Loading...
CAFR FY2010-2011LIVLF4\iCARL C A L I F O R N I A Comprehensive Annual Financial Report For the Year Ended June 30, 2011 Prepared By: Administrative Services Department Finance Division LIVEW Comprehensive Annual Financial Report FY 2010 -2011 City of Livermore, California Comprehensive Annual Financial Report For the Year Ended June 30, 2011 INTRODUCTORY SECTION Tableof Contents .................................................................................... ............................... i -iii Letterof Transmittal .................................................................................... ............................1 -7 Elected Officials and Administrative Personnel ........................................... ..............................9 CityOrganization 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 -30 Basic Financial Statements Government -Wide Financial Statements (Page 31) Statement of Net Assets ............................................................................. .............................32 Statementof Activities .............................................................................. ............................... 33 Fund Financial Statements (Page 35) Major Governmental Funds Balance Sheet - Governmental Funds ................................................. ............................... 36 -37 Governmental Funds Balance Sheet - Continued (Reconciliation of Fund Balances to Net Assets of Governmental Activities) .................................................... .............................38 Statement of Revenues, Expenditures, and Changes in Fund Balance- Governmental Funds.......................................................................................... ............................... 40-41 Reconciliation of the Net Change in Fund Balances -Total Governmental Funds with the Statementof Activities ........................................................................ .............................42 Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual GeneralFund ..................................................................................... .............................43 Statement of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual Other Federal and State Grants ......................................................... .............................44 Major Proprietary Funds (Page 45) Statement of Net Assets - Proprietary Funds ....................................... ............................... 46 -47 Statement of Revenue, Expenses and Changes in Fund Net Assets - ProprietaryFunds ....................................................................... ............................... 48 -49 Statement of Cash Flows- Proprietary Funds ..................................... ............................... 50 -51 Fiduciary Funds Statement of Net Assets - Fiduciary Funds .................................................. .............................52 Notes to Basic Financial Statements Note 1- Significant Accounting Policies ....................................................... .............................53 A. Reporting Entity ............................................................................. .............................53 B. Basis of Presentation ............................................................ ............................... 53 -54 C. New Accounting Pronouncements ................................................ .............................54 D. Major Funds .......................................................................... ............................... 54 -56 City of Livermore, California Comprehensive Annual Financial Report For the Year Ended June 30, 2011 E. Basis of Accounting ....................................................................... .............................56 F. Supplies ......................................................................................... .............................57 G. Compensated Absences ............................................................... .............................57 H. Property Tax Levy, Collection and Maximum Rates ............. ............................... 57 -58 I. Revenue Recognition for Sewer and Operations ......................... .............................58 J. Land Held for Redevelopment ...................................................... .............................58 K. Use of Estimates ........................................................................... .............................58 Note 2- Budgets and Budgetary Accounting ............................................... .............................59 Note 3 -Cash and Investments ............................................................ ............................... 60 -64 Note 4- Interfund Transactions ............................................................ ............................... 65 -68 Note 5 -Notes Receivable .................................................................... ............................... 68 -69 Note 6- Capital Assets ......................................................................... ............................... 70 -74 Note7 -Long Term Debt ...................................................................... ............................... 75 -78 Note 8- Special Assessment District Debt with No City Commitment ......... .............................79 Note 9 -Net Assets and Fund Balances .............................................. ............................... 80 -82 Note 10- Retirement Benefits .............................................................. ............................... 82 -87 Note 11- Deferred Compensation Plan ....................................................... .............................87 Note 12 -Joint Ventures ....................................................................... ............................... 88 -89 Note 13- Health, General Liability and Workers Compensation Coverage ....................... 89 -90 Note 14- Commitments and Contingencies ........................................ ............................... 90 -93 Note 15- Payment to the Supplemental Educational Revenue Augmentation Fund ...............93 Note 16- Proposed Dissolution of Redevelopment Agencies ............. ............................... 94 -95 Supplemental Information Major Capital Project Funds (Page 97 -98) Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual: Redevelopment Agency Capital Projects .......................................... .............................97 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual: Isabel Parkway Capital Projects ........................................................ .............................98 Non -major Governmental Funds (Page 99 -121) Combining Balance Sheets ............................................................ ............................... 102 -106 Combining Statement of Revenues, Expenditures and Changes in Fund Balance.. ........................................................................... 108 -112 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual ..................................... ............................... 114 -121 Internal Service Funds (Page 123 -129) Combining Statement of Net Assets .............................................. ............................... 124 -125 Combining Statements of Revenues, Expenses and Changes in Fund Net Assets .......................................... ............................... 126 -127 Combining Statement of Cash Flows ............................................. ............................... 128 -129 Fiduciary Funds (Page 131 -132) Statement of Changes in Assets and Liabilities —Agency Funds ............. ............................132 11 City of Livermore, California Comprehensive Annual Financial Report For the Year Ended June 30, 2011 STATISTICAL SECTION (Unaudited) ..................... ............................... ............................133 Fund Information Net Assets by Component -Last Ten Fiscal Years ..... ............................... ............................134 Changes in Net Assets -Last Ten Fiscal Years ............................... ............................... 135 -137 Fund Balances of Governmental Funds -Last Ten Fiscal Years ............... ............................138 Changes in Fund Balances of Governmental Funds -Last Ten Fiscal Years ................ 139 -140 Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years 141 Direct and Overlapping Property Tax Rates -Last Ten Fiscal Years ......... ............................142 Principal Property Taxpayers- Current Year and Ten Years Ago ... ............................... 143 -145 Property Tax Levies and Collections -Last Ten Fiscal Years ..................... ............................146 Ratio of Outstanding Debt by Type -Last Ten Fiscal Years ....................... ............................147 Ratios of General Bonded Debt Outstanding -Last Ten Fiscal Years ....... ............................148 Direct and Overlapping Governmental Activities Debt as of June 30, 2011 .........................149 Legal Debt Margin Information -Last Ten Fiscal Years .............................. ............................150 Pledged- Revenue Coverage -Last Ten Fiscal Years .. ............................... ............................151 Demographic and Economic Statistics -Last Ten Calendar Years ............ ............................152 Population Demographics .......................................... ............................... ............................153 Principal Employers -Last Four Fiscal Years .............. .......... ...................... ............................154 Full -Time Equivalent City Government Employees by Function /Program -Last Ten FiscalYears ........................................................ ............................... ............................155 Operating Indicators by Function /Program -Last Ten Fiscal Years ........... ............................156 Capital Asset Statistics by Function /Program -Last Ten Fiscal Years ....... ............................157 Scheduleof Insurance .................................................................... ............................... 158 -159 Continuing Disclosure 2011 Certificates of Participation (Capital Projects) ............................... ............................160 2007 Certificates of Participation (Refunding and Capital Projects) ............................................................ ............................... ............................161 Special Tax Bonds Community Facilities District No. 2006 -1 — (Shea Properties), Series2006 ..................................................................... ............................... ..............162 2001 Tax Allocation Bonds, Series A ......................... ............................... ............................163 Special Tax Bonds Community Facilities District No. 99 -1 — (Tri- Valley Technology Park), Series 2000 ........ ............................... ............................164 LIVEP Comprehensive Annual Financial Report FY 2010 -2011 L TA PAL F O R N I A January 26, 2012 Honorable Mayor and Members of the City Council: I am pleased to transmit the City's Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2011. 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 their 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, 2011 are fairly presented in conformity with generally accepted accounting principles. The independent auditor's report is the first item presented in 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. That report is commonly referred to as a Single Audit report and is issued as a separate document and is not included herein. The Single Audit report includes the schedule of expenditures of federal financial awards, findings and recommendations, and an auditor's report on the internal control structure and compliance with applicable laws and regulations. The provisions of Government Accounting Standard Board (GASB) Statement 34, "Basic Financial Statements —and Management's Discussion & Analysis —for State and Local Governments" requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements entitled, "Management Discussion & Analysis "( 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. Honorable Mayor and Members of the City Council January 26, 2012 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, 2011 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 GASB 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 2008 Certificates of Participation (COPs) fund and the 2011 COPs fund. 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; sewer and water services; 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 26, 2012 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. This means 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 division 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 lapse thereafter. Financial Highlights of Fiscal Year 2010 -2011 2010 -2011 was a very challenging year financially. The Council adopted an operating budget which reflected significant reductions to General Fund expenditures of roughly $12 million or a 14% decrease. These spending cuts were imperative in order to maintain a balanced budget and eliminate supplementing operations by using reserves. Although quite a challenge, the City was able to reduce actual expenditures $500,000 more than planned in the budget. Unfortunately, revenues declined to a greater extent that contemplated resulting in a net change of fund balance of about ($1.6) million. The revenue shortfall was primarily comprised of lower than expected property tax revenues and interest income. The amount of interest income realized by the City was impacted by historically low interest rates and the implementation of GASB Statement 31, which requires the City to report its investments at market value. In prior years, the City reported the investments at carrying value and this change resulted in the reduction of interest revenue city wide by almost $1 million. Honorable Mayor and Members of the City Council January 26, 2012 In June of 2011, the City issued $17.5 million of debt financing in the form of Certificates of Participation. A majority of the proceeds will be used to for various infrastructure, roadway and drainage projects associated with the El Charro Specific Plan which will are being constructed in conjunction with the much anticipated outlet mall development. The remaining portion of the proceeds will be utilized by the Airport Enterprise to design and construct a new administrative building at the airport. Both of these projects are expected to contribute to the long term economic stability of the City. 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 $2.7 million with an average yield of 1.76 %. 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 which covers general liability claims, 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 2010 -2011, the pool made its nineteenth distribution of excess assets. The amount distributed to the City of Livermore was $123,259, or 36.3% of the amount of the deposit premium paid for FY 2010 -2011. In March 1992 the City joined a risk sharing pool called the Local Agency Workers' Compensation Excess Joint Powers Authority (LAWCX) for workers' compensation and employer liability and provides statutory unlimited coverage above the self- insured retention of $350,000. In FY 2010 -2011, the pool provided a premium adjustment in the amount of $20,507, or about 8.5% of the amount of the deposit premium paid for FY 2010 -2011. Long -Term Financial Planning In October 2000, the City Council adopted a resolution establishing the Operating Reserve Policy of the City of Livermore to help maintain the City's credit worthiness, and to 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 transfers, with a goal of increasing the reserve to a level of 20 %. In June 2002, as part of the CI (Honorable Mayor and Members of the City Council January 26, 2012 budget adoption process, City Council also established a Reserve for Economic Uncertainty as a way to protect the City from anticipated State budget takeaways. The operating reserves designated for economic uncertainty of $3,247,474 and designated for operating of $13,100,000 in the General Fund provide a $16,347,474 total operating reserve at June 30, 2011 which exceeds the Council's target level of 20% expenditures. These reserves have traditionally been reported as designations of fund balance on the balance sheets of the appropriate funds. Neither of these policies is considered adequate under GAS'B Statement 54 because the policies do not specify the conditions that would trigger the use of the reserve funds, and, therefore, are no longer being reported as such in this financial report. Staff is working with Council to adopt new reserve policies which meet all requirements set forth by GASB Statement 54 for inclusion in the CAFR for future fiscal years. Economic Indicators The City of Livermore is located on the southeasterly boundary of Alameda County near the intersection of 1 -580 and 1 -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 81,687 per the California Employment Development Department as of January 1, 2010 and represents an increase of 1.0% 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.orq website, between March 2010 and March 2011, the total number of jobs in the East Bay receded by 8,300 or 0.4% compared to the previous twelve months. Trade, transportation and utilities decreased by 200 jobs over the twelve months, with more than half of those losses concentrated in retail trade. Construction fell by 2,400 jobs, while government cut back 5,700 jobs. In March 2011 the unemployment rate in the East Bay was 10.7. This compares with an unadjusted unemployment rate of 12.3 % for California and 9.2 % for the nation during the same period. In comparison to the East Bay, San Francisco's unemployment rate was 8.7 % in March 2011, slightly lower than the March 2010 rate of 9.6 %. The unemployment rate in San Jose was 10.6 %u in March 2011, down from 11.9 %o in March 2010. As reported by MDA DataQuick, the median sales price for a residence in Livermore in June 2011 was $422,676, down 1.6 % from the $429,537 median sales price in June 2010. Between June 2010 and November 2011 there were 245 homes sold in Livermore. Honorable Mayor and Members of the City Council January 26, 2012 The City of Livermore occupies approximately 26.17 square miles of the 413 square miles in the valley. There was one annex in FY 2010 -2011. The current General Plan approved in February 2004 covers 55,000 acres and has the following use categories: 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, 2010. This was the twenty first 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. 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, 2010. This was the twenty first 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. Honorable Mayor and Members of the City Council January 26, 2012 Acknowledgments This report represents the culmination of the dedicated efforts by city staff both inside and outside of the Administrative Services Department. Sincere thanks to all of the Finance Division staff for the hard work and dedication required to produce this document, as well as the staff at Maze & Associates, CPAs. I also 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, Do galas Alessio Interim Administrative Services Director 7 LIVE- Comprehensive Annual Financial [deport FY 2010 -2011 ;V� City of Livermore Comprehensive Annual Financial Report ELECTED OFFICIALS AND ADMINISTRATIVE PERSONNEL Elected Officials as of June 30, 2011 Dr. Marshall H. Kamena, Mayor Doug Horner, Vice mayor Marj Leider, Councilmember John Marchand, Councilmember Jeff Williams, Councilmember Administrative Personnel Linda M. Barton, City Manager Troy Brown, Assistant City Manager John Pomidor, City Attorney Susan Neer, City Clerk Marc Roberts, Director of Community Development Robert White, Director of Economic Development Susan Gallinger, Director of Library Services Holly Brock -Cohn, Director of Administrative Services Dan McIntyre, Director of Public Services James Miguel, Fire Chief Steve Sweeney, Police Chief z G LT'ir'EWI) r C F H Comprehensive Annual Financial Report FY 2010-2011 ORGANIZATION CHART Citizens of Livermore Advisory Commissions &Boards Mayor & City Council City Manager's Dept. I City Attorney's Dept. t inch B arten. (Al t ianattt John Pormdor. Cita Attonw%, Assistant City I Administrative I Community I I Econamic I Fire Dept. I I library Dept. Manager Services dept. Development Dept. lij Development Dept. Troy Oro Von. Alzt. City M rr HollV SrocK- Cairn. Out etc•r f•1 a.: Robt rU. CA, tCtlr Rub' 'wte. Dirt: dor 3a'ne +r•tigne3.fue Chief Susm Galhn er. DirtRbr City Clerk I I--I Finance I H Building Human Resources I H Engineering information I u Housing Technology n Planning Redevelopment Agency Police Dept. 5tt,e 5:•: t nly. INtf Horizons Youth Services Public Works Dept. Dan Mc lnta rr. Director Airport Las Positas & Springtown Golf Courses Maintenance Services Water Reclamation Storm Water Water Certificate of Achievement for Excellence in Financial. Reporting Presented to City of Livermic)re California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2010 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. 4,-&, J I"o-i President: s Executive Director 11 H\ Tj- Comprehensive Annual Financial Report FY 2010 -2011 MAZE & ASSOCIATES INDEPENDENT AUDITORS' OPINION Honorable; Mayer and City Council City of Livermore, California ACCOUNTANCY CORPORATION 3478 Buskirk Ave. - Suite 215 Pleasant Hill, California 94523 (925) 930 -0902 • FAX (925) 930- 0135 maze @mazeassociate,s.eom www.mazeassociates.com We have audited the basic financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Livermore as of and for the year ended June 30, 2011 as listed in the Table of Contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these frnancia.l statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in the United Mates of America and the standards for financial audits contained in Government Auditing; Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the fmancial statements are free of material misstatement. An audit includes examining on a test basis evidence supporting the amounts and disclosures in the financial statements. An audit. also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating; the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion the basic financial statements referred to above present fairly in all material respects the respective financial position of ,governmental activities, business -type activities, each major fund, and the aggregate remaining fund information of the City of Livermore at June 30, 2011 and the results of its operations and the cash flows of its proprietary funds and the respective budgetary comparisons listed as part of the basic financial statements for the year then ended, in conformity with generally accepted accounting principles in the United States of America. As disclosed in Note 16, the State of California adopted ABx1 26 on .tune 28, 2011, which suspends all new redevelopment activities except for limited specified activities as of that date and dissolves redevelopment agencies effective October 1, 2011. The State simultaneously adopted ABxl 27 which allows redevelopment agencies to avoid dissolution by opting into an "alternative voluntary redevelopment program" requiring specified substantial annual contributions to local schools and special districts. These conditions raise substantial doubt about the ability of the Redevelopment Agency of the City of Livermore, a component unit of the City, to continue as a going concern. However, on August 11, 2011, the California Supreme Court issued a partial stay of ABxl 26 and a full stay of ABxl 27, but the partial stay did not include the section of ABxl 26 that suspends all new redevelopment activities. As a result, the accompanying financial statements have been prepared assuming that the Redevelopment Agency of the City of Livermore will continue as a going concern. The activities of the Redevelopment Agency of the City of Livermore are included in the Redevelopment Agency Capital Projects Fund, Redevelopment Agency Low and Moderate Income Housing Special Revenue Fund and Redevelopment Agency Debt Service Fund of the accompanying financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. A PwfbssloffI Comoradbn In accordance with Government Auditing Standards, we have also issued our report dated December 23, 201.1 on our consideration of the City of Livermore's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. As of July 1, 2010, the City adopted the provisions of Governmental Accounting Standards Board Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions. As discussed in Note 9 to the financial statements, the provisions of this statement affect the classification of fund balances reported in the financial statements. Management's Discussion and Analysis and Required Supplemental Information are not a required part of the basic financial statements but are supplementary information required by the governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. I lowevcr we. did not audit the information and express no opinion on it. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information listed in the Table of Contents are presented for purposes of additional analysis and are not a required part of the basic financial statements of the City of Livermore. Such information has been subjected to the auditing procedures applied in our audits of the basic financial statements, and in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The statistical section listed in the Fable of Contents was not audited by us and we do not express an opinion on this information. December 23, 2011 14 LIVEW(Pi,RE, Comprehensive Annual Financial Report FY 2010 -2011 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, 2011. 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 -7 of this report. (A) Financial Highlights Government- wide: The City's total assets were $746.8 million at June 30, 2011, Of this total, $500.8 million were Governmental assets and $246.0 million were Business -type assets. Total liabilities were $177.5 million of which $154.3 million were governmental liabilities and $23.2 million were business -type liabilities. Citywide revenues in fiscal 2011 were $142.3 million, of which $105.0 million was generated by governmental activities and $36.4 million was generated by business -type activities- City-wide expenses were $144.8 million, of which $104.3 million was incurred by governmental activities and $40.5 million was incurred by business -type activities_ Fund Level: • Governmental Fund balances decreased to $82.7 million in fiscal 2011 from $86.6 million in fiscal 2010. * Governmental Fund revenues decreased to $104.2 million in fiscal 2011, down $11.1 million from the prior year's $115.3 million. Governmental Fund expenditures decreased to $114.3 million in fiscal 2011, down $16.4 million from fiscal 2010's level of $130.7 million. • E=nterprise Fund total assets decreased $1.7 million to $248.8 million in fiscal 2011. This decrease was largely due to less capital expenditures in fiscal 2011 than 2010. E=nterprise Fund total liabilities increased $2.5 million to $25.4 million in fiscal 2011. This increase was primarily due to the net increase in Long Term Liabilities as a result of the issuance of debt for the Airport administration building as part of the 2011 CCP's. • Enterprise Fund revenues increased to $35.9 million in fiscal 2011, up $0.1 million from the prior year's $35.8 million_ • Enterprise Fund expenses increased $1.7 million to $39.9 million in fiscal 2011 due to the increase in Repairs and Maintenance expense for the Sewer enterprise. (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. 15 L1VLF41&(j Comprehensive Annual Financial Report FY 2010 - 2011 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. 16 LIVLF**NjZE ,�4Mq Comprehensive Annual Financial Report FY 2010 -2011 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, sewer (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, LA1/WMA, 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 throughout 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 -95. Supplemental Information The combining statements for non -major governmental fund's are found on pages 99 -121. Combining and individual fund statements and schedules for the internal service funds and fiduciary funds can be found on pages 123 -132 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. 17 LIVERN1 Ot I E Comprehensive Annual Financial Report FY 2010 -2011 Governmental Activities Table 1 Governmental Net Assets at June 30 (in Millions) Cash and investments Other assets Capital assets Total assets Long-term debt outstanding Other liabilities Total liabilities Net assets: Invested in capital assets, net of debt Restricted Unrestricted Total net assets 2011 $94.4 40.8 365.5 500.7 108.4 45.9 154.3 2010 $105.3 52.1 347.5 504.9 09.7 60.3 160,0 262,1 247.6 41.2 36.9 43.2 60A $346.5 $344.9 The City's governmental net assets amounted to $346.5 million at ,June 30, 2011, an increase of $1,6 million over 2010. This increase in the Change in Net Assets is reflected in the Governmental Activities column of the Statement of Activities shown in Table 2. The City's net assets at June 30, 2011 comprised the following: Cash and investments comprised $16.4 million of unspent projects funds from debt issues, $5.8 million of debt service reserves and $72.2 million of pooled cash and investments available for operations_ Substantially all of these amounts were held in short terra investments in government securities, as detailed in Note 3 to the financial statements. Pooled cash and investments were down $19.3 million from 2010 primarily due to $17.0 million less Community Development program Revenue for Capital and Operating. Accounts and interest receivable of $12.3 million, all current, along with notes receivable of $13.1 million that are due over longer periods of time, as explained in Note 5 to the financial statements. V Land held by the Redevelopment Agency for redevelopment purposes has decreased to $11.5 million due to the conveyance of properties from the Agency to the City. Capital assets of $251.6 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 $113.9 million include the conveyances of Land held by the Redevelopment Agency for redevelopment purposes. Current liabilities, including accounts payable, claims and other amounts due currently, totaling $15.3 million. This is a decrease of $3,5 million, mainly due to a decrease in accounts payable. 18 LIVEfW-"E Comprehensive Annual Financial Deport FY 2010 -2011 • Deposit payable of $18.7 million, primarily represent developer performance deposits, which are refundable if the developer performs City required improvements_ This is an increase of $2.2 million from 2010, due to more development activity.. • Long -term debt of $108.4 million, of which $103.0 million is due in future years and $5.4 million is due currently. * Net assets invested in capital assets net of related debt of $262.1 million represents the City's investment in infrastructure and ether capital assets used in Governmental activities, net of amounts borrowed to finance that investment. Restricted net assets totaling $41.2 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 $43.2 million of unrestricted net assets at June 30, 2011. 19 LIVEWPra�!ai.a Comprehensive Annual Financial Report FY 2010 -2011 Fiscal Year 2011 Government Activities Sources of Revenues Functional Expenditures Interest City Manger 2.5% Imergovern 1.096 Mist &aresfor went 5.7% Trarsfers Services Police 251% 6thertaxes Grants 8.6% Lontributi 25.9% Sales taxes 16.0% Property city Caun COmmurity taxes Development 0.39E 21.7°% 23.99 Incremental Property taxes 459E Redevelop- ment 9 nur Economic )mcnt 96 .ibrtry 5.19E 13.7% ��� i luntau Resources 1.3% CityAttomey City Clerk Interest 13 0.15% 3.9% As the Sources of Revenue Chart above shows, $16.7 million, or 16.0% of the City's fiscal 2011 governmental activities revenue, came from sales taxes, while $23.0 million or 21.7% came from property tax, $9.1 million, or 8.6 %, came from other taxes, $7.8 million, or 7.4 %, came from charges for services, and $27.6 million, or 26.0°/x, came from grants and contributions. The remaining 20.5% 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 $24.8 million, or 23.8 %, of total governmental expenses, police accounted for $26.2 million, or 25.1%, fire accounted for $15.1 million, or 14.5 %, public works accounted for $14.3 million, or 13.7% and other governmental programs and functions accounted for the remaining 22.9 %. 20 LIVLIW )RL Comprehensive Annual Financial Report FY 2010:2011 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 Not Assets (in Millions) Governmental Activities 2011 2010 Expenses General Government $10.7 $11.2 Fire 15.0 16.0 Police 26.2 27.6 Public Works 143 26.9 Community Development 24.8 19.2 Economic Development 1.0 0.8 Library 5.3 5.8 Redevelopment 3.0 6.5 Interest on long term debt 4.0 3.7 Total expenses 104,3 117.7 Revenues Program revenues: Charges for services 7.8 8.4 Operating contributions and grants 10.9 16.7 Capital grants and contributions 16-7 29.0 Total program revenues 35.4 54.1 General revenues, Property taxes 23.0 23.8 Incremental property taxes 4.7 4.7 Sales taxes 16.7 13.8 Other taxes 9.1 9.5 Intergovernmental 6.0 6.0 Interest 2.7 4.4 Miscellaneous 8.2 8.2 Total general revenues 70.4 70.4 Surplus before transfers 9.2 9.2 Transfers, net 01 0.2 Changes in net assets $1.6 $9.4 As Table 2 above shows, $35.4 million or 33.5% of the City's fiscal 2011 Governmental revenue, came from program revenues and $70.4 million or 66.5% came from general revenues such as taxes and interest. Program revenues decreased $18.7 million largely due to decreases in operating and capital grants, while general revenues were the same- 21 Ll\/EIW MI E Comprehensive Annual Financial Report FY 2010 -2011 Program revenues were composed of charges for services of $7.8 million which include permit revenues, fees and charges used to fund expenses incurred in providing services-, $10.9 million of operating grants and contributions which include gas tax revenues and housing and police grants and capital grants and contributions of $16.7 million which consist mainly of street project grants and developer impact fees restricted to capital outlay. Operating Grants and Contributions were down $5.8 million. This is largely due to fiscal 2010 operating Grants and Contributions now being classified as Capital Grants and Contributions- Capital Grants and Contributions were dowry $12.6 million. This is largely attributed to the winding down of the one of the City's largest capital projects funded by grants, the Isabel Avenue Interchange project- 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 exceeded expenses for 2011 due to an increase in operating and capital grants. Table 3 Net Revenue (Expense) of Governmental Activities (in Millions) 2 2011 2010 City Council $0.2 $0.2 City Manager (1.2) (1 -4) City Attorney (1.3) (1.4) City Clerk (0.6) (0 -8) Finance (5.8) (6.0) Human Resources (1.4) (1.4) Fire (14.0) (14.7) Police (22.9) (24.8) Public Works (13.9) (26.4) Community Development 52 28.1 Economic Development (1.0) (0.8) Library (5.0) (5.4) Redevelopment (3.0) (5.1) Interest on long term debt (4.0) (3.7) Totals ($08.9) ($63.6) 2 LIV-L- Comprehensive Annual Financial Deport FY 2010 -2011 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 .tune 30 ( in Millions) 23 Business -Type Activities 2011 2010 Cash and investments $80.6 $79.2 Other assets 0.2 23 Capital assets 165.2 _ 166.4 Total assets 246.0 247.9 Long-term debt outstanding 24.5 17.7 Other liabilities 2 -7 31 Total liabilities 23.2 20.8 Net assets: Invested in capital assets, net of debt 150.6 151.4 Unrestricted 72.2 76.7 Total net assets $222.8 $227.1 The net assets of business -type activities decreased to $222.8 million in fiscal 2011, a decrease of $4.3 million. An increase in long -term debt outstanding was due to the issuance of the 2011 Certificates of Participation, a portion of which are for the Airport. Table 5 Granges in Business -Type Net Assets (in Millions) Business -type Activities 2011 2010 Expenses Airport $5.0 $4.7 Water 10.5 10.3 Sewer 20.9 19.4 LAVVVMA 1.7 1.7 Las Positas Golf Course 2.3 2.4 Springtown Golf Course 0.1 0.3 Total expenses $40.5 $38.8 Revenues Program Revenues: Charges for Services $36.2 $37.1 Capital Grants and Contributions 0.2 1.4 Total Program Revenues 36.4 38.5 Transfers, net - - -(0.1) - - (2.6) -- - Changes in net assets ($4.2) ($2.9} 23 LIVEW_ ( Comprehensive Annual Financial Report FY 2010 -2011 Total program revenues of Business -type Activities were $36.4 million in fiscal 2011, down from $38.5 million in the prior year due primarily to a decrease of Capital Grants and Contributions_ Program expenses increased $1.8 million to a total of $40.5 million. Net transfers increased expenses by $0.1 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) At June 30, 2019, the City's governmental funds reported combined fund balances of $82.7 million, which is a decrease of $3.9 million from the prior year. Governmental fund revenues showed a decrease of $12.4 million to $104.2 million, while expenditures also decreased $16.4 million to a total of .$114.3 million. Expenditures included $8.3 million in debt service and capital outlays of $26.4 million. The decrease in revenues was primarily due to a decrease of $9.6 million in intergovernmental revenues. The decrease in expenditures was due primarily to a decrease of $8.6 million in capital outlay expenditures. 24 2011 2010 Governmental Funds Total assets $147.1 $166,6 Total liabilities 644 80.0 Total fund balances 62.7 86.6 Total revenues 104.2 116.6 Total expenditures 114.3 9307 Total other financing sources (uses) and special items 6.3 1.4 At June 30, 2019, the City's governmental funds reported combined fund balances of $82.7 million, which is a decrease of $3.9 million from the prior year. Governmental fund revenues showed a decrease of $12.4 million to $104.2 million, while expenditures also decreased $16.4 million to a total of .$114.3 million. Expenditures included $8.3 million in debt service and capital outlays of $26.4 million. The decrease in revenues was primarily due to a decrease of $9.6 million in intergovernmental revenues. The decrease in expenditures was due primarily to a decrease of $8.6 million in capital outlay expenditures. 24 LIVER 4 ZE Comprehensive Annual Financial Report FY 2010 -2011 Analyses of Major Governmental Funds General Fund Revenues showed a decrease of $1.0 million to $70.9 million in fiscal 2011 compared to the actual for fiscal 2010. Sales tax revenue increased $2.9 million and taxes and special assessments revenue decreased $1.2 million in fiscal 2011, Expenditures showed a decrease of $6.6 million to $70.0 million for fiscal 2011 compared to the actual for fiscal 2010. Department expenditures were within budget by $0.4 million. The following table shows the budgetary variances between the original two -year budget approved in 2010 versus the final amended budget for fiscal 2011 that was approved on June 13 2011 and reflects the change in economic expectations between the two time periods. Table 7 General Fund Budgetary Variance Analysis 25 Budget Approved Budget Approved Variance Final Variance Final June 14, 2010 June 13, 2411 Budget Budget original Final PositivellNegative) %g Revenues: Property taxes $23,720,900 $23,115,000 ($605,900) - 2.555 %a Sales taxes $14,969,000 '$15,707,000 $738,000 4,93% Other taxes $9,432,000 $9,168,000 ($294,000) - 3.12 % Licenses and permits $1,956,000 $1,573,000 ($383,000) - 19.58% Intergovernmental $7,427,000 $7,368,000 ($59,000) - 0.79% Fines and forfeitures $713,000 $735,000 $22,000 3.09% ether in lieu taxes $507,000 $507,800 $600 016 %4 Charges for current services $8,403,000 $8,428,000 $25,000 0.30 %4 Use of money and property $3,618,700 $4,064,400 $445,700 12.32% Miscellaneous iLM 0 000 $2,095.450 JZ§5 450 59.9E ° %, Totals $72,056,600 $72,761,650 $675,050 0.94% Expenditures: City Council $147,170 $167,040 $19,870 13.50°1 City Manager $1,589,030 $1,126,695 ($460,335) - 28.97% City Attorney $1,308,330 $1,291,830 ($16,500) - 1.26% City Clerk $817,920 $563,200 ($254,720) - 31.14°! Finance $5,694,334 $6,359,710 $665,376 11.68°/, Fluman Resources $391,886 $1,172,097 $780,211 199,09 % Fire $13,974,770 $13,682,340 ($92,430) - 0.66 °!s Police $23,976,000 $23,814,690 ($161,310) - 0.67% Public Works $6096,610 $5,072,720 ($1,023,890) - 16.79% Community Development $11,393,650 $11,136,035 ($257,615) -2.26% Economic (Development $650,770 $1,075,320 $424,550 65.24 % Library $4,366,450 $4,282,070 ($84,380) - 1.93% Capital projects 4447 1 a0 50$ 6,10 $59,000 13.20% Totals $70,854,020 $70,451,847 ($402,173) - 0.57% 25 LIVT, W-. (' jk Comprehensive Annual Financial Report FY 2010-2011 The following table shows the original budget approved in 2009 and the final amended budget approved on June 13, 2011 and the actual results as of June 30, 2011. The variances computed are between the final budget and actual results- Revenues were lower than budgeted by $1.8 million. The largest contributor to the $1.0 million variance in Use of money and property was Rental of City Owned Property. As to expenditures, the largest negative variance was $0.3 million Debt Service expenditures. Overall revenues had a net negative variance and expenditures had a net positive variance. Table 8 General Fund Budgetary and Actual Variance Analysis Property tax revenues were lower than expected by $333,084 due to lower property tax assessed values by Alameda County. 26 Budget Budget As of Approved Approved June 30, 2011 Variance June 14, June 13, Actual Variance Final Final 2010 2011 Budgetary Budget Budget Original Final Basis Positivel(Negativie) % Revenues: Property taxes $23,720,900 $23,115000 $22,781,916 ($333,084) -1.44 % Sales taxes $14,969,000 $15,707,000 $16,734,416 $1,027,415 6.54°./ Other taxes $9.432,000 $9,168,000 $9.078,649 ($59,351) - 0.65 %4 Licenses and permits $1,956,000 $1,573,000 $1,608,187 $35,187 2.24% Intergovernmental $7,427,000 $7,368,000 $7,315,992 ($52,008) - 0,71% Fines and forfeitures $713,000 $735,000 $648,231 ($86,769) - 11.81% Other in lieu taxes $507,000 $507,800 $7,907 ($499,893) - 98.44 %6 Charges for current services $8,403,000 $8,428,000 $8,497,643 $69,643 0.830/0 Use of money and property $3,618,700 $4,064,400 $2,504,558 ($1,559,842) - 3838 %a Miscellaneous $1,310,040 $2,095,450 $1,78%418 ($306,032) - 14.iW% Totals $72,056,600 $72,761,650 $70,966,917 ($1,764.733) - 2.43% Expenditures: City Council $147,170 $167,040 $158,101 $8,939 5.4 %Q City Manager $1,589,030 $1,128,695 $1,144,122 ($15,427) -1.4% City Attorney $1,308,330 $1,291,830 $1,262,414 $29,416 2.3 %4 City Clerk $817,920 $563,200 $554,010 $9,190 1.6% Finance $5,694,334 $6,359,710 $5,888,915 $470,795 7.4 % Human Resources $391.,886 $1,172,097 $1,261,354 ($89,257) - 7.6 % Fire $13,974,770 $13,882,340 $13,970,849 ($88,509) 46% Police $23,976,000 $23,814,690 $23,731,935 $82,755 0.3010 Public Works $6,096,610 $5,072,720 $5,006,701 $66,019 1.3 % Gommunity Development $11,393.650 $11,136,035 $11,150,367 ($14,332) -0.1% Economir, Development $650,770 $1,075,320 $961,443 $113,877 10.6% Library $4,366,450 $4.282,070 $4,335,981 ($53,911) -1.3%fl Capital projects $447,100 $506,100 $237,354 $268,746 53.1 % Debt service N LD0 29$ 9.167 ($299,167) 100.0`ta Totals $70,854,020 $70,451,847 $69,962,713 $489,134 -0.7 % Property tax revenues were lower than expected by $333,084 due to lower property tax assessed values by Alameda County. 26 LIVEF�M� ''j L Comprehensive Annual Financial Report FY 2010 -2011 Redevelooment Aaencv CaQital Proiects Fund The fund is used to account for redevelopment activities and acts as the General fund for the Agency. Property tax increment revenues are recorded in this fund. Tax increment used for debt service is transferred to the redevelopment debt service fund_ Cash and Investments held by Trustee amount to $1.5 million and represent unspent 2001 Bond proceeds to be used for redevelopment activities_ Land held for redevelopment amounts to $9.2 million, which is a decrease of $4.5 million from the prior year, due primarily to the conveyances of property from the Agency to the City. The Capital Project Fund owes the City $13.0 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 amount to $4.0 million, which is a decrease of $1.1 million from the prier year_ Expenditures decreased $4.0 million over the prior year due the slowing of activities in the Downtown Project Area because of declines in the housing market and consciously slowing activity due to State legislative action to eliminate redevelopment agencies. Other Federal and State Grants This Fund is used to account for both Federal and State grants. The grants are used for operational expenditures as well as capital improvement projects. During fiscal 2011, operational expenditures and capital outlay amounted to $4.0 million, and $1.3 million, respectively. Transfers amounted to $14.9 million of which $14.1.0 million was for the Isabel Interchange project. Isabel Parkwa This fund is the capital project fund for the Isabel /1 -580 Interchange project_ This project is to construct a new interchange on 1 -580 at the future Isabel Ave. /Route 84 extension. During fiscal 2011, capital expenditures amounted to $15.3 million. Revenue sources for this fund are Federal, State and local grants, Measure B funds, and Developer Impact Fees- 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, 2011 the City held $17.4 million in performance deposits on behalf of developers 27 LIVLf� n V i F Comprehensive Annual Financial Report FY 2010-2011 Other Governmental Funds These funds are not presented separately in the Basic Financial statements, but are individually presented as Supplemental Information. Analysis of Major Business -type Activities — Enterprise Funds Airport Fund Airport Fund net income amounted to $0.2 million in fiscal year 2011, up from $0.1 million in fiscal year 2010_ This is due primarily to increased rental income being charged to Las Positas Golf Course. Water Fund Water Fund net income amounted to ($0.3) million in fiscal year 2011, down from $0.3 million in fiscal year 2010. Operating revenues decreased by $0.2 million in fiscal 2011. The decrease in net income is due to a decrease in Operating Revenue and an increase to Operating Expenses. Sewer Fund Sewer Fund net income amounted to ($2.2) million in fiscal 2011, down from $0.5 million in fiscal 2010. Operating revenues amounted to $18.6 million in fiscal 2011 and 2010. Operating expenses increased $1.6 million to $20.0 million. The increase is mainly the result of an increase to Repair and Maintenance expense. Transfers out amount to $2.7 million in fiscal 2011 and are composed primarily of a $2.6 million transfer to the LAVINMA 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 LAVINMA. Contributions to LAVWMA amounted to $2.6 million for the year and were funded by Sewer Fund transfers. Las Positas Golf Course Fund The Fund generated a net loss of $0.3 million which improved as compared to the loss of $2.6 million from fiscal 2010. The improved net loss is a result of zero transfers out in fiscal year 2011 as compared to $2.4 million transfers out in 2010. Operating revenues were down by $0.1 million at $2.0 million in fiscal 2011. Operating expenses had an increase of $0.1 million in fiscal 2011. 28 LAT_W��P,�L- Comprehensive Annual Financial Report FY 2010 -2011 Springtown Golf Course Fund This Fund generated a net loss for the year amounting to $0.1 million for fiscal 2011 _ In fiscal 2010, 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 six years ago and City staff has implemented these adjustments. At the end of fiscal 2011 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) Business -type Activities Land 2011 -- 2010 Governmental Activities 111 7.8 Land $31.7 $23.2 Construction in progress 81.9 63.6 Buildings 97,9 97.9 Equipment and vehicles 17.2 17.0 Infrastructure 269.6 268.2 Internal service fund equipment and vehicles 12.4 12.1 Less accumulated depreciation X145.2) (134.8) Totals $365.5 $347.2 Business -type Activities Land $13.9 $13.9 Construction in progress 111 7.8 Land Improvements 0.6 0-6 Buildings 22.2 22.2 Equipment and vehicles 2.7 2.7 Golf Course Infrastructure 7.3 7.3 Sewer Infrastructure 211.7 211.2 Water Infrastructure 42A 41.9 Airport Infrastructure 10.9 10.9 Less accumulated depreciation (157.6) (149.4) Totals $165,2 $16911 The principal additions for governmental activities in fiscal 2011 were to land and construction in progress. Business -type activity additions were primarily composed of Sewer and Water Infrastructure. 29 LIVEIW�Mj E Comprehensive Annual Financial Report FY 2010 -2011 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 0_ (E) Debt Administration Each of the City's debt issues is discussed in detail in Note 7 to the financial statements. At June 30, 2010 and 2011 the City's debt comprised: Table 10 Outstanding Debt (in Millions) Governmental Activity Debt: Certificates of Participation Tax Allocation Bonds Notes and Loans payable 'Vitals Business -type Activity Debt: Certificates of Participation State Water Reclamation Loans Totals f►�iTlil�I /II[I] $66.7 $56.1 31.8 32.6 9.9 11.0 $108.4 '$99.7 $18.1 $14.6 2.4 3.1 $20.5 $17.7 In fiscal 2011, Governmental activities debt increased $13 million for the new 2011 Certificates of Participation, and was reduced $4.4 million for scheduled retirements. Business -type activity debt increased $4.4 million for the 2011 Certificates of Participation, and was reduced $1.0 million for scheduled retirements. (P) 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, 2011, a total of $41.1 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. 30 LIVLEM-PI � ') 1. Comprehensive Annual Financial Report FY 2010- 2011 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 Fong- terra debt. The Statement of Net Assets presents similar information 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. II LA7 EWM)RE Comprehensive Annual Financial Report FY 2010 -2011 STATEMENT OF NET ASSETS JUNE 30, 2011 rrti��_N k�11 Cash and investments in City Treasury (Note 3) Gash and investments with Trustees (Note 3) Accounts receivables (net of applicable allowance for uncollectibles) Internal balances (Note 4D) Prepaids, deposits and supplies Notes receivable (Note 5) Land held for redevelopment (Note 1J) Land and construction in progress (Note 6) Capital assets, net of accumulated depreciation (Note 6) Total assets LIABILITIES Accounts payable and other accruals Accrued payroll Deposit payable and unearned revenue Claims payable - due in more than one year (Note 13B) Accrued compensated absences (Note 1 G): Due within one year Due in more than one year Net OPEB obligation (Nate 10) Long -term debt (Note 7): Due within one year Due in more than one year Total liabilities NET ASSETS (Note 9) Governmental Business -Type $72,221,867 $76,294,909 $148,516,776 22,155,661 4,292,927 26,448,588 12,300,318 2,467,244 14,767,562 2,363,994 (2,363,994) 2,979,234 1,587,990 126,758 1,714, 758 13,127,618 Total net assets 13,127, 618 11,495,156 11,495,156 113,941,199 25,647,146 139,588,345 251,561,699 139,582,063 391,143,762 500,755,502 246,047,063 746,802,565 6,906,046 1,523,388 8,429,434 1,872,929 332,432 2,205,361 18,662,849 413,1844 19,076,033 2,335,905 2,335,905 1,093,226 182,701 1,275,927 2,069,283 262,343 2,331,626 12,904,692 12,904,692 5,401,922 1,576,945 6,978,857 103, 005,573 18, 955,540 121, 961,113 154,252,425 23,246,533 177,498,958 Invested in Capital Assets, net of related debt 262,064,031 Restricted: Capital projects 27,274,565 Debt service 4,875,827 Special assessment administration 4,213,787 Redevelopment 2,979,234 Special revenue grant programs 1,902,595 Unrestricted 43,193,038 Total net assets $346,503,077 See accompanying notes to financial statements 32 150,566,596 72,233,934 $222,800,530 412,630, 627 27,274,565 4,875,827 4,213,787 2,979,234 1,902,595 115,42.6,972 $569,303,607 LIVEIWPIkE, . Comprehensive Annual Financial Report FY 2010 -2011 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2011 See accompanying notes to financial statements 33 Net (Expense) Revenue and - Program Revenues_ - Changes In Net Assets Operating Capital Charges for Grants and Grants and Governmental Business -type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental Activities: City council $180,646 $199.815 $19,169 >i19,109 City Manager 1,227,247 (1,227,247) (1,227,247) City Attorney 1,335,953 (1,335,953) (1,335,953) City Clerk 642,275 (642,275) (642,275) Finance 5,880,275 $504 (5,079,771) (5,878,771) Human Resources 1,351,139 (1,351,139} (1,351,139) Fire 15,079,053 1,123.373 (13,955,690) (13,955,890) Police 26,196,950 1.538;616 1,763,157 (22.995,177) (22,895,177) Public Works 14,266,864 368,505 (13,698,359) (13,898,359) Community Development 24,828,977 4,982,719 8,362,120 $16,689,112 0,204,974 5,204,974 Economic Pevelopment 997,209 (997.209) (997,209) Library 6,300,974 143,899 197.059 (4.966,016) (4,966,016) Redevelopment 2,996,523 (2,996,523) (2,996,523) Interest on long term debt 4,038,829 (4,038,829) (4,038,829) Total Governmental Activities 104,329,914 7,789,111 10,890,656 16,569,112 (98,960,035) (68,960,036) Business -type Activities: Airport 4,953,877 5,170,897 $217,020 217,020 Water 10,559,395 10,232,383 104,101 (225,911) (226,911) Sewer 20,970,795 18,749,866 103,948 (2,116,981) (2,116,981) LAVWMA 1,654,518 (1,654.518) (1,654,018) Las Positas 2,253,488 2,004,170 (249,310) (249,319) Springtown 103,661 2,998 (100,863) (100,863) Total Rusiness-type Activities 40,495,934 36,160,314 204,049 (4,131,571) (4,131,571) Total $144.824,848 $43.949,425 $1.0,890,656 $16,893,161 (68,960,035) (4,131.571) (73,091,606) General revenues: Property taxes 22,994,297 22,994,297 Incremental prop" taxes 4.710,558 4,718,550 Sales taxes 16,734.417 1$,734,417 susiness license tax 3,414,185 3,414,185 Transient occupancy and franchise taxes 5,672,650 5,072,650 Intergovernmental, unrestricted 6,055,422 6,055,422 Interest 2,606,706 2,668,755 Miscellaneous 8,163,061 8,163,851 Transfers, net (Note 4D) 942,900 (142,900) Total general revenues and transfers 70,555,036 (142,$00) 70,412,138 Change in Net Assets 1,596,001 (4,274,471) (2,679,470) Net Assets - Beginning 344,900.076 227,075,001 571 283,0777 Net Assets-Ending $346,503,077 $222,800,530 $569,303.1307 See accompanying notes to financial statements 33 LIVE" Comprehensive Annual Financial Report FY 2010 -2011 LIVF"" E Comprehensive Annual Financial Report FY 2010 -2011 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 2011. 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. OTHER FEDERAL AND STATE GRANTS SPECIAL REVENUE Used to account for federal and state awards, including American Revitalization and Reinvestment Act (ARRA) grants. 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. ISABEL PARKWAY CAPITAL PROJECTS Established to account for the construction of roadway from Concannon Blvd. to E. Airway Blvd. Financing is provided by Federal, State and Local Grants, developer impact fees and Measure B funds. DEVELOPER DEPOSITS CAPITAL PROJECTS Established to account for developer fees received pursuant to development agreements, performance deposits, public park improvement fees and transportation development fees collected. 35 LAIEW" Comprehensive Annual Financial Report FY 2010 --2011 ASSETS Cash and investments in City Treasury (Note 3) Cash and investments with Trustees (Note 3) Accounts receivables Due from other funds (Note 4A) Advances to other funds (Note 4C) Prepaids and deposits Notes receivable (Note 5) Land held for redevelopment (Note 1 J) Total Assets GOVERNMENTAL FUNDS BALANCE SHEET JUNE 30, 2011 Other Federal and State General Grants $8,626,425 6,373,673 4,839,592 9,544,661 32,963 $4,271,039 3,737,674 3,506,837 $29,417,314 $11,515,550 LIABILITIES Accounts payable and other accrued liabilities $964,182 $282,575 Accrued payroll and benefits 1,684,084 6,146 Deposit payable 520,233 Due to other funds (Note 4A) 1,369,849 Advance from other funds (Note 4C) Deferred rents and revenue 843,950 3,511,004 Total Liabilities 3,492,216 5,689,807 FUND BALANCES (Note 9) Nonspendable 9,577,624 Restricted Assigned 5,825,743 Unassigned 16,347,474 Total Fund Balances 25,925,098 5,825,743 Total Liabilities and Fund Balances $29,417,314 $11,515,550 See accompanying notes to financial statements 36 Redevelopment Agency Capital Projects $2,218,115 1,562,811 553 2,000,000 9,203,150 $14,984,629 $308,559 13,033,492 13,342,051 553 1,642, 025 1 ,642, 578 $14,984,629 Isabel Parkway $1,355,402 3,853,086 LIVLWC9.41 Comprehensive Annual Financial Report FY 2010 -2011 Developer Deposits $17,527,797 32,048 $17,559,845 $115,798 17,452,449 5,208,488 17,568,247 (5,208,488) (5,208,488) (8,402) (8,402) $17,559,845 Other Governmental Funds $27,599,0192 20,592,850 663,015 4,965,353 9,905, 543 2,447 7,620, 781 2,292, 006 $73,641,087 $1,715,578 87,244 595,865 4,756,176 4,288,407 7,629,023 19,070,293 17,158 50, 369,442 4,388,896 (204, 702) 54,570,794 $73,641,087 37 Total Governmental Funds $60,242,468 22,155,661 10, 806,410 9,804,945 19,450,204 35,963 13,127,618 11,495,156 $147,118,425 $4,742,094 1,777,474 18,568,547 9,979,111 17, 319, 899 11,983,977 64,371,102 9,595,335 52,011 ,467 10,214,639 10,925,882 82,747,323 $147,118,425 LIVE"RE Comprehensive Annual Financial Report FY 2010 -2011 GOVERNMENTAL FUNDS BALANCE SHEET - Continued JUNE 30, 2011 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 CAPITAL ASSETS Capital assets used in Governmental Activities are not current assets or financial resources and therefore are not reported in the Governmental Funds. $82,747,323 365,502,898 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 investments 11,979,399 Accounts receivable 1,493,908 Internal balances 407,855 Prepaids, deposits and supplies 314,656 Accounts payable and other accruals (1,496,418) Accrued payroll (95,455) Accrued compensated absences (45,111) Net pension obligation (12,904,692) Claims payable (2,335,905) 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. 11,889,675 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, Unarnortized bond issue costs Non - current portion of Compensated absences Long -term debt Interest payable NET ASSETS OF GOVERNMENTAL ACTIVITIES See accompanying notes to financial statements 38 1,237,371 (3,117,398) (108,407,495) (667,534) $346,503,077 LIVEI"r Comprehensive Annual Financial Report FY 2010 -2011 LAT. W--�I Comprehensive Annual Financial Report FY 2010 -2411 GOVERNMENTAL FUNDS STATEMr:NT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30.2011 REVENUES Taxes and special assessments Sales Takes Property tax Increment Other taxes Licenses and permits Intergovernmental Contributions from outside sources Flnes and forfeitures Charges for current services Use of money and property Miscellaneous Total Revenues EXPENDITURES Current: City Council City Manager City Attorney City Clerk Finance Human Resources Fire Police Public Works Community Development Economic Development Library Redevelopment Capital Outlay Capital projects Debt service Principal Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Issuance of debt (Note 7) Transfers In (Note 4B) Transfers (out) (Note 4B) Total Other Financing Sources (Uses) Other Federal and State General Grants $22,781,915 16,734,417 9,086,556 1,606,187 7,315,992 646,231 8,497,643 2,504,559 1,789,418 79,966,918 158,101 1,144,122 1,262,414 554,010 5,888,915 1,261,354 13,970,849 23,731,935 5,006,741 11,150,367 961,443 4,335,981 237,354 299,167 69,962,713 $14,187,849 67,320 20,170 1,299,107 15,574,446 $,093 3,924,288 57,115 1,342,403 Redevelopment Agency Capital Projects $3,774,846 1.118 145,666 44.399 3.966,029 1,726.816 78.181 17.634 5,332,899 1,822,631 1,004,205 10,241, 547 2,143.398 1,534,021 (4,107,831) (2,573,810) 94 (14.883,027) (14,882,933) NET CHANGE IN FUND BALANCES (1,569.605) (4,641,388) FUND BALANCES AT BEGINNING OF PERIOD 27,494,703 10.467,129 FUND BALANCES AT END OF PERIOD $25,925,098 $5,825,743 See accompanying notes to financial statements 40 914,246 (4,302.764) (3,388;518) (1,245,120) 2.687,698 $1,642,578 LAT P-44@j E Comprehensive Annual Financial Report FY 2010 -2811 Isabel Developer Parkway Deposits Other Total Governmental Governmental Funds Funds 41 $943,712 $23,725,627 16,734,417 3,774,846 279 9,087,953 1,608,187 5,792,769 27,296,610 981,826 981,826 648,231 5,873,472 13,638,435 604,732 3,275,127 294,617 3,427,541 13.691,407 104,198,890 158,101 1,144,122 1,262,414 554,010 5,888,915 1,261,354 1$,970,849 773,965 24,514,993 1,024,149 6,0$0,850 2,124,308 17,198, 963 961,443 4,393,096 545,246 2,272,062 $15,322,961 $2,911 9,385,731 26,369,541 4,377,745 4,377.745 3,673,326 3,990,127 15,322,961 2,911 21,904,470 114,348,585 (15,322,961) (2,911) (8,213,063) (10,149.785) 13,046,596 13,046,596 18,178,148 22,311,247 42,937.756 {26,392,983 (49,686.605) 18,178,148 8,964,860 6,297,747 2,855,187 (2,911) 751,797 (3,852,038) (8,063,675) (5,491) 53,818,997 86,599,361 ($5,208,488) ($8,402) $54,570,794 $82,747,323 41 Comprehensive Annul Financial Report FY 2010 -2011 RECONCILIATION OF THE NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS WITH STATEMENT OF ACTIVITIES -FOR THE YEAR ENDED ,TUNE. 30, 2011 The schedule below reconciles the Net Changes in Fund Balances reported on the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance, which measures only changes in current assets and current liabilities on the modified accrual basis, with the Change in Net Assets Of Governmental Activities reported in the Statement of Activities, which is prepared on the full accrual basis. NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS ($3,852,03B) Amounts reported for governmental activities In the Statement of Activities are different because of the following: CAPITAL ASSETS TRANSACTIONS Governmental Funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets Is capitalized and allocated over their estimated useful lives and reported as depreciation expense The capital outlay asset addition expenditures are therefore added back to fund balance 1$,732,523 Land held for redevelopment transferred to govemmental activities Is added back to fund 13,167 balance. 8,881,749 Depreciation expense Is deducted from the fund balance 372,281 (Depreciation expense is net of internal service fund depreciation of $780,257 which has already been allocated to serviced funds.) (10,077,787) 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. 1,979,934 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 balance 4,377,745 Proceeds from issuance of long tern debt are deducted from fund balance (13,045,596) Reallocation of 2008 COPS to governmental funds (63,689) ACCRUAL OF NON- GURRENT ITEMS The amounts below included in the Statement of Activities do not provide or (require) the use of current financial resources and therefore are not reported as revenue or expenditures In governmental funds (net change): Bond issue costs (61,869) Interest payable 13,167 Long -term compensated absences 196,831 Deferred revenue from loan receivable offset 372,281 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 Intemal 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 (4,807,562) Change in Net Assets of Internal Service Funds reported with Buslnes5 -Type Activities (89,888) CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $1,595,001 See accompanying notes to financial statements 42 LIVEW� Comprehensive Annual Financial Report FY 2010 -2011 GENERAL FU ND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL -FOR THE YEAR ENDED JUNE 30, 2011 Amounts available for appropriation Charges to appropriations (outflows) Current: City Council City Manager City Attorney City Clerk Finance Human Resources Fire Police Public Works Community Development Economic Development Library Capital Outlay Capital projects Debt Service Interest and fiscal charges 72,056,600 72,761,650 70,966,918 (1,794,732) 147,170 167,040 158,101 8,939 Variance 1,128,695 Budgeted Amounts (15,427) Final Budget 1,291,830 1,262,414 29,416 Actual Amounts Positive 554,010 Original Final Budgetary Basis lNegative) Budgetary fund balance, July 1 $40,698,697 $18,872,038 $27,494,703 $8,622,665 Resources (inflows): 13,682,340 13,970,849 (88,509) 23,976,000 Property taxes 23,720,900 23,115,000 22,781,915 (333,065) Sales taxes 14,969,000 15,707,000 16,734,417 1,027,417 Other taxes 9,432,000 9,168,000 9,078,049 (89,351) Licenses and permits 1,956,000 1,573,000 1,608,187 35,187 Intergovernmental 7,427,000 7,368,000 7,315,992 (52,008) Fines and forfeitures 713,000 735,000 648,231 (86,769) Other in lieu taxes 507,000 507,800 7,907 (499,893) Charges for current services 8,403,000 8,428,000 8,497,643 69,643 Use of money and property 3,618,700 4,064,400 2,504,559 (1,559,841) Miscellaneous 1,310,000 2,095,450 1,789,418 (306,032) Amounts available for appropriation Charges to appropriations (outflows) Current: City Council City Manager City Attorney City Clerk Finance Human Resources Fire Police Public Works Community Development Economic Development Library Capital Outlay Capital projects Debt Service Interest and fiscal charges 72,056,600 72,761,650 70,966,918 (1,794,732) 147,170 167,040 158,101 8,939 1,589,030 1,128,695 1,144,122 (15,427) 1,308,330 1,291,830 1,262,414 29,416 817,920 553,200 554,010 9,190 5,694,334 6,359,710 5,888,915 470,795 391,886 1,172,097 1,261,354 (89,257) 13,974,770 13,682,340 13,970,849 (88,509) 23,976,000 23,814,690 23,731,935 82,755 6,096,610 5,072,720 5,006,701 66,019 11,393,650 11,136,035 11,150,367 (14,332) 650,770 1,075,320 961,443 113,877 4,366,450 4,282,070 4,335,981 (53,911) 447,100 506,100 237,354 268,746 299,167 (299,167) Total charges t4 appropriations 70,854,020 70,451,847 69,962,713 489,134 OTHER FINANCING SOURCES (USES) Transfers in 1,740,750 1,534,021 (206,729) Transfers (out) 3,526,000 (4,086,150) (4,107,831) (21,6181) Total Other Financing Sources (Uses) 3,526,000 (2,345,400) (2,573,810) (228,410) Budgetary fund balance, June 30 $45,427,277 $18,836,441 $25,925,098 $7,088,657 See accompanying notes to financial statements 43 LATW(pui Comprehensive Annual Financial Report FY 2010 -2011 OTHER FEDERAL AND STATE GRANTS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - FOR THE YEAR ENDED JUNE 30, 2011 Revenues Intergovernmental revenue Charges for current services Use of money and property Miscellaneous Total Revenues Expenditures Police Community Development Library Capital Outlay Capital projects Total Expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers (out) Total Other Financing Sources (Uses) Net change in budgetary fund balance Budgetary fund balance, July 1 Budgetary fund balance, June 30 Budgeted Amounts Original Final Actual Variance with Budget Positive (Negative) $42,426,000 $50,875,250 $14,187,849 ($36,687,401) 125,000 75,000 67,320 (7,680) 20,170 20,170 1,561,000 1,357,100 1,299,107 (57,993) 44,112,000 52,307,350 15,574,446 (36,732 „904) 15,000 17,670 9,093 8,577 3,525,020 6,088,059 3,924,288 2,163,771 345,000 345,000 57,115 287,885 7,133,520 7,664,280 1,342,403 6,321,877 11,018,540 14,115,009 5,332,899 8,782,110 94 94 (32,535,400) (40,941,240) (14,883,027) 26,058,213 (32,535,000) (40,941,240) (14,882,933) 26,058,307 $558,460 ($2,748,899) (4,641,386) ($1,892,487) See accompanying notes to financial statements 44 10,467,129 $5,825,743