City’s financial activities and financial position. They are prepared on the same basis as is used by most businesses, which means they include all the City’s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis—the effect of all the City’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between City funds have been eliminated. The Statement of Net Assets reports the difference between the City’s total assets and the City’s total liabilities, including all the City’s capital assets and all its long-term debt. The Statement of Net Assets presents similar information to the old balance sheet format, but presents it in a way that focuses the reader on the composition of the City’s net assets, by subtracting total liabilities from total assets. The Statement of Net Assets summarizes the financial position of all the City’s Governmental Activities in a single column, and the financial position of all the City’s Business-Type Activities in a single column; these columns are followed by a Total column that presents the financial position of the entire City. The City’s Governmental Activities include the activities of its General Fund, along with all its Special Revenue, Capital Projects and Debt Service Funds. Since the City’s Internal Service Funds service these Funds, their activities are consolidated with Governmental Activities, after eliminating inter-fund transactions and balances. The City’s Business Type Activities include all its Enterprise Fund activities. The Statement of Activities reports increases and decreases in the City’s net assets. It is also prepared on the full accrual basis, which means it includes all the City’s revenues and all its expenses, regardless of when cash changes hands. This differs from the “modified accrual” basis used in the Fund financial statements, which reflect only current assets, current liabilities, available revenues and measurable expenditures. The format of the Statement of Activities 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. Comprehensive Annual Financial Report FY 2008-2009 33 GovernmentalBusiness-Type ActivitiesActivitiesTotal ASSETS Cash and investments in City Treasury (Note 3)$101,035,240$80,854,229$181,889,469 Cash and investments with Trustees (Note 3)16,327,96416,327,964 Accounts receivables (net of applicable allowance for uncollectibles)10,906,3972,104,46413,010,861 Interest receivable1,156,1861,156,186 Internal balances (Note 4D)2,435,132(2,435,132) Prepaids, deposits and supplies1,660,67643,8321,704,508 Notes receivable (Note 5)11,203,45511,203,455 Land held for redevelopment (Note 1I)17,047,74117,047,741 Land & construction in progress (Note 6)59,052,91930,426,24989,479,168 Capital assets (net of accumulated depreciation) (Note 6)266,869,097138,791,889405,660,986 Total assets487,694,807249,785,531737,480,338 LIABILITIES Accounts payable and other accruals6,099,6612,234,0168,333,677 Accrued payroll 953,454162,0141,115,468 Note payable (Note 7)10,850,00010,850,000 Claims payable (Note 13B) - due within one year2,810,7722,810,772 Accrued compensated absences (Note 1F): Due within one year 1,206,258194,5001,400,758 Due in more than one year1,963,326222,8762,186,202 Deposit payable and unearned revenue18,062,573389,41618,451,989 Net OPEB obligation (Note 10)5,963,3015,963,301 Long-term debt (Note 7): Due within one year 3,517,0441,399,4504,916,494 Due in more than one year100,792,44515,263,780116,056,225 Total liabilities152,218,83419,866,052172,084,886 NET ASSETS (Note 9) Invested in Capital Assets, net of related debt221,333,459152,554,908373,888,367 Restricted: Capital projects12,236,15612,236,156 Debt service2,738,3382,738,338 Special assessment administration3,452,1803,452,180 Redevelopment9,205,7569,205,756 Special revenue grant programs7,624,2627,624,262 Unrestricted78,885,82277,364,571156,250,393 Total net assets$335,475,973$229,919,479$565,395,452 See accompanying notes to financial statements STATEMENT OF NET ASSETS June 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 34 Net (Expense) Revenue and Program RevenuesChanges in Net Assets OperatingCapital Charges forGrants and Grants and Governmental Business-type Functions/ProgramsExpensesServicesContributionsContributionsActivitiesActivitiesTotal Governmental Activities: City Council$186,190$384,433$198,243$198,243 City Manager1,405,895(1,405,895)(1,405,895) City Attorney1,427,623(1,427,623)(1,427,623) City Clerk791,772(791,772)(791,772) Finance6,775,114(6,775,114)(6,775,114) Personnel1,434,631(1,434,631)(1,434,631) Fire16,712,448$2,161,428(14,551,020)(14,551,020) Police28,474,2071,702,0201,128,404(25,643,783)(25,643,783) Public Works16,652,17372,820405,339(16,174,014)(16,174,014) Community Development23,031,6075,141,8988,323,816$7,056,206(2,509,687)(2,509,687) Economic Development491,263(491,263)(491,263) Library6,101,655144,181329,995(5,627,479)(5,627,479) Redevelopment5,369,824478,828(4,890,996)(4,890,996) Interest on long term debt5,638,705(5,638,705)(5,638,705) Total Governmental Activities114,493,1079,701,17510,571,9877,056,206(87,163,739)(87,163,739) Business-type Activities: Airport5,264,7745,112,238833,248$680,712680,712 Water11,140,49510,346,298523,677(270,520)(270,520) Sewer19,770,49120,387,403581,7171,198,6291,198,629 LAVWMA2,092,3592,341,705249,346249,346 Las Positas2,414,8612,243,182(171,679)(171,679) Springtown561,662340,260(221,402)(221,402) Total Business-type Activities41,244,64238,429,3812,341,7051,938,6421,465,0861,465,086 Total$155,737,749$48,130,556$12,913,692$8,994,848(87,163,739)1,465,086(85,698,653) General revenues: Property taxes25,636,31525,636,315 Incremental property taxes5,293,6865,293,686 Sales taxes15,692,17715,692,177 Business license tax3,470,1533,470,153 Transient occupancy and franchise taxes5,584,1145,584,114 Intergovernmental, unrestricted6,418,8026,418,802 Interest4,752,6094,752,609 Miscellaneous 8,264,1488,264,148 Transfers, net (Note 4D)712,761(712,761) Total general revenues and transfers75,824,765(712,761)75,112,004 Change in Net Assets(11,338,974)752,325(10,586,649) Net Assets-Beginning346,814,947229,167,154575,982,101 Net Assets-Ending$335,475,973$229,919,479$565,395,452 See accompanying notes to financial statements STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 35 Comprehensive Annual Financial Report FY 2008-2009 36 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 2009. 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, 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. Comprehensive Annual Financial Report FY 2008-2009 37 Redevelopment AgencyStreet GeneralCapital ProjectsImprovements ASSETS Cash and investments in City Treasury (Note 3)$29,403,049$921,656$5,109,994 Cash and investments with Trustees (Note 3)4,990,352 Accounts receivables4,464,7231,677130 Interest receivable1,156,186 Due from other funds (Note 4A)286,0551,706,301 Advances to other funds (Note 4C)9,810,647343,163 Prepaids, deposits and supplies26,871 Notes receivable (Note 5)2,390,000 Land held for redevelopment (Note 1I)14,773,241 Total Assets$45,147,531$23,076,926$7,159,588 LIABILITIES Accounts payable and other accrued liabilities$915,114$1,083,228$500,021 Accrued payroll and benefits868,9556,339 Deposit payable586,815 Due to other funds (Note 4A) Note payable (Note 7)10,850,000 Advance from other funds (Note 4C)14,954,859 Deferred rents and revenue843,950343,163 Total Liabilities13,478,01916,044,4261,429,999 FUND BALANCES (Note 9) Reserved for: Capital outlay Low income housing Advance to other funds9,810,647343,163 Prepaids, deposits and supplies26,871 Notes receivable2,390,000 Land held for redevelopment14,773,241 Debt service Special assessment administration343,620 Unreserved: Designated for economic uncertainty7,400,000 Designated for future operations11,651,090 Undesignated, reported in: General fund2,437,284 Special revenue funds Capital projects funds(10,130,741)5,386,426 TOTAL FUND BALANCES31,669,5127,032,5005,729,589 Total Liabilities and Fund Balances$45,147,531$23,076,926$7,159,588 See accompanying notes to financial statements GOVERNMENTAL FUNDS BALANCE SHEET JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 38 OtherTotal DeveloperStreet GovernmentalGovernmental DepositsProjectsFundsFunds $14,224,847$11,348,467$23,489,838$84,497,851 11,337,61216,327,964 402,1363,051,3492,637,99710,558,012 1,156,186 1,992,356 10,963,74721,117,557 26,871 8,813,45511,203,455 2,274,50017,047,741 $14,626,983$14,399,816$59,517,149$163,927,993 $2,347$48,110$1,122,020$3,670,840 27,678902,972 14,624,6362,71015,214,161 1,992,3561,992,356 10,850,000 4,230,00019,184,859 2,600,0009,061,86712,848,980 14,626,9836,878,11012,206,63164,664,168 6,083,2236,083,223 2,173,2562,173,256 10,963,74721,117,557 26,871 2,274,5004,664,500 14,773,241 2,738,3382,738,338 343,620 7,400,000 11,651,090 2,437,284 18,281,57518,281,575 7,521,7064,795,8797,573,270 7,521,70647,310,51899,263,825 $14,626,983$14,399,816$59,517,149$163,927,993 Comprehensive Annual Financial Report FY 2008-2009 39 Amounts reported for Governmental Activities in the Statement of Net Assets are different from those reported in the Governmental Funds above because of the following: Amount reported in the Governmental Balance Sheet as Fund Balance$99,263,825 CAPITAL ASSETS Capital assets used in Governmental Activities are not current assets or financial resources and therefore are not reported in the Governmental Funds.325,922,016 ALLOCATION OF INTERNAL SERVICE FUND NET ASSETS Internal service funds are not governmental funds. However, they are used by management to charge the costs of certain activities, such as insurance and central services and maintenance, to individual governmental funds. The net current assets of the Internal Service Funds are therefore included in Governmental Activities in the following line items in the Statement of Net Assets. Cash and investments16,537,389 Accounts receivable348,385 Internal balances502,434 Prepaids, deposits and supplies272,696 Accounts payable and other accruals(1,767,753) Accrued payroll(50,482) Accrued compensated absences(51,031) Net pension obligation(5,963,301) Claims payable(2,810,772) ACCRUAL OF NON-CURRENT REVENUES AND EXPENSES Revenues which are deferred on the Fund Balance Sheets because they are not available currently are taken into revenue in the Statement of Activities.10,000,568 LONG-TERM ASSETS AND LIABILITIES The assets and liabilities below are not due and payable in the current period and therefore are not reported in the Funds: Unamortized bond issue costs1,361,109 Non-current portion of compensated absences(3,118,553) Long-term debt(104,309,489) Interest payable(661,068) NET ASSETS OF GOVERNMENTAL ACTIVITIES$335,475,973 See accompanying notes to financial statements GOVERNMENTAL FUNDS BALANCE SHEET - Continued JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 40 Comprehensive Annual Financial Report FY 2008-2009 41 Redevelopment AgencyStreet GeneralCapital ProjectsImprovement REVENUES Taxes and special assessments$34,463,868 Sales Taxes15,692,177 Property tax increment$5,293,686 Licenses and permits1,690,189 Intergovernmental7,663,997 Contributions from outside sources Fines and forfeitures599,111 Charges for current services8,837,758622,087 Use of money and property3,708,973326,407265,809 Miscellaneous 3,693,583595,059 Total Revenues76,349,6566,215,152887,896 EXPENDITURES Current: City Council160,973 City Manager1,314,310 City Attorney1,352,432 City Clerk708,848 Finance6,583,668 Human Resources1,338,912 Fire15,457,071 Police25,760,137 Public Works7,729,713 Community Development13,775,397 Economic Development456,422 Library5,057,367 Redevelopment4,018,497 Capital Outlay Capital projects202,1571,214,073 2,164,146 Debt service Principal- Interest and fiscal charges275,968 Total Expenditures79,897,4075,508,5382,164,146 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(3,547,751)706,614(1,276,250) OTHER FINANCING SOURCES (USES) Proceeds from debt issuance (Note 7) Payment to bond escrow (Note 7) Transfers in (Note 4B)3,239,4085,387,299 Transfers (out) (Note 4B)(5,199,825)(3,684,927)(1,823,700) Total Other Financing Sources (Uses)(1,960,417)1,702,372(1,823,700) NET CHANGE IN FUND BALANCES(5,508,168)2,408,986(3,099,950) Fund balances at beginning of period37,177,6804,623,5148,829,539 FUND BALANCES AT END OF PERIOD$31,669,512$7,032,500$5,729,589 See accompanying notes to financial statements GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 42 OtherTotal DeveloperStreetGovernmentalGovernmental DepositsProjectsFundsFunds $1,528,334$35,992,202 15,692,177 5,293,686 1,690,189 4,868,300$9,378,95021,911,247 1,279,6331,279,633 599,111 38,443705,70210,203,990 181,6871,033,8695,516,745 2,012,1026,300,744 6,616,76414,410,256104,479,724 160,973 1,314,310 1,352,432 708,848 6,583,668 1,338,912 15,457,071 770,25926,530,396 7,729,713 4,877,32218,652,719 456,422 57,4395,114,806 343,8174,362,314 1,237,263 12,554,28117,371,920 3,480,1633,480,163 5,550,0945,826,062 1,237,26327,633,375116,440,729 5,379,501(13,223,119)(11,961,005) 58,575,00058,575,000 (46,030,256)(46,030,256) 15,524,14924,150,856 (2,216,871)(10,486,323)(23,411,646) (2,216,871)17,582,57013,283,954 3,162,6304,359,4511,322,949 4,359,07642,951,06797,940,876 $7,521,706$47,310,518$99,263,825 Comprehensive Annual Financial Report FY 2008-2009 43 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS$1,322,949 Amounts reported for governmental activities in the Statement of Activities are different because of the following: CAPITAL ASSETS TRANSACTIONS Governmental Funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense. The capital outlay asset addition expenditures are therefore added back to fund balance7,564,330 Retirements are deducted from fund balance74,723 Depreciation expense is deducted from the fund balance (Depreciation expense is net of internal service fund depreciation of $934,418 which has already been allocated to serviced funds.)(10,014,588) 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.368,400 LONG TERM DEBT PROCEEDS AND PAYMENTS Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Assets. Repayment of bond principal is an expenditure in the governmental funds, but in the Statement of Net Assets the repayment reduces long-term liabilities. Repayment of debt principal is added back to fund balance3,480,163 Proceeds from issuance of long term debt are deducted from fund balance(58,575,000) Payment to bond escrow added back to fund balance46,030,000 Reallocation of 2007 COPS to Enterprise funds4,014,757 ACCRUAL OF NON-CURRENT ITEMS The amounts below included in the Statement of Activities do not provide or (require) the use of current financial resources and therefore are not reported as revenue or expenditures in governmental funds (net change): Bond issue costs142,891 Interest payable44,466 Long-term compensated absences(693,141) Deferred revenue from loan receivable offset(254,438) ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY Internal Service Funds are used by management to charge the costs of certain activities, such as equipment acquisition, maintenance, and insurance to individual funds. The portion of the net revenue (expense) of these Internal Service Funds arising out of their transactions with governmental funds is reported with governmental activities, because they service those activities. Change in Net Assets - All Internal Service Funds(4,980,102) Change in Net Assets of Internal Service Funds reported with Business-Type Activities135,616 CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES($11,338,974) See accompanying notes to financial statements TheschedulebelowreconcilestheNetChangesinFundBalancesreportedontheGovernmentalFundsStatementof Revenues,ExpendituresandChangesinFundBalance,whichmeasuresonlychangesincurrentassetsandcurrent liabilitiesonthemodifiedaccrualbasis,withtheChangeinNetAssetsofGovernmentalActivitiesreportedinthe Statement 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, 2009 Comprehensive Annual Financial Report FY 2008-2009 44 Variance Budgeted AmountsFinal Budget Actual AmountsPositive Original FinalBudgetary Basis(Negative) Budgetary fund balance, July 1$34,192,157$31,826,427$37,177,680$5,351,253 Resources (inflows): Property taxes26,482,00025,722,00025,409,601(312,399) Sales taxes18,281,00017,427,00015,692,177(1,734,823) Other taxes10,852,00010,357,0008,559,271(1,797,729) Licenses and permits2,710,0002,076,0001,690,189(385,811) Intergovernmental8,041,0007,860,0007,663,997(196,003) Fines and forfeitures746,000746,000599,111(146,889) Other in lieu taxes575,000575,000494,996(80,004) Charges for current services8,813,0008,099,0008,837,758738,758 Use of money and property3,783,0003,826,0003,708,973(117,027) Miscellaneous 803,0001,050,0003,693,5832,643,583 Amounts available for appropriation81,086,00077,738,00076,349,656(1,388,344) Charges to appropriations (outflows) Current: City Council208,270193,300160,97332,327 City Manager1,374,9301,294,8901,314,310(19,420) City Attorney1,325,9701,332,6601,352,432(19,772) City Clerk923,600778,730708,84869,882 Finance8,112,7307,676,1106,583,6681,092,442 Human Resources1,422,1101,362,8601,338,91223,948 Fire15,135,47015,008,48015,457,071(448,591) Police25,333,31025,980,90025,760,137220,763 Public Works7,963,6207,717,4807,729,713(12,233) Community Development15,137,49014,126,76013,775,397351,363 Economic Development496,660461,680456,4225,258 Library5,044,3905,062,0705,057,3674,703 Capital Outlay Capital projects669,890509,890202,157307,733 Total charges to appropriations83,148,44081,505,81079,897,4071,608,403 OTHER FINANCING SOURCES (USES) Transfers in3,717,5004,207,5003,239,408(968,092) Transfers (out)(4,854,000)(6,662,880)(5,199,825)1,463,055 Total Other Financing Sources (Uses)(1,136,500)(2,455,380)(1,960,417)494,963 Budgetary fund balance, June 30$30,993,217$25,603,237$31,669,512$6,066,275 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, 2009 Comprehensive Annual Financial Report FY 2008-2009 45 Comprehensive Annual Financial Report FY 2008-2009 46 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 2009. 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. Comprehensive Annual Financial Report FY 2008-2009 47 Business-type Activities-Enterprise Funds AirportWaterSewer ASSETS Current Assets: Cash and investments in City Treasury (Note 3)$1,601,304$17,919,002$56,107,166 Accounts receivables (net of allowable for uncollectibles)236,4141,341,533447,316 Prepaids, deposits and supplies43,832 Total current assets1,881,55019,260,53556,554,482 Noncurrent Assets: Capital assets (net of accumulated depreciation) (Note 6)4,299,94423,754,510105,471,221 Land & construction in progress (Note 6)13,935,6788,822,6876,888,675 Total noncurrent assets18,235,62232,577,197112,359,896 Total assets20,117,17251,837,732168,914,378 LIABILITIES Current Liabilities: Accounts payable and other accruals292,491686,5401,059,266 Accrued payroll and benefits18,49831,703107,872 Accrued compensated absences (Note 1F):20,89035,434133,655 Deposit payable174,282142,526(77) Total current liabilities506,161896,2031,300,716 Noncurrent Liabilities: Accrued compensated absences (Note 1F):32,46124,426159,400 Claims payable Advances to other funds (Note 4C) Net pension obligation (Note 10) Long-term debt (Note 7): Due within one year 44,892567,943731,494 Due in more than one year1,493,2258,808,2153,128,886 Total non-current liabilities1,570,5789,400,5844,019,780 Total liabilities2,076,73910,296,7875,320,496 NET ASSETS (Note 9) Invested in Capital Assets, net of related debt16,697,50523,201,039108,499,516 Unrestricted1,342,92818,339,90655,094,366 Total net assets$18,040,433$41,540,945$163,593,882 Some amounts reported for business-type activities in the Statement of Net Assets are different because certain internal service fund assets and liabilities are included with business-type activities. Net assets business-type activities See accompanying notes to financial statements PROPRIETARY FUNDS STATEMENT OF NET ASSETS JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 48 Governmental Activities- Internal Service LAVWMALas PositasSpringtownTotalsFunds $4,687,335$539,422$80,854,229$16,537,389 66,670$12,5312,104,464348,385 43,832272,696 4,687,335606,09212,53183,002,52517,158,470 5,018,044248,170138,791,8894,349,979 725,48453,72530,426,249279,068 5,743,528301,895169,218,1384,629,047 4,687,3356,349,620314,426252,220,66321,787,517 150,16745,5522,234,0161,767,753 2,9171,024162,01450,482 4,521194,50051,031 68,5534,132389,416 226,15850,7082,979,9461,869,266 6,589222,876 2,810,772 1,393,934538,7641,932,698 5,963,301 55,1211,399,450 1,833,45415,263,780 3,289,098538,76418,818,8048,774,073 3,515,256589,47221,798,75010,643,339 3,854,953301,895152,554,9084,629,047 4,687,335(1,020,589)(576,941)77,867,0056,515,131 $4,687,335$2,834,364($275,046)230,421,913$11,144,178 (502,434) $229,919,479 Comprehensive Annual Financial Report FY 2008-2009 49 Business-type Activities-Enterprise Funds AirportWaterSewer OPERATING REVENUES Charges for services$2,755,564$18,201,740 Sales2,227,449$9,888,436120,942 Miscellaneous 107,01593,812852,391 Total Operating Revenues5,090,0289,982,24819,175,073 OPERATING EXPENSES Cost of sales, salaries and benefits2,953,8266,694,0125,502,088 Contracted services884,074694,3592,129,717 Insurance premiums Materials, supplies and others418,681990,2872,590,749 Utilities153,547180,971674,765 Depreciation422,3601,015,9066,077,780 Repairs & maintenance138,4181,362,2322,614,353 Claims expense Total Operating Expenses4,970,90610,937,76719,589,452 Operating Income (Loss)119,122(955,519)(414,379) NONOPERATING REVENUES (EXPENSES) Interest revenue22,210364,0501,212,330 Interest and fiscal charges (expense)(279,959)(182,328)(107,435) Loss on disposal and other Net Nonoperating Revenues (Expenses)(257,749)181,7221,104,895 Income (Loss) Before Transfers(138,627)(773,797)690,516 Contributed assets833,248523,677581,717 Transfers in (Note 4B)144,074 Transfers (out) (Note 4B)(66,000)(483,934)(2,976,000) Change in net assets628,621(589,980)(1,703,767) Total net assets-beginning17,411,81242,130,925165,297,649 Total net assets-ending$18,040,433$41,540,945$163,593,882 Some amounts reported for business-type activities in the Statement of Activities are different because the portion of the net income of certain internal service funds is reported with the business-type activities which those funds services. Net business-type activities reported on the Statement of Activities PROPRIETARY FUNDS STATEMENT OF REVENUE, EXPENSES AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED JUNE 30, 2009 See accompanying notes to financial statements Comprehensive Annual Financial Report FY 2008-2009 50 Governmental Activities- Internal Service LAVWMALas PositasSpringtownTotalsFunds $2,222,957$339,539$23,519,800$9,797,475 12,236,827 $2,341,70520,2257213,415,869 2,341,7052,243,182340,26039,172,4969,797,475 117,62264,13715,331,6857,805,348 $2,092,3591,435,682400,8437,637,0341,334,999 598,322 156,49516,1764,172,3882,482,192 56,47643,3701,109,129 459,41618,0927,993,554934,418 21,0303,2344,139,267166,516 1,383,162 2,092,3592,246,721545,85240,383,05714,704,957 249,346(3,539)(205,592)(1,210,561)(4,907,482) 1,598,590 (143,799)(12,448)(725,969) (46,171) (143,799)(12,448)872,621(46,171) 249,346(147,338)(218,040)(337,940)(4,953,653) 1,938,642 2,800,0002,944,074 (130,901)(3,656,835)(26,449) 3,049,346(278,239)(218,040)887,941(4,980,102) 1,637,9893,112,603(57,006)16,124,280 $4,687,335$2,834,364($275,046)$11,144,178 (135,616) $752,325 Comprehensive Annual Financial Report FY 2008-2009 51 Business-type Activities-Enterprise Funds AirportWaterSewer CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers$5,100,368$10,033,164$19,161,791 Payments to suppliers(1,460,633)(3,693,744)(7,466,001) Payments to employees(2,934,585)(6,672,423)(5,430,753) Claims paid Net cash provided by operating activities705,150(333,003)6,265,037 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Interfund receipts4,014,057 Interfund payments Transfers in144,074 Transfers (out)(66,000)(483,934)(2,976,000) Cash Flows from Noncapital Financing Activities(66,000)3,674,197(2,976,000) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital asset additions(182,004)(860,812)(3,782,029) Long term debt: Debt issuance proceeds1,580,0005,905,000 Payment to bond escrow(1,580,000)(5,905,000) Repayments(55,772)(542,899)(712,264) Interest paid(279,959)(182,328)(107,435) Cash Flows from Capital and Related Financing Activities(517,735)(1,586,039)(4,601,728) CASH FLOWS FROM INVESTING ACTIVITIES Interest received22,210364,0501,212,330 Cash Flows from Investing Activities22,210364,0501,212,330 Net increase (decrease) in cash and cash equivalents143,6252,119,205(100,361) Cash and investments at beginning of period1,457,67915,799,79756,207,527 Cash and investments at end of period$1,601,304$17,919,002$56,107,166 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss)$119,122($955,519)($414,379) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation422,3601,015,9066,077,780 Change in assets and liabilities: Accounts receivable9,03755,553(13,205) Prepaids, deposits and supplies94,890 Net pension obligation Accounts payable and other accruals39,197(465,895)543,583 Accrued payroll 19,24121,58971,335 Accrued compensated absences Deposits payable1,303(4,637)(77) Net cash provided by operating activities$705,150($333,003)$6,265,037 Capital Assets contributed$833,248$523,677$581,717 See accompanying notes to financial statements PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 52 Governmental Activities- Internal Service LAVWMALas PositasSpringtownTotalsFunds $2,341,705$2,521,669$365,420$39,524,117$9,842,828 ($2,092,359)(1,692,021)(446,733)(16,851,491)(4,343,767) (164,028)(63,903)(15,265,692)(6,328,660) (1,092,011) 249,346665,620(145,216)7,406,934(1,921,610) (1,194,425)(381,100)2,438,532(47,686) 1,393,934538,7641,932,698 2,800,0002,944,074 (130,901)(3,656,835)(26,449) 2,800,00068,608157,6643,658,469(74,135) (4,824,845)(915,683) 1,940,0009,425,000 (1,940,000)(9,425,000) (51,425)(1,362,360) (143,800)(12,448)(725,970) (195,225)(12,448)(6,913,175)(915,683) 1,598,590 1,598,590 3,049,346539,0035,750,818(2,911,428) 1,637,98941975,103,41119,448,817 $4,687,335$539,422$80,854,229$16,537,389 $249,346($3,539)($205,592)($1,210,561)($4,907,482) 459,41618,0927,993,554934,418 278,26621,028350,67945,352 94,890(6,151) 3,034,458 (22,338)16,890111,437(627,895) (46,406)23465,99312,294 (406,604) 2214,132942 $249,346$665,620($145,216)$7,406,934($1,921,610) $1,938,642 Comprehensive Annual Financial Report FY 2008-2009 53 Agency Funds ASSETS Cash and investments in City Treasury (Note 3)$4,627,490 Cash and investments with Trustees (Note 3)5,133,761 Total Assets$9,761,251 LIABILITIES Due to special assessment districts$9,761,251 Total Liabilities$9,761,251 See accompanying notes to financial statements FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET ASSETS JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 54 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 55 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 56 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. The financial activities of these funds are excluded from the City wide financial statements but are presented in separate Fiduciary Fund financial statements. Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 57 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 58 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, 2009: Business GovernmentalType ActivitiesActivitiesTotal Beginning balance$2,883,047$387,775$3,270,822 Additions2,983,541 466,897 3,450,438 Payments(2,697,004) (437,296) (3,134,300) Ending balance$3,169,584$417,376$3,586,960 Current portion$1,206,258$194,500$1,400,758 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 59 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: Secured Unsecured 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 60 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 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$12,915 2000 Financing Authority COPs Capital Projects Fund405,605 2007 Financing Authority COPs Debt Service Fund2,617 2008 Financing Authority COPS Debt Service Fund530,511 Airport Construction Capital Projects Fund 33,448 Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 61 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$181,889,469 Cash and investments with Trustees16,327,964 Total City cash and investments198,217,433 Cash and investments in Fiduciary Funds (Separate Statement) In City Treasury4,627,490 With Trustees5,133,761 Total cash and investments$207,978,684 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 62 NOTE 3 – CASH AND INVESTMENTS (Continued) C. Investments Authorized by the California Government Code and the City’s Investment Policy The City’s Investment Policy and the California Government Code allow the City to invest in the following, provided the credit ratings of the issuers are acceptable to the City; and approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code, or the City’s Investment Policy where the City’s Investment Policy where is more restrictive. Authorized Investment Type Maximum Maturity Minimum Credit Quality Maximum Percentage of Portfolio Maximum Investment In One Issuer City of Livermore or other California Local Agency Bonds 5 years None None U.S. Treasury Bills and Notes 5 years None None Obligations issued by United States Government Agencies 5 years None None Bankers Acceptances 180 days 40% 30% Commercial Paper 270 days A1/P1/F1 25% (A) 10% Negotiable Certificates of Deposit 5 years A 30% None Repurchase Agreements and Reverse Repurchase Agreements 1 year 20% None Medium Term Corporate Notes 5 years A 30% (A) None Money Market Mutual Funds N/A Top rating category 15% None Collateralized Notes, Bonds, or Other Obligations Secured by First Priority Security Interest 5 years None None Certificates of Deposit 5 years None None California Local Agency Investment Fund N/A $40 million per account $40 million per account Passbook Savings Account None None None $100 million 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 63 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, c,d,e Debentures of Federal Housing Admin. a, b, c Participation Certificates of Federal Home Loan Mortgage Corp. a Participation Certificates of Federal Home Loan Mortgage Corp. 3 years Bonds & Notes of Farm Credit Banks a, b Federal Home Loans Banks a, b Federal Home Loans Banks 3 years Letter of Credit-backed issues of Student Loan Marketing Assoc. Not more than 10% of the proceeds 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 Deposits (fully insured by FDIC) a Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 64 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 Commercial Paper Not more than 270 days A-1 or A-1+ by S&P and P-1 by Moody Money Market Funds Highest Rating Category by Moody’s a, b, g Repurchase Agreements 6 mo. or less Equal to or better than existing Certificates by Moody’s Investment Agreements Equal to or better than existing Certificates by Moody’ b State of CA-Local Agency Investment Fund a,b,c, d,e,g Commercial Paper Prime – 1 by Moody’s A-1+ or better by S & P Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 65 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 yr Minimum rating of Prime-1 or A- 3 by Moody’s or A-1+ by S&P Prerefunded municipal bonds Aaa by Moody’s & AAA by S&P; if no Moody’s rating, then must have been pre- refunded with cash. 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 c,d,e 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 c,d,e Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 66 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 c,d,e Bankers Acceptances 270 days Highest short- term rating category by any Rating Agency or long-term obligations rated A or better c,d,e 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 c,d,e Obligations – Any corporation organized and operating within the USA having asset in excess of $500M Rated “A” or better by any rating agency c,d,e Money market funds which invest in Federal Securities Rated Am or better by S & P c,d,e 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 c,d,e Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 67 NOTE 3 – CASH AND INVESTMENTS (Continued) Authorized Investment Type Maximum Maturity Minimum Credit Quality Maximum % Allowed Issu e Investment Agreements c,d,e Treasury Money Market funds g a 2008 Variable Rate Demand COP’s b 2001 RDA Tax Allocation Bonds c 1998 LCPFA Refunding Revenue Bonds d CFD 99-1 e CARD 2002 f CAsRD 93-3 g 2007 Refunding and Capital Projects COP Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 68 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 Type or lessMonthsMonths60 MonthsTotal U.S. Government-Sponsored Enterprise Agencies - Non-callable$19,018,344$40,959,375$48,821,171$108,798,890 California Local Agency Investment Fund77,412,83877,412,838 U.S. Government Money Market Funds15,093,26615,093,266 U.S. Government Money Market Funds- Sweep Account1,276,0251,276,025 Guaranteed Investment Contracts and Agreements$6,368,4606,368,460 Total Investments$112,800,473$40,959,375$48,821,171$6,368,460208,949,479 Cash deposits (overdraft) with banks and on hand(970,795) Total Cash and Investments$207,978,684 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 69 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, 2009 for each investment type as provided by Standard and Poor’s investment rating service. Investment TypeAAAAAAmA +BBBTotal Rated: U.S. Government-Sponsored Enterprise Agencies $108,798,890$108,798,890 U.S. Government Money Market Funds$15,093,26615,093,266 U.S. Government Money Market Funds- Sweep Account1,276,0251,276,025 Guaranteed Investment Contracts and Agreements2,428,681$496,200$3,443,5796,368,460 Not rated: California Local Agency Investment Fund77,412,838 Total Investments$111,227,571$16,369,291$496,200$3,443,579208,949,479 Cash deposits (overdraft) with banks and on hand(970,795) Total Cash and Investments$207,978,684 Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 70 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, 2009, these investments matured in an average of 235 days. Money Market funds and mutual funds are available for withdrawal on demand and at June 30, 2009, 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, 2009: IssuerType of InvestmentsAmount Federal Farm Credit BankFederal Agency Securities$23,615,025 Federal Home Loan BankFederal Agency Securities56,320,932 Tennessee Valley AuthorityFederal Agency Securities17,371,964 Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 71 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, 2009 were as follows: Due from Other FundsDue To Other FundsAmount General FundSpecial Revenue Funds Horizons$192,448 Solid Waste Management10,410 Capital Projects Funds Other Streets & Trails Construction83,197 Capital Projects FundCapital Projects Funds Street ImprovementsIsabel Parkway1,323,434 Other Streets & Trails Construction382,867 TOTAL$1,992,356 Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 72 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, 2009 were as follows: Fund Receiving TransfersFund Making Transfers Amount Transferred General FundRDA Capital Projects Fund$152,509 Street Improvements155,000 Street Projects357,500 Non-Major Governmental Funds2,397,550 Airport10,400 Water50,000 Sewer90,000 Internal Service Funds26,449 RDA Capital Projects FundGeneral Fund57,811 Non-Major Governmental Funds5,329,488 Non-Major Governmental FundsGeneral Fund5,142,014 Street Projects1,859,371 Street Improvements1,668,700 RDA Capital Projects Fund3,532,418 Non-Major Governmental Funds2,615,211 Airport55,600 Water433,934 Sewer86,000 Las Positas130,901 WaterNon-Major Governmental Funds144,074 LAVWMASewer2,800,000 Total Interfund Transfers$27,094,930 Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 73 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, 2009, the Redevelopment Agency Capital Projects Fund owed a remaining balance of $3,647,950 which is expected to be repaid from proceeds of the 2001 Tax Allocation Bonds. During fiscal year ended June 30, 2009 the Agency repaid $85,000. 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, 2009 is $343,163. During fiscal 2006-2007, the City advanced $582,325 to the Agency which was used to acquire the Train Depot Structure. See also Note 14B for details of the $2,000,000 advance from the City to the Agency to finance the loan to the Valley Care Senior Housing Project developer. During fiscal year 2007-2008, the City advanced $523,083 to the Agency to be used to purchase the Shell Property. The City also advanced the Agency $400,000 to purchase property located at 241 North M Street. During fiscal year 2008-2009 the City advanced the Agency $1,364,759 to assist with the purchase of the Kibler property. The Agency shall repay the loan in ten annual installments from fund generated by tax increment arising out of the redevelopment of the property. The balance as of June 30, 2009 is $1,364,759. The City’s Low Income Housing Special Revenue Fund advanced the Agency $5,322,420 to assist with the acquisition of the Lucky site property. The Agency has agreed to reimburse the City principal and interest equivalent to debt service owed to the City pursuant to funds its borrowed from the State that were used for site acquisition. The City’s Low Income Housing Special Revenue Fund advanced the Agency $771,159 to assist with the acquisition of the property located at 2121 Railroad Avenue. The advance shall be repaid in 10 annual installments commencing FY 2014. The balance as of June 30, 2009 is $771,159. The City’s General Fund made an advance of $4,230,000 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. During fiscal year 2008-2009, the City restructured advances of $1,393,934 to the Las Positas Golf Course Enterprise Fund. The term of the loan is 15 years and the interest rate is 3% compounded annually. Interest only payments to the City are to begin June 30, 2009 and for the next two years. Principal and interest payments will begin in 2012. The balance as of June 30, 2009 is $1,393,934. Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 74 NOTE 4 - INTERFUND TRANSACTIONS (Continued) During fiscal year 2008-2009, the City restructured advances of $538,764 to the Springtown Golf Course Enterprise Fund. The term of the loan is 15 years and the interest rate is 3% compounded annually. Interest only payments to the City are to begin June 30, 2009 and for the next two year. Principal and interest payments will begin in 2012. An additional $123,817 was advanced in fiscal 2008-09. The balances outstanding of June 30, 2009 is $538,764. 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 75 NOTE 5 - NOTES RECEIVABLE Notes Receivables balances as of June 30, 2009: Deferred Second Mortgage Program$4,007,788 Rehabilitation Loan Program1,775,619 Eden Housing Project, net1,186,297 Livermore Independent Living Associates Project (See Note 14A)800,000 Livermore Independent Living Associates Project (See Note 14B)2,533,751 Savannah Terrace Project (See Note 14G) 390,000 Livermore Housing Authority 510,000 Total Notes Receivables$11,203,455 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, 2009 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, 2009, 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 76 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. 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. All capital assets with limited useful lives are depreciated over their estimated useful lives. 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 25-50 years Improvements 10-20 years Equipment 3-10 years Infrastructure 50 years Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 77 NOTE 6 – CAPITAL ASSETS (Continued) A. Capital Asset Additions and Retirements Capital assets at June 30 comprise the following: Balance atRetirementsBalance at June 30, 2008Additionsand TransfersJune 30, 2009 Governmental activities Governmental Fund Capital Assets Capital assets not being depreciated: Land$16,511,039$620,640$17,131,679 Construction in progress34,807,3616,879,694($44,883)41,642,172 Subtotal51,318,4007,500,334(44,883)58,773,851 Capital assets being depreciated, cost: Office equipment7,702,480118,88744,8837,866,250 Other equipment7,111,65419,0317,130,685 Library books2,062,3402,062,340 Infrastructure264,102,392369,201(74,723)264,396,870 Buildings 97,929,19497,929,194 Subtotal378,908,060507,119(29,840)379,385,339 Accumulated Depreciation: Office equipment(6,354,774)(250,545)(6,605,319) Other equipment(1,888,988)(455,630)(2,344,618) Library books(1,660,788)(123,522)(1,784,310) Infrastructure(82,863,149)(7,201,985)74,723(89,990,411) Buildings(14,158,657)(1,982,906)(16,141,563) Subtotal(106,926,356)(10,014,588)74,723(116,866,221) Net Governmental Fund Programs capital assets being depreciated$271,981,704($9,507,469)$262,519,118 Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 78 NOTE 6 – CAPITAL ASSETS (Continued) Balance atRetirementsBalance at June 30, 2008 Additionsand TransfersJune 30, 2009 Internal Service Fund Capital Assets Capital assets not being depreciated: Construction in progress$135,743$265,296($121,971)$279,068 Subtotal135,743265,296(121,971)279,068 Capital assets being depreciated, cost: Office equipment9,0009,000 Other equipment234,38944,502278,891 Licensed Vehicles11,246,322605,887(183,792)11,668,417 Subtotal11,489,711650,389(183,792)11,956,308 Accumulated Depreciation: Office equipment(6,150)(901)(7,051) Other equipment(71,103)(18,138)(89,241) Licensed Vehicles(6,854,248)(915,381)259,592(7,510,037) Subtotal(6,931,501)(934,420)259,592(7,606,329) Net Internal Service Fund capital assets being depreciated4,558,210(284,031)75,8004,349,979 Governmental activity capital assets, net$327,994,057($2,025,870)($91,054)$325,922,016 Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 79 NOTE 6 – CAPITAL ASSETS (Continued) Balance atRetirementsBalance at June 30, 2008 Additionsand TransfersJune 30, 2009 Business-type activities Capital assets not being depreciated: Land$13,880,133$13,880,133 Land improvements634,433634,433 Construction in progress16,309,457$4,551,030($4,948,804)15,911,683 Subtotal30,824,0234,551,030(4,948,804)30,426,249 Capital assets being depreciated: Office equipment365,415365,415 Other equipment1,632,80011,593(16,382)1,628,011 Licensed Vehicles901,91738,964(71,484)869,397 Airport infrastructure10,862,77710,862,777 Water infrastructure32,336,826523,677(9,154)32,851,349 Sewer infrastructure198,715,6221,638,2244,553,876204,907,722 Las Positas Golf Course infrastructure6,867,1316,867,131 Springtown GC infrastructure460,401460,401 Buildings 22,169,72322,169,723 Subtotal274,312,6122,212,4584,456,856280,981,926 Accumulated Depreciation: Office equipment(214,323)(15,820)(230,143) Other equipment(1,146,255)(46,627)16,382(1,176,500) Licensed Vehicles(590,893)(66,395)71,484(585,804) Airport infrastructure(9,429,520)(287,393)(9,716,913) Water infrastructure(10,127,004)(961,487)9,154(11,079,337) Sewer infrastructure(100,489,221)(5,815,092)394,928(105,909,385) Las Positas Golf Course infrastructure(5,744,639)(339,391)(6,084,030) Springtown GC infrastructure(200,639)(17,945)(218,584) Buildings (6,745,937)(443,404)(7,189,341) Subtotal(134,688,431)(7,993,554)491,948(142,190,037) Net capital assets being depreciated139,624,181(5,781,096)4,948,804138,791,889 Business-type activity capital assets, net$170,448,204($1,230,066)$169,218,138 Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 80 NOTE 6 – CAPITAL ASSETS (Continued) B. Capital Asset Contributions Some capital assets may be acquired using Federal and State grant funds, or they may be contributed by developers or other governments. GASB 34 requires that these contributions be accounted for as revenues at the time the capital assets are contributed. C. Depreciation Allocation Depreciation expense was charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program were as follows: DepreciationDepreciation Governmental ActivitiesExpenseBusiness-Type ActivitiesExpense Governmental Fund ProgramsAirport$422,360 City Council$3,387Water1,015,906 City Manager10,575Sewer6,077,780 City Clerk3,564Las Positas459,416 Finance9,828Springtown18,092 Human Resources1,184 Fire198,234TOTAL$7,993,554 Police114,780 Public Works8,333,568 Community Development21,261 Information Technology15,907 Library729,309 Redevelopment572,991 Internal Service Funds934,420 TOTAL$10,949,008 Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 81 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 atBalance atCurrent June 30, 2008AdditionsReallocationsRetirementsJune 30, 2009Portion Governmental Activities Redevelopment Agency: 2001 Tax Allocation Bonds, 4.00-5.00%, 2032$34,115,000$730,000$33,385,000$760,000 Certificates of Participation: 2007, 3.5-3.7%, 201713,795,000($4,014,757)942,9308,837,313974,834 2002, varies, retired in 200920,055,00020,055,000 2000, varies, retired in 200926,685,00026,685,000 2008, varies, 2030$53,575,0001,420,163 52,154,8371,522,210 Notes Payable, varies, 2011-20194,932,3395,000,000 9,932,339260,000 Total governmental activities debt$99,582,339$58,575,000($4,014,757)$49,833,093$104,309,489$3,517,044 Business-type Activities Airport Certificates of Participation: 2002, varies, retired in 2009$1,580,000$1,580,000 2008, varies, 2030$1,580,00041,883 $1,538,117$44,892 Revenue Loans, 6-6.94%, 200913,88913,889 Water Certificates of Participation: 2007, 3.5-3.7%, 2017$4,014,757387,0703,627,687400,166 2002, varies, retired in 20095,905,0005,905,000 2008, varies, 20305,905,000156,529 5,748,471 167,777 Sewer 1994 State Loan, 2.7%, 20144,572,644712,2643,860,380731,494 Las Positas Golf Course Certificates of Participation: 2002, varies, retired in 20091,940,0001,940,000 2008, varies, 20301,940,00051,4251,888,57555,121 Total business-type activities debt$14,011,533$9,425,000$4,014,757$10,788,060$16,663,230$1,399,450 Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 82 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 2009, tax increment revenues amounted to $5.29 million which represented coverage of 2.20 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 November 5, 2008 the 2000 COPs were refunded. The refunding was financed using proceeds from the 2008 Variable Rate Demand Certificates of Participation. 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. On November 5, 2008 the 2002 COPs were refunded. The refunding was financed using proceeds from the 2008 Variable Rate Demand Certificates of Participation. Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 83 NOTE 7 – LONG TERM DEBT (Continued) On November 5, 2008, $63,000,000 principal amount of 2008 Variable Rate Demand Certificates of Participation, (2008 COPs) were issued to fund the costs of design and development of a new Fire Station No. 9, to study the options for the re-use options of the former library, to fund public safety communication projects, and to reconfigure a potion of the Las Positas Golf Course in order to extend Jack London Boulevard. A portion was used to refund and defease the outstanding portions related to the 2000 COPs and 2002 COPs of $25,975,000 and $29,480,000, respectively. As a result, the Refunded Bonds were considered to be defeased and the liability for those obligations was removed along with the trust assets from the City’s financial statements. Interest rates on the City’s 2008 COPs are reset periodically, using the “put” mechanism described below. The 2008 COPs are periodically subject to repurchase at par, referred to as a "put". Once a put occurs, a remarketing agent resells the 2008 COPs at par by setting new interest rates and repurchase dates. The City has obtained an irrevocable, direct-pay letter of credit in the amount of $64,967,672 to be used in the event the remarketing agent is unable to resell any 2008 COPs, and to ensure the City will not be required to repurchase the 2008 COPs before they mature. The letter of credit related to the 2008 COPs expires November 5, 2011. Interest rates on the City’s 2008 COPs are calculated using a Weekly Interest Rate, calculated on the basis of a 365 or 366 day year. Each Weekly Interest Rate will be the rate of interest per annum determined by the Remarking Agent to be the minimum interest rate that would enable the Certificates to be sold on the effective date. The calculation is based on the examination of comparable tax–exempt obligation, and in the judgment of the Remarketing Agent, to the Certificates and known by the remarketing Agent to have been priced or traded under then-prevailing market conditions. 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 84 NOTE 7 – LONG TERM DEBT (Continued) CALIFORNIA HOUSING FINANCE AGENCY NOTES PAYABLE The City entered into seven 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; 6) $750,000, a new loan entered into in fiscal year 2007, is to be used to rehabilitate small multi-family rental housing complexes; and 7) $5,000,000, a new loan entered into fiscal year 2009, is used to loan to the RDA for the purchase of the “Lucky Site.” As of June 30, 2009, the City drew down $260,000 from the first loan, $1,080,000 from the second loan, $418,875 from the third loan, $1,488,464 from the fourth loan, $1,500,000 from the fifth loan, $185,000 from the sixth loan, and $5,000,000 from the seventh 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 ended upon repayment of the remaining debt service in 2009. 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 $4.179 million in remaining debt service on the loans which is scheduled to occur in 2014. For fiscal year 2009, Sewer Revenues including operating revenues and non-operating interest earnings amounted to $20.39 million and operating costs include operating expenses, but not interest, depreciation or amortization and amounted to $13.51 million. Net Revenues available for debt service amounted to $6.9 million which represented coverage of 8.2 times the $836 thousand in debt service. Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 85 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 .66% rate. For the Year Ending June 30PrincipalInterestPrincipalInterest 2010$3,517,044$1,726,881$1,399,450$292,175 20114,462,0201,941,8821,444,224256,580 20125,419,3362,157,2681,489,531219,872 20133,649,7291,545,6061,537,631182,024 20143,801,7541,499,5371,587,000143,027 2015-201920,589,7977,222,3823,245,202330,766 2020-202423,972,4476,684,8752,147,552155,462 2025-202923,490,6843,269,5002,614,31675,503 2030-203315,406,678885,8751,198,3244,035 Total$104,309,489$26,933,806$16,663,230$1,659,444 Governmental ActivitiesBusiness-type Activities TAX AND REVENUE ANTICIPATION NOTES On November 2, 2008, the City issued $10,850,000 principal amount of 2008 Tax and Revenue Anticipation Notes. Proceeds from these notes were used to pay 2008/09 current and capital expenditures, and discharge other obligations or indebtedness. The principal of the Notes, together with the interest thereon, are 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. On October 26, 2009, the City authorized the issuance of $15 million principal amount of 2009 Tax and Revenue Anticipation Notes. The principal of the Notes, together with the interest thereon, are repayable from taxes, revenue and other unrestricted moneys which are to be received by the City 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 86 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, 2009 is as follows: Consolidated Refunding Assessment Districts 1993-3T$45,000 1993-412,720,000 Community Facilities District No. 1 (Tri-Valley Technology Park) Special Tax Bonds Series 200019,400,000 Consolidated Reassessment and Refunding District 20024,980,000 Community Facilities District No. 2006-1 (Shea Properties) Special Tax Bonds Series 20069,980,000 Total$47,125,000 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 ($12,720,000 as of June 30, 2009) 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, 2009 is $19,400,000. 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, 2009 is $4,980,000. Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 87 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, 2009 is $9,980,000. 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 88 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 economic uncertainty is the portion of fund balance to be used in the event of economic uncertainty. Designated for future operations is the portion of fund balance to be set aside per Council’s Budget policy for unforeseen contingencies, financial emergencies, cash flow requirements and prudent financial planning. C. Fund Deficits The following funds had GAAP basis fund deficits at June 30, 2009: Fund Excess of Expenditures Over Appropriations Horizons Special Revenue Fund$12,915 2000 Financing Authority COPs Capital Projects Fund405,605 2007 Financing Authority COPs Debt Service Fund2,617 2008 Financing Authority COPS Debt Service Fund530,511 Airport Construction Capital Projects Fund 33,448 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, 2009, are summarized as follows: Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 89 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, 2009, 2008 and 2007 amounted to $10,872,885, $7,229,828, and $6,597,877 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: Entry AgeUnfundedAnnualUnfunded ValuationAccruedValue of(Overfunded)FundedCovered(Overfunded) DateLiabilityAssetsLiabilityRatioPayrollas % of Payroll 2005$108,503,111$90,442,792$18,060,31983.4%$28,240,56264.0% 2006118,438,151100,221,82118,216,33084.6%28,421,58264.1% 2007129,987,818 112,065,123 17,922,69586.2%30,567,390 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 90 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$5,295,150,375$1,071,898,88983.2%$664,147,796161.4% 20067,278,049,8346,102,615,567 1,175,434,26783.8%754,730,438155.7% 20077,986,055,1766,826,599,4591,159,455,71785.5%831,607,658139.4% 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 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 91 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 City 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 Service Percent PERS Service Percent 10 75% 10 75% 15 75% 15 80% 15 80% 20 85% 20 90% 20 90% 25+ 100% 25+ 100% 25+ 100% ▪ Cap ▪ Orig DOH before 1/10/05: No Cap ▪ DOH before 2/1/06: No Cap ▪ DOR before 10/3/03: $200 benefit ▪ DOH before 2/1/07: Active medical cap ▪ Tier 1 (PL/Cpt DOH before 9/1/04): No Cap ▪ Orig DOH on or after 1/10/05: Active medical cap ▪ DOH on or after 2/1/06: no benefit, RHSA instead ▪ DOH before 4/1/07 & DOR on or after 1/1/06: Active medical cap ▪ DOH on or after 2/1/07: No benefit, RHSA instead ▪ Tier 2 (DOH 9/1/04 - 5/29/06): Active medical cap ▪ Employees promoted from other units after 2/1/06 are eligible for retiree medical benefit ▪ DOH on or after 4/1/07: No benefit, RHSA instead ▪ Tier 3 (DOH on or after 5/29/06): Active medical cap ▪ Tier 4 Promoted EE's stay with RHSA if RHSA was prior benefit As of June 30, 2009, approximately 140 participants were eligible to receive benefits. Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 92 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 93 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, 2009, the City made contributions toward the ARC amounting to $2,018,901 to the Plan which represented 4.75% of the $42.5 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)$5,117,000 Interest on net OPEB obligation171,337 Amortization of OPEB obligation(234,978) Annual OPEB cost5,053,359 Contributions made: City portions of current year premiums paid682,901 Additonal contributions to CERBT 1,336,000 Total contributions2,018,901 Contributions less than the ARC3,034,458 Net OPEB obligation at June 30, 20082,928,843 Net OPEB obligation at June 30, 2009$5,963,301 The actuarial accrued liability (AAL) representing the present value of future benefits, included in the actuarial study dated June 30, 2006, amounted to $35,220,000 million and was unfunded since no assets had been transferred into CERBT as of that date. However, as of June 30, 2009, the City transferred additional contributions to CERBT which along with investment income totaled $2,236,588 reduced the unfunded actuarial accrued liability. The Plan’s annual OPEB cost and actual contributions for fiscal years ended June 30, 2008 and 2009 are set forth below: Percentage Annualof AnnualNet OPEB ActualOPEB CostOPEB Fiscal YearCostContributionContributedLiability 6/30/2008$4,823,000$1,894,15739%$2,928,843 6/30/20095,053,0592,018,90140%5,963,301 Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 94 NOTE 10 - PENSION PLAN (Continued) The Schedule of Funding Progress presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Trend data from the actuarial studies is presented below: Unfunded Entry AgeUnfundedActuarial ActuarialActuarialActuarialLiability as ActuarialValue ofAccruedAccruedFundedCoveredPercentage of ValuationAssetsLiabilityLiabilityRatioPayrollCovered Payroll Date(A)(B)(B - A)(A/B)(C)[(B – A)/C] 6/30/2006$0$35,220,000$35,220,0000.00%$35,041,000101% 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 $44,380 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 95 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 96 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, 2009, the City contributed $13,094,025 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, 2009 the City contributed $653,938 received a refund of $221,339. 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, 2009 the City contributed $249,833 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 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 97 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, 2007$1,695,205$816,648$2,511,853 Increase in estimated claims liability43,236 295,404 338,640 Claims paid(65,366) (265,506) (330,872) Balance of claims payable at June 30, 20081,673,075846,5462,519,621 Change in estimated claims liability 948,365246,5571,194,922 Claims paid (653,938)(249,833) (903,771) Balance of claims payable at June 30, 2009$1,967,502$843,270$2,810,772 Balance due within one year$1,967,502$843,270$2,810,772 NOTE 14 - COMMITMENTS AND CONTINGENCIES The City has the following outstanding construction commitments at June 30, 2009: Water Reclamation Plant Project$1,064,760 Slurry Seal Project 766,355 Isabel Interchange 23,657,366 El Charro Specific Plan Infrastructure, CIP 1,217,000 Other Miscellaneous Commitments 955,533 Total$27,661,014 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 45.8% in the fiscal 2008-09. Livermore’s share of the fiscal 2008-09 debt service was $422,230. Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 98 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. Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 99 NOTE 14 - COMMITMENTS AND CONTINGENCIES (Continued) 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 unit 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 the Developer for $1.1 million. Fifty-five units are to be made affordable for lower income seniors. The Developer will also construct Iron Horse Trail Easement Improvements. This agreement replaces the Livermore Senior Housing Continuum of Care Project, Phase II. To assist in financing the project, the Agency has agreed to loan $2 million to the Developer. The loan bears an interest of 3% per annum and due in forty years. The loan is due in installments as follows: $989,000 is due in two subordinated payments from available remaining Bond Proceeds, and annual payments ranging from $33,000 to $175,000 per year are payable each March 1 from cash flows available from the operations of the project. In addition, the Agency agreed to a Property Tax Loan and an Additional Property Tax Deferment up to maximums specified in the agreement, which bear interest at three percent with annual repayments beginning in year eight from available cash flows of the project commencing after the project is complete. As of June 30, 2009, the Agency had disbursed $533,751 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, 2009, 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, 2009, 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 110 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, 2009, 70 units have completed construction while the remaining 40 units are still undergoing construction. Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 100 NOTE 14 - COMMITMENTS AND CONTINGENCIES (Continued) 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 was paid within 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, 2009, construction was complete and the Developer had repaid all of the above installments. 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 was paid within 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, 2009, construction was complete, and the Developer had repaid all of the above installments. F. 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, 2009, the project is complete, 2 units have been sold, and the remaining balance of the loan is $390,000. Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 101 NOTE 15 – SUBSEQUENT EVENTS The State of California adopted AB26 4X in July 2009 which directs that a portion of the incremental property taxes received by redevelopment agencies based on the property taxes received in fiscal year 2006-07 be paid instead to the County supplemental educational revenue augmentation fund (SERAF) in fiscal years 2009-10 and 2010-11. The State Department of Finance will determine each agency’s SERAF payment by November 15 of each year, and payments are due by May 10 of the applicable year. Based on the calculations in AB26 4X, the Agency’s SERAF’s are estimated to be $1,560,296 in fiscal year 2009-10 and $321,237 in fiscal year 2010-11. The Agency can use any legally available funds to make the SERAF payments. The payment due in fiscal year 2009-10 represents 39% of the Agency’s cash and investments available for operations at June 30, 2009. The obligation to make the SERAF payment is subordinate to obligations to repay bonds, however if the Agency fails to make the SERAF payment the Agency may not encumber or expend funds other than to pay pre-existing indebtedness, contractual obligations and 75% of the amount expended on Agency administration for the preceding fiscal year until the SERAF is paid in full. Comprehensive Annual Financial Report FY 2008-2009 NOTES TO BASIC FINANCIAL STATEMENTS 102 Variance with Budget Positive BudgetActual(Negative) Revenues Property tax increment$5,286,000$5,293,686$7,686 Interest and rentals355,000326,407(28,593) Miscellaneous689,000595,059(93,941) Total Revenues 6,330,0006,215,152(114,848) Expenditures Current: Redevelopment4,299,2004,018,497280,703 Capital Outlay Capital projects2,698,0001,214,0731,483,927 Debt service Principal199,000199,000 Interest and fiscal charges30,000275,968(245,968) Total Expenditures7,226,2005,508,5381,717,662 OTHER FINANCING SOURCES (USES) Transfers in1,954,0005,387,2993,433,299 Transfers (out)(5,629,000)(3,684,927)1,944,073 Total Other Financing Sources (Uses)(3,675,000)1,702,3725,377,372 Net change in budgetary fund balance($4,571,200)2,408,986$6,980,186 Fund balance, July 14,623,514 Fund balance, June 30$7,032,500 REDEVELOPMENT AGENCY CAPITAL PROJECTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 103 Variance with Budget Positive BudgetActual(Negative) Revenues Contributions from outside sources$1,250,000($1,250,000) Charges for current services654,000622,087(31,913) Use of money and property265,809265,809 Total Revenues 1,904,000887,896(1,016,104) Expenditures Capital Outlay Capital projects3,902,5002,164,1461,738,354 Total Expenditures3,902,5002,164,1461,738,354 OTHER FINANCING SOURCES (USES) Transfers in230,000(230,000) Transfers (out)(2,298,950)(1,823,700)475,250 Total Other Financing Sources (Uses)(2,068,950)(1,823,700)245,250 Net change in budgetary fund balance($4,067,450)(3,099,950)$967,500 Budgetary fund balance, July 18,829,539 Budgetary fund balance, June 30$5,729,589 STREET IMPROVEMENTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 104 Variance with Budget Positive BudgetActual(Negative) Revenues Taxes and special assessments$1,721,000$1,528,334($192,666) Intergovernmental9,481,0004,868,300(4,612,700) Contributions from outside sources2,700,000(2,700,000) Charges for current services38,44338,443 Use of money and property 181,687181,687 Total Revenues13,902,0006,616,764(7,285,236) Expenditures Capital Outlay Capital projects5,595,5901,237,2634,358,327 Total Expenditures5,595,5901,237,2634,358,327 OTHER FINANCING SOURCES (USES) Transfers in10,500(10,500) Transfers (out)(6,147,500)(2,216,871)3,930,629 Total Other Financing Sources (Uses)(6,137,000)(2,216,871)3,920,129 Net change in budgetary fund balance$2,169,4103,162,630$993,220 Budgetary fund balance, July 14,359,076 Budgetary fund balance, June 30$7,521,706 STREET PROJECTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 105 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. Comprehensive Annual Financial Report FY 2008-2009 106 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. Comprehensive Annual Financial Report FY 2008-2009 107 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. ISABEL 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 2008-2009 108 Comprehensive Annual Financial Report FY 2008-2009 109 RedevelopmentLow Housing & Low and ModerateIncomeCommunity Income HousingHousingAssistanceHorizons ASSETS Cash and investments in City Treasury$2,200,223$6,167,091$2,831,294 Cash and investments with Trustees Accounts receivables (net of applicable allowable for uncollectibles)20,0006,119$194,822 Notes receivable1,720,0481,024,3663,870,067 Land held for redevelopment2,274,500 Advances to other funds8,040,6642,923,083 Total Assets$3,940,271$15,232,121$11,905,063$194,822 LIABILITIES Accounts payable and other accruals$43,764$124,876$879 Accrued payroll 2,1531,00412,695 Deposits payable1,050 Due to other funds192,448 Deferred rents and revenue1,720,048$1,024,3663,870,067 Total Liabilities1,767,0151,024,3663,995,947206,022 FUND EQUITY Reserved for: Capital outlay Low income housing2,173,256 Land held for redevelopment2,274,500 Advances to other funds8,040,6642,923,083 Debt service Unreserved, undesignated6,167,0912,711,533(11,200) TOTAL FUND BALANCES (DEFICIT)2,173,25614,207,7557,909,116(11,200) Total Liabilities and Fund Balances$3,940,271$15,232,121$11,905,063$194,822 NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2009 COMBINING BALANCE SHEETS SPECIAL REVENUE FUNDS Comprehensive Annual Financial Report FY 2008-2009 110 Other SolidAT&T Federal andWasteMaintenanceBroadbandCity StreetPark State GrantsManagementDistrictGrantSweepingFee $2,833,038$412,069$3,221,885$112,051$1,015$1,501,441 1,986,92287,36132,25731,62723,000 2,198,974 $7,018,934$499,430$3,254,142$143,678$24,015$1,501,441 $294,021$61,905$145,582$119,779 2,7134,6034,510 1,660 10,410 2,382,306 2,680,70076,918145,5824,510119,779 4,338,234422,5123,108,560$143,67819,5051,381,662 4,338,234422,5123,108,560143,67819,5051,381,662 $7,018,934$499,430$3,254,142$143,678$24,015$1,501,441 (Continued) SPECIAL REVENUE FUNDS Comprehensive Annual Financial Report FY 2008-2009 111 DEBT SERVICE FUNDS Capital Projects Financing Authority Certificates of Participation Redevelopment Agency200020072008 ASSETS Cash and investments in City Treasury$136,350$1$1 Cash and investments with Trustees2,495,31257107,117 Accounts receivables (net of applicable allowable for uncollectibles) Notes receivable Land held for redevelopment Advances to other funds Total Assets$2,631,662$58$107,118 LIABILITIES Accounts payable and other accruals$500 Accrued payroll Deposits payable Due to other funds Deferred rents and revenue Total Liabilities500 FUND EQUITY Reserved for: Capital outlay Low income housing Notes receivable Advance to other funds Debt service$2,631,662$58$106,618 Unreserved, undesignated TOTAL FUND BALANCES (DEFICIT)2,631,66258106,618 Total Liabilities and Fund Balances$2,631,662$58$107,118 NON-MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 112 DEBT SERVICE FUND Assessment 2002District Variable Rate Certificates of StormAirportCollege Isabel ParticipationDrainConstructionAvenueParkway $1,078,493$81,558$86,658 $2,778 $1,078,493$81,558$86,658$2,778 $23,965$36,398 1,323,434 $65,080 23,96565,0801,359,832 1,054,52816,478$86,658(1,357,054) 1,054,52816,47886,658(1,357,054) $1,078,493$81,558$86,658$2,778 (Continued) CAPITAL PROJECTS FUNDS Comprehensive Annual Financial Report FY 2008-2009 113 Livermore Capital Projects ParkingTVTCFinancing Authority Lots20% Fee2002 COPs ASSETS Cash and investments in City Treasury$167,603$654,651 Cash and investments with Trustees Accounts receivables (net of applicable allowable for uncollectibles) Notes receivable Land held for redevelopment Advances to other funds Total Assets$167,603$654,651 LIABILITIES Accounts payable and other accruals Accrued payroll Deposits payable Due to other funds Deferred rents and revenue Total Liabilities FUND EQUITY Reserved for: Capital outlay Low income housing Notes receivable Advance to other funds Debt service Unreserved, undesignated$167,603$654,651 TOTAL FUND BALANCES (DEFICIT)167,603654,651 Total Liabilities and Fund Balances$167,603$654,651 NON-MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS JUNE 30, 2009 CAPITAL PROJECTS FUNDS Comprehensive Annual Financial Report FY 2008-2009 114 LivermoreLivermore CapitalCapitalTotal ProjectsProjectsNonmajor Financing AuthorityFinancing AuthorityOther Street andGovernmental 2007 COPs2008 COPsTrail ConstructionFunds $2,004,416$23,489,838 $6,249,6562,485,47011,337,612 253,1112,637,997 8,813,455 2,274,500 10,963,747 $6,249,656$4,742,997$59,517,149 $166,433$103,918$1,122,020 27,678 2,710 466,0641,992,356 9,061,867 166,433569,98212,206,631 6,083,2236,083,223 2,173,256 2,274,500 10,963,747 2,738,338 4,173,01523,077,454 6,083,2234,173,01547,310,518 $6,249,656$4,742,997$59,517,149 (Continued) CAPITAL PROJECTS FUNDS Comprehensive Annual Financial Report FY 2008-2009 115 RedevelopmentLow Housing & Low and ModerateIncomeCommunity Income HousingHousingAssistanceHorizons REVENUES Interest and rentals$48,305 Intergovernmental$92,630$395,415 Contributions from outside sources$8,283 Charges for services324,119 Use of money and property293,739118,125 Miscellaneous 1,015,54896,770 Total Revenues48,3051,641,689210,755492,185 EXPENDITURES Current: Police768,725 Community development883,018 Library Redevelopment343,817 Capital Outlay Capital projects Debt service Principal retirement Interest and fiscal charges Total Expenditures343,817883,018768,725 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(295,512)1,641,689(672,263)(276,540) OTHER FINANCING SOURCES (USES) Proceeds from debt issuance5,000,000 Payment to bond escrow Transfers in1,058,7351,800,426300,000 Transfers (out)(749,850)(2,055,474)(5,082,000) Total Other Financing Sources (Uses)308,885(2,055,474)1,718,426300,000 Net change in fund balances13,373(413,785)1,046,16323,460 Fund balances (deficits) at the beginning of year2,159,88314,621,5406,862,953(34,660) FUND BALANCES (DEFICITS) AT END OF YEAR$2,173,256$14,207,755$7,909,116($11,200) SPECIAL REVENUE FUNDS NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 116 Other SolidAT&T Federal andWasteMaintenanceBroadbandCity StreetPark State GrantsManagementDistrictGrantSweepingFee $4,144,807$592,221$2,891,529$96,659$431,542 (17,473) 103,591$276,000 108,3896,67087,25226,210 723,37431,627 5,062,688598,8912,978,781128,286276,000457,752 1,534 2,361,8421,290,649341,813 57,439 861,974690,81185,574131,944478,838 3,282,789690,8111,376,223131,944341,813478,838 1,779,899(91,920)1,602,558(3,658)(65,813)(21,086) 99,80686,000 (790,300)(1,305,453) (690,494)(1,305,453)86,000 1,089,405(91,920)297,105(3,658)20,187(21,086) 3,248,829514,4322,811,455147,336(682)1,402,748 $4,338,234$422,512$3,108,560$143,678$19,505$1,381,662 (Continued) SPECIAL REVENUE FUNDS Comprehensive Annual Financial Report FY 2008-2009 117 DEBT SERVICE FUNDS Capital Projects Financing Authority Certificates of Participation Redevelopment Agency200020072008 REVENUES Interest and rentals Intergovernmental Contributions from outside sources$359,059 Charges for services Use of money and property$134,448$159110$12 Miscellaneous Total Revenues134,448159359,16912 EXPENDITURES Current: Police Community development Library Redevelopment Capital Outlay Capital projects Debt service Principal retirement730,0001,330,0001,420,163 Interest and fiscal charges1,678,6811,814,705492,707891,348 Total Expenditures2,408,6811,814,7051,822,7072,311,511 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(2,274,233)(1,814,546)(1,463,538)(2,311,499) OTHER FINANCING SOURCES (USES) Proceeds from debt issuance46,582,017 Payment to bond escrow(46,030,256) Transfers in2,408,6811,454,4501,461,6221,875,729 Transfers (out)(9,373) Total Other Financing Sources (Uses)2,408,6811,454,4501,461,6222,418,117 Net change in fund balances134,448(360,096)(1,916)106,618 Fund balances (deficits) at the beginning of year2,497,214360,0961,974 FUND BALANCES (DEFICITS) AT END OF YEAR$2,631,662$58$106,618 NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 118 DEBT SERVICE FUND Assessment 2002District Variable Rate Certificates of StormAirportCollege Isabel ParticipationDrainConstructionAvenueParkway $734,147 ($264,266) $85$34,14919,484 138,768$6,015 85172,917734,1476,015(244,782) 190,771799,818$1,814,947 672,653 672,653190,771799,8181,814,947 (672,568)(17,854)(65,671)6,015(2,059,729) 602,25955,6002,793,760 (163,284) 602,259(163,284)55,6002,793,760 (70,309)(181,138)(10,071)6,015734,031 70,3091,235,66626,54980,643(2,091,085) $1,054,528$16,478$86,658($1,357,054) (Continued) CAPITAL PROJECTS FUNDS Comprehensive Annual Financial Report FY 2008-2009 119 Livermore Capital Projects Financing AuthorityParkingTVTC 2002 COPsLots20% Fee REVENUES Interest and rentals Intergovernmental Contributions from outside sources$40,417 Charges for services Use of money and property$117,710 Miscellaneous Total Revenues158,127 EXPENDITURES Current: Police Community development Library Redevelopment Capital Outlay Capital projects$142,000 Debt service Principal retirement Interest and fiscal charges Total Expenditures142,000 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES1(142,000)58,127 OTHER FINANCING SOURCES (USES) Proceeds from debt issuance Payment to bond escrow Transfers in142,000 Transfers (out)(141)(50,000) Total Other Financing Sources (Uses)(141)142,000(50,000) Net change in fund balances(140)8,127 Fund balances (deficits) at the beginning of year140167,603646,524 FUND BALANCES (DEFICITS) AT END OF YEAR$167,603$654,651 CAPITAL PROJECTS FUNDS NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 120 LivermoreLivermoreTotal Capital ProjectsCapital ProjectsOther Street Nonmajor Financing AuthorityFinancing Authorityand TrailGovernmental 2007 COPs2008 COPsConstructionFunds $48,305 9,378,950 $1,153,6131,279,633 1,992705,702 $117,002$1,50520,514985,564 2,012,102 117,0021,5051,176,11914,410,256 770,259 4,877,322 57,439 343,817 3,469,146830,2463,058,21212,554,281 3,480,163 5,550,094 3,469,146830,2463,058,21227,633,375 (3,352,144)(828,741)(1,882,093)(13,223,119) 6,992,98358,575,000 (46,030,256) 9,3731,375,70815,524,149 (56)(90,392)(190,000)(10,486,323) (56)6,911,9641,185,70817,582,570 (3,352,200)6,083,223(696,385)4,359,451 3,352,2004,869,40042,951,067 $6,083,223$4,173,015$47,310,518 (Continued) CAPITAL PROJECTS FUNDS Comprehensive Annual Financial Report FY 2008-2009 121 REDEVELOPMENT LOW & MODERATE INCOME HOUSING LOW INCOME HOUSING VarianceVariance PositivePositive BudgetActual(Negative)BudgetActual(Negative) REVENUES Interest and rentals$70,000$48,305($21,695) Intergovernmental Contributions from outside sources$8,283$8,283 Charges for services$300,000324,11924,119 Use of money and property293,739293,739 Miscellaneous 1,015,5481,015,548 Total Revenues70,00048,305(21,695)300,0001,641,6891,341,689 EXPENDITURES Current: Police Community development Library Redevelopment534,900343,817191,083 Capital Outlay700,000700,000 Capital projects Debt service Principal Interest and fiscal charges Total Expenditures1,234,900343,817891,083 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(1,164,900)(295,512)869,388300,0001,641,6891,341,689 OTHER FINANCING SOURCES (USES) Proceeds from long term debt Transfers in1,057,0001,058,7351,7355,000(5,000) Transfers (out)(169,300)(749,850)(580,550)(2,862,480)(2,055,474)807,006 Total Other Financing Sources (Use887,700308,885(578,815)(2,857,480)(2,055,474)802,006 Net change in fund balance($277,200)13,373$290,573($2,557,480)(413,785)$2,143,695 Fund balances at beginning of year2,159,88314,621,540 Fund balances at end of year$2,173,256$14,207,755 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2009 Payment to bond escrow Comprehensive Annual Financial Report FY 2008-2009 122 HORIZONS VarianceVariance PositivePositive BudgetActual(Negative)BudgetActual(Negative) $20,000($20,000) 1,235,000$92,630(1,142,370) $464,000$395,415($68,585) 125,000118,125(6,875) 98,00096,770(1,230) 1,380,000210,755(1,169,245)562,000492,185(69,815) 755,810768,725(12,915) 8,038,940883,0187,155,922 8,038,940883,0187,155,922755,810768,725(12,915) (6,658,940)(672,263)5,986,677(193,810)(276,540)(82,730) 5,000,0005,000,000 2,577,1801,800,426(776,754)370,000300,000(70,000) (5,082,000)(5,082,000) 7,577,1801,718,426(5,858,754)370,000300,000(70,000) $918,2401,046,163$127,923$176,19023,460($152,730) 6,862,953(34,660) $7,909,116($11,200) (Continued) HOUSING & COMMUNITY ASSISTANCE Comprehensive Annual Financial Report FY 2008-2009 123 OTHER FEDERAL AND STATE GRANTSSOLID WASTE MANAGEMENT VarianceVariance PositivePositive BudgetActual(Negative)BudgetActual(Negative) REVENUES Interest and rentals Intergovernmental$14,013,530$4,144,807($9,868,723)$624,000$592,221($31,779) Contributions from outside sources(17,473)(17,473) Charges for services110,000103,591(6,409) Use of money and property108,389108,3896,6706,670 Miscellaneous 599,000723,374124,374 Total Revenues14,722,5305,062,688(9,659,842)624,000598,891(25,109) EXPENDITURES Current: Police12,0001,53410,466 Community development3,130,1202,361,842768,278758,750690,81167,939 Library265,50057,439208,061 Redevelopment Capital Outlay Capital projects2,732,350861,9741,870,376 Debt service Principal Interest and fiscal charges Total Expenditures6,139,9703,282,7892,857,181758,750690,81167,939 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES8,582,5601,779,899(6,802,661)(134,750)(91,920)42,830 OTHER FINANCING SOURCES (USES) Proceeds from long term debt Payment to bond escrow Transfers in154,20099,806(54,394) Transfers (out)(8,536,400)(790,300)7,746,100 Total Other Financing Sources (Uses)(8,382,200)(690,494)7,691,706 Net change in fund balance$200,3601,089,405$889,045($134,750)(91,920)$42,830 Fund balances at beginning of year3,248,829514,432 Fund balances at end of year$4,338,234$422,512 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2009 BUDGET AND ACTUAL Comprehensive Annual Financial Report FY 2008-2009 124 MAINTENANCE DISTRICTAT&T BROADBAND GRANTCITY STREET SWEEPINGPARK FEE VarianceVarianceVarianceVariance PositivePositivePositivePositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) $2,915,000$2,891,529($23,471)$137,000$96,659($40,341)$387,000$431,542$44,542 $276,000$276,000 87,25287,25226,21026,210 31,62731,627 2,915,0002,978,78163,781137,000128,286(8,714)276,000276,000387,000457,75270,752 1,841,2301,290,649550,581348,260341,813$6,447 90,00085,5744,426 140,000131,9448,0561,175,500478,838696,662 1,931,2301,376,223555,007140,000131,9448,056348,260341,8136,4471,175,500478,838696,662 983,7701,602,558618,788(3,000)(3,658)(658)(72,260)(65,813)6,447(788,500)(21,086)767,414 86,00086,000 (1,403,200)(1,305,453)97,747 (1,403,200)(1,305,453)97,74786,00086,000 ($419,430)297,105$716,535($3,000)(3,658)($658)$13,74020,187$6,447($788,500)(21,086)$767,414 2,811,455147,336(682)1,402,748 $3,108,560$143,678$19,505$1,381,662 (Continued) Comprehensive Annual Financial Report FY 2008-2009 125 FINANCING AUTHORITY COPSFINANCING AUTHORITY COPS REDEVELOPMENT AGENCY 20002007 VarianceVarianceVariance PositiveFavorablePositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) REVENUES Interest and rentals Intergovernmental Contributions from outside sources$416,000$359,059(56,941) Charges for services Use of money and property$140,000$134,448($5,552)$1,000$159($841)1,000110($890) Miscellaneous Total Revenues140,000134,448(5,552)1,000159(841)417,000359,169(57,831) EXPENDITURES Current: Police Community development Library Redevelopment Capital Outlay Capital projects Debt service Principal730,000730,0001,330,0001,330,000 Interest and fiscal charges1,678,6901,678,68191,409,1001,814,705(405,605)490,090492,707($2,617) Total Expenditures2,408,6902,408,68191,409,1001,814,705(405,605)1,820,0901,822,707(2,617) EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(2,268,690)(2,274,233)(5,543)(1,408,100)(1,814,546)(406,446)(1,403,090)(1,463,538)(60,448) OTHER FINANCING SOURCES (USES) Proceeds from long term debt Transfers in2,409,0002,408,681(319)1,048,0001,454,450406,4501,406,0001,461,62255,622 Transfers (out) Total Other Financing Sources (Uses)2,409,0002,408,681(319)1,048,0001,454,450406,4501,406,0001,461,62255,622 EXPENDITURES AND OTHER USES$140,310134,448($5,862)($360,100)(360,096)$4$2,910(1,916)($4,826) Fund balances at beginning of the year2,497,214360,0961,974 Fund balances at end of year$2,631,662$58 Payment to bond escrow BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 126 FINANCING AUTHORITY COPS 20082002 VARIABLE RATE COPSSTORM DRAIN VarianceVarianceVariance PositiveFavorablePositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) $1,000$12($988)$1,000$85($915)$34,149$34,149 $150,000138,768(11,232) 1,00012(988)1,00085(915)150,000172,91722,917 333,300190,771142,529 1,781,0001,420,163360,837 891,348(891,348)1,855,230672,6531,182,577 1,781,0002,311,511(530,511)1,855,230672,6531,182,577333,300190,771142,529 (1,780,000)(2,311,499)(531,499)(1,854,230)(672,568)1,181,662(183,300)(17,854)165,446 46,582,01746,582,017 (46,030,256)(46,030,256) 1,848,5601,875,72927,1691,783,920602,259(1,181,661) (9,373)(9,373)(412,000)(163,284)248,716 1,848,5602,418,117569,5571,783,920602,259(1,181,661)(412,000)(163,284)248,716 $68,560106,618$38,058($70,310)(70,309)$1($595,300)(181,138)$414,162 70,3091,235,666 $106,618$1,054,528 (Continued) Comprehensive Annual Financial Report FY 2008-2009 127 COLLEGE AVENUE AIRPORT CONSTRUCTIONASSESSMENT DISTRICTISABEL PARKWAY VarianceVarianceVariance PositivePositivePositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) REVENUES Interest and rentals Intergovernmental$711,000$734,147$23,147 Contributions from outside sources($264,266)($264,266) Charges for services Use of money and property19,48419,484 Miscellaneous $6,000$6,015$15 Total Revenues711,000734,14723,1476,0006,01515(244,782)(244,782) EXPENDITURES Current: Police Community development Library Redevelopment Capital Outlay Capital projects766,370799,818(33,448)$15,428,0801,814,94713,613,133 Debt service Principal Interest and fiscal charges Total Expenditures766,370799,818(33,448)15,428,0801,814,94713,613,133 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(55,370)(65,671)(10,301)6,0006,01515(15,428,080)(2,059,729)13,368,351 OTHER FINANCING SOURCES (USES) Proceeds from long term debt Transfers in55,60055,60016,690,0002,793,760(13,896,240) Transfers (out) Total Other Financing Sources (Uses)55,60055,60016,690,0002,793,760(13,896,240) EXPENDITURES AND OTHER USES$230(10,071)($10,301)$6,0006,015$15$1,261,920734,031($527,889) Fund balances at beginning of year26,54980,643(2,091,085) Fund balances at end of year$16,478$86,658($1,357,054) Payment to bond escrow BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 128 PARKING LOT VarianceVarianceVariance PositiveFavorableFavorable BudgetActual(Negative)BudgetActual(Unfavorable)BudgetActual(Unfavorable) REVENUES Interest and rentals Intergovernmental Contributions from outside sources$28,000$40,417$12,417 Charges for services Use of money and property17,71017,710$122,000$117,002($4,998) Miscellaneous Total Revenues28,00058,12730,127122,000117,002(4,998) EXPENDITURES Current: Police Community development Library Redevelopment Capital Outlay Capital projects$142,000$142,0003,483,7103,469,14614,564 Debt service Principal Interest and fiscal charges Total Expenditures142,000142,0003,483,7103,469,14614,564 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(142,000)(142,000)28,00058,12730,127(3,361,710)(3,352,144)9,566 OTHER FINANCING SOURCES (USES) Proceeds from long term debt Transfers in142,000$142,000535,000(535,000) Transfers (out)(60,500)(50,000)10,500(56)(56) Total Other Financing Sources (Uses)142,000142,000(60,500)(50,000)10,500535,000(56)(535,056) EXPENDITURES AND OTHER USES($142,000)$142,000($32,500)8,127$40,627($2,826,710)(3,352,200)($525,490) Fund balances at beginning of year167,603646,5243,352,200 Fund balances at end of year$167,603$654,651 (Continued) Payment to bond escrow LIVERMORE CAPITAL PROJECTS FINANCING AUTHORITY 2007 COP CAPITAL PROJECTSTVTC 20% FEE Comprehensive Annual Financial Report FY 2008-2009 129 LIVERMORE CAPITAL PROJECTS FINANCING AUTHORITYOTHER STREET AND 2008 COP CAPITAL PROJECTSTRAIL CONSTRUCTION VarianceVariance FavorablePositive BudgetActual(Unfavorable)BudgetActual(Negative) REVENUES Interest and rentals Intergovernmental Contributions from outside sources$3,650,000$1,153,613($2,496,387) Charges for services1,9921,992 Use of money and property$2,000$1,505($495)20,00020,514514 Miscellaneous Total Revenues2,0001,505(495)3,670,0001,176,119(2,493,881) EXPENDITURES Current: Police Community development Library Redevelopment Capital Outlay Capital projects4,390,460830,2463,560,2145,899,1403,058,2122,840,928 Debt service Principal Interest and fiscal charges Total Expenditures4,390,460830,2463,560,2145,899,1403,058,2122,840,928 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES(4,388,460)(828,741)3,559,719(2,229,140)(1,882,093)347,047 OTHER FINANCING SOURCES (USES) Proceeds from long term debt6,993,0006,992,983(17)13,800,000(13,800,000) Transfers in9,3739,3733,901,0001,375,708(2,525,292) Transfers (out)(270,000)(90,392)179,608(2,517,300)(190,000)2,327,300 Total Other Financing Sources (Uses)6,723,0006,911,964188,96415,183,7001,185,708(13,997,992) EXPENDITURES AND OTHER USES$2,334,5406,083,223$3,748,683$12,954,560(696,385)($13,650,945) Fund balances at beginning of year4,869,400 Fund balances at end of year$6,083,223$4,173,015 Payment to bond escrow BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 130 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. Comprehensive Annual Financial Report FY 2008-2009 131 Liability Fleet and InsuranceWorkersEquipmentInformation ReserveCompensationServicesTechnology ASSETS Current Assets: Cash and investments in City Treasury$4,355,309$1,637,005$3,613,304$4,118,867 Accounts receivable (net of applicable allowance for uncollectibles)51,00073,063 Prepaids, deposits and supplies272,696 Total current assets4,355,3091,688,0053,959,0634,118,867 Noncurrent Assets: Land and construction279,068 Capital assets (net of accumulated depreciation)4,349,979 Total noncurrent assets4,629,047 Total Assets4,355,3091,688,0058,588,1104,118,867 LIABILITIES Current Liabilities: Accounts payable and other accruals70,1084,484334,879100,598 Accrued payroll3,1624,29919,03212,630 Accrued compensated absences10,659 Due to other funds Total current liabilities83,9298,783353,911113,228 Noncurrent Liabilities: Claims payable1,967,502843,270 Net OPEB obligation Total noncurrent liabilities1,967,502843,270 Total liabilities2,051,431852,053353,911113,228 NET ASSETS Invested in Capital Assets4,349,979 Unrestricted2,303,878835,9523,884,2204,005,639 Total Net Assets (Deficit)$2,303,878$835,952$8,234,199$4,005,639 INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET ASSETS FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 132 Facilities RehabilitationCommunityEmployee ProjectsReprographicsDevelopmentPayrollTotal $1,445,702$156,373$1,210,829$16,537,389 222,3291,993348,385 272,696 1,668,031156,3731,212,82217,158,470 279,068 4,349,979 4,629,047 1,668,031156,3731,212,82221,787,517 95,7526,1721,155,7601,767,753 9,4921,86750,482 40,37251,031 105,2448,0391,196,1321,869,266 2,810,772 5,963,3015,963,301 5,963,3018,774,073 105,2448,0397,159,43310,643,339 4,349,979 1,562,787148,334(5,946,611)6,794,199 $1,562,787$148,334($5,946,611)$11,144,178 Comprehensive Annual Financial Report FY 2008-2009 133 Liability Fleet and InsuranceWorkersEquipmentInformation ReserveCompensationServicesTechnology OPERATING REVENUES Charges for services$737,301$967,323$2,179,023$1,612,438 Total Operating Revenues737,301967,3232,179,0231,612,438 OPERATING EXPENSES Salaries and benefits 222,144221,690989,539593,617 Contracted services454,594117,84319,418649,355 Insurance premiums227,439262,36351,28033,530 Materials, supplies and others45,35164,713782,466247,980 Depreciation934,418 Repairs & maintenance10,08360,875 Claims expense948,365434,797 Total Operating Expenses1,897,8931,101,4062,787,2041,585,357 Operating Income (Loss)(1,160,592)(134,083)(608,181)27,081 NONOPERATING REVENUE (EXPENSES) Loss on disposal(46,171) TRANSFERS OUT Change in Net Assets(1,160,592)(134,083)(654,352)27,081 Net assets-beginning3,464,470970,0358,888,5513,978,558 Net assets-ending (Deficit)$2,303,878$835,952$8,234,199$4,005,639 INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 134 Facilities RehabilitationCommunity Employee ProjectsReprographicsDevelopmentBenefitsTotal $1,919,126$209,814$26,449$2,146,001$9,797,475 1,919,126209,81426,4492,146,0019,797,475 485,668100,4785,192,2127,805,348 93,7891,334,999 23,710598,322 1,173,829167,8532,482,192 934,418 95,558166,516 1,383,162 1,872,554268,3315,192,21214,704,957 46,572(58,517)26,449(3,046,211)(4,907,482) (46,171) (26,449)(26,449) 46,572(58,517)(3,046,211)(4,980,102) 1,516,215206,851(2,900,400)16,124,280 $1,562,787$148,334($5,946,611)$11,144,178 Comprehensive Annual Financial Report FY 2008-2009 135 Liability Fleet and InsuranceWorkersEquipmentInformation ReserveCompensationServicesTechnology CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers$737,301$967,323$2,165,000$1,612,438 Payments to suppliers(689,432)(485,908)(646,674)(943,035) Payments to or on behalf of employees(221,177)(220,242)(985,655)(588,944) Claims paid(653,938)(438,073) Net cash provided (used) by operating activities(827,246)(176,900)532,67180,459 CASH FLOWS FROM NON CAPITAL FINANCING ACTIVITIES Receipts from other funds Transfer (out) Cash Flow from Non Capital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital asset additions, net(915,683) Cash Flows from Capital and Related Financing Activities(915,683) Net Cash Flows(827,246)(176,900)(383,012)80,459 Cash and investments at beginning of period5,182,5551,813,9053,996,3164,038,408 Cash and Investment at end of period$4,355,309$1,637,005$3,613,304$4,118,867 Reconciliation of operating income to net cash provided by operating activities: Operating income($1,160,592)($134,083)($608,181)$27,081 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation934,418 Change in assets and liabilities: Accounts receivable(14,023) Prepaids, deposits and supplies(6,151) Net pension obligation Accounts payable37,952(40,989)222,72448,705 Accrued liabilities3111,4483,8844,673 Accrued compensated absences656 Claims payable294,427(3,276) Net cash provided (used) by operating activities($827,246)($176,900)$532,671$80,459 INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 136 Facilities RehabilitationCommunityEmployee ProjectsReprographicsDevelopmentPayrollTotal $1,930,816$209,814$74,135$2,146,001$9,842,828 (1,407,766)(170,952)(4,343,767) (484,094)(100,074)(3,728,474)(6,328,660) (1,092,011) 38,956(61,212)74,135(1,582,473)(1,921,610) (47,686)(47,686) (26,449)(26,449) (74,135)(74,135) (915,683) (915,683) 38,956(61,212)(1,582,473)(2,911,428) 1,406,746217,5852,793,30219,448,817 $1,445,702$156,373$1,210,829$16,537,389 $46,572($58,517)$26,449($3,046,211)($4,907,482) 934,418 11,69047,686(1)45,352 (6,151) 3,034,4583,034,458 (20,880)(3,099)(1,163,459)(919,046) 1,57440412,294 (407,260)(406,604) 291,151 $38,956($61,212)$74,135($1,582,473)($1,921,610) Comprehensive Annual Financial Report FY 2008-2009 137 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. Comprehensive Annual Financial Report FY 2008-2009 138 BalanceBalance June 30, 2008AdditionsDeductionsJune 30, 2009 Assessment Districts Cash and investments in City Treasury$4,803,189$8,624,109$8,799,808$4,627,490 Cash and investments with Trustees5,153,36119,6005,133,761 Total Assets$9,956,550$8,624,109$8,819,408$9,761,251 Accounts payable- Due to special assessment districts$9,956,550$8,624,109$8,819,408$9,761,251 Total Liabilities$9,956,550$8,624,109$8,819,408$9,761,251 AGENCY FUNDS STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED JUNE 30, 2009 Comprehensive Annual Financial Report FY 2008-2009 139 Comprehensive Annual Financial Report FY 2008-2009 140 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. 142-148 Revenue Capacity These schedules contain information to help the reader assess the government’s most significant local revenue source, the property tax. 149-158 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. 159-162 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. 163-165 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. 166-170 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 171-174 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. Comprehensive Annual Financial Report FY 2008-2009 141 2002 2003 2004 2005 2006 2007 2008 2009 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$228,275,975$221,333,459 Restricted 72,647,51158,710,72041,804,17537,940,46833,104,09648,076,35328,722,41235,256,692 Unrestricted 45,323,36964,399,75569,248,96681,050,46884,494,48985,650,77889,816,56078,885,822 Total governmental activities net assets $143,559,244$162,765,34 9 $183,996,86 8 $284,209,67 5 $304,896,30 9 $330,803,062$346,814,947$335,475,973 Business-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$156,436,671$152,554,908Unrestricted46,462,31054,527,07868,065,41173,558,95176,761,65975,448,83672,730,48377,364,571Total business-type activities net assets$107,824,573$124,842,59 9 $141,110,23 8 $215,055,26 8 $221,913,753$222,130,604$229,167,154$229,919,47 9 Primary 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$384,712,646$373,888,367Restricted 72,647,51158,710,72041,804,17537,940,46833,104,09648,076,35328,722,41235,256,692 Unrestricted 91,785,679118,926,833137,314,377154,609,419161,256,148161,099,614162,547,043156,250,393 Total primary government net asset s $251,383,817$287,607,94 8 $325,107,106$499,264,943$526,810,062$552,933,666$575,982,101$565,395,452The 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 Eight Fiscal Years (accrual basis of accounting) Comprehensive Annual Financial Report FY 2008-200 9 142 2002 2003 2004 2005 2006 2007 2008 2009 ExpensesGovernmental activities:City Council $203,045$211,376$251,493$265,398$166,068$181,376$187,508$186,190 City Manager 1,122,575 724,539 782,010 911,600 1,139,339 1,118,005 1,300,7941,405,895 City Attorney 730,244 793,474 887,074 898,971 1,088,292 1,158,163 1,297,0391,427,623 City Clerk 788,728 873,170 1,157,543 942,167 955,941 743,797 994,675 791,772 Finance 6,397,401 7,397,074 6,057,822 5,032,359 6,099,619 6,678,870 7,608,8176,775,114 Human Resources 1,045,478 1,061,365 1,186,762 1,199,286 1,277,370 1,230,107 1,344,3111,434,631 Fire 10,077,26111,162,22411,291,28212,400,50913,213,64613,911,09815,930,78016,712,448 Police 17,597,27119,995,28221,161,67521,951,22523,709,22224,107,37226,817,05228,474,207 Public Works 4,193,045 5,562,720 8,876,91615,969,10821,530,79020,709,20319,203,29216,652,173 Community Development 20,365,60916,647,06619,184,28016,541,56515,214,10220,865,56923,590,20723,031,607 Economic Development 620,494 332,990 369,204 360,962 445,402 343,222 335,741 491,263 Library 3,388,721 3,337,384 3,976,185 5,152,325 5,352,000 8,356,676 5,775,1036,101,655 Redevelopment 855,206 1,169,660 2,318,738 3,234,590 2,328,327 1,998,205 3,518,9105,369,824 Interest on long term debt 6,827,570 3,745,081 3,531,868 3,627,369 4,283,470 4,693,492 4,020,9885,638,705 Total governmental activities expenses 74,212,64873,013,40581,032,85288,487,43496,803,588106,095,155111,925,217114,493,107 Business-type activities:Airport 3,617,607 3,579,227 3,848,789 4,537,129 5,463,658 5,338,068 6,019,3655,264,774 Water 5,862,996 6,054,826 6,908,766 7,091,055 8,101,428 8,572,763 8,438,48511,140,495 Sewer 11,226,22812,285,48810,810,48914,449,22717,073,35621,455,74918,757,89119,770,491 LAVWMA 2,215,118 2,455,216 2,559,564 2,432,617 2,469,101 3,750,222 2,664,9612,092,359 Las Positas 2,161,221 2,193,908 2,505,865 2,538,503 2,827,296 2,752,551 3,672,9952,414,861 Springtown 324,034 119,498 184,558 217,610 258,208 245,444 604,666 561,662 Total business-type activities expenses 25,407,20426,688,16326,818,03131,266,14136,193,04742,114,79740,158,36341,244,642 Total primary government expenses $99,619,852$99,701,568$107,850,883$119,753,575$132,996,635$148,209,952$152,083,580$155,737,749(Continued) Fiscal Year Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) Comprehensive Annual Financial Report FY 2008-200 9 143 2002 2003 2004 2005 2006 2007 2008 2009 Fiscal Year Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) Program RevenuesGovernmental activities:Charges for services:City Clerk$- $- $- $269,638$- $- $- $- Finance117,246- - - 55,331114,420- - Fire1,182,049997,4491,403,0255,312,8826,307,5001,505,7731,544,5892,161,428Police1,539,4751,743,2721,521,9301,764,1201,676,0072,028,4451,785,7431,702,020Public Works74,85969,943314,288373,659191,365288,15064,34072,820Community Development6,855,5187,350,9885,701,9195,632,4627,983,36111,070,8576,335,2015,141,898Library88,65889,27798,478130,748160,910292,554124,630144,181Redevelplment0000000478,828 Operating grants and contributions6,914,3037,574,2364,790,6247,983,60110,078,8989,655,79011,036,52310,571,987Capital grants and contributions23,401,04720,045,14426,250,44435,118,92824,471,14730,561,22027,407,6617,056,206 Total governmental activities program revenues40,173,15537,870,30940,080,70856,586,03850,924,51955,517,20948,298,68727,329,368Business-type activities:Charges for services:Airport3,992,4983,939,7354,317,7454,679,4605,290,3216,306,5386,102,0395,112,238Water8,516,0118,419,68710,022,6088,972,5239,314,81210,863,46410,512,32310,346,298Sewer15,102,60815,546,26516,838,34117,253,74317,809,00120,239,73919,968,15720,387,403LAVWMA- - - - - - - - Las Positas2,586,8362,478,3922,397,2582,108,7992,093,0002,259,0642,649,0272,243,182Springtown234,74781,010134,98179,292109,257102,799258,354340,260Operating grants and contributions209,864113,900- 401,28680,172115,51602,341,705Capital grants and contributions6,504,9386,803,7159,707,6557,177,1299,580,6792,738,7248,358,5151,938,642 Total business-type activities program revenues37,147,50237,382,70443,418,58840,672,23244,277,24242,625,84447,848,41542,709,728Total primary government program revenues$77,320,657$75,253,013$83,499,296$97,258,270$95,201,761$98,143,053$96,147,102$70,039,096Net (Expense) RevenueGovernmental activities $(34,039,493)$(35,143,096)$(40,952,144)$(31,901,396)$(45,879,069)$(50,577,946)$(63,626,530)$(87,163,739) Business-type activities 11,740,29810,694,54116,600,557 9,406,091 8,084,195 511,047 7,690,0521,465,086 Total primary government net expenses$(22,299,195)$(24,448,555)$(24,351,587)$(22,495,305)$(37,794,874)$(50,066,899)$(55,936,478)$(85,698,653)(Continued) Comprehensive Annual Financial Report FY 2008-200 9 144 2002 2003 2004 2005 2006 2007 2008 2009 Fiscal Year Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) General Revenues and Other Changes in Net AssetsGovernmental activities:TaxesProperty taxes14,252,92515,561,01917,165,50518,073,34020,461,29223,474,63624,743,46325,636,315Incremental property taxes1,939,0252,172,7052,333,4723,049,9033,944,6484,166,0774,850,9655,293,686Sales taxes16,561,04816,400,39317,783,55319,353,51619,256,96620,304,09019,338,33415,692,177Other taxes10,183,8899,895,32310,640,94410,464,87510,244,38910,452,48510,350,5949,054,267Intergovernmental4,199,4114,385,9543,558,832645,2301,813,3056,024,3536,292,7386,418,802Interest6,042,7086,238,0415,538,9834,110,8835,094,8986,129,2386,514,8554,752,609Miscellaneous3,345,7816,019,2514,829,4565,449,7053,984,4955,639,6246,893,9648,264,148Transfers (net)(2,140,742)(6,323,485)332,9188,754,0151,225,710294,196653,502712,761Gain on sale of land held for redevelopment905,639- - 3,267,560- - - - Loss on refunding of debt(233,896)- - - - - - - Total governmental activities55,055,78854,349,20162,183,66373,169,02766,025,70376,484,69979,638,41575,824,765Business-type activities:Transfers (net)2,140,7426,323,485(332,918)(8,754,015)(1,225,710)(294,196)(653,502)(712,761)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)(712,761)Total primary government activities$56,819,363$60,672,686$61,850,745$64,415,012$64,799,993$76,190,503$78,984,913$75,112,004Change in Net AssetsGovernmental activities$21,016,295$19,206,105$21,231,519$41,267,631$20,146,634$25,906,753$16,011,885$(11,338,974)Business-type activities13,503,87317,018,02616,267,639652,0766,858,485216,8517,036,550752,325Total primary government$34,520,168$36,224,131$37,499,158$41,919,707$27,005,119$26,123,604$23,048,435$(10,586,649)The 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. Comprehensive Annual Financial Report FY 2008-200 9 145 2002 2003 2004 2005 2006 2007 2008 2009 General FundReserved $5,451,570$5,241,756$9,765,567$9,575,127$9,329,690$9,078,026$8,826,957$10,181,138 Unreserved 28,001,21728,203,55324,260,69723,849,12825,587,34728,926,62928,350,72321,488,374 Total general fund $33,452,787$33,445,309$34,026,264$33,424,255$34,917,037$38,004,655$37,177,680$31,669,512 All Other Governmental FundsReserved $31,486,882$24,269,211$13,848,036$9,879,776$13,013,138$23,803,645$28,504,239$41,739,468 Unreserved, reported in:Special revenue funds 16,003,43219,122,03434,572,47628,679,80025,731,86725,015,90514,589,10918,281,575 Capital projects funds 45,042,17437,251,42714,331,54228,038,22422,479,40223,880,54117,669,8487,573,270 Total all other governmental funds$92,532,488$80,642,672$62,752,054$66,597,800$61,224,407$72,700,091$60,763,196$67,594,313 capital projects. A reserve was established in the Low Income Housing Fund in FY 06-07 for a $8,000,000 loan. A reserve for land held for redevelopment was established in the Redevelopment Agency in FY 08-09 for $12.2 million.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 eight years of data for this schedule. Fiscal YearFund Balances of Governmental Funds, Last Eight Fiscal Years (modified accrual basis of accounting) Comprehensive Annual Financial Report FY 2008-200 9 146 2002 2003 2004 2005 2006 2007 2008 2009 RevenuesTaxes and special assessments$24,574,002$25,581,558$27,924,855$28,647,685$30,805,535$34,017,461$35,838,595$35,992,202Sales taxes 16,561,04816,400,39317,783,55318,953,51619,256,96620,304,09019,338,33415,692,177 Property tax increment 1,939,0252,172,705 2,333,472 3,049,903 3,944,648 4,166,0774,850,9655,293,686 Licenses and permits 2,194,6852,154,186 2,521,787 2,566,277 2,215,956 2,256,1202,324,0871,690,189 Intergovernmental 19,739,50714,911,71415,133,50021,598,36127,074,24525,012,77122,621,64821,911,247 Contributions from outside sources 6,080,8759,191,514 9,874,276 1,178,717 758,29611,930,2222,454,7571,231,668 Fines and forfeitures 604,227 719,087 750,465 733,561 687,841 762,058 680,340 599,111 Charges for current services 16,726,84315,918,99317,707,78616,364,59915,456,87914,577,80213,114,16510,251,955 Use of money and property 7,973,3856,926,357 6,843,242 5,339,709 6,204,142 7,595,5277,936,1305,516,745 Miscellaneous 848,5273,160,833 1,164,542 2,201,231 1,300,634 3,520,1672,912,6666,300,744 Total revenues 97,242,12497,137,340102,037,478100,633,559107,705,142124,142,295112,071,687104,479,724 ExpendituresGeneral government 9,968,23010,051,930 9,450,717 9,195,21310,492,01011,043,97212,473,77511,459,143 Fire 9,896,53710,979,658 1088414612,091,53212,927,45713,669,32314,976,86115,457,071 Police 17,546,72019,881,68720,687,90421,542,55823,445,94424,042,14525,569,80126,530,396 Public Works 4,722,6125,341,962 6,402,095 7,152,912 6,874,574 7,175,5637,175,3887,729,713 Community Development 17,547,09516,439,12619,178,56117,185,78517,003,46517,522,08018,115,20318,652,719 Economic Development 336,796 341,505 359,692 367,093 450,603 360,741 315,836 456,422 Library 3,343,0573,231,861 3,757,989 4,422,218 4,626,688 7,700,2914,895,8115,114,806 Redevelopment 830,3641,134,050 2,484,801 1,739,846 1,968,118 1,810,0012,292,1004,362,314 Capital outlay 42,446,29339,080,04737,825,40519,662,41229,276,21222,466,47532,239,05217,371,920 Debt service fundsPrincipal 4,575,000 955,000 3,331,691 3,010,000 3,165,000 3,300,0003,755,0003,480,163 Interest and fiscal charges 6,077,5703,685,996 3,472,783 3,568,284 4,224,385 4,663,0094,124,5395,826,062 Total Expenditures 117,290,274111,122,822117,835,78499,937,853114,454,456113,753,600125,933,366116,440,729 Excess of Revenuesover (under)expenditures (20,048,150)(13,985,482)(15,798,306) 695,706(6,749,314)10,388,695(13,861,679)(11,961,005) (Continued) Fiscal YearChanges In Fund Balances of Governmental Funds , Last Eight Fiscal Years (modified accrual basis of accounting) Comprehensive Annual Financial Report FY 2008-200 9 147 2002 2003 2004 2005 2006 2007 2008 2009 Fiscal YearChanges In Fund Balances of Governmental Funds,Last Eight 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- - 1,715,47915,393,200- 58,575,000 Payment to refunded bond escrow agent(15,258,896)- - - - (12,026,398) - (46,030,256) Transfers in13,531,20611,865,95616,528,57317,974,46719,470,36117,842,07819,662,61624,150,856Transfers out(12,982,850)(10,097,768)(16,195,655)(17,735,207)(18,317,137)(17,713,101)(18,564,807)(23,411,646)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)2,548,0312,868,7034,174,6071,097,80913,283,954Net change infund balances$38,026,408$(11,897,294)$(17,309,663)$3,243,737$(3,880,611)$14,563,302$(12,763,870)$1,322,949Debt service as apercentage of noncapitalexpenditures12.8%5.5%8.3%7.9%7.9%7.8%7.7%8.5%Note: GASB 34 was implemented for the fiscal year ended June 30, 2002.The City of Livermore has elected to show only eight years of data for this schedule. Comprehensive Annual Financial Report FY 2008-200 9 148 Total Total Taxable Direct Common Public Unsecured Assessed Tax Fiscal Year Property Utility (1) Valuation Valuation Rate* 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 % Assessed Value and Estimated Actual Value of Taxable PropertyLast Ten Fiscal Years 2007-2008 13,180,062,58717,462,826616,286,51313,813,811,9261.0000 % 2008-2009 13,667,492,88817,107,843632,906,07914,317,506,8101.0000 % Note:* Direct tax rate is per $1,000 of assessed value.Source: Alameda County Office of the Auditor-Controller. In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation fa ctor" (limited to a maximum increase of 2%). With few exceptions, property is only reassessed at the time that it is sold to a new o wner. At that point, the new assessed value is reassessed at the purchese price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. Comprehensive Annual Financial Report FY 2008-200 9 149 Livermore East Bay Flood Pleasanton Countywide Bay Area Community Valley Joint Regional Zone 7 Unified Applied Rapid College Unified School Park State School Fiscal Year to City Transit District District Authority District Water Bonds 2000 1 0.0000 0.1438 2001 1 0.0000 0.0863 0.0065$ 0.0145$ 0.0942$ 2002 1 0.0000 0.0820 0.0072 0.0157 0.0870 2003 1 0.0000 0.0955 0.0065 0.0158 0.0759 2004 1 0.0000 0.0793 * 0.0145 * 2005 1 0.0000 $0.0186 0.0793 0.0057 0.0114 0.0935 2006 1 0.0048 0.0158 0.0830 0.0057 0.0130 0.0854 2007 1 0.0050 0.0159 0.0692 0.0085 0.0151 0.0721 2008 1 0.0076 0.0164 0.0626 0.0080 0.0150 0.0756 2009 1 0.0090 0.0183 0.0616 0.0100 0.0169 0.0777 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 all overlapping rates apply to allOverlapping Rates a City Direct Rate Comprehensive Annual Financial Report FY 2008-200 9 150