.Ambac - CA.gov

Il4I1NGS: ,Standanl b'Poor's: 1JA,1

$1[)7,081J119iJ.85 C.!lLJPORNil1 STil'I'ElVIDE COlitfJlH.JNITIES DEVELOPlitfENT _!!U1'IIORITl"

TA}(llBLB PE1VSION OBIJG!l'TlON BONDS $178Jj5{t000.00 2004 Series _:l-1 Bonds (Current Interest Bonds)

$18,~52[),Jf)if.8l5 2004 Series 11-2 Bonds (Capitalllppreciat:ion l-Joruls)

/1 Pcrr·,rm.Pnt ··, by ttnd betrocen l\Tatio,ud /!ssociation, as trustee (the

The Series A-1 IJonds and the Serzts A-2

interest on the Series .A (the ';Series A-l _Bortcls ,, or "Current Interest Bonds'') is 2004. lfw Curren! lnJerest Brrnds will bear intrresl at the rates set

··series .,4-2 Bonds" f)T

il,h!Jr.,,r·,o.h•nn Bonds ·will accretc i,n ;)afru:' at the rates re1rtsle1·ed 'lrt thP nrune

l)TC zriLL act as 5e(:nriries 1frflo.-.1f,HI

an

l!f the interrst

THE BONDS ARE' A LJlVJTrED OBUG'1'1WN OF THE AUTHORJn: EIYilfiLE SOLEfY FROM A,VD SFCURED BY A PLEDGF Ai\Tl) ASS!CN11IE1VT or; THF PENSION OBLlGATTON l?ONDS ISSUED lff CEftTAlN LOCAL AGENDES AND JWYMJ,J\'TS H]711 RESPECT THEfrETCJ TO THE EXTENT PROVIDED IN 1HE T!WSTAGREEMEN1; u,.,,_,'""'-'"

PROVISIONS OFTf-JE TRUSTAGREEivlENTPFRAfJTT!lVG THE DISBURSEMENT THERt.'<)FFOR OR TO THE PURPOSES AND ON THE CONmTJOIVSAND lERl\.IS SEr romH TIJEREJA'. TfiE BONDS ARE NOJ'A LIEN OH CHARGE UPON A.\IV FUNDS OR PROPERTY OF Tf!E AUTHORITY TO THE EXTENT OF IJ!E AFOTrEJ\AEVTlONED PLEDGE AND

THE BONDS ARE NOTA DEBT OFANY LOCAL AGENCY OR ANY MEiv1BER OF THFAUTHOR fTYAND NO SUCH LO( AL AGENCY OR :'v!EMBFR JS UABLE lN ,1NLVLlNNER FOR THE P1JVV!FNT THERE()f,

by .l1Inbac ,dssttrttnre OF' !lVSURANCE POLICY" atf:cu hed hereto.

.Ambac THIS COVER. n4CE COJ\!TAJNS CEKDlIN JNFORMATION FOR GJL.VERAL REFERENCE O;Vf:'t'. IT IS NOT l/'v'JENDED

AS A SUAJ/\1JARY OF THE THANSACTJON. INVESTORS ARFADV!SED TO RLAD THF ENTIRE OFfJClAL S7ATJ.MFNT ro Ofr!AJ;\l fA/FOR!'vJATION ESSENTl/lL TO M,JKINC 1LV I1VFOFU'vlED INVESTA1ENT DECJSJON.

Intere•:,t on inonne tax Cotie t~f J ,986. l1t the

ltlORGA.N STilNLEY RBC: D!llN RllUSCIIER ING

E. J. DE LA ROS;l & CO .. INC. Datni:.Jane 15, 200)

Matudty Schedule

$17ft,555,000 Series A-1 Current Interest Bonds

CUSIP*t ISIN'l" Maturity Principal Interest Base No. Base No. {thlne ll ~mm.mJ. Rate Yield UHHH1 !JS1809ll

2005 $1,710,000 2~650t/() :~.650%, WV8 wvs:3 2006 1,500,000 a.150 ;3.] 50 WWfi VilW6fi 2007 1,890,000 8~780 3~730 V{X4 WX40 2008 2,305,000 4.140 ,u40 vVY 2 'liVY23 2009 ~~,790,000 4.510 4.510 WZ9 '.;VZ97 2010 a,wo,ooo 4.820 4-8'.20 XA3 XA38 2011 Ll,320,000 5.020 6.020 XB 1 XB11 2012 4,900,000 5.180 ruso }(J~ H XCtl~s 2013 5,545,000 5.380 5~330 XD 7 XD76 20H 6,296,000 5.408 5.408 XE5 XE59 2015 7,115,000 !""' t'-(';.'""•

(U)Ub Ei.508 XF2 XF25 2016 8,0lfi,000 5.588 5.688 XGO XG08

$95,480,000 fi.896% Term Bonds due ,Tune 1, 2024 - Yield 1:i.89fl% CUSIP*+: BOBE XH 8 - ISINt: lJSl:30911XH80 $32,900,000 6.076':;} Term .Bonds due ~fum: 1, 5!.034 - Yield G .. 076% CUSlP*t: 130911 X,J 4 · ISINt; US130911XJ47

$18~529,194.85 Series A-2 Capital Appreciation Bondi;,

Initial CUSIP*t ISIN't' Maturity Principal Accreted Value Yield to Hase No. Base No. i!l.Yn.eJl l\mou.nt at ~l\lfaturit.:£: ;I.\'Iatuifu _130911 !}Sl30911.

:W07 $ 495, 19~1~20 $ fj56,000.00 8.H4(YU1 XI( 1 XK10 2008 1,114,977.60 1,a20.,ooo.oo 4,;350 XL 9 X:Ij92 2009 1,088,903.40 1,870,000.00 ,t720 XM " XM75 j

2010 1,058,009.65 1,415,000.00 4.970 XN 5 XN58 :wn 1,027,574.10 1,470,000.00 5.240 XP 0 XP07 :!.012 H09,278.f30 1,5:30,000.00 i5.4fj0 XQ Q XQ89 '···' 2013 965,788.05 1,585,000.00 5.630 XR 6 XR62 ~3014 9;34,690.::m 1,64fi,OOO.OO 5.780 XS4 XS46 2015 89B,626.20 1,705,000.00 5.940 XT 2 YTf'('O

..!. 1..1 L,._,

2016 86G,6G2.80 1,770,000.00 6.080 XU 9 XUHl 2017 83::3,()22.15 1,.835,000.00 6.200 xv ·7 XV74 I

2018 804,329.10 1,H05,000.00 6.290 xw 5 XW67 2019 773,G66.75 1,975,000.00 EU:180 xxa J{}(:31 2020 747,,87f.t15 2,055,000.00 G.450 A'Y 1 XY14 2021 722/223~75 2,125,000.00 6.480 xz 8 XZ88 202:C~ 6[17,044.60 2,205,000.00 6.530 YA2 YA29 2m~a 676,611.!)0 2,295,000.00 6.560 YB 0 YB02 2024 G,S.3,908.75 2,875,000.00 EU580 YC 8 YC84 2025 357?42G.H5 l,385,000.00 6.1580 YD ,._.

0 YD67 W2f:i 348,321.60 1,440,000.00 G.580 YE 4 YE41 2027 8:38,946~40 1,496.,000.00 fi.580 YF 1 YF1f5 20:28 329,:390.50 1,550,000.00 6.580 YG Fl YGH8 2029 320,6Bfi.90 1,610,000.00 6.fi80 YH 7 YH71 2030 a11,7sB.oo 1,670,000.00 6.580 YJ '),

u YJ38 2031 rm2,75o.oo 1,780,000.00 6.680 YKO YKOl 2082 294A83.85 1,W5,000.00 6~580 YL x u YL83 2033 28G,725J.O 1,8!35,000.00 G.580 YM 6 YMG6 2034 278,saa.fio 1,985,000.00 6.580 YN 4 YN40

-------------------------------------------------------------------;!,.

t CUSIP and ISlN data herein are !-iet forth herein frJr conven]r.-~nce of reference only. Neither the AuJh,)nty :nor the Cnderv1?riters fJ5Surne re,,pc,ns1inJl1tv [Or the accur<.1cy (;f such inforrnation.

No broker, dealer, salesman or other person has been authorized to give any infonnation ur to make any representations other than those contained in lhis OfficiaJ Slatement in connection with the offering made hereby and, if given or rnade, such infonnation or representations must not be relied upon as having been authorized by the Authorhy, the Local Agencies or the Underwriters. Neither the delivery this Official Statement nor any sale hereunder shaH under any c1rcurnstances create any implication that lhere has been no change in the affairs of the Authority or any Local Agency since the date hereof. This Official Statement does not constitute an offer to sen or the suhdtation of an offer to buv. nor shall there be anv

"'' "' Bonds in any jurisdiction in \Vhich it is unlavvful for such person to make such offer,

solicitation or sale. The information contained 1n this Official Statement has been obtained frorn Local Agencies and mhcr sources believed by the Authority and the Underwriters to be

reliable. 'The lJndenvriters have reviewed the information in the Official Statement in accordance with, and as part their responsibility 1.0 investors under the federal securities law as applied to the facts and circmnstances this transactjon, but the Underwriters do not guarantee the accuracy or completeness such information.

This Official Statemen.t js not to be construed as a contract vvith the purchasers of the Bonds. Statemenls contained in this Official Statemenl v1hich involve forecasts or opinions, whether or not expressly so described herein., are intended solely as such and are not to be construed as a representation of facts.

In connection with this offering, the Undenvrit.ers may overnllot or effect transactions which stabilize or maintain the market price the Bonds at a level above that whk:h m1ght otherwise prevail in the open market Such stabilizing, if comr.nenccd, rnay be discontinued at any time.

Other than with respect to information concerning i\.mbac Assurance Corporation (the "lnsurcrlJ) as the Insurer for the Bonds contained under the caption "SECtJRITY AND SOURCE OF Pi\ YMENT -- The Insurance Policy" and "-·- The Insurer" and Appendix F attached hereto, none of the information in this Official S tatcrncnt has been supplied or verified by the Insurer and the Insurer makes no represemation or warranty, express or implied, as to (i) the accuracy or completeness of such informat1on; (if! the valkijty of the Bonds; or (iii) the tax exempt status the interest on the Bonds.

CALIFORNIA STATK\V HlE CO MMl.JN]TlES DEVELOPMENT AUTHORITY

STEVE SZALAY, Chainnan

CHRIS McKENZIE, Vice Chairman

DANIEL HARRISON, Secretary

l"JORMA LAMMERS, Treasurer

STEVE KEIL, Member

PAUL IIAilN, Member

SPECIAL SERVIC'.ES

Bond Counsel

On-ick, Herrington & Sutcliffe LLP San Francisco, California

Trustee

'Wells -Fargo Bank, National Associmi_on Los Angeles, California

Tl\BLE OF CONTENTS

lNTR()DUCTION ......................................................................................................................................................... 1

THE AUTHORITY AND THE PROGRAM ................................................... ., .............................................................. 2 TI-LE A,TTHORITY ........................................................................................................................................................ 2 THE PRUGR_,\l'vJ ........................................................................................................................................................... 3

DESCRIPTl()N ()F Ti!E Bf)NDS ................................................................................................................................ 3 DEN01HN/\TIONS:. f\'\H,'LENT OF PRINCIPAL AND INTEREST ....................................................................................... 3 R.EGJSTRATiO'.'i AND TRANSFER UF BONDS .............................................................................................................. 3 REDEMPII0"-1 OF CURRENT ]NTEREST BONDS ............................ .. ........................... 3

ESTLMATED SOURCES AND USES OF BOND PROCEEDS .................................................. . . .......... ... .. ... 7

SECURiTY .AND SOURCE OF PAYMENT ................................................................................................................ 7 (iENE)lAL ................... ., ........................................ ., ........................................................................................... 7

FLOW OF FUNDS UNDER Tl:-IE TRUST AGREl::JvlENT ..................................................................................................... 8 Fl.O\V OF FtTNDS 1JNDER THE LOCAL /-\.(iENCY Fff(UST 1\GRE_ElviENTS ., ....................... , .. , ............ , ....................... , .. , .... 8 ISSUANCE OF ADDJTIONAL BONDS U-"lDER THE LOCAL AGJC:NCY TRUST AUREEMT.NTS .............................................. JO OTHER 0BUGAflONS OF TflE LOC/1.L ACiENCJES ...................................................................................................... 11

THE INSURANCE POLICY AND THE INSURER .................................................................................................... l2 P1\ Yr.1EI-.JT Pl lRS1:JANT TO FlNANCIAL GUi\.R".NTY lNSURAJ°\JCE POLICY ...................................................................... 12 .AMBAC ASSURANCE CuRPORATlON .................... ,. ......................................... ,. ......................................... ,. ..................... 13 f\ V i\lLABLE INFOlUvlATlUN ...................................................................................................................................... 13 LNCORPORATION OF (:ERTi·JN J)OCLTlVfENTS B'{ REF_ERENCE ., ............ , ....................... , .. , ............ , ....................... , .. , .. 14

Risr.,:_ f·ACTClRS ........................................................................................................................................................... 14 LIMITED OBUC<~,TIONS OF THE AlJTHORTTY ...................................... , ....................................... , ............................. t4 Bli.NKRUPTCY ...................................................................................................................................... , ................... l4 No JorNT OBLJGATJON ............................................................ . .......................................... 15 RlSK OF STATE UR LOCAL LEGISLATION .......... ,. ........................................ ,. ........................................ ,. ..................... 15 ST/\TE BUDGET FlN;\NCES .......................................................................................................................................... 15 THE LocAL C,nvER1'-!:MENT AGREEME0n ... , ....................................... , ....................................... , ............................. 20 REALICiNl'vlENT ..................................................................................................................................... , ................... 21 SEC, JRlTY ....................................................................................................................................................................... .22 RECENT LfTlGATlON Rt,GARDING INCREASE IN i\SSESSED VJ',J.Ui\TlON ..... ,. ......................................... ,. ..................... 22 PENSION BENEFIT LIABlLJTY ................................................................................................................................... 23

PARTICIPATIN(3- LOCAL AGENCIES INFORivlATlON ................... , .......... , ....................... ,. ........... , ....... ., ..... 24 (}ENER/\L ..................................................................................................................................................................... 24 PERS PENSiOl'·l PLANS ............................... , ....................................... , ....................................... , ............................. 25

CONSTITUTIONAL AND STATUTORY U!VHTATIONS ON T/\XES AND APPROPRfATfONS ..................... 26 ART!CLE XHlA OF TilE Ci\UFORNIA CONSTITTJTIOt, .......................................................................................... 26 A.RTICLE XllIB OF THE C'IJJf,ORJ'·HA C07'-ISTlTUTIO.r, .................................................................................................. 27 tTt~IT/..,,RY PROPERT'r' ........... ,. ....................................... ,. ....................................... ,. ....................................... ,. ............ 2.8 PROPOSITIO'.~ 2.18 ........................ , ......................................... , ......................................... , ......................................... , ..... 28 PRO.POS[T[O:~ 62. .......................................................................................................................................................... 29 Fr.rruRE I:\IITL'>T[VES .................................. , ....................................... , ....................................... , ............................. 30

T/\X IvlATTERS ............................................................................................................................................................. 30 TAX ST/,TUS OF TfIE, BONDS ........................................................................................................................................ 3 l SAl.E 1\ND Ex er-TAN GE or: l3oNDS ................................................................................................................................... 31 I)J::'.iFE'.,/-\S.11,N{_"1:~ .. "···-" , ..... ,, .. , ..... ._, ....... , ........ "''''" , ..... ,, .. , ..... ._, ....... , ........ "''''" , ..... ,, .. , ..... ._, ....... , ........ "''''" , ...... ' .. , ..... ._, ....... ,,~)2

f~'t)1{1~I(],l\J IN \lJ~S1-0I-{S ....... , ............ ' .......................... , ............ ' .......................... , ............ ' .......................... , ............ ' ... 3:~

ERl.SA. C()NSHJERJ\TI()NS .......................................................................................................................................... 32

TABLE OF CONTENTS (continued)

,ABSENCE ()F LITI<}AT1()N ..................................................................................................................................... 33

Ri\TJN(.iS .................................................................................................................................................................... 33

UI\JDER\.VRITING ........................................................................................................................................................ .34

C(Jf,flTNUING DJSCL()SURE ................................................................................................................................... 34

CERTAIN LE(i!\L IvIATTERS .................................................................................................................................. 34

Vi\Lil)A.TH)N ............................................................................................................................................................ 35

AUTHORIZATION AND APPR(JVAL ......................................................................................................................... 35

DEBT SERVICE BY 1.0CAL AGENCY AND UAAL BY LOCAL AGENCY ................................... APPENDIX A

LOCAL AGENCY INFORMATION ......................................................................................................... APPENDIX B

SUMMARY HISTORICAL flNANCl.AL LNFOR},;IATION .................................................................. APPENDIX C

FINANCIAL STATEMENTS OF LOCAL AGENCJES ............................................................................ APPENDIX D

DEFINITIONS OF CERT/UN TERlVIS AND SUivl'MARY OF TRUST AGREEMENT AND LOCAL AGENCY TRUST AGREEMENT ......................................................... APPENDIX E

PROPOSED FORM OF BOND COUNSEL OPINION .............................................................................. APPENDIX F

HOOK-ENTRY OI'-JLY SYSTEM AND GLOBAL CLEARANCE PROCEDURES .............................. APPENDIX G

FORivl OF INSURANCE POLICY ......................................................................................................... APPENDIX H

ACCRETED VALUE TABLE ................................................................................................................ APPENDIX I

FORMS OF CONTINUING DISCLOSURE CERTffi1CATES ............................................................. APPENDIX J

n

$197,084,194.85 CALlFORNIA STATEWIDE COJVlMUNlTIES DEVELOPJVIENT AlJTHORJTY

TAXABLE PENSION OBLIGATION BONDS

$178,555,000.00 2004 Series A-1 Bonds (Current Interest Bonds) $18,529,194.85 2004 St;ries A-2 Bonds (Capital Apprecfatfon Bonds)

INTRODUC'l'lON

This Officjal Statement, inchu:Ung the cover page and appendices hereto (the "Official Statement"),. sets forth certain inforrnatjon concerning the California Statewide Cmnmunities Deve]oprnent Authority Taxable Pension Obligation Bonds, 2004 Series A.-1 (Current Jnterest Bonds) (the "Series A-1 Bonds" or "Current Interest Bonds") in the aggregate principal arnount of $178,555,000.00 and the California State\vide C'omnmnities Development Authority Taxable Pension Obligation Bonds, 2004 Series i--\-2 (Capital Appreciation Bonds) (the "Series A-2 Bonds" or "Capital Aprffcc1ation Bonds") in the aggregate principal amount of $18,529,194.85. The Series A-1 Bonds and the St:ries A-2 Bonds are referred to collectively herein as the "Bonds." Pursuant to the California Statewide Comrn.miities Development Authority Pension Obhgation Bond Program (the "Program"), the California Statewide Communities Development Authority (the "Authority") is issuing the Bonds pursuant to the terms of a Trust Agreement, dated as of June 1, 2004 (the "Tmst Agreement") by and betv,.:een the California Statewjde Communities Dcvdoprnent Authrnity (the "Authority") and '\VeHs Fargo Bank, National i\.ssodation, as trustee (the "Trustee").

The net proceeds of the Bonds wm be used to purchase taxable pension obligation bonds (the "Obligations") of participating counties and cities (collectively, the "Local Agencies") in State Caiifomia (the "State:"). The Obiigatkms purchased the net proceeds the Bonds will assigned to the Trnstee for the benefit of the registered owners and the Insurer of the Bonds, and the payments on such Obligations wrn be used for the payrnent the principal of and interest on the Bonds or the reimbursernent drav,:ings under or payments made pursuant to or from the Insurance Policy and the Obligations shall not used for any other purpose while any of the Bonds remain Outstanding. For information on the Local Agencies, the Obligations of the Local Agencies and their allocation 10 the Bonds, see Appendices A, B and C hereto.

The Obligation of each Local Agency is under the authority Articles l U and 11 (commencing \\'ith Section 53570) of Chapter 3 of Division 2 of 'Title 5 of Government Code of the State of California (the "Acl") and pursuant to the terms of a Trust Agreement, dated as of June 1, 2004, by and between each such Local Agency and \VeHs Fargo Bank, j'\fational Association (the "Local Agency Trustee"), as trustee (each a "Local Agency Trust Agrecrncnt") and a resolution issuance adopted by the legislative body of each such Local Agency (each an ''Obligation Resolution"). The issuance a Local Agency's Obligation wm provide moneys to meet such Loca] Agency's obligation to

pay rhe Local Agency's unfunded accrued actuarial Hability ("UAAL ) to the California Public Employees' Retirernent System ("PERS The aggregare amount Obligations issued in connection with the Bonds will equal lhe aggregate principal amount of the Bonds. Each Local Agency's Obligations are unconditional obligations of Local Agency, payable from any legally available source of funds. The fuU faith and credit of the Local Agencies are not pledged to the repayrrient the Obligations. See "SECURITY AND SOURCE OF' PAYMENT" herein.

Payment of principal and interest on the Bonds when due win be insured by an jnsurance policy (the "Insurance Policy") to be issued concurrently with the delivery of the Bonds by Ambac Assurance Corporation (the "Insurer"). See "The Insurance Policy and the Insurer" herein and APPEND1X H - "FORM OF INSURANCE POLICY" attached hereto.

THE BONDS ARE A LIMITED OBLIGATION OF THE AUTHORITY, PAYABLE SOLELY FROM AND SECURED BY A PLEDGE AND ASSIGNiv1ENT OF, TEE PENS10N OBLIGATION BONDS ISSUED BY CERTAIN LOCAL AGENCIES AND P/\YMENTS \IVITH RESPECT 'THERETO, TO THE EXTENT PROVIDED IN THE TRU5T AGREEMENT, SUBJECT TO THE PROVISIONS OF THE TRUST AGREEMENT PERMITTING TJ:IE DISBURSEMENT THEREOF FOR OR TO THE PURPOSES AND ON THE CONDITIONS AND TERMS SET FORTH THEREIN. THE BONDS ARE NOT A LIEN OR CHARGE lJPON 11J~~y FUNDS OR PROPERTY OF TIIE AUTHORHY (EXCEPT TO THE EXTENT OF THE AFOREivIENTIONED PLEDGE AND l\SSIGNMENT). THE BONDS ARE NOT A DEBT OF ANY LOCAL AGENCY OR ANY MEMBER O.F THE AUTHORJT'l /\.ND NO JCH LOCAL AGEI\fCY OR ME}VfBER IS LIABLE IN ANY MANNER FOR TlIE PAYMENT THEREOF.

The auditt:d 2002-03 Annual Financial Report for Kings County has been completed and is attached hereto at Appendix D. The audited 2001--02 Annual Financial Report of Kings County and unaudited financial information for fiscal year 2002-03 that \:Vere attached lo the Preliminary Official Statement dated June 4, 2004 have been rernovecL

Copies of the Trust Agreement and tbe standard form of the Local Agency Trust Agreement summarized herein and the standard form the Obligation Purchase Agreement (as defined herein) are available request during the initial offering period frorn \VeHs Fargo Bank, National Association, { --, __ y-,.., -·,'1--~ ,C·-, -~,.,, .. ·117ur1,1-i·-BJ -1 -,7th;,~1,· . f,-,· l\t ~-cs],,-. (-',j:f-,.· 'n 9ne1, Ufl,Uadtc _ 1LlSLcJCf'\11-.".S, ., HI1Sl,lC ~ V(., J, ! .. dOt, ,_,US,~,1):).:: ..... S, _.thLr1Ha, ,,.J.t,.

AH talized \vords, unless otherwise defined herein, shall have the meanings ser forth in APPENDlX E ~ "DEFINITIONS OF C'ERTAIN TERMS AND SlJMMA.RY OF LOCAL /\.GENCY TRUST AGREEMENTS AND StJMMARY OF TRUST A.GR.EEMEI\lT" or, if not defined therein, in the Trust Agreement.

THE AUfHORITY AND THE PROGRAM

The Authority

The Authurity is a public enthy organized pursuant to an Amended and Restated Joint Exercise of Powers Agreernent among a nurnber of California counties, cities, and special districts entered imo pursuant to provisions relating to the joint exercise pcnvers contained in Chapter 5 Division 7 of Title 1 (commencing Section 6500) of the CaJifornia G-ovemment Code, The Authority is authorized to issue bonds and to finance working capital for local agencies vvithin the State of California pursuant to the Marks--Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with Section 6584) Chapter 5 Division 7 of the California Government Code.

The Authority has sold and delivered obligations other than the Bonds, \Nhich other obligations are and will be secured instmmcnts separate and apart frorr1 tht~ Trust Agreernent and 1he Obligations. The holders of such obligations of the i\uthority have no claim on the security of the Bonds, and the

2

Owners of the Bonds will have no claim un the security Authority.

such other obligations issued by the

Authority's Pension Obligation Bond Program (the "Program") began in 2004. The Program provides unfunded pension obligation refinancing for California counties, cities and other local agencies meeting certain criteria.

DESCRIPTION OI? THE BONDS

Denorninations; Payment of Principal and lnte:rest

The Bonds will be prepared in fully registered furrn and, v11hen issued, will be registered in the name of CEDE & as registered Owner of the Bonds and norninee of The Depository Trnst Company, New York, New York ("DTC"). DTC will act as securities dt'pository for the Bonds. Individual purchases may be made in book-entry form only in denominations (a) ·with respect to Current Interest Bonds, principal amount or any integral multiple thereof; and (b) with respect to Capital Appreciation Bonds:, $5,000 Ivlaturity Amount or any integral multiple thereof (" i'n1thorized Denominations"). Purchasers wm nor. receive certificates representing their interest in the Bonds purchased. long as CEDE & is the registered (hvner the Bonds, as nominee DTC, references herein to the of the Bonds shaH mean Cede &: Co. and shall not mean the actual purchasers (the "Beneficial Ovmers'') the Bonds.

The Bonds '>viH be dated the date of initial delivery an.d execution thereof and mature on the dates set forth on the inside front cover. Jnterest on the Current Interest Bonds is payable on Jun.e 1 and Decernber 1, commencing December l, 2004. The Current Interest Bonds wiH bear interest at the rates se! forth on the inside front cover. The Capital Appreciation Bonds will not pay periodic interest. Interest on the Capital Appreciation Bonds wrn accrete in va1ue at the rates set forth on the inside front cover. So long as Cede & Co. is the registered Ovmt:r of the Bonds, the principal of and interest on the Bonds \Vin be payable by wire transfer by the Trustee to Cede & as nommee DTC which is expected, in turn, to rernit such amounls lo DTC Pmticipanls (as defined herein) for subsequent disbursement to the Beneficial Owners. See APPENDIX G ·- "BOOK.-ENTRY ONLY S'{S'TFJvI AND GLOBAL CLE<'.ARA.NCE PROCEDURES" Interest payable on the Bonds will be calculated un the basis of a 360-day year consisting twelve 3(}-day months.

Registration and 'f nmsfer of Bonds

long as the Bonds arc subject to the DTC book·-entry system, they will be registered, and 1nay be transferred, as described in APPENDIX G -- ,;BOOK-ENTRY ONLY SYSTEM AND GLOBAL CLEARANCE PROCEDURES."

Redemption of' Current Interest flonds

Optional Redemption. The Current Interest Bonds maturing on or before June 1, 2016 win not be subject tu optional redemption.

3

The Series A-1 Term Bonds maturing on June 1, 2024 (the "2024 Term Bonds") and the A--] Term Bonds maturing on June l, 2034 (the "2034 Term Bonds" and collectively with the 2024 Term Bonds, the "Tcrn1 Bonds") are subject to optional redernption p1for to their rnaturity at the option

the }tuthority, in vvhole or in part (and if in part, pru rata as described belov,r) on any date, at a redemption price equal to the greater (1) 1 percent of the pr1ndpal arnuunr the Term Bonds to be redeerned; or the sum of the present values the remaining scheduled payments of principal and interest on the Term Bonds to be redeen1ed ( exdusive of interest accrued to the date fixed for redemption) discounted to the date of redemption on a semiannual basis (assuming: a 360-day year consisting of t1,velvc 30-day months) at the Rate (defined below) pius 10.0 basis points for the

Tenn Bonds or plus 12..5 basis points for the 2034 Term Bonds, plus h1 each case, accrued and unpaid interest on the Term Bonds being redeerned to the date fixed for redemption.

"Comparable Treasury Issue" n1eans, ,vith respect to any rcdemptjon date for a particular Current Interest Term Bond, the Treasury security or securities selected by the Independent Investment Banker which h,1s ,.u1 actual or interpolated maturity compan1ble to the remaining average life the Cunem Interest Bond to be redeemed, and that would be utiljzed in accordance with customary financial practice in pricing nevv issues of debt securltit:;s of comparable maturity to the remainjng average 1ife of the CmTeni Interest Term Bond to be redeemed.

"Comparable Treasury Price" means, with respect tu any redemption date for a particular Current Interest Bond, (1) the average of the Reference Treasury Dealer Quotations for such redcrnption date, after excluding the highest and lowest Reference Treasury Dea! Quotations, or (2) ff the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average all such quotations.

"Independent Investment Banker" means one of the Reference Treasury Dealers appointed by the Trustee in consultation with the Autbority.

"Reference Treasury Dealer" means each of the dealers designated in the Trust l\greement and their respective successors and three other specffied the ;\.uthority frorn time to

time, that are primary U.S. Governrnent securities dealers in the City of New Yurk (each a "Prirnary Treasury Dealer"); provided, however, iJ any them ceases to be a Prirnary Treasury Dealer, the Authority will substitute another Primary Treasury Dealer.

"Reference Treasury Dealer Quotations" means, \Vith respect to each Reference Treasury Dealer and any redemption date for a Current Interest Bond, the average, as dclermined by the Trustee,

the bid and asked prices for the Cmnparabk Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Tmstee by such Reference Treasury Dealer at 3:.30 p.m .. , New York tintt::, on the third business date preceding such redempLion date.

"Treasury Rate" rneans, with to any redemption date for a Current. Interest Bond., the rate per a:rmurn equal to the semiannual equivalent yield to maturity or interpolated maturity the Comparable Treasury assuming that the Comparable Treasury Issue is purchased on the reden1ptiun date for a price to the Cotnparable Treasury Price.

No Optiorud Redemption fcrr Capital Appreciation Bonds. The Capital Appreci,.Hion Bonds ,vill not be subject to optional rcdernption.

4

li,J.andatln:v Sinking Fund Redemption, The 2024 Term Bonds are subject to mandatory sinking fund redernpt1on on the dates and in lhc amounts designated bdow, upon notice pursuanl to the Trusl Agreement.

Redemption Date (June 1)

* J\,faturily.

2017 18

2019 2020 2021 2022 2023

Principal Amount ---·-··----·-··------

$ 8,985,000

11,225,000 12,480,000 13,830,000 15,285,000 16,855,000

£ o,

Giving effect to the mandatory redemption set forth above, the average life of the 2024 Term Bonds calculated from the date delivery is 16.589 years.

The 2034 Term Bonds are subject to mandatory sinking fond redemption un the dates and in the amounts designated belov,', upon notice pursuant to the Trust Agreement.

Redemption Dale (June _I)

* Maturity.

2026 2027 2028 2029 2030

2033 2034*

Principal Amount -------------------

2,280,000 2,520,000 2,775/)00

3,350,000

4,020,000 4,390,000 4,790,000

Givjng effect to the rnandatory redemption set forth above, the average life of the 2034 Term Bonds calculated from the date delivery is 26.180

Selection o.f Bomtsfor Redeniption. Redemption payrnents on the Current Interest Bonds, being redeemed in part will be made on a pro rata basis to each holder in whose name such Current Interest Bonds are registered at the dose of busi.ness on the fifteenth day of the calendar rnnnth imrnediately preceding the redemption date (DTC so long as the book-entry System with DTC is in effect). "Pro ra!a" means, in cormection vvith any rnandatory sinking fond redemption or any optional redemption in

part, ,vHh respect to the allocation uf amounts to be redeemed, the application w such amounts of a fracUon, the numerator of which is equal to the amount of the specific maturity of Current Jnteresl Bonds held by a hokier such Current Interest Bonds, and r.he denominator of v,rhich is equal to the total amount of such maturity of Cunent Interest Bonds, then Outstanding. So long as there is a securities depository for the Current Interest Bonds, there wiU be oniy one reg1stered uwner and neither the Authority nor Trustee win have responsibility for prorat.ing partial redemptions arnong beneficial owners of the Current Interest Bonds.

Notice of Redernption. Notice redemption shaH be maikd by first--dass mail by the Trustee, not less than thfrty nur more sixty days prior to the redemption date to (i) the respective Holders of the Current Interest Bonds designated for redemption at tbeir addresses appearing on the registration books of the Trustee, (ii) the Securities Depositories (iii) one or more Infurrn.ation Services. Notice of redemption to the Securities D,-:posirories and the information Services shall be given by registered mail or overnight delivery or facsimile transmission. Each notice of redemption shall state the date of such notice, the redemption price, if any,. (including the name and appropri.ate address the Trnstee ), the CTJ SIP number a.ny) of the rnaturity or rnaturities, and, if less than al1 of any such maturity is to be redeemed, the distinctive certificate 11mnbers of the Current Interest Bonds of such maturity, to be redeemed and, in the case of Current Interest Bonds to be redeerned in only, the respective ponions of the principal a:mount thereof to be redeemecL Each such notice shall also state that on sajd date there \vill become due and payable on each of said C'urrent 1ntcrest Bonds the redemption price, if any, thereof and in the case of a Current Interest Bond to be redeemed in part only, the specified porrion of the principal arnount thereof to be redeemed, together with interest accrued thereon tu the redemption date, and that from and after such redemption date inlerest thereon shaU cease to accrue, and shall require that such Current Interest Bonds be then surrendered at the address of the Trustee specified in the redemption notice. Failure to receive such notice or any defect therein shall not invalidate any of the proceedings taken in connection v11ith such redcmptiort

1n the event redemption Current Interest Bonds l other than sinking fund redemptions), the Trustee shall maH a notice of redemptfon upon receipt of a v\?riuen Request of rhc Authority but only

Authority shall file a Certificate of the Authority ,vilh the 'Trustee that on or before the date set for reden1ption, the Authority shall have deposited with or othervvise 1nade available to Tmstee for deposit in the Principal Account the money required for payment of the redemption price, includfag accrued interest, of all Current Interest Bonds then to be called for redemption the Trustee detem11nes that rnoney wiH be deposited with ur uthervvisc made available to it in sufficient time for such purpose), together with the estjrnated expense giving such notice.

If nutice of rederr1ption has been ch1ly given as ;:iJort~said and money for the payment the redernptiori price of the Current Interest Bonds called for redemption is held by the Trustee, then on the redemption designated in such notice Current Interest Bonds so called for redemption shall become due and payable, and from and after the date so designated interesl un such Current Interest Bonds shall cease to accrue, and the Holders of such Current Interest .Bonds shall have no rights in respect thereof excepr. to receive payment of the rcdemptiun price thereof.

ESTJ!\iATED SOURCES AND USES O:F BOND PROCEEDS

The t.able below sets forth the: estirnate:d sources and uses of the proceeds amounts.

s_ource§. Principal Amount $178,55\J)OO.OO $_18.529.194.85

the Bonds and other

Total Sources 178,555,000.00 18,529, 194.85 $197 ,084, 194.85

Deposit to Proceeds Fund Costs bsuanct?)

Total (}ses

$175,463,419.00

$178,555,000.00

$17 ,97 5,87 4.00 $193,439 ,293. 00

$18,529, l 94.85 $ l 97,084, i 94.85

r;, 1 1 · 1 , · , " · · · ,. 1 • n 1· · .. , 1ncj_uctes, among ot1er tnmgs, Uncterwntcrs· a.iscount am.i insurance ,o 1cy prerrnum.

SECURITY AND SOURCE 01.;-· PA Yl'VLE'.NT

General

Each Obligation a Local Agency wrn be purchased with proceeds of the Bonds and. deposited with the Trustee, pursuant to the Trust Agreerncnt. The Obligations a.re unconditional obligations the Local Agencies payable from legally available funds. The Obligations are not voter-approved debt backed by the taxing power of the Local Agencies and the full faith and credit of the Local Agencies are not pkdged to the rcpayrncnt ihe Obligations. The Local Agencies have other obligations payable from their General Funds. The Local Agency Trust Agreements irnpose no limits on the amount (3-eneral Fund obligations lhat the Local Agencies rnay incur. See Appendix A hereto a listing of each Local Agency, the estimated principal arnount the Obligations and the allocation of each Obligation respect to the Bonds.

Under the Trust Ag.recmcm, the Obligations and an right, title and interest of the Authority therein and to all payments arc irrevocably assigned and pledged transferred to the Trustee for the bcneJit of the Owners of the Bonds and the payments on the Obligations shall be used for the punctual payment of the interest on and principal of the Bonds and the Obligations shall not be used for any other purpose while any of the Bonds remain Outstanding. This assignment, transfer and pledge shall constitute a first lien on the principal and interest payrncnts of and all other rights under the Obhgations for tht;; foregoing purpose in accordance vvith lhe terms of the Trust Agreement.

AH principal and interest payrnents on the ()b1igations shall be paid directly by each Local Agency Trustee to the Trustee. ;\H principal and interest paymt;nts on the Obligations receh;ed by tht'. Trustee shall be held in trust by the Trustee under the terms of the Trust Agree.ment and shall be deposited by it, as and when received, in the Bond Fund, and all money in such fund shall be held in trust by the Trustee for the benefit and security the Ov,mers. If the Trustee receives ObhgaHon rcpayrnents frorn a Local Agency Trustee which, together with other amounts on deposit in the Bond Fund allocable to such Local .1-\gency, are in excess of the a.mounts required to pay the principa] of and interest due on such Obligation, such excess axnounts shall remain in the Bond Fund, and shall be

-, I

transferred to such Local Agency following paymenr of the arnount of Bonds corresponding to such Obligation.

J\foneys received hy the Trustee attributable to a Local Agency shall not he used in any nmnne.r (directly o:r indfrediy) to rnake up any deficiency in repayment of any other Local Agency's ObUgatfon.

Flow of Funds under the Trust Agreement

Pursuant to the Trnst Agreement, the Trustee shaH deposit the rnoney contained in the Bond Fund at the foBowing respective times in the following respective accounts in the manner and priority provided in the Trust Agreement, and the money in each of such funds shall be disbursed only for the purposes and uses authorized in the Trust Agreement:

Interest .Account. The Trustee, on the Interest Payment Date, shall deposit in the Interest Account that arnount money represeming the interest due and payable on the Bonds on such date; and such money shall be used by the 'Trust.et: solely for the purpose payh1g interest on the Bonds on such date.

Prindpal Account The Trustee, on rhc Principal Payment Date, shall deposit in the Principal A.ccount that amount of money representing the principal becoming due and payable on the Bonds on such Principal Pa.ymem Date. AH moneys in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of paying the principal Bonds on the Principal Payment Date.

Moneys held in the Bond Fund., the Principal Account or the Interest Account on each Interest Payment Date after the payment by the Trustee of an of the principal of and interest on the Bonds shall be 0) returned by the Trustee to each Local Agency (other than a Local Agency which is in default in the payment of the principal of and imt:rest on its Obligation) by check in an amount equal to the proportion the amount initially received frorn each Loca1 Agency and deposited in the Bcmd Fund over all ammmls received from all Local Agcndes and deposited in the Bond Fund multiplied by the remaining balance in the Bond Fund, or (ii) applied by the Trustee as otherwise directed by the Authority.

I?lm,;r of' :Funds unde.r the Local Agency ]'rust Agreements

The Local Agency Trnst Agreements each provide that jn order to meet each Local Agency's obligations, each Local shaH deposit or cause tu be deposited with the Local ,L}.,_gency Trustee on or before August 1 of each Fiscal Year such other date as provided in a Supplemental Loca! A.gency Trust Agreement) the amounl vvhich, together wHh moneys transferred ptlfsuant to tbe related Local Agency Trnst Agreement,. is sufficient to pay Local Agency's debt service obligations un the Obligations payable during such Fiscal Y car.

AH amounts payable by each Local Agency will be promptly deposited by the Local Agency Trustee upon receipt thereof in a special fund designated as the "Local Agency Bond Fund".

8~ .

Interest Account On or before each Interest Payment Date, the Local Agency Trustee shaH set aside from the Bond Fund and deposit in the Interest Account that amounl of money 1,vhich is equal tu the amount interest becoming due and payable on all Outstanding Obligations on such Interest Payment Date.

No deposit need be made in the Interest Account if the amount contained therein is at least to the aggregate a:moum interes[ becoming due and payable on an Outstanding ()bEgations on such r nterest Payment Date.

AH money in Interest Accoum shall be used and withdrawn by the Local Agency Trustee the purpose of pay1r1g the intcn~st on the Obtiirntions as it shaH ticcomt"~ due payable Oncluding ,.,-:,'rHP·d· •nt'~'·P~t nn qnv C)•)1 1·g'l,_J.nl1'' P]'a{·}1•3 QP(i or 7.•p.ct.nn_rr1ed rwi1·1r tl'1 'TI"t11r1'tv) ,..l,"o,. ..... ~ ,,i't-~- ,. \..J.,~!..... ,.,!Eft!E) "'--'-'·.t ... (...,.,l,.\_l '"'t'·L~vJt.,e....,J~U-,_J":\-~, v, ..... i ...... }'.L-., ., ! t;,.tt. ·; ~

Prindpal Account On or before each Principal Payrnent Date, the Local Agency Trustee shall set aside from the Local Agency Bond Fund and deposit in Principal Account an amount of money equal to the amount of all sinking hmd payments required to be made on such Principal Payment into the respective sinking fond accounts for aH Outstanding Term Obligations and the principal amounl or Accreted Value of aU Outstanding Serial Obligations maturing un such Principal Payrnent Date.

No deposil need be made in the Principal Account if the amount contained therein is at kast equal to the amount of the principal or Accreted Value of aB Outstanding Serial Obligations maturing their terms on such Principal Payment Date plus the aggregate amount of aH sinking fund payn1ents required to he made on such Principal Payment Dar.e an Outstanding Term Obligations.

The Local Agency Trnstee shall establish and n1ainrain Vlithjn the Principal Account a separate subaccount the Term Obligations of each series and maturity, designated as the inking Account" (the "Sinking Account"), inserting therein the series and maturity (if more than one such account is established for such series) designation such OhUgations. With respect to each Sinking /\.ccount, on each mandatory sin.king account payment date established for such Sinking Account, the Local Agency Trustee shall apply the mandatory sinking account payment required on that date to the redemption payment at :rnaturity, as the case may be) of Term Obligations the series and maturity for which such Sinkjng Account v1as established, upon the notice and in the manner provided in the Local Agency Trust Agreement; provided that at any time prior to giving such notice of such redemption, the Local Agency Trustee rnay upon the \Vritten Request the related Local Agency, apply moneys Ln such Sinking Account to the purchase for cancellation of Term Obligations of such series and maturity at public or private sale,. as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account), as may be directed by the Local Agency., except that the purchase price (excluding accrued interest) shaU not exceed the redemption price that would be payable for such Obhgat.ions upon redempUon by appHca1fon of such ?vlandawry Sinking Account PaymenL H, during the twe1ve-rnonth period immediately preceding said mandatory sinking account payment date, the Local Agency Trnstec has purchased Term Obligations such series and rnaturity ,vith moneys in SL1ch Sinking .Account, such Obligations so purchased shall be applied, to the extent of the full principal amount to reduce said mandatory sinking account payment.

All money in the Principal Account shall he used withdrawn the Local ,L}.,_gency Trustee solely for the purpose of paying the princi.pa1 or Accreted Value of the Ob!igahons, as applicable, as they shall become due and payable, whether at maturity or redemption, except that any money fo any

9

sinking fund account shall be used and withdrawn by the Local A.gency Trustee only to purchase or to redeem or to pay Term Obligations for which such sinklng fund account was crcaled.

Surplus Account. On the Business Day fol10,11ing the last Interest Payment Date of each Fiscal Year, or on such other date as provided in a Supplernenta1 Lc.1cal A,gency Trust Agreement, any moneys remaining in the Bond Fund shall be deposited by the Local Agency Trustee in the Surplus Account. So long as no Event of Defauh has occurred and is continuing, moneys deposited in the Surplus Account shall be transferred by the Local Agency Trustee to or upon the order the Local A.gency, as specified in a V\'rittcn Reqrn:st the Local /\gency.

Issuance of Additional Ho:nds unde:r the Local Agency Trust Agree:i:nents

Under the Local Agency Trust Agree:rnents. each Local Agency may at any time issue Additional Bonds on a parity with the Obligations, but only subject to the following conditions:

(a) The Local Agency shall be in compliance with aH agreements and covenants contained 1n the Local Agency Trnst i\.greement.

The issuance of such Addhional Obligations s:haH have been authorized pursuant to the Act and shall have been provided for by a Supp1emental LocaI Agency Trust Agreement wbich shall specify the folfo\ving:

CI) The purpose for vv'11ich such Additional Obligations are to be issued; provided that such Additional Obligations shall be applied solely for (i) the purpose of satisfying any ubligation of the Local Agency tu make payments to PERS relating to pension benefits accruing to PERS':-; members, and/or for payment of aH costs incidental to or connected with th.e issuance

Additional OhUgations for such purpose, and/or the purpose nf refonding any Obligations then Outstanding, including pay:mcnt of all costs incidental to or connected with such refunding;

\Vhether such Obljgations are etrffent interest fixed rate bonds, listed secu.rities, index bonds, auction rate securities, variable rate bonds, tender option bonds, capital appreciation bonds or bonds bearing interest at such other interest rate modes as may be set forth in a Supplemental Local Agency TrusL Agreement;

The authorized principal amount and designation of such Additional Obligations;

The date and the maturity dates uf and the sink1r1g fund payment dates, ff any, fur such A.dditional Obligations;

The interest payment dates for such Additional Obligations;

(6) The denomination or denominations of and method of numbering such Additional Obligations:

The redemption premiums, if any, and the redem.ption terms, if any, for such Additiunal ObHgations;

lO

(8) 'The amount, if any, to deposited from the proceeds c,f sale such i\ddilional Obligations the Interest Accounl hereinafter referred to; and

(9) Such other provisions (including the requirements of a book-entry bond registration system, if any) as are necessary or appropriate and not incom;jstcnt herewith.

At any ti:me afrer the sale any i\dditional Obligations in accordance with the Act, the Local Agency shaH execute such Additional Obligations for issuance pursuant to the Local Agency Trust Agreement and shaU deliver them to the Local Agency Trustee, and thereupon such Additional Obligations shall be delivered by the Local A,gency Trustee to the purchaser thereof upon the \Vrirtcn Request the .Local A.gency, but only upon receipt the Local Agency Trustee of the foHowing documents or money or securities, an of such documents dated or certified, as the case rnay he, as the date of delivery of such A.dditional Ob1igations by the Local i\gency Trnstee:

the issuance uf

Obhgaticms;

An executed copy of the Supplemental Local Agency Trust A.greement authorizing AdditJonal Obligations;

(b) Written Request of the Local. Agency as to the delivery of such Additional

An Opinion Counsel to the effect that ( 1) the Agency has executed and delivered the Supplemental Local Agency Trnst Agreernem, and the Supplemental Local Agency Trnst Agreement is valid and binding upon the Local Agency and such Additjonal Obligations are valid and binding obligations of the Local Agency:

(d) A Certificate or the Local Agency stating related to Additional Obhgations with the Local Agency

that aH rcqrnrements of the provis1ons Agreement have been cmnplied with and

containing any (Jther such statements as may be reasonably necessary to show cornpliance ,vith the condhions the issuance of A,dditional Obligations contained in the related Local Agency Trust Agreement; and

(e) Such further docmncnts, money or sccuritJcs as are required by the provis1ons of the Supplen1ental Local Agency Trust Agreement providing for the issuance of such Additional Obligations,

Other Oh ligations of the Local Agencies

Concurrently with the issuance the Bonds and on July 1, 2004, Butte County and Kings County v,;ill be issuing other obligations that are payable from their respective general fund (the "Other Obligations''). Such Other Obligations are being issued by Butte County in the total aggregate principal amount approximately $28.2 minion and by Kings Coumy in the total aggregate prjndpal amount of approximately $6.9 million. The Other Obligations are bdn.g privately placed with a single purchaser. In addilion, all of the Local Agencies have other obligations payable hum. their respective genera] funds. See APPENDIX D -- "FINANCIAL S'fATEMENTS OF THE LOCAL AGENCIES,"

l 1

THE INSURANCE POLICY AND THE INSURER

Payment P1.:n'suant to .Financial Guaranty Insurance Policy

Ambac A.ssurance has made a commitrnent to issue a financial guaranty insurance policy "Financial Guaranty Insurance Policy") relating to the Bonds effective as of date of issuance of the Bonds. Under the tcnns the Financial Guaranty Insurance Policy, Ambac Assurance will pay to The Bank of New York, in New York, Nevv York or any successor thereto (the 'Tnsurance Tmstee") that portion the principal of and interest on the Bonds which shaU becornc Due for Payrnent but shall be L1npaid by reason of Nonpayment by the Obligor (as such tcnns are defined in the Financial (}uaranty Insurance Policy). Ambac Assurance ·will nmke such payments to the Insurance Trustee on the later of the date on v/hich such principal and interest becomes Due for Payment or \vithin one busi.ness day following the date on which Ambac /\.ssurance shaU received notice Nonpayment from the Trustee. The insurance will extend for the term of the Bonds and, once issued, cannot be canceled by Amhac Assurance.

The Financial Guaranty Insurance Policy wiH insure paymcnl only on stated malurity dates and un mandatory sinking fund instaflment dar.es, in the case principal, and on stated dates for payment, in the case of interest. lf the Bonds become subject to mandatory redemption and insufficient funds are available for redemption uf an outstanding Bonds, Ambac Assurance •,viH remain obligated to pay principal and interest on out.standjng Bonds on the originaBy scheduled interest and principal payment dates including mandatory sinking fund redt'Inption dates. In the event any acceleration of the principal uf the Bonds, lhe insured payments will be made at such times and in such arnounts as would have been made had there not an acceleration.

In the event the Trustee has nc)[ice that any payment of principal of or interest on a Bond which has become Due for Payment and which is made to a Holder by or on behalf of the Obligor has been deemed a preferential transfer and theretofore recovered from its registered o,vner pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order a court of competent jurisdiction, such registered owner wiU be entitled to payrnent from Ambac Assurance to the extent of such recovery if sufficient funds are not othenvisc available ..

The Financial Guaranty Jnsuranct: Policy does not insure any risk other than Nonpayment, as defined in the Policy. Specifically, the Financial Guaranty Insurance PoHcy does nut cover:

L payment on acceleration, as a result of a can for redempUon (other than rnandatory sinking fund redemption) or as a result of any other advancement of maturity.

2. payment any redemption, prepayment or acceleration premium.

3.. nonpayrncm of principal or interest caused the insolvency or negligence any Trustee, Trustee, Paying Agent or Bcmd Registrar, if any.

1f it becom.es necessary to call upon the Financial Guaranty Insurance Policy, payment of principal requires surrender of Bonds to the Insurance Tn1stec together with an appropriate instrument of assignment so as to pemlit ownership uf such Bonds to be registered in the name Ambac Assurance to the extent of the payment under the Fimmc1al Guaranty Insurance Policy. Payment of interest pursuant

[2

to the Financial. Guaranty Insurance Policy requires proof of Ho]der entitlement to interest payments and an appropriate assignment the Holder's right to payment to Ambac Assurance.

Upon paynmnt of the insurance benefits, Ambac Assurance will become the o,vner of the Bond, appurtenant coupon, if any, or right to payment of principal or interest on such Bond and win fully subrogated to the surrendering Holder's rights to payment

In the event that Ambac 1\ssurance were to become insolvent, any claims arising under the Policy ,vould be excluded from coverage by the California Insurance Guaranty Association, established pursuant to the 1a1,,vs of the State of California.

Ambac Assurance Co:rpo:ratio:n

i\mbac Assurance Corporation ("Ambac Assurance") is a \Visconsin-dumkiled stock insurance corpora.tiun regulated by the Office of the Commissioner Insurance of the State Wisconsin and licensed to du business in 50 states, the District of Columbia, the Tcffitory of Guam, the Common\vcalth

Puerto Rico and the U.S. Virgin Islands, w1th admitted assets of approximately $7,670,000,000 (unaudited) and statutory capital of approximat.ely $4,683,000,000 (unaudited) as of March 31, 2004. Statutory capital consists of Ambac Assurance's pollcyholdt'rs' surplus and statutory contingency reserve. Standard & Poor's Credit Markets Services, a Division The McGra,v-Hm Companies, lVIoody's Investors Service and Fitch Ratings have each assigned a triple-A financial strength rating to Ambac i\.ssurance.

/ 1~mhac Assurance has obtained a ruling from the Internal Revenue Service to the effect the insrning a bond by Ambac A,ssurance \Vill not the treatment income tax purposes of interest on such bond and tha!. insurance proceeds representing mat1Iring 1ntercst paid by Ambac Assurance under policy provisions substantially identical to those contained in its financial guaranty insurance poiky shaH be treated for fr':dcral income tax purposes in the same manner as if such paym.ems were made by the Obligor of the Bonds.

Ambac Assurance makes no representation regarding the Bonds or the advisability investing in the Bonds and makes no representation regarding, nor has it participated the preparation of, the Official Statement other than the information supplied by Ambac Assurance and presented under the heading "BOND INSTJRANCE".

A vaiiable lnf'ormation

The parent company of Ambac Assurance, Ambac Financial Group, Inc. (the "Company"), is subject to the inforrnational requirements of the Securities Exchange Act uf 1934, as amended (the "Exchange and in accordance therewith reports, proxy statements and other inforrnation vvith the Secudties Exchange Commission (the "SEC"). These reports, proxy statements and other information can be read and copied at the SEC's public reference room at Fifth Street, N.W.,. Washington, D.C. 20549. Please call the SEC at l-800·-SEC-0330 for further infonnation on the pub1ic reference room. The SEC maintains an internet site at http://s.:vw,,;v.sec.gov that contains reports, proxy and information statements and other information regarding cmnpanies that file electronically \.Vith the SEC, including the Cornpany .. These reports, proxy staternents and other information can also be read at the offices of the New York Stuck Exchange, Inc. (the "NYSE"), 20 Broad Street., New ''{ork, Nevv York 10005.

[3

Copies Ambac Assurance's: financial staternents prcpa.red in accordance with statutory accounting standards arc availah1e from Arnbac Assurance. The address of Ambac Assurnnce's administrative offices and its telephone number are One State Street Plaza, 19th Floor, r .. rew York, New York and (2 668-0340.

Incorporation of Certain Documents by Refert;ncc

The follmving documents filed by the Company with the SEC (FHe No. incorporated by reference in this Official Statement:

1 -10777) are

L The Cornpany's Annual Report on Form 10--K for the fiscal year ended December 31, and filed on fviarch 15, 2004;

2. The Cornpany's Current Report on Fonn 8-K dated April 21, 2004 and filed on April 22, 2004;and

3. The Company's Quarterly Report on Form 10-Q fr:ir the fiscal quarterly period ended IVIarch 31, 2004 and filed on 1\ilay 10, 2004.

AH docmnents subsequently filed by the Company pursuant to the requirements of the Exchange Acl after the date of this Official Statement will be available for inspection in the same manner as described above in "Available Infonnation".

RISK FACTORS

In evaluating a purchase of the Bonds, potential investors should consider the following factors, together with aH other infonnation in this Official Statement.

Limited Obligations of the Authority

The Bonds are a limited obligation of the Authority, payable solely from and secured by a pledge and assigmnent of, the pension obligation bunds issued by certain Local Agencies and payments with respect thereto, to the extent provided in the Trust Agreement subject to the provisions of the Trust Agreement permitting the disbursement thereof for or to the purposes and on the conditions and terms set forth therein. The Bonds are not a lien or upon any funds or property of the Authority (except to the extent of the aforementioned pledge and assignment). The Bonds are not a debt of any Local Agency or any mernber of the Authority and no such Local Agency or member is liable in any manner for the pay:ment thereof.

Bankruptcy

The filing of bankruptcy by the Authority or one or more of the Local Agencies could dday or impair tbe payment the Bonds. Further, the opinion of Bond Counsel as to the enforceability of the Bonds is expressly qualified by the dcdaration of bankrnptcy.

[4

No Joint Obligation

'The obligation of a Local Agency t.o rnake payrnents on or in respect to its Obliga1fon is a several and not a joint obligation and is strictly limited to such Local A.gency's repayment obligation under its Local Agency Trnst Agreernent and Obligation.

Risk of State or Local Legislation

The Local Agencies rely nn a nurnber revenue sources that could be reduced or eliminated by State or local legislation, including, arnung others, sales and use taxes, hcense and permit fees, fines and penalties, and motor vehicle license ft.":es. There can bt:; no assuran.cc that the State or local government \Nill not adopt legjslation to reduce or eliminale one or more these revenue sources. See "State Budget Finances" below.

In addition, a number statutes and constitutional a111endrnents have been adopted as measures that qualified for the ballot through California's initiative process as described under "CONSTITUTfONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRl/\TIONS." There can be no assurance t.hat other initiative measures will not be adopted affecting rhe revenues of the Local Agendes.

State Budget H:mmces

The follnwjng information concerning the State of California budgets has been obtained from publicly available information that the Agencies believe to be reliable; however, the Local Agencies take no responsibility as to tbe accuracy or cornpleteness th.ereof and have not independently verified such inforrnation.

State Budget for Fiscal Year 2003 .. 04. On August 2, 2003, then-·Govern.or Davis sjgned the 200J-04 Budgel Act (the ''2003-·04 Budget Act") into law. The 2003-04 Budget Act projected that State General Pund (the "State General Fund") revenues would increase from $70.9 billion for Fiscal 2002-03, excluding proceeds of any fiscal recovery bonds, to $72.8 biHion in Fiscal Year 2003-04., an increase of 2.8 percent State General Fund expcnd1tures were projected to decrease from $78. 1 billion in Fiscal Year 2002--03 to $70.8 billion in Fiscal '{ ear 2003--04, or 10 percent. A significant portion of this JO percent decrease was attributable to the Vehicle License Fee ("VLF') increase which eliminated the need for the State to backfill locaJ governments, new federal fonds, borrowings to cover the 2003-04 pension obligations, and the Medi-Cal accounting shift from an accrual to a cash basis.

The 2003-04 Budget contained various reductions in local revenues provided by the State, including a reduction in VLF revenues of approximately $825 million during the period between the elimination the Slate's VLF bacldill and the increase in the VLF rate on October 1, 2003. The 2003-04 Budget Act assumed that the VLF rate ,vould increase from the rate of 0.65 percent to 2.0 percent beginning October 1, 2003. During the approxiniately 90 day period between the dare when the State backfill ended on July 1, 2003, and the date vvhen the \lLF rate increased, local governments would only receive revenues based on the 0.65 percent VLF rate. The 2003--04 Budget Act and related legislation required the State to repay tbe $825 minion VLfi' "gap" loss to local governments no later than August 2006. Governor Sdnvarzeneggcr subsequently rescinded the VLF rate increase retroactive to October 1, 2003. See "Govt:mor's Proposed Budget for Fiscal Year 2004-05" below.

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The 2003-04 Budget Act identified a budget shortfaB of $38.2 biHion between expenditures and revenues and altempted to close this shortfall through a combination of program savings, borrovving, new revenues, funding shifts:, and deferrals. Program savings were primari]y achieved in the 2003-04 Budget i\ct through significant reductions in spending for certain programs. Some reductions in program spending were to he offset by higher fees. The year-end reserve \Vas projecLed to be approxirnatdy $2. billion and reflected the issuance of $10.7 billion in fiscal recovery bonds t.o elirninatt: the Fiscal Year 2002-03 deficit and the issuance of a second series of tobacco securitization bonds. Governor Schvvarzenegger subscquentJy proposed, and the State Legislature approved, placing a bond n1easure on the March 2, ballet authorizing the issuance up to $15 biBion of economic recovery bonds to replace the fiscal recovery bonds. The voters approved this nwasure on Ivlarch 2. "Governor's Proposed Budget for Fiscal Year 2004-05" below.

Certain the features of 2003--04 Budget Act aJk:cting counties included the following:

1. The hudget package required redevelopment agencies to shift $250 n1illion redevelopment agency funds to the Educational Revenue Augmentation Fund (the "ERAF") in Fiscal Year 2003-04. The Assernbly version the budget also required such a one-tirne shift to the ERAF but set the amount at $135 minion.

2. The 2003-04 Budget Act repealed s1x mandates and suspended local government requirements to implement 37 other n1andatt:s .in Fiscal Year 2003-04. The 2003--04 Budget Act defom~d an unspecified date) State funding to reimburse locaI agencies for: implementing 40 actjvc mandates in Fiscal ''{ear 2003-04 (about $200 million) and (2) unpaid prior-·year mandate claims (about $700 million).

3. The Budget Act reduced funding for the Citizens' Option for Public Safety and Juvenile Crhne Prevention Grants program by minion (leaving $200 million to be dividd equally bet\vec:n the two programs).

4. The Senate budget package eliminated the $38 million continuous appropriation for 1ocal government booking and county authority to charge local agencies foes for booking people into county jail. The Assembly budget package, in contra.st, maintained the continuous appropriation and county fee authority.

Governor 1s Proposed Budget for Fiscal Year 2004 .. £15. On January 9, 2004, Governor Sch,,varzeregger (lhe "Governor") releast:d bis proposed budget for Fiscal Year 2004--05 (tl-w "Governor's 2004-05 Proposed Budget"). The Governor's 2004-05 Proposed Budget projects the State General r:.·und revenues for Fiscal Year 2004-05 to be $76.4 billion, an increase over the current fiscal year of 2.4 percent, and State General Fund expenditures to be $76. l bilHon, a decrease over the current fiscal of 2.4 percent.

The revenue in..;reases forccasted by the Governor's 2004-05 Proposed Budget include significant gains in the personal income tax, tax and corporation tax. Personal i.ncmne tax revenues are forecasted to l billion Fiscal Year 2003-04 and billion in Fiscal Year 2004-05. This forecast assumes that moderate growth wi.11 resurne in Fiscal Year 2003--04. Sales and use tax revenue is forccasted at $23:7 billion in Fiscal Year 2003-04 and $25 bi!lion in Fiscal Year 2004-05. This forecast assumes a 2.3 percent increase in taxable sales Fiscal Year 2003-04 and that taxable increase at

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a faster rate in Fiscal Year 2004-05 and Fiscal Year 2005--06 due to the irnproving economy, increasing by 5.8 percent and 5.4 percent, respectively. Corporate tax revenues are expected to lotaI approximalely

.5 billion in Fiscal '{car 2003-04 and approximately $7.6 bi1Hon in 2004-05. The Governor's 2004-05 Proposed Budget also forecasts $500 million in additional revenue from a 25 percent share of tribal gaming operations annual income.

Cenain or the features or the Governor's following:

Proposed Budget affecting counties include the

1. The Governor's 2004--05 Proposed Budget includes provisions for fun reirnhursement to local governments, including counUcs, for the VLF off~et program in F'isca1 Year resulting in payments estimated at $4. J billion in fiscal year.

2. The Governor's 2004--05 Proposed Budget includes a $1.3 billion shift of local property taxes that vvould have been payable to certain local governments, including counties, to the ERAF, resulting in a decrease in payments of such taxes to such local governments of approximately l O percent.

3. The Governor's 2004-05 PropDsed Budget includes a provision to reduce and, by October 2004, eliminate federal Ternporary Assistance to Needy Families ("TANF") funds used to suppcnt counties' juvenile probation services, including prevention, intervention, supervision. treatment, and incarceration programs for at--risk youth and juvenile offenckrs.

4. The Governor's 2004-05 Proposed Budget includes a provision to eli1ninate State rcirnbursenK:nt of jail booking fees that \vould have been payable to counties.

5. The Governor's 2004-05 Proposed Budget nrn.Jor reform in the heaHb and human services area,. including, with respect to Medi-Cal program, realigning eligibility standards, requiring co-payrnents, irnplcrncnting a Uercd benefit stmcturc and conforming basic optional benefits to those offered under private plans, and with respect to the CatWORKs program, increasing work incentives and reducing services and assistance payrnents thereunder. The Governor's 2004-05 Proposed Budget proposes budgeting $31.2 billion for the Iv1edi-Cal program in Fiscal Year 2004--05. The State General Fund increase of 16.2 percent reflects the costs of using une--tirne savings in Pisca1 Yem· 2003-04 because of a change in the i\-1edi-Ca1 program fr01n accrual accounting to accounting and Federal 1Vledical Assistance Program arnuums received in Fiscal Year 2003-04.

6. The Governor's 2004-,05 Proposed Budget assumes implementation of the 2003---04 Mid--Year Spending Reduction Proposals to achieve State General Fund savings of rniHion in Fiscal Year 2003-04 and $479.4 mminn in Year 2004--05.

The Governor's Proposed 2004--05 Budget identifies an existing deficit of more than $22 billion, which includes an accumulated deficit through Fiscal 2002-03 of $9.J billion and a pre-existing operating deficit in Fiscal Year 2003--04 of $3.0 billion. The Governor's Proposed 2004-05 Budget assumes the issuance up to $15 biHion in cconornic recovery bonds (the "Econornic Recovery Bonds") to finance the State General Fund reserve and other State obligations incurred prior lo June 30, 2004. The voters approved issuance of the Economic Recovery Bonds on March 2, 2004. [n connection there·v.;ith, the Governor's Proposed 2004-05 Budget also includes a provision for the creation of a deficit recovery fund to finance what would otherwise be the State General Fund's costs of the existing debt.

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'The arnount of Economic Recovery Bond proceeds received hut not used to finance the accumulated budget deficit through Fiscal Y car 2002-03 wiH be transferred into this nc\v fund. The new fund is tu be used in FiscaJ Year 2004-05 to finance outstanding State obligations due in Fiscal 'Year 2003--04 and Fiscal Year 2004-05. The Economic Recovery Bonds arc general obligations of the State and secured by a pledge revenues available under the Trip]c Flip. The "Triple FHp" is designed to trade 0.5%, the loca] Bradley-Bums sales tax fur an equal share property taxes from the ERAF. The legislation creating the Triple Flip becomes opera.ti ve on July 1, 2004. In general, the legislation provides the Triple Flip to sunset 'Nhen the Economic Bonds are no longer outstanding.

Govemm· 1s lUay Revision to 2()04-05 Proposed State Budget. On May 13,, the Governor released [he May Revision to the Governor's 2004--05 Proposed Budget ''J\iiay Revision"). The May Revision assurn.cs an approxirnate $3.6 billion increase in revenues from tax shelter amnesty proc1eeds ($ l.3 billion), accounting changes resulting in accrua] additional revenues 1 billion) and increases in revenue forecasts for fiscal years 2003-04 and 1.3 biHion). The net effect is an increase in the reserve at the end fiscal year 2004-05,. from the $635 minion projected in the Governor's 2004--05 Proposed Budget to the $998 miHion projected in the IVIay Revision,. ,However, pressures on the Genera] Fund have aho increased primarfly due to caseload increases in certain State programs, an increase in the Proposition 98 guarantee, and court cases, resulting in a continuing struclural budget problem that will require additional ongoing budget solutions.

The I'vlay Revision projects the State General Fund revenues for Fiscal Year 2004-05 to be approximately 7 bilhon, an increase over the current fiscal year 2.8 percent and State General Fund expenditures tu be approximately $77.6 bill1on, a decrease over the cuffent fiscal year of 0.1 percent.

Personal income tax revenue forecasts have increased by $949 minion in Fiscal Y car 2003-04 from the $35.1 billion forecast in the Governor's 2004-05 Proposed Budget and increased by $.559 miHion 1.::.'iscal Year 2004-05 from the $38 billion forecast in the Governor's 2004-05 Proposed Budget. This forecast is due, in part, to [he stock market recovery that began in mid-2003. Sales and use tax revenue forecasts are reduced by $105 million in Fiscal Year 2003·-04 from $23.7 billion forecast in the Governor's 2004--05 Proposed Budget and by $417 minion in Fisca! Year 2004-05 from the $25 billion forecas1.cd in the Governor's 2004-05 Proposed Budget. The $417 milHon reduction forecasted is due, in part, to an increased transfer to the I1\1b1ic Transportation Account and a reduced expectation of taxable sales growth in ,Fiscal Years 2004--05 and 2005-fJ6 than assumed in the Governor's 2004--05 Proposed Budget. Corporate tax revenues arc expected to decrease by $]73 ·million in Fiscal Year 2003-04 from the $7.5 billion forecasted in the Governor's 2004-05 Proposed Budgel and increase by $358 million in f-i'iscal Year 2004-05 from the $7.6 billion forecasted in the Governor's 2004--05 Proposed Budget.

The Governor's 2004-05 Proposed Budget identified an operating deficit $14 billion and a projected year-end deficit of over $26 billion. On March 2, 2004, California voters approved Proposition , a bond act authorizing issuance of up to $ l 5 billion of .Econmnk Recovery Bonds to

fund the accumulated State budget deficit. To eliminate the deficit and create a sniall reserve, the Governor's 2004-05 Proposed Budget proposed $12.3 bi!Iion in proceeds from Economic Recovery Bonds and $14.G billion in various ether solutions.

Certain of the features the May Revision include the following:

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1. 'The es:tirnated General Fund contribution to the Proposition 98 guarantee for schools Fiscal Year 2004-05 is approximately $4.3 billion higher than the 7 billion estirnated in the Governor's 2004--05 Proposed Budget

2. A,nmml fixed increases in base State General Fund su_pport of the Un1vcrsity of California and the Caiifornia State University systems in the amount of 3% in Fiscal Years 2005-06 and 2006--07, increasing to Fiscal 'Years 2007--08, and then to .5<fo in Fiscal Years through 2010-1 L

3~ ']\)tal Ivledi--(:al e:xper1(1iturcs $28~7 bjl]ion, a decrease 1 trl_iLlion fron1 the Governor's 2004--05 Proposed Budget General Fund expenditures Medi-Ca] have increased by

81.9 mirnon, or 2 percent. The estimate of the number of persons eligible for IVledi-Cal in Fiscal Year 2003-04 is expected to decrease by 59,000 to 6,561 representing a decrease below the level projected in the Governor's 2004··05 Proposed Budget The net General Fund increase inc1udes the follm.ving adjustrnents: $282.2 million increase due to erosjons of the \lid-Year Spending Reduction Proposals as a result of caseload adjustmenls, legislative delays in enacting certain prop,osals, 1e:gal challenges., and the Adrninistration's rescission of certain proposals; $20.3 rnillion decrease in fiscal intennediary expenditures; and $19.9 miUion decrease in county administration expenditures.

4. An increase of $ l . 7 minion to provide increased oversight and policy direction to departments under supervision of the Youth and Adult Correctional /\gcncy. Funding for this proposal is provided through corresponding reductions to the CaJifomia Department of Corrections ($1.5 111iUion) and the California Department the Youth /\uthoriry

Final Budget for Fiscal ''{car 2004-05 (the "Final Budget'') must be irnplernented by the adoption of appropriations bills. It cannot be predicted how these h.11.ure actions may affect the spending phm represented by the Final Budget biH adopted by the Legislature and signed by the Governor. Further, it cannot be predicted what actions will be taken in the future by the State Legislature and the Governor to dca1 with changing State revenues and expenditures, ,vhat the Final Budget will include or the affect of national and state economic conditions on future State budgets.

LAO Report On May 17, 2004, 1.he State's Legislative Analyst's Office (the "LAO") released its analysis report of the Y.vfay Revision (the "LAO Report"), which is available on the LAO website at vvww.lao.ca .. gov. Information on website is not incorporated herein by reference.

The LAO Report states that the State's short-term fiscal outlook has improved significantly since the Governor's 2004-05 Proposed Budget as a result an hnproved revenue outlook and the one--thne receipt of certain fonds. Specificaily, the LAO Report notes that the May Revision relies on the State's receipt of approximately $3.6 billion in nev; resoun.:es comprised (i) approximately $ L3 billion associated with greater-than-expected receipts from a previously enacted lax shelter amnesty program, (ii) appruximaldy $1.3 biilion related to an increasic in the administration's forecast tax collections in 2003-04 and 2004--05 combined and (iii) $1 billion an accounting adjustment, which results in the accrual tax revenues attributable to p1ior-ycar liabilities. , the U\O Report cautions while this accounting adjustment irnprovcs the State's budget condition, there is no actual effect on cash received by the State. The LAO Report also notes that tbe May Revision reljcs on the State's receipt of approxi1nately $5 billion in one-time receipt of funds corn.prised of (i) the use bilfam in Proposition 57 bond proceeds, (ii) $1 billion in pension obligation bond proceeds, (iii) $1.2 biHion

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related to the Imm of Proposition fonds from transportation special fonds and a variety of one-· time savings delayed !vJedj--CaJ chcckwriles, special fund loans, and other fonding shifts.

However, the L/\0 Report also concludes that the State's long-term fiscal outlook relative to the Governor's 2004-05 Proposed Budget has worsened and that the State continues to have a structural budget prob1eni. The LAO Reprni. contributes this negative outlook to the May Revision's reliance on

ongoing than the Governor's 2004-05 Proposed Budget and the May Revjsion's addition of future spending connnitments of the Stare.

The LAO Report agrees wirh the May Revis.ion's assurnption that growth m employment and personal income in the State ,.:vm be more restrained than forecasted in the Governor's 2004-05 Proposed Budget. Hovvever, the LA.O Repmt that sales taxes vviH be stnmger and corporation taxes ,vill be weaker than assurned in the May Revision.

Continuing State Budget Shor(fall. The Local Agencies cannot predict whether the State wm continue w encounter budgetary problems in this or in any future fiscal yea.rs, and if h were to do so, it is unknown what measures vvould be taken by the State to balance its budget, as required by Jaw. Accordingly, the LocaJ A.gencies cannot predict the final outcome of future State budget negotiations, the impact that such budgets will have on its finances and opcra[ions or what actions will be taken in the future by the State Legislature and Governor to dea] with changing State revenues and cxpendirures .. Current and future budgets v.;ill be affected by national and economic conditions and other factors, including the current economic downturn, over which Local Agencies have no contruL

The Local Govcrrnnent Agreement

The May Revision relics on a proposed "agreement" with representatives from local government (the "Local Government Agreernenf'). The Local Government Agreement replaces the proposal in G-overnor's 2004-05 Proposed Budget to permanently shift $1.3 biHon in local property taxes from counties cities, special districts and redevt:;loprnent agencies to the Education Revenue Augmentation Fund ("ERAF"). The proposed .3 hilljon shift wm be replaced by a Vehicle License Fee C'VLF'')/property tax swap. SpecificaJ.ly, the Local Government Agreement reduces the VLF rate from 2 percent to percent. This reduction in VLF to cities and counties lvill be .replaced by an equivalent irn:rcase in the amount of property tax received by the cities and counties. However, in Fiscal 2004--05 and 2005-06, the State will not provide the full arnmmt of these property taxes to the cities and counties. Under the Local Government Agreement, the Slate wiH retain $700 million, comprised of $350 minion from counties and $350 million from cities i.n Fiscal Years 2004-05 a.nd 2005--06.

Further, in Fiscal Years 2004-05 and 2005-06, the Local Government Agreement provides that special distdcts vvill contribute $350 million in property taxes and redevelopment agendes \ViH contribute $250 million in property tax revenues.

The counties' $350 miHion reductkm will be allocated based on each county's proportional share or non-realigm:nent VLF. The cities' allocation consists an amount based une-third on sales tax revenues, one-third on property tax revenues, and one-third on VLF revenues. City reductions are limited to no more than 4 percent of their general--purpose revenues and no Jess than 2 percent of their genernl--purpose rcvcrmcs. Redevelopment agencies' property tax reductions will be aHocatcd in a manner similar to that contained in last year's budgeL The special djstricts' $350 million reduction vvill

based upon the respective special district's allocafam property rax.es .. Enterprise special districts will collectively conuibute $200 million and non-entcr11dse special districts will coBective1y contribute $150 million. For enterprise special districts, the reduction will equate to of each special district's net allocation of property taxes. For non-enterprise special districts, the reduction will equate to 25%· of each special district's net aHocation property taxes. Certain public districts, comrmmity services district.s and healthcare district.s will also be affected but not on as large a scale. These special districts \VHl each contribute of their net tax allocation if such allocation exceeds $] million. These special districts 'Nith a property tax aHocation of $1 minion or less win be exempt from the reduction. Frnther, the Local Government Agreement provides that fire distdcts \Vill be ex.empt

contributing property taxes.

The table below shovvs estimated net impact the proposed VLF/property tax swap to Fiscal Year 2004-05 revenues for each Local Agency.

Counties Butte Counry Kings County

Cities City uf Da]y City City of rv:Ierced City of Milrbrae City Monterey Park City Riverside

Fiscal Year 2004-05 Estimated Net Impact of Proposed

VLF'/Prn~ertx Tax Sw;~pP)

$1,96R,640 1,409,50]

1,069,890 666,764 266,248 54'.'\ 157

2,713,954

'11 Source: League of California Ci!ies .. State General Fund: City Contributions Breakdown. dated as of

27, 2004. For n1ore information see hltp://vv\VVv.californiacityfinance.corn. Infom1ation on such \Vebsite is not incorporated herein by reference.

If VLF revenues are significantly reduced or eliminated without a co1Tesponding inerease m other offsetting revenues to cities and counties, loss of the VLF revenue will have a significant impact on revenues available to the Local Agencies. Appendix B for more information.

UeaHgnment

Jn 1991, the State shifted responsibility for a number of mental health, social services, and health prugrams to counlics. This shift is known as "Realignment" and resulted in the creation of two dedicated funding streams to pay fur the services shifted hy Realignment. The first is a cent sales tax and the second is a change in the depreciatkm schedule for vehicles which resulted in a 24.33%, increase in VLF revenues collected by the State.

Certain features of the Realignment program adversely impact certain county revenues. Some counties receive a smaller share revenues than other counties based on population and estimated poverty population. Revenue distributions among counties were detennined by expenditures in the programs that \Vere transferred by the State jusl prior to the adoption of RealignmenL In connection

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with Realignm.ent, the State attempted to address the inequity issue between increases are distributed based on cxisling sharing arrangernents betvvcen the counties.

The State anticipated that some the problems v1ith Realignment could result in litigation or unfunded mandate claims and, therefore, the legislation creating Realigmnent contained three "poison pin" triggers that Vs!Ould make certain revenue transfers under Realignment inoperative. These triggers are: (1) a successful unfunded mandate claim t,y a county with to reaJigned programs, (2) a constitutional cbaHenge regarding Reaiigmnent's treatment VLF revenues or a finding that exclusion of Realignment revenue frorn Proposition 98 education fonding calculations is unconstitutional, and an appellate court detennination that J legislation shifting responsibility for medically indigent adults to co1.mtics is reimbursable as an unfunded mandate.

The County of San Diego was recently successful in court in seekjng addiUonaJ funds from the State for medically indigent adults. Thjs court action triggered the third poison pill provision (discussed above) and resulted in the immediate cessation of Realignment VLF payments to counties by the The State Legislature has passed a measure to temporarily revoke the poison pill provisions and :make the counties whole for funds lost as a result of the San Diego decision:, however, this rneasure only resolves tht: problem until July 15, Further resolution of the Realignment issue is being considered as part the State's Fiscai '{ ear 2004·-05 budget process. Delays in the adoption of a final State budget may result in a monthly loss to certain counties.

Security

rvlilitary conflicts terrorist may adversely impact the operation of the Local Agendcs. In addition, the Local Agencies may experience a decrease with respect to their revenues because of any change in economic circumstances as a resuh future military conflicts or tenorist acti Such a reductiGn in revenues may include, but is not limi1ed to, a decline in ahvort, transient occupancy tax, parking tax, business tax and sak-:s tax revenues.

The Local Agencies are subject to safety and secmity measures and inspections on a continuing basis. The Local Agencies do not represent that any existing or additional. safe1.y and security measures wm be adequate in the event that temxist activities are directed aga1nst any the Local /\gencies or that costs security measures will not be greater than presently anticipated.

Rect~nt Litigation Regarding Inc:rease in Assessed VaJ.uatio:n

On November 2, 2001, the Orange County., California Superior Court issued a Minute in the case of Countv of Orgng~_y. Cou.my uf Oran~Countu\ssessrncnt l:1Qpea1s Board No. 3. The case involved the assessed value a property that the prior year's value by more than 2 percent. The of a property's assessed value by more than 2 percent is a connnon practice arnong California assessors wben tbc prior year value of the property is 1ess than the base year value of the property (the value assigned upon change of ov,:nership or ne·,~,: constructiGn) and current year, rnarket value property is equal to or higher than the computed b:be year value the current year. Such instances occur vvhen the prior year value of the property v,;as detennined by a Proposition 8 appeal and the condition causing reduction (e,g., recession in the real estate market) bas ceased to influence the value property.

The court mled that the ifornia Constitution and the California Revenue and 'Taxation Code limit the year to year change in value of property to 2 percent except in situations described in 1.:rw. The court also found that the California Constitution does not authorize a temporary decline in the base value

property that can be restored at a rate higher than 2 percent. Some of the Local Agencies follow similar procedures regarding increases in assessed values as practiced by Orange County.

On March 26, 2004,. the California Court of Appeal reversed the judgment the trial cunrt in the {~ou..!l!.Y of Oran_gQ case favor the county. The Court of /\ppeals decided that the base on ,vhich the

inflation ai.~justment should he figured is the original purchase an assessment at time a genuine ncvv construction), and not a prior reduced (or level) base due to a decline in property values or natural disaster.

On IVfay .5,, 2004, the Respondent med a petition to the California Supreme Court for a review of the decision published by the Court of Appeal cm J\;1arch 26, 2004. The California Supreme Court is expected to issue its decision to accept or deny this petition fur review within 60 to days.

Pension Benefit LiabHity

JVIany factDrs inHuence the amount of e::K'.h Local Agency's pension benefit liabi1hy, including, without limitatk1n, inflationary factors, changes in statutory provisions of apphcablc retirernent system laws, changes in the levels of benefits provided or in the contribution rates of such Local Agency, increases or decreases t11e r1u111.ber ccJvered ernployees, chan.ges a.ctu.arial assu1111,,tio11s cJr methods, and differences actual and anticipated inveslmem experience of each Local Agency's respective pension system. Any factors could give rise to additional liability of a Loca1 Agency to its pension as a result of \vhich the Local Agency would be obligated to make additional payments to its pension system over the amortization schedule for full funding such Local Agency's obligation to its pension system.

PARTICIPATING LOCAL AGENCIES INFORMATION

General

are two types of Local Agencies partJC1pating in the Program: counties and cities. Following are brief of each such type of Local Agency.

are political subdivis1ons the State and are governed by elected boards of supervisurs. Counties generally provide for the health, safety and welfare of their residents. County revenues are generally comprised of property and other taxes, aid from other government agencies, license, pennii and use fees, and fines, forfeitures and penalties. A substantial portion of county revenues is derived frum the State.

CiUes are either general law e1t1es, established under California statutes, or charter cities, established under the Califoniia Constitution and their voter approved charters. Cities generally provide for the health, safety and welfare of their residents. Cities are governed by elected city councils. City revenues are gcneraHy cornposed property taxes, other taxes, license, permit and use fees, and fines, forfeitures and penalties. Other taxes rnay include sorne or aH of sales taxes, utility user t.axes, business taxes, State motor vehicle license fees, transient occupancy taxes, State cigarette taxes, real property transfer laxes and other misccHaneous taxes.

Certain information regurding the individua1 Local A~tmc1es part1c1pating in Program is included in the appendices herelu. A table listing the partidpating Local Agencies, the principal amount of the Obligation being issued by each such Local Agency and the principal am.ount the Obligation of such Local Agency as a percentage of the principal amount of Bonds and the debt service schedule such Obligations is set forth in APPENDIX A - ''DEBT SERVICE BY LOCAL AGENCY AND TJAAL BY LOCAL /\GENCY .'' Certain general inforrnation and a summary of certain budget and financial information for each Local Agency are set forth in APPENDD( B "LOCAL /\.GENCY INFORNIATION" and APPENDIX C - "SUl\111\iIARY UlSTORlCAL F1NANC1AL INFORMATION."

The infurrnation contained herein regarding each Local Agency has been derived frorn information provided by such Local Agency. The .Aulhority and the lJnderwriters have no reason tu believe that any such infonnation i.s incorrect; however, they have not verified the accuracy such infonnation and take no responsibility therefor. Each Local Agency has represented that the information relating to such Local Agency in.duded herein does not contain any untrue statement of mate1ial fact or ornit to state a material fact necessary to make the statements about such Local Agency contained herein, in light of the drcumstanccs under \Vhich they v;ere made, not misleading.

infon11ation regarding the Loca1 Agencies contained in the Appendices hereto is essential to mak1ng an infonned investment decision ·with respect to the Bonds_ Inveswrn are advised to thoroughly and carefully revievv such infonnation.

The audited 2002-03 Annual Finandal Report for Kings County been cornp1cted and is attached hereto at Appendix D. The audited 2001-02 A.nnual Financial Report of Kings County and unaudited finarn:i<t"! information for fiscal year 2002-03 thal were attached to the Prefaninary Official Statement dated June 4. 2004 have been removed,

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PERS Pension Plans

'The following informaUon concerning lhe Cahforn1a Public Employees' Ret1rement System ("PERS") is from publicly available sources, vvhich the Local Agencies believe to be accurate. PERS is not obligated in any manner for payment of debt service on the Series 2004 Bonds, and the assets PERS are not available for such payment. PERS should he contacted directly al CalPERS, Lincoln Plaza, P Street Sacramen1o, California 95814 or 225-7377 other information, including infonnation relating to irs financial position and investrnents.

Each Loca] Agency provides retirenK:nt benefits to certain their employees through contracts with PERS, a multiple-employer public sector employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost--of--living adjustments and death benefits to PERS m.ernbers and beneficiaries. PERS acts as a comrnon investment and administrative agent for particjpating pubhc entities within tht:; State. PERS is a contributory plan deriving funds fron1 employee contributions as wen as frorn employer contributions and earnings from investments.

PERS may maintain more than one pension plan (each, a "PERS Plan") each Local Agency based on type of employee (i.e. a Local Agency may have a PERS PJan for "Safety Employees" and a separate PERS Plan for "Miscellaneous Employees"). Each Local Agency comributes to PERS amounts equal to the rccornrncnded rates for the PERS Plans multiplied by the payroll those employees the Local Agency ,vho are elig1ble under PERS.

The actuaries at PERS prepare ammaHy an actuarial valuation which covers a Fiscal '{car ending approximately 15 months before the actuarial valuation is prepared (thus, the actuarial valuation delivered to each Local Agency in Septmnber 2003 covered PERS Fiscal Year ended June 30, 2002). The actuarial valuations express each Local Agency's required contribution rates jn percentages of payroll, ,vhich percentages each Local must contribute in the Fiscal Year immediatdy folfrn~,:ing the Fiscal Year in which the actuarial valuation is prepared (thus, each Local Agency's contribution rate derived from the actuarial valualion as of June that were prepared in September 2003, wm afft.::ct such Local Agency's Fiscal Year 2004-05)_ PERS rules require the PERS Local Agencies to implement the actuary's recommended rates.

In calculating the annual actuaria11y recommended contribution rates, the PERS actuary calculates on the of certain assumptions the actuarial present value of benefits lhat PERS wiH fond under the PERS Plans, which includes two components, the normal cost and the tTAA.L. The normal cost represents the actuarial present value benefits thar. PERS will fund under the PERS Plans that are attributed to the current year, ami the UAAL represents the actuarial present value of benefits that PERS wiU fund that arc attributed to past years. The 1JAAL represents an estimate the actuarial shortfall bet\.veen assets on deposit at PERS and the present value the benefits that PERS wiH pay under tht: PERS Plans to retirees and active employees upon their retirement. The U AAL, is based on several assurn.ptions such as, amcmg others, the rate of investment remrn, average life expectancy, average age

retiremem, inflation, salary increases and occurrences of disabihties. In addition, the U/\AL includes certain actuarial adjustments such as, arnung others, the practice of smoothing losses and gains over nmJtiple years (which is described h1 rnore detail below). As a result, the UAAL may be considered an estimate the unfunded actuarial present value the benefits that PERS will fund under the PERS Plans to retirees and active em.p1oyecs upon their retirement and not as a fixed expression the hability the PERS Local Agencies owe to PERS under their respective PERS Plans.

25

In each actuarial va1uation, the PERS actuary estirnates the value of assets (the "Actuarial Va1ue") the PERS Plans at the end the Fiscal Year (vvhich assumes, among other Lhings, that the rate of return during that Fiscal '{ear equakd the assumed rate return 8.25%;). The PERS actuary uses a smoothing technique to determine Actuarial Value that gcneraHy only recognizes one third of the gain or loss realized in a given F1scal '{ear.. However, PERS docs not allow the Actuarial Value to he than or more than 1 of the Market Va1ue.

On April 21, 2004, the PERS Board approved a change in the inflation assurnption used in the actuarial valuations that set employer contribution rates. The inflation assumption was changed from

percent to 3 percent. The change impacted the inHaUon componem of the annual investrnent return assumption, the lung term payroll growth assumption and the individual salary increase assm:nptions as follmvs:

e The annual assumed investment return has decreased from 8.25 percent to 7.75 pe;rcem.

$ 'The 1ong term sa]ary increase assumption has decreased from 3.75 percent to 3.25 percent.

The infiat.ion component of individual salary scales bas decreased frorn 3. 3.25 percent.

percent to

T'he change to the inflation assumption also impacted the cost living adjustments and purchasing power protection allowances assumed in the actuarial valuations. The neYv assumptions v;iH be used to determine the Local Agency 2005-06 employer contribution rates.. For cornpk:tc updated inflation and actuarial assumptions, contact PERS at the above--referenced address.

Included in the PERS pension plans for Butte County and Kings Counly employees are State tria] court employees. The State is obligated to reimburse the County for Lhe share of PERS costs associated with tbe trial court employees, but 1.he County ren:iains prirnarily liable for such costs to PERS.

CONSTITlJTIONAL AND STATlJTORY LIMITATIONS ON TAX.ES AN:D AP.PROPRlA TiONS

.Article XHJA of the California Constitution

Tn 1978, California voters approved Proposition 13, adding Article XHIA to the California Constitution. Article XIUA ,vas subseqttcntly amended in ] as discussed below. Article XIUA limits the an1ount any ad va1orern tax on real property to l of the full cash value thereof, except that additional ad valorern taxes may be levied to pay debt service on 1ndebtedness approved by the voters prior to July l, 1978 and on bonded indebtedness for the acquis_itiun or ii-nprovement of real property which has been approved on or after July 1, 1978 by two-thirds of the voters voting on such indebtedness. i'\rticle XIIlA defines full cash value to mean "the county assessor's valuation of real property as sho1,vn on the Fiscal Year 1975--76 tax bH1 under 'fuH cash' or thereafter, the appraised value of real property ·when purchased, newly constructed, or a change in ownership have occurred after the 1975 assessment." This fuH cash value may be increased at a rate not to exceed per year to account for inflation.

26

Article XHIA has subsequently been amended to permit reduction of the ''full cash value" base the event of declining property values caused by damage, destruction or other factors, to provide Lhat there would be no jacrease in the "full cash va]ue'' base in the event of rccunstmction of property damaged or destroyed in a disaster.

Legislation has been enacted and amended a number of times since 1978 to implement A,rticlc XIIIA, Under cun-ent law, local are no longer permitted to levy directly any property tax

._,.,~_s..,,._,p, to pay voter-approved indebtedness). The 1 property tax 1s automatically levied by the cnumy distributed according to a formula among taxing agencies. The formula apportions the tax roughJy

in proportion to the relative shares taxes levied prior to 1979.

Increases d 1 • 1-, f. . I assesse . vamatmn resu ung rorn reappr,11s:11s property due to new cnnstruction, change in ownership or from th.e 2.%, annual adjustment are al1oca.ted among the various jurisdictions in the "taxing area" based upun their respective ''situs." Any such allocation made to a local agency continues as part of allocation in fut1Jre years.

Article XIHH of the California Constitution

On Novcrnber 6, 1979, California voters approved Proposition 4, kno'1Nn as the Gann Initiative, which added Article XIIIB to the California Constitution. Propositions 98 and l 11, approved by the California voters in 1988 and l respectively, substantially modified Article XHIB. The principal

J\rtide XUIB is to limit the annua] appropriations of the any city, county, school district, authority, or other political subdivision the State to rhe Jevc1 of appropriations for the prior fiscal year, as adjusted for changes in the cost living and population. The initial version Article XHIB provided the ''base year" for establishing an appropriations limit was the 1978-79 Fiscal Year, \vhich was then adjusted annually to reflect changes in population, consurner prices and certain increases in the cost of services provided by these public agencies. Proposition 111 revised the method for making annual adjustments to the appropriations limit by redefining changes in the cost living and in population. It also rcqujred !.hat beginning in Fiscal Year 1990-91, each appropriations limit must be recakulated using the actual 1986-87 appropriations limit and making the applicable annual adjustrnents as iJ the provisions Proposition 111 had been in effect.

Appropriations subject to limitation of a local government under Article XHIB include gcneraUy any authorization to expend during a fiscal year lhe proceeds of taxes levied by or for that entity and the proceeds of certain State subventions to that entity, exclusive of refunds taxes. Proceeds of taxes include, but are nut lirnited to, all tax revenues plus: the proceeds to an entity of government from (}) regulatory licenses, user charges and user fees (but only to the extent such proceeds the cost of providing the service or regulation), the investment of tax revenues, and certain subventions received from the State. Article XUIB pt:rmits any govermnent entity w change the appropriations limit by a vote the electors in conformity with statutory and constiturional voting effective for a maximum

four years.

As amended by Proposition 11 l, Article XlllB provides testing appropriations limits over consecutjve two-year periods. If an entity's revenues in any two-year period exceed the amounts permitted to be sp1ent over such period, the excess has to be returned by revising tax rates or fee schedules over the Stibsequent two years. As amended by Prnposition 98, Article XIIIB provides the

')'_,, ... I

paymem needs.

a portion of any excess n..:venues to a fund established to assist in financing certain school

Unitary Property

AB 454 (Chapter 921, Statutes of 1986) provides that revenues derived from :most utility property assessed by the State Board of Equalization ("Unitary Property"), commencing ,vith the Fiscal Year 1988--89, will be allocated as follows: each jurisdiction wiU receive up to its prior year State-assessed revenue; and (ii) if connty-wid1e revenues generated from T.Jnitary Property are less than the previous year's revenues or greater than 102% the pn.wious year's revenues, each jurisdiction v,rffl share the burden of the shortfaH or excess revenues by a specffied formula. This provjsion applies to all lJnit,1ry Property except railroads, the valuation of 'Which continues to be allocated to individual tax rate areas~

The provisions of AB 454 do not constitme an elimination the assessment of any State-assessed properties nor a revision the rnethuds of assessing urilities by the State Board of Equalization. Generally, AB 454 allows valuation growth or decline of Unitary Property to be shared by all jurisdictions in a county.

Proposition 218

On November 5, 1996, the voters of the State approved Proposition 218, known as the "Right to

Vote on Taxes Act." Proposition 218 adds Articles XIIIC and XIHD to lhe California Constitution and contains a number inten-elated provisions affecting the abHity of local agencies to levy and coHect both existing and future taxes, assessments, fees and charges, The inteq)retation and application of Proposition 218 will 1.1ltimately be determined by the courts with respect to a number of the nmtters discussed below, and it is not possible at this time to predict 'Nith certainty the outcome such detenninati on.

Proposition 218 (Article xm C) requires that aH new local taxes be submitted to the electorate before they become effective. Taxes general governmenta1 purposes of a Local Agency require a 1rntjorily vote and taxes for specific purposes, even if deposited in such Local Agency's General Fund., require a twu--thirds vote. ·Further, any general purpose tax which a Local .Agency imposed, extended or increased without voter approval after December 31, 1994 may continue to be imposed only if approved by a majority vote in an election which must be held 'Within two years November 5, 1996.

Proposition 218 (Article XIHI)} adds several pnwisjons making it generally more difficult local agencies to levy and m.aintain charges, and assessments for :municipal and

programs. These provisions include, among other things, (l) a prohibition against assessments which exceed the reasonable cost of the pruportiunal special benefit conferred on. a parcel, (ii) a requirement that assessments must confer a "special benefit,'' as defined in Artide XlHD, over and above any general benefits confem.:,d, (iii) a rnajority protest procedure for assessments which involves the mailing of notice and a ballot to the record owner of affected parcel, a public hearing and the tabulation of ballots v,1e1ghted according to the proportional financiaJ obligation of the affected party, and. (iv) a prohibition against fees and charges which are used for genera.1 govemn1emat services,. in.duding police, fire or library services where the service is available to the public at large in substantially the sanie manner as it is to property ownt:;rs.

28

Proposition 218 ( Article XiTIC) also removes limitations on the initiative power in matters reducing ur repealing Iocai taxes, assessments, fees or charges. Nu assurance can be given that the voters of any Local Agency will not, in the future, approve an initiative or initiatives ,vhich reduce or repeal locaJ taxes, assessments, fees or charges currently comprising a substantial part of such Local Agency's General Fund.

1n connection 'With the sale [he Bonds, each Local Agency, subject to one exception described below, has represented that Proposition 218 will not materiaHy impact any existing or future taxes, foes

assessments collected by the Local Agency and that no revenues collected by the Local Agency have been challenged as a result of Proposition 2lfL The City of Riverside has indicated that a taxpayer group challenged the City's Street Light Assessment District revenues under Proposilion 218. The City prevailed in defending the challenge and assessrncnts were upheld by the Court of Appeals. See Appendix B for more information.

Prnpositio:n 62

Proposition 62, a statutory mttmtive that was adopted by the volers voting in the State at the November 4, 1986 genera] election, (a) requires that any new or higher taxes for general govcmrnenta1 purposes imposed by local governmental entities be approved by a majority vme of the voters the governmental entity voting in an election on the tax, (b) requires that any special tax (defined as taxes lev1ed for other t.han general governmental pur1:-1oses) imposed by a loca.1 gove:rmnenta1 entity lx: approved by a two-thirds vote of the voters of the governmental entity voting in an election on the tax,

restricts the use of revenues from a special tax to the purposes or for the service which the special tax was imposed, (d) prohibits the imposition ad va1orem taxes on real property hy local governmental entities except as permitted by Article XIHA of 1he California Constitution, prohibhs the imposition of transaction taxes and sales taxes on the sale of real property by local govemrnental

required that any tax imposed by a local governmental entity on or after August l, 1985 be ratified by a majority vote of the voters voting in an election on the tax vvithin t\:vo years November 5, 1986 or be tenninated by November 15, t 988, and requjres a reduction ad valorcm property taxes allocable tu the jurisdiction irn.posing a tax not in compliance with its provisions equal to one dollar each dollar revenue attributable to the invalid for each year that the tax i,; collected.,

FoHowing its adopUon by lhe voters, various provis1ons of Proposition 62 1,vere declared unconstitutional at the appellate court For example, in Ci(v Woodlake v. Logan, CaLApp.3d 1058 (1991) (the "\.Vood]ake Case"), the Court of Appeal hc]d portions of PrnposiUon 62 i.mconstitutional as a referendum on taxes prohibited by the California Constitution. In reliance on the Woodlake Case, numerous taxes \Vere imposed or increased after adoption of Proposition 62 \Vithout satisfying the voter approval requirements of Proposition Ci2.

On Septernber 28, 1995, the California Supreme Transportation Authority v. Guardino, 11 4th ( 1 constitutionalHy of portion Proposition 62 requiring

Court, in Santa County Local (the "Santa Clara Case"), uphcJd the

a two-thirds vote in order for a local government or district to impose a special tax, and, by implication, upheld a parallel provision reqniling a 1rn~iority vote in order for a local governrncnl or district to impose any general tax. In dccid1ng Santa Clara on Proposilion 62 grounds, the Court disapproved decision in the Woodlake Case.

The decision in the Santa Clara Case did not address the question of whether it should be applied retroactjvely. On June :~., 2001, the California Supreme Courl released Hmvard Jarvis Taxpayers A.ssociation v. City La Habra, et al. ("La Habra''). In this decision,. the court held that a public agency's continued imposition and collection of a tax is an ongoing violation, upon which the starute limitations period begins anew with each collection. The court also held that, unless :m1othcr statute or consUtutiona1 rule provided differently, the statute of Emita.tions for chaHenges to tax.es subject to

Proposition 62 is three years. Accordingly, a challenge to a tax subject to Proposition 62 may only be made those taxes received vvithin three years of the date the action is broughL

In connection with the sale of rhc Bonds, each Local Agency, has represented that Proposition will not materia!ty impact any existing or future taxes, fees and assessments coUected by the Local Agency and that no revenues collected by the Local Agency have been challenged as a result of Proposition S,-:e Appendix B for more information.

l:i'uture Initiatives

Article XIIIA, i\rticlc XIIIB, Proposition 218 and Proposition 62 \Vere adopled as rneasu.res that qualified for the ballot through California's initiative process. Frorn time to tirne other initiative measures could be adopted, funher affecting Local Agency revenues.

TAX MATTERS

Interest on the Bonds is not excluded from gruss incmne for federal income tax purposes under Section l of the Internal Rewnue Code of 1 (the "Code"). In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, interest on rhc Bonds is exempt fro1n State of California personal income taxes. Bond Counsel expresses no opinion regarding any other federal or state tax consequences relating to the ownership or disposition or the accrual or receipt of interest on, Bonds. The proposed fonn of opinion of Bond Counsel is contained in l\.ppendix F -- "PROPOSED FORl\1 ()F BOND COUNSEL OPINION."

The foHowing is a smnrnary certain of the lJnited States federal income tax consequences of the ownership of the Bonds as of the date hereof. Each prospective investor should consult vvith Hs own tax advisor regarding the application of United States federal incorne tax laws, as \.veil as any state, l.ocal, foreign or other tax laws, to its particular situation.

This summf1ry is based on the Code, as well as Treasury regulations and administrative and judicial rulings and practice .. Legislative, judicial and administrative changes occur, possibly with retroactive that could alter or modify continued validity the statements and conclusions set forth herein. 'fhis summary is intended as a general explanatory discussion of the consequences holding the Bonds and does not purport to frmi.ish information in the level of detail or with the investor's specific tax circumstances that would be provkled by an investor's O\vn tax advisor. For example, it generally is addressed only to original purchasers of the Bonds that are .S. holders" defined belovv), deals on]y with Bonds held as capita! assets within the 1neaning Section 122 l the Code does not address tax consequences lo holders that may be relevant to jnvestors subject to

special mles, such as individuals, trusts, estates, tax--exernpt investors, foreign investors, cash method taxpayers, dealers in securities, currcndcs or commodities, banks, thrifts., insurance companies, electing large partnerships, mutual funds, regulated investment companies, real estate investment. trusts, FASlTs,

S corporations, persons that hold Bonds as part of a straddle, hedge, integrated or conversion transaction, and persons vvhose "functional currency" is nut the U.S. dolhu-. In addition, this summary does not address alternative minirrn.nn tax issues or the indirect consequences to a holder an equity interest in a holder uf Bonds.

As used herein, a "U.S. holder'' is a "U.S. person" that is a beneficial owner of a Bonet /\ "non--.S. investor" js a hokier beneficial of a Bond that is not a U .. S. Person. For these

a "lLS. person" is a citizen or resident of the United a corporation or partnership created or organized in or under the la,vs the United States or any political subdivision thereof (except, the case a partnership, tu the extent otherwise provided Treasury regulations), an estate the income \vhich is subject to United States federal income taxation regardless of source or a tnm if (i) a United States court is able to exercise primary supervision over the trust's administration and one or more United States persons have the authority to control an of rhe trust's substantial decisions.

'Tax Status of the Honds

The Bonds will be treated, for federal incorne tax purposes, as a debt instrument. Accordingly, interest win be included in the 1ncome of the hokier as it 1s paid ( or, if the hu1der is an accrual rnethod taxpayer, as it is accrued) as interest.

Holders of the Bonds allocate (which generaHy will include all initial holders or the Bonds} a in the Bonds that is greater than the principal amount of the Bonds should consult their own tax advisors with respect to vvhetber or not they should elect to arnortize such pre:miurn under section l71 the Code.

If a holder purchases the Bonds for an amoum that is less than the pdncipa1 amount of the Bonds, and such diffr.::rence is not considered to be de minimis, then such discount wm represent market discount that uitimatcly wiH constitute ordinary incorne (and not capHal gain). Further, absent an election to accrue market discount currently, upon a sale or exchange of a Bond, a portion any gain \Nill be ordinary income to the extent H represents the arnount of any such market discount that \Vas

accrued through the date of sale. In addition, absent an election to accrue market discount currently, the portion of any interest expense incurred or continued to carry a mark.et discount bond that does not exceed the accrued market discount for any taxable year, v.1iH be deferred.

Although the Bonds are expected to trade "flat,'' that is, without a specific allocation to accrued interest, for federal income tax purposes, a portion of tht: arnount realized on sale attributed to the Bonds will be treated as accrued interest and thus wffl be taxed as ordinary income to the seller (and will not be subject to tax in the hands of the buyer).

Sale and Exchange of Bonds

l Jpon a sale or exchange of a Bond, a holder generally will recognize gain or on the Bonds equal to the difference between the arnount realized on the sale and its adjusted tax basis such Bonet Such gain or loss generally wiU be capital gain (although any gain attributable to accrued market discount the Bond not yet taken into income \.Vill be ordinary). The adjusted basis the holder in a Bond will (in general) equal original purchase price and decreast~d by any payrncnts received on the BoncL In general, if the Bond is held for longer than one year, any gain or Joss would be long term capital gain or loss, and capital losst:s arc subject to certain limitations.

31

Defeasance

Defeasance of any Bond may result in a reissuance thereof, in which event a hokkr will recognjze taxable gain or loss equal to the difference behveen the amount realized from the sale, exchange or retirement (less any accrued qualified stated interest vvhich \,;jl] he taxable as such) and the holder's adjusted tax basis in the Bond.

Distributions on the Bonds to a non-U.S. hokier that has no connection with the United Stares other than holding its Bond gen.era.Hy 'vViH be made of withholding tax, as long as that the hokier has complied with certain tax identification and certification requirements.

ERISA CONSIDERATIONS

Section 406 of the Employee Retlrernent Income Security Act of 1974, as amended ("ERIS/\'') and Section 4975 of the Internal Revenue Code (the "Code"), prohibit employee benefit plans ("Plans") subject to ERISA or Section 4975 of the Code from engaging in certain transactions involving ''plan

with that are ''parties in interest" tmder ElUSA or "disqualified under the Code (collectively, "Parties in Interest") wilh respect to the Plan. ERlSA also imposes certain duties on persons ·who arc fiduciaries Plans subject to ERlSA. Under ERISA, any person who exercises any authority or control respecting the management or disposition the assers a Plan is considered to be a fiduciary such Plan (subject to certain exceptions not relevant here). A. viotatkm of these "prohibited transaction'' rules may generate excise tax and other liabilities under ER.ISA and the Code for fiduciaries and Parties in Interest.

The Underwriters, as a result of their 01vvn activities or because of the activities an affi ti ate, may be considered Panics in Interest with respect to certain plans.. Prohibited transactions may under Section 406 of ERIS/\ and Section 4975 the Code if Bonds are acquired hy a Plan with respect to which tht: Underwriters or any of their affiliates are Parties in Interest, Certain ex.ernptions from the prohibited transaction n1!es could be applicable, however, depending in part upon the type of Plan fiduciary making the decision to acquire a Bond and the circumstances under which such decision is made. Included arnong these exen1.ptions are those transactions regarding securities purchased during the existence of an undcnvriting, investments by insurance company pooled separate accounts., investments by insurance cornpany genera] accounts, investments by bank collective investment funds, transaclions effected by "qualified protessiona1 asset managers," and transactions affected by certain "in-, house asset managers." Even if the conditions specified in une or more of these exen1ptions are met, the scope the relief provided by these exemptions rnight or might not cover an acts which ·might be construed as prohibited transactions. In order to ensure that no prohibited transaction under ERISA or Section Code will take place in connection \Vitb the acquisition of a Bond or on behalf a Plan, each prospective purchaser of a Bond that is a P1an or is acquiring on behalf a Plan will be required to represent that either no prohibited transactions under ERISA or Section 4975 the Code will occur in connection with the acquisdtiun of such Bond or (ii) the acquisition such Bond is '"'"""i"'"" to a statutory or administrative exernption.

Any Plan fiducia1y ·who proposes to cause a Plan to purchase Bonds should (i) consult wHb its counsel with respect to the potential applicabilHy of ERISA and the Code to such investments and

!''),...-,.

.).!..

whether any exemption \vould be applicable and (ii) detennine on its own ,ivhether all conditions have been satisfied. Nlureover, each Plan fiduciary should determine whether, under the general fiduciary standards of investnient prudence and diversification, an investment in the Bonds is appropriate fur the Plan, taking into account the overall investment policy of the Plan and the composition of the Plan's investment portfolio ..

ABSENCE (ff LITIGATION

There is no action, suit or proceeding known to be pending or threatened, restraining or enjoining the execution or delivery of the Bonds, the Trust A.grecmcnt or in any way contesting or affecting the validity the foregoing, or any of the Authority taken ·with respect to any the foregoing.

There is no litigation pending or., to the krmvvkdge of the Authority, threatened, questioning the exjstence the Authority, or the title of the officers of the Authorjty to their respective offices, or the power and authority of the Authority to issue the Bonds.

Each Local Agency wiH certify to the effect that, other than as described in the Official Statement, including all appendices ht:reto, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board ur body pending or, to the best knowkdge of the Local Agency, threatened (i) in any way questioning the existence of Local Agency or the titles of the officers of the Local /\gency to their respective offices; (ii) in any contesting or affecting validity of the legal documents relating to the Obligations entered into by the Local Agency or the consummation of the transactions contemplated thereby, Oii) which rnay result in any material adverse relating to the finances or operations of the Local Agency: or (iv) contesting the completeness or of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the OfficiaJ Statement contained any untrue slatcment of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, jn the light the circumstances under 1Nhkh they were rnade, not rnisleading. Sec Appendix B for certain information related to any litigation affecting the Participants.

For information on litigation concerning the Local Agencies, sec Appendix B attached hereto. For information on the judicial validation of the proceedings and transactions related to the issuance of the Obligations, see "VALIDATION" herein.

RATINGS

Moody's lnvesturs Service, Inc. and Sr.a:ndard & Poor's Rating Services have assigned ratmgs of "Aaa" and "AAA'', :respecliveJy, to the Bonds. ratings on the Bonds are conditioned on the issuance of the 1nsurance Policy. Sec "SEClJRITY AND SOTJRCE OF PAYMENT - The Insurance Policy" herein. The Authority and the Local Agendes supplied cerlain information to the ratjng agencies to be considered in evaluating the Bonds. Each rating reflects only the views of the rating agency issuing such rating, and any explanation of the significance such raling on the Bonds should be obtained from such rating agency. There is no assurance that any rating \.Vill be retained for any given period time or that the same will not be revjsed downward or \Vithdra\vn entirety by the rating agency issuing such rating if, in its judgrncrn, circumstances so warrant. The Authority i.mdenakes no

responsibility to oppose any dovvnward revision m 'vvithdrm,val pf any rating. Any such downward revision or 'vvithdrawal of any rating may have an adverse effect on the market price the Bonds.

UNDERWRITING

Authority and Morgan Stanley & Co.. lncoqxxated, as representative: of the underwriters (the "Underwriters''), have entered into a Bond Purchase A .. greement pursuant to which the Bonds arc to be purchased by the Undenvriters at a discount of $J ,430,364.55 from the offering price the Bonds stated on the the cover (the "Bond Purchase Agreement"). Bond Purchase Agreement provides the Underwriters will purchase all of the Bonds if any are purchased, the obligations to make such purchase bejng subjcc!. to certain terms and conditions set forth jn the Bond Purchase Agreement, the approval of certain legal matters by counsel and certain other conditions.

The TJndcrwritcrs rnay offer and sell the Bonds to certain dealers and others at a price lower than the offering prices stated on the cover hereof. The 1Jndcrwritcrs may change the offering prices frrnn tirne to time.

CONTINUING UISCLOSliRE

The Local Agencies have covenanted in Continuing Disclosure Certificates for the benefit of holders and beneficial owners of the Bonds tn provide certain financial information and operating relating to Local Agencies by nut later than the O days foilowing the end of the fiscal year (currently their fiscal years end on June ([he "Local A.gencies Annual Reports"), commencing with the fiscal year ending June 2004, to provide notices the occurrence certain enumerated events. if material.

The Authority has covenanted in a Continuing Disclosure Certificate for the benefit of the holders and beneficial owners of the Bonds to provide notices of the occurrence events, if material.

certain enumerated

The Local Agencies Annual Reports and the notices of material events will be filed by the Trustee as Dissem1natiun Agent with each Nationally Recognized Municipal Securities Information Repository. The specific nature of the information to be contained in the Annual Reports and the notict:

material events is set forth in APPENDIX J--·'TORMS OF CONTINLfJN(i- D1SCLOS URE CERTIFICATES" hereto. These covenants have been made in order to assist the UndenNriter in complying with Rule 15c2-1 pronmlgated under the Securities Exchange Act J 934.

CERTAIN LEGAL MATTERS

At the time of rhe delivery the Bonds, Orrick, Herrington Sutcliffe LLP, Bond Counsel, ,vrn deliver its final approving opinion in the fonn set forth in Appendix E A copy of such approving will be available for delivery with each Bond. Bond Cot.mse·! has undertaken no responsibility for the completeness or fairness or accuracy of this Official StatemenL

Certain legal matters wiH be passed upon for the Underwriters by their counsel, Hawkins Delafield 8: \Vood LLP, San :Francisco, California.

34

VALlDATR1N

Each Local Agency, acting pursuant to the provisions of Sections 860 et seq .. of the California Code uf Civil Procedure, has filed a complaint in the Superior Court the State of California such Local Agency seeking judicial validation of Lhe proceedings and transactions relating to the adoption the Obligation Resolution, issuance the Obligations, the execution and delivery of the Local Agency Tmst Agreernent and certain other matters.. Each court entered a default judgment to the cffoct, arnong other things, rhar the L.ucal Agency Trust Agrecrnent the Obligations are valid, legal

binding obligations of such Local Agency and that the Obligations arc valid and in conformity with all applicable provisions of law. In issuing the opinion as to the validity of the Obligations and the Bonds, Bond Counsel has relied upon the entry of the foregoing default judgments.. The last day the appeal periods Local Agencies was June 12, 2004. appeals were fiied prior to the last day of the appeal periods.

AFfHORIZATlON AND APPROVAL

This Official Statement, and its distribution and use by the Undenvriters, have been duly authorized and approved by the Authority ..

CALIFORNIA STA'fEWIDE C01V11VI1JNTT1ES DEVELOPMENT AUTHORITY

Member of the Commission of the Authority

35

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APPENDIX A

DEBTSEKVICEBYLOCALAGENCYANDUAALBYLOCALAGENCY

DER'f SERVICE TABLES

FoHowing is a table listing the debt service payable by each Local Agency for each Series of Bonds.

:.Fiscal Year

County of Butte

Ending Compm.mded Total Debt

·-- J um~ 30 --·---·- Pr ind pal ___________ ].:!!~.I~J. __________ Principal ·---·---·-----~!f£.I.:_~-~-----·---·-----~i:~!l~~~-----· 2005 1.,559,470.22 l,559,470.22 2006 L,690,991.80 1,690,99 L80 2007 2008 2009 2010 201] 20]2 2013 20i4 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

T()TAL

55,()00.00 J25J100.00

370.,000.00

575,000.00

8 l 5Jl0CUJO 950,000.00

l, 100,000.00 1,260,000.00 1,435,000.00

1,825,000.00

2,285,000.00 2,540,000.00 2,820,000.00 3J 15,000.00 3,440.000.00

l,W0,991.80 .80

1,690,991.80 J .80 1,690,991.80 1,690,99 l .80 1.,690,991.80 1,690,991.80 1,688/) 17 .40 l,681, L32.40

1 ,653,447.60 t ,631,632.40 1,603,92120 11570:,0] 9 .20 1,529336.80 1,481,284.40 l A25,272.40 1,360,416.40 1283,858.80 1,196,668.20 1,097, 933.20

987,046.20 862,792.00 723,955.40 569.625.00 398,281.80

4A-O

i\-l

l,690,991.80 l,690,991 .80 1,690,991.80 1,690.,991.80 1,690,99 ! .80

.80 1,690.,99 t .80 L745,99L80 1,813,017.40 l ,88 l,132.40 1,949,956.40 2,023,447.60 2.101,632.40

1.20

2,344.336.80 2,431,284.40

2,620,4 l 6.40 2/7] 2,821,668.20 2,922,933.20 3,032,046.20 3, 14 7 ,792.00 3,263,955.40 3,389,625.00 3,513,281 .. 80 3,649,014.40

(i9,422,008.02

Fiscal Year

Ending 30

2005 2006 2007 2008 2009 20]0 201! 2012 2013 2014 20!5 2016 2017 2018 2019 2020 2021 ?Cl2? 2023 2024 2025 2026 2027 2028 2029 2030 203] 2032 2033 2034

rl'OTAL

Series A~l

County of Kings

Interest:

495,l 93.20 489,914.40 476,892 00 463,580.20 450,874.35 437,590.40 423A84.35 409,060.80

1.80

338,846.45 327,537.00 316J)79. l0 305JJ55.80 296294.10 286,343.20

7,007,56530

/\ .. -2

Compoum:!ed Interest

123,108.00 156,419.80 194.,125.65 232.409.60 27] ,515.65 3 l 0,939.20 351,908.20 395,529 .. 00 439~296.55 482.446.30 526, 153.55 572.463.00 61 659,944.20 708,705.90 753.65fr80

6,942A34.70

Total Debi. Service

555,000.00

620,000.00 645.1()00.00 670,000.00 695,000.00 720,000.00 745,000.00

835,000.00 865~000.00

930,000.00 965,000.00

I,005,000.00 l, ,rev ,\J'-.f'.!. ,.nJ

13,950,000.00

Fiscal Year

Ending 30

2005 2006 2007 2008 2009 20]0 201! 2012 2013 2014 20!5 2016 2017 2018 2019 2020 2021 ?Cl2? 2023 2024 2025 2026 2027 2028 2029 2030 203] 2032 2033 2034

rl'OTAL

City of Daly City

Series A~l

400,000.00 335,000.00

545,000.00 660,000.00 790,000.00

l ,080,000.00 1,250,000.00 1 ,,,v,,nn,,uv

1,625,000.00 1,840,000.00

2,325,000.00

2.895,000.00 3,215,000.00 3,560,000.00 3,925,000.00 4,325,000.00

36,235,000.00

Interest: l,877355.79 2/)25,087 .00 2,014,534.50

1,975,746.00 1,945,980.00 1 ... 907 ,902 .00 1.,861,216.00 1,805,272.00 L738,647.00 1,661,312.60 1,571,807.60 1 ~468~988.40 1,346,94120 l ,209,,859.20 1,056,563.20

885,874.00 17.60

486,420.00 255,002.00

29,789.135.09

i\-3

Compoum:!ed Interest

Total Debi. Service

2,277,355.79 2,360,087.00 2,449,534.50

2,635,746.00 ') _ .... , 2~837 '1902. 00

1216.00 3,055,272.00 3, 168,647 .00 3,286,312.60 3,411 3.538,988.40

.20

1.563.20 4, 100,874.00 4,256,317 4,411,420.00 4,580,002.00

66,024,135.09

Fiscal Year

Ending 30

2005 2006 2007 2008 2009 20]0 201! 2012 2013 2014 20!5 2016 2017 2018 2019 2020 2021 ?Cl2? 2023 2024 2025 2026 2027 2028 2029 2030 203] 2032 2033 2034

rl'OTAL

Series A~l

40,000.00

205J)O(LOO 245,000.00

325,000.00 375,000.00

540,000.00 61 O,OOCUJO 680,000.00 755,000.00

925,000.00

City of Merced

Interest: 384362.03 415,453.10 414,193.10 411,768.60 408,249.60 403J)63.10 396,315.JO 387,78l.10 377, t 62.10 364,103.60 348,690.80

789.80 309,834.80 284,776.80 256.,476.00 224,637.60 t88,672.00 148,579.20

54,538.00

7,355,000.00 6.,2 ! 3.510.83

i\-4

Compoum:!ed Interest

Tot.al Debi. Service 434,362.03 455,453.10 479,193.10 496.,768.60 523,249.60 543,0fr3. JO 566.,315.10 592,781. JO 622,162.10

705.,789.80 734~834.80 764,776.80 796,476.00 8YL637.60 868,672.00 903,579.20 944,064.40 979,538.00

13,568,.510.83

Fiscal Year

Ending 30

2005 2006 2007 2008 2009 20]0 201! 2012 2013 2014 20!5 2016 2017 2018 2019 2020 2021 ?Cl2? 2023 2024 2025 2026 2027 2028 2029 2030 203] 2032 2033 2034

TOTAL

Series A~l

City of Mm brae

Interest:

612,01140 594,429.45 576,699.75 561,683.20 542303.70 52'.\529.50 506,534.40 487,191.80 467.918.70 451,775.40 434~820.30 420,339.15

144.65 39L988.80

367,565.55 357.42(.J.95 348,321.60 338,946.40 329,390.50 320,695.90 311,789 .00 302,750.00 294,433.85 286.,725.10 278,833.50

U ,521,629.55

i\-5

Compoum:!ed Interest

114,936.80 157,988.60 200,570.55 248.,30025 298..316.80 347,696.30 399,470.50 453,465.60 507,80820 562,081.30 618.224.60 675,179.70 734.660.85 788,855,35 848,011.20 909,682.20 967,434.45

1,027,573.05 ,678.40

l, 156,053.60 i ,220,609 .50 1,289,304.10 J ~3581211.00 1,427 ,250.00 1,500,566.15 I .578,274.90 1,656, J 66.50

22,138370.45

Total Debi. Service

795,000.00 825J)OO.OO 860JJ00.00 890,000.00 925,000.00

U 10,000.00 L 155.000.00 1, 195,000.00 l ,240,000.00 l. l 1,385,000.00

1,495,000.00 1,550,000.00 [ ,6 J ,,,,_,,.,,,.vv

l,670,000.00 l ,730,000 .. 00 1,795,000.00

1,935,000.00

33,660:,000.00

Fiscal Year

Ending 30

2005 2006 2007 2008 2009 20]0 201! 2012 2013 2014 20!5 2016 2017 2018 2019 2020 2021 ?Cl2? 2023 2024 2025 2026 2027 2028 2029 2030 203] 2032 2033 2034

TOTAL

City of Monterey Pa:rk

Series A~l

525.000.00 51 v,,,,v,.;.•Jv

495J)O(LOO 485,000.00

465,000.00 455,000.00

445,000.00

435,00CUJO 430,000.00 425,000.00 425,000.00 4 t0,000.00

845,000.00 895,(100.00 950,000.00

1,065J)00.00 1,130,000.00 1,200,000.00

l .350,000.00

1 "' i. /.,"Y\i,J,V'.f'\J,\.,''1

Interest:

1,022,840.80 l. ,022,840.80 J .022,840.80 1,022,840.80 1,021 ,713.30

996,408.30 970,806.30 945~ t65.30 919,314.80 893,626.80 868,014.60 842,589.20 8] 6,()57 ,.20 789.,820.00 763,877.60 7.38,230.00 712,877.20 687,8 t9.20 662,76120 638,587.60 590,283 .40 538,94120 484,561.00 426,839.00 365.775.20 301,065.80 232A07.00

2 l,483.711.92

/\ .. -6

Compoum:!ed Interest

Tot.al Debi. Service 943,286.52

t,022,840.,80 1,022,840.80 1,022,840.80 1.047,o··,u.ou

713.30 l ,506.,408.30 1,465,806.30 1,430,165 . .30 l ,394,314.80 1,358,626.80 1,,323,(H4.GO L292,589.20 l ,261,057.20 1~229~820.00

[('o .OU

1, t68,230J)O l ,137,877.20 I, l 12,8 l 9.20 1,072,761.20 1,433,587 .60 1,435,283.40 1,433,941.20 1,434,561.00 t ,431,839 .00 L430,T75.20 J ,431,065 .. 80 1,432,407.00 1,434,495 .00 1,432,026. 00

38,888,.711.92

Fiscal Year

Ending 30

2005 2006 2007 2008 2009 20]0 201! 2012 2013 2014 20!5 2016 2017 2018 2019 2020 2021 ?Cl27 2023 2024 2025 2026 2027 2028 2029 2030 203] 2032 2033 2034

rl'OTAL

City of Riverside

Series A~l

1,125,000.00 l 1,675,000.00 l 2335,000.00

2., 71 "·· ''"'' ·"" 3,120,000.00 3,565,000.00 4,050,000,()0 4,575,000.00 5,145,000.00 5.,760,000.00 6,440,000.00 7,.175,000.00 7,965,000.00 8,815,000.00 9,730,000.00

10,71

89,540,000.00

Interest: 4,588hl7.25 4,942,251.60 4,906,814.10 4,854,967.10 4,785,622.10 4,695,873.10 4,.583,326.JO

10 4,285~668. 10 4,095,653.60 3,876.,629 .60 3,624,638.60 3,337, l 36.00 2,997,526.40 2,617,,824.00 2, 194, 786.00 L,725, !69.60 1,205,437.20

631,756.40

68..397.010.95

i\-7

Compounded Interest

Tot.al Debt Service

5,848,647.25 6,067,251 .. 60 6,296,814.IO 6,529.,967 .10 6.775,622.10

JO 7,293.,326.10 7,567,284. lO 7,850,668.10 8, 145,653.60 8,451,629.60 8.,769.,638.60 9Jl97, i36.00 9,437,526.40 9~ 792~824.00

l 0, l 59 .786.00 10,540,169.60 l 0,935,437.20 l 1,346,756.40

157,937,.010.95

UNJ'UNDED ACCRUED ACTUAIUA1., LIABILITY TABLE

Fo11owing is a table listing the accrued liability, actuarial value of assets and rolled forward unfunded liability each Local Agency's pension plan. "PARTICIPATING LOCAL AGENCIES INFORMATION --- PERS Pension Plans" in Official Statement

Entry }\ge Nc1n:na1 /\ccrued Liability (6/30/02)

Actuarial. 'lalue of Assets ( 6/30/02)

Unfunded Accrued Liahility ( 6/30/02)

> 6/30/20(1Ll Roiled i:k; Fo1v.rard Unfundi.:~d

Liability

Certified L)nfunded Actuarial

Miscellaneous Safety Plan Plan

:51.872.187 228~722~348

43,919,098 216.691,430

7.953,089 12,030,918

9.160,991 23?978~72J

(6/:.29H)4) 11~900:,000 1"5~'!Qf1,noo*

Dot:s nut include ',.,i,~ ,, Court employi:ccs.

Safety Plan

85~432~196

76,538,51:2

8;893,684

13551,748

l 8.300.000

~V:liscellnneuus Safety Plan Plan

129.247.02:5 100,554,045

122~601,,881 en ·,1·1'1Vi

\\545,J44 :1,.,1n r;n,1

J. L710,81 l 12,474265

l 8.300.000 17~300~000

City of

!\Jfr!:~~1

Safctv Plan

54,441,620

,IR (;Oii V,',

5,747~265

7,138.,378

10~200~0()0

Safe1y Plan

]8.704,0J6

33/+32)23

5~27 t ,893

6,354,783

8,500,()00

Source: Cal PERS An.nual Actuarial\/ aiuati.ons - June 30, 2002; Bartel /1..ssociak~s'.' LLC for'' Certified Unfunded /\.ctuariaJ LiabilJ1y. 11

tvj isce11aneous Plan

22.898.788

L36l/764

2~700~000

of Monterey

f>al~

Safety Plan

84.836 . .349

69.904,508

14.93L84i

l7.01L84l

21~500~000

of

Safety Plan

38L31CL978

328,395.,034

67J43,907

88~300J00()

APPENDIX B

LOCAL AGENCY INl?ORMATJON

This Appendix contains certain information on each Local Agency. Such information is intended to he reviewed in conjunction "vith the audited financial statements each Local Agency in Appendix D and the surrm1ary firnmci.al information in Appendix C. The financial statements for each Loca! Agency are presented in Appendjx D should be read in their entirety.

Local Agency Certifications and Additional Information

In response to a written due diligence questionnaire, each Local Agency has certified, subject to ce:rtain exceptions noted by such Local Agency descl'ihed herein, that the foUovving slatements arc true and correct to the best knowledge of an officer of such Local Agency. See "Exceptions a.nd Additional Information" below .. Each LucaI Agency's -Fiscal )'car ends on June 30.

"" 'The Local Agency has not defauhed on a lease or debt obligation in la.st years.

@ The Local Agency has never failed to comply with any disclosure obligation with respect to securities, including any obligations under SEC Rule 15(c)(2)(12) or a written undertaking.

* There has been no material adverse change in the Local Agency's financial condition since June 30, 2003.

$ The Local Agency does not have any sales tax or property tax payers which contribute in excess of of lhe sales tax or property tax received by the Local.

during the 2003-04 Fiscal ·year.

Iii; Proposition 218 and 62 cannot materially impact any existing or future taxes, fees and assessments coHected by the Local Agency.

revenues collected 218 or 62.

the Local Agency have been chaUenged under Proposition

@ The Local Agency does not have any funds invested in derivates or reverse repurchase agreernents and docs rmt have a leveraged portfolio.

ti' n1ajor taxpayers are cuffemly delinquent, or expected to be delinquent, in the payment property taxes, franchise taxes or other taxes to the Local Agency.

G Over the last ten years, the Local Agency has not experienced any significant losses, realized or unrealized, in its invcstrnenl portfolio as a rcsuh of a ratings do-wngrade, bankruptcy or decline in market value relating to such investments.

B-1

ii The Loca1 Agency has not recently adopted, and does not phm to adopt, any significant changes in accounting practices that rnay have a mater1al adverse nnpact on its finances or the presentation of its finances in its financial statements.

(!!, The Luca] does not have any major ongoing or expected challenges to

assessed property valuations within its boundades (including any cha.Henges to annual increast'S in assessed valuation in excess of

• Since June 30, 2003, the Local. Agency has not entered into any long-term lease obligations or issued any debt.

in, The loss of motor vehicle license fee revenues, or any proposed item in the State's FY 2004--05 budget, \vcruld nor result in a significant reduction (greater than. 5%,) in the Local Agency's discretionary revenues.

G No other conditions or events, includjng but not lirnited lo labor disputes, litigation or hazardous rnate1ials, exist which may adversely affect the finances of the Local 1\gen_cy~

5 The Local i\.gency does not have any other informalion which is necessary to make the above statements, in the light of the circumstances under ·which such statements are made, not misleading.

"" 'The Local Agency has not faikd in the last len (l 0) years to rnakc its allocated pension ftmd1ng obligation.

~ 'The Local Agency does not anticipate any significant increase in its liabilities related to post-employ:mcnt benefits other than pension benefits, induding healthcare and life insurance ("OPEB") as a result of GASB's recent proposal to require Local to (i) recognize the cost OPEB during periods employees render the services a.:nd (ii) pruvide rckvant information abour OPEB obligations.

Exceptions and Additional Information. Certain of the Local Agencies have reported except1ons and additional information in connection with the matters described above. Such exceptions and additiona] information is described under the Local Agency sections below under the headings "Other Information."

B-2

THE COUNTY OF BUTTE

Set forth below is certain infonnation with respect to the County of Butte ("Butte County" or the "County"). Such information \Vas provided by the County except as otherwise indicated.

General

Butte County is located in north central California and encompasses approxirnately } ,(j65 square rni1es in the northern portion the Sacramento Va.Hey. The County is suITomHJed by the counties of Plumas to the northeast, Tehama to the northwest and Glenn to the ,.vest, with Sutter, Yuba and Colusa counties bordering to the south.

Butte County ·was created in ] 850, one of California's original tv,'enty-sevcn counties, and incorporated as a county in 1865. The Chy of Oroville serves as the county seat. Butte County is a chartered county divided into five supcrvisorial distlicts on the basis of regis[ered voters and populat10.n.. The County is governed by a five--mcrnber Board of Supervisors who serve four­year terms. The Chairman is elected by and from mt:mbers of the Board.

A Chief A.dministrative Officer, appointed by the county affairs. Other elected county officials include the Recorder. District Attorney, Sheriff-Coroner, Treasurer­Schools.

Assessed Vahmtion

Board Supervisors, administers Auditor--Controller, Clerk­

Collector, and Superintendent

The follo,ving table sets forth the assessed valuation by category and property type for Fiscal 1999-00 through Fiscal Year 2003--04.

County of Butte Assessed Valuation History By Catego:ry And Property Typen;

I1'iscal Yea.rs 1999-00 Through 2003-04

1999-00

2000-01 2001-02

2002-03 2003-04

Secured

$ 9,049,396,442

9.507,581,525

l J .387 .731.654

Source,:. California _l\rfunicipal S1atistics1 Tue.

,633

19,591,858 20,289,420

18.939.909

$523,536,374

572,349,506 596.,850,004 623.191.997 635,802.768

B-3

Total Before Rdv. Increment

10/J99~522~889 10,591.367,952 11 ,3T7,332 12,()42,474,331

Unitary

1I!ill!l:

$648,454~447

585,521,735 524,383.,116

571 529503,014

Top Twenty Prope.rty Taxpayers

The fuUov,iing tabk shmvs the total tax levied against the twenty largest property taxpayers in Butte County for Fiscal '{ear 2003-04.

County of :Butte ,,_fwe:nty Lasgest Local Secured Taxpayers

2003-04

Fanntand Reserve Inc. Chico MaH Partners LP Ca tifornia \\/ ater Service Sierra Sunri~,I:': Senior Village of Chico \iVcstcm Invc;;tm,.::m Real Iistatc Trust Pacific Realty Associates LP Pan Pacific Dcvduprnent LLC s.;,,tp·sx1:1,v Inc.

Evergreen Orchard LLC M&H Realty Partners JV LP \Val-Mart Rea! Estate Business Trusl Mede A. Webb & Sons Lowes HIW Inc. Gregory L c,ud .loan R. ·wcbb Ed and ?vfary \Viltmeier 1661 Forest A venue Investors Parrott Invcstn1cnt Co. Inc. A&L of Chico LLC Ceres Pia1:a Apartments LLC Paradise Retirement Rcside1Jce LLC

Primary L.md

!l~

/'-1.gricultural Shopping Center v,,1 ater Service R.etirement Horne Comn1ercial Store Commercial Store Comn1crcial Store Commercial Store Commercial Store Comn1ercial Store Commercial Store Apartments Commercial Store Apartrnents Commercial Store

Agricultural Professional Buildings Apartments Retirernent Horne

2003-04 LocJ.l Secured A.ssessed V~ al uation: $11 ~.387, 731,65-4". Source,: C\iJifornia MurnlCJlJ:J.J. Statistics~ lnc.

B-4

2003-04 Assessed

,Yahmtiog

30~792.980 23~476,652 23.372,302

19,222,584 17.731,680 17 .1 I ~

15.347.501 14,304.,705 14,232,060 13.158,821 12. L2,448 .. 167

10,777,11t6 10.634,800

$357, 196..396

Percent of Iota! (t)

0.31% 0.27 0.21 0.21 r120 0.18 0.17 0.17 0.16 (116 0.13 CU3 0.12 0.12 0.11 iUl CUJ 0.09 0.09

3 14%·,

Popufation

As of January l, 2004, the population of Butte County was estimated to be: 212,700, an increase 4. over the 2000 population of 203, 100. The following table shows the population

Butte Coi.mty the years 2000 to 2004.

2000 200! 2002 2003 2004

County of Butte Population

As of Janua:ry l 203, l 00 206,100 208.600 2 !0.800

700

Source: Slate of California~ Departrnenl of Finance ..

Labor Market and Unemployment R~de:

As of March 2004, the civilian labor force in Butte County reached an estimated 92,300. This is an increase frmn the 2000 annual average civilian labor force of 86,700. The annual average unernployrnent rate increased from 7 to during the same period. The table belmv lists figures for the civilian labor force and comparative unemp1Dynmnt rares for the years 2000 to March 2004.

Labor Force Empioyrnen! L' nemployment Unemployment Rate

Butte County Civilian Labor Force, Employment and Unernploytnent

ArmuaJ A vernge01

20(.!Q 20lH £,002 JOO:~

86,700 90,lOO 91,800 80.600 81.,800 83,100 6,100 6,200 7.000 7 J)l}'(J 7.1 S?, 7. 7i}f) 7.89()

Source: State of Ccdifornia, En1ployrnent uc:velOflrnent [)epartrnenL

B-5

J004(l)

92~300 84, j()()

8,200 8.9%,

Major Employers

The following table sets forth the rm\jor employers in Butte County.

Aero Union Corp Butte Comnmnity ,._,,_,,.,~F,''

Butte (~ounty (Tovernrncnt Cahfornia State Ur:ttv::::rsJty - Chico Enloe .Medical Center Feather F2ll s Casino

Casino Paradise Posl Pro Pacific Fresh Roplasi Industries Inc.

Butte County Major E1nploye:rs As of April 2004

Chico Oroville Ivlultiplc C~hico (~hico Oroville Oroville Paradise I)urhaxn Oroville

Source: California E1np1oy1nent U1:,velu;m1em Departrnenl.

Agriculture and Industry

Aircrnft & Parts & Universities

Government Colkges &: Universities Hospitais Misc. Amusement Recreation Services Ivtisc. 1\musemcnt, Recreation Services Advenising Groceries & Related Products Plastics Materials & Synthetics

The economy of the County relies heavily on agricultural production and its fertile land supports a vadcry of cash crops, including rke, almonds, \Valnuts, dried prunes and timber. The Cuunty's industry employers include government, trade, transportation and utilities, and educational and health services. (3ovcmment is the largest employment sector in the County and trade, transportation and utilities is the second largest. Financial activities has become one of the County's fastest growing industries along with natural resources, mining and conslruction. growing JS% and 24% respectively since l

B-6

The value the folknving table.

agricultural production in the County for 1998 through 2002 is presented in

Field Crops Se,ed (:rops \ 1 egetable (~rops Fmi.t & Nut Crops Nursery Stock

Products Livestock, all

Grand Tolal

County of Butte Value of' AgriculturaJ P:roductio:n

(in 000 1s)

$ 86.730 5.708

550 105,521

3,610

$120,435

575 l1Ui20

6AOO

29,484

11!.1!9.

$127,540

570 138,634

5,%1 2.515 8,573

33,484

$324,829

Source: Butte County /\grjcuHural C0n1rr1issi0ner\~ ()fficc - 2002 /\gricultural Report

Litigation

Jit91. 19.9-i

$106~642 $1 t2,%7 5.,755 6,8T!

505 490 121,991 _i 497687

8.555 7,178 2,377 2,260 8.,800 8.,()18

32.878 18,056

$287.503 $305,553

Butte Coun1.y is a dcferu.iant in various lawsuits and is a party to v .. u-ious cla1ms. The County Counsel estjmatcs that the potential claims against Butte County resulting from such H tigation would not malerially affect the financial condition of Butte County.

Plans for Future Borrowing

Butte County anticipates issuing approximately anticipation notes for the 2004-05 Piscal YeaL

rnillion in tax and revenue

Butte County is jn the of instaHing 997 kw of photovoltaic cells at a <:ost of $8,4 minion. The first $4.2 million is funded a grant from PG&E. The remaining $4.2 million is funded through a ioan fro:m the California Energy Cornmission and an internal loan $1.2 milHon from the County Treasury. The loans are expected to be paid from the reduction in utility costs rcsuhing from the project over next 12.5 years. T'he cells arc guaranteed a 25 year Jife. Butte County is also considering issuing bonds to advance fund workers compensation in order to nmve from an insured to a self-insured approach, Butte County has indicated that it does not have current plans for issuing any general obligation debt or cenificatcs participation or bonds payable from the general fund.

Butte Ccnrn.1.y also anticipates issuing other obligations in the total aggregate principal amount of approximately $28.2 milbon payable from its genera] fund around the same tirne as the Bonds are issued. See "SECURITY AND SOlJRCE OF PAYMENT - Other Obligations of the LocaJ Agencies" in the Official Statement.

B-7

Othe:r Information

Butte County reports that general fond revenue has been reduced by $2,146,243 or J general fund revenues resulting from a loss of vel1kle license foe ("VLF') revenue for Fiscal

Year 2003-04. However, lhe County has budgeted for this loss of funds for r:.·iscal Year 2004-05 and anticipates repayment these funds by the State in Fiscal Year 2006-07. See ,;Risk Factors -· The Local Government Agreement" in Official Statement

B-8

THE COUNT\' OF KINGS

Set forth below is certain infonnation i.vith respect to the County of Kings ("Kings County" or the "County"). Such information \Vas provided by the County except as otherwise indicated.

General

Kings County 'Was created in 1893 frorn a section of Tulare County. In 1908,. one h.undred square rnHes of territory were added 1.0 Kings County from Fresno Co1mty, bringing Kings County total area to approxirnately 1,390 square miles. Kings County is bordered hy Fresno County to the north, Kern County to the south, Monterey County to the \¥est and Tu1are Coumy to the east. There are four incorporated cities in Kings County: Hanford, Lemoore, Corcoran and A venal.

Kings County is a general lav.r county divided into five supervisorial districts on the basis of reg1stercd voters and populafam. Kings County is governed by a five--member Board Supervisors, elected by district. Members serve staggered four--year tenns, and the chairman is elected by the Board mernbers. Kings County administration includes appointed and elected officials, boards, commisskin.s and ccnnrn.ittees v,rhich assist the Board of Supervisors.

Kings County provides a wide range of services to residents, including public protection, medical and health services, education, library services and public assistance programs.

Kings County is located in the central San Joaquin Valley approximately half v1ay betvvee:n Los Angeles and San Francisco. The county is served by two rnajor highway systerns, Hwy on the east side and Interstate 5 on the west side., Both passenger and freight rail service is availabk to the an:a.

Assessed Valuatk.m

The following table sets forth the assessed valuation by category and property type for Fiscal Year l through Fiscal Year 2003-04.

1999-00 2000--01 2001-02 2002-03 2003--04

Kings County Assessed Valuation History Hy Category And Prnpe:rt:y Type<t)

Fiscal Years 1999-00 Through 2003-04

Non-Unitary _!coca! Secured .!Jtilitt

$

4524,292,941 167,766,696

$169,573,943 179,442,883

219,125,J 12

Total Before Total After Reh'. Increment !~.dv.Jncremertl

149.921,880 4,380,818,448 LL559, 4.735,804.448

714.415

751,746~631 3~961,200,562 4, i !5,()94.828 4,176,142,657 4.547,754,158

Source: California I'vfunicipaJ Statistics) Lnc.

B-9

lfnitary UWitv

1 7(t479iJ08 186,686.341

Top Twenty Prope.rty Taxpayers

The fuUov,iing tabk shmvs the total tax levied against the twenty largest property taxpayers in Kings County for Fiscal Year 2003-04.

Cou:ntv of Kinos v b

,,_fwe:nty Lasgest Local Secured Taxpayers

Lcprino Foods C11rnpany

J .Ct Boswell Co. Del Monte Corporation SK Foods LP Hanford },;!all Partners LP :Sand.m:!gc Partners \Va;,te Management Holding:,; lrn::. Wasatch Pool Holdings LLC Chevron US/\ Inc. lnternatiornd Paper Exopack LLC Hanford Tviedica! Plaza W iJJiam J _ W arrnerda rn CAG 45 fnc. Penney Newman Milling LCL Centennial Capital LP \Val-Mart Real Estate Business Trnst Calco! Ud. Dc.fong Investment C:Jroup Valley View Farms

2003-04

2003-04 Assessed Valuation

$287 ,71650 l 190,618,728

24,557,761 19,695,707 19,435,205 17,740,090 15~ 788 14,366,235

12,903,139

l 1,880.658 11,380,542 11 J 18,508

rJ) 2003-04 Loca.1 Secured i\ssessed '-ialuation: $4~936~822~607 Source: California I\tlunicipai Staristics, Inc,

B-10

Percent of Jotafll

5.83~:;'(, 3.86 2. to 0 .. 97 0.80 0.70 0.70 0.50 0.40 0.39 0.36 0.31 0.29 0.26 0.26 0.26 0.24 0.23 0.23

Popufation

As of January 1, 2004, the population of Kings County was estimated to be 141,400, an increase over the 2000 population of 128,000. The following table shows the population of Kings County for tbe years 2000 to 2004.

2000 200l 2002 2003 2004

County of Kings Population

As of Janua:ry l

128,800 Ul 134,300 l 141.400

Suurce~ State of California~ l)epartn1ent of f'jnance

Labor Market and lJnemployrne:nt Rate

As of 'March 2004, the civilian labor force in Kings County reached an estimated 49,690. This is an increase from the annual average civman labor force The annual average unemployment rate increased from 14% to 17. l for the same period. The table belnw lists figures for the civiUan labor force and comparative unemployment rates for the years

to March

County of Kings Civilian Labo:r Force, .E1nployme:nt and Unemployment

'l) Amnml A vcrng,{·

2000 JJiOl JOO~ ,200J

labor Force 45,600 47,300 49200 Employment 39,200 39.700 42.000 Unemployment 6,400 6,400 6.970 7~200 Unemployment Rate 14(fo l 3.8<H, 14.6~fo t4.6'1'a

(l) Bencbn_\ark March 2003; data not seasonally adjusted. Prelimimi.ry da,a as of lVIarch 2004.

Source: State of CaUfornia 1 Ernployinent I)evelopntc~nJ I)epartrr1ent.

B-11

7004(Z)

49,690 4L200

8,490 l7 ]%

Major Employers

The foHowing table lists the major employers m J:(ings County and their type of business, as of April 2004.

California State Prison Central Valley General H,,,,,m;-,,1

Del Monte Corporation Double L Contracting Hanford Conm:mnity tvledical Center Hanford Joint School District Palace Bingo US Nava1 Air S!ation Wal-Mart Warrnerdam Packing

County of Kings Major :Employers As of A.pril 2004

Corcoran Hanford I-Ian.fr)rd t .. en1oore Hanford Hanford Lemoore L,en1t;ore Hanford Hanford

Source; State of California Employrn\-;nt l)eve]oprnent DepartrnenL

B-12

Govemmeni J-Iealthcare Preserved Fm-its and V cgetablcs Personnel Supply Services 1-Ieahhcare l~ducatlon Amusement & Recreation (iovcrn111e11t Retail Merchandising \Vholesaic Groceries & Related Producis

Agriculture and Industry

Kings County's largest industry employers include government, agriculture and trade, transportation and utilities. Government positions currently account for more than 34%; of total employment Kings County. In agriculture, the second largest industry en1ployment sector, Kings County c1mently ranks tv,1c:lfth in the state in terms agricultural production vafoc. The 'Tulare Lake Basin area extensive cotton and tmnato farming operations, and the top five crops by value were :rn1Jk, cotton and cononseed,. canJe, alfalfa hay and turkeys. In recent years. Kings County has successfully diversified its cconorny by building upon this strong agricultural base by expanding imo the food processing industry with the processing of onions, garlic, cutton, tomatoes and cheese. in the trade, transportation and utilities employrnent sector provided approximately 1 all employment in Kings Counly, particularly in the area of retail trade.

The follmving table sbmvs lhe value of agricultural production for the leading commodities in Kings County for 1999 through 2003.

IV1:iJk Co Hon Cattle and Calves Alfalfa, Hay Turkeys Alfalfa, Seed Pistachios Tornaloes Wbeat Peaches Com Silage Grapes

Tota!

Source:

Litigation

County of Kings Value of Agrk.ultural Production

(in Thousands)

199.2 JOOO 20(Ll_

7~473 $293,313 .839 211.477 232,100 205.707

51,073 62~617 66,958 30.907 33.928 39.!)28 46.067 30,449 36.%6 26J)85 21.442 18.27 l 20,538 21,899 19,610

146 15,559 15,687

20.840 15.556 17.801 20523 15.533

$749,947 $818,013

Agricultural Commit,sioner, Annual Crop Reports.

J002

$303,507 205,353

66,544 50.186 33,388

32,237 29,045

26,848 23.709

$799,856

200.07 l

45J}07 30.117

37.744

22J21 26.4Ci0

$840,435

Kings County's County Counsel determined that arc no significant lawsuits or potential claims against Kings County that would materially affect the financial condifam Kings County.

Plans for Future Ho:rrnwing

The County reports that it anticipates issuing certificates participation by the end 2004 in an amount not to exceed miHion for the construction a nevv jail facility. The certificates are expected tn be repaid by revenues from court penalty assessments, although if the court penalty assessments are insufficient, the Kings County rnay pay the certificates from

B-13

moneys in its general fund. Kings County also anticipates issuing rnunkipal lease ohligarions during lhc 2003--04 fiscal year in the amou.nl of $2.4 million for energy retrofitting of Kings County buildings.

Kings County also ant1c1pates issuing other obligations in the total aggregate principal amount of approximately miUion payable from. its general fund around the same lime as the Bonds are issued. See "SECURITY AND SOURCE OF PAYMEt,TT-- Other Obligations the LocaI Agencies" in the Official Sr.atemenL

Other Infonnation

Kings County has recently implemented GASB 34 and has indicated that this accuunting standard will change the presentation of its financial statem.ents, but wiH not have a material adverse impact on its finandah.

The County's general fund revenue has been reduced by approximately $1.8 rniHion resulting from the loss of vehicle license fee revenue for Fiscal Year 2003-04. The County has budgeted for this reduction and does not H to affect its operations for the 2004-·05 fiscaJ year. Kings County anticipates repayment by tb.e State the VLF reduction in Fiscal Year 2006--07. See "R1sk Factors ---The Local Government A.greement" in the Official Statement.

Since the last actuarial valuation on June 2002, Kings County has contracted minor pension benefits enhancemems for its fire safety employees.

The audited 2002-03 Annual Firnmcia] Repon for Kings County has been completed and 1s attached hereto at Appendix D. The audited 200J-02 Annual f<'inancial Report of Kings County and unaudited financial information for fiscal year 2002-03 that vvere atlached to the Preliminary Official Statement dated June 4,. have been rcnmvcd.

B-14

CITY OF DA.LY CITY

Set forth belov,' is certain infonnation with respect to the City of Daly City ("Daly City" or the ). Such information was provided by Daly City except as otherwise indicated.

General

The Daly City is a general l::nv 'Which was incoq)()rated. in EH 1. Daly City 1s located in the nurth area San Mateo County, adjacent to the southern boundary the Oty and County of San Francisco and 45 rnHes north of San Jose. There are apprnxirnateiy 7.6 square miles of land included in the Daly City's boundary. Daly City is served by the Bay Arca Rapid Transit ("BART') system and is ac,cessibie by Interslate 280, U 101 and several state highways. Daly City's BART stations are irnportant transfer points for ccmmmters en route to San Francisco from Peninsula locations and local neighborhoods. Daly City is located with1n close proximity to the San Francisco International Airport and the Ports of San Francisco and Redwood City. Daly CHy is also by the Municipal Raihvay (IVIUNT) of San Francisco and. the San 1\!Tateo County Transit Districl (SAJVlTRANS ).

Daly City operates under a Counci1--1\ifanagcr form of govemnmnt, whereby policies the City Council are administered by a City lVfanager, who is appointed by the C'ity CounciL AU municipal departments operate under the supervision of the City Nianager. The Council consists

five members who are elected at fur four--year overlapping terms. The Council elects one the Counc1J members to serve as Mayor each year. 1V1unicipal serv1ccs provided by Daly City

include police, fire, public works, general government, parks and recreation, sanitary sewer, community development, planning, and library.

Daly City is part of the highly urbanized Peninsula, v.;hich consists of San Francisco, San Mateo, and Santa Clara counties. Less than I of the pop11!ation is retired, and overan labor force participation is 52%.

Daly City is a significant retail shopping area in San County. Daly City dr,nvs its shoppers from San Francisco and the neighboring communities of North San Mateo County. 'Two of the most successful regi.ona1 and cornrmmity shopping centers in the Bay Area., Semummte Shopping Center and Westlake Shopping Center, are located in Daly City.

Semnnonte Center, an 860,000 square regional shopping center located on Interstate 280, was constructed in the early 1 by Suburban Rea.Hy Company. Serrnmome Center is anchored by Macy's, Targcr. Mcrvyn's: and the Good Guys, and has over 140 other retail tenants. Serramome Plaza, which is adjacent to Serrarnonte is a mixed-use, office/retail project with Circuit City, Office Depot, Sportmart and Hollywood Video as ten.ams,

\Vestlake Shopping Center has nver square ft.::et of commercial space. This discount center is anchored by Sah.::way, \Valgrecn's, Burlington Coat Factory, H.oUywood Video, and Trader Joe's.

B-15

Assessed Valuation

The foHmving table shows the assessed valuations for Daly C1ty for fiscal years to 2003--04.

City of Daly City Assessed Vah.lations

200CH)l

2001-02 2002-03 2003--04

Secured lTnsecured

4,638518,217 132,857,473 5,033,633Jl48 l 32J01,446 5~482,283~726

7055)74 i48,807,194 169,352,103

Source: Caiifurnia iviunicipal Statistics, Inc.

Top Twent;y Property Taxpayers

Total Uefore Rdv. Increment

$4,439,531,323

4,771,375,690

Total After Rdv. Increment

$4J53.061,708

5.275,370,770 5,732,350,266

The following table shmvs the totaJ tax levied against the twenty largest property taxpayers in Daly City for Fiscal Year 2003-04 ..

City of Daly City T\venty Largest Local Secured Taxpayers

2003-04

HPivlC Pacific Plaza LLC Daly Serramonte Center LLC Ki1nco Vlestlake LP John Daly Blvd. Associates LP Seton !v'ledical (~ente,r Sky Line nt:t;!Jms Apartments LLC Daly Partners Il LP Linc Franciscan LP Serramome Corporate Center LLC Target Corporation, Lessee Serramontc Lessee Seagate Buchanan Associates LLC J3ay 1\partrnent c:on1n1unlties Inc, American Slore Inc. JS Group LLC First Arnetican Tax Valuation Citizens S&L /\ssociation, Lessee California State Automobile Association Shmgard Inc. Shyam Lodging Group LLC

Primary Land

Jl.'.?r

Office Building Shopping Center Shopping Center Apartments l\.1edical Buildings

Commercial Stores J'V[obile Horne Park Office Building Shopping Center Medical Buildings Office Htnlc1rng

1\partn1ents Supermarket Office Building

Office Building Office Building Industrial Hmel

d) 2003-·0,4 _Local Secuxed As:-;es~ed Vatuatiow S:\990.705.974 Source: California Jvlunicipal Stat!shcs. Inc.

B-16

2003-04 .Assessed

Va}t:rn,1im1

$122,455.621 115~4611354

:56,812,318 56J)71 ,438 34,262,346 28,089,485 27,317 . .587 2 t,100~000 1E(515~422 18.437,795 18,333, 157 i5,300J46 l2,989,t84 10,949,612 9,812.151 9,71

743 _ B,i4J,l05

Percent of Iot~l 11

:

2.049(1 L93 1.34 0.95 0.94 OSl 0.47 0.46 0.35 0.31 (Ul 0.31 0.26 0.22 0.18 0.16 0.16 0.16 0.14 0.14

11.37C:1:.1

Popufation

As January 1, 2004, Daly City's population \Vas estimated to be l 03,300, a decrease or from the 2000 population of The foHowing table shows the' population for Daly for the years 2000 to 2004.

City of Daly City Population

2000 200l 2002 2003 2004

As of Janua:ry l

103,600 103,600

J(l3,000 103,300

Source~ Staie of Ca1ifnrnia~ Departn1ent of 1-:;'lnance.

Labor Market and Unernployn1ent Rate

of March This is a decrease of 7

the civilian labor force in Daly City reached an estimated 51,3 frorn the 2000 annual average civilian labor force of 55,470. The

annual average unemployment rate increased from 2.1 to 5.8% over the same period. The table below lists figures for the civilian labor force and comparative unemployment rates for rhe years 2000 to March 2004.

City of Daly City Civilian Labor F'orce, Employment and Unemployment

1) Amuml Average1'

2000

Labor Force 55.470 En1pioy111ent 5ii..290 Unemployment l.180 Unemp.loymem Rate 2.1%

11) Bendirnark Mcerch 2003; data not s.::asonally adjusted.

t'rE:lmnn.1-ry data as Cif l\rtarch 2004.

~)Oi

740 52,()60

3.8%

Source: State of CaJ.ifon1ia. En1ployrnent Uevei.op111e111t I)epartrnent

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JOOZ iooJ

53,no 51,930 49.840 48~530

3,450 3.400 6.5% 6.5f}t

J,OO,f2l

5 iO 48.360

5.89(·:

Major Employers

The following table shows the rrn\jor employers in Daly City.

Litigation

Companv

Sctun Tvlcdical Center Jefferson School District

of Daly Target Sen-amontc tJ.S. Postal Service Genesys Telecommunications Lab

City of Daly City Major :Eimploye:rs

2004

Nmuberof En1pJovees

1,580 l,418

775 610 584 380

Dalv City is a defendant in various lawsL1its and is a party tn various clm:ms. The Chy Attorney estimates that the potemial claims against Daly City resulting from such litigation would not materiaUy affect the financial conditjon Daly City.

Plans for Future Borrowing

The City expects to issue cert111eate~ of participation in June 2004 in an amount not to

exceed 0.8 minion for the pu11)ose of financing other v,rarer utility improvements. Payment the certificates of partjcipntion wiH be secured by future 1,,vatcr utility revenues.

Othe:r Information

The City bas received a loan from the State Water Resources Control Board State Revolving Fund in the Amount $4,437,040 tu finance capital improvements to the Tertiary \Vater Treatment Project of the North San :rv1ateo County Sanitation District (the "Distrid'). The loan is secured from sewer service revenues of the District

Total vehicle license fees revenues constitute approximately l of the City's general fund revenues. The Joss of vehicle license fees under the State's cunem budget proposal would not exceed~ the City's general fund revenues.

B-18

crrY OI? JVIERCED

Set forth below is certain information with respect to the City of Merced ("Merced" or the ''City''). Such information v'1as provided by Merced except as other-1,vise jndicated.

General

Merced was incorporated in 1889 and operates as a charter city. IV1erced is located fo the County of Merced (the "J"vierced County") approximately 131 rniles southeast of Francisco and 275 miles northwest. of Los Angeles. Merced is a fuH servke city operating under a council·· manager form of government.

Merced has long been a Central California transportation hub. The town was born when the Central Pacific Railroad established a station in 1871, and rail service still plays an important role. \Vith llighway running through the City of Merced, and Interstate 5 on the West side the county., a substamial portion of all north/south traffic in the state passes through the Merced County. Merced's prime location in the California heartland ensures manufacturers and suppliers rapid and cost-effective access to the West's major markets, via truck, mainline rail, ur air service.

Merced's largest industry emp1oymcnt sectors are government, agriculture, manufacturing and retail trade. These four sectors combined provide Tl rhc Mcrccd's jobs. Employment in these sectors is expected to grow, especially in the retail trade sector, Industrjul expansion is progr1essing with the sale of over thirty acres in the Airport Industrial Park to several users. Recent industrial developments jndude the \Vestem Industrial Park, Aiq)ort lndustrial Park and University Industrial Park. Ivh~jor tenant~ include Safe,~'<1Y Food Processing, Quebecor and Malibu Boats.

Merced is also the home uf a new campus of the University California. Merced ,.vas selected an exhaustiYc 80-city she search university officials. Construction of the new $600 million educational facilities 111 2002 and is targeted cmnplction in 2005. The nev-1 ca:rnpus will encornpass over 500,,(H)O sq1.wse feet and wm house students, faculty and staff at its opening. The UC-Merced carnpus developrncnt will provide a major stJrnuius for the local econmny. The new acadernic community is expected to increase demand for housing Merced and surrounding areas, and housing starts are currently double the in,Pr:1°,,

rate cxperi,~nccd during the I The addition of the carnpus wiH create new local jobs by the year 20J 0, and create an economic benefit of $434 :million annually rhe Urne the

1 students. The University of Califurnia wiH help w rnake 1\-'lerced the educational and cultural cenier of the San Joaquin Valley. Campus theatrical productiuns, concerts, lectures, exhibits, dances, and workshops, as weH as visiting artists and will benefit the local connmmity. The avaiiabiliiy undergraduate and post-graduatt courses wiU insure that opportunit.Jcs continuing education arc available to our vv'orkfurce, and will be major assistance attracting new industry and economic growth to area.

B-19

Assessed Valuation

The foHov1ing table shows the assessed valuations for Merced for fiscal years 2003-04.

to

1999-00

2000-0l 2001-02

2002-03 2003-04

2,123,17L394 2,20 LU 1,642

2,410,877.512 2,613362,863

S(:,iurc:e: Ca1ifon1Ja _'f'-.,lunicipal Statistics, fnc"

Top Twenty Property Taxpayers

City of Me:rced Assessed Vah.lations

7~01 t1952 6,673,878 5,889,898

$.160,,305,537 154.853, 138 162,524,826 223.179,317 228,667 7.521

Total Before Rdv. Increment

87,029,356

2,285,()36,484

2,370.330,346 2 .. 639,946,727 2,847,866,47]

Total Arter R.d v, Incr;ement

l,892J 720 i ,953,334,599

2.170,472,906 2,362,250572

The f0Hov1ing table shows the total property tax levied against the twenty 1arg:est propeTi.y taxpayers in Merced for Fiscal Year 2003-04.

City of Merced T,venty Largest Local Secured Taxpayers

2003-·04

Property Owner

l)Liet,ec:or Vi/orld Conopco Inc. ,.,,"·";·,," Inc. SchoUe Corporation l'Vlerced rv1all Ltd. California Rental Properties LLC Lyons Investments, a Partnership Costco Wholesale Corporation iVIcLane c::ornpany lnc. Timothy F. and Billie K. Razzari., Co-Trnsl Clifford l\. and Judi.th G. Zachman, Tn.1stees HD Devdoprncnt uf Maryland Inc. Village Landing Don and Thelma frene Uragnm.11

Dayton Hudson Corporarion 1\/[erced Iv:Iedica! Jnvestment Group Merced Retirement Residence JonJ. JVIerced Cormnons Partnership Jarm:;s E. and Raley TceL Trustees

Primary ·Land Use

Industrial fndus1rial Industrial Industrial Commercial Apartments Industrial (~on1xnerciai Industrial Cormnercial Apartments Commercial Apartments l\.gricu1turai Commercial Comrnercial Apartments Commercial ,Apartments Commercial

2003-(}:L Lo\.~al Secured l'tssessed 1/aluatioo'. $'.~\6J 3.362,86J Source: Ca!ifornia j\/fun1cipal Statistics. Iuc,

B-20

201X~-04 Assessed

Vahiation

$ll3,266.,964 45 .. 844.418

188,416 26.659J69 13,526.990 12,985.,447 12.,607.214

10~713~063 10,661.964 I 0,253.,05E

7J)03J5()

$369,7 t5J)06

Percent of Total (tJ

1.75 U6 1.02 OS2 0.50 0.48 0.4(i 0.4! 0.41 0.39 0.37 0.3(i 0.34 031 0.29 0.27 0.27 0.26

14.15%

Popufation

As of January 1, 2004, lVlerced's population was estimated to be 69,800,. a increase over the 2000 population of 63,500. The foHov.ring table shows the population for J\Ierced for the years 2000 to 2004.

2000 2001 2002 '100.i 2004

City of Me:rced Population

As of January l

64500 66.500 68.200 6~\800

Sou.rce: Stale of California. Deparunent of _Finance.

Labor 1\ifarket and Unemployment Rate

As of Iviarch 2004, the civilian labor force in Merced reached an estimated 28,360. This is an increase of 1 from the annual average civilian labor force of 25,590. The annual average unemployment rate increased from to l over the same period. The table belov,1 11sts figures for the civilian Jabor force and comparative unernp]oyrnent rates for the years

to March 2004.

City of Merced Civman Labor Force, Ernployment and Unemployment

''!) Annual A verage1-

Labor Force Ernpl.oyrnem Unemployment Unempluyrnent Rate

25,590 21.910

3,680 14.4%

rn rJ.,,nr·•1wad l\f,n;l, -~po'<· ·1at" w,t sca.smmU!y adjusted. ,;; l'1~eii:nn;ar; ·d::r: a,s ~o,f ;;,~c1~2C;),l,

25~350 21~790

3,560 ]4.0%

Source: State of California .. Employment Ocvclo1:m1,rnt Department.

B-21

26.CiOO 22~780

27,260 23.260

14.7%

28~360 23.210

:'U50

Major Employers

The following table shows the rrn\jor employers in the City of Merced.

~OU!Q?llV.

Quebecor World Malibu Boats \Verner Company \VeUmade Scholle Corporation

Source: Clty of J\1erced.

Litigation

City of Merced Major fvlmmfacturi:ng and Processing Employers

2004

Location ----Western Industrial Park Airport Industrial Park Airport Industrial Park University Industrial Park Western Industrial Park

,-ndustr:v, ComrnercfoJ Priming Ski/Wakeboard Boats Ladders Lighting Fixtures Food Packing

Merced is a defendant in various lavvsuits and is a party to various clairns. The City Attorney estimates that the potential claims against M1erced resulting frorn such litigation would not materiaHy affect the financial condition of tv1crccd ..

Other Information

Merced has issued revenue bonds in June 2004 in the aggregate principal amount of 1,000,.000 and $8,75\000 in connection with its wastewater system and water system,

respec[ivdy. These bonds are payable from wastewater system and \Vater system revenues and will not he secured by a pledge on general fond revenues. Additionally., the City has a construction loan with County Bank, the proceeds of which are be1ng ust:d for the instaHaUon vvater and sewer to the new University California -- Merced campus. Upon completion the project, the financing wiH be converted to permanent financing with University of California as the ohligor.

Based on lhe Governor's :rvfay proposed budget for Fiscal Year 20()4 .. 05, lvTerced could experience a potential loss revenue approximately $667,000 ,1vhkh is approximately 2. of the City's General Fund revenues.

The City currently pays post-ernployn1ent health henefits for 153 retirees at an approximate annual cust of $600,000. Current contract commitments require that the City provide heath care insurance for another 420 crnployees upon their reUrement. The Oty will not have an obligation to provide post-employment health insurance benefits for police officers and sergeants hired after December 31, white collar workers who are part AFSCNLE and hired after December 3 L 2003 and members of the Tear:nsters hired after December 31, 2004.

B-22

CITY OF MlLLllRAE

Set forth belffw is certain information 1,.vith respect to the Cit.y of MiBbrae ("lVIiHbrae" or the "City"), Such information was provided by Minbrae except as otherwise indicated.

General

Millbrae ,vas incorporated in 1948 and operates as a General Law City. The City is located in the County of San Mateo (the ''San Mateu CountyUl approximately 15 mHes south San Francisco, 35 miles north of San and adjacent to the San Francisco Intemationa1 i\irport ("SFO"). 1Viillbrae is served the Bay Arca Rapid Transit ("BART") system and is accessible hy Interstate 280, U 101 and several state highways .. ~v'IJilbrae's BART station is an important inter-rnodaJ. transfer point with the Caltrain system cmmnutcrs en route to SFO fro:m local neighborhoods as wen as locations frorn San Francisco, the Peninsula and the entire Bay Area. Millbrae is located v.1ithin dose proximity lo the Ports San Franc1sco and Redwood City, Millbrae is a full service operating under a council-administrator forrn government

A.ssessed Valuation

The fol1owing t.abk shows the assessed valuations for Nlillbrac for fiscal years to 2003-04.

1999-00 2000-01 2001-02 2002--03 2003-04

$1 ~759J)25;348 L869,4 2Jll l ,836, 71 L 2,107215,515

City of 1\'linbrae Assessed Valuations

$7~492,088 136 765

8,309~812 7,105,108

Source~ California rv1u.nicipa1 Statistics, J nc"

B-23

lJnsecured

52,356,002 i.5

Total Before Rdv:: lncremerit

$1,817,171,417 1 .. 926,278, 139 2l)76,634,733

67,881,329 2.34) ,.367,344

Top Twenty Prope.rty Taxpayers

The fuUov,iing tabk shmvs the total property tax lev1ed against the t1vventy largest property taxpayers in the City of :rv1iHbrae for Fiscal Y t'ar 2003-04.

City of I\,1iUbrae ,,_fwe:nty Lasgest Local Secured Taxpayers

2003-04

Primary Land :Use

2003-04 Assessed

,Yahmtiog

'vVestin Bay Hotel Company SLT Realty LP

Iiotel $ 40~535.625

l'v1agno1ia of Millbrae Inc. r\;i arymmrnt Greenhills LLC Glenborough Panls J\fillbrae LLC 'vVilliams Portfolio I Townsquare Associates l\rnerican Store Properties Inc. .John and Susan C. \Vilms Millbrae Hotels Suites LLC Green Hills Country Cluh World Journal Inc. Ray1nond IJenardi EMJ P Partners LP Millbrae Corn pally Ramkabir LLC Paul D. and i"'fancy Jean Wright Integrated Storage Properties rn LLC Poplar Apartments LLC C'.alifornia

Hotel Senior 1\ssisted Living Apartments Recreational (~ondcnni niurns Apartments Commercial Hotel l!ote1 Golf bdustrial Apartn1ents Hotel Shopping Center Hotel Cmnmcrcial Indnstri al Apar!mellts Commercial

Club

2003-04 LocJ.l Secured A.ssessed \Taluation: $2~279~863.,221. Source,: C\iJifornia J\1_unicipaJ. Statistics~ lnc.

B-24

9,961,255 9,735~187

6,223,606 6~t87,430 5, 5,756,566 5~537 4/168,362 4,551,579 4A-63,384

Percent of Iota! (t)

1.78f:~·C 1.38 l.06 0.83 055 0.52 0.44 0.43 0.36 il32 0.30 0.27 0.27 0.25 0.25 0.24 0.22 0.20 0.20

10(}7%-,

Population

of January L, 2004, the City of MiHbrae's pupulation was esfonated to 20.,450, a decrease of l .2% frorn 2000 population of 20, The folkY...ving table the population for the City Millbrae for the years 2000 to 2004.

2000 2001 2002 2003 2004

City of 1\·linbrae Population

As of January 1

20 .. 700 700

20,600 20,450 20,450

So1.1rce: State of California., Departrnent of Fjnance ..

January 1, the population for the County San fvfateo \J\iaS 712,.400, a mcrease over the population level 706,300. The foHmving table the population for the County of San Mateo for the years to 2004.

County of San Mateo Populatfon

2000 2001 2002 2003 2004

As of January 1

706,300 709.)100 709,900

712.400

So-:1rce: Stale of Ca]jfornia, J)epmtrnent of P'inance.

B-25

]_,ahor Market and lJ:nernployment Rate

As of l'vfarch 2004, the civilian labor force in the MHJbrae reached an estimated 10,380. This is a decrease from the 2000 annual average civilian labor force of 1] ,410. The annual average unemployment rate increased from l to over the same period. tabie below lists figures for the civilian labor force and comparative unemployment rates for the years 2000 to March 2004.

CHJ of Millbrae Civilian Labor Force, En1ployment and tJnemploy:ment

Annual A ve:rag,/1)

Labor Force Employment Unemployment Unernp!oymcm Rate

1L410

140 l.21:iJ

ti:, Benchrnark 1\/Iarcb 2003: data not seasu1rn.u1y adj11stn·d. Prelin1inary data as ot~ l\!farch 2004.

11,180 10,930

250 2.2{:X:1

Source: State of California~ Er1Jpioyn1ent .Developrnent I)t:partn1e-11t.

I!lQJ lJl@

10.750 10~4·70

410 400 3.8'11 3.9%

iillM:!.

l(U80 10,030

350 3.4%

As T\/farch 2004, the: civilian labor force in the County San Jvlateo reached an estimated 366,800. This is a decrease of 83% from the 2000 annual average civrnan labor fcm:e of 400, The annual average unemployment rate increased frorn 1.6%, to 4.4ck over tbe s,m1e period. The table below lists figures for the civilian labor force and comparative employment level and unernploymcm rates for the years 2000 to "March 2004.

County of San Mateo Civilian Labor Force, En1ploy:ment and Unemployment

Annual .A ven1g(?>

J!)Oi) 1001 7001 20QJ

Labor Force 393.200 370,600 Employment 393.600 381,700 361~300 35 t ,800 linernployment 11.500 19.000 18,800 t1nernployment Rate 1.6% 2.9% 5.(Yfo 5. 1

( 1> Benctunark l\1arch 2003~ data not seasonally adjusted.

Preiirr,irwsy data as of j\farcb 2004 . .Source: State of Ca1jfornja, Ernpluyn1ent I)eveloprnent Depa.rtrnenL

B-26

20Q4<2:

366,800 350.500

16.300 4.49(,1

Major Employers

The City of MHJbrae is a ''bedroom'' connnunity, and the n1ajority of its re:-ddents commute by car, rail or bus to workplaces outside of Millbrae. Millbrae's economic conmmnHy is a mix of retail, shopping, restaurants, service businesses, hotels and public services. According to the Millbrae Chamber of Commerce, the three largest employers in I'vimbrac arc the \:\/estin Hotel and the (]arion Hotel, both crwned by the Starwood Hotel Group, and the El Rancho Inn and Suites. The Westin and the Clarion each cn1pioy approximately people and the El Rancho employs between 50-1 people. In addition, there arc over licensed businesses in Millbrae and the vast majority these businesses consist small retail stores and shops employing less than five people.

The major en1ployers in the County of San Mateo are listed belu\.,-.

Applied Biosystems Group DPR Construction Inc. Electronic Arts Inc

Frank.Lin Templeton (1enentech foe. Mi.Hs-Pcnin:mla Medical Center Oracle Corp

Raychem Corp Sequoia Hospital Seton Medical Center Siebel Systems Inc.

SIU International United Airlines UPS Visa Inte:mational

County of San Mateo Major Employers As of April 2004

Foster R.ed,vood C~ity Redyvood (:i1y

San Mateo South San Francisco Burlingame Redwood

Menlo Park Redwood City Daly City San Mateo

Menlo Park South San Francisco South San Francisco F(-:.ster (~ity

Source: Caljfornia ErnpJoyn1ent l)evelc,prnent Depart:rncnt

Litigation

'[ype of Business

Professional & Cornrnercial Equipment f\T(n1resid.ential Building (~onstruction Cornputer Prograrnming, Data .Processing. and Other Cornputer Related Services Security Brokers & Dealers

Proprietaries & Sundries l{ospi!als Computer Programming, Data Pnx1::s1anR and Other computer Related Services E!eclronic components & Accessories Hospitals Hospitals Computer Programming, Data Pnxt:ss,m}~ and Other Computer RclcJed Services R.esearch !3z Services Air Transportation Freight Transportation Business Credit lnstitutions

MiHbrae is a defcndam in various la\,vsuits and is a party to various claims. The City Attorney estfrnates that the potential claims against MiUbrae resulting fron1 such HtigaUon would not materially affect the financial condition of Millbrae.

lVIillbrae has indicated that it does not have any current plans for future borrowings.

B-27

Othe:r Information

The City reports that general fund revenues have been reduced by an estirnaled $300,000 Fiscal 'Year 2003--04 and by an estirnated for Fiscal Year 2004-05, The City has

budgeted for this reduction and has taken steps to reduce expenses.

B-28

ClTY O:F MON'I'EREY PARK

Set forth bdow is certain information with respect to the City of Monterey Park CMonterey Park'' or the ''City"). Such information was provided by fvfontercy Park except as otherwise indicated.

General

IVIonterey Park was incorpuniJed in 16 and operates as a General Lrw City under the Council--Manager form of municipal government l\fonterey Park is located in the Crnmty Los Angeles (the ''Los Angeles County") approximately 8 miles east of the City of Los Angeles. The City is a fuH--service municipal govennnent, offering its residents police, fire and emergency rnedical protection., water, sewer and refuse collections, public infrastructure improvements, and culture and leisure prograrnm1ng. Striving to blend residence and conuncrce, lVIuntcrey Park maintains of its space for residential living, 11 for industrial, for commercial and retail use, and for schooling and recreational faciiities.

A.ssessed Valuation

The follovving table shows the 1999--00 to 2003-04 ..

valuations

City of Monterey Park Assessed Valuations

l <)99--00 2000-01 200t-02 2002--03 2003--04

Local Secured

$2,9 16,91! $3/)37~523~828

$3,636,302,37()

$244,321 $.530,721

$370.275

Source: Cahforni;i 1VIuniCJpal Sh1.tistlcs, Inc

lJnsecured

$101,623.205

$125,783?288 dJ/.J ... ) /., () .7 94

1\!Ionterey Park for fiscal years

Total Before _Rdv. Increment

$3,015,484,437 $3, 137 ,820,621 $3.332.929.016 $3,520~4207.586

731

Total After B_rl v, lncn:nu~nt

Top Twenty Prope.rty Taxpayers

The fuUov,iing tabk shmvs the total property tax lev1ed against the t1vventy largest property taxpayers in Monterey Park Fiscal Year 20((~--04.

City of Monterey Park ,,_fwe:nty Lm:gest Local Secured Taxpayers

2003-04

Arden Realty Finance Partnership TJn.ion Bank Garfidd t\1edical Center Inc G MS Fi YI:': LLC

Bank of California lVIonterey Park Hospital r,lar Investrncn! Rcai Estate Investors 1984 l eL al. NNN 901 Corporate Center LLC TSL lnc. lVIonterey Atlantic Place Partnership Lincoln Piaza GanJen Restauran! Fu Jen Company LLC Lytc Optronics lnc. Aespace America Inc. BCTC Dev,,loprncnt Curpornlion r.til!er Brothers Coral Circle LLC Monterey Park Village Associates Energy First Credit Union AH AS fnc.

PrimaIJ Land Use

Office Building Office Building Medical Buildings Shopping Center Office Building Hospital c:onn11crcial lndustrial Commercial Comn1ercial Shopping Ccmer Comrncrcial Office Building Industrial Commercial Cornmercial (~ornrnercial Commercial Office Building Commercial

;,1·1 iooj-n-04--Local Secured 1\ssessed -valuation: $3 .. 636~302~376.

Source: Los Angl-~les /\ssessor 2003-04 Secured Tax Ro!Js.

B-30

2003-04 Assessed

,Yahmtiog

$ 47.l 19,016

38.()6:5,635

'"'"' ., .,,·,.,_, 10 l I,938,723 11,050,823 l0,7 l0,000 10,072,065

$363,239~974

Percent of

Jotal (l'.

l.30% 1.06 1.06 1.05 (),85

0.63 0.50 0.44 0.38 033 0.33 0.30 0.29 0.28 0.27 0.19 0.19 O.El (J.18

9.99%

Popufation

As of January J, 2004, Monterey Park's population vvas esthnated to be 63, an increase of 6. from the population of 59,900. The following table shows the population

l\!Ionierey Park for the years 2000 to 2004.

City of JVlonte.rey Park Population

2000 200l 2002 2003 2004

As of Janua:ry l

5•),900 61 62-600 63~300 (i3.900

Source~ Staie of Ca1ifnrnia~ [)epartn1ent of 1-:;'lnance.

As of January l, the population Lus Angeles County was estirnated at J0,103,100, a increase over the population level of ~},487 The following table

the population for Los Angeles County for years 2000 to 2004.

Los Angeles County Population

As of January l

2000 2001 2002 2003 2004

9.487,400 9,6(JJ .800

10,103,000

Suurc(;,: State of Ca1jfornia. l)epartrnent of FiDanct.~.

Labo:r Market and Unemployment R.atc

As of March 2004. the civilian labor force in I\,'Iunterey Park reached an estimated 30,340. This is an increase of 2.1 frmn the annual aycrage civilian labor force uf 720. The annual average unempJoyment rate increased from 4.4%) to 5.1 over the same period. The t,1bk below lists figures for the civilian labur and comparative unemployment rates for the years 2000 to IVIarch 2004.

B-31

City of Monterey Pa:rk Civilian Labor Force, Einpfoyment and Unemplo;yment

( 1' Annual Average .-J

Labor Force Empioyment Unemployment Unemployment Rate

29.,720 27.,700

1

i,J) Benchffm.rk Ivian~:b 2003; data not seu..smrnLiy adJnsted. i're:lrn1m,1Ty data as df March 2004.

30380 28,950

1,430 4.7(}{1

Source~ State of California.~ brr10!1.ivrne1it Lli~'1'el(1p1nent [)epartn1ent.

30.400 26~680

1,720 5.6%,

1:nm 5.9%

30,340 28.800

L54fl 5.l %

As rv1arch 2004, the civilian labor force in Los Angeles County reached an estimated 4,774,700. This is an increase of from the ::woo annual average civilian labor force 4,671 ,800. The annual average unemployment rate increased from to 6.J over the same period. The table belcn:v lists figures for the civilian labor forct:; and comparative unemployment rates for the years 2000 to March 2004.

Los Angeles County Civi1ian Labo:r li'orce, Ernployn1.ent and Une1nployrnent

Annual A veraoe{l) b

2!!00 IfJOt J.00~. JOOJ

l. .. abor Force 1.,800 4.777~000 4,789.800 4,788,800 Employment 4,421,900 4,465,600 4,451,700 Unemploymenr 270,100 324~200 337JOO Unempioyment Rate 5.390 5.7Sb 6.8% 7.0 1;ib

d'.i ____ B~-~;-;J;~~-~~~-i~--T\ti~rch 2003; data not sea.sonally adjusted. Prelirninary data as of 1\1arcb 2004.

Source: State of California, Ernp1'ovm1cnt De:veJorimen1 Depa.rrmem.

Major Employers

The major employers in the City of 1\/fonterey Park are listed belmv.

City of Monterey Park T\!lajor Employers

2004

!'J!WIOYer East Los Angeles Cornnmnity College Union Bank !'r·uoes;,rng Center tJnited (~alifornia I1aak Processing (~enter Garfield Medical Center Los Angeles County Sheriffs Dept. Los /\ngdes Counly Children's Court Community Development Commission

B-32

1,000 896 791 736 500

JOO~(Z)

4,774,700 4,484,200

290500 6.l.%

Litigation

!;):!mJO Vfl: of lV!onten:y Park

~.ii,~mt<-'•''" Park Hospital Southern California Gas Company Pacific Hell A T & T Communications Chlnese Daily News

Store (2 Locations) California liighvl'ay Patrol La Colonial Tortilla Products, Inc. (2 Loe) Sav·-()n Drugs, (2 locations) Htcr1!a,2e Manor Healthcare Southern California Edison Company Tv1onterey Pa,rk t:onvalescent }Iospilal Shun Fat Supermarket

Source:

N um her of Ern.m.oyf_es 500 374 290 281 233 166 143 L31 BI 120 96 87 84 82

Monterey Park is a defendant in various lawsuits and is a party to City believes that the potential dairns against rvlontcrcy Park resulting would not materially affect the financial condition of Monterey Park.

various claims. frorn such litigation

Plans for F'uture Borrowing

Monterey Park is considering entering into certain lease/purchase agreements for water system improvements and the purchase of major equipment.

Other Information

In March, 2004, 1V1onterey Park entered into a five-year lease/purchase agreement $770,,000 vvith LaSalle Bank National A.ssociation for the purchase of City vehicles.. Additional debt may be issued to fund water system improvements for major equipment purchases.

]\1(,nt1"rc··,1 n,,rk- ... ,_,l..np1·"P'~ ~-i {-)··1')() (){)() i-i·1 u<>h11·,··l1-' ji,,nnse-' {',_,,,,, ("\11· P"\) an•.,.,-,.c . .lj,· ,u_hi,.··_ ..... - J~ ·'l-.-'~- et Lt1L '-'-' ,...._. 'i/'\,v'-...1 ,i.; ••. ., .... \_., \_,.,J -"., ..;'l,..,J.. ti...,_,., __ 1\.~\..·.ltl_r_ _u, .. ,v•J . -·-~- .Ji.b,.t--!.4,_LJ Vrl.1~ lj

amount to 135%, the City's general fond revenues. The eslimated loss to Monterey Park for 2004-05 is approximately $546,000, or of the General Fund budget. Monterey Park anticipates repayment hy the State the VLF reduction in Fiscal Year 2006-07. See "Risk Factors -The Local Government Agrecrncnt" in the Official Statcrncm..

t\.fonterey Park has indicated that voters had previously approved certain special retirement property taxics which are available to pay for l\11onterey Park's pension costs. Ine special tax \Vill be available to pay debr. service on the Bonds. For 2004--05, the projected retirement tax is minion.

1V1onterey Park has one local business taxpayer (an auto dealership) which contributes in excess 1 the City's tax (it represents a General Fund budget) received by the City during the 2003--04 Fiscal Year.

B-33

Monterey Park curn .. ~ntly pays post-employrnent health benefits for 189 retirees at an approximate annual cost of $776,000. Current contract commitrnents require that the City provide healthcare insurance for another 347 fuH-tjmc employees upon their retirernenL The cost of providing benefi[s tu these retirees in the near term is not expected to be significant; the long-term costs of providing benefits to retirees is not presently kno,vn.

Proposition 218 and 62 cannot materially impact any existing taxes, fees and assessments coliected by the City or fhturc collection such taxes at their cun-ent rates. Tbey may impact taxes adopted in the future and future increases in rnxes.

Monterey Park is currently a pany to litigation involving hazardous materials, hm,vcver, the City does not anticipate any adverse financial effects as a result of this litigation.

Based on historic results and assuming the continued viability of the Court Appeal decision in County qf Orange v. County cf Orange County Appeals Board No. 2 (the "Orange County Case"), the City does not expect any ongoing ur expected challenges to assessed property valunlions to have a significant effect on the City's finances. No evaluation has been made concerning the effect on the City's finances if the Orange County Case is overturned on appeal. See "RISK fiACTORS - Recent Litigation Regarding Increase in ,Assessed Valuation" in the Official Statement for a description of the Orange County Case,

B-34

CITY OF RIVERSIDE

Set forth below is certain information v1ith respect to Lhe City of Riverside ("Riverside" or the ). Such jnformation was provided Riverside except as other-1,vise jndicated.

General

The CHy of Riversjde is a charter founded in 1883 and operates under a Council-Manager funn 2.overmnent. Riverside is located in the County Riverside (the "Riverside Coumy") approKimate]y miles from Los Angeles. The City Riverside provides is a fuH range of services to citizens including sewer, vvatcr, electric, refuse, po]jce, fire, recreation, parks, airport, museurn, libraries and street services.

Assessed Valuation

The folkrwing table shows the assessed valuations to 2003--04.

City of Riverside Assessed Valuations

Riverside for fiscal years 1999--00

1999-00 2000-0l 2001-02 2002-03 2003-{)4

$ $ 630,052, l 09 $10. l 0 . .733,676,024 l l ,618,309,751 12525,074,Hi3 13,620J 66,707

Sourci.:,: California i\-1lu1J<:1pal Statistics., Inc.

Top Twenty Property Taxpayers

19,124,138

18, 1 I 1,595 12,843,594

795,333,567 972.883,427 835.370.922

l 1 .. .435,609592 12,433 ,009 ,590 l:3,516,069, 185 14.,468,381,223

The following table shows the total propeTi.y tax levied against the twenty largest property taxpayers in the City uf Riverside for Fiscal Year 2003-04.

Cit}' of Riverside T~·e:nt)' Largest Local Secured Taxpayers

2003-04

Tyler Mall LP State Street Bank & Trust• ·nrmv.,n·" of California Riven;ide }leaJ.thcare Syste,n1 Charter (~on1LnunJca!ions Entertainn1en1 lI Rohr~ Inc. Lyon Corona Pojnte California Stale Teachers Retfren1ent Systern

Priniary Land JJse

Shopping Center/~v1all \Varchouse

I-lospital Cum.munications Industrial /l..0::1.rtments

B-35

2003-04 Assessed Valuatio~

$ 11~12,4 H\201 94,846,282

94,669,360 60,178,663 56,7()6,46-4 55,79~(880 54~359 .. 183

Percent of Total •0

IJ.70

(l.70 0.44 0.42 OAl 0.40

PrQ_Perty Owner Pepsi CirLmp LLC Press Fr;l1>,TW1'P Cr,l.

T\/Jj~~sion (Jro've Pa.rk A;:1Rrtmeffls J\1etal Container Bryan K l:<ichrer Rdlpbs (}rocery Co. Universjt:y \T_ill_age l"'~-ordstron1 Inc. Kilroy Realty Square Parl11ership VVindernerc at Syca!nore lrigblands lviission Grove Plaza LP Historic M1ssic>n Jnn Curp. Dow Jomes & Co. Inc.

Source.· Califcirnia M1:m,,c11pal Statis1ics, Inc.

Population

Primary Land !I§S:

Industrial Industrial

[ndustrial f\par( 1T1en rs IndListrial Cornrnercia1 l)epartrnent Sture Offic,: Building .i\partinenls .::ilJ:or)ping Center

lndustrial

2003-04 Assessed

Valuatfrm 48587,342 4.5,263J)tl 4:i~567 ,46 l 4 l ~423~449 :16,77 l ,OOO 35~406~.3]9 32,904,086 30~670~3()7 28.777,390 28,440)000 27 ~ 9~10J)9 l 26.426)884

·-- 25.569296 $1,010,766.689

Percent of Total 111

03() o.:n 0.32 0.30 0.27 0.26 0.24 0.2.3 0.21 0.21

(J,19 (]J-2 7.42'!0

As of January 1, 2004, the population for the Cily of Riverside was estirnatcd to an of 9.1 over the 1999 population 253,800. The following table shows

of Riverside for the years

City of Riverside Population

2000 2001 2002 2003 2004

As of January l

to 2004.

253,800 261.700 270. l 00 276.300 277~000

Suurce: State uf Ca1iforHia. Depa.rtnH.~nt of Fina:uce.

As January 1, 2004, the population for Riverside County was 1,776,700, a 15 increase over the 2000 population level of 1,533,800. The follo'vving table sho\vs rhe pupulation for Riverside County the years 2000 to 2004.

Riverside County Population

2000 200] 2002 2003 2004

As of January 1

1,533,800 1586,900 1 ,U'+0.01./V

L776.700

S,Jurce: State of Ca]ifcrnia~ Dcpar!~nent of _Finance.

B-36

]_,ahor Market and lJ:nernployment Rate

As of lv1arch the civilian labor force in the City Riverside reached an estimated 177,340. This is an increase 15. from the annual average civilian labDr force of 153,230. The table below lists figures fur the civilian labur force and comparative unemployment rates for the years 2000 tu March

City of Riverside Civma.n Labor I;'orce, ElnpioymenJ and Unemployment

AmmaJ A verage0 )

20(!!! 2001 ~)02 JOO~

Labor Force 173,840 Employment 151,J90 158J40 l llnemployment 8,390 1(),180 J.0,440 Uncmploymenl Rate 5.5% 5.2%, 6.0% 6.0%

(l) Benchrnark Tvlarcb 2003~ dala not \,:asmnl'ly m.,.1a~,c,,1.

Pre1irnlnary data as of fvTarcb 2004. Source: State of California, Ernploymeot Dt:,velq)ment Departrnen1.

JOO,f2l

177,340 167,250

l0,090 5.7</[)

As of March 2004, the civilian labor force in Riverside County reached an estimated 834,000. This is an increase 15.Y.10 from the 720,700. The table helmv lists figures for the unemployment rates for the years to March 2004.

annuaJ average civilian labor force civilian labor force and comparative

Riverside County Civilian Labor I;,tH''t:e, E1npfoyrnent and Unernployment

Annual A veraoc(l) ~

lJ1bor Force Employment Uncrnployment Unemployment Rate

JQQ!J,

720 .. 700 680,900

39.800 5.5%;

,i', Benchmark March 2003; data not sea.srn1ai!ly m, 1"'"'·'"·

Prelirninary data as of _\\{arcb 2004.

~ill1

750JJCH) 710,700

,..}0 ')'-){) .).;,,Jl.,V

5.2%

Source: State of Ca1iforn]a~ bnrni,w1nc11t Developn1ent JJepart111en1.

B-37

i!l~. ~tQ;!

746,20() 48.300

6.} Cf()

JJ}JL{~

834,000 786.200

5.7%

Major Employers

The following table shows the rrn\jor employers in the City of Riverside.

Rt ver:,idc Sheriff\; Department Riverside Unified School District Kaiser Permanente Medicat Center Alvord Unified School District Prcss-finterprise (~on1pany Riverside Corn_rrnmity College Riverside Community Hospital Goodrich Markel Broiler IVJanagen1cr1t Inc. Riverside City Police Departrncnt Luxfor Gas Cylinders Fleetwood hn tP.1;-rw·1 ,1'"

Johnson lViachinery Pepsi Cola Bottling Group Riverside County Office of Education Riverside rvledical Clinic Riv,:rsidc Public Utilities SBC The Historic Mission hm Taco Bell/ET Tacos lnc.

City of Riverside Major :Eimploye:rs

2004

Source: G-reater Ri vcrside Chan1ber uf Co1nn1erce~ i\tay 2004,

Litigation

Number of Em~lovees

3,000 1.600

1,200 918 900 750 600 550 540 :500 500 500 500 500 :500 500 400 400

R.iverside 1s a defendant in various lawsuits and is a party to various claims. The City Attumey estimates that the potential clairns against Riverside resuhing frorn such Ht1gaticm would not rnateriaHy affect the financial condition of Riverside.

Plans for F'uture J.forrowing

Riverside indicates that two IlC\V assessment districts arc in the process of formation and will issue bonds upon fonnation and that another assessment distrkt is in the process refunding its bonds. bonds win not be secured by a pledge on general fund revenues.

Other Information

In December 2003, Riverside completed a $53 million certificate of participation financing to finance various rmmkipal construction and acquisidon projects, induding a fire station, park irnprovements., a parking stmcture, sewer improvements, a police station and a library. These certificates of partidpation mature in In early 2004, Riverside complt'ted two bank finandngs in the aggregate amoum $3.8 in connection with a software project.

B-38

Furthermore, voters have also approved general obligation bonds to construct certain fire facilities.

In June Riverside issued $110 rnil1ion of Electric Revenue Bonds for generation and distribution fadlities. Riverside's Redeveloprnent Agency recently issued Tax Allocation Bonds in the aggregate principal amount $7.5 miUion. These bonds are not secured by a pledge on general fund revenues.

Riverside's Street Light Assessment District revenues were challenged by the Howard Jarvis Tax Payers' Association. Riverside has prevailed with respect to this challenge.

The Cily reports that the loss or the backfiH for reduced motor vehicle license foe revenues could result in a reduction of approximately $11 million or YYc of general fond revenues. See "Risk Factors --- The Local Government Agreernent" in the Official

B-39

[Trns PAGE INTENTIONALLY LEFT BLANK]

APPENDIX C

SU[\ilMARY HISTORICAL l?INANCIAL INFORM.ATION

[Trns PAGE INTENTIONALLY LEFT BLANK]

Jl,./COAIF __ S?'ATEJ.IE/Y?'

'fotal Expc11ditim,:,,

Tota! Oth~r Fil1::mcing Sourc~s

Net lncome

Adjushnents + ·r rm1:;fers

Ending Fund B,J lr-mce

BAJ __ .A.l"'CE SHEET

Tctal L iab-ill t~es

Tofal Lir1hi1it1e3 Fund Equity

T ofaJ Rever~ue.:-.

Total Expendilures

Tot::±J 0-{h,:_;r Fin:1rn:ing ~e1Jrc~s

Net lnconie

Begirn~_ing .Fu!!d Babnce

b'AL'l/".ICE SJ-JEET

'fotal Asset:"

Tota! Lrnbi1kr;:s

T otc!l Fund .Eq1dty

lNCOME-STAT'f.'MFAT

Net fncorne

He gin r:Jng i: und fk,lanc:e

Fr:d.ing Flmd tblm;c{'

BAL,l_\1CE Si-JFE}

Total As.sets

Total f1md Equity

1

1

~ Butte, Cuorn!y of IL_ . . . ----- .. Daly, Cit~ r,f __ . ___ . .

111 i1L -------- Km;!'·, Com>~} uf --------~

I il613fi!01 06''0'(!2 (k\30/03 06/30/04 jf ,,r.:-1,J:QJ Q6•)0'0., 061.10,\)3 0613!J:•.J4 ,I ,I Jr, l'l 1,' '16 '10 r,: ,Jr,/,1/'J' Go ,,~;<l4 I I Audited Andi(ed .4uditcd b(ima,,,d 11 Awfaed Audited Audited burnatcd 11 II \ua,ced \ud1kd A, ,Med E,t,mm .. d I

11 li.6/ffi .. c,93 lh.2,2,,2f i2b.667,394 134,4883,i 11

1

47;i19,\1' 47.503.: ,Ji] 4i<.656,J,7 5'/ .. 0:1,,27411 II 9.5,87·,.562 104,32.,.0,6 i07,4:-i9,]66 ,2,,,i'cl,OOii I

II

1-02,84] ,203 I. 08,996AUl 119,992,554 1_:,0,::i[M,4)4 I· /~ 1.,966)~87 46/·55,688 ,~0,762.,228 Yi,)7:) 9'1(J 11 II 94,·r79.t{77 l!H,387,207 105,314,546 12 l)UO,OOO II

(7,G46)09j (5,471,2.~s: <·YIGAlff· I (2.5"15,69'1) (979,743) , .. ,.,.•,,..;u., - , .... , ... '. I' ,sor,,12; 1 (526,ooo) 1:is1 ;

1

1

...--"'"G'"· ,-7:..-Jc"'1,~-·.s-,1"---'-6~.-1S-l4 ... ·;-t~-.7""""'--0-,1_s_4~,4-2~.s---(l-6-,o-9-0-,1-o·-.,'l.;i 11 2.n6 .. .SM (uo,201: 287.5'14 Jsu,35411,1

1 rnJ,564 \58,<.12\J 2. .. 1su91 I 1

1

14,991/204 2!,?ll:585 42;489;825 ,18,674}25 1.

1

29,:105,069 .i2,:i!i:,6.l3 32 .. :4.,,392 II .•

1

1

1

1-l..054,2.50 12,(})-1:,354 1-l.,466,233 l:::,16.5.6£·21

1

I il,%3i03 75 I

11 li0,,4(; l,54\,218

I 2J,7il,585 42,489,825 48,674,..125 I 32 .. l71,4.l?, 32,247 .. ,92 32,5'17,"1.\I, I· II i2Ji54 ... l54 ll,466.233 iS.165.662 15,165,6021

11 31,%5.0,1 7,%5 111

1

46.t>T/,991 47,3c,1,:,10 411.f<',5.431 111 II l?.'H04W '','\s<J .. "J" I

II 10.253.486 9,878,()33 '1,44:i,6'10 . i4,:iH,,35S 1 :i,210,CS4 i6,1,iif;,(J39 I· II . 886,05{, LiU3,3'l'J . l.,5Q7,82G i

II' ~:::~::~~~ ·--·:~:~::::~~ · :::::;;,~~~~ I~ :~::~-~:~;:: ·--· :=:~;:::~:, ·--:~:~~~:~~~- 1111--· :~:~::::~;;: ·--· :~::::::~~ · :::~~::::: I

I~ .River~dd(~. Citv of

1, - 0(1:/30/0 ~ - t16/30;02 - - ~6.'3-1) '(}3 - - 0(J:'30:'Cl4

11--- A 11~1;!teci _____ _;;~~1di1,:'.! _____ ;;rnd~;;~ _____ E s1i~'!;atc,~-

II 125,917,000 l.25.495.00() [29.287,f..lOG 122,062,57]

11 :3\l,474,ooo l 35.994,ooo 145.J c; .ono , 48,600,423 ' ~::::: ::: :: :;: :~ :: ·::::~ ': ;;;:::' II 4.778,(i()i)

II 70,l37.0iJO 74,.776,000 8l,738,00IJ

11

II 30,79LCOO '.-l7)23,G01J 30,629))1_10

it- ] ~~:~~:::;~~ -- ,·:'.1::;~:~~~;- !~::~;,~:::~~

S:5,200 . .148

l 00.978,000 l l l.999,000 121.367,000

[Trns PAGE INTENTIONALLY LEFT BLANK]

APPENDIX D

FINANCIAL STATEMENTS OlY LOCAL AGENCIES

[Trns PAGE INTENTIONALLY LEFT BLANK]

C(H.J1'fl'Y OF IHJ'fTli!c STAIB Hf CM.IFORNIA

!~,DEPENDENT AUIHTOII'S REPORT AND FlNANC!AJ.S'fATfiMENTS

Fon 11:1:E YE,rn RNDEl> JlJ1\fE 30, 2003

COUNTY OF l'HJTTE, CAUFOR.NlA

AUlHTREPORT For tl:!.e Year Eud~d June 30, 2003

(iove;i.1trnent,.Vllde F;nan_c:fal Sta:i:emit~nts: Smterr.iet1t ~·.YfNet 1\~set.3 .......................................... , ................... ,. "-·· .-.......... ,, ..... ,, ................. . Staterntnt of Activitie-..~ ... " .. , ... ,.a ..... ,., •. ., .•.• ",.~·., -~-~ ........ -· ,., •• ,,.,o., ... , •.. < ............... , ....... , .... ,_ ••••••• _ ••

fund Eoon.::iai 8i:r,i:enioots: G(Pl~U13er.mU Furu.1~:

Be!i\nce Sh;:;et......................... . ........ , ...... ,,..... . . . Re<;on,.ilfr:.tion nf (he: Go11;x•;r111n<'l'ttaI Funds B~fa.nce Sbeet to th{- .

Gs)ve1nmenml-\Vide Stitt:11'.len.{ ofNet A1.:':Sets .......................... , ..... a .. ,, .... , ... ,, ..... ,o"·······--······· Staternent ofRever..J,J.~, Exfrenditures, and ChaJ1~~s h~ FundBafo ... tjces ...... " ................ .,..,. Ree~:t1leilfotion of i.b.t'· Statrn1ent of RevetiJ1t.'•,s; Expenditures .. ar:,d Cha..."1g·e.s

i.rl fi.u1d Balances c,f Govtnunentu Ftmdsi m the Gov~rmnerm·tl .. V./ldc St.iitt;~rn:;nt r!'.)f Acti,'itie>~ ......... ,. .... H., •••• ,,. .......... , .. .,., .......................................... ,."" ........ ..

Fiduc.i~y Fw.1ds: St~t:en1ent of'Fid11cfa.1)1 Net A:,sr1.~ts., .... ,., ........ ~ ................................... ,.., ............................. _. Statement of Changes in ·Nct As,oe!s ... fnve:;tmimt Tmst F,m(L .............. " ...... ., ..... ,., ....... ,, ...

12 13

!4

1.5 16

18 19

2Q-2{

22 23

24,48

Gilbert Assodates, Inc. CPAs and Advisors

INDICPENDENT AUDITOR'S REPORT

To ·th't; Dm1.rd of Super\isors; and Grn11d Ju..ry County of Hutk Ornvilk,, Califm:nIB

\Ne hz'>re aud.1tcd the a(:corr:pa.nyiug fLTJ:a.nci~J gt.a~·.ement::; vf the govcttrrnc.nt ac,tivitle:;;~ tile Tuu...1$iness-type act.{vities, e.a.cJ1 nt?.jor fi.m<l, sud th~ aggregate r~rrminfr.1.g fond inforn:ation of the CouJJ.ty of But.te2

Californfar (the County), as of and :for the yeiar e.;1d.cd June 30_. 2003, which toUectively \'.";,,"imprfae the Cotmty~s basfo financhi! $'taternent.s a~ ~fated in the tehlt1 cf r:a:mte:uts. These financial s~tf~me:nts are thr.: respom.ibmty ,:.:;f tli.e Co1iuty's man~gemenL Our respcn:~.ibHH:y is t.c• expre:;s an opinion on the5e financi.aI fill).terr11'!'0ts baSced or. our ~udit,

· \Ve (~r)ndi.);;ted {;:11:r i .. udit in accord.unce "With a~.Ut.,i r1W.dard~ genera.Jly ac;c,cptt>d iI1 the United States of Ameri.<:~ a.'1d th: stm:i&mi;; applic;,ble w fa11m.cial ~udits c0t1mi1ml in Government Auditing Stamlards, ism.;1.e.d by the Compi'roH~r General of the U.nit~d Siaif."t:i. Th.i)$e stand.ard-s ·ror . .yufre that we pl.art ~nd perfonn \h(': audit to nbt.ain rcasorutble a.&m.u-:an-ce about ,~rhethe:r th~ financial ;.,tatements ate free of rnateria} m:tss.tak:.rtitnt ,Au. ;a1;.<lit lncludes ex».rn.f.nffig~ OZ} a te!ft tmsis.-. evi~lenc~ suppcq"'ti:11g th~ .fil'f.1:om.1ts and dfac-!omir~s jn the fitw.n~fal stmem,~nts. ..~ audit also il1i."'Jlndes asset::;ing the $."',C-ountiag princ-ip1es U.8:eli tm.d si_g.1:1ii:fic:ant el)tln~:.neG 1n..'ld,~ by n-wriag~rne:nt~ ~.s ·f\.rdl as t:valuating the overall fi.nr.mdal ,3w_ternent pre-;;f!ntatjon.. '\Ve be1Jeve that our a.udit pwvides a. reasonable hasi$ t{"..r o~r opirJio1ll.

1"1 1)nt" o_pin.ion~ t.be frnancfa.l &tatcme-n.t~ referred to ~bove present fufrly~ in aH n1Uteriaj' resJ1c,;;ts, thi! resp.,:~ctiv·~ finai.-:it:iai pvsH.i~ln of th~ govt-'1.n..7nen.t activities, fue busfoeas~-tyµe a.efrvities~ each ro.aja:r 1~~ $.Od the agit;regate; remaJn.lng fond iTifonJJ;'Hiou of the Ci)Unty as of June 30t .2(.(.(J~ ~.nd th~ te~pi;.cfiw; changes in financfa.1 position. ~,nd t'-~.h 1101,ivs:" v:here ap,p1ica.bfo:- n.iri:ercof' far t.'he year 1he11 critded in .;m1formity with ~ccmmfuig principles goo,:,ally acc""1rrnd in the Uni.t.:'.6, Siaft.:.s vf Amer,,,,._

ln acce:rrdance w.ltl1 0.<;JFe.f?!m(uu Audlting li:a.r1.daPds., we hal"v·e also l1.;sued our r;!port dated Novel'!J_ber 21 1

2003"' on our ennsidera1icm of the Count/~ foternrti control over fmm1cfaj reporting ~nd _on our re-11ts •Jf its compliance ,·1;,it!J ,~e..i.-ttfo provi:.5km.~ <Af la:.ws~ reg1.dation~1 con!racta and S1~'111.:>. ·rnat report is an i.nt~grn1 part of ai1 audit p-erfOrn1e.d in accordance with Govet'lmnttU Auditing ·s1an,i,1rd.s and should be: read in cor;jun.r.:tion wiili thi~ report in con~idering the a•sul ts of our. audit,

TILe lvia.nagernet)f s Discussim2 and Anal)· :i-i~ and sc.J~eduh~s of fu:ndfog progress and bY.dgetary oomparhrm h;J00112.ti(:t1 011 p::.ges 21hrnugb H and 49 farough 52, i-c8-p.:-ctivt:-iy~ art nut~ 1·t;qufred part of the ff.n:i!f.lcillll stateJnents bu.l are !H1ppk:mer.rt.1ry infonnr1tion required :t:he ac,;;;•)t.mting prirtt:l,pks gen.era11y acet"1~icd Ln the United States of lu..1erica. V-./ e 11avt~ .;;tpplied Jirat ted procedures~ which com~jsted rninci'pa]Jy 1'.'!f inquirie;s ..:;f mm:iilgement regard.mg rbe rnethi)ds ~J'f n.it:asuremtrit and pr~·8{!11ffitio-n of the §upplementru:y h:tforrnntio:n" Ho\vev~t. we <l~.d n(,t mi.dit the lnf·i)miation and express no 01)tnkw1 oo it

vi ' _,y/_

Gll,l{ERT ASSOCU TES, .!'."IC. Noyewbe, 21, 2003

··'!'~(80 (··~""\V:C T'~akt pr , Suit~ 100" S.U..:Llllltnto, ·C.A. 9f,.S33 ,:.,c , ~vl.J;p;1~~1~·9l~t.;46.6·:!:64 • Pax 9i6,6'1·l.2727

http:_//'i!A\"W.f.Eb~rt,.p;1.co:,JJ

_______ ......._. ___ .,_..,__________ ____ ..,,~~-----·-----,· ...... ----.·--·--..-·-,--·-----

1\!IAN1\Gl:J\'1ENT'S DISCUSSI()N AN-:D A.NAL\,.SIS

ll1 tJ1is section nf the County of Butte .. s (County) annual fixwncia1 repori~ the C~Jij.nty n1::t11r1gement dh;cusses fin.ancj~iJ results for the fisc.al yere- ended Junt: 30~ 2003. It should be :read in c.cmjunction v.c!th d1e CcmtHy':~ fi.nHI::-cio.1 statements f{illoi,,,,frAg tl-Js section .. /\Jl doUar runount~ are expl~e~.~ed i.t.l tiHJUJfil~ in thi.:, tex1; and iabk& unless (.1tl1erwi.[,e. indicated.

* The assets. offhe CoUt"".'.tty exceeded its habiht1es &t the clo&e. of the n1ost receut fiscal yew.· by $427/i75 (net as~ets). Oftlli:9 ·amount1 $3:t42l (rnnrestdcted net asset~) rnay lw used to meet tl-ie govem1nont's ongoing obligati.,,11-~ to dtizens rutd crcdit.,us.

As of June 30, 2003, the Co,~nty's gtw1omme11t;,i far,ds reported. combined endiu~ fond balances of $7:5,999, a net increase of $2,589 in comparison 11,ith the prior year. This net increai;e rnpres(mts an mcreasc1 of $3 ,&48 hi rnse:rved fund l:rnlances an<l a decrease of $1,259 in 1mrese.rvc<l. fond b~Jru:ices, which may be m.oo to meet the gove:rnm.ent's ongoing obHgationfl to citizen~ and cre~iitors\.

At the end of the carremt fiscai year, unreserved, tmde~ignaied fond balance for the general fi.mJ. Wl'I.£ $16,079 or t3.4% oftoral gert(;,'l'Rl fund e-.,q.iend111in:s.

·n,,., Comri:y's total lnrrg--tenn d::ihgations as Qf Jur:t(-:. 30, 10iH i.nctcased by $4.339 ove:r· the prier period. A key factor in the inc:re&;e '.Tt:'as the is~ua.u{;,e of the 2003 COPS b,::;nds to refinance the 1993 Justi;.oe. Fr.;:;i.J.i.ty COPS and the fire trucks c.apitaJ foim:s, bu! die old debt tr:taling $5,222 was not due and p:ayabie .u:1m Jdy, 2003, 10 is. stil1 showing as m..li~tand.mg loug-·term debt as of June 30, 200.1. Di.her key factors affecfa;g the loug·!l':nn debt weTe a c . .1:pital. equip,nent. kase for the N·eal Road Landfill f,1r $2,258~ anrl a d~rease in the Landfill Closure/Post~Cfo~ure ca.ku.fa.ted liability of $2,954.

IL OYE1H1EW rnrnrn FII'.ANC!AL STATE:!\.f.l':l'f.rn

A. GASB 34 Fim11m:ia! Report Mod~!

·rne County cf Butte has 00(ipted a finzincfa1 reportix1g :010-del t..~at fa desil;,'7led to de11Kir.strn.te government ac\lountabili1.y b:, prasenting hi:>lh a fong-t,;m:i l(,1d a ne-.i!l:-tem1 view of .lts finance,,. This modd fa prescribed by Sta(en1ent Number 34 oI the Gove-r:mnent /,;}.ccounting Standard. Board {GASB 34). '11lis 1nodel is cornpr1se(} of three farts: !) ~faua~~~m!_ Di~cussi?n and Analy:;is :-"'?ich pm;i<les t~e fa1~cial highl!~:ts; .2) 11lc Co,J:r1ty s t-asic frnanem1 stattm1ent:J., w.hlcb cons1s:t of the f.....vov·ermT1e.nt· v¥1de financial statements; tlle Fund .fimm;:i<1.l srntements i!nd ltie: Note, t,, foe Jimmdal .stater.o.ento~ 3J Req1..llred Suppleinenta:ry Informatkm.

'The governrnc.nt-·wide finm1.cial stater;;e.nts provide fil1 overvfo·1:-v ,)ftlrn County's finances, L.~ a rrw.rm~.r sirniiar to a privtJ.te~secwr business, that is, using the 11ccro.al basis of accounting. Tbe.y derncnstratc acc-0untsbi.iity of Buttl:l County by shci1.,vin.g the extent t:o

2

Gt,. it has rnl.'f'C ope.:mting o~joctivi;:s efficiently and effectively, using 2H resources ava.tlab1e;) and wheth{-:r it cm1 contJnue. to do $(;,

1]1e ~~ .W-1!¥,f '~!i present~ kfrn:mation. on a.11 of the Crn..:i...tlty'ts assf;:t~ JJ111<l liabi.ltth~s:i with fh,~ diffi:;:rence behvean the t\vo re.po~ied as tlct assets. Over ti111ef ir1creas~~= or de,::;.r\•;t:i~es in net r~ssets rr;.1y serve as a us~fd h1di:::.atcr t)f ".urhether the finanoia.1 _po:~itior1 of the Cou:nty is h:r11J1uvi11g er dete!·k-.ni:i:ng.

The Ug:tem~f.£sli1rfti£:t. p:rcs~;nt& h1fOrrnatio.n on expenses und P..=.wenues to show 1HY~r

the go ve .. rr!fnenf !l !'\et 1l3,:ets d:.ange<l tl\JJ:"ing th~ fl.seal ye!lr. AH change., i.n rwt !l.llsets are reported .as soo_11 as the 1tn<..forlying event g1~\·iug riBe to the cbzng1;.~ ucci.ffs) re;;:~a.rdless of the timing cf rditted -i;as.h flO"Vh'.. Thn.~1 reve1;w:& are reported as soon f.1$ earntwl a.nd expe.m::.eo are :r.eported as soon. as iJ1currOO even though the relate.cl cash, fk~vls rnay n~)l ta"ke pface tmtil :futCi.re fiscal periods (e.g., earned but m,used v . .c,,tion. leave).

Both of lliesr;::- governrne.nt· .. ~vide financial stateraeni.s d1stinguish fwn.ction.s of th.e County that are ptiucipally supp<H:ted by taxes and intergov;;;m:mental rew:mics (government.'.!l a.e.tiv-ities) frmn otlier fmi.cdor...s th.at an: ln.t0nde<l to recover a1J or n sigrri..fi.Gmt portion of th;efr c:oM.s thr1)ugh user fees and charge~ (t;rnsines.s-·tvi.1e a0th'1tie~) ·-n1e gcvmunental activities of the Couu(;y include genentl govcrmnen~ public prntection, public 'w'll)'S .:'.:nd fa.c.iHties~ health and sm.1itation, Jmhlic as.sfotanc-e~ ;:dm:,ation and rccr{lation~ The busll1ess-.type activities ~,f tb.t; County i-.ncJude the BuHe (:C'Junt)'' Landfi.H and Butte County Trmmit AmdK

Certain co-mponcnt units 8U.ch ss county St~nice areas are etJ~entiaUy part cf·cou:nPJ ope::rations und their financial <la.ta are blended. in vrith operation.a[ fi-l.nds oft11e County.

The fi.m.d fina.oci~J statern.,i;nts provide evidence :of l'l.Ci.VJu.ntabHity by den:wnstra1.ing compliance with budget.lry dec;fakrns made in r1.ibifo fornm.. A fund is: a grnupiug of refat.:.:i acc.oll!lts lb.at are used t<J maintaiJi c,.mtml over resou:rces that OO\'e been $egre,g,ated fo:r specific activities or stipnbted by .1aws~. regulations or polities. The funrl~ of Hte Com1~1 are ilixce categories: gov~rrrmental, proprietary and fl.cl11cim·y, "

{v{ivenune:n:tal f1uuJs are used to accom1t for ess.emfaUy fhe sa.rne functions reported as gov;,-rnmcr1fal .wtivitk-<i', in the gowmment-'1-'ide fma'1cial £iatemcnt.,. However, unlil~e th:: govermner,t-1vide fin~.tndal st.ate1,_u~11ts~ go\"t!Tnmental ftm<l financial st1.itemeni:ti foc~ts on nem"-tt;rm h1.f1oivs ruld ontf1ov/S of spendahk reuourc~f a:_{ v.r;;;.11 ~::, on. ba11:J1ces of spenc!ablt' res<mrces ;n;ailabI-, ai the ,:n<l of the fisc.al yeru:. Sui.:h infr,rn:wifon may be use:fo1 in evahJating a gnvermnent's ne'.fil .. tean fi.naY1cj11g r~cr..1ircm1;nt~.

The Ccrunty nrn.intains 142 individu.ul gover:r.nJenta1 fundt! .. On the frn;u1.dill. statc;nc.nt.s for governmental f'iJnds infonnatir)n is pres~nteJ s.1:-:p;jt.Htety for frrrr.e rnajor tUnds: t.\e General Fun.d~ tl1e "\:Velfore Fund am:i th~ Road Fund. Ds.ta from tbc otht;! governtneri,tal .funds nre aggi·;;gatf:rl into a single co11unn.

3

Proptietary ji,mds a1'e of two type$. Dnlerp,lse ftmds am 11sed to rnport ,he same fhnctkm.s presented as bush.:tess-.type ia.ctivhfos in ilie governn:1cnt .. ·Mde :5u2J1ci&t statement.s. Tt:i.r~ Cou.nty u~s enterprise fJ.nds to ~count for its ce:i1tra.i lan<lfiii and tra11sit -operations Intern~.l se.r-vi(,;c fimc!~; c1..re used to acci.nnu:fa.te ~Ln<l ·a11ocate c·o.m:s inr.crrmHy a.rncmg th.e Cou.uty''s; various fu1u::tio11s. The County tises kn.enm1 E;e.tyi~~e 'fr.1.nd .. ~ to account far a varidy c,f serv!,ces im:bdi..ug ftJkphone scr\.i.(~(>S; fleet seni~es~ i1IBw:anoo, .infrnnmti~Jn s:ysterrrn~ d.upHca:!ing1 utili.H~s and. fadUUes r.r.u1.intenanc.e. Becatrne t11cs~~ aenrices predon1inantl~{ benefit gO'Vf.~i.1'!.n1ental raffK;r thim1 husin-ess-type 1\rnctions, they have beer. include,d wlthln gov;:;rmn,mtal. ~ctivities in the r;ovemmer,t-vvide fim;.iwial stakments.

P,,,pri.et&y funds stat.emcntll provide thr, sarue tyP·, of iriformat.km a:; !:he part of govermnent-·,.vidr:5 t\nao.".ial statements p,,rtain\ng tc busm.r.:ss·type !/.Ct!Vitles, oniy in more demi!, The County's int•.ortw.l service funds are con:ibim:l\ into a sii1gl•), aggregated presentati(m itl the pro·prietary fu.nr.l fiimnda] stater.nc:nts

Fi,l:Mcian, ful!ds m·,, uicd to account for :n:sourne,1 held for the benefit of parties oulsid~ the giw~nent Fiducfary funds are no!t refie.zcted ln the govi=ment-wide fifil!,".lcial i;tatem,~n'! !:,:;,ca.use the resources of those fi.m& ITT"!' not avcilabl.,1 to suppoii the Cmmty's pr:ogrn,".P..s. In the fidud.ary fu.ud category, the.Coimty maintains b\lth agern:fos funds ,·;nd mveslment trm;:t fun& ..

The Note§ to tl!e Fii.rm . .nfinl Stat1i.1iuent~ provide add]tiQ11rJ i.ufon..flarion that is esseniia1 tn a fuU um:h-~rstanding oftlw infiorniatiorJ _pfovJdDJ.-in fh.e finar.ac.ia1 statmu .. ~ts.

fu. <1.dditiou 10 tb:e ba;;ic futanda1 siatements, this report prnsenti Rcquimd Supplementary lufmmation that i.!1dm!e; bmigeta,ry comparisorui for the t1'.mm,.l :Fum! a:m1 the major fimds and ,:omJiinlng ~tate:i!lents for the aggregated nmHn4/or i'\mds.

~ ---------------------------····-~--·=~-·~----i I

,- ,,,---··-·-....--.--------L----

I Cmmt.y of Butte's Net A,ss;ets I

II I

Governmeri!al Eusiru~as-type Tot.a! ~· ect/-i;Ut€.s. acUv!tie~.

1 ~-Jl2-1!2 ___ Q.t:9·2 __ Q.~:Q.~---- 0·1,.c2 -- 02~-03 01 .. 02

iG«rrent ,3nd 0t!1e; a'.,seis !J2,568 Q;J"!J04 15.419 --15.445 ___ 108,Gffi i06,~4gj p:apital as:,ets __ 356,58•i _ 3611.490 ___ ._ 6.65:2 _____ 3,716 __ 3H5,236 _ _37'.J?l}aj , Total a:,;se1s __ 451,in. -· 459,394_. 22.QYL ·i9,161 473,24'3 478,555 flJi'r(mt ,ma, o!!usr liabioiiies 13,497 14,64$ fl42 1 3~,2 14.43"' - 15 eii·~

11';!~7~~~::~;~~lles :=~~tl~Lj~filt~3:~~~--~~ --;;~~: =!~~s;i fr-.JB:t ~ssef&~ jJ -1.~ ..i

4 I +82l!l-~'!~6&?.?~NL~-Y·7GW-f?~t?75 4

~~ Ji oves"t.ad ki ropital ssseh,f nst of

~!~~;cl d~bt 346,873 36i ,0'52 4 . .39(1 3,716 ::l51 ,263 364,76~ 1'""'-lc:S,IICl?O 43,991 50)328 (l O 43,9fi'I 5-0.6:i'flJ JUnrestrk;ted ". __ a{!jJQ__j_4.d~~---.. --.E.1.lll .. _ 5,9~7 _ 32A~_l_Q,S83! ! Totat ()et e~s~ts _.:5.i3/r!4 426.ll76 131701 9.703 42"! 675 435 Tl~ I - -- -~---------~~---~---=-----·-=~~~=1 L ______ ----···--------·-------- -- ------------··---- -------------------------_]

Invesuuent in c-l!pital a%,e!s net ofrehued dr.ht rd:1.::c,ts !he Cou,i:ty'N invest1n1~11t in rurnets (Lt!, its fa .. nd,. st.n.1~tures a...~d 'ffilpr<..'lve1neritst in.frastnicture ;:ind equipment) .. County uses these c~1ital &.sM~ts to i;rovide services t.o t."ltb~en.s.; conzec_r11entl:v! t.heAf, assets are rm: avaifahle for ti~1.l..te $pcndw~. Althri1..1g,li. !he County's investment in itE C!,pital a&sl~r.s l~ re-~o:rtcd net o1 related deb~ a srliJukt be noted that the r~1ou1·ces needed to rep3.v ~h.fa debt raust be pl{Ji,:id~.d from other ro1irce,,£~ since the Cft},1itaJ as'.t,l(:ts fheniaelves cru1m1·, be used t1J tiquidat~ these lfahili!ies.

Re-stric.ted_ net ass<~s repre:,tmt resources that are su~fect to e.xterr.=.aj restrictio:ns on h,,w they rnay he u.sed.

lJru'l1>Stricted net as.sets represe.n1 7.6%~ ofthei total net ~ssetb f:md rn.ay be used t~J _n1eet the Count(s ongoing objiga.tion.s to dtizens an.d creditors,. -

Beside the runmmt invested in i.-;apitrtl as.gets, L\err.. .are ex1ern-a1ly !J."1.'.'iposed debt st;rvicc H!sewe and st.anJtory corrntraints on the usi;.~ of 100~1~ of the rt~strh;.te<l net as.sets.

5

The fo1lo1i,,ving table present'l the :activities fr1& a,;:;c.01111.ted for tlje changes in net .r1.s:sets.

r-···---···---··------------------------------------------- ---- ---------------~------------------ ----1

j C1:mnty of Bt1tte's Ch,mg,.:;, ln N,.,l: Assefo I -,l,· Govemrn,s,nla! Busim,ss-(ype Tola: I

activi,i;;,ll ac!lvi!les I .. 0.2--os ___ oqJ2 ___ 02-03 ~ Oi-GL~3 - o·i-02- _J Revenm;s: · f Progn,m Revenues: I I Cili;rges for ser,ites 29,861 27,358 •h85!! I Gr,ir,!s & oontrlhiJUons 207,823 208,111'.2 2,087

4,3$~ 1,60(!

34,729

0

31,757 :210,412

i) '3,en~ri\i! R.ev.imJo;,: ! P,,1pert'; w.,i;es 17.,7&9 14,269 H,7!)9 14,269 I Otn,;,;iaxes 6,Hi4 f,,9136 6,184 6Jl68 ! Oilier revem,es ______ 21 .MG __ 22J?,32 __ 05 ! --~- 888 _ 22,2.SS ,'W,520 r·mal revenues: ___ 28.3J~l2 ·-- 20CJ,1l39 __ 7 ,G 16 ·--~ 20;.;;t,"''.,_S""O'"\l'---...;,2"'0"'6"-',tlc:-24~

I , rxpenoos: ! f (;jenera~ government 13A04 12,073 13.404 12,073 I Pubiicpm!ectlan 67,676 61,!!:16 ffi,Eliil iSJ,Hifl ! Pun!,c way.a and fudt~Uf;~ .28,463 2?,690 2fJ.4tfJ. 2:r,590 I H1ii<1lth end M,,1lation 55,095 49,12i 5-6,095 49,121 I!, PubW:,Assistll.nce 127,500 ,2'.:J,!19 i27,i5(iD 123,iii!

Education ::.522 2.454 2,562 2l$51, ,~~~~ ~ ~ ~ ~ Ii C!llniraliandfiil 1,426 4,76-1 1,426 4,781

·n·an.~~f~..nt.:.~~r~~e. ____ ~·---··- 2i192. ____ .. 1J:96 2,192 ___ ~ __ 1,796, r,-oti! expenses: 295.394 275,983 3,618 H577 299,012 282 5€Ki I - - - -- - - " = 1 tocreasrcl{cteciease) in net a$se1B 112,10:Z) 4,056 3;il98 31!.l (8, 104) 4,36, ~ginning net asse!s _ 426,076. 422.0W _______ ;pm _____ yd§ 435,l'nl 431.41~;

L~n@!as(;&!s ------- -~413,97L3f6,!l76=-13}~- 427.<l75~4}5~2J

-ni.e folh:r,ving high.Ug'ats s:igcifi.;a.nt fur;\r.,rs that aJfected the governmental ;ind l:msbess .activities and contrilmte<l to the dci~Teuse in net mmets:

Governrnenta1 /1et.ivities accou:.nted for a dt::cr.easc in 11et asset~ of $12rl02, 111is dec.rt,a~e is due prhriarily frorn e1.1rren~ yenr dt;J:ir~cjttfion exper1se of ilie Cmmty,s infh',stmd;.ire (marl;; ~:mi bridges) capi!al assuts acedi.ng the cmTent yea;r capital 01:tlay~ for. iJ1J:h1str;..1cture by a total of $14/:h56,

6

i20/JDO,Oml

110,c~o.ooa

~N.iJOrJ.f~JO

40.()00,0DO

;&i,DOO.,cm1

1-·-------

l~~x;,'1"1$€S ... tlfff'11]~~~1'VOn:~

IV. FINANCIAL ANALYSIS OF FUNDS

i\s n.otr;:d 0arher} th~ County 1.Jses n.md accm.mttng to t-::nsure and dernrmstrate comnlian(:e with budget,aI'Y and iega1 requirenwnts. ~

GlHr'entmental furuls. The general gov·e,mment function3 ar~ induded ln the Gemer.a1,

~~::~-~~;~ ~~c;h;;\'~~/~~j;~~!~~~::~. !r;~~h~;:~,,i~/~.;~·~!~~~1;,,t;u:!:n~r;~;:; fends fa to provide inforrnabon on neM-le:rm infl.ov/s, oi.ttfk:,\vs; and balance& of

:;i~:~~1,::so~i~c;:~i;:1';~ ~::~:~~~:\~~;~:~~in~~ :~~:;,':!;ie ~t:, ac;:~~~~Ii':1n:i~:~:~l~! the Crn.mty's net rcsrn1rce& av.nilabk fo,r spending ~t. the end of the fiscal year.

AJ June 30, 2003, rhe Coun~f i i;ovenunentu! fu:-ids reporte.d cornbLned endine: flmd. balances of $7\999. Approxirnateiy 39.7% of this h)tzJ mnount ($30.185) ~xm;:iitutes unreserved. fund hn!2ncc; T,-vhich may be used to rnect the: County\ ongoing gen~ra1

7

oblig:ationEi to citizens arid i;:.reditors.. 11:ie rernai:ndie:r of V.rnd balance is reserved t·J indicate that it is not avalhi~le for genera1 obligat:icms because it has been eom~miW:d in the t~Jmt of prior year 6bligations (encurnbrances\ .irnz~111orh:is~ debt s.et'\'~foe reserves or the fnnds ii~~Ye .)U:itt~tortres.trictions.

The gt';JJers.1 fund is the m.ain 011e-ratfng ilmd offhe County. At June 301 200~.\ u.n.res,~r.ved fund 1x!i~JJ,ae of the gen·:mil fond -,,.as $18,58! while i.Gtal fond balance re.ached $48,674. .As tnc~un~s of the -gen.e~..J ftmd~s h,:1uidity~ it is usdUl t.o note that t1nregerved fund bafa.n.ce n1'resents: 15.5'}{; percent uf tot.B.1 fund expenditures, ·while tula.1 fund ha]ance :rt.~:prcsc-nts 40.6%, percenl ofihat sarne a.rn.ount.

Tite iOlknving table presents the reve:nu,;;t; from various sc,urces t-tS ,vcU as increases 01

,.focreases from the prior ye-a.r in me gov;,mment.al ftmds.

C~Ilnl~y of Butt~ R.ft1t·~~~~ ht the {}o•wi1-mn.bMtl.l!l Fml:rl!i

Revertue &1-m'Cf.-~ A,.::-ncmnt %,oftottl r-\rrL'tll1.fit ~A;. of total }....moutU ~t;j ofch~ T,1<es $ 22,754 8cl'·% $ 11,1.3& 7.5% .S l,.516 7.\% L&ceuses and permits 3/~e:9 1.,4% 3;,'396 L2% 59·1 i7.4'% Fitres, fo1feiWze;s ~Ild. pr.:riNltieg 21.25.5 0.8% :2.~l 1:5 0 .. 7°1., 140 6.6~v'o U.s.eofrallneyand.property 3,053 1.1%~ 3r5J3 L3%j (480) »i3.6% mi.:eri·~~~ 22:;7e:11 7~•-2% 22-teSo 79.69·~ u,0iun .. o..s:% Ct-mrges: for 1':lervkes 21:,.'705 8.0% 201092 7.1~,;,; 2,613 13.0% Otht:::{ ____ 3r9B _ j,4% __ },filo __ 2.0~.Jl2'~~J0.6%

Tr..tn.1 ~--·--·--·--·--~~-- 122~ -~-- 100% $ _2~0.694..=:;~ 99% $-~~ lj607 ----~0.6%_

9 Taxes ,_. Tror revmn.H::& include sale~ taxes and property ta.x.:.e~s. 'Tl'w inc:rease in tax :r~verm es is dl!e t!J piima.rily to iw:.'!eased pmperty taxer; as wcU as sinal kr h;creases in salt~S tax ar:ui property trm1sfor tax revenues.

ie Licentes 2x1d Pen-nits .... Incre;;..sed franchise foe reventuJs as \.vdi as increa3ed nT'venues ftorn ccmstruction pe,rmits and phmnU1g applicatfr:m. fecr\ account 1;·:,-r nKist ,:f the inc:rea>Jo;; noted fr:. this re.ve;xrue eategrn)'.

·* T.J.se (if rnnney and property - Reflcct.1 decreased. 1narket .Jntere-st r.ate~ availabfo. f()olcd. mvcstmcnt illW!'~ot e<l.!uings for the qm1.r,er ended 6/30/03 w,irn :t79%, vernus ii 4.56% retum for the i,,;1;.,1e period one year agn (a decre:;se of J.6.9%)

~ Charges for 8er-v ices -- The in<!reased charges fbr servic·~B revenues re:fle..cts tncrease3 from a ·wide variety of so1rrce&, T'\'.!/O sign.ific.ant in,:::r-~ases. were due to 111.crea,;:ed ~ervk·.es agreer.nents 1-vith th-a Butte County Child.ren \i and Fan.1iUes C,):rttmission ($600) and increami court -· related foes ($400).

O·ther - Grants and co:ntribu.tlo11s from private ft.mdinz srn.:rees fcl'r the South OrovH]e Coumm.:a.ity Centet accounted for$ l ,270 of tbe Fi'r 2002 revean~--s. Si.n,~e constructfon 1lh1s (;on1plett;Jd in that year, th.ere -~vere nr.1 cn1np.a.rc1.0ir:: revenueS- in the c-:urrent yefil,

Th·~ following tabfo present.(; ex_pendie.rres by :fl.rr1r.:tio:J] c.on1par,-;;:d tn prior yeru}.s ar110:.1nts in tht· gove:.1"1rnenta1 funds.

c..,m1ty of Ruttt Expci,dit,ires 111. tl.i~ Go~~nmm!!iil !7,mlls

- - f~-t 4_.c_~ E':(U.&i £;~ ~

rJ::::~:tgoYf.(t1ltt:.mt..___=--- $ k1"l~•~:,1~65 -% <>f~'.~;; n~~~·~4 -% <,f~~~i, $ A:,nr,o;,;l % ofclrc;~ Ptlbflc proh::ctfon 721.3!9 25A% 611,904 2.1.2s; 3~4:t5 s·.0% .Public v.11,r8 and faci_lit~.t'~~ H.942 ~1.9% 14,793 :5.2%. (.8.56) .. j'.8% Hr..e1U1 ~u.d s.1.nit:itlnn 5417fa5 19,2% 4€.967 i7.1% .5.739 J J .7% l'l1blk\ fiEi~istznce, 127,320 44.7% 122)99 42-9%i 4,921 4.-IJ% E:du~~!im1 2..5~16 0..!}t}".':l .'!~324 0)3'}11 272 U. 7%; ~hu.n, a.l'!d rer:n~atio~1 fi3{} 0.2% 4,066 i A%i (3,436) ,..&4 . .5%

.~.~~--~·--~~ .,.-.n~-J~g~i=§~~ 2!4;'J~ ~--~~(. 10,326 -~)~~

H,~tlt and slt!'..itation - Beh2lvbra.1 flealtb exp,cnditures in,;ream::d by $4, 1{)() and Puhlic Health expem:l.itim,l> by $1.600.

Culture &td recrf;3tion ~ The decrease in th)s functio.u is due t..1 t.be cor.npfotion of tl1e :t.."'-t.:mstrn{:tion of the Snuth Orc,vill~ c~;n1m1ntity Centcir in FY 2002 .

. f',"t'}•ri.m.:ry ftmds. 'Th,~ Cotmty' s propd,;:r.ary fum:!s provide the S:.."lle type of mfonnatfon. found in :ilic gov ~m:me:o1-wide firut.'lCial staten:mnls., hul in more rletai.\. Th.ese f\mds i.nciude tile ;r,.l,~rpcistJ ftmds: B~tte, Cou~ty Transit Fimd:' .and fu;J Cmwty Centr.J I.,1,mdfW fi.,1nds; ar1d tne rntcr:o.¥J serv11:::0 .ti.n1as ";ivhJ.ch Me, pre.sc:nlet11:n aggregate,

v. G~NERA.L FUND mmGETARY ITIGHUGHIS

Differences bel.w6ffl'l ms: ,:,1.1.r,.faa! hidget .at,d d-;c fi1li,1 l!.ll',end~d budget v,ern $4,164 of b1creased appropriations fi..1.I.:tded prirr;i:rrily hy .additional grant rcvenuec8, received from_ St.ate amd Fed.ernJ p:rognu11s ($.\ 195) as i.veH as increased charges fi1.r servic .. es ($1~028).

Durirtg the yea.r., actual revenut~s v1·ere. l,· .. ss than budg,.::.tary esd111ates $:t675. Actuaf expt.111iiture~ anrl tnm.sfom were less tlmn budge1m:y estffim.tes by $29, T'ht1 nci effect ,~f uri.~~r~-n:~l!zation ~f !~-r~ues ~~d unrfor-~nH~:~.ticn of ~p_pr(1f1i.1tions, rt'-suJted in n. nivor&tHe ,:anunce of $:tb,622. AJmough a s1gr.111ca11t port;on 01 th,~ var:rn:nce, $6, J 84,

9

1"eflet~ied. inc-reases to reserve~1 fund he.lances~ tbe am.{H.mt of r""vaitabte gcme,rn1 fund balanr.e at fiocai yea:r .. end increased 'by $156 frorn the prior perk,d~ to$ l 8~581.

VJ.. CAl'ffAL ASSETS A,'•m DEiH.' ,';_tlJ'lrUNISTRATION

A. Capit.ir .l.\ssets

Titi':. Cow:1ty\: invcstn1cnt il1. capltnl asset:; for its goverrr::nenta:l and busfr1ess type activities as of June 30~ 2003? an1ounts to $]651236 (m:t of a.ccrn::mtated depr()ciation). Tb.is it:1vesl1nenl i:n c<1pital assets indudes fa.id, str.i.ctu.re.s ii,'1U imimivt~ments, equipment, cm:i.strrJ(;tiim-in-progre,~s, and some hlirastrn.c(!l,re. Tbi:l toi.al decrease in the County's nt:t inve'ltme11t in e~pital asset?. for the cuTrent pi;;tiod wa~ OL9'l·-.. The d;xrem.\o re,mltoo from infrastnictute de.pre,~fatiou exceied;ng Lrifrastructure assets acquired by $ l 45)66~

'" GASB J4 requir,:s the Cm.mt.y to record i.r.Jhstructuxe costs as capiml a&set~­lnrn,stmctnre fud.ud<!s the County'll mml network, bridges, drainage clitcheB, and se~n;r ~yllti:ltl'.W, fr any. A;; pm,;id&.l for in Srntemrut '.14, the Cmmly is pl11.1.sing in the historical co.ll',s related to it'~ infrastructure. Curn~n1ly, or>Jy the roads network ilwl.ndes histmica! costs ;md .related dep,"eei.ation. All current y,~,1.r m~ulsltfon costs identified for infrasl:!'.1cture have been intill(l(l!.t Cuueut yew i:nfr..structure aci:ruisitk,ns ,otall".t:l $4,362 white d&prndation was $19,32.!L Information on othe, exi~ting inJ:i1.15rn1cture as.sets will be provhkd in the next fow fiscal y!':ll.rn, as p~tted by Guvt:rnment .Accoun1i11g Standa,rrls Bc.mrd Statement l..Jo, 34.

~ F-or govennner:t-,vkle fin.ancia1 statement presentation~ ul1 depreciable capital nl.laef.s. were ifopredate,i from a,iqufaitfrm date to the end.of the c11rrem fiscal ye11r. Ftmd firmndal stalt!:ITients :t'OC-C)td capita.I t;..SSd pu.rchasei':1 as t:AJh;1.:nditurcs.

A_t June 30;, 2003~ the County lrnd total. kmg»tcnn dcht ourt.~tanding of$15~02J t::-'JJnsisting uf $91 345 in Certlffostes cJf ?trticipadon~ capital 1euse obligations of $4,62{, b(md.s payah1e, of$L052. Addition~1l long ... tern1 lia1,i!iti~?:s :nclude cmnpensated leave payn.bk of

10

.:Ki., actLrn .. ri.1:11 dairns liability of $1.~324 .for the gcnetal insurance ISF~ and iaridfiU i~losure/post c'10sux-e care H.itiiHty of $5J l 45.

Additional jntt)n1mtion {m the County~s lon.g ... tean liabilities c&l be fbunff. in the I'Jotes iD tl1·~ Finanda': Statcmanrn $·!;\)t.ion. of this n:.port.,

The County adopted it's fisel'J year 2003-2004 Final Budget i:n !he total amount of $3l8SN)5,. \vitb a C·eneral Fund Cnntl13,gency .Appropriation of $6/)23. ~ 1b.ile this represents increased foIB.'leing requirement& of $23;771. from the prior y1;;;ir, the Generrtl Fund Contingency Appropifatian de~reawd by $l,28L The County is facing u difficult fisca.1 challenge in the sho.rlAerm. A!faough tlm mo~t cdtfoal fiscal uncertainty facing the Cmmty coatl:nueG to be lh.e i.rnpact 011 lociu go·ve.rmnr.li from actions ft,e Stat,: of California r.tfii}' take in ndJ.re~~ing h" s o,;vn fl.sea] prob-1-ems} large in1.~rea~'.\]es in. employee bend1t and worker';; cornpern,atfon insurs.nc~ costs will also L.-upact fue ability of the, County to maintain ci.1xrent 3-,:,,vke k,JVelij,

This financial r~nrt i;, desig;a.ed to d,mwnstrate ai:C'\J1.1t1tability by· tht~ Butte Cou-nty gov<;;rmnei11t by providing both .i. loug-ierm and nea:Henn views of the Coumy's finanr.,eJ.

o:r co:m.n1ents n:-garding :any of the i11for1nation prrtsented in tlds report or n:,:p1i:!',2is fur additio.n2l fmanda1 hrt~1rm.ariou :should he addre£sed tr.1 the A.uditcr­Coruroller, 25 County Center Drive, Omvilk, CA 95%5.

BASIC H..NA1";{CIAL ST A'I'E.\\J.E?;:~rs -GOVlUlNMEYf-Wll1'f'. HNANCIAL STA.TEI'lfEN'I'S

l~t!ftio~slf!.~Jrn?~ ~~---------­Pfn'!'t:ry t£ii"Vtrn.OU!t!t):!:!

Gc,vl'.'.'IT'.fJitstnl .&.~J:h•;tfo:~: Ger.RNli. f~)V!:l!:1'.l.J.nent

Purdi.::}"tI"r.~te["ti(('.ln

Pubhc wayi &id f..1eiHries Ht."-llhh ;ru.d :$;rnit~rim1

'Jzyral l'-,1.,,.m.et?.,-,eypt aclivitie:!i

'l'obtl .6tWt: Cnum.~

I j

' I I I

I I

I I I

I I I I

COUNTY OF BUTTE, CALUl'ORNIA

S'1'A1'.EMJ.NT 01? A(."1'!:Vn'IES FOR Tm: HAR RK!ll!;'D ,l'lJNE ;W, 21liil3

N',tt {Expe~u:t:) Rr:·ifftli'l'.11.': :.11n.J.

... -----··-----~a:i18.~1,~111;:~g __ "!,r""":C'" ___ ,_.,, _ Chi~n__ges: ~tiµt~--., ................ . O~re·n\d!ig 1CS\pUt'Ql

Grt.:nh: .aritl (i1rJ.u1;.ts :l.'lll'!a~ (;:~!)~{erom~ntl'.:! B~3~u.~3.-TJ'~,;::

_ Cu~~rihutfort~i1 , . Coi:!_tfibui!!~.u~ _ __Activ!_r~-~· -~~~,:~v~ti_~- ---..-~ r~ad _

U,403,744 67,,S?5,6'.l!} J.N.,~145,.5:H 5)~{}95.2(117

tJ7~1'CO, . .'l'?9 2~22JK"u5

:~:r,.titu

1,415,941 2.a2,€!6S

~----·~i5U:,010 ~ _!_~?.!Ell_._J~ ...

?~ft."C,e~ Si&lcsts:XG~

1i'61\7i4 l3,7:H~788 :l,631,9].1 6.,91,54,l 1.t5i1!~j'.(

327,068

.... .--....,..,-17.:'}5(.;

--· '.!9}!6!.150

Spc.·t.::i.al ~~P.:5$!!.KtW.$ {)t,"-i,~ t!Gle3 ~d .r~tated N",-'\':CWJ.e.'l,

~Hl\tr"!l l91f;}),~~B~ w.g~,.733 4~,759,180

914.572 ]~2M,61£!

G4;~61,910 {2_!74,!-~0-.a;, n::z.109 ~\4S21S::,;8)

......_,,...........__ S:i.161. n ~-n•--= 4)~)j)3 , !18 5& ~ •, -·-- 20:\J7ili.97l ·--- 2,643,92\> __ tit.zii~

Gran~. ~d OO!::trll:irtitkiaui1 ti.6t N:i.:.~ric•ed b ~j:'lc)IJJ.i°lf.l ~>grornti:

I7//98/i24 3,517/~81

292~941 ,,J53,<98

1:\05614(H 15~1.519 Uur~ttii;:tOO ID~:fAl ,:"ffl!~

MIB~H!::n{:{JUS

Tr~1.ders T~:ri.ul gen~rW revenues :ar!B tre!tS,1:f.rsJ.

Cr:..an~ in net !WSi:tS

N-:;1 l:!..33Cts .. ··tegbmkig Gfyear N,:t :fi.'~-»t,;; .. 1Cm:~;llf~ nf ya=n

5iJtK{_,)78 6:j,),463

,~.Sil

fJ ,029"338) ('..13366/iitn) (} 3,,6SJn215)

11 )'9:tfl.~ :t5]7.4tl

2V2.,941 2~353A·~ig

1.1/)56,-Wi

2,220.0ll2 .1 .. i.fYJ,.UO

-·~~~ ~-~~J.2,1§1_

{g,liD;69Z)

435.T/9.,0W ,}I 4-'l7J;i75/Jl'l. __

BASH." }1llofl10'.'o!CIAL STATE.MJ~NTS -­FUND FINA,'iCUL STATEM.E:NTS

A!x:il!TS

t:~i'1.t1rl!'.!1ri1!'1,.-&II'~t.ll.s

~-"W.x1tm.-~.;;8..tfa~lf1::h ftq.:.iJ ~:t lm~i!Wl c.a:.:h C~ from c;;:hltl" fJ:l">'JS iU:tt1urn.,:;i:~fr.J.b]~ Du.t TI-Om ud:l'llS! ~·.rer!iz-.1;e(~S 1~rf.~~~re-0'.\'i n~....:isit~ frfa'l' -c4.he.ra ltr;,r.e:clt.!:le)'

L1lir.srer.tii'v.1b!:11 'J°o<Jl..-

uwmrt.~-Du, fum1 oif~.r fu:'1-rl;; Al'..cru-.\.1.~~Pi!:lr~ Aect,untt U.l!?>~Ul t"lwJ: J.IDC,•.tr2d fo:;:Ji~it.:ies :srua....-:;'"~ ~d ·111~~fi~ ~1:1',f1!bk

~.r!'rev...-:r:~ 'fi:,tgi,foW~lJ1J,}.1

t;i.~ b.!i.li!:!.tlu:i,: ft~tlli-:OOfor:

~JH.'1ll'!3~,!iID1Ci;::!.

!~..;!C\'.Sfl

~-OSiD:withrntl{:o; L.."'V::!fi ~~4'-i',111bie~ (~~ tt~trialiorl.'1 {)~~'le,!

jrr;.·~~ki"ij

u~en•fd: De."Ji_fnD-1'~ tJ1W~i.~Jlfd.f~rred i"i".; Gt:-mm.l:fu!rw S~t.':{:ii& nv-fil"flla fur~~" (~tw pro.,~ :.is::1th1 1·~ ii.mi ~G!lW!i

TMrJ lia.N!iti~ an.] fi:nd '::n'!rmc.e~;

Gll'm.w1,l Wd:l°.'i::'t R!i'l!f'd -G~·Yi>rmru~.l'l.Wi Cilltt:~'1:1111.::c.~~

·=-~i\::i<l. -=- ~=~-~u11J ________ ji1!1,1rl~·..-- ~~-' ~- ~-· !11,~~ -·--

~ <\4.~!66)65 4,BtS,?.i'.4

44,27t} :,;·,~,291

.4,~:99~ 6,251/~it:5

:)J'S< 1,;,1}0

·1,9~~,1.:is 1n,.,;ri:.;

1:().;.4_~_t4 :.:Hz,:rm

--~~~ll­____ ...-J..:+1~,£i4C

]~.B1,2~0 4,6X,..~65

4,ffll} ~)~4,2'14 ~.4'17,151

5:!6,$21) 4;,],-4~-0

~-:~'2!.. 4i _,,1.014~E:L ---~~£

(166,Wi)

-1?ifif:5 -~~~~

2,57J,M~ JOO

lli1.2,)]

1!~,008 4$j

l,l&S,U'/3 f~·J~Hl4 4!U¥i?

- •. - L11!il,'S1.

)l,-:.ifr.-·1199 ~).'::S

3ii~M,#t tl~it)J~ 1,!S0..9t6

,_797 I ~9-;3.:t;

:r.~-~t:

1..SOV ;.U43-6i

:U~ t18. 7{H3 5,!W7,i!i.l

!}() .. 13'}

!4

COUNTY OF .EIJTTE, CALIFOR.'{iA

RECO,~iCIUA TrGN OF THE G(JVER!'fMENTAL FUNDS BALANCE SHRET TO THE GOVJcRi''i:!tHil'fI'-.Wlll£ STAT1:MRN'T OF NET ASSi!:rn

P.)R 1lff: YEAR F.NllED.JUl'{i<; 30, 2fl(IJ •-~~---- _________ ..__.....,....,...,m_••-m..___

0 __________________ , ___ ,,....,.....__ __ ,,,, ____ ........,_ •

~~ornu1:. rep•.xted for govcrnrr.e:nt~J a.cl:h•\!:,~;;; in !r.lr. slli.'leme.rit (:if.;i,;i ·a.~s.::-~s ~re dirf~r.ent ~"=..:::ar..1.!1:~:

Ca1,H:1] a:i:~e{:j;: i.1st!d in g,1v{';mrr!f.'.nWJ a.cii..v~ik~ ~.te not tlm.lncfaJ ce::iClirc.~:,; ~.ndt thl."nforei a:-i;; not rep·nil'~d iu ihe gr.n:-err1:nct1tal .foncfa. Thi.'!.se i"~~ com:ist of:

La,-W. C(!n,r,.tn,c!ion h.;, progre'!".;s ~nfrnstructt~n~. ne1-0f .$27t:J,ioi:n:z 2,;:A.mrnbited de_prt;C:m::on Bullr:11.1'.lgs and imprnVt:tlW~lIB, i.~et ona:::,'397~32iii a1:,.xon11fa1.1.00 dc:;ir&":i?Jfoe-:1 Equiptr.1:ent~ n~t :Jt $23~.236.,68:& ~:::G-t[tilUfa.te.d r ... :;:;p;n:::iu.tfon

1fJt.a l C."],pit~ ~5ctZ

h1t~:al S':!Fi'!ce. fond~ are !.i..':ld hy th(': CG-lJ:i1~· ro ch~e th~ w.e.t 1Jf HatiHizy,, m~~··dci.; a.~d \!,:r;,rk-r.r'9 comptr,;satiori imurru-1c» i•): iOO.ivklnal TI.11!-ds, T:.ric ar .. ~~ anri ihwsJit-1·~~ Mthi: intr-..,.f11a,J senrioo foml1 are ind1J.d~d fa. g.v~ern.m,~r,r,;::1j acl1'1i.lJc, iri. tin-; sm~m;m~ of n o."".t .f~-m',1!.i,

Long ... tt.;rin ti~blHties appii;;:ab~-i io th~ co~41ty"s govr.tmw:nm:.l w:f.iv~ies arf; m;t due :tmd payabk fo th,;i cur-n:::nt .r~rfod \lliri ~;.ie.cordfag!; .&it rmt il!".p_orred .as ti'Jnd: HabmtJG'"};- fateres:t -mi k1ug-1cr.T1 d.efrlt i.s not atcru~d ]n ~:i-:v-;;!n:im,:,r..tu1 f.:.rnd~~ lm.1 rather ls .rr.:c..;.111{nized 1::s .ai:t e::._p,;nd!tlj:re 'Nhtn dw;;, A.1! lio.t1ilit!GS; ~:r~ re;,,.1rted i.r1 fu~ ':.=Men~e;i1t Dfl'lct ~s~s Ba.km-cies :a~ of JmH."= J,J, 200:?. ti11;.:

1.b.79,979 ~=tj.59,230

301,30:;)MiO :~ l ,852~292

. ..., ...... IL.~~

{9,34.ta)\JO) (1,0:'H/iW} {2,36:5/795') (9,(,!5,0U)

.\i 4)3Sl3.946 """"""""""'""'_._·~

15

COUNTY Q:F lUJ'fTE, CALIFORNIA

srATEWl!Il\T 01: :rutVEf'i;'1.JE,$t E-XPf,NBirUlf[§ .AN1J CUP..NGf}1 _{f',! l'UND KU.AN"CES GC,\'ERNMEN'.l'AL li'Vl'1'tlS

RtV:iiNl.:J!:~ T~ l.k.t:1;':l;;:o-..,:iWt.l~rtni:s fin~. fC.rfr·H: ~1:S pe!'!.iW~, Re'·.liMI!~~ ~·f!Ot~-i ~i;,i. r...•fmom:1,• ~~d prs.1pt!!l'f Atd t'r.r.m ~1t};r, t{l:~m1n::-r;t5; Cti~er..furS!:!:Y.iel!i! Oti"""ie!r

Tc't.1:il1~·,rw:i,.izs

;!..'il"'l\NlJf"!V!illS: L1er,~-al ~li!·fW-:Wfll~!ll

Wubfk: vrok"'1.:<loo Pu~'!J't~ )vays mui ft:;:ij~~ hJ.C4,il11.llnd.amlf.B.til-""..n

~hl.iorc :i;otl ~ru:h.trvJ ~ewkes TnW ~pen.tHti.w,F,,1'

:i2':«.-r~:s: t-d-efa~\r.n,;yJ ,;jf m1r·~.:i11ait,

(l;t~Cl\J)lt\lo;ji'J.lf~

{~:~ing i?JUM.fUc1 b OPf.rnZh1g trizru:,fu. ~111?

C.ar.1i~i~es Toed: ll]~U ;firus.Adf!f ~Ot1,.:::c.11 (L1$('."-3)

F...i..'Ml hafa .. "!oo-.bc~,:i!i'jfoii; rlfr.i:;ru­E'lllnlly~s~,"!

-~,u~ THE \'EAR. ENfr~~o ~mNE :ml 2003

Gtncnili Vl~U,u--e Rotd

,~--· f l.l~J :J --- - ---·-·Ftii""!t!i ·--- ____ ·twhd ~~........-.

' ~S,3J.'.l.1JM '),47~.t,·;~ ::!4l,:l~ri• 1,n.;1JJ,lJ3 1,~7:\~4,; 'i{l;:,·JU

llZJg,tl,01.5 l8,:i>'"'9,.H5

~-- 3}l)3.2% _!~~S,(i(i.~

23:S,{!69 11#4.213

E!~·;:,;Hl.4\li

___ Jl7,~~3A7t. _!~~-'..i'.IJ

..._ __ _Mlim.~ ____ ib!.q?:i~. -·--· ~;;4,Jl 3

20.;;.2g )4.33-9 8lS'.~6;!

{5,119,.!.59)

~~...1~&t. ·-___:~ .. ·HQl ~~--.E,sF:: ____ J..:!;)J9

C,ilJ~a.~23 nJAtJ'i3i i@,,3S2

.ii/.,489 ,8l5 1.,R"iS,.'nS 7 ,j~'~i\H7 !

·-··---·- 11 - --·---·--_____ ..,_

)¥:~.:... ~~ .... J.m.MIW'P

:Ooui--f:""»t~r:ttoamW

---- ~e.1.1::.J11 -~-

.1,'JS,4~,· 2/..i1j72 lM,156

1,i}It6,dtl8 l4,256.4"t1

i,f;:53.41! 39~AU

--......... ~-:u5it,,1 ~J ,

153.!i,SS~ 17)'94,MO

1.:l~.l:}6 J,~'93,!j6 ~,5Q'j",3"_2g

2,)9:',:59~ ._,_ ___ ~3?lill~. ___,. ~.'LS9"J_.62i

- ..... ~m 1'tAJB'.-t1J9)

1s,n<1 ;,,.9,,1$

f2,Mt,i1$)

20.,s;;;-1; ___ ..........£.a

._!_dlfV,~.~-

T~i,;;~ (;ijtJ~~t#limti.i!

~- F11md.1 _.,.,.,..~

'f3.:i54,.."i9:& "i":2JH(719 ~\!l-4:t).tll :!4,J0,$.,42~

l'J.7..3W,f14"l 2,j9S,937

t:'29144

·--~!~ ..

___ ...,JJ.J].§,22fil,

16,35&,8:'N) ---~'J!j, -·e-»~~

75~,-0-~H

1J.-iji)"J,:!i.Z..i

-----·----·-- 0 .

4=.~~~~

16

COUNTY OF BU'ITE, CALIFORI'i.fIA

RliCONCJLiATION 011 THE STA'.fE.MJ:?1'tr OP REVENUES, KXI'ENDXTIJR&S, AJ',D CHANGES IN FUN)) BAlANCJt OF GOVEJ!:Nllflt'll:'AL .FVNUS TO Tmt

GOYJrn_NMKNI'-Wim~ S'IA'I'Ef;,11:i'."TS Di<' AC'II\THES I<'OH. 'fl'lll: YEAH. ENDED ,ITJN}~ 30, ZiJOJ

fi...;t:wunh n::-pc~i:ttid for gov~rameniai a~;frv"tties ill. thr: st?J.ement~ {}fa{..:-Hvhiw are different bx>,e-atl.St-~

GoY.ernm~rrta.! fomis rnpmtf'Al c:1:v:pit;:,J outfay ~s -0xp:?,11dit:;1·es. How1:Jvc1\ in the statemfnt <:f .<u;tlvHies. th(o cus{ of thote .~s5m fa aU~)Cfiled ov~ . .r t.hdr estim.a.ttd urie.fd l.ivt;s c11d reportr.d as de.pre,;;.ial-icm cxpe:~s.e.. 11tiE is fhe :.uoouru t,y which d~f"r~datiort (~2\33 l t25S} exct.c(fotl capital 01.1-tl~ys ($12./iOZ~ 950) in tl1:e cun"Unt _per!o&

Bo:ud prc(;'.(:eds are rt1pmterl ;;i:s finandng srn~"'Dt~ rn goverrarwntal fond.s {lr,.d thus et-1.1tribut~ to tt~e du.ngti" m fun<l bala:nei. rn illifJ $\3f,cmer~t of net as~r.tsi h~'everj is:rrill!g de.bl increase:i ·1ung-tcrn1 li$bfmie~ and d~;;es uot ~fftct fue !jffite.meut vf activh}1·:,\5T Sf.111Uady, r~puy-1.nem ofprinc1pat i:-3 an eKpcuditme in th(jl; gov~:rmnc1W1l ftmd:::, but n~d.w.:e~ fhe ifobnfty fa ~he. stat~rm:n\ of H-l::tl~Sdt;,

Repu;,-,-ne.rits~ To bi..r:nd, ce~tif-kar~. atHi f.~ote h.<Jldirs

'£',nrir1t: ·~:tpitaJ Mchtit'1m \Vf;fC fin~;~d throu§,h capit.;f: leases. In £OV~rum~~l fLl:-h1S., ~. c,-:;pital l~.ase r£rrnngcme:t'.Ut is cr:msk1eted· ~ 5curce tcf fii1.aGdng1 but it';, the stru:emr.nt ofn.et a-..is£.,.....s: th~~ ],;a.st ubligation 1$ repor~d a!i ,'i 1iabHr.ty.

Un<ter ti\t. modified accrual ba.s]r of ~~~X"'--Ou.ntT.ng ilS~tl in the goverru:r~~wJ fondf1t !;).>-.:pendh:u.rts a~, n:"Jt rec,:ign!Z.ed fur trau$$.Ctl\1i.rui th.at ~.re rmrtnally paid wi1h ~xpe-1x'~bfe tnlfilbble t1nt!acW resotJrce~. In the .statt.;-nci]t of ac-rivilie$., OOw;;·"1::f~ \Vhieh fa p11't'.sBJl1ed on th." !flC"::ra.:U !:,.a,~;.s~ l!Jiplin-.;es antl ~fa.bilh.lk:$. are repoti~d reg~tUe~s of when t1n;,mdal J(::S£>Un~~5 ru~~ a'ihtHbi.bJ.e.

Int~ma1 zerv!ct fimds ar~ u.s~d by t:1r;- ('.ottnty t.1 chs.rg:J tl-l!!e or.:isr.'?. of HabiHty, rruJ.lpr:'!1':~~:e~ tnsU1Iu1ce to ir.:divjduB.l fbnds .. '!1tf,, til)t ,,e','"IJ'"' ·;1f ila!ei1m:: .wrvi,:dimd, lt r~portGrl with. gov~rnm~nt;.d a~:tivlties

iJ2t253

(:i, 15(),000)

(743,"13!)

17

COUNTY Of BUTl'E, CALIFORNIA

l'i.TATK1"'1ENT OF l".E'li' A1li81':T!i PROPRUT.AR\I FUNJ}S

JL"NE 31!, 2!!03 ______________ .... ·---·----· ----·----·----·----·---·---·---·---~--~--~,._,,. ... ,~---~-..... _.._ ____ _

,\$8ll'rn C..a.?>h. s.$'! ~':'·~m~tlr lmpr.:;~j -{'.;l!!Jb

Um.: fuJat .:l'UH:r- fv.'l.Hfo AL~,w:ri2'.i it;eh,aUk;

"'"'"~"Y rrei;mid ;tt'.tn~ rhwif.•1;,m otbftr~Q~{l::rnmen!:i:

C&lpif4t U:K·~ ~U:t

Totl\l.Mms

UAflllXffiiS Dm, Iv o1'J,,« fi;c:l• ,A,.,,,ur,t;;;,a~"bl• k,,t;rut,.d U'J~tie5, an,;! btn'11irn

U:rm:i(h,~m-e<l !1,g~$.euu;q tidr:eti Dme~ ;t~n:ti.!.l~

i~g-{trm &blliti.~: l~ <;;1itlcffl OOJ;: 7C'~! Dm:1 fil ruM!i' thM M.:e 'V,C.~

(J.a~m-:i: irnd ju&grn!'mti Landfill (;k,1,.1:m.·•, 'f1:.st'°"')-I;!su.r~ c.~ro -::'01.t&

Torijl ~fob!frtics

N'l!'l.' ASSE'f'li illver.:ied jn (ll".,.pital .a:;;se:Li, n;.t of r,Jnre<l tle l11: P'hlls'afotOO

~..,.1rr..rm:it_

61..193-Pi~DLi

l9i),C(J()

--~.2~-'7..1-·--- 3.6~5.[16 _

5,'j.]_jij

!7l,4U

1.35i 50,26&

431,RM

77.246

·-~ .:.t..!~84:2:~~

U,%6/)13 J.,')'.Jf!

i.311.301 17'A5%

rn,tn :li'h,9&2

!S,43:J f:f76

Y.M,,:9.l1. t,'46))&'.}

-- :l,1<!5,157 __ ,J;IU~!L

.M.751,5J9 1,frJO

201),,095 J51J,6l9

!91).000 ___ ..§.&..fiL

22,141..60,

7J~~r:is 441,427

l:l.~J3 ·,,zn

~;ui9. 43!:~W.4

S,6,922 l,74(.,0,,J

Govtt11mr;.u~

At.il:iVJtefj .Ir..JJ;~WJ s~rvl:-'.RI

_,....,... Fond:,; --·-

$ l,D07,615 •fO,iKlO

:J61,799 iOJ,1% 228-,289

569

!26,643 56!,U{)

'6~,:503 1i9'

3i6,6SO

C(Hl1\'1'Y Oii BUTTE, CALll!'ORNIA

:ST" TK):t:£NT Ol! RlS:VJSrfC'ES, EXJ>ENSES A,"{)) CHANGl'.S IN NET AStmTs .i'RJ}r:m.1:rARY l'lI"IDS

!''OR TILE YilA.R L"f!HLD JUNl!; JID, W!'.13

__ '°' Bm'1I!~~fauvilim - tn.!r.:rpr.ise P11mfa ~- --~,e~:...._

OPERATING REV_i!,NUES Cb.mrges: fur :.-•;'TvlccP: Tra.r.tJitfs.~s

Landfill fe:e;s Contr$.t::tor fo. .. '%

O'lilJ:ir revenue

A.tlministrntfr:u:t S1.\lrn1es lir«i e1np loyee b(*·efii~ Smv:ic.e r;·nd suppU-t.::H Clrin1S rn-1t:l jt:idger.ce..'1ts Ope.ratkrn a..11.d mlli.nlA~~mc:e Contrfr,(,,i;;:.1r foes Depreioiatioo Othesr exp~iw.:~s La.tdfill 1s;lrn;ur~pottl-ci-J~ru:·~ ca.re ,::ost Tofl\J 1..~pen:fu1g {;d'"f)-~U.~

NONO.l'Ji'.B.ATli'lG REV:lii',FE (F.:\.'1."E.NS!'.) lntzn-guver::_,,.:;:nwU]

lntL1X'~ incn-.ttit! (e,.'\:p~_:r1s.-;:)

Other in-:.ome (e.J;1cnse) (lfm1ts ''fnu.:s:fr.-1. out .Safoi of wpH:ai as.~et

T o~a1 ~1r.·!1("'.PW.r."'J.r:g reve.u,,Jc ( eA'Pen5~)

T.1tal nt.~t .~£'<H)t.s--be,ginning ofye11t

t Ot!il nt."t f,ssets-,tn&ng uf year

S }14,320

So,229

lf772,520

333,3!9

-:i'J9£'ri'i'

__ J~!)l.

l,!$7.397 24,83 l

34:! !90,000

--- l.372,57fl

(267,{H 1)

-------·-(:267,nJ l)

4,531)37

9!000 12,9119

-·-· 4,553,¥6

"r./}')3,119 154JJ2

!,68.2,705 1,066.53}

l03,3l:i

~= (;954fa:1>.0j __ _j:425, tli ~

·--2J.P ;l,!:,:_

607,632 18520

511)~-rl

~~~

4,265,313

=-"......._ _ _,.._,_n•-

314,320 4,531,317

9,000 251,U6

--·Tios,,r.C

1~179;'.358 434,n2

3,455,21:'.i 1.{'J66~53 l

43(,.,644

_ (2,954,460)_

_....,..l/118/!W.

___ tlg763.

l,!57,'.!97 632,46c-

!8~fi62

5111827 __ tt:?f0.,549.

3)8iJ8~312

n-...•~----•..,_ ___ m

1ntffiJa.! Sen'ir.e.

3,J80,503 8,Gf!2J32 32'74)535

270,030 559,235

----~ .. --. __ l <5,(l36Af,5 •

=-·- (14.3.796)

46,444 l52,W6

(270,()80)

(20JIC·R])

__ 652.,SOS

-~,6150,244

J«.zi,60?.~!:.~;

t9

COUNTY OF JHJTl'E,; CALIFORNIA.

STATF'.M.ENT OF CASiff JILiDWS PROJ'.RlETARY Jli't!N!ll';

l'Ol!, THEY EAR ENDlO'} Jtl'i',E '.l(J, '.l:!l(D

~-~~--"""~-------..........------------~-~~-"------------.-.... --........ .,.-m_ _",__ __ _

CASH FUJ',VS FROM Q'P:£.RA 1i~G A-CTIVIl'lES~

Cash rec:e.lpt from -:."JStomm C~b pa~d to suppH.srs for good.s &tK{ s:c.rvk-e~: Cas~ 112id °t!) empk:y:::~s fru ::icr,,fo-~s ktern:.1-1 nch.vilJe~ - pr..yn1,;n:.s fro:rn (to) o-th-:T fumi~ t)t.'i'ol' N<:oipts

CASH FL(iWS FROl'l'f NONCAPff AL JffNANCL"lG AC11VUU;l;:

Aid :from f.~!h~r gove.rru:nenutl a.gt.nc:ic.'i' Advanctr. .ftom o-tha fowjs Tnm.!.J:~r& N::m.~perii.ting t;;-ve.m"M;f.

CA.Sii :n .. ffWS FROM CA.!'ffAL AND RELA11W F!NANCH•;G ACITV!TIES:

Net cash m~d in :,;.apitftl i;v.:\d .;datc,d !11rn,1-iici11.g: aohvite~

C~l:I FL(lWS FROM fil'f\!F"STING ACTI'Vrrrn,;, fut~~ 1e,1;~y~d

Sen··k~ __ '1):,.:n:sh .. ~ ,_ Lt.~.dfHl.____ .L,~--~~ToUd .,. _ _E!tvl.<i _

2·::a:,562 (l~-'6U1064)

(Stl,.964) 6'.)4

761)&4

(38.168)

$. 3,777,()t'I (2)67,0?2)

(41.0/107) (399,653)

_ _J.;,,ooo_

2:,~:l6~S39 (3,293,,f-43}

~,46ll

--- 32.43E .. --··-- 62.S;2.U6

$ 4,072,579 (3!321.1~1,}}

(41u;707) (J,58,l'J7)

_ ___ J.!!ie2.L

i~232,I75

--- I, 234:21,? ·-

$ 16,69'1,365 (U.SOOJ651) {3,074,7?.0)

(438,775)

JS-J:w (604,~}~\)

0,0'.?3.:it,4)

-·--~ 8. Ui1 .....

(10~'., 765)

Oi:)l!tfiling ir,tl;tm, (!os_:;) A.d,jt.1smlmi! to rncm:idic ,n~rarb.;g 9Itoc,me

{k:-~".i) t,o net {}a.~ii ~n:·vklr.d hy 1,i;t.ed !!'l} operating ac.tivflie,s; DcpwJ:.iati o:n Chang~~ !a asze-is fjmi Uabilil~f:;j;

(Incr-~'"ii,:z-) ..:h:r.n.::i.l.."li.:: in: A,._·,·;.ttf.mt5 r?.c~h,~bfo D:.n~ :fr!1m tJthe.r li.inils !!lvemmy Prar,ak~ cn:;p~ue::i ?J1d othi:--.;- asst:;

!ncre'&e (<'leo""1..se) io:

S'l:A 'l]i;!i,,f,EN1' OF CASH !'LOWS:

PROP:tm~r A.RY FUNJ)S .FOR nm YEAR ENDlm .mNF, :,O,. WG:J'

33.5,31~) W3,325

(3710.57) 2iW.74D {54,BO) zn,9"14

AO"'.}}t\.n.~ 1,1:.yabi;.:-ia..',C(lJi:'-Oi s1:dt,.3 ta,rJd~.ferrt:d rcv;:.rrn~ Due., ro nth.~ f.ur.\G::.

2!,367 ;;3~17~0

l!0.481

A{'CT'Utc;;i s~i~s and h-c11tflrs (~omperu:~J.;d ttt'.·~cric;;:s Limdtm .;:fo.9:!Jre/p;:;~4~Gkt:s1:.irc !'.;.-;)$(

Chtilri:'.; a.'ldjl}.d~C!it's

Net ci\.-:h pt.1·.-j(k;:d. hy (u»..~d in) t•p;~mii:r.ip; ~i·lf~~i~:3

_...._ ____

~~- L_h3~'2.JD.~

"9,(}'.Lj

('.l,95,,1\460}

------·---

-4w~

$ {!43,796)

436Ji4-I Z70,0~{l

243/)g.; (46,043) 2;!);44.:1 l,4&5,665

42,48{.l (56'j)

13 l~ij{~ (299.,752) (?-1)1,~J))

J0l73? 9,0-25 (9~7C~4)

(2,954,~l-60)

-----~-· _,..,...._, __ 20.00!J ,

_L_(ill,,~ill -.tJ~L~-

21

ASSETS C'-ll~h ;md investment, In1pn:,st cash Dm;; frorn other fonds Aocounti. receivable Pr•~pe,ty lax re;,;ei "" bk

LUB1l • .JTIE1'i Due !o or.her fonds

COUNTY OF BUTTE, CALIFORNIA

STA Tfi~MEN1' OF FWUClli.RY i'{f.:T ASSETS FlDUClARY F!)NIIS

Jt;N}L 311, 2003

$ 193,356,217 7,671

tllL517

--!95,958,003 _

Accom:it.; ))!lyallle and ,K:~rued liD,blllfoos Sales tax atcnJ«!

4(0;5:56 1,22,t,391

69! !47,966 '.>i;,H.l9 81..!)95

Safaries ~.r.id ber..efitH payahl{;' Nt:'.ttcg payabfr~ Deferred n,venue Ag,mcy fim<ls held fo, m}iers

!'>i1!:'.f ASS:I-11'S He.k! fo trust for !)OOi pii.r.-ticip:ants.

Ager1.cy Funds ----"'""""""'""-

3.57,664

$ :~0,264,990 ---~-'-"""-

.\; 2,724,H()

$ 3(\264/)90 ·~~..:..=--

Additlon'S;

COUNTY OF BUTTE, CALIFORNIA

STAT.El',1.ENT OF CRANGfJ; Ii"I NET AL.SETS Le.,'VESTlV!INT TIUJST FTJND

FOR THE 'i{E.<\.R ENDED .r,JNt'. 30, '..W03

Contribi.It1ons: to po,:.:ded inv~stt:nont;: Jntentst and investruen:t lncom·~

TotoJ additions

D0dw··tir1ns · Dlb-tributlon f:r(1m investm~nt pool

Total ciedu,;fams

Nd fillSGt,,, begilllling of year }Jet 8.;it!C°ts, end5ng of y~-r

$11044~9,~5,008 5,056,174

(l,052~34.4}25 2)

-·- ~ J ,052.~3441252)

(2,343,070)

196)i6\36j

.J--~1:2i~

23

I.

COUNTY OF' BUTTE, CALIFORNIA

NOTES TO TUE RASIC ftNANC1AL Sl'A'i'EMEN'i'S FOR TIT.I-~ YEAR ENDED JtiNE JO, JOfi3

The CoJ..:11ly of Hutte (the Count)'), \'Vhich ;v~s incorporntcd as a County iri l g50 as ,.Jtle of r.he Stare,~·~ r1rigina1 27 counti.er;J h; a l~ga! 5ubdivfakrn ;)f the Stat~ cl Callfontla charged with g::y-.,·err:mental powers. rte Coun~/s rmwe1·s are exet-cised throug..~ a Bc·~n.l cf Supervisr;n_.'. "llhich~ as t11c gO(,l'en1ing body ~yf dm Count)\ is n~sponsible for the lcg-lslative and executive co11tw-1 of frlt'- c:ou:nty, As req~1ired by g~nera.Hy acc-epted .aGc(m:r.;;~:in_g pr.indple8~ tb~e finiinclilJ statements present the govc:rn.rJJ.c>,~1t ar.:,d its ~arJ1+1(metit units~, foially se.par...ate er..tltie~, for ~vhich the Cotmty i.;C{)nsider,::<.] to be. financ.ii!Hy accountable

Blended corr,pom:nt mi.it,;, although ieg~Jly entitfo.s, are, iu substr,n.:e, pout of the County~s: r:=µerat1m.w and :5(:. data from these a....-e combined v,dih data of the rirfmary guvelntnent. Each blended. ;i.1-1.:.rq)on~nt u:n!t hat a June 301 2003 year-end.

In evahmt!Jig ho'?,.- to de:One the County for fimmGfal reporting purpcsc~, :c:oonzgeme:nt bn:s <:onsirJered all 1)0te11tfo1 cotnp(tncnt units. The de~ls.wn t,) indu.de a pott';fttfa1 ~ornp•o;1ent unit h1 ttie re.p,orting entity wa.i; made by .applying tlie criteria zet f:','.)!th b G-over.nme-nta! Accounting Standards Board (G.,.\SB) Statement.No. 14 1"'H;e Fhm.nci.aJ Reporting Entity.~'

The Bu\.t..., Conaty Afr Qu.alit;r M;i;r,agemer.t District (1:he Dlsiric() is a bkn,foll cnr.v.por,eni -.wit oftl1e Coun{y. 'Ih~- Distrid.~$ JJoitrd is cr,mposed ofsev~n mcmber~1 of which five memh{1rs ate th';;) County\,. Board of Supervisors. "Ffo~ndal statements nf tht1 l.Jistdct may be obtaint"J.i by conU1(:fo1g lb~~ DlsniG't 07 t.ie C.::ntrrt:y i'~uditor"'C:~mlroHtr"s Off1·::.e"

Based on the criteria est.abhsbed. by· (},ASE 14~ f.ht> re].'lorting cntit;/ also in.eludes tLe foilo\vlng blended cornponent vnits which are Special Dfatrk:t~ rJil.der control of the Board of Supt:;titl'sors:

LindoMrmor R~ncho D,: Thua<ler East Chico~ CSA #14 F~ .. st Chien -· CSA # 15 W,:c;,, Cfoco -CSA #!6 Nor!hP~rk ~)~·~ -~ (}uincy Road .i:bCm'llfo Oro-·V<yarid,)tte GJ.en Haven. Chico Rancfo:ria

Duthmn \Yard Subdivision P~ach I,,~<' Pl:i.c.e MMdow· Estates Souih Orovm~ "" L:l-o l'hnru:s Park ShrHng City LightiDg \V~Jnu.t V-/oods \Vvotbid~o;; Oak •N av H,t1<tc,s

24

NOTES TO Tm: HA.SIC Ji'INl..NCJ.AL STAJ'l~l,:!Jl:;NTS :FOR THI? YEAR. E-NnFJ) Jf;NE 30, 200:.l

Rarn.:ada 8ueet Gliv,,; Glen E~;;tates ~,1:ufoenv Street Stithng City

East m:1d (iU)'Titl

QJ,\ilRun Bir;: Chfoo Creek Estates CS.A 117921-llnd #?5r12

Lindo \.Vest La.ke-ridgr~ vm.age Silv~rtree Suhdivisbr1 Stony l'srook-Sacramentu Av,;:rme £:,tales Carriag;:. Esmr.s Subdivision HoHyGmdens Meadowfa..t.· Acres Bbck Oulrn Subdivision

Vlalm1t Grove Units 1 & 2 Young & Hi)bal't S:i.ibd.lvision P~rnan Snbd~vi&fon Pistachio (Jn;"'e Subdivision fvfacint.osb Avc:nu~ S,:ni!h Fork Estate~ £\larno East ,Subdivisio·n \Vi11ow· B enrl S1ih:1ivfoion w~st Chko E~rat;i,i West~t-ood Lrn1c Suh<livig.icn1 Y\.'Jldth)vvie.r Estti!t:-s Suhd"ivision Qpc,har<l House E.:staks c~.re& Av1.:::ni~. Subili:vi~ion Baker':, Dozen Subdi,is]Ofl Featber0.ew Estate1·.

fi..1·;')t'M~ Subd1vision .l\lmond (t:ove \Vest 1 .. ,1.~stn~;ood Subdhisirm

Sierra D~] Orn Keefer Road/Rock c.:retk North Chico Pl~ijSI\Ii! Valley Chioc; ..... Mud Creek Sha~tn. Uniuri

O;ikridg,, Stidi11g Cjty

· Mi::u.m~io Ocike Subd.ivh;fon Roor,gani2.a~.on Vlehb Hor.ne Kcctl1· Creek

Vi,1}.2 Dcl Cmr.o Crest;,/ood Lindo Gard~ns Jo,shllii. Tree JO<lhu~. T-n.w 112

25

COin,rrY OF lHJTTE, CAJ,lf'ORNIA

NOT.ES TO THE Bl\.S:[C FfN'ANCIAL STA'fE.lVUJ;l'H'.S FOR THE :{EAR [l"iDRD JFNE JO, 2003

CSA-· Dr@hm_g_e .&J_Jf::htim.r (condrme<l)

0,1.k W'9v Park Daily • Marigo!,d f,'it.ttt~s Slustir., fo..:. Fore hay ~./':i-sta Subdtvisinn La~rrehw:iod l~st.ates Carrv,or.i R...1.nch Estae.es f'hc,;sa,,'l\ 1-anding Snbi:hvision

'\/alley 0fsks Su.bdivigion Southgate A.er-cs Drainage arni

Fir,:: Protectk:1; 1~1crrri..1lito Sewer a.u<l Drninage Sycamore \l;tlley Se"\ver and Light1"0.g Gridley-Bigg~ Amhnla.nve 'Valk•rnbr.r,sa Lighting and Pirc Hydr,a11"t Big.gs S'Al'lrr1-rr:d.11g PtHJl - P,..t!c:reation Gndky Swfomung I'onl - R<'>C,e.ati()!l Cmm.ty of Butt~ ..... Nitrate Study Piao "W~1nut M{anar Dwrham-D!!yt1)n Indmt.rial hi-me.rs for

E:xi~ndcd Stmctur,J Fin, Fn1t1o0tfon F'orrc,t Yoilllg Blgg{:1:-s Subdi:vfa~.i)n hhi Ya\Iev Esiates Thocritroe.l.,:;dustrif.l Park Coe.m:y ofButtc-Anirmtl Control J11.c;tin .~1anor SubJiv:hsi(ln Ke:efrT Creek Est11ttr;, Lighting, Th'siru1ge .nd Sr:.wer

Lo(;aJ Board GovC'1'n~·d Dittii""lch'; and Schcoi Dis.tric~s; Th~:.~e po~n.tia] comp~'..'lr.u.,nt unit~ have been :ex.c1uded from the reportin.g entit;. Thr..-y are legally ::ep:arnte prin1a.r:,;f go·ven·-uncntal u..illlli, Th.c finandnl :reporting for these governmental entlti.es, ,vhkh a.-re im:lependeut of th(~ County-1 are limite--'J to th~ ltottl-1 arnm.mt fbr cti.sh ~":td .h1ves:tn1:eras and the rda.tcd fidudary J'Cijpqr:rn:lbiU.tie.s of the County for di~hur~ement of these a.s~ets;, Activities of scb)ol <l:ii>triGts .&1d ioca1 htrard governed disn:"icts are ~d1nin.istered by b<Jard.-:i vif:hich a:rc separ";ptdy elc:.cted ;fifld which c.re Lnd.i::pende11t ~1f the Count:.v Bui.-u-d of Supervi~orn, 11:tc foUov.dng l(x.~l bc~d gov~rned. dfotrich: arrd sd]Oi>l d'.istrU";t:i · h~ve been e-x,:;luded fron1 the CcnJtity\s flna,·u:;ja.l stat.em.e~t8::

26

COUNTY OF' BUTTJJ:, CALlFORNIA

NOTES TO Tm: l:lASIC FINAI•lCL\l. S'rATEM:ENTS FOR 'l'HE YEAR E.NDED JUNE 30, 2003

El Medio Fin; Db,sic! ~Aaintenance l~sea #5 f;.1ainr.enance Arca #7 Miinterumc~. Arc:a IH3 M aimenarJ!:e Area !I l 6

Cr'J.co Area Recrl:.atioo & Park Dm--hmnRecreation & Park Featbe, PJ ver Rcc>realior. & Park P:ru:adise R~reaHon & Park Rkhvo.1e Recreation & Pmi:

Buth: Co-1 .. uuy .A.ssor:iation of Ooverrunents

Sdmd Di~trict~ Butte CounJy :Fair

Bangor Cemetery Gddley,Blggs C.;metcry Kln:tshe.'1.v CerrK:!ery Omvi.ll<! Cim'.,et~11· Pa~d.ise Cemet,:r-y .Pine C!r~k Ce1n.0tery Thoropsr.m FJ€it: Ct~n1i:,tery Uphatn Ce1neter:y

Bum:c Creek Drajmi.ge Drainage Distri,:t #l Drainage Distiot #2 i)rai:nag,: District #100 l.maitl!'lge Dimict #2&1 Reel.nutation District #833 Roek Cr~ek R.ec]amaiian Dfatrict

Health_& Sanitation

Butte Cnunty Mosquito Arnr11;ml'llt Du.rh~xra h.fc'£quito /\bate·ment Onlvilk Moquito Ahllte!n,:mt Fioh;,~-ule Satiitary rJpcra.ting Richv2fo ,Sznitai-y ··· Bond & Ililkmst Re,fornptim1

111~.;c rntitie:s l-.i4ve sq:Hu.!lte ~lect¢d booril...s and pro'vide s~~vice1 to residents, gen.~.l"a1l}· ·\Vithin ,he gt}o.r,.n.1phk boundaries: of th6 (~ounty < ln m::~.iitfor-4 thes~ cutities ue e:~dulied from the tep.rJrting ~:nlity bec:u.1sei they ,ire not fl.w:in~..;.iaUy accou..t1t}J!bk t~J the Cmntty.

27

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FlNANClAL STATEl\-IENTS FOR TFfE YEAl~ I,NDlm J1-1NIL 3il, ioo.3

TIH;: sialr.m1ent of net Msets and statement of activit1e~ di5pfa.y infrnrnation about the- prirrrury gQv;;;nmu::nt (the County) r:Lid its blendt..d component wilts. The1te ~,1r .. te:ments t.nclude the frnanciz111cti vi ties of the ovt~rall gove:t11rnet1~ exc,:pt for fiduciary activitie~. EHn1tn:itim1B have ber:.n t.n~.de t.ri min1mir..e the d1)ub]i: ~xn..mtjng of :btent'Al at:tivitics. These :1L=rt~:men-U; disth1gu.isl1 benvee:i1 the goverrtm•.mt(d and br.-ts.foess:-(vpe activlt"i'e::; ... ~f the Co,mty, Govt':t11Jfj_ental a,,:;tivitie&; which. 1:1::.Y::--rrreUy ate suppi'.·:rte.:-:1 by t~x.e::t and intergove...f1m11.:•;11t1! rev~ue~~ arc reported seperat~ly frorn bm;in~s~,..zype. a0ttvities, 1,-;.,tt·Jch ndy ti:J fJ ~ignifitant e:xteri.t 0!.1 fees c,h.&1.{ed to cxh::-maJ pirrtie,s

The statement of activiti.e8 demonstrates th~ degree t.o w·hicb the 'tJ:rogi:-ru-n ~xpc.nseg of ai given ft.tnctfon w:e offset h;; progrmn revenuer::.. P::og.ra1.n int; hv:}e direct expt"".Jl.St3~ whfoh a.re clearly ~dcntifiable "t"Zl:i1b a st---..ecific fuudi1.:m1 ra!Jocatc-d indireot ~4p,cll.S<~5. Ink.rest e.xpensc~ rcfatf:#.:l 'to kmg ten~1 deht is reported ~ a direct eA--pe11se. 1l1e! tt.)Ull ~,n1eo1.mt of intere:;t

to ;:xpense for th~ y~~.r end,,ii June 30. 2[)()3 v1i,s H6l,046. 1) fees, fir1es and charges psid. by the redpientB of goods or seTvjer:s by the

ptognur.il$ md 2) gn:m:i~ ~.ntl contrib11tior1s that ::L"fe rest.ricU:.d to meeting the operat.kmai .r.)r capital req1.drem.e11.fa of~ parti1..~u1al Pf('!grant Revetmt~s H1at are not ch-u~.sified as F·ro~rn rcve11:1.1es 1 includiug aU ta~es~ arr:, pri;;:sented instead B5 gener~1 revenues.

The fond :finaneial statements provide infonn.ation about fiie County1s fi..i.rids~ inc.foding fid~im:-y fl:md;1; rmd Ni!n<'J:,d ·~o:rnp011ent uni.ts. Sr::parate staternents fOc -c:wch fund ea.tego!y -­goi•t.wnrnce.nta/. propri*!:ta.ry and _fiduciary - are prcserited. The emphasfa of fLmd fin.ar1~faj statr--...meht~ is o;::1 mr.tjor gove:mmenral imd entt.-rprl~e fi,n1<l.s~ each displayed frt a se:par3te i:.,o1u.tru:t AH ·rem:ah1i:ng g,:r,.""t:tnrnental -fiJJj_d:-; we -:sep3rately .aggr·;;!gate<l a'11d n:.1-1t>rted as l1th::r j'l:)Vtrrrmeata1 :fi.rnds.

:Proprir:t~.lJ' fund rcver1ues~ such .as c"ti.atges for tnmsactlr..ms the prim"!ipaJ aQtivr~r of th{': ihn;i, thos,~ in which ~Jir.h pany rt~ceiv:es- and give~ up ef.~cntia.ily equal Nouoth.':t'-::t!ini;~ !\·~venues, suc.h as subsidie,s: and inv-estrrlent earrim_gs, res uh fr~al no.nexcha.ng-1.~ tra~1s~rion$ o~· m)d1:ary u:d,lities.

•$' The (Y,;7:neral Pwul is tist.:d tD acCO\.iflt for sll revenues a:ud e~-:pt-c.nditu:e.tt necessary to ca..~y om basic g.r,rterr.Jnental 2.:::tiv-iti~.s of the Cou.:1ty that are !-mt accomrted for tf-'..r<.N.J.g..1 ofoer f,tnds, For the County~ the Gr.nernl Fu.c.d inchidc:s such activhies as :pubH;:; proteictfoni pubEc wuys r..nd fadHtet, hc:dtl: and Sf-mitatiun. public. rrs;;faiiu)e-;.;;t .Jdm;a!.io-ri and recrea!inn services.

COUl"ffY OF IHJTTE, CALIFOllNIA

NOTES TO Tllt JlASIC ]1'1:",ANCL<\L :STAT_~~MI:NTS H1H 'I'lIE YEAR El\"DED JUNE 30, 2V03

g:~2::~1~:;e ,~',,i:o;:;TI~:~~b\:~!eds~~i~cci::~i::: 111~/~ct~;l~::nr~!n;h:d!:!f sten Ca.,f\·Vorks prngnm1, Adult ~1n<l ChUdren~s Prctcc:6on S,rvt~es and va.rk:<us ,-ther State~ Federal and kicaJ assisttince prt.,gram.~.

The Road ,F'tmd T"it~ifj e~t~J.:iHshed t,:, a1xount :for the eoru;trui;:tiou and maintenan~e cf th;;:: Countf s ri:.ads ,and bridgr;s,

The 7.};,;.rr,..;$1 Fund \Vas estaMish.ed t1} ac1xRc1t fr~t thf!, Cc1n11t:/ ~1 shru0 of ,costs iri ptuviding t1-a11sli ;3nd transit re!31ed ,tervk-~ to ti1e -citi2·ens of Butte Co~11r;ty in bofo the-110.inco.r;H)ttrt.ed and irrcorpotaied ar{;.i::W of' tt~ C01.mfy.

~Th~ Lcmdtili Fund ,vas t;.-;,'llahlfrshvd to acc,:)>imt for th~ CoUJJ.ty1s cest8 ofprovkih1g lan.Jffli ~m:I :re-.t?.ied wa:sh:: dispo~ai servkes to th~ citb::tru; c)f Biitte County in both thr; unlncorp\)ltlted at,d inr,.,i:):porated ar~as ~fthe County".

fnh.7-nai Service Fu1ids. are use<l lo 1-wcount fer the .financ.ing of goods er servk~ p.rnvid8d by o:nt:; depat1lllt~x.1t o:~ tlgeni~y to ntiH.1r departments or agen...-;ies of 1}.e Count)' on a c.C·~,J·reU.nhunement ba~if:;.

The Irn .. ,-est!nent 'I Fust fa}:11d a('~o·:.1~1t5 :fo: tbe ::ti5sets of degal~v. ~epa-::-ate entities: that depn~it ~.ru;h v.-ith ihe: C...01.tnty ~ rea.~_n.1,:rer m ~n mvrastr.cH:;nz pool1 vvmch resources m. thc invc51n1e:ril portfolio for tb~ h,nefit of nU parti.cipants. TI,ese and c01nmunity co Hege districts,. other spe~iul di&tricl~ gov~nie<l bourd.s :tad ~n;;thorith;t; and pass through fund~ fbr tax cioilectkins

~ T~e Agrn<-~V .f'unds 1~ c~arn,.todi..al in :nat~re and ~o n~t invv~v.:: mei1snren1t,ct (:ftJ~~.H.':~;uit~ ofopt)rat]ons. Such-fund~ .r~ve rm equrt_y ac.c-<H111ts s;n1c.e ali assets m·e due to u1vauua1£ or entitfo!i at sorn,: futJ.rr:e time. The!:\t fund8 aGCQUUt for asset::i held by the County as an age.,.11t t~,r nther goven:mu~nt units.

C, Basis of Accounting

Th r-.yr. :11 r, n+ V'i-°'"' p~o,-,ri""tat·,r an•-i j11ve~tmen1' tnls'i fund fir,~r!::,la1 ~tai';;·ID~nt.s :are :ep:m~ '\~:;tri:;~ ;1~ u.~~or,:1~;1/ r;~~l;rc~~ rti.easurert:i!nt frJcu~ and ths ac,:wua] basi~ c,f a;.~'.CllifJ(ir:g.

29

COUNTY Of HUTH~, CALIF'ORNlA

NOTES TO 'n1E :1:tASlC FINANCIAL STATEMJ<:NTS i'OR THJi'.1:'RA1{ £:NDJW J1TNJ1 JO,. :ioo:;

n .. C'Vi!i'\Ues are rt'.corded when ersrt'p;d ~nd eJ\penses are recon:lt~d at t]1e: 0.r.nc J.iahiiities ;1re incurre4 regardless ofvihen the ri:l.1t;ed \;~h flows take r-,lm.:c. Norie.xc.hangc trJ.11~~tions, i.n 'fl"hkh the CrJi.!.nty gives (or U!ceive~) value vAth~;u.t dired~y tecehrin_g (or e,'lving) -0quai vrtlue ir1 ~xchangt, iacludt: pn,peny and ~ales tfl.x.-:::~; gnmts, ~r.ttitlcments wd 1,.kmatiori..50 On an acoru.a1 li~s.is, rr-:vc11ue frtJ"t'l: p:::-operty taxes is r-ecogriized 1n the fiscal year for which th.e !clAe!{ are 1evlcd. Rcvt::rm.es fro111 sules W.x .art reCOi;:;'111z;.;d w11e.n the underlying tr~nsrmtio.m1 take pfac~. Re~lenw~s from gt'O.ffi:,:i, ;~ntltkme:nt5 and do1l8.tion::<t El.re -rv.:-ogn.h;erl in the fi~~ai year m which ali eligible n_":qtrin.=iment.s have bec:11 satisfied.

G~;vernmcmta! fu.r.si!s sxe reported. 11:-.;ing th,;; current fin2n0-iat resc.:irceii rneasu:remetit f. . ..1cus r.nd die moditled nccnraJ b~~is of ~ccem1tir1:g. Undc-r· this mdhod1 rnvet1ues arc recognized \vh,:;n rri.easu.rable .and avrJJabie. P.rop,e:rr:,1 and l'1ales ta-1l.:.eS. io.ter(;s1') certafo stat..~ and fud.f'.1-a.l gra.rits .and charg,..,s ihr !le.rvic-es are acc.ru,ed whr.:,n fr:eir :receipt oct:urs within shttv days after the end of the acco1~1.tttl_-i1g .sn as to h.e rneasurnb1e 1tnd avaih;bk,. Expenditu.res are gen~-;ifiy recrn·Ued wh~f! a fa incurred, as 1mder &.;t.T',ml acco:1:ntir4{, H-0:~·l;Y~~ d~bt ~erv.ice expenditures~. as weH l'",S e,"{pendltures reJ.;;;t~d to c<,tn:pens~.U;d absences ~'lre: recorded only wlh..Ti J:.t-1yment i~~ due. Genend cwpif: •• d a8set,i; acq1.11~K~tkms :a1re reported- as ex:pendituxe·s in gr.tvernrnerttal D..m.d.s_ .Procee,ds of gt':1J.tmd k•r1g .. tenn debt ru1d •;apital leases a:re rcpmied a;;· o!h\.i firul.ocfa-1 ;mrrce.s~

\Vhen b·oth restr:ict:d. and unreitrici:cd net assets are av:aifahle, lli1Je.sttic~ted. reso1Jces are used only after fue r.e~llictt:·d resoi.t'i"Ct".S an;: deµl~ted.

Fr.rr !ts proprietiry "fiIDd;-;~ the Comity has t~ec:ted ur.N.kr GASB St:-i.te1nent No, Accouliti.'fl.g and flf.na?"J(:ial Reporii"ttg for }.Prt)pn<era.J}' Funds and Other Govenu1u;.rital that Ure Proprietary .F'u.nd Accounting, to aJ,:ply an app.tioab}e G".:l:.SB prr~·1tnJ.nrements a~ weU as a!(V applicabfo. pror.wu..11w{!lttie·nts '->f t.he; ~Financial .AceoDnting Srandtrd.s Board, the Accounting Prlr~ciples Bo.zrd or any AccoU:"ltfrig R.Me.;.;.rch Builc•tins is~ued on c·r before NovcmbeT 30~ 1989 mtlei:;$ those p:n .. rn.ouncenh<:ntf: C4J.n1lkt ,vith or contr.adic:t G AS.B r.m.;nounc,;;.me:nts. The GA.SB periodic:uHy updates iti cod{ficafa~n of' the e-A:isting (hYVf;r:~ta.I Acoour1ting and. Fitrnnci~ Repc~tfr1g Stfu.'1.dar.ds wllicf'i, akrag with :i'!.lbscqurot GASB pron.ounci:tnents (&tr;1tements and Inkrprt;..1~th:~rrn)t arc u..c-urn:rhng pdncipks gene..•·rt.tfJy ac.r;epted in the United Stares of /'u,:1e1k11.

Fo:r p!.!rJh)~e.s of the a,,;;om.panjfffig statemenf: cf ca~ flry1vs -- Ftmd,":~ the County cons.idt.rs an highly liquid inve~tn1ents with a n:1at1..1rity o:r n1on.ths r)r k:.~,~ \vhen purcha~ed, rrnd thi:°'.!lt eq1.1ity an the County Tr.:aa5u;er~s it1vcsfr11cnt pool~ to be <~f;a.'ih r.+:jufvaJent.s.

It:.ventcwir~s are vslui':d al cos~ •,vhid1 l~ ,.fotennined on a first-in_, fo~-;t-out ba;;is:; and ;;ons-ist prirnari1y of eJtpendah!c t\.lpplies held frn: C()mJurnpdon. The co-~t is recorded EIS -an expen.di~r~ 1~:·~t~ ,1l1t\ ite:m.s t1R· Tu..~~:-~. ~ th~ grrvernr111:mcl ~iind:, balam::.e she-:i~ ther~~ ~ a rnsf'...·r--{nt10G ot funu barn.nee cqu~ to the m.v1-;.nrcry balance~~; tbe~e amoLmts :ire no-£ ,"J.v31far.~Ie for a_pproptiation

30

COUNTY OF BUTTE, CAL1FORN1A

NOTES TO THI RA.SIC FINA.NCIAL STA'ITMKNTS FOR 'niE YRA.tt ENIHl:D JUNE 30, um:;

------~-----·.,__,____ _ _,,.,_,, ______________________________________ _

hl) 111cmts made for sc·rvices that ~.vtn hertefit futut·:~ petio,h a.rt.:: reGordcd arr prep,aid i'tWts. In tl:1.r:: gcverru"l:~mtal tbn.d typ~s. there i3 of fU:nd hala...1.ce equd to the ar.nount ofpreps1d. i.te~\- s!nc-e these arm1u1tt; 1.trr:; rnJt 2 . .-.."al!abte for .t:i.p:xopriati:on.

r·toperty- taxes r:::lt1d1 a~ an. enf1J:r~eablt: lien on .fa.nu~~l L St~curnd mxes :ar~ Jev-ied o:n July 1 and are pny.abie in two in::rmJim~nt:~ due by December J 0. ~nd April l 0. All general taxes are thrn aHocated by fhe: Cminty /\udiror-Cm1tr~.lierj~ Office tci the varlou£ e::ltities thi:: fogje,faiiori .. irnpkrn.enting :Prf.1positi0n 1.3. 'Jhe rnethcid of aHocation used fhe is suhjeci tu imvfow by the State of Cal:ifcrrrl:faL

The County utilizes 11le u.lten1...atlvr: metl~c.il c,ft~t·perty tax dhd:ril~ufrr:ini wb.cr-eDy the Oounty: through the 1egally required Tax .Resot~rce Agency Fund p·1..trchases the ii'!U~)t .ser:uxed u.npairi ta..~es rnm,aitring ut :,ear-c.·-~:nd fr.om partfoip.;;.rting a~cie:3. L."1 rcttu11 .. th~~ 'I'ax R.e&Jm·c.c .Ag~rwy Fut1d records a tax r-c~cdvabic and receives the de1inquen.t S.-Ct.t1red ta:xe-iJ. The T~ Los::.: Re$l-'tYe Ag-en,1' fun<l nxdves ildll1q_uerJt pi;rit-1.H.ies and redemption interest accruii.'lg to de}foquerit coHeotions related to p8.riic]pahng age-m~ks. The partkd.patli.,.g inchAd.tng the County~ t.h.e ~1'le!.,;ial distrfots~ and the school rti&tricts~ in turn~ f.hH ta.it dfatr{b~~itiun. ,vi1J1 no liahifity fhr ·un.coHected. t?utes to the 'T:?-1; Resource Agency 17und. TI:i.erefori:. for narticipatffig :agendts$ revenue fs. rne.'-1.i-1t1f'>i!bl~ j;.n_d available and fo recorded in l1'e period the ~1yrne:nt of current seo~1ri::~d u.npaJd t<a~cs it t~cd•red.

Tb;!:; c~)u.nty is ·requked to r.;reat,~ ~. 12:x loi•S resc."1-v~ fund (m agency :fu.i,d) under one of two· alten:t.a.tiYe mcthod-s: 1) on~ per£;ent of the t;JUil ~mm.mt nf ra.xes 211cl asse§sments- k'\"led or1

the 5oour·ed roU iiJ1' th~; year or 2) ·{';ve-11.1iy-fivc pt..'t'ctr1t uf the iom1 ~.k.:linqut.ltt secured til-1..:t•:s 2nd as~e.-s£.ment.S as cafou!ated at the end. of the fEGal :ye-JI. 'The County is m:ifag ti.-venty-five pcrccr1t of the ddinq·ueril ;;ecurecl l.li%e:, tc establish re,i tax !oos reserve ..

I.-0ariii receiV"~hk relate to the Housing and Comreucity Devefopmt.'Dt Prngram funder\ by t~:lerat and state mrmles.. L-na:ns rn•.,',eivu.hle are -cclla1.cntlb:ed "by <leeds of tn1st PJ'oceedrl frc·n1 th<~ coUectiot.1 of th~ lotu1;:, re-::.:~ivabfo and re.sale ,c,f as:s.els held for $ak: [1re re~ttictr.-:d by the te1ms of the gram and, acc(li'dingly ~ ate off5:t by a fi.J.r.:id bi1la.o)CC: res,:.:rve ·i,rh:ich indicates that tbe\· do nnt C:Ql16iitu~ &V'J11ab1e spe:rnful11~ rescn.i:r,es. No an10unt has been provktod as nn alkt\VSJ:;oe f;)r dtrJ.btfo.l acr:-ounts ~;cam:c in the oi>irdon of fJ1,anag::ment ~fl rr1.qteriul fu""'lw.unts ure fully cdk,;..i.ib!~.

31

COUNTY OF' JJUTTE, CALit'ORNIA

NOTES TO THE BASIC Fll"lA.NCJAL STATEJ\'.l:ENTS I'OR THE YEAR El'>rn:.m JUNE 30, 2!W3

c:~_p,ital a~.sets (including 111.fuu:tructure) aTe recorded at histo.d,;.~al cogt !Jt' estimated b1$tcrical cost if actual hfator.ical co~.t ]:; not av;-ril~ble. C.;mtrHH . .!!tr.;d frned assets at¢ valued at their estimated. !air :market v~lui:i on the ili11t-.; contributed. Capital assets 1rrciude i-'llbllc dornafo {inf!.''ii1stn..1.cttze) terierf11 fixed 3.ssets conE:isfo:.g of t::ert.t'!.in improven"ieuts im;:1udfa1g l"OD.ds, b.e:"1-dges1 ,;.,rat,eti~Ji!\J;/f:t, lighting sysU:~ drafrrnge t1ysten:1St and f1oc)d control. 1'he County deiJne?-) ca.pita! :s~ts. a..~ as~ts ;·it5t a~l initl~!, ~11dividual ciJs~ ?f rn•:1te ~l$!J SS~QOQ an~ an esf.:.nl.Uted u.sett.h hn? 1n excess cu. one ycaJa. Citp1tal as:~et;; YS(!U m operntwns ri.n:;, deptfmated or aa.-rIDt.1ized (assets tmdtr cnpitai leases.) u~Ing the srn1igfrt.Ji.ne :rt1etJhJd over tl,e 1esSer of the c.:1pl1I1l 1eill.(! period or tl1eh- estiJn.-'"tted useful Hves. .in the _gow::':i'nm(->;nt·wicl.t staic.tnent.s and tii1e proprietfil)' -ft1nds.

Jn:frastr'Jctam, ( except fur th,;: mai,,taim:d pavcrnent S'd.hsys.t:"}m)

Structures and im.prove1~nt3 Equiprncnt

2{} h:) 50 years 20 tn 50y(:a;s 3 to 25 years

n,:.': County has fiv(: :.tth~rodrn of Lnfr,,~v~tr~cture t:.:t~eL-i - r~ads. w.at~ifs~wcr I

Eghting1

dmin.age~ at~d flood ~vntrol. Thti }mi:; the option of pha.;,ing in t11e hi::Jtorica1 CO!;;ij

refo..tOO to if~ ~.nfrastructi1re~ Currently, toad network ha.~ t.J{:en fo:dud-;1,d in the; C1)tmtv~s capi($~l ar-;.sct:,. ar. hist.oric~l ~ost and r.:lated depreciation. in future year.:, the teim~irJng netwt)rk...~ •1.rfl! be .added iri capil:ai ;:}S~tts. AU cu1T!;"11t ye-.;:.r acquish-Jo:n t,i:)sts i~ntifkd fvr infril.Structure have been inclU!lt:d.

The lfohiHt),1 for compensated ab£e:r~f. repnrtOO in th.e gt1ver.n:rri.ent-%'id.c and PJ"Uoriet.~-..,,,- fond ~iat-cments con~ists of unpaid. ac-cumulat.ed If.'ave lmfa.n.ce.s. The Ii~1biiity has-be ... ;,. caliuJated using ihe vesting metbo<l~ in 'i-Vbich foav.e zm.oi.mts fur both en]p[oyees who currenfiy ru'e eHglhJe t~; rced·1tf., ret:mirmtion payn:wnts and other emp1nyee3 1vhn arv expected to booon1e t~Hgiblc fr; tbe fo.ture ti\) reot~ive such p,·ryn1e:nt.3 upaon t~n1~rnatio:n ttre i11ch1tfod.

'.\2

2.

CfHJNTY OF BUTTE, CALlf.'ORl~lA

NOTES TO Tf!E BA.SIC FINANCl:AL STATKMEl'flS }'OR TUE YEAR EN])E)) JUNE 31i, 201i3

b1terfund. t.riln.sactJons ~ refie~.te<l a.s dthcr k)~"!Sa, herv!!ces pn.-,vidtd; reirnl:run;emcnu flT trrH'i.Sf:!:rs. Loan:s are reported a:; rec.eivables sr.id payabies as '..:l.pJ;rupriate, are s~~ject to eli1ninatkw upon commH.dati~n anti art~ n}forred tn as either Hciw;; to/fi:cra {Jilier fu.nds'J (j.e., the cun,ent porti,,:•n ,of Jnterfond loans) or Hadvmce3. to/from othe-r fonds"'' (Le., tl1~, n<.m(!utt·ertt pcrtion. of bter!i.:ind loa:ns). Any re5idual bala.l'tces outst.anding betr\veen the governrnental 3J;tivities and tJ1e husines~·.-!)'pt! acti"vities :aire .reportt:d :fr: the go11en1ment ... Vif1de fin:mcisJ st!rteme~1t~ as ~~hrten1aJ bi:tfonce:i'. A<lv.':tnc.es bet.ween i-umLs\ as reported ID the fl.md fina..11cfa1 ~tatetnents, are Qffset by a fl..k..rid balance !eser:,.e accourrt in applicable goverr..r.r~entaJ fuudt m irn::Hcare that they are t"i.ot av&.11.ihie fOr appn:rpn~tion ~nd are uot av·Gilable fina:."1dal t1;'.sour;~.ei.

Services pr(rvl,fod~ <lt~f;m,~d U; ~,: at rnark~t or riear n'v:lrkt:;t l.1t..e:i, ure treated as re.,,1e1.me6 eind ex.µenditur~slexpf;r,..&es. R~in1-burser:.1en.ts n:ee. when one fr.ir.:.<l incu.r,ii a c.o~~ ch.a-r-ges the app,:·otfri.ate henefitin~ fund and rcii:uc~.s :its related <.:-ost as i::'l feirdbi.irsement, A Ji oth~r intx..1:1.·fi:nd trn.nsac-tions "'a1e ~1-eat~d as iranzfers.. Tr&!l_rlm bctwe~n gove.n:unen.W. or propri1!fa1y fi111.ds ,?J"C rj~Jtt~d as part i)f the rcconcUhrtiort to the ~Jv,e.rr.rn-ent-,,1.id~ pre3eri.tation~

The pre-}'2.rat1on of basic ftn.aH(;la1 :.:i4*tei-ue:nts i.11 cr.mfOnnity with accOU:..1!').Ling pri.nciph~s. gt:.nera.Hy acc;epted :L., the United St.ate,s of A.1nmica requires msnag{'.:n1e:nt to rnake estin1ater. and as.sumpticn.s that affect certain reported ~mourJg and tlirsQb.::;urt:~. AtcorJ;ingly ~ actu::.1.1 re~:u.Hs voltld differ from those estimatci'J.

l'atal c~sh twd frrve~U.1.1t;:nts ht::id h-1 the Tre;a:.;ury ~re 110oled for ioveitrnent purpose~. Ca~h TMth fiscal agent fa held outsidre the Trea~ury anri fa not pooled with oth;;.1: ca.sh and inve::.1tr.nents.

Cash and lln'cstrnent~ R,:strfoled cm,h wi1h fiscal agent Impreat Ca~h

$ 301.,561l,J69 5,974;454

. ·~~ .~._\l8.J!}Ji i __ 301Ji4.1..1.lli.

'The County maJntain.s a Cush a.1cl Investrnent J"on! (Pod) Yfo;.t is. avu.ifabk !hr u~! t~y aJJ Count)' .fi1n.ds and a-.ienc1~s outside of the County n:'{~ortir1g ,·.ntity particip";;lk, in the fool. The partkipation. of theSi:'.' agencies is invr;h_mmt;.'~ except fr~r rhe Butte County Fair. Tbe agencies p~n'icipating in thr; Invest:rn.e-s1t Trmn: Fund are Snp-er1or Ci)ur!~ Butte Count::v· Fuir~ Autnnon1ons. Special Districts~ Sclmo1s1 Sc.:t,ooi. Bond .. ~) and th,! Butte Coumy Asso~iation of Governments.

33

COUNTY OF J.lUfTE, CAlJFORNIA

Non:s TO '.fHE. BASIC f'.H',Af\CIAL STATEN!Ei'fl'S FOR TH."E: YEAR El\'Dim .m~,1'.: 30, 21103

:g:: ;~~;-~;us:~:~~;v~:~;:::r~'.~~!~,,:~:~~:;~; ,fot~~:d;;~~;,:;1~;~~~r:t i~:~r~:~ :~:~i~~:~l:: the CA hRr:rn~a G1)vern.rnent Code Section ]:-i'tt"l County ha~ not provide.._] nor obtained k-gally binding guarantees rlnring the. fisc:al y,~ar ended June JO~ 2003 to sugprn:t the vulues shares in the Poot .However~ rna.nagern.cn1 believes th~t lbe irr~e.c:tments in the Pool are of ht,gh qlillJitf aud ilmt the 'risk o.f partiC"~p~J-ion ·in, i.he P1..K~1 fa w;gli_gib!e. At JtiL\.1(! 30, 2{)03., fhe Oift1-ren"t: OOt·~veen the ct1:lt aod fair vrth!e of ;,.;ash i:i.t1d itrv,::.stmcnts ,vas not m.atcrial a."r"..d approximates fair value. Th~forc, an. ad!f1;.,stn:1-ent to ·fa.irv~iue vvas. not tJ'.l?:'ld~ for G/iSH :.H compUa.rLce,.

The Pool Vfllue~ participants' sh~ri'J£ on an amorfrzed (:~·x;,t btisJ.3, Sp~-dficaHy: the r{',cl distributes iw;nme to JHn-tlcipants quattedy based irm then' rnhili.vt;· particip:ati,1:n. during fut month which fa calculflted tr~se-d or:. O) -realized iiiv~~tm.ent gah10 and k~~~t(;S comp1.1kd o~ 1n1 amortt::.eeJ (2) interest in(!omr br~ed on sfaterJ iate:s (both vaid ~~ .\Jiccrued.)~ (3) arrM:rrtization of iliscc,.rnts premiurns ou a straight-1in~ ba:~is.t :and (4) investrnc1u aDd a.drninfatrafrve expenses. T'hi~ method djfi{:r:; from. fu:e fuir Ya°iue methOO used tiJ ya!ue i.nve3tm.ents in fa~~te .finru1ci:-:i.i sta.texne:nts beca.1.wc; t11e atru:wtized cost rn~ll':~00 is not. de~igned to distribute:. to rnrrliciofir.ts an utireaHztx~ !laius and k~~~es. ill the fa.fr value t,f the:~ Po;~rs inve~t.mt!nt.s. Ir.rvti:shnent f~come rdat.·:i;.d t,o m;;estrnents rept1rte<l !l1 certain fonds fo tU3ig.ned io otlier :funJ.:: b1ised upon leg-al or G-O!tttact1Mtal prir)visiorts.

~:n1

• ?~p~si~ are e;jtire1y .in.sured in' colh1terA~iz_:~d., The Ca1ifot:r.tii1: Gove-nJn1e.nt Cc,de requL"'eJs Gittram:.a o.snks Md rtavmgs fillld ]oru.1 a~i~c,,.;:1at1ons to ~ecu.te a G;:-iw1t;/ s d,,posh.s by pledgir1g g:ttve.rruriental se,;ur.it.ies ~~- cullatcraL The n1arket walu-t of pledged 81.."£':.H~tie; must equ~J nt least 11 Go/~ of a ci:~u:r11ty., s deposit~. Cfilif~.Ymia law aiSL""} Hi iQWS financiJJ in.stftc.tinns to S-!.:cure a Count,;/ s depusits by pkxfgi:ng first tru.8t de-e-rl mon:guge ri.oter, h2ving 11. vafoc of 150°1; -nf a Co1..n1!':y"~~ ital dep~isits. 'fbt Cou:.nty nt..1y "tn<a!ve coUaterJl re~quircmc:nts fer dept'mit-,:1 whi.ch '.tlle ih.Hy insured up t.;, $10J,C•.l0 by1l1e federal Depo~it Insu,mi-:e Corporation {FDIC).

At June 3tli 2003, tbe carrying amount. nft!ie Coun!y's cash dr:pos.bi in the Tn~at:ca.try Or~ch1ding im.01.m:ts in checkL.~g .ilI1d ncn.-negotfabfe certificatr..'!S of rlepn!ii~) w.a~, Sl7,872i363 artd th.e bank bdan.rec") was ,$14244,407. The dlffi~ri.:nce Ot~.t·tvcen carrying a.mr1unt ~)f th,:. Count.ts deposits and fhe bank haia.-ice is a :result of{;ri'.Jn&aK~tfonB b tr.an5it lnciuding .$3,696,270111 otrlli"tanding wurrmts (1f th.~ bank 1.nils:nc-es, $2fh'):OOO W"RS covered by fodernl deprndt,01)' insm:ance and $ l 4~04tii,407 w~.s c,~Uatcraii:a!d {i"e, .. coHateralizc(.1 with. s,:c~mitie:.; h~-1& by pledging fkm.nch1l in;?.rit.uth>11s .z.i i HJ% of d1e ~nvcstment~~ t-at n.c~t in the County's nam,.).

COUNTY Qii' BUTTE, CALIFllRJ'iIA

NOTIS TO THE fJASIC FIN!i..NCIA.L S'.tATEM1'~Nn;; fOR THE Y1IA11 ENDED JUN£ :rn, Zil(\3

-~----~~------~-~--- ......... ~~-~----·--··----------------·

Ih; Cahforrda Gvvec.t'1U:ni;mt Crxie authQr.iz.es the (~ounty to lmrc~;:t lP. obligatit)OS of t\e 'C.S. Trea.~iU:t}\ it.; ageni.::i~~ and in":;tn1rnenta.!itiesr co.n1merciill papor rated A-i by St~ndard. & Poor:s Ctlrpr;n1tk;.tJ. or P~l t·y J:;,1oody'.<$ C<)nuw;'<t'C-ibl.1 Pap~r Rei..·~·Dr-der\':, n:::m-m~gotiabl-t:i c-ert1~car.e.s of

:t~i:;~:i,Jn~~~:~~;: s~:;:r~,;~~:1:1'0::it~~~::(i~:e:~·r ;;~ :.~:~.~~;~·:;itl~~~(~:~::::~i:,f ,()d;~:{~ notes, mutual fi.tnd.s) finru1c.-la} fut1£.res 1 fimmcfo ! option ccntra~rn and for;:. State Trei1sure-r=·:i L:c-cal Agerv;::.y Inventment F'un.ct 'lbe C1..mnty L~ also .authorize,d to enter U1tc reve:,rne repur,..,ha..'3~· agfeen1e:mts; l1owever, th.e County did not t\nte:r in.to st1ch ag.Teen1onts du.ring the ye~r ended Ju:ne 30~ 2003.

Cnsh ~:ud invetib:H~nL5 vtllb. fioc.al agent ~)w.:fats of reserv~ fun-ds it1 the G$n~raI Fw1d 1wd Otht~r {Jove.rument Funds 1,'lf $5,974~454 frir debt sejlfke. The tlmds are heid by a ilifrd pmty ti.rntodian in accord.ance ,,1it.h the tenns of de,bt or trlKA ugrooru~rrts.

Tm~ por:!e{i 1n~.~~·mr;(s pro-rs.ta share 0f tu.vestment b the .S.mte ·rrcmsurer~~ .Lcca1 Ageilr..,y Jmestci:tent Fi,nd (LATF) at J1;ne 30, 2003 is $1 i0,77(1,Q()()_ Th,: total amount 11wested by :<U pubHc ~cen<;fog in LAIB is $55.Tl bmion. Of this an10i.ill~ 100 1-x:rce.ni w~s ~«vested in nou­derivaHve Hnancfal ptod11cL.~~ an.d O pt~r,;t.mt in dedvnfr11e :financial products,. 'Th~ Loceii ln:vestn:v:-mt Advisory BoHrd (}3-o.ard} h~s ovt,rsi.ght msponsibilit:Y frn· L/\JF. 11-uc. Boar-d",con~~s~i of five mf;mben Ml de-~i~.nated by state S:1$.tute. The- vatue or the shares 1t1 LAJ.f,, ~t:h!ch may be wifudraWll, )s dertnni11ed c,n lin amortized cos1 basis, v;hic.11 diffornn( than the fa.IT ,,ahte Of tlie pm:.!ed tnaswyl~ portion in th~ pool.

fuy;;.strne1.rtz cf the County are ~11.mur~ar:&zed beli:r·N. 'T}~ invcttneot~ ~rt1 are. n:-p~cst.nted by :me:iilc ide.atifiah1e in.ve:t"1..t.'net1t. re~:urities are cla;r;:~iifl~<l a~ to ,:usto<li:,1 c-rndit risk by thrt.~

c~tegorie:; as t011ovl<'s:

l -~ trwh!dc:f. illvestme.nts t1-ia! are in~ured er 1,egii:tered~ or for whi,:b ..;~~uri-6es tJ.re lwrh,, Cot1JIN or its agent in the County'~ name;

Cakg;)I'Y 2 -- in=:::ludes udmmred and tm.rt.;g,i:·itc-ced inv~stlierrt.s fen· \vhid1 tJu; ser:ui:hk,s ar~~­he-[d by The- ccunterpart}' tr1Jst D.epgiiJ11cnt O.:i"" agent in the Coun~)·~:, niam<.~;

35

COUN"I'Y OF .RUTT.E, CALlf.'ORNlA

NOTES TO nn~ BASIC FINANCL\L STA.Tf'MENIS FOR THE YEAR ENDED .Rll'\'E: .10, WOJ

Categury· 1 1B.ve:sttnents; U $_ Goverr..men.t Agrmcies C(.'tpcr;;,te md Other N,)tcs

Lo~n! Cmi.ficGtes ofDl'f><,sit Local AgetH;y fn.\,.t;:stm0nt Fund Cash i11J3Mk ('..a,;J1 on Hand

T o!al Tre"~-ury

Outr.tanilk1g Wstrd!li.'i

lli i g10:1 -- 615/(J 8 l l/!3/()3

Cash. r>c.posit';': -- OuJ1iidt~ Ac,;:;cu:ms

Tot.11 Cash a11d Investa1ent1

Stated btere:.:>t Cf.;rf.ying

_______ P~Hc:~--- _._ ~_A1n.rn.1r7t _

3.25o/:..,. 7.25'?C $ I 91\530/il 9 5.625~':-~ _ . 3;}~qJlft5

l94,5!0,684

.soo,rwo l l'J,7?0,00(1

PJ.72,363 •u _______ 3 7 ,.5 94

(21,690,074)

·---- 67,802

$ . ..J.i21268,J69

The "fhllowing i:tre C(mdcnsed strdt:i:me-nJs of net a~set& an.d cha.nges iu nd ru;s~ts, fur the C1J1.1nty~s inver;,tm~t pool at1 ,:)J anii fbr tho;! year ende<l J unc; 30~ 2003:

Equity of i.nte.rnaI pool participants Equity of ex.re:rnal ~/1.'.tl pitrt]cf~xats

Toll!! Eqcity

Nci ass,:ts a! h<ly l, 2002 Net Change m in vc3tment by-pool pcW<:-{idpant.-s

$ JOt595JH4 __ t~~_97:]9_~

'• 301,162,700 405 669 ,n-•·--··--••--•1 ,•r,,..,~

36

CO'UNTY OF BUTTE, CALIFORl'UA

NOTES TO T.!IE IlASIC Ji'INANCL:\.L SIA:l'ENIENTS FOR THE YEAR Ef',1)El} .f!JN1i; 39, 200.3

The com:pm;;itkrn of fr:_tt.:rfond balance.':;~$ of Ju..."1.e .30, 2003 are as follows:

'Nelfoure Ror.d Other Govcrn.o-.texita] T'ransh l.~i1dfiH Interrn~J Service Tn:1st ~nd Ag-enc)

Genen:1 Oth,~r Go i.u:';n1menrn 1 Internal 8er'vice 'Jtu~t ar..d A g~n~;y

Gc.ncral Other Go1t't'nnner1tal foterrml Senice Landfill Tru.'11 a"id Agency

Gen~Yti11! Otht"'J· Go ve:rnmentaJ l.D.te_{n!J.l Se.rvice 'Tm.st and Agency

Gt~ernJ lntrrna l Scrviee 'ft~-titit I n.tc;t ar!d Agen~:y

l-._rnonnt -~-a..,......,..., __ _

$ 1, ! 17,62\i 4,295

98,36& 839

4.,989 82,364

885,808 2~i94r,292

122,698 93,925 20,059

·--------- 13~750 '' 25-0,<132

40,966 7,821 l~S69

I'l,092

=~== ;~~:;~! 2,4!.;>),667

478 H}l,.906 202,192

__ 2,794,:?A3

21245 29

54;,Jl9

37

COUNTY OF UUTT£, CAUFOllN"JA

NOT.11:S TO rm: RASIC :FlNA.t'fCIA:L STAI'"El\fE:'.TS FOR THI: YEAR EN!")J'.:l) ,llJNP.'. 30, 21!03

--~--· . -·-- --·-- ~-------·--- ----~----·--~-~---~-------------

La.ndfill

..... Tr1m.sfr:r Frnm ·-------··

Groe.nil Fund Other Gcven1rn.enral Gerrnra.l Fund fut,-;mid. Service Fund Other (}~YVQ;TID.UentnJ

---·-- Payable Fund -=--Gent~r&l Lritemal Service: Triist and 1~gem::y

Gerieral Wclfor" .Ruad Other Go v-err..rnent.11 Landfill infernal Scn'l~e T:n.lst and Agency

f.)~~Tiit.Tai

R.Qad Otber C.fovG.'~-J1tal lu.ternaJ Service Trust nnd Agency

To\a]

Otb.er f3overrunental G-c11eral f u.,id "'Vl,:.lfute Fu11d 0th~ G~~v~_..mrnent.n1 OU'Jer Governn1t'ntal

rotal

:!: 1,453 ,,.., ..:.J./.,

136,737 _m.,~..9-~ 288.094 66,136 25,274

115~003 5%

15,928 __52,l68

)63,799

4,502 ll!! 13

4,375 1;'S31t254

==-1]40165

$ 5,]59,iml 81.9,863 5~\649

270~080 ____ ....:-U 9.5?2

JS

NOJ'.ES TO TID; I!ASIC .lT.f.NA."iCJALSTA'l:'EJ\f€N'I-S FOR THE YEAR El'.1.lJE.D .ITTNJ:; 30, .1!003

4.

Gm~rnm,mfal Acihiti~~ Capit.ai atsetr., not b~iu.g deprici.ated:

Lund (~o:ns.tr'IJ.Ction ln prngr~::.;;:

Tf,tai ~pital as;;J~t2~ nat bel1:_£ agpl:'<:ciot1x!

Capiial a..~sets~ hehng ,i:l"1lteriated: Infrr.&Structu:re Strucrurcs. ru:0 it:npro,/r.m;aents Eq01~:m,nt

ks;,; accm:nulatcd d~rtd~tiou for: fofra,;fJ:,.;c\ure

Structm:~ and Ur.ipro .. .iement3 Equipment

'fow.l copi!:al "'""ts, hein.g d,;;pr:!da:ted, 'fl.et

Govenm.w.:.nt lCfr.-ities capit-Ri ass1:"1.!, net

B!!~foe,s-1)11~ Acti ;1.tl~ C..p[llll "-!!Sets, not he ing; tlepre,:.i.;ili.xl:

Lm.u1 C:11:ra;tr.u.:;tion in pro14·es;::.

··-.roh:51 capir.Jii .:rstet.5~ u;,.1t being deprecisv.ed

C.~pital fUl.$C~, being dcpjedati?d: Structures and :ht.IDHP.:emerrt.$ F~.quiprr~nt ·

T olal c11rJita! aI~sets~ ~;,,;;itiG deprt!dll.ted

Less ;;i,ccunm1ated de!,Prei;.~lat1'.1n for'. Stn1Ct1.1ra:1 and ilTiprnve,rr.!Cnt~ Equipt~_eni

Tot.a1 :.i£~M!~~ b<:iC.§. doprec:iat,;(i, ,wt

fi;miuesg .. Type a,;tivides c:apital s.!l.~ets, net

Bahmce _ foh,· 1, 20'"V1 ~

l,21.5,2~8 ·-~ 8AJ2,895

·-··-• .. 9,6<\8,153

S77,t2.\069 44,:$47,169

-- :12,~44,.3{!_~

_}'i54,l lli,60~

(260ftt55~01) (l2,n2,4Hl) {22,287.143)

_j_29SJ7 4T85"?_}

<-"c'J51,R.41~750

____ 488,W

7%,2iJlj

--- 3,869,153

(279 14e8) __ _j_U.Sg,259)

_____ 3,/.27.S{E

. Additions .

_ _s ,'.llt\~§1.

4~.3f5I~592 23

___ 3/jZ 7 .;761

__ 8,289,376

( 19J47 ~SOO) (.864.916)

_fJ1.973t.1..ZQ)

fZJ. !65,5:~~)

.0.~,87~J.t_l))

B8tl73 _ :2,636~?9_~

__ 2,T?41765

(79.583) __ t3S1&E1_)

_ 2,33B,l1l _

~----~---~-

$ (4lilH,079}

__ Qt!~~.) {(\~~'°

4,(lil,u79

-- lJl:j-$609

.. 6,0g:.,_<&30

-~ {i86;~144)

(28,004) -~-- (6,005)

___ {34,0!)9;

Tra~fers. & .B-al:ulc.: .AcifU3!~-1~~ts l~~]J\ 1001,

$ {43/JOOJ $ 1,619'.i~):i9 ___ JI:±111}:l.J ----·~ 12.,ss9~230

___jj-y1 /5:!.D

302,432 -~--- .~ i3)M5

____ Jl .. ~

·--·- 49,'.)!7

-··- 49,(trJ

----865,064

-u~ 14;239~2.0)

571:,40.5_..582 44,849,f.24

___ }-1,4;,.;o:,1;

_ 656.,580.294

(276;10!~722) {12,997,326)

_ JJJ:236t6S8)

f312,Bi,736)

_3~.J.4t558

', 48-3,!'.!3

--·-· 612,4!2

900,455 __ \:.&!2,J_:Q

(}5!.i,07]) _ (L51?7_.33~Y)

__ n.s14,4r;1)

39

;',,

NOTES 'fO Till~ BASIC FL"'!fu~CUL STATE.!1'1.ENI'S FOR 1.1IE 'lEAR El:','JJED .llTNE 30, ZOO?,

GoYenimutal Atthit!es: Gent::-ra1 g-overn:tJ1ent 'Puhl.fr: protecti.on Public w,~ys Health and srt11.i.t~ticm. Publk a~;stance Edwation R,-~creation

B11~!11e~$-I)p,• AetMtfa~: Transit Sardt.ation

.$ 336,8JC, 2,232,773

19,6:5.1,343 286.840 44J.t354 !05,455

·-- ... 107 ,991

$ 333,31"1

---~

Amounts Hah .. TJt~ J-hJ.mce t'l:ie "lliiliin

G""•,;·mr~nlal Ad:t;;!iies: ~ita11r~s.,r1 ohi.i.!u6on Born:1.'l payable

~;~;~:~::e:1;~b~:~;:1wn Total O-Ovm.1.1xaeJ1'.ai

Acth:1ti~~; Lung-'Term I ~abili.des

1hisill~,s·T)'J"1 Acti•dtimi: C(!n.1pt:-:11~ate·d abstnc~s Capital !,,ea~~ ObEg;tlion

lc~tal :Bti.srti~s.<a.:~'JJ1Je Acth1ities Long-Tenn Lkbilitiet

$

$

"' ,,,

$

_I!:~tlL!::~~ ....6-~~~~1z"~ _ _ Ile1etlans M. l.:!!-~l9.zl_Q_;!L ~ One_ Ye:J.r -·

2,9-9~,0(;7 74,85,6 $ 707)58 $ $ J,346 .. 9l6 l,1091309 57/i89 67.9-~-2 S~823;60R 1,148,806 4,440,0iK• ··- 24~J)Ofl ___ fil95,,00D

n~- ?7~370}!84 $ -~,!H.\\02 S, 1JX}9~847 $ ..2:~377,'!22 $ ...Jh~~i?:t

JS.902

----~----- $ =-- 268ir61_ $ T-~53:2JJ2

-~ 5: 2.S~S~ s_ 2'iJ.tlli $-~ 21"'"? . .t!)~G0.5 $ _336!2E..

40

COUNTY OF' mJTTJ~, CALlFORl'{IA

NOTES TO Tm: BASIC l!1Ni-..t'iC1Al S'fA'n,--;MJi:NTS J<'OR THE YEAR ENHEU ,HJ"i',1i~ 30, U103

The O;u-0.ty base:;;. equipment un<"Jer capital leases. The fol.lmving i~ a s1.~rr.1:n1..ai.'J, hy year~ uf fi1tu:r.e rn_h1irnu:,:n 1e·~i;; p:ayrti.ents_~ together wifh the -prcserrt value of the n1h1imr11n lease pa)Toents, a,:; of.fat:.e 3,J, 2{HJ3:

Year Ertdit1g --· .!1.irie 30, -·-·

2004 2005 2(H}6 2007 2008

Total mi_nimum i~aSt"':- payrnc.nts

Less: A.r~(JUnt repre~enti~g 1titerest

Busl11css .. 'J Vt.le Clo•1,erri.."'ncn.tal Acii.vitieR ,, __ _ r--· Acth~;~tie~" .

1,Sn?,451' $ 3M;m 37'1,951 363,094

536,922'. 536,922 536r922 536,9?..2

__ 26il,46l.

2,416.!49

____ {lM,079) ____ _jl58,{J7l)

,'!:---~~ $ __ 2,~58,0_~

']1l~ .follo\vintr is a ~~che-dule of ner rearnaiimg prop,e~-ty kas1.;(t lmder capital le;.1.ses ut Jufl,e 3Di 2003;

Govemrm;n!al Actlvitics: Energy M~.ll.agement ·i::sdlity Ve!JJcles S Hi-'Tech F:ire E11gines

·aillsine.s.s-T ype Activities~ c~.t.e;pilfor Eqt,1pment

;!,

A-cquisition ___ Valu1., __ _

21'555,775 1'..12,450

L418,499

2SZ6,539

$

Aoc1.imul.,;.te1:l D~:.t_iori~

306,693 25,923

2l7,'l74

55,744

Af Jime 3(\ 2003~ hon~ J.:rnts't.:rndjng. oonsist of the fr ... llowing Bu±k, c~)t.m.fy Se.1Yic:: i\rea No. 26 bonds:

1974 Sev:er Bonds 19'75 Sew~ B(.n1drn~ Series A 1975 81,wer Bomi,, Se.rie~ B 1975 s~wer Bonds~ Series C

To!ul

S 36:5,(!{l{) 430,000 210J)(10

----- 46~620

41

NOn:s TO '.fHE i:!ASICFINANClAL STAJ.'El\1El•trs li'OR nm y~:AR fNDF;I) JUNE 30, 2003

---L-•----~-----"'--··----L - -·- ~~ ---·--- ~----·-----------·~_,, ____ --,-------·----·---------

Tht. hor1ds bear intc··rest rat the rate r.;f"five percent pei :wnum '!/hich fa payable (~~ni.1--.armu.aUy. P.rin.c.ipal p,ayrnenrs. arc due Jru1u.ar~y i of each y,!ar through 2015. The debt rervi,e t{";quircn:-.ents, ~)Yef lhe next five y.~a:rs and th<~eafter~ i:ire as follows.

Ye.m-fmlbg ---- Jun.,:c- ].()? ___ a_

2004 2005 2006 20ffi 2008

'.Wf.}9.,2(113 2014-Wi5

$ 67,942 73,089 73,244 73i:W6 83576

465,749 __ f1_4&J~

$ 50,885 46,444 43/t01 40,f.l35 36,l.lO

l:58,715 ______ 1j\C:60

$ 1]8~.S27 119,S:33 Wi,945 ll3,44 I 119JS8G tf24j4l~ 225,4]4

Up<m termJnatinn~ an. e:.npfoyec may be co1Tif.,>ensa.'ted ft1er sick foavc arnounts ~;crued over. 240 hours ~t half the ·.oorn1a] pay mte not to ~xteied $3.000. Up-0n ·retirew;.;}lt

1 County

emp1oyees lu1.-1~c a (H'.le b.n:te 1i)p!ien i.'I f ra~.;fo.ng tJu.t t.heir at-cn:ed ~fok J .::rrve i.Jf elecJintl l.'."i-oSt reti:rt';Jn,enJ h.,:·;;Jth :'.nsDraU.(,i;' bc'lL-efits up to rtge 6.5. ff 311 en1pktve-e h~3 iO years of cun1;iat1ve ~e;rv~cei thi.: County \'vm pay healtti insurance he1:,d}ts iOr 12. :nonths pbz 1 1uonth f':ur e·very g htJ1J.r~ in cxci:s:£ of 240 hnu.r;~ i-.\Ct,n1ed sick le-ave (ernp]oyee c~1vera.g~ only). Vacation i1 gccrued 2t varying rate.~ depending on ~n en1pfoyee~~ j'{:;rrs vf servic(.K tT:pon terminatie,n; an C11:'£pfoyee is ·paid at 100%; (rf th.e ?l.i"110Ut~t accnwC.. C-ompensai..ed ~bm;rice.£; f~ v~u:;ation a.re p-.aid o~;: ~l tlK~ e_mphJye,is current rate •:lf pay. Ad.rnJnl.,;rrstive kurv-e "!$ ao~ued by ~mpkr:vee,s exempt fron1 paid {JVert.h'.~~e and r.lliy l\e at:Gra~d up to a tthlltUtlUrn. of 352 hotm;. ' ~

1he. Cmm!y [s:s\!cd l99J Ct-1·!ifi;;at.::s ,;;f Pll'rticipatim, tot.1li11g $5,515.000 for the cr»i~iru.cti,:;n of a 11ew j~iice facility pn:,ji!cL foterest r-at,t:.~ CJ'tnge from 3.8% to 5.5% an.d tl-,e c·ertific:at~5 -f;.1lly marure in 2(Jl4.. li:-:.tcITT.st p~.ymtmt.& bq;;.11 iii'July l995, payn1<ea1t. of pti."1d1,al and 111rer,:;;:-3t beg211i in July ] 996 atn! are fonded by pe-na!t:y ~~Se$Smen01 on {~rJurt fine£, parku.1g fineg and .a,ssessmt-.nts. ShortfoJls in ~r::sessnlt~..rit imcl fir:e n~Yermes. arr.~ fund~~d hv the other Gene:nt.1 Fund rew ... 11ues. Tot bafa1'J.ce ~.1f the l99.?. Certifil:atcs cif})artlci}:iil.ti.on were"' paid ~}ff in .hly of 2003.

4'.l

6.

COUNTY OF BUTTJ\ CALU1'0RNJA

NOTES TO Tr-0: BASK FINANCUI., STATEMlLNTS l'OR TH!i~ YEAR F.NJJED JUNE- 30, 2003

On. June 3Ql 2~)((1) the Cou-nty i~sued $.\!50,,000 in Cettificntea of Partkipa:tion (COP'~) Viith i.nter0s1. ni.te;.,:; rrmging fron1 flf2J)%, tc 3.47!: lo advan,:-~ refi.,ind $4~195JJ{)G etfr.nJtsianding f 99] CJJP 1

i:.- and $1~026,882 of outstanding k::tse nbllgati-D~s f(,r fit~ true~ w!th intere:;t rates ranging fro.m .":t.85% to 5.5%, The_net proceed; of$5,~91,~45 (ai~.,. pa.}:nr;::nt o.f $~6,6/J50 -in u.nderv"Titing foes~ fo~;;uranc1;\ -iind ot11er is.suarw;;;: oostg) plus fill additional $883)08 of 1993 COP~s reserve fond moriies 1ivere 1..15ed t-.J. c,urc.hijs,:;: U.S. governm\)nt stx:rn:itfos. T11i:, 1993 COP' s were prt--ca11ed and proceeds iv;r!r~ pt't)vide~l frw aH foture. debt sen·it:e paynieri~ (Jf'.. the 1993 COP\1 and fire tru,Cks. Paycff ofth~ ! 993 COP"s and fu·t: tr1J_cks ucciJ.rred. on July I.1 2(W3. A.s a re:mh.: .. th,-: 1993 COVs are ~()otjd~red to he deJea~".lttl but the fotbiHty for thoric bs.11.1.<ls \ViH. be- re;1ov1;d fh1m t'S,.e g'..!D.cral k;ng ... ttrn.1 tleb~ accrlu:nt grou-p in tbe tbHciwin.g year.

·The Cmmt~/s advance refmufod the 1993 Ce:rti.ficaie t)f _Piu.1foip..tttfon to reduce its tota.! ddnt sen1ce r,,1ym,:,ul's ow:,: the nei.t 1.2: yea.,"!l by ,.:mo,i $94,448 ,md to oht..1i11.;n eccmr,mk g,d:n (differ.eni:;c be&;!veen the present -valuer,: of the debt S0rvice p{tyrn.en.ts rm the uld and new dehtt) ;f$3:IS,626.

YearEndh1g _ foni:: :lQ. ___ _

2.004 2005 2l}(l6

2007 2008

2009·:2013 2014-2015

$ 4~195~000 610,000 620,()0(i 630,000 640,00[1

1,835,0!)() ___ 81§g00

5, 64,115 121,423 109~122 96.623 83;922

269,357 ___ 27,.5,_~5

__ }2ta1 __

$ 4,2.SS.\_11.5 73 l,423 729,122 726,623 nJ,922

2,]041,3.S-7

--~~

State and fe.dend faVl'S and regu1ath1ns require the G:)ilflt)' to phtce a fm3l cover. on its Ntal Re-ad .ta;:1.dfiH site when it sto:p& ~i~;t-"]:'1hng ~vaste and. to perform 1::eii1t:n maintt-:nmx.:e a.."1.d I1l(mjt~::ring :fi.1.m,tio11n ~t the site f<,:,r thirty yearn after dosure, ~.<\1thoug,.i clv.sur,; ~ud po.s:t--c-losure care costs wHl be plid un!y Tie:.ar ;..tr ~fter the (fate tlmt the htndfi.11 sh111s accept:i.ng W.f!.1Ste~ rJ1(· Cotmty r1;ports ~ portion of t.he8e cfosl"lre and poist·,Cb$1.lre care cost~ a;-> an open.ting expense in each period bused on fandfiH cirpadty u~tl as of efl..c:11 b~t.an,~ !Sheet date. The $5;145.157 reportt:d -iiS bi.ndfiH c!(Jsure ~nd poot-e:k1sn:re care Ha.bi.Uty at .f1me 3-0, .200.ll represents -the cumulative a.~1'mun~ _ reported to date b.a.;;ed f.}fi tht: use of 29,57 peTl'·en.t of the estirDalc":d capacity of th~~ 1ru1dfUl. l1u; County ,vm :recognf:r::e t.he rerri,..aintng estht1nted cost of dotru:re and potitclosure ca.re of $~2.29:5;603 as the n•;1\1aini~1g estimated {iapa,~Hy is fiHi;:tl. Tb.ese arnonnts are ba..:1ed or.t wha.t it w1.Juid c-ost to perf.::;in:n an dosurc nnd postclosur,e care i:t'l 200:3. 1lie- Cm .. mty expects to clo~c the fandfifl 1n the ye,1r 2018. Actual C(1Sl5 may t-e h.ighe..r due to inflaion., ,h.a..11ge~ in tecb.n.ology, or c'h.ange:s in r-ew;.lat.~ 1:.:n.~,

43

7.

COUNTY m~ nUTTI;, CALU'ORN!A

NOTES TO TEE BASIC liTNANC.IAL STATEMJJ:NTS FOR Tlll: YEAR EN'l)ED ,ITTNF: :'IU, 20()3

T'he Comity fa :,equITc-d by t:tate and federal 1att~ and :reiul~t"tnns. to rnakc u.nnm;.\ contribution.~ to a ,~ep.aniJc' fu.ntl h1 firiano;:~ i;kJs:un:- m~d postdo.~ure cue. Tb .. e County is fr1 ct)m;:iifa.nce w1th these reqlll:rcment~" and at June 30. 20t):\, i::r;rr,stn;ents of $5,616,8:55 ;?il'e held f;)r tb.m1e purpnRes. The County expt,tts t\e future -i11.t1atfrm costs %"in be p~1d fro:rn intere5t l;'~irniv._gs t~;ti tt.e~e anm:wJ C()Ott~buti.ons. H:o;;,r.ver~ if inte.rt~:1t eru:nl'ng$ aJfe inadc.q_oate ct itdd.iti.ona1 pos-{Ck,!lu.re care reqt.rirero,~n!.E ate <l.etemrtned {clue to {'hange~ in k'f:~1o!ogy ~~:r.· app1k;!bk t,svs (>r regula,-tiorrn: for exan1.?k)~ these ~ostti rruw nef;d ti.::t be e;o'l.e-e-.ed by ;;.:hsrgecl to fhtm:1:: ifti:id:fii! Y&crs er from future tflj'._ re;rc:nuc.

...t\~m!J1111y~ t.1,t; L_atKtfill adju~;ts. the {!Sthnated dtu-~ure 2nd ccist:; due to c:haJ1tge-s in in.t1~tfon and capi'i(~ifj-. Ai June JO, 2003~ i0ral costs for dost1r--.::! .and postdosur~. i11c-r,;;;a&.-d from S!?,211A34 at Jt.me 30~ 2002 to $17A~1>760 itind th.e remaining c.£1pas)ily ~.1-ftbe landfill increaiied from 2.G.J3 pcrct::vt to 29.57 pe:rct;.ot at June .:H}" 2002 and 200l re:rpec:Hvely. T"he:;;c drnnge.'5 r~z~::1ied in a redu1.:tJon to tl-H~ landfill dosure ;;1nU poatclosure ,.;are Hsbi1Hy of $l,954A6G at Jun.e. 30~ 2003.

Tfle governm.ent-wi<lt:; and busine.:MH:yp·t n.c:hvities ftmd fin~d21 stHemenL"i utdfa:,e a net 23.set.i p;re.senmtion. Net EL£sets ~:H:e categorizt.=xl as fove.::;ted capital ~SZ!ts (rr..~t of rd~te.d :;kb!}, restricted ali.d un:restricte;;,L

'!! lrf'le.ri'ed i11 C;~phu.i .,;'lJseftv Net ~:,f Related .Debt ,_ This category groups ~ll c~pita1 a.sse,tsi: including iuf.rastn.1-.Jtu.re1 n1tu t:rnt::, r;.ompont:nt of riet n~~1cisa AccU:.11ulaied dqneciation. ~..nd t.'Je mttst;mdi.ri.g bltla:n{:es of debt that an; ~ttribw.able to the .iM::qnfattion~ const,nJi;fron or in.:.pro•v-emt;nt of th~e ass(!;t& reduce the net asset hala.-ru::c.

qi Re..strict::,x,Z N,:t A!M.tet.s - 1'1ri.s Nl.tegory prese.r;.t5 .exrerr1al restricti011:; i:mposed by ti.::-1:exlirors, grantorsi cont-ributor.s or faw.8. or reg'l.1lation:& of other goven1ttilf~nn a:nd reatdcti.or~ Un}H)Sed by .Ia.w tlJroug,h cor.:.stitutk~n~J proviskrm~ or e1nabltl1g legislation,

Unrestrit)ted /'let AJ'set:s ~~ Thi$ c.alegozy reprt{ie11t.-, n{~t a~ie~ of the Count;", not restricted. f,::n: :wy pmjcct nr c,thcr pt1,1'Q!,e,

In rhc fo:nd fi".xmncird tltri~m:::nt:;., gover.:1.::.nentlil fimd~ report n;.Gerves a.nd d-e&igixition~.,; to :segre,gak ~;?rtic,ns_off~:d b~lance tl~t,are.,eithern_ot a.vail~bk .. ~r h~.vt~ 1-.:i~en eaI"tmrked ibr spe1jfiG pmpo.~~~· .the ;fos1g11aticms ~re estab.i.i~hcu ac-t.ons rtf tne Lir~1:·d en.a mana.gc:nerat and ~·u1 be mc.tcas.eci r~duc~d or eliminated by ti111ibr

The lt;;nn Hrei;ervea~~ is n:ted to l.ndieafo the:, por~io1:·. (if foad b!l.bn~e tb.;1.t is specific u~e or (2) n;1t avnHabk for ap:propfiat.~cn tir expenditure, The som.efrmc.s dt.~sign.ate portiun.~ of u1t.te$;.e:r11e(~ (.aw.tilabk) !und balance sp~nding p]~w. De!;'i&,inated po:rl:iorl!s nf' fmd balanr.:t: r-epre6tilt flna...11eia1 :rtstl:11J;ces.

available for uses othe-r thm1 tho~e tem.m:ively plt""llttt:-d. 44

COUNTY OF BUTTE, CA..LIFORN1A

NOTES TO TJU<:, [!ASIC :!.1Ii'i'A.~ClAL STATll:",','IENTS FOR rm Yll:AR ENDED .JlJNr.2 3•J, ioo;;

----- ~----------~--·--·--·-~-·~----·--~-------·- ~-·--

Reserve for Encwnbram:e.r refiect5 th~ outsUU1ding contrnl~rill-41 ub}Jgt1.t1on§ b~ised on purcha~e order at;d c1.1ntracts signed. b:'i the Cot,.-nty bu.t not yet corn:ple:red as of fh~ c1~.e of rhe fis,.;ai

year.

R.-::ser¥e (or lm,fJrest Cttsh n~pre!;;e,nts the pm1,ion of the fund balarw-e th.at is not available f'1r cxpe:nd.iiure b;,.c.a])Sr; foe County aJ.a-i.nt-ahL'i vttri(}~ Jevds of revolving ftmd~ for daily

opera tirn~,L

Rnet"',,'rJ. for Deposits wlih Oihers rd1ec:ts l1-ie portkrn of the fr:nd blliance thaL fo U\)t ~ va]lab1.e for exp~1dihu'~ betaLt.'*; of the restrictions p b,::ed on the fo.nd in. -ord<~ te obt-1in certain

£.mfi!1:TIWt~S.

Re.vcl"'Yt! (or .'loaJtS Recr:ivabfa r~flc.c:ts ~ segrcgatlon of a po:rtfrm ~:~f f!Jnd balm1ce to i.7ld!catc th.at r~5~ts eq.uaJ to tht~ loug .. te:n.1·1 Hou.r)ing .and CommunJfy Dew~fopm.en.t fo~.n:5 are not available for appropriation.

R:r:st:rtNt fOr l'?-!t.il ~e'i:,1L:_i~1r~1

repre.sentf.: Llie portion of fortrl 00.fanct>, legally r-:::~tJ..i,:ted to a n.~.tn)wcr use tnan tne i-u.nct 1Ueif.

Rcser.·e for Derrt Service r;..7-m:senti; cru:.b aml ii;v~strnent9 hdd by a fac:;;J J.g,mt for th~ rep:a.yn¥';.1t of1ong-ttnn cc1pi.taI 1s..M.e: cbJig~,ti(}tD.

R~retv~ for !n.ventoti~.s refl.ec"'";J; 00.10.nces cf invenWr:-y -~ccou.::i.t which reflect -re&ources f!lready exp.ea.cle4 'but not 1.xn1stlU'.Vt-<l.

The Cr.m11ty contdhw:e,~ to the c::.JJfon1fa: Pul•1ic Empl.rJ·yee~ Retirement System ~:calPERSt a~ ag~nt inultiple.--ernployer public ~-wfloyee reiiren:1.~1~t 8)-'St~;.m~ that 3C~'S as a c.°mJ"1:~D 1~~1e:;~1e~11~ ~m~ atlrr:i!r.dsb.11tive 14get1.c for ~-rtici-:pabng imbfo:~ {',11tit~~s ~,,'11hm ilie :,rate i!)f C$.lw:;mia.0 t~~l~.~~!?..S provides retireJncnt and ditabii!iy ~.e-n~-fits~ a...t1d death benefits to plan me1~iliern .and bet't~t::~a.r1.es.. .Bern:.fit provisions ar.d all other roquirernents are e:stabHsl.1ed liy :;tat.e statc.te lli'1(t C-01.mtf ordkJia.m;e:. Copie-s of CatPERS) arimmJ financiaJ r~part may be obtained frrn·n th;.~Jr ext.:votivc r1ffice: 400 P S:~reet, St!l:rmne11tc\ Cl'!. 95814,

fu.-nployet:s under the f-.tfisc;eUaneous Pfon are ~equired to contribute 7%1 a~d cmploye~~ turtd_er. the s~fety Plan are req_tii.red to cor.rLJj_bute 9~:; of their annua1 covcr:ed .. TI1e O:runty ts: felfmred ;,_, cortbbute, at a11 d~t1;rrr.imtd rate:,; foe curr,:oni rate is !er non -safety emp!oyc,es t1..t1d 16.6291.)'0 ff1r safu1:y of am.1J:ial o.-.,·f.'"..ted pu;roll. Th~ contrihulinn require.meets of pfar1 mernbers a.1Hi the Cmm!y are estaNlshed and nrn.y be e.rnendfii by CalPERS.

45

COUNTY OF BUTTE, CAU]i'ORNIA

NOT.ES TO THE BA.SIC FINANCIAL S'l'Af~li{EN'l'S Il'OR TI-U; YEAR ENill:'.D ,Rl1','Jl: 30, 2003

FtH' the y~ru- {)nded Jone 30 .. 2003; th('; ('!rn.mty\, arin.ual pension co~.t of$7,557.,2rfi ror Ca1PERS wss eq1.w.l to tlte Crnmt:,/3 r-equired and ~vt:ua! cotitributio:os. The required ~~ontrfV.tdions Vt'a.~

dctennined fcP of the JUJ.1e 30, 2002 actuarfoJ vr.1:1uatkm u~ing the er.rtry age actuarJ.a] ,;;o:d u1efood. Thls a prc~~r.ted. b(~nefit C·f~it mr.:thod, l11;ihic-h vike!l int.o acct)Ul'1t thus~ bcnt=:i&1ts that ~re expected t.o be Cf:DT.ie<l in the tl1tw:e ti$ ·wdl ~s those a1reacly accn1ed. 'fhe actuarial 3ssurnptior1s ind.uded (~) 5.25%.r investment rate of return (m:rt: 1.tf ai.J.rr1ini§mtiv~ (b) prqfocted a!mu.o..l m~;.it or f!t-:niodty s~dm:y increase~ that v.ruy by k:ngth n_o post n~tire1n'{."fl.t b~{:flt increm;ert Boih (a) oo.ci {i.J.) indudeJ an infhtion cornpor~ni The actua1iai valu(l oflhe Com.1t./ s CaIPE-RS !r\ssets WtL'{ cfotcnnfrh~d using tc~rlniques that stnCHJth tlH!i efl:6ct:-:.: of sh1Jrt~tetm voiatiUty in the market v,1lu1: of inve,;t<;•.,:,,.its over a three }CC,;r (.~moothed. market ,.Jue). Tha Cr.n::.ntfs ·CatPFJl ... S urtf1;!Rded actu:.tri~l 61Ccrn:eci Hab.Hhy being ~rmor.tized a~ a level of p£'1'l~e.ntage of projected paytoH on a dt;.~¢d basi.~1. 1'be rett1al11ing il..."l.1ortiz.ation pt'bfiod ~t June 30i 2002 VY'"SS thirty-nvo ye:1rs for the M:isce11an,:{)tIB Ph'i.n. and fourteen ye:a.rn for the Safe~y PL:u1.

____ Fi:,ic2J Y(;.;1.r ___ _

6/JO/Ql 6/30102 6/JIJ/;)3

Annu&l Pe:t15iQH

____ ens, __ _

$ 4/tl3,762 S,937,479 ?,557,216

p:;;;[;~~~e _J!,!'.~] __

100% l•J070 100~/;!

NeL P~nsio11

Cm1.t.-il;,ut,:d Obii~!!l.

111. addition to the pt:osion. b~n':."Jits dcs.{;ribed in Nnae Si th.e Cmmty prr1vides post-re6m1aeat he:1Uh i.o.&'dtan,ce bentfilti, in accordar1~1e ,vlth County ordinruict\. to e-mp!oyees wfoJ n::tfre frorn. tbe County bef:n:re attsjcing ag-e 65 ,villi at !east lO ye-.ara ofoontiw.;mrn ;:;ervice wh'fl have, S1J;:crued §ic:k leave irt excess 1,;>f 240 hot1%"3 .arii e.1eJ;:,t th~.!'- post~ri::ti.remerJt IDS11rnnce bexie:f:its rather than the sh'3k k~rv·;;: payrHit or}tiQtL Refer t.<1 Note axprnpeusated ihsence_s~ for sp-c:t::Hfo: details. 'I'b:: Cm . .mty p • .ys fr.s; fall p,<";rnium fo, healili and covemg<' incurred by re times fil\dcr 65 y~m-, of age or not covered by .anoth(".r governmeutai tff empfoyet,·paid hea1r.h plan. Expenditures for post-­retirement 1x·aHh Garn benefit·,: ~.re iccogrMed as r~tire>es rtpoti. pn:':miu,m.s lM.:id ft.X r~imb;;n-2-em.ent During the fisc-aJ year, expenditur-~s of $596~299 'w{:re :recogn~zci-il :for pc1m .. ret!reme.nJ healt11 care f:.<)VP.J:i11g I 02 retiree&.

46

COUNTY OF BFI'fJl, CALIFORNIA

NOTES TO THE lllASIC f.'H'{ANCLU.- STA::nrME!'ffS FOR THE YtAR EN:J:€l) .nm:& 31!, 2(J(l3

The C1rn..u1iy i£ e::-tpm;ed to Vil:t'iotrn £"i,sk of k)sr; re"l::1it-ed t<.~ torts; theft (tflt darnage to 1 an.d de~.tn ... ,:tior~ ofs~!,,scts; ernJfS and om.issiern.~; injuries to en1p!c1ye-e~~ Jmd natural disfis-t~rs,

Tils: Couuly hus two iisk rrlll,r,;agemen! fond, (foxemal Service Funds) to ,,,c,,mn,li,fat,, ihe, Co,.ir,1:y's insurance prog.rarn.s 1±1..~t ;are ·partiaUy seff-in.1::1.xrOO. Fund revenu~s are prir.r:tarily prcmim:n chari-t~ to oit;J:r fundr. and are pfaoo~..d to equal e~tirn.1tcd expenses resu~titii frmn sdf-ins:u:r.a.nce prograro$; lfo.bilitv fr1sura11cc oov~rag:e in excess of the seif-lllm~ed o.nvJllt'l.t) ~ .. nd ope.rating e.-xper~:~'!:;, Th.-:; prL"narJ ~ . .ctiviti~s of the funds £:011sfat ()f1·lsk nmnag-cme;!t :pTu~atns related \o the fulb,,~.t11.g~

Ge"nerai Liability 1.r!.Su.rance Unen1:ploynlent. l!i~tirancc

The C11unty maintaim a self-irnmred 11:lt:niicm (SIR) of $HJO.OOO per occurrer,ct f,;r its ;;:e,r.enil lfabiHty pn)gran1... Ft)r g-~nern1 liability c~i!I're~ fue Cotmty fa a parcidp.ant i:n the c·,~Jifonlia Shlte i\s»(}()mUc•n of Counties -- Elmer;,, L·isill>U'1ce A•~thcdy {CSAC} ,:x1.::ess liability insurn= program. 'X he Ca1.u1t>; co,rer'S i:he fast S JOG,OOfl of ~trims. The por;x.:,e of ti.le p•J•}l is m sprl'ad tile a,hrern;;, effects of foss<.~s tcmong the member ~lgenc.ie~. The Couufy pay~ an am1uui basic I-,-'1·e1:r1iu1n fot exccs5 iG<.'IVeri:l\i~e: a1:id is ft-S}:;~~ed an anrmel risk pn:.mi1.rrt1 based a:m an i:\!..".:lu~r-lal reyiew that e~timate~ esd; of the progroJn's partidp.a:r1fs ulthnzte foabiE:.ies, Should act1.wJ iosB,es runong P~!l~lp~.1112 be grem:e:r. tl~ antid}Xttcd, tl1e ()~m.:n.t:i~ ~iH be sssesse~ it~'I pro.- niJa.}~1-e ~f th.a~ ddtc1.ency. Conversely] 11 the a5.1t1.u.tl l(i~scs r.re icr:s than the Coi.1n~~l \Vlh ne :rer~~ndc~ itf\ pro r-ata s!:\fi.;_-e_ uf the e:xcess, Con1rn.~rci.al lns-;.rrance covets between $100~000 m.11.d $20,000

100(1. Settli:.:~d dai.Z,W have nf~t exi::eeded th.fa eo:mrri_crci.ai c~Jveragi;.~ in .:my of the p;.\5t thri:e

fi~~.! years,

The (' .. (n1rity is fu"!ly seff-i!l'..sured fo.r :its unem_ploynient insu~.a...n~e prograr.n. Qtw..r-t~;-,rly biH.ingt, fr,f~l the St:de Empbj,-me~t Development D¢p:::utmcnt are- ~nt to tbe Cmm.ty's dai.ms n.w:ie,ver.s~ R.E. Hm:ri~"lgti;1i, :in~. Al'lli:r fae dain'.s irrc review;;,d by RJ.'.. Ilim:ingtor~ Inc., !hoy are tt1mixl ovl';r lo ih,~ Cou.11ty for pa:i,,ment.

Ith th:e: County~ j _policy to ;;.harge to expense of the Intet11.cl Scrvk:e Fund the esth:nated foili.Hity, <!$ delt;rn:rincd witl, the a<sfatauoc of indep:ndent a·::t<lll!"ies, for claim~ in ca~es whi:re such iltn.ounts are reasonably <letennlo.ebk: and \vhcre the IikeHhood ofH.ability erims.

,-~ ''ti

COTJN'IY OF IHJT'1'1t, CAL!J'OR.l'f[A

NOTES TO TH.E BASH.: FIN ANCfAL STATI.}rllil'iTN J<'OR J'Hl'.'. YEAR ENDJW .llTNlI 30., 201)3

AH operzitin.g; fonds pmikipaJ':. in the pro_grarn and make p:zyiT1ents to the insnnmce fuuds barir:d Cin

at.tv.ada.t estinrnte:i of the a:mmmts n·~eded tl) pay prior a . .nd curre.n.t cfoju1s0 and tll alkw ~i.~rual of esthnate:d in~urred bu.t !K•t repmt~d c.+rim~. Ihes~ olairrrn ~:1,tjm.=1t:;:,s am b~~i~U on tbo requirernc-,nts of GASB Stateme:nts No, lO ~tld 30 and includ{'. ,e,.~tu:na.k.~ daims h1(;1Jrrcd bat nvt yet reported ;;w of June 3Qr 2003. The ciai.m:; lh1.bihty includc.s .c.H ~u.._Jt~a!fd !o~,& ;=.H.\ju.stment

20;}2,2003

20(.11 •. ;wo:2

in dm insurance for._rls~ claim~ lbhifay amount during the fi.:;,;.d y~ars e111d't:d 2003 '"'·ere a!: foHows:

Cta.Lm:: Lfobaitv

Jul~, l .. < ____ ::.;;:./~----

C t1.rrent Y'c;n Ctabns and Change,, .in

__ Estim.atiz:s _

Claims C,m,,r,t l.iabHity

\ear_Ciaim ·-- June 30 ~--

Th$ Courny iH a number of gt:i11t pr{Jgra.rn~ funde,:1:, in_ \~·h.etfo or r1.a.rt., by fodetal: state and other souri::es. programs :ttrn subject io p:ogran1 cempI1iiuce audits by the graritnrs or tl1elr repre::.:ent.a:tive1. 11:.:e audits ofthe~e progr£1m:;: for or including the )'Car ended Jun.e 30~ 2003, hti.ve rmt yet been co.:l<lt;cred. Additic,naHy1 ccrtdn :audits refa·~d t,1 prior y,!!.&.rs hav~ not bf!f.rl fil'.);.lf;wcl, Acco.rdfogly,. tbe Comity's complianc~ with appHeal1le gran'i re:quhenJt:1}1,S win be etttabHshcd at ~m.rn.e. thtun, dau~. Th·:: a:mm.:mt, if any~ of expencH.tu.rt:s ;vhkh may be disalio\V\:.d by the gra . .ttth1g agender: crum~)t be de,termtned at this time~ afthough:r the Couut.y expe;:ts sucfi ~1no1..nit$, if s.r1y~ to be irrm1cat.triat -

J11c Courr{y i_g ,:l' <lt":fondant in variong matt~s of Utlgatfon. Of thc~e- ra::ttteJ.'S:, rnan:igeme.nt and. C~1@tyis ieg£fl c.ou1i.sd de rot &'1iidpate rrr:.y material effec.t on. th(; June JO~ 2003 fo1r;midal ,t-;Wlteme1"tts

COUNTY Of KINGS STATE OF CALIFORNIA

COMPREHENSIVE

ANNUAL f INANCIAL R.EPORT

For the Fbical Vear Ended Juane 30, 2003

Ve1ahJay Brarui Director of Finance

BOUCHARDT,CORONA& F!\ETH A.ccountancy CorporlJ!ion

ll\1)EI'END!:KT AUDTTOR~' REPORT

'T'J:1,1 Ho.norahk Boar.d or S 1.q)ervi:::;Ot!.;

C,1tmty of Kings, Calj_forn.~a

Tt~:inl(l~ R. Ho1·~ht1t-Ot CP.A Gnstavo J'd Coro~1a. Cf!\

~;c;:it1 A. Fat':til. CP;l~

e~1:h 1:naj,_1,r iunn,. m1d the agLvrtgas,~ remaining ofKing:ti, caw,m,:e:1, w; of\1m1 t,:;-,1e y~=:ur ended Ja_ne 30~ 2003 1 1~:hkh o.>Hect1vd:1 ~ornpdse frle C.JmJ_ty's; basi.c financ,ja1 s1.atern.-tms as h:sHjd ir.i. the J:2thlc Qf contents. The5P, fim:mr.:,ial stutem..:'.nts are the responsibiiity of ef Kings., Ca!ll:Ornla, tTJ~~nngmti~nt. Oc.r re.sponsibi1ity i:1 to exprc~~, ,r..n ,;.-1pfrd,:,n o~i thesf'~ ;;.r,;..r~:mem:; b8.sed. cm. mJ.:: a"".1cEt

YVe cv11ducti!d 1)ur audit in accordan{:C with ~u.di"ling !~tcx1cfa.n:1s ge11~rally acc.epted in tht: 1Jnjted :~\,1ici,o!-i\1:nerk::< ai,1-::l "ll\e: ,:t,;nr1lanis :s:,p:!lc:,b;.e t.o fo.rnnc1;;11 ~uditsconlained io.Oovern.r,:ent .Audui.ng :,;wrb.l1.H·rt.s\ iss\ied by th.e C'omptrC!rle1 ufihe u~uted S.tat,;:~. Ti.lase sta.nd.ards require that vve plan and pt!.rforr:·, !.heandit. to obtair, :-cssnnabie as~uranc~; about whcihcr H:e ft:n.andaI staa.:ments an.: fret of n::~te·ri:A! rn.isst:iteme:nt. An a~idit ind.u.des cxwnir1i:ng~ 1..1rt & rc;jt basis, evi.deri.cf s.uppori:iug the ~u11crm1ts and disd.osuresin the financie-1 statcinents. Pill audit llltfo ine!nd~'1 ass~ss1n.g thcacn.Jttnt.1.r1r~~

u~,;;:ri and s1gnif:icar1i cstin :.1t·el-. tmH.ie 1~y 1:~1r11::tJW:~nrnn~, as \vcll .as cv;.r.Ju.atihg tbe {?vern~l stalttnt:nt presentation V·/ r:: bel1_eve thai ot\1' audh provide:.; a re-aS:l'lrmble ha~i~ for our

th~: -fin.::lli:.~i~i sWt.en1z;;:·Ht1;. referred 1-n ~bn,n: present fairly1 ir1 ill nmtt:riai re~pt:ctG, fl1,;~ fin.ancia l por;:;ithn (~f !:he ,g-overn:rn.en.t.:.~i acti vitie~~1 e.ach-rnajor

fund-) and the ag,sr<::gafo rernainlng fond infc.rrtH.1Hn:l of the Cc,u..nty as uf June 3C\ 2003~ ai.1d the n;speclive ch:an,se~ in fin.ancia} ponition i;iH<l c.ash 11011'/·s~ ;vh~re tip,r.d.:01bJ.e, lh,~re;of fo1 the yt::;r then ended in cn:nfon:nity ·,Ni~h accottnling prLndplc~" g~~·tK::ra1\y ~h~cc.pt{~d in d1e United Srnte5' cf.1\.."'n{ltka.

~~~'t'.',:~·~~~c ;;~'.~r,~~-;::;:i~:~·;';'\it'[~;:::;1!1 '~t;:;:,:;~'."~,:;:~ir~::,0 ;::;~;'.'.~a,;1;,;;l~~~;~r ;;~'~;11 f~::c~:; re.porhng and citr 1ests r:,f its ",:0m.;>Uanc·e \Vi~h certain -pt,,,;Vi:$1.0n":J ,:{ h,.v,;:;;!' r.:;3ct1dons, ·;;1.JDtra.c1.s and

Thatrnport is ~J:J lnte:gta] part of rm au.d!tpt:=rforrrttid •~: at:cordanc,; w1ft.Ch,venunenr Auditing i:,li;md'ar,ls [.i.nd should. be read. in con.janction '-Vifn this repoti in considering the· re$ult:1 t1f ou:r arn.iiL

The man.agem-eurs cb;cu~sicn r1,nd ~.nalysis ani budget.3I'.l corrtp?.,r~scm inforn1ation 011 fKige:S 3 through 9 and page 30~ arc not a :\·:quired pan: ·nf th('. ba:ii~~ finru,dal statt1xnenu:: ·bu.r ~tn;

suppfomrntary infc1n:1,u~on !'~quired by:a1.:c(m.n~ingprli-1,ciptes g.trn::raHy accepted int!1c United Statc.1 of Americ:;a. -~vle h:.:n,-~ applied ..-.:Brtnin 1irnited prrn;ed1.1n~s, \Vh:c.h consisted r,,inr:ipallvufi11;,uii-f:,s tif :ar.1ao.?~g<.~ru~n.t reg}J.n .. tir,g H:e n-,etiiod.s nf mt~2i;:,1·~n~:mem a.nd rir1,-,e1m,1,,.1,n of the required snppk111~~nhtry i1J .. fr.Jr.matiun. Howt-:vcr .. \Vt! (:.Jd nut aw.lil ihe ~nd expru~i, rv .. ) ;:,pinion un lt.

t1f fonrnng opin1l,ns. on the financi:d st.aternents tha~ ~n!h.;chvdy co-rni,ri~c rl11? Caiifornia i-.Hrnie 1~nr~nc-ial ~-u1te:nH.:ri:1ts. Thf.:: inirn,b:·:;01:-v ~M,;~~Uon U) pttsc:11lt.!<l for fJUt1Jo~,cs of an,ily::;is Bid !b .no~ ;.~ jf.Xf~ircd pr.irt of 1J,a;. financ~al srn.terneri_ts,, The introd"..1ctory .section ha!:; no~ been suh,jected to the :nuliti·ng p,ocedure] upphe~ t-o the aw.Ht of th~ b.a!ik foJa.uciril s1atenients~ and. o/~Cmdlr:gly~ \lie expn.:~;s no upimun Dn it

Onandn.: ~ri0rmimce pwvid.t.':> ,1tl ... rvetv~e··'\' of th<.., Co,mty's 10!\). \Vt ~::nc'1rurag~ read~-1"3. tc; .c.:m.s::<l~r th~ :nft.,t.maci.O:::! heCT.~ in ci;i1:jtmdk.1tt<: ,.,,,i:jJ lntnrrns1iim: tirnt v.e have fo.m~~:h~tl ln C-ii.lf ii;::tti;:r ot

-..,rhich S:'.~H ht:: t~,und ,m !l":1gr:::i i tl1rough 1i1i Df thfi repu1t .;\H amoi~nt~, unit!iS -:·tLh-er'.'iiSe lt'.id!i:-a.te:d, arc dnHru:.

Th'.: 3.S.~~;is ~}r th~ (}f ih is SG:!0'4-~l( ,>·o,:.,n:, J ,,l.i!

by $~9J81,Y69 1n .tJ:ieei the

1~ kvc:;~ed ii: cepii..111 ~.1;rnrt:s {n•:t 1.J{

Tht? t..:ita1 '1t.'t .,,,-s:et•' iu.c .. ~s~q bv :t,;"J 1..:;.;,; '!CJO th,;: fo.c~t~ y,:fit, This i::; 2!11db.utabk! to a of factmi, i;_~.~~dt1~;{'"'1n:1-~~~~ ii}~ r~:,.::;1:1~:3: ~;~,. ii1 e).ptn:}.lture:~. E-xp:tnditm<!'S ~Ne:.te.

rcdur.cd cfoe to Cou.:nty tfopurt:r·J:;ms ~1ot fiHfag vacaut pc~h.ions. Se·,r~~~~ h~-p..--c a!:io LlGefl revfli:,,·ing an di'.lo;r('Li~1r:ary c;..p(~l:ld1t1.1r~·'.l, \:!i_mmatlng mmcC-i;,;".J·;i:iry -ii:;,1:i•; and w.ays. tn ;et th'° s;u:.ue. hei1.1t"fit mutf; ~·!J!HOn.ti.~liy

of thit~1~~::l r:~;,-~:~:;~ \t ~~n·!:~:1i~:ht;~~1

}J :~:~di~~~:·~~ t~:~ {l'lflrc"::~l?r,:r~d h1:1d l~.la:r,t.e')

~~~:: 1~;~~~~~:!':~: and miaiy~ ~i::eii~:::~::~d -~~:~es:;~:~~~ ~r:1 mlrbd11i·do:~r t~l(~~ r:~~~~~~~~~\~~-: g,,~:~~:~~~.:~:;· f,.ri~ndal i!lHc.sm':'Jlh. :fo1~nd.·,:d suteni..e:111-;, ar~d the fi:mm.e:ii1l .;;t.,1tente'.'."lt,; Tt.is 1·ep0.r1 a!.~1 ::orit.ait'.~

The govcrrunt:niA.vic.lc Gnt.n•.;fa( :t.V..1k~n-::uiL~ D..n.-:: dt;~ig1v.;·d to pnxvide mil<lcrn wirh a brnr;.-J ,,vervit~-w 0i th~ Crnmi.:/~, fu.1.an-Gm,, b a n:i;.ma,ir !eim;h•:.: t,) p.riv;;.it'!.",-~i::;;10, :)a•jne%,

Trlc ~tilteNt;nt c1f :n:e::t W;;~et", pr~scrts mfo.n.'f!;;;llfm rn: al! uf tbt C;Jtint.·/~'1 ~;':>t\~ ami 'ti...ibfo\h)'§. 11:~hh :ht; different:·.'.: br.;:lw::ctJ. tlR- twu 1;~ .'.°lf.:S i1w,::1r;t~. (ht~.f ~Uni:, ir,cr.i,;(.l'.::-1;:;, or dt;~n:as,.;G hi ;Jft a:1<b:its ri\i':l.Y sct'Ve .% ~ t1::.l:''11li

i1idj_1.:::i.tnr of ·t,h:t:>lher fbnni:lfll po~:h.ion of-::he Cou.,.':i!}' i;; hnpNvin~ or deterior-.a~i.ng

Tt:i~ '7-.tmentm of artivides ~1rt~t:J!'ifj. infonnat:iou sJ1<i,w11,,d11111, ih·e Cou11\s/:, n,':t ,,,,~cb; ,:nang,:d ~h,ring ,thtnrn,,r, r~eem tisc,d A!i

t'f th~ l"n ~-::&£3 rlow'.1 t.n foUif('. ti?.l{;;tl r1..:'r"iads1

arid r,a:1t1J:d bt:r m1usc.d ~,,.-~.c1t1cm J,::ave,

.Bi:';...:b of ft,;:; g,.:.,y~.'."'_ui.l.i~JJt-wk~i' s!.£1i?>W?:ril:,;: distin.guii:h hu,,e:tjo:r..,,;: nf tile (\nr:d:y of Klng& tl_1m m·e ,.;r,inc·.iY,.,11,,

ami inter_Q:-OYCnu-.nenit,1: i-e,i-r.:rrn.,,:; (f~D\·crru:ue,:mr-.i ac-;ivlt]es} fr-nm t>tt,.er i\n1ct]on.s; thu-t a~e nf t~1e:i. Ct)~t:3 Hm::n~gh um;.r foe:-. ,.~.ad Ghatg.,e:,. ftm;i:ntr12H:ype: .a·u;ivitl~Ei). "lhe !'\"''Wlme.«ml

ln;::.lude g13-r-..crnJ govi.immr.;n'i:, pub!ic r1-,1tt:cC1.~on} pu.bilr:.:: ~'.}5hl..;ni_;,;;;~ h~hl1

v.r;:ry'£ and far:i1iHe:s, rc:crek1Lf•f~ .-"Hh.1 rnltund s<;tVJ,ee:;, .:)1"1d ~d·.1catic·n, T.'i,e: b1.i'.·d.nes2·fJ9e acH.Yltle:; orth: C·01.mt}" frrn Puts He \\/orks. fle~t fyr;3.nagem.t:m~ Dat{!I Pr:u~\:;;,;~;Jr:µ 1 He.ulth a.L·ld \'Vurke.rs~ C.:::rtr.p,~n~at·:rin }nternai S-crYiCt

A fond is a grouping 0frci.J-;:.:.1J aecf.luflt~: th.at ifi. us.ed t.o n1.aint:Un -i::,:)n!rol over reso1Jrce~ lhrif h;svi::: be.eu ~cgi,cga:ted fN sp1;dfic :u~t)v!tl1;s 01 TI1i.:: Cr.•un-i.y of Kings. Eke t!H other ~tatc r;nrt lnmtl gov:~:rnm~ms, u.:H!S fond .1.cccil.1nDnp io r.,r,.•rnn: d.::ffafm:~~tc -t;ornpliane::- \Vi!:h firnmc~:,.1·elm.ed 1-egai r~lrJ.frern~rn:s. AH of [h~ ftmd:; of th.: Courny (:~fi he d1...-id,;,d inw d1rec c:~t~gorie:S: gover.:.1ment..Jl fund:,.,. p;1;p1i~bry fund•; ~nu.: fo:iudl!.f)' fond . .;.

fl,:rv-enitJJ.entfil fmd.s nrc i1$Cd to acc.0u;:1t for e~senti:llly dw r,am(;! firuct;un~ gove-rn~n;;'ti.i.id activH.lc.'?. m i:he [~ovcnl!T.:C,Ht~widc rimmdnl :,;tatenE'.(•1S. These st~k-ments .. how..::··1\'=.t, -D.'1\'.W~ on hri\-V cash ii.Tf!d. or.her :finm1chJ ::fK~!..::cs {..~JI ri:~dil:,, bi; convexted to ava1~ab!.c re:~ource5 Hn.i ('2) H~c ho.;an;::~~ left at ye:::a"··end th$.! are ;;;.vaH~ble ·for s.pendfr:.~·. 'S1.Jch tnf:::,mrn.tion o.rny l:-e: usefo1 h-1 cv.a-.h.iailn~;:;. !}Overnmz!nt1

·~ n1:ar .. tem• fh--..arK:.en.~ .r1:q~1ktn1f'nts

fk:,:ausc fu.z i!)C\.lS -!)f fur,(L-; ~:; E::rr::·o•;.;er: th~m Hnt of th~ gove:mmer.at ... 1.rid,: fi:mm.cial it;~ i.1.~tfu1 to cor.11ji.1re inforrrmt!nn }1ff;:lented fi.;r govern111entGl foml~ ,,.~fh shnUar infon:r1:atkm fot g,J·,•<emrr,eJlltal ac:ivith:& in the· uov-ermw;,:nt·- 1,11id~ fo1£J.uci:ll sur.te.n:n:.nts.. 'better und~rJtrmd ~he

:inrp11.ct t,7 tf.e gove;,ment1B ·nttr-lcrrn fo.1lUH.d:ng d"j,.-;\sion.s. the govern.r.:1t)fil~tl ba!l!nc1;; sh.~ct :;;mJ the jl',O\!err\mf.f!.1:il funC. statcm~nt ufrl!:v-emies. expem.Hture:;;-i aod ch:;!.Tige~ .in fand bah1DJ:::i""!l. provid:.:: ;1 re.ctmt.ihil.tim; to facHi1~te this compaw'i&tm hcHveen govecnm.en.tal fu.r ... di;; ~md &oo.,t':rmni~n~;ciJ ,;1;~:-tivHe~

Tl1e Cr~1.;1ny c: KJ:1gs m&int'lir.s ~eyi;rai i-:'!divldual funds organizt!ld & .. u.,fWHg ta thdr typf; (i..r-~;;::rn .. i revc:nu~. pn~je1.:.S.!,: 1..~b•. :,t~i v~ce and w:.:.uc.Ii1l f..md) lni"firmat9t!'IL. i3 pre:;.cnt:-d ':;,::purit;;:ly m thl\ guv..:nnlental fund 'balun;;:e­and iH ~1-e ~;OtJerr1rnel1t?.l, ilrn<l ~t,;{e-rne,r.t of ~ev,:nw:.::~, expcndlt'J.rcs0 tlnd .:::.1mrnges ID fumi hal;mc-ef.. t(rr th~ fur.d., prcpe:Ly ~pcc·mi re,,·errnie foEd, grant r-evem;,: .:,pc,;:ia1 revenue fu.1d, :~Jpitr{i prvjeCis ~ervicc fi.m,l uH of f1.rc L'\.:.n:;kfar,ed rfJBjor ti.m&.:;, Drnta hrm t11e nm1!iiui;lg g.uv{:Jrillit-1.tta/ fim.d~ m~ ,::cmti~n..':\.1 !mo a :;i.ngle1 fad.iv.ti.foal fim.d dr,tt) frt: e;:1.ch of the~e n.on-m:ujor gi,vermn0ntal fu.r.ds ts pro-•fitkd in i.h? statements. dse·i:i.,·here if~ rhl:, rcrmn

Thi;;, i'.'! ?bt~ fir.st ve.ar th3!" th.;; Hs finand:d :t..at(:m,;fnts under th:;-:: new r,;;;porting moJeJ H:qnired by tl1e Goverm:'l~m21 .Accounting, Boa.rd St(d:~.men! No. 34 (G.A.SR 34), n~--"'H': firnmdal Srn.tcmcnt3 and t,·t'!r:RgerurrJ.1.t'<:- j)is-t";uss·km and {MD&.A.) ~ for s.tn.tc a..'1d l.,i.:){.-:a1 Govern1nent.s .. Beca•Jil-~ !his. reponl11g rc.oci.ei cll8J"!g,('li ~.ignifictm-:-Jy hnth tl;e anC prc~scntauon ol fln-ilnc-Lul dJ:rn~ the Co·Jrity h:a$ not resmted ptior ~1:i-cc:d

for ptrrp'i.1S.Z$ cif pni·viding .::vmp.a.rative i.nformati1Jn fur -.ht: 1\,1D&A. h;. ,c..vl'l.Unbi,e 7!.. con~ptttiii1v~~ :1rm!y::i~ of govermn~nt--w~d;;: ,lat.a Vti!i b*

The forge~t. pmtiuri. uf th..: Couuiy's ~,:::ct assets $3g)B2~0 5 3., 4~t 5 1~: invcstrnc:nt in {'UpiruJ asCJets brn!J:ings.1 ~qn-ipm¢nt find \rifrB•itructur.e)~ l6S:.i rt~lY rehnt:;d used to accmir~ thm:!: a!:l~ds .. u~s these cr<,:oltal ~1-ss,e:ts to tm:wid~ 3~-r\'l.:ii:.s tu citi:.::~:n~-; tb~s~ a~Sf,t; art"' IIOt ,rvl'1~!:t:.hl~ for falJJtc spending. Altht1vgb foe Cou~·t)'~ lr:v,;stmen!::i in jts c1.•.p1lf.d oss'=t'J u:pf:rted net of reL-1ted ciehr,, h should be m;tr;;<l

~l:tr::t~~::;~~~~:! ~~:i;;.~:(:i::~r:}~.:t:~J.;;_;!~~ rr!U.'it be pnT,ide;d from OtltU /jUUfCe~t S{OCC th~; Gapltai aggetS th:;mttdV~S

Assets:

{;l::trtnt d:rld. other assets

('1;1Jµ]tai:tS.'}d,3

T01.·1d asSf~t$

l. iahilitie~

L:.::nµ,D1.r..-r111 Hat.il:tit~ Olbl;;T }]3Hl,hie-~

Tot;d lh:bnit.les

net ufn:l.<1t.ed dt·bl

Res.U:kt~d

UHD:::.trlct~tl (d<:'ricit)

Tr.n.al ,.u . .J.: &sser.~

Chargt:~ fo.t ~\end,;.~>2as

Op•..-'Tattn~ grant3- and .::or:tributio::is Gt"a.tns & {\:ic1tdhut\or1s not r£:snk"tecJ

Gr~nern l re,v~nr:.f:s: Pr1ipeiiy t.rne~.;.

s,,ir;~ !J)i('.:,".~

OH:u .. :r · ... ~'.'-~.'..:s.

lltlrn·est. ,)..rJ.i hr¥d$tr(le:nt bcomc Ott,cr

Uc.u,~r§.l t:,-t'l'v~·,rn.G11;ut.

.P,~bH.c seJety

County of K~n\.1:~·s Ne! As,e(s

.Juai .)t\ 2(~03

Govi.:riimf.n:,:=iL A"\;Livltii-::s

$ 54,'l~,.i,Oo I

42.9·5L~] l

21J.4.Q,17.~

442,;47

-12.66L'.H 1

(\Jur,~y ufKin~fs O,~ugr:s ill Not Agsct,

,.I\.HH:~ 30~ ]O(j3

Govermnei\Wl A~LtviLie:s

$27,!S'i,472

98,482,S84

13,016.HO

2..3&2J75

3.097,339

l.D"'·l.347

4581..:i§! 152,5.,W.661

'.Z1/i42~J42.

43,2)2,730

H~.:1-H:h and sf.i.nitation

7'\ihFc '\.1iray~j ::-ind !~1cJJJit)i'l 2n,<25.~8a

571,977

1.19I.U7

{ !2,977,MZ)

$10i..22'J,6-U

Prop~rty 1,.:.D:.. r;,;'v~nuGs 111::re-0::;cd. by mi~J 1·~~ti or "l i. 4 pe1r.:;;-r11t <l~:ing the ytii.r. Mr,.;si 1.1f this .fficre~se is iitt.ribmat>le to gnJwih in n~si!~sed v~!ue cfurnpcrty" Cho:trges l:i:'n· ~;~r.vk,es in::.re~i.:;:ed .is !9 . .25J in th-t g,:Jvetmr.ient. ir,tergvv.:.":rnxc.ent;;;..l rc~-r·{mues decreri.::ed b~· 53,767,876 1 in largi: ~=--Mt due to State ,velfa:r~ fundings. F~l:llc;, fo!f~iturcs and r,enJJJth.;;~1 revcrm,e \Ven:: 1...1p by $79, ·~o I.

As nutt:·d. l~r'.Jlier. tbe (\:~unty bes fond a.ccr.:u.nt!1~g to en~ure a11d -dtwon5trntt' cotnpLa~ct'" vilth I1n~n,:e-relatr.-:d leg.al Nqi~:ternertb.

The focu;,; uf tht..~ Cou.rly':~ govermnt:ni.al ft:1.r.ids 5:, u..• informr .. tion UJ! ne.'.!r--ti;.;rrn 1nfl:::i,,.i~, ov.tfh:nvs., and b-r1~:;-rnc,e:;;- of.-esnutce:;: Ui~~t are avaiiaiJl~ ti:\t ;;pendJtt~~ h;formatim,. is us<'-fi.l it.i. £13'.~6s:ing th!i.! Couflt°y°G 1lmr~if·.fos

-~::~~.'._',;\iaret:.'.'1:1!,.,t~~·-·~rJ,.-.~,~

1,1

~.~-'.·,~-~~.:.·1b-..1i~-, ".~"',r•~,{sr.

0.~\;_:.~ :_,!

1i~~-'.;

1baiance i.·1-•1,cu_::'', D::iDff\rP~-e,,,',",.rr",·,., r~,,,er.tfo~1l m:ea:s,un: of~" g1y,·,:;rm:1.:::.m·s net r~m~rce5

~· ~ 1 ~ - , ., ,.., ,... ,, -~ , .~K ... _ ~ , .... ...-~.... ; 1 fim,::-1~ 1-e-~.:,rteJ by the C:::':raty i.11-:;~ude the g(·m~rrd fomi, .'!:pecial revenm: fUnds, m1tl ca;iital pmject fond~,

the 0Jui:1ty"':.. g;cv:g.u-nn~nt::i1 furn]$ mparted z:u1nbfa1;.~d ~md.U1g fond b<.t1rJJ.1(.!e::. of

c,,;a,ilaiolefor ''P'"''-li<,~ a!tl,e. 0:J,i:;1,1:,'c d ::.:~~it~~~~rhmn \\dtb th<~ prfr,t yer1L Tb~ '.Jt!rts~:n-·r;xi aroount of $3 :'..J::'iJ4,,;;.97 hi

The .remaindw \if htnd balrinct ~£ re-~erv-ed hll h"1.uict1t1;; thi.:ii it .ls Bot ~lv;!jJlab]~ for H~W ~p-end~n~ b;:ca.use it h:~ a.tn~dy t'lf'.'l":"'.:I'. {~OITffiiiHed, to COt1tr:::H.:h "J1d c:rd&\'!:; (r7 ,..,~62,682\ (2) .{HV~5imtnts; {J.) J:c,.;,.r

vru·i"t:i' OJf .,fber fe'.itrio:cl~,· pt,trpOS~'.:'- ($16J~~)O:-

go,1ur1111emal mr,ns. ,01:a111~g :i 1-1-.1., milE011., 0y 7 percent (.Iver the fi:-1::~d yi;:m· cndi.::d J~.E1~~ 2002 ln for: expemiittn'tJ c~f ~,overrimmmi f1IDCs- i;x.,t!c..:i::icd F~'lt:f~ue>$ b_y 'S H'l.2

The general -fund is r.hr ~~hief o~~nting fo.nJ of the l_.~t ihe end nf the ~J.rrem f=scal year, H1e umeE~en,''.X! :fund

~;~::~i::~~ ~~~:c~t~:~~:t:: :::e~i ~~o:r;:~a~!~t~~;!~1r~1~!cn;:rv~~t;:\f ~~:!:1~::-~a~J '~t!i ';:~r;~ 1~:~:~::: ~: 1~:!~~::~ ~;,q)C-n<[turet, U:r.teSC-0!'"{(ti fond 1.nihmcc rcp!~sf;;nts 7,--; percent ,Jf'l:OHd gc;ccrnl fu'1.d t:'!.pl.)nditut{tS qJf$ l·t2.7rnHliun, whilt~ tcmJ fmd baltd'l(.:,! r{~pn:sents W.7 p-::-rcent of that ::m.m_c <u.nnur.L Th,::: furid hi,hua.:~ jri tt~ C,.;unt;.':,, gcn.crvJ fsJnU

im:t~(lS~d b~~i!-~.~:9·~::~:u,:~:!!_ il::t:rc;11A;:1~r~-~l~;l}!:i.;;:~:;~:~:~:l~:~-!!1~,t r:~.:::)~:t::~u;~i·tr·::ry t1:t~;i~~_r:~~:n~;l~

As n1_·1kr1 ahove, the County':..:. ih,cal yr;:fir r: i ato;:;d w grn,:nh ::i!tS.~:,:~1:d rcd.:!!ced ;:i~:i;c.;·;.mc-r:.t ap::.,.:ah, a:nd ta.v~ 7C\.'.:.'nlJ4':~,. Jn ad.Ciu-on1 mrmy ;!!,r:n..::rnJ for:d pr-01,;---r·Jm cx.pc:n.ses grew m0rc ·--'""',.' ;1,.'"

frrn.i bud~et. ,:;.f 1:b.~ genera,] frnJ dif!:Cr3 from ,.b: butli.Y-~i in th(~t it cm~t;;;hB cc~~,v tO!"'','a<O apJJYC,Jpri,,tiua:; fi)r varwiis µrogrrim3 11:iti an{i ttpp!OJJ1~1~1.imi;-i :uppt(t<'\!i;d d.!.!j,ig lh.r;: '-'1'''"''""""'' ~,ctwe1:::n tb~ origin-.1l b1..Hlg1:t .a.ru-:nderl l:rudget ,.,C$-i,1R6,295 net lm::ree:.;,e in ap;,rn,~rn,tiori:l iire bdefl:1 sumr-LaTJt.:ed a'ii fo!knr:;.~

depart .. 111ent in<:(t!'is,ed apjpropri,;tio,1:1 for services io l\:iunty :.l.!:lp1:>.rt1.nen1s and OUEsidor: nv" •·'"·- u I The C~n.;31'"::lil in~.r~:-t1.ed ::1pp1·-::-1,r'.::11ioriti; by$ i 1 2~~ l ,6771.

0ve1·aH, the Cc-unty\; ~.cnrnl genernl fo:td .revern.1~~ wet;;: undt.:r htMtgen~d hi fiscal year 2003 by $2:),"H/753, Gr 2.5 p,:.rc.;;nt Kev~:rn.n:s. that had 3Jg)lifi.:..amt variar:tces i:1-. .;.~w:.!.!'..': the foHnv!:i.ng:

CJn.rg,$ for ~urrcnt s,~rvk:t:s '"',. ~ gr;;;~ti;;r than budg.;t by $4 76. MS, nr 5}.1%. .. ·.fax rl;;'ve.1-rue~ bt~dgct by $_2/J59H305T 17~(~.

;.~~:;:Jf~:s:j~:~:~ :1:;~~; :~~·j·~:~-e;;; ~:J :::i ;;~:r£ fos~ fa:~·::.~l:i':l~~t~~~~:~·~:'. ~~!:!~;~~ ~;t t~r~?1,.r51cl11litUre :.~~1.1~~~~:r~~:

J~part1f,c>Df1, ,31,ovit!r '-:;;.plt8'.1 ~-:,quL~Ll.vn:t, s~;;.vlng:-; ~n :.,.J!l;;c.ry r:o~tI lh.;-lj w z. hfring frear::z.t'l, £'"'Om the folloi.ving CoLm,~y fi.mct.lnns.

·1.h~'. ('.o;..n1ty's ct11nt.al tl.3-stt~; f,;.;r it~ govi;;,rmnt:=:nt~i n~,;;t1:rnuluted depre,.-;!;1.tfon} r& 8-hown h, the- tab!e:

mAh,·lt.ies a~i ot Jmm 30~ 201)3 arn:;unt to $42,661 . .:il 1 This i:nvrstffi.ent i.f.l. cu pita I ~153.e:t;,; include; lmH-3,

of

f;,.-;i112, d:..-pr~dJt<',d fac1Btle:}1 infras!.111ct~·s, and

f~q~iP,:l.';'~i:::'f:.

T(:.t;tJ.

p:r:1r\;. tY,aDs yci:.r, nii:'l ,;,if Jq:irci::iat,,<'ll, w~r.

C1:i.p1Wt .c\. .. ,ss.e.t.~! Net of Actmnr,;iateJ D~'P,l'i:-thition .Jn!!'~e 30_. 2~0-?t

:r.\fi'itv~;Jf, "lq_:;n-1•-,o-r5

Thf: tr,tal i1rn;n~U~f; in th~ pe-i·,;;ent (a 7.5) r<:c'cerit

gn,,·ernm"'l!Hi1de slattrnt;nt ,,f' ne: ~.~,1~(~. pre${s:rttt1liot4 ~il dt:pre,;:"ri<_)!-.~ 1.:.ri.plral a.:sstts i;-'\:"f;;r~: (k,ptoci&-\lf¢d fro}~, d~te to ·:"tie ~mi nt" the .;;1m.:r,t fua: a~ y~?:.:--.

Ft:nd finimdrd .,;mt.t·m.i;ms n;c;u.r<l m~·itJJl :i:is:-;d p:m:;ba::u~ ...:.~ i;t.;,_pern.HflJ!n:;;. in fl.:s.ca.1 ytar 1rn:H, m: .. going tn?rastni,turi: i:ro.i~tB ;'l.rn ~1cc(H;11t~,c ibr in (:On~!rnctii<n in pmj;';re(~s:.

!1.( d1-e ~;~~d oflhi!· {_:1.:i.;1'1::int fi.sct~l y~ar, tf!c, C\::.unty had !on~-terr:.i ~:b:igr~t;;_in:£ ,)t•l::qzw1tfr.1~, of$ l.,762;624 '.n tv~'J :::s.yitv.~ kui.;;;:t.

Kin.gr; C\,;.Jtity\-; kgu.t Q,;:bi .fol1it 1:, $!52.,5t"~\6td .. Ar, ot J~;:r1~ 301 20(~:.:L tJ1:e C<"l\Jr,ty d!d net i1t.t,,~ ill':j' g~nc,-1;;.J ,,Migatina bonth. :rnd th~rdi-:,rt f:t~<l wrt used .'.°'Lil)' rifih debt Hrnic

On July ,oL2002. tl.1(: ~';a::tind ,;;if $1~pt;;rvi&•.Jts !rfipnwei.i thi'! ~m.t!:. 4jf thkl' M;-.:.st.i.;r s~~tr·~:nent fi§.teeme!.1C T~;hav,.n t\!:V(C.!.i.1!'6

i.S' he n.::i;,i:,h,ed .. u;. a 1'ts.u:i: 1;f fh.t1 l;.,,,,..-sy,~t ri~.:dn&t tbt lMge;::;t U. S. toha,~..:ti :.n~n1fu.Grin-&-n, Thi:: pr..::,o.;:~d.., wm lit: ...asc.:d. t.v y,artiaHy fin,v,c:c c,;.rri.,.:.tJ::uctie::1 cfa t'Jti\si' dt.1-:oriti.cm. fadHty.

Thoe rrnen::.ploy'ln~nt r.;,_te i;n C01m.t~· wJ..'i 1:ii-.4 p,;.;rG't:a: iu I)i;.:ccmb~:r 2U!J3., C{J!npar=:~d ro i.h.,r,; ;,t\~tes ~-1.V~ff1g¢ D11~.rrrployrm'.~rJt rl!~ oi p1:;rrnm

ihhi finf\nct::i! re_ro~1 i1'; ·d~~igr1ed 1G pmvid{'." m;ir citil.et~$. tJ.Xp<iyer~. CY!.tVm-f~ri:,, riT~d SmN;.Sto~~ 3r.d cre.di~l,)t& v;,,1ith a g:en-er:..,1 uvt'.rviC\\• oftlle fmrm.ces ru:lld w Lkrnarrntr;,iu·.: th;~ Crn.mty's. uc-crinnt.FJ.bifay for th.e rni:·,r.ev il rrce·,ve:;.

8dow ii.: the ((Tf!ar.:t ft.1r ~boi:J: ~h1.i report or T1::qw=::,;t:; for additional fir.an:la] infu::llnar.k1n.

King~ D~r,artmcJ',t 1,wo ~1/. Lacev Biv:l H,'inford., Ci\ ·tiJ)1.;}

A.Si'lETS C,i:tsh ar1d c<.tsh (~qulvr;i!t2n~!~ invf.1thT'N:}:1tt

Courrly -t~t t:~ings Sts1tem1mt <.1f N,;1 !\~<sets

June '.ltl, 20113

R~ceivable:s ln2t of a!lcwanc-:e fur unc,:iJlec!1bles}

!rr,,.~~nhJf!fm e?.nd pr-e~a d e;-:pt1nS&fi

Capita! d:;i-se"tt ·~r'ie\ cif a~;cun~w~at~r.~ d1:1preciatkm):

Land Struc.tun~s and lrnpr,5veme:1·~s EqtJipmc;;nt. i.)oristruGtil":ln 1n mogreo-.... ~5

Tota:1

' ass.els

Ul\aitrm,s Ace.our.ill pay~t,!e and o;tsar cutrent liahi!ift1er,

Due oi~1er agendes ~-~or1r..:urrent Hab1\itles:

Due '.tv!t,;ri one year C.~a!rns p~ya~le Cap:Uii L~a-sE<s

Du10 iri rnore than (Jr:e- y~ar· Comper~s~t~:r..'l ab,sE<n;;.e!:o

Tot~! i,atimues

ME'f ASSETS

n\/el=t'i:!d in capitai: as~.e1s, ret of raiatiad d~Llt

0n res1riGted lc.,tai net 3.$!!~ets

G,:;~errmmr11«1 A.ctiv\t~es S44,39Q 2'36

1t,_, __ 22.,a.2

8,(f2.2/;5!59 246,3[')4

2/16A,3fa2 162.474

4,310,000 9:i,429

442.,'t47' T.9:64.402 ___ ,.. _______ ......,

FumcHonsiProgrZlms Primary govim1rns11t

Go1,,,ermr1ent~~l .actlvm~s G,ener.;,: goveniment Pt.~b;ic :.~af.eiy Pubb:. v,m•1s i.:ind faci!itles Mig1"1w.a;1s an! strt:::$t~: H!:::a!U~ and sanifi.:.ltion Pub!!c A~s1sti:lnce [dL!Wl10!1

Cw!turce and r~rnation TotsJ t>rlnmry QJve:1~ment

Cour,fy of King:; Stf.lteme:nt of Actb;1tlas

Por the Vear Ended. ""hn1£1 30~ 2003

$24 ,842,]42 43J:-t2, 730 20.42?\881 ,-i-,464,796

Program R.eves1V.e$ · Op,mlting Ch~ffJOS: for

Ser-ukes

S9.267,697 5,6l4,5CJ.

10,941,891

(i,t~ntg am!

Contrltmttons

S 13,437 }:1~)7 17,.263, l ~)g

~Wi,6C11

8'~2,414 20.338 50~ 6BB;i01 i a1069,St0 53,40D.n~1 1 /,-46 t...3,0d;3,2!-50

!:1'91, 147 42,979 i.44.202 5·r1 977 E:3,53$. ·HS0.442.

--!~~2!~ ~-=$~7~1~;·',J14?A.:.e ;:;::...o:=.$98,-492 13,64

Genera! mvaf1ue~.

N,;l (Exp!!11.\'l.e[ RliMHlll!l !l!1d

Cha 11,J"s !n Net A:r.sets G(liVfH'nmentaJ. -

$8 l :;,312.01 (20,:!051067) (9, 102 38'])

(3,f:97. 067) 1·1,6.10 542J (5,305.252) (1,003.936)

{347J)96J

--~t!_:C~!t

Prcperty fax0.s 1'.l,D2€, 1 '. 0 S~ie~~ Tax:5s 2,382,375 Fran<:hh~e Ta·11:·As 2,800,fi5t'c Hote! TaXtl!S 196.7~,5 Grants and cor.tr:but:on5 r:0t ::::stricted to soe:-:ffic pr-ogm~s 2,736,S, S litH'estr~c:1ed Jrivestrnent ~;errdt1gs 1,074,;..~7 Gain un sais of,::ap!ta! assehi ·i,104,789 ~itsc&ih.:'1neoas 3-,4301779

Tota! general re~'?.l··1ues 25.9G2,305 Change 1n net .~s~eis

N.a! a:,i~fi1s - beg!nn!ng Ne'!. ~5seis .. ending ~-2~~~1_:_~

1l

Trt:.i.asuf~r !tl\!€~·strnent!:'.· !iT'j:'h:;,;:,t ca-sh 'DepcsHs witri ott,~rn

r,cci::,un~s. r1;;t(!:1•ti1t1te

.,.·\c!vlu,ce~ to Dthe1 "funds: !rnrer.tori~~s Prepsid f;A;'.)~n:;11;;::s

Totai 3~1ne~~

1.JiU,lUTiE& Mm FUND BAU>.tl:CE!, ti,::;hillti~s Ac:n .. 1%d expene~s p~y~b!e Cla1n1i ~)~Y$b!e

Fund b&lances: Res0r•.1ed :l!('

::~ncumbr~t1cea~~ 1mm'!:trnents '.::crn~oflllc •.ine2:-l:a!r1ties

Othet p;,.:rpoies 1..Ji~H:·a;~i\Jif::j, t'9:pOrt~ 10:

Gsner$1 f:.ir1ct \3ptt~J~! ~Yl\tl~e ·\H1di:­Capit~i )Jrojec'is f1~n-d.:-}

rct1:!~ fun1'...1 balance~ T(!tai ii~Mrtic$ a~d tun'.i befanCGf:

Ce,1mtf of Kl»(ls Seila!~C·~ Sh~~t

~cir,;e,rum1.:.1ntal Fur.d~i, Ju:1e 30, '201lo

'1,L26 n];,,:

6,612,:~48 SGS ~70

21.7'54

~~~i~~,.,

1/t}(,J. 715

'i)?.t'.i,7'?.;t

-Tif,165Jf6'2

~~~

C~~lV!I !'roje(;~ $~-.72 {614

_2a.-~~ :~wJ~ ~~,1;..,;.,;;_, ,\r.2

~~~~

Go\·~rnm~r;ta~ Govs1"fime1,Uii

e!ll10S

--$6.5615,023 -ti9Q .7.~J~-1,5

?5,(}{;0 1 ~.;Jg.~ .802 1.'.!26-flt;'.

1, i 12,DJr' 7,51'.n ,-:~4;; ew, 478

20,77~ 21 T54

~$.~~k~~~ ,=~]1!,~E~

1.1~m.100 -z,-as5.885 6~J{1.00iJ ·:,9l! GOO

2..~re.270 i6,000

---~sT47ti'f

~~~1

15?.474 JA9t; 1:-%1 ·---·-~=--

7)61,662.

1,226.7$2 3,831,343

'16000

1·1.a2Q.e·1s ~,.)22,1:195

Capita! as.•,1-Hts i...ised in gave~r.rnenk.1,1! aGtiifit!.s~~ are not g1na1·r.:.·:'J~1 f'#'sc-urs;es '~rtd, thsrefr;te, are not 1·spot'1~1·:1 in t~e 'rl.1ri\'.tS. 3.8.832,013

iritetr1Ji $~Nice tundG Fif~ usF.id b,y m.an~gel'f1t!nt tn charg~ thti cc.s~ of p1_ibJ\;; 14·ori-::s. fktei m~n-agement; data r.:-:'(t.::essing heal!~,

:~f~i;t~;,:~~=$:: ~~~~~=~~!~::~~;~=~~~:~:~~t!:~:;~~n~~ld::J~v!6t~i in-ch.1ded ln go,:·smrnemai ;acfr .. rrlt!efi !fl th-e s.te3t;-tm~rJ 07 n~ <?ili;g.;.•rr£

Cmmty of King,s Sblternent of Fi~evm1tri!:~. Expendilur~:rt, .:lnd Changes tr1 r:und Ba~anc~;;1;

Gu·v~!'nn1ent F\.1ntls

Ta:<~.:R: Propen1)'

S~il;'S fr~;nchi?3F; Hglel

!~1t-.;rgo,·11err)mentil:I Chor:-,;ies fc,r servive:s Rer.ts !:incl G~f!CGlj::i;on~ ln\·~r;:m'i!.rit. e:~n11!ng$ C:nntributkiri!.G .llrid donation~. Mi:sct.,iiar.eou$

Tot~! r·9V$:"'H.i-f3~

i::'.X!'ENCHTURES Curf':e,f~t:

G(';rner-~! gcv1trr1m~int

Public Sat!!!ty Higt1w:;,y!!i B-:-1d ttr@Hts

H eam1 an~:i s13 mt~t! or~ !='1j:bJ!C ~)SS:i&t~r:C@.

[duc:3tion Cu!tu1-e ;;1rid r-r1c;~af!on

Cilp:!al out!ay-rotal '!!!Xpen:ditures

~?C(:e~,1 \-doficir~ncy) of ~~venue~ over (Linder) exp,snd!tures

OTHF.R Fl!IA11CING SOURCES (USES}

Transfers. ou.t Sale of cap:wl a~.s€'ts

Tot.ii olher fin~ndn:;,~ sources ari-d u::tes Nrat .:~rw:ingG- in fi.Hld bali-J.(lOOS

fund bah:·mces - begirning Fune balancs'"" end!11g

J:or th~ 'fci;!lr E.t!d$d Jyn~ JO,. 2003

08nt:m! -i---·-·i---..--i-----

.35,600 6.2.~~9611.36

8,539.736 516.%'.1

1,0'18,602 --· 1Q7;459,1~3

10.Ji55,()09 32,428, ~93

1S.690,v4a 42,104\~!,15

1;3J,53c

{531YJ6i

3r,~dai Ro-verme

-1~e.s·1.e 41.'.l.1 ;19

614,116 1~ 06~.21"!

67,(lf;f,

'!69~5B1

lri;!OO 1,591,209

----- 23 31;;7 l101

508,707 9,9(Yi,964

4 4f..4,79fi

$90,0!)0 ii 2?0j5:'6

i .(!54-,143

Capit1t!

"- i'mjo-ut,;. __

Total Govcmmia-nl!a!

f'urn:is

s13.02e.,no 2.382,~:rs 2 ~HJG.654

'!.96,735 290.'152

i00,243,:U.4

R,eO!Ul26 516.'.!$9

1,C,~i,ftn 10, 1()6

i0.86J,71$ 42)3:?.Q, 157

4,·464.795 ,to .sg~J /148 _::,:1t.314i7i1

1,1-87.67.'i

531.Hl/1 (S3·J. ~ ~~q

Goo;nty o! Ki119~ R.ecom.~mat.;o,rt ot· the St~tem~nt of Revern.m$.

Exps'n,lit,m,s, :l!flci Cl'oar,g;,s in Fur,cl A;;!;ine,;,• of Gm•11mm,,nl:l>li Fm,<l& To the Stalernant of Activities

For th;;; Year Enrlel'l .h.me 30, 201.13

ArrK)Unts reported for !-JfN(Hnm1;;·1tta1 ~Gtb;ities in the statl?merit Qf activ!'ilfJS are diffen:.nt because:

Gcrve1Y1rr-1;ent;;d funds n.:;:port cHpit81 c,ut12ys 0s :e-tpenditur~~s. Ho~ll.·evt;r, 'fl the ~tat~:rnent of activit1e~ the cos1 r..Jf tnose ass~ts is a!lo,:-ated vv~r their esiim.atgd 1m0fui !ives 8nd repr,:11i'ed as depreclHtio11 e,}:p~nse. Thi:: is the rlmoi;nt fN v:1!1ich d~pr{l-c!ation ($2

1149~950) exceeded c8pitill outlays {:ii,72.7, ·14.H) !n

!r, tne current period

Internal ::ier"vicr:: ftwH.h~ are l.f:ed b'-1 ina~a,~ernent t,:) cl1ar~1e tho co:Slli of publ1G ~vo(k:;, fl~~i rn~rlag~rnrmt, d~ta proc.ess1ng 1 health sel1-1nSLH!'.rnce and workers, Gor,1p0nsc.1tion ~..:;if-in:;unmce to indiv1du:::~! ru~·-rjs. T'he nc~ raveriue (expermt;-~)

($"1/M,154)

t}f c0;·m1r, i,::1iv!tlr;;£- oi t"::ervtce funtls. is repi,n.ed with gov0rnmental .;i,.t!vit:es (2.9Cf1,6B7)

C,:,,mty of Kings Staterrnm! of N<.it A:isei3

P!"f.)pti~t;.1ry Fui~ds .,,_h.HUJ 30~ 20!}3

ASSETS Curr.en\ ~r~;;;t;!t:.,;,

TrEizsurer !nv-,~~~rni,nts !rttpresr c'.a~h

D0pos11 with otr.ern AtLolm\s rccf;!\',lable !il\'~ntc:-ie~., Prep.aid r::t(f.l(~~-\:ar~S

AmtJwr'.t.s to be vov1ded To~a1 .::urrent assets

Noncurre·nt Sl8S6t$:

Capita! ass:Js Land S·1suducr;~s and ;r-(lpmv2ments Equipment

Le;;:t SIC{!UffH .. i!«te-d d:nipr.sc!.f:1:!!Dfl

Tc,te.1 cap!t.cJ ass·~ts {net of ar;cuim.1tated ,:iepreclatk)f"1)

Tola! noncurreot as.~ets T otai a£Sf~ts

Cun-~n! Hablilties · Ace.rue·~ expen..e~ p;;yable G!~!rnSi payable Caplta! \;~ases oay~b!e

Total current l!aoilit!es

Noncurrcnt !iai)!litie:$; Compe:1~~ed a.nsences paysb!i?i

Tota! non2.1.;1Tent !1abfoties Tda! Labl!ibe$

Nf'TASSHS ~rwested 1n caiJiia! a3sets, net uf related debt Unre~t!icted -r o~a! net a5e>&th

15

ln!emai s~rw~ce Funds

S-5,'Pt\7?-5 180

260,0QO 105,972

14c,,993 49.871

62.D,10B "i '! ,4t?.\iD50

~£~.S~~

108.457 3,6:~0JJOD

95,4;i9 ____ 4,D23.916-

c,,unty of K~,195 St,,.tem1ml o1 Reverw'.)S, L';'i1f>1mai,s, 1111d Ch,mg.i:1;. in Fm1d N>!t tl,,:.sl.'t1'

Proµri~tary Fimci§ F~r ti,~ Yt..~r Ei'%ied .June JO, ~JW3

Operating reve-nt<t~s:

Chiiirnnt; t;-,r s1:;:a·vices: lV1isce!!a.necus

Tt1t;1i operating re,;>i;:;m.u:.!S

Ope;·ating ox~}enst:i§: Saiafles ~md benefits Serv!r.;~s ;)nd ~~upp1ies J,.dmir.istration Depr1s1ciat!an

Tot:Jl ape.·atin·; expenses. Oper,:ai~ng inctme (expense~)

Nor:O~l{!rat1n~ rsv'i:!nue~ (ex·~-en$esJ

lr.ve$tm£mt earnings

!nl.-,m:i.i SefV~Cf:

[';;ml~

5,64 t),4JJ3

']"j_fi86.776

1,028.679

t\2 . .3?6 i~~iea~st expense \t.,Y'!.t} Nc-'t nain Qr1 sait? of fixed r:issets ~!7, 503

lcit~j :'1•::-noper~1mg r~ver.L!e {expe11s·e~} - --- - 6019fi3--

~nc(.m1e {~xpt.\n~e~) D~f(H"{~ t:r.:mt1ibut~ons ,:;1nd ~f~,~~fers. --f2,8ffa~f-47) lran£f~rs out ("1 '\71Jn:

Chari~e in r~1i2t a:ss€-ts -('2,903,667) r,~tai n6t ass~ts ,, br~!n n :ng r otal n·at assets - ;-)nding

16

G~t.mt:~ of K!nga. sr~t·n·mllfnt o~ C!'.Jlsrl f°!O'll!.':'i:

tp'lr-tipr1'1;\t.tu)f Fund~

For too Ye~ r Ent:Ntd .J1.e1w 30~ 2il03

r;.l'\Si1 FLOWS FROM Of'ERKl!NG ACi!V!T!tS

P:;,;;ym(;;rit.s ~o 1.ti.J~pl!JJ!~

P~;!;l'ICJnt:s lo ~mpioyec:::;.:, t11iswl:~:!~)u.'1 R~ce!::its

Nat G~st1 prG-tidcd by operating, nl:th,.;fo; .... ';.

CASH f'LOWS FIR.OM 0.J\P!l'Al AND RE.LATED FlNA!~C\lfG AC1W!f!ES

P!._ii·eheM•.i:; c:f c~piti'il ~~~~J§. Prir:::}ipel pa!d ,JJ! c3;:Hts( deb~

c~pit;;."1) .;if;lt)t trorr. sa.!as uf crlpit.a! asse!s

N~i cash pr,ov1dec {iJ!SOO) by ,:.af.;:it~I ~nd relE!tr:;d financing ;::ic:k~riti.et

CASH fl.Ol\tS Ff.!OM i~VlaSTH-lG Ai':TiVIT1!:1a

i,itCiCSt ~:-iu lji>Ji,::!e1·1q{, rnt-'+.::!1.:ect r,!;:<[ •.~t;.;,h pr0Vll1SC [cl~~) bl investing ecti•.,imes

'R~O~ic;m.~tinn uf oi~!!;r;1;tiflg: ;r~f:om~ ta n~t ~JSh ~r!':"1·:r;~t'Mi i:jy .oPQrating act!v!tK.lla~ o,_-.er:;:tli·ig lrir:t!fi'!fla

f.i.ijjustr;-~r:ts 1c re.;:;oriciii;. r;,~erl:lting !i1l:11:in1':".- -1-.0 1~e.! c.anr1 pwvided ('J'SedJ by cpt:ri.lt!J'lfl a(,;tiv1i!f:s·

(inr.:-eesz;,.) r:l·!!~-:>&nse tn eccxrnnt~ f'F.a':C'ei\'8bk1.:

Oncri:;mw:) d~i';N~&~(! i:1 t1d1.';!!(!(_:ef; r-r:Ci)1V-3'o!e

$'f,,.24S.9n ('11,?:f~\'.IM}

(5,58E:>, 348') tl,G.?4~

_____ l,4G;,:t2

--- -- "52,3-b3

____ 5,18'~J~l6

$:3,4:;,6,9ti5 -~.:.-.;;;.;=-?~~

(lncr~1;_is:e; decft?.-a.t~ in inveni(.1!'~9. ;21 ,743) (increas~·~ d&i:r-E-cs.e ir. oreoaid :t(l:ms ~49,87 ii (iri-;:;rt;JSeJ decfe:a~c in ~rn(nml}i; to be pr-crv\,df;!lr! (5,89i) ::~crca5.cr (d~".rG.;..t,B) in ~cc;ruad eixpen25 ~'7.i:f~bi@ 3,43:1,011 increase· (di?oeawel n1 corr1p~n::;:;.,t.sd absenQi:;:=o r~ilyebli~ 5,890

T!Jt;j! ?JnjD,'itmer!is --- 4.4.45J;1· N£:t cash 1~rovkj1;1d oy np,eratin;;i ~.ctivlt~S-£i. '%!___~-

Corn,fy of ~:,ng'fi Stalem;,nt oi Fid,;cl;;;o-1 Net As:;iets

F!ciw;ia,y l'\md,;

Treasur·e: :n\lt)strn~nts Aoc-0u~-,ts re:elvable Dreposlts wi:h otr1er::.s

Total a~.sets

UASIUTIES Dtie ether a.geric'..frs

Tena! !iabmties

.. h;me 30, 1.ClOJ

$127/)81,733 4,2716,73[~ 2,B14.1?00

i3~ ,G43,:3t:36,

[THl~ _pA .. GE lNTENThJN/\!_ LY LEF1 BL/,.NKJ

i J1e firMi!t1...~IB.l :.:tfile-...;:i~ut~ of t11t: Comlty of K]ngs tmve hr:~n pn:o~r,~<l in cGntormiry •.;·1th a::t.:iunti:-1,g ~rini.:ipL;;~; a~ appli.;;~,:.bb to f.C.Hr~~nm:::ut. The {lr.iv,3-rrm:cr113J ,<\fGt)ut~'jng Sr.at1d:J.rds i3oMd CC,A'.::.iJ) is thf,M:cep110<1

tirnm:::12...I XfH:;;-iing p£ncip1e;.;,

rhese fi11art.e1?.i 51S>J:c-1rHtJ1ts pr,~~-~-;fJl p,irna,:i' g<>W:!TffncmC u~eid rn de::i:.rmJnLrig wb&'. '9.11etber rfobt is t-,;e,:;urnd b;:,- grncn~i oblig~,,ion .lt't no ;Jther ager..cte~. ,:u:::tvlti;:;s meet~ any M th1: d.esc-r1be H1f. ;;igtfrficunt ac-[01mtluf!;- p;)Hcies ,)f tht: C!.mnt7 o,·f l(in1..~§.,

-r.rper~!Ji.m'.~ f1t.:h1d(.'; how rr1t budget t'.1:1:t may c,r.:c11r. a..1d st.J.11;-r-.,isilin uv;;r th'.:" ;:i.c.:o!Jx•.ti_ng f1 . .J:1.chon;:;.

c:rilc!ia L~..at ~r,; e·xch,d~cl [r-:.~m fric C1):)!il)' 1::::pc-rtlng eniit_1i The- fol!cr,.\·mf~ .:;c-ctk,o::- :furth<$t

Th-:: 0Ju!l'ty of Ksm.gs. wae: inr.1.:wpornt;]f] ia 1~97 .,;(1Ut:r l:;..,i,.~ of tile: Stam of Cal~f,.:i_m.fa,.. The k:g.i.sfotive t·ody is 8 live-m,xrd:i;;r Bc,s.rd or St1p·erd':-ors, dec-i:,:•11 CoJtrnty Ad:rfrz:1::l.b"Btive ()ificer~ :iippo:11tcJ !Jy ~h~ B-0a.~·d -0f S:x;~nV"i!run., ~~n:'.nis.t(:t~ affsirs. (;rh~r c;t:.c~i:d C•nm1y ,oflici~1.ls inchi,j~ A,;;,5i,cci;·/,!Jcri-lf'.,·cordi<1. A1hfoor-{:ontrofier. Dis11ict Am.u·oi,;;,,':. Stiidff,,Coroner-Puhfa; Adr.rnm::11rniu:, jc~'1t'.i i:n1;;ndi::-nt cf~chuob.

Tbe Couni--y ~m:'.i-v1dc::: v~ilii.f'IJS .~l"'\•k:ts. in.cluiJ.fog hcr.lth und we!fo.re,! p .. 1lu:e. fue 1ihrnry m~d fr1e noct;,55;~:x~; ::.it..:.ppcti tu tl:~s~ :re,nrJC~ pruvh.i(.TI. A,H a.re responsible: tn

und pn::vcrctb,1 it.\lt¢e, re .:id rnrt~<1 lemillc•: :bn:e, a t)fCoumy-oi" Kit',g:;;:, and an~ the<tfc,re ii11dt1c!,,,;: ·,,•:,t,,,.c ,,,, ,,e·;10,timice1,;,,,

a. lnl'Jrnra'lhm cit!(1·0.-;: t!.11.'" mn.t.1a1J 1t:-: comvonemt r.mirs, in~~l1d;;; 1hf !1n2.nCi~~ attivici{'5 ,;ftl 2timi-:-1.:ti1ous. f:wl'e

t~; r,'\;n11ni;; t!1io:: dot.1blt:Y-Gou~r1ing nf iniernaJ e.divii:te:t. 'f'nf::se $:·,::rrr:n1.e.nh.: ~- b•Jsin-e::;.:,.~ 1yµe activities cf the ·Crmnty. C:o,·en,,rn,·nt<1l,tyl"" :?::"t1v-i11-f'~ t1re ~.cn:;·n11y fillancd thrnrJ.~h UX~s~ inl(.-'?g,01Ji~mment:,1i n-.,venu0,q, .:.1.nd. other nouCA.(:h::rizc t:·;_msactiom_ Bmbi:ss type ac~;h-~ties ;.ue fa12inc,;;d iri c tug2.<l Lt) cxt·trrrnl -parth.$.

JtJ(· :Kf'cl.t'''~1'£'.IJ"' 0f:.Y,..h1,e: 1 if':';; or,~se-r\~ ""- ·"'fp""'·""'a:rl-!U"' ht;f,,,,,,__,(1 dii.t.::'kt e~p~nr;,5 ard· r(!\,~~t"11.I.CS fr.if the; d_iffi~r,;;nt bL<';ffl{~~5'.·i"yf,-~ ril'tivitit.i:-~ Ofthi_;:

~~cJ~'t1J1:~c~!~·.~·Dfth;~ c~:l;~t:ls'"' g,~~~I;J;~~~~! ru,t;~,~ii;~h'Din.:~t ~~P~:;1;;;·~~.Jc ~;~~:se j})t~,jfo;;;Jly ,1;;f.ocmt~fi · . .;'ith a prDgrnr:1 rsr fonctkm GmL ar~ de~ly idm!lrii.Jbk t1, ,r; j)f.irticuhr fiu1c:tfori. indirect :aHom1ti1Y.J.."i. tbat ~ta;-,.-:. b~ta nmrk· !:~ H~t: .f.ir,d~ t'1a;,,.r-;:; beer. re·,..e,rs;;;:rl frn· tht~ sL31.c.r..1t;::ni of ac~.lvJ!i~s.

rrvi.-:rna::s induc.i: for.5., iii.le::', .&11,j ch:ug.es the r,:-dpient:: of .w;ods or ~r~k:s:i '!:Jffe"r.::d hy tt'.r progra.m;:; and gr.-1nJ~: and corr~d.bmfom; 1h.:1.r are tu m~et'Jlg tbc op,ei:at]onal er ,:aL;(ta: nfa p<11:iticu.iai:- p;-~~f:,mr:J. R~v~mM~"- th&!. c.•J:,;; not iei,3sstfit:~J ,1::i r,r-0gt~rn; n:,,enl.i;;~. incbiding, al! t(Lx.e~;.

a.r-;e pre-,;,.:1:ted .~ ¥,t'.'t1t:.tal 11!vem1r.5

The f:n2U.1.ci1:1l stmemr::ms cl lhe Count}, hr.,:i: been ~e'prn"'ed iT:. ,~~.m.fornnh)" wHh ~.:.·c(H.,!1.iing in th.~ U:nit:~ct ~u:,-2:1 uf _ti.mt:nca. a~ goverrmu,,r.u>,( i:li.:i.;mrnth1g and .fiuam.:iai

a,;ct j8 a1:1d the.·;-e st?!te-rncnts ;s.n.: p.1c~l:!'f.ltt::d app!kxl tt, u;,-~it"<l. Th11;: {i"-werm:iu:.ut-,.J A~~cvruJJt1ng. ~t1nd3.rds, Bua.rd if, fr).i1

rev10:mca1J;,>ror;ccir,,les. in 2{l()3, the C-0 1J.TI1) ad-upte<l ~e.w Gtx·atmtiHg str.md.f.m'J& in orJF.r. V> i;;ur:fr:mn fo GA.SB No~. acco,tl.ingtc tt:o,c: r~c111irt'mart,. Tb.'.'. mNe s~t,amcimt ofiht Col;.:1ty's accrn.1r,t1:ig pot..:i1;g ~r~ (foscdb1:.d t,dtJ1J""

Govii::n"ij"::k:,Jt ·'.'t"i<lc, .Pr,.,F°1a!.j(,. il!l<1 Fi,!uc,,r_v !'ir"11,·1..n;.1.nci11i S!:!7e.mr.:ritJ, Tu,, go,e:·,,:,,,,n,-w:d,,- ;isr~p,ric',.r;,c,, ,,mt r · · f d - \ _f\..iUCJl!t:,, 11,~ tmauc1::i- s"Lz.:tern~m:i.r:<~c~;:;;;:

G-cYtr:irt::;.nui F'u:n,J Fi11.arn::.fal f~:izlJ?.!f.1<:'Jo1rn. G(•>'emm;;jJW.i funa:J,, ::i.if

0! acrNmti::--1:g. U-n:ie:- t.hi3 rnft,hOO. n:t,{•:;;m.,:2s. a.r;;,:, ffeJ.nd:; tO /:}~. «Ti:'..iht:de, (( ~ht. fC\•t:!fll~S !)({:: C:ciit.~!;-:_.;',(]. i:::oui$ider~d. t1: b"' ,,,s,,n,1cb],,· 10

il"-"-'111~5.itivnri are fina.n.cJ_fl_w. :m:JJ•.:;--:-; ~.

cash fk:1;.vi;: t.uk•; pfac( gMrcgieq~u, v-~iur: iri t;::::cl:2,,11,~f!. -indud•:

}cir:- for whi\;,i tr.:; TilJ:e~ ~1r1:' wi,i'c~ ,, , c ,,, igil,iii;, y ,oq,.,.r,,:ne-," );,,w<· ,,,,.,, f{:"Jt~s.lfo,J

wne:·tl lb.;i.nd:"' 1t::;..J1,1r~~t'.ii 111:f.a!.!;,:rcmen! rx~cu:~ m,d moJiflctl w;tr'.;,tl basis Th~ (.t:~r.tr (.l.)!'r~it:ers. ail t(;.-.·f,m:,_;') Dj.'1'Jb~tt:d lr1 the ""''"'""""'"'·'cl

tt1'(.e5--:, r.ak~ taxi:;;, f'nH)(hh.~ Lt~J:c:,:,, fa;:ea":::r::s, .,.,,"""'· ,.,.·~·.,,,, fot yir:.:ridp.::·d and i!l!~n:.-,.:,.t r,n ~'''"''"' ;:u,g•

O.f'<PC)'itcrc,, C:"X~t'C,t UJ.~.y ~:r.t nl'Jl\.llf~d. d.;;t•r ~.ml ..!cquis5il0n:. vt.ddr ~:aap~l~l .l~?,lf;) olfe

·:be Co"iimy fariti3 cnrt.ai!! pr:igi:1.rn:; by \:01•J3bnii·Y~ ,of i{l·.i.~;itic t.c;i-1rimt1:m;,0;riw,r;, pr,>,trnro', e:,pc""'" 3!'1!' fa\•;'.·J.,.n:'d, th.:-s\:' ar.s both r~s:rk;,e,J ;ud wu\:i.:;,O'ictl.;J.1.H'.-c :~sits ::,_•«·o~1~bk v.~

d.

~-

SJ 2Cl

-~-lS j--!5 J--15

.~!!''!!'J_'!!cs!'_<>_,;;_,~,.;,£il:,:£. L.c,; .. •o=""""' !"i.1r v:3..::r£lon aind wsh."'d skk l£s11vc b(;:tli.r:iit.s 11re re,;:i,:.,~ ~,.~r..1 ·.v!;c;t 12,1rnc(.t ;;.1f sick ~<ei..h"t ~.1end-it~: :-mJ. i.l,i.:::: i~l~ poriiiO:tt

nmoi;n1 ~ re!1.1ting i:,.t gov~rn_;.rJeJ ,t.ui !L!1d5: th.E'.t , .. ·1~! he pa-iJi ff"om [,trnt-::, n-:-:i:alHCCS ar8

.F~r iH.ffj.'.:{..Sf;:t,: r.,f \he "''°'"'m1>:m:emi rnJt1.u::ity oftbc"c rnorri:bs or ;es,: wlcm, ·m"cfa.m:.

i'fl :lem;1i'tG .,,,_;:c:\m1t.~. ~:ii.;:i1~y:, J:tv,~.:·;:,:ai)frltS rn t,H furi11~ •

Jn.rt,."i.~1~~- - Sr2.!U~lf.~ &lith"1.Jd2t tn im11,~;,,! :rr.i ohlig-G.tll1ns cJft.h~ U.S. Tn~sl1ry, &§':tr:icic;\ ,·"i:,;dpiiitics., <r>llffi1rn:i,Jp;pcerr!\te,i A-l by ;st<'l,1:fad &. Pools Corpnr:!tkm ,c,r P-1 f;l-J0dis. V~J)i:-at Rtc ... -xJ;:d, r.,\JJJker's ,;cr!'.fo:~,.e,-;i; r,~1r~~;":, Slllir~s ::if G-o,,'~rrn:n-;;r1t m~Jit){:)' m:;.:rlec'L trlf{'J.rd1,13;;: Ytiro::~rn:eri:tf, anri th~ st~de

;11.,i.::sl.m.ent~ :1.r.e it~kd &1 mz-irl,iet itnd a.re fr1d1.1d,;;.·J ~ .. :,.vcr;,.gr:; dr.i:i!:· b,tfa.nces.

uppE;:::;. to ntv~,1,.m;.."!1L;, 111 1$:..'tc-rn.2:.l inv\:s.t:.;.)ent p,Jo:s (8t,c{I_;; i"'1 Cd~frJ~r1i,; LA.ff ,rn.:l ·r~-.,es1::1.1,:.nts. rrnJhLtitfos tb.u1 OOi~ ye:u·. mum.l.i fund:, md ,~e11Di1; J(".:YC-~t;n.~nt ti.gret:r\'1..-:rrt~

g/J\l{;fflmj,::HtJ! 1;;1H~tic::i .cJi:::'f:d lu r~p"Jrt ·~"''' ,,,,,,keh·al'.1," '"'"'~"' n:.cord:a ih~;:31~, g,t:iins o~ k,:-,~::; sU1tt·mvnt. ".'.he. -'.:"'.mt.:ity •fo~~:; ,1.ot rre':'.l:M ~l'i;;,c,, ~r:,;_i it1 it!,

Tt.c;; (::(}1u1i~ .. pn=:~m:;;; it:; rc~11;;·,:i~ m C.ll!.lt ;,(h!ch .i~·p1,c,:i-;_i.,.,i;,;t,e:, ·"raLr "},;flllJ~;·" at n~ca! ,nv,ost11:-"'"' c,,,,,.,,,iian ftCVJd<c< nwr,,11,·,l:J,,s iUi c-.a-ct', im·c~ln~•.::-a-;- t,1.-;tn111cf1t un ::.. rnc,mJi!y ~~sil.,, TI;~ inve:.;l(1l::lH~ held !;y1J1,; •Cco,mty· '"'' wide!·,, •x"""'-' ,,mim,c,.,w ,ai,c,esore1>:e,dil1: avai'ab!c rr,,an ·mor,,rn,o,; pub"t~~ht::d ::>O"J!!'i.·.:s.

Th~

m11·t.·);~!ilJ!1ed ~UJt)U!itr;, f:;,,r ·;:h~ d:r::poslrti- are h:r;:U IJJlliJJSl!J{\l ru:Hf \Ji'.J"~g?~tt:::r~,d JJ1i1ornm; rm· Wli ;1;h Choe dt:ro,<l,tOe !,,,:1dt~ lite ]C\arJ~ Ofelc<·.·

Elc.1:n}.~r:. Acceptanoc:. -"A·" Cost Ccmrao.::r,;h.."! ?[1per DIB-c.·i\t Co::.1

~~!;~~:~ -B ~~;i~;.{~;~~;:F~;;J;tm~ni P uo l !v5l°'1fA NJ.tfons Tn:as,~rY Rf~.;;nn;· tvJt":i.Hum Tt'tm t-·k:-t·~s • Iotal

;t·t1.sh ~wi Ax·crm.·d h1f~-r~!it

PRa:: s:b'\.'lo!-.:/Che ck !11 g. Er1.:iin.g /\c1.·r1.1.ed hil-i=-rc.'-it

Subb11c2J]

t".m-ds h1 th;; oK.llH:'.1l ·n~:e C·J 1J.11!}" 1S t"~hl~ri:r,g lJl~:~m:irti:zed. tafan;:e is.$ l;J.26~ 7SZ,

E5l~.J.tn ,:".HJ4 2.9~7Ari-: 3,716,3J4 ·i,9-5l,24J

40,000/)lH) .-J,(j0{~,0!JO

1 ~0.53...12:5-

$5~)2,.i,5Tl l}nP,?·~1 '.\716,049

At Juue· JO, 2003

~ Ov;.;:i-,;i<?i:>? an-; capt~one,d Mienio:an(klT'i •.::.,r.ily t~; it:<li,;;;~H.~ i1r.-.;::,le11ld oniy kO f:i.\"..:!Htclt\" f~na.:1.1:1ij1 Datr. in !h:sc- c:::1i.~.:.1TL1~ do J"KiT presf!:ut &~an,::;a.1 ~m:rthm~ r...-.:sr.1trts of {1pi:tar:,;:J.ti,;: m .::-a5:b DoYo'S ~n ~~cnerfiHy m:,.:epr.ed acrntmt!1·g p; i11,,;:-ip,!,r;:; i:s s,~·;..h {1..;t.rn comµai-sbk to .a comclid:<!.br, f.nt~.:.::fi,inri e!k,n!n&tions.hti!--if, 1"J..m bee-1 niado in tlvj aJ;..;rcguth.m ofth fa d:at:'i.

j. ~l!~g,~_l;i.'!12" .. ?Iill£.'.J!l?Ji- The Co1Jx1ty ;::;. rr:~ul•.1.'!,~ by :d:]te ~UlJtute t{; .m.iopt arim.lal budg-e:.s for g.overnmcnixl arid. rro}H'J,;:tat}' fotKls. offl:i.e Cc,m~i3r. The bod.get is A.&:ipte<l by At1g5v-._t JiJlh oC-;;-&th yt;&r. Th~~ r:r,1.mty Bf1>'ird rnf f.upe:rvisr:r~ rnay mien\! the bud.get l..,y ti:ans£-:;rring h1dgr:tcd arm:iu!1t-; tt"mn. one d::ijot::i~t or prnJJn·j(t To Et\:Olh{:r t;,cjrh.iu.th.~ f.am~ ft: .. nd

RI·C!;IV.~,w .. Es

A,;;cc11,m~ t ~'-."·dv;q.ble: in 1he pro~a.m. $421,126, l(!ldfhrc- \l-..'ekb:rc lni:t'n.1h1ts Fmgn;TJ ~l.L35.97i, Offi~,e ofCdliiinal gr:rn1~ 1,30J,62ti1 He-J.Jth }l,345,273, 'Vbtat.::r P1:ii!·dul.SC~ S15J,5&-9, Pfi1vwtkw :£6i))269, k:h1z~u::io"1:s. v~T~~t{~· T<i.x<:-s. S3.J~tt9.::1, ·:Jrher S,H,77t\, Co-at R.:i-rihur~-emeni \';;;:r::rn \1/itra::ss $82/209. Scht10l Pwbntfori Offi.;-.cr $17,56'}'; Ct·~11rJ.ct L.?iw E::1f,x..rcemeHt $168.722 Pri:.1;)1~tty h!J.'.1~&: n::,:r:"ivable, i:c.; lb: a~;1ou.nt. of$J,2Ci3,300 ls ~h,;;,•,a!Jl in Ag~ri":' !Fun.C.s

22

Hu-; (%mr:ty ,s n:.i~{H.1n::i:lb1e fo; :h,e a~s;:;:~:I..-nc1lf, t'c1ll;:;.;::tion .:::nd !wail i1:du1Lng th,, witMn rb~ C.Jlm'y taxus. F::ir \i;1hic:t thB !icn C.J.te is .l:::i.nua:ry 1. a:nU l-::,,,,y 7, a.re :11 81-JW'::i Jr;·!;'.t:i.11mtn1s. Nnvembcr ~ _; turd ar~ rcc:elvab1e wben 'f!lty be.rnmt.: d.~ti!Jtjlh':~1t on .i)ex.:efnber W ati1d April. ! 0, rc:tspectivdy_ Pwpm'ty t:j'-'.f!-5 :.tn.: a:.:::oJ~rn\e<l for fr \h? Pt\)JH::ny ·1 ax .t\:,,i (rm

u11til and di:.;hurst:ment 1.a trr;1;1;11g _iur:::.·dkti0r\?1, P.ruf1·::-ny lax ;,e:·i,,cnEcS r:.1""..lnccted. Prnp-:.n.y Mixes c,n :h1'.l WJSC1.-;1.1·!;d r-::iH /J:::il·) ni'!d b.::c::.-m~ d~U~at•~t if ':.i.11pi-:.ii ari A.ut~u;it J}. tr-t'i"S:ii i::, kept-C-W7t'[lt

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):Jif.£. 'fh.r: Cctmn-y nf ·r,,;ings r.,:,!lidbut;.<~ ;-.c t:1~ Ct1}ifornil-1 <:..<:;11.mori ~,n,t.~:.-tm~r..!. llntl :.,dmirii:l.;:r-""*Uv1:: ;1g-.:n~ for pa,cc,ci1nifo,g

",,:,ntlV.ui:tii:,1'e-c,mp1h,y,,r puJ,!:,· ~·t;-~1rerr1r,,_1t ~y~;rc-m ,..,..,, wir; w ui' ,·.,i;,,,,,,,;, cov,;11;"tl 1,c ?i,R.S

-p1an frn Ji.me 30, ·2003 was ,,,,r,ro,im,,tc''f $,,4,li96.'}7:l(1,,,,d of,-::rnpLtJ1yr~03. tit tto1: ,,..jt}1 th-,:;

All

~r""""'·"·e.,·v ~!l'lploy'i'..-e::i art"'

m pmL1::i~;stc r(j 7.h.~ PERS phi.11. lk:t}efits \'G5t tun:v :1fter s y,:;a.i~ ~f 5tr,·.irn, yi>!a1s '.:l cr;;;<lhed strvke ~.:~ ,:mtftfr:\J t.i:t l;'.ll :mmi.a, rdl.r~~n1e11t b<;:nt.::fi.\ p;1}'ibic. trh~·ntM:,­

their ~a~ploymntl, md a.Ii :')ti)rJ t.equ.i.rcn'1erJ:; 01t {!;:;1.,1bljr.hr:J by stz:,1Jre.

11 P•ff,1:::ii:,n b~rn:-:.fit.s- 0bl1gi3Jfon" 1~ a ?,l4r.danHx.1;tl ·=l~$-d:}~llr8 m,"'11.s1ii"c c:f ti-i.i;; pr~*~! v:;.d1JE:

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1:i)tnp~1rison~ r-:m:Jng, err;p~ari::r~. Tht.· m.::;;i~;,n~ ~::; fn::d.lt.:::d prnj!:l\'.tc:d ber1cfits/ ~nd d~!r:mtfo,; contnbution::: to rh_,~ ?ERS pbu,,

an at:J!i;u-ia! valuatiori p'.irfor,T1.ed .s.".} ,;;if Jaw! -)G, 20:12 (ih~ !r.tc,st ar.,1."1ilre;,mt av~H~hl~ fo-r PERS) -·'"· -,, ... ,,,". cio.. the and. fi_~tm-e a::,sets: of 8 .2.5

wry fiit1.m:: )"e-f..:: indt1d~g ar: D.&\1!-:J'"-I Nr.) pmHei.!rt:mr'.:rnt i:cr,efit. i1:1crta%Y.

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fm•{c:1Ui!~file.i!.!1'.Jl;.9, 'l'iic1 . .ti1ie ba!ow d1s1,la:;•s asl10,,H,1cuir,· ,,ftJ1c Entry ,\gr.,"J Normnt Accmed L!.~l~!ili.l!)', ~e ActL.:.i.,·;3t Val LB! of /.,.::c:it:ts. ;:.m:i ~t·.e Unfimdt::. Uabmty (t··r

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n.:pres.-;m.ed ll'/ ~i;:i,res do;.tash r,c,;er'-'(~d for g,~.::i,:·r,~J !;~hiLty and 1.01irfr·;_qu.::t~J; r.1.H'CEi,gt!' rh,·s,, a:r.m:.m!:, ~n:not>'ieiilat•b i,,ro,pp,opr,ari,rn,s '""l s.cpertdi•icrrc cl\iw !,ol:••occ st,,,01.

L~stl Cnnatrncti,::,n Ill Prcgr~~s~

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G·:yb·~·.rnm;,;ntc;.l A,:..·ti!,iii1<:::..: Genernl l..J1Jve:rnrnrni Pllbifo Safe~)' Pubtic V/ii:fS and F:a~:ilitic.s. m;;;a<,,:0,ys,au Stree-;,;_._

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The Cmmty k',; i:i Tl~k tnat.ag-;-::ment fi:rn.d (_ln:c.rn.&J Secvi-cc FJ.r,d} t-0 (011roH<lrit~ th::: Cotirit.~/s \v~~rkers' C,,.1r;:1ptns.::P!K'~1 im,ur:;::~r1ce Fm:..5 revtnt:.e.i;. ~.re pdmarHy pre-,:r1iurn 1,J~irgc:s to other fu.l'l<l5 and a,-e _µ:arn.1i;,-d t1J f:gu .. \l esLtnw.ed. ray·ri:!:nts resu.W.ng from seJ:.·in:,urnrn:c

co,·t~·,:ge in a;::x.::ess c:.if the t:.eif--,i:.sun.d J:itl(VilTI~ .rA:nd or.;crati.ng cxp~m:.t::~

·nw ComJi.y rnainta\;r: 5 1s~l.f-iD;i:.1re.d n.1.entit~.ri

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in:~mance

an,j clairu•J ~1:curf•:'.d but na..:.t n;)fJ'J:rted ~.:laim~~ ;:.:.1,.l u;:,i,.1TJf.lm f;::.:pc·.r,.:,t· tfability (Jt 7·~/;.,c, <:cm:fi,:if?:n.:::e 1,ev::~l afl.r.::-1· '0, 7•Jo:, wei·,, ,,,: k,1:1,w.·s:

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-1;t~~iH;;·tf; ~·e·lf ;1~1~;a~:;.~ ~o~,.,;;ig~ ~t;;')f';~~~j ll~,·Q;~,;~r\:.r~~z~l i{c~:'k~ ·;und i"- tb~: Ci\SB No. Hi .. \\·llkh re~i.,in~s tha1 ~ if ir,fu.rma.c.'icm pr~or t,o ;',~::.,1..12.l:.rn -cfthe f:li.l<mcirl ).tL~lt':n.if;c,l~ ind1('3.t~:. 11:ar it IE, prnb5h.ie t0...1;. f;: !bt·Hfry h1;; b-... 't'.n iuc1.iu.;;d :1: the d.@.:e: 1;,ffb;;:

::if t.h~~ k)~5 c1n be reaf.n,1:ab1y l."Sti.makd. ·~·h,:: esthn.ateJ. ljJ;bJ!ity dt'i-E:n1rined by :nd.q,cern:k:m ::i\c~H,::rri;;>:, i~ ;.~~bj,:s.'\.'.~ lt~ Lho~ng~· ba:;,-.:d on

1"1 J)NPAU) ClAHvl-.S_l,1A.f3.iLfJ'ffS

Th~ County of Kie.gs .:~tabH:t.h::s dznms H.abH;tk~ b:,1:,ed nn c:~anz~1c:-.. ;i;if \.~~";: .:1l;1r1J1.te c.:nr.s uf tb.e d.al!.!t3:i -:::h.:tr fo:1):c b,>t~.:1 ;cported hm ~M~! ;;;.t.Jltted~ am.t of da.ITns th:.1t ha~,'i: bl;"i;'ll kir•.ifT~d .. but not r~p,:w:e·J {IB1{R). for ,,W1i;:;b $uC:h. tu.;ts m.:Jst be :t~1misted lrivuh.1~d" I.:.,tim:lted arric,u.nt!'; vf .'3~i\:ag,;::: and rcL11~n,n,;.:.~ r:.:r. ;y,•ei~>~t are la ;l~vt:kipi."lr lltc t~:itimac,~8. f3.r1:orn, ihe pro-;;~~~ ,;;;E<d i:i

dJ1-t! m1d 011 ether t':1ttor~ the pt:riuds in whic.:h 1..1.':l~y c..re

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n.rnde.

27

t,irig1lr.for1 - ·11,c: (.\11mty t~~ a d..~ter,ilm.1l it"11.'Tt!11;"r va;·i1JH!S ,.;jeiiH'ISc The Ct•:.!lm)" it ·,rjgc,1{H1Siy ()llk':i.~!11r, i::!l.l rf1e~,):! i::.hi_m~ :cm·J in th.t"" cp!r:~Oll c,f rn.ruag;;;':n:te~;l .;W.d kgaJ r.1J,uncit the p\>t,:ntfal !nss:et;; ~rt'. 1.k(-:ne,cl imn"'a.teJ'7a[ tu tbe: ti12.;1ric:1.~l ~;1..tl~mt.rr-Ltg

2 pr~m.ir;i;1 cmrnr.c.en~-:t..''Tlllif, wi1:.h th-:: ~et·,:,;;~ M t::OVi;'jctg;..~ rn .. 1u,<::;,;ted ~Tl~~ :ih~trr~~ ~u 11:L1.",\,:$ 9.mi d;;fic.its ~o thflit 1l1e: !r.H-YG ro'\',;Tag;; Urrfrt.s vaf'.', \'c11:h c~K:h fro:r.t, fr·. 1.!ic ·>tMli~r t·i:t,im:ics tr1 r:J.l]icr; in Larg,er

rniiti.-f.'•j"1, t~~~l@} Cotli)t:,;'s r.,1)".-'Cr2gi0; n:1:rgf: i~. \::i"'o.o:x)co ~.:,,a,iii:on.

[Trns PAGE INTENTIONALLY LEFT BLANK]

CIT\' OF DALY CITY, CAJ.JF'ORN1A

COl'HPREHENSIVJ;: ANNUAL Fl!~ANCIAL RF,PORT

a .. ,, ,:uy R~d~V-P..~orp-mff';Orrt

Agi!ncy

.mNE 30, 2003

Prepared by

DEPARTMENT OF PlNANCE AND

ADl\HNlSTR4.'lTVE SERVICES

Donald W. l\if'\ley Uirector

'AZE& ASSOC!"\ TES

!!.CCOUNT,4NCY CORPORAT "193'1 51111 Migw&I Drive· Sui!e

Walm.d Creek. California 9.~ (925.) ;}3(H1002 • FAX (928) 93(),, E .. Mr,:H: maze@mSizeassoc}ates. website: www.rn:1zeat.;s·ocJ;1tt~s.

!l'ilJEPE:>mENT AUD!TORS' Rl':l'ORT ON HIE BASJC fl;'iANC!AL STt, Tll.!\U:NTS

\Nr;, havt;: a~adi1ed the b~sic fnar/_:;~l :~t2lte!'l')tf;'iS (•fthe icfr.-]'He-~\ the busir;es:Hy_pt ac:"!-.,.·ltie:;., each f,.._1nd, :u1d the aggreg:ne: n.:rnairdng. fond infur-n---,atlon or Lhiy Ci0· as of ,=mi fr,., the yc:.:1: -::~Jed J,...:,1~· 10, 200.3 a~ th!.! w_b!i.! ot c,cimt:nts. Thcs,:: i1nan::1:-iJ .~taternenh are Hie nf the Cit::,,\, m3J1>0.gt!Y1r11L Dur re:-;p,1ns,ihiilty 1::-; !<:•

\\\~ :t.:l.in.du•.:tr:-d 1.Jtff 1-md1t m ,t;.;-c•:irdar11.:i:: ;-vnh g•::-nr.:-ri:1.lly s~anda.rds in the Lh t1e-d ~W.tc: s c,f Ame;'!::;a. ·1 hose VA'.' pb::-J and perfop11 tht audiI tu ass.mnr1:ce as to \\'ht·:ber the flnt1nc!~.! st1tern,::nts are

'1·ee rnia;5t.atcrrn~.,1t /',n ;:.\1dh ~nclui~t:s exn.lni11!ng nn): test bfJSh f\'i,Jtrlte

m Lile fltL'.l.l1':ia.l ::,;taterne;:t·;; 6.1.1CH ai:.;-o !!1c!:1de.,c; a:.;:,e:~sing the-- ;;.c::uunting pcbrip!e..;,; tJ.SE:d s,g,c1p,,;c,1c1L<·,,,,n,l!cs !j""j!'l,i~ by :rru_nDg~mt;11t, a~ \.\•ell ct:'!< r 1:a'.in.ring lhe inver;'5.ti fo1:_mc.i.a.l ~tj'Jerm;:rit pr~sen.lmion 1,\,e b-eiie\·e th.Jt

rea.5xmabJe basis for our C!.t"Jinkm.

1n uur c,pjr1iun, HJ;;;. bas:.:: fov1.n:.:.1,ii sta:cmcrits rcfc.rrc:d to n:spe,J:ve tin?.t;cbl p,')<:,11~,:,;-; t:fthe nr.·;_!'\•!tlf;'i, 1:!1e- bs,,ne;s-type remi'!ining foi:d i1if,;.1r1.11,niu;1 ofthr.:

ford and ti-1;~ fl:'3f1e,Ji~1e: :,ucl,~e:;~,,.· c.t,m,,ari<:ons

fa!dy ~::1 aH ~ljat1::1:.al respe(rs tb:: t'i"i.:.:..h ;:;:c.\rr hmd" ;:ind lh,;::

fh,; t.il.sic fin:1n,·;~! .:.,;iat;;nwnH i::'fcn~-.-d to .ah~:i-ve foLm~., tte reqwrements ufthe Clovetnm~nt A.cct.1rn1~irig St,!n:.b.rds Hem.rd\, S1.a:1tcrm:.nt t,;o,_ 34, B.:ui~· Finallda.i Statem.en.i~~and L\.;cttssfr:}1 tn-ul Sr,1te· (nid l'.1)ccJ! G<)Vt'T.'W'}.f;'.•i!S. }.e,_ 36, ""' ,!/1':C!i"~.,,,,.,,:,;g ~o. ) ;, Bc~s~·c .F"1,,·,,.J.11ur..d S/c.iier,ieo1.·,-w,,J

M""'"!;err,em:'.s. Di.%t1;,;si:.m .ur.d j.)o required by the Cov{~rr,mi::~nrnj basic 1;,t,1km1;nts. ~A·c appJkd ,c,;:'.;t,.,.ir: il;--nlteJ pr-c.,cedar~:::. m,)rE~g~rfl(;Ht rl':gi.1.rding tlit; methuds. o-f :-rE:asctP?t,1-.;ni: ~md pn:.·.s~n1at;on of this !nforrnMiori mv! ·,,,l~ ;'~·.:pre:s.s no opir1i{1t1 c,n

~~trn,cL:irdr; Hoard .. hut!~ riot part 1::ifthe !nform:c1:imL pril.~c:pa!!y inquirie1~ of

infr1rrr1aticrn, b~t ,,,,....: ci.:l nN .audlt r.hi~

Our ;iudn 1.v21.S rnade for 1-he p;irpu:!'.e nf fi.!.,..r~1:r;.g an npirjo.n the 1_·,:1s1c fi.nan::.J<1J srat,;rrieHt.;:. iaf...:,n ;b ;J.. -_\fo)'.1:. Tbi: Suppit:.:11er:~z.! !nforrnatiorJ lh.ted [11 th~ :able of conte.nt-.s ls for pm pose5. nf adcfaf-nn2.~ and iE- rio~ ;i

0f U:c ba .. <:i,.,-: (i!!i.mi.-ial '~u1tcmcn~:~ ~-if the· Such ii~;;: ba.ri Jhe pr{}l'.(~d1.::rr~.;; a~u.'.il ol thi.; b::.!..':~I,:.: rirLan:!~~l :-;1,1tr.:iTJ(.'..1Jt:.i our {.lpinicm j:; fairly s.tm·::d rn :n rnlat!i)J, tfJ

fil"ta,'.'ll1C!al s:t?iten-'.l•'.'::rM :11ke.11 as a \vlwle.

Th2 SL:~i:lsbci.l Sect),)rI l).~t~.J in thi:.:: iz:.bie cfi:o:1tenl3 was no! avlhhx! t,y us \md, accordircgly~ v,/~ ,:o nnc r:xr,r~ss Gpin.(rrJ or, th's i 1-:forr-r.11tio11

]'.tANAGEMENTS mscUSSION JL"i'D ANAI.YS!S

Fi•T't1 1 P1~·J; i·" f)'l1~~ Fjr,:.·t Y'~'.':ff the is rcqufred to t:=;~we ii;; finanrill sr,nement:.:. in -:he forrnat prcsi:.::ribt:d b~".;h;, ;;:;;:isi~,~$ .of· {J;::\:.,;ni-r;1e;1tai AccrnimiingStandarJs Bo:1rd S:arement 34 (G.l\.SB _-;4) .. ,vhid: requ1re-t the Clty to provide 1hi5 ovC"rvie,h· ofii~ fox t1-::,e fiscal y:,:,a.1.

of th~ Cit.y'~ flna~d.15 acfrv·1ti-es the year inforr:J:..1uon p-re.:se-rikd ~ib,)ul gn~1·ern.me.n~-w]de fin.ar1ci2..l hitff:d~;eed with 1,he adven1 ;;if G.ASi3 34

fim-.n-11,.:j.ul r;:1suhs provides an ;w-::';rvi.ev,.' of the Th.e

'Nlth these 1.:k:i.nge;;, grc8! ,;:;r;.,"c rnus.t b.:: tak.~n \Vlk>;H (:ornpari:)g the .2~J03 fiu,u:u.,;i~:..l stakn-tc::nts ,vith thu:-;i.~ Df prior y-~~irs. Tht: ln.(;·iusion t;f lnfra~;trnctur=::· 11::.s~as, as wdi ,i:.,; udJmt their ~nmud d.(prc,;;rat1on cosrs to

:i·divitit:t~; ~l)(y\:i,, a diffcrcru picturti of c0sl:) and rnak,.~ <.:o~n.parisfJm: to prc-viou:. rep•.)rts

FISC,\L 2003 flNANCIAL fHGHUGfHS

The t•)ti!h:J.

total nf~i asse~t~ rncn:'..%ed $13.9 n-1~mon chtdng Fb .. ',al 20C1J Al Jun~: 30., 200]. net a~sern n1\~lio11.

.;:i,n.d ge:1_e:i:;_d revenue~:., v~-~~rc '.£.hH miHlon, v, .. Ji.ile (t)U.11 Tc-t8] capital a::sets ~n,:rea~ed $!0.2 rnlLEon.

Ne! assets in g1.1vcmrrn:ntal fun.d.s 1.vere $l.-'1G.4 rrnHivn~ whik: net asset~ ]n business a.ct~\·1tJe:i \\:·ere$?'~ 1 milllon.

(Ji.)vernn1t~ni~1I progrd.r.1 reveouct 'Ncn:. $27.2 rn.iHim;. tO:H~1patt.~d w,ith li:2h.9 tndli~Jn in fi:scaJ 2002_

Goi·em.i1k'in1i.1i gcnercl re-vl~nut:~ of $.1-4.4 mHhon rq21n:;_.~e1;t an incn:.-:2.:-:e of ;f;2.9 trdlion ff-,,(':r th~ pnnr ve.ar.

futr941ai:;lo_;~y :\i~cJ,i~~n_. containing ·rhe '[r~.n:~rmuai Jxw.:1 and rnfaci-::ii,mevns oLber information

"--''"'"'-'"'""""-'""-"'"'"-"cont.:.1inin; the ir!depend~n! AudHors' i<eport l-hscuss~o11 part). the B.:-F,ic Fln,1ncicJ Sta~t,.,rnr::.nt~\ 'NfJch the G·::.vs:r::mJem~v:ide

~:rid the Fm1d F!nanctaJ Sr.atern~:mt, Vlith the Note.-: w !ht~se fm;indal swtern.er.ts, Requ~red Suppkment.:il lnfctn1::..tion. and SW,kment'.~ for ~~orn.1111jor Govt.nmH~tit:d Fumds ~rnd Fi:hi,:::iA.ry Ft.1nds

Th-: lla:::1.-: Fn:mncial Statements an: c·on.1prised of the City-\vide Financlai S:atcms!llt~ and the Fund Financial :•;rn.temtms. !nciu.dmg ihe Nntet 1.he,r;:1;:o. Thc,f:e N.10 sets of firnrndal sh\f.~rn.ents p,r-;J 1;kk twD .Jjffoi,_mt -,..,ie.,.vs of th~· Ci~y·~. financial oicjvi.Hcs and finindai position.

'f'he Gov,;;rr,.ment-·-,,,ide Vinm.~.rifii S•crfer.,·.:trl:: pr1 . ..'"idc J. longer-term vie-..v :Jf the ;,\divitics ;:1,:.; a \Vho!c-, and a.re Ct..'mprised of the .Slatcme.nt of Nt:t As~~ets .and the 5t.ar.ernf~nt cf The Stm..crncnt of t,!-::L ,.",,.ssets pr::iv!de~ Cnfonru.1inn_ about the ffoanri._=il pc,!:ition of the Ckr as a whok. indudicq:; ;:i,11 its -:.;apib]~ a::.:ri':ts ~md kmg-ter:m. fo1bi\itie.s on ~h£: tuU .:-,,,,c.::-nw.l b;.:i,;j~, ,Jr;,njb.r t..:r that u3e1J b} ptivit!.'..'

4

~~~.:~~:~:l!~~f;o ~:;;e,h~!~'.~~~~:~:~!·1 ,~~~i~'.t~~toviJcs infon~~Jlit~~~.a~~:;;~g"~:.,:'~,~:::;;::, ~~.,;~;~~:.:~:;';)t;a~\~ of tht CHf s progrnrns fhc St~teraent of c.;q:daiuj in dda.il the ;,:,hangc if! net as:;e.ls for the ye;;;ir.

A.11 of Hu.: City\~ activiht~s arc groupe<l !nto eovcmrncnbl act&·l.·jtie~ and tmsrn,-_:ss-tyJJ{~ art;vitks. as e1q;luined bdow. AU lhe ;J.muunt;; in the St::itement c.f 'Net A'.>sd:;1 ,~Hd the Stali.:rn~ut oJ i-\.ctivitie~\ are 'it:pKrntcd into ad_iv~Ul:s and busir.cs:~·-i:.ype acfrvit.i_\'.-:;o: ~n Grdcr to pu-:.n•id>'.~. a ,nmmltry nf these h"l.ifl ,.Hies of the City as a whok.

the Citis opermioos h1 mure <letaH than the govemm~;~nt-witle. sw.tem.ent;:,; and :f+rx:us s!,rnt--term uct1vlij1.;s of th~ Chis Genet.at Fund :an<l C!th:..:r major flmd::;. The Pund n1.1:.a~urt;; 1.:u:rrent =-~v~nu.t;S lmJ ~xpew:ltture:. m:d fond b~ib.nces.; they ex.dw.:k capita] asset:-s" long-tenn debt otb~r kmg+.;nn amnunt('r.

~ffajnr funds account for the nHljor t.inandal activlHes of the CHy end .ue presented ind.iv!.d:uaHyc1 \Vhl~~:. u~e. :c.c-tlv]:~es nf fun.d1) are pre~e:i1ted b sum.ruary, wlth subordinate schedules presenring the det:dJ

funds

The folucia.ry ~-;tati:mc:nts provitl:.! [1\llanc:i~l infurrrn.1cliun abtm( the asiset1j for ·.,vhicb the City act~ so!dy 33

casK,dian1 lnduding as~:essme:rit distrkts and :;.;here t.he City acl$ a5 .:, fiscal agent

The G,n-·;:·r11nu:nr-widef: Fina:H:idl Sta;Jemenis

Go..,ernment11! activitic!.5·---AH of 11-'..r City's basi,~ St3rvkes dl~ considered tu o~~ g0.,,.crniT1erd.ai a.4.':tiv~tte·.~. induding gcnc:ml goverrnne:nli pubhc safety~ public \vork~;i, stn"':et . .:. .Jnd ~nfrn.2.tn1eu~_r,e.~ cu.Hun:: and recreation, a.n-::1 rY...-:{:.'.-nrnnic 3.nd cornrn\miliy development The~e. s.ervket; ~re ~:npp,orted by gener.;:tl (;ity rt-vs:,nw.:s s'J.cf1 u;-:: l~x.c~. ;;.rn.:l by ::.spclifi,;,,,· p!'ogr.arn n.wen1.K.:s. The City'~ gn'ir'(-;mm,-;nr;;_d

iictivWei- 'inch1.dr:~ the act~vitie:~ of a £,~r ...... t1:1~g,!lg·.-.:,·l

1l:~.~,Yi ~he Daly City Redeve.J0p·ment Age1J(:y,

he(::~use the City is tinanl"i.a~ly ac,·ouo.'ab!e -~'L s. ,_ f'i.""- , __ ,

Bu~iacs!Hype acth.rltie~~-·--AH the City's ..enl.erpti:se aclivities G.1\~ repo1k:d here~ inch.1<ling Vd.tt4r. f,GVl"Cf,

awJ :-;,uiiJ. v,·aEtc tr,msport. tin~ikc guvcmmcntai services, these services are supported by charg{$ paid by usero based on the an1'.}Un{ ',}f tliG scrvkc th;:y use,

Gf;;,emn.1c:nt-wide fo13ncia~ st;1knie!'.Lt~ are prepared on tht; accn.1r.tJ lmsi:;, v,hkh mearn~ the:it mer,sure LI:!.,; fiov: ,:ri aH economlc re~ourcl'~; of the City d~ a whnk.

fMnd financi.rti Swuments

The Fund Flnan.dal Sta.tem1~rit.~,; provide JctaHcd inforniatloti about each of the Cil:i's I_nost signiticani fonds, calh:d m.ajor funds. The of majc~r fonds~ .and the det~nninatiun ur ·,,.vhich arc r.m:i.jcr funch~

the of C(.imhfnin~ tu.tKl~ hv fond an<! pre,;entjng indivi;faallv. ,;h:11 all w;nmaior summ.srb:ed

and pr1;;set1t(~d only ]n a Suborditrntc scht::duki ~1re8ent the <let.ail o-f rhefs~ nonrnajor fund~. ivfoji)r tun<b pn!:i.enr.. the ,1ctiv~1ies of foe City fo:r th-e ye~.tr. ;:,_nd rnay change fro.m y1:>:ai- to ye~r .1::. a res-uli of cbang-:::;; in the pa.tl.ern ,;Jfthe City's ~lctivitie;s

Gnvermnent1l fund fln:mcfal stal?.rnen{~ ::ire. prnpared 011. th-L:: modified accrual v,1hi:ch ntcan:.;

roe.a.sure . .-:mly current firrnn~ial ret;,:mrce·s and uses. Capita! assets and other assets, ai.ong k·iugA~~r.ntliabiW.ics, ~tn~ not p1e:;tuti;:-;J in the gQvcrnmcnU!il fa,mcl fi.nanciai statements:

fund fl.n.:1ndaJ starernents are pn-;pa:.~<l on !be foll w::cru.al t-asis. <1nd lndude aU their ~,ssett and both cun.-cnt ~nd !ong-tenn: .

t~~:\~e~~:l~~!\:~1.i:~~~:~\1~;~r,~·~:::t!~l:;;;: ~;~:~~;1~~:;:·!~1:~~~ ~~:~:i\:: 1~::ir1~:~~ ;~:,:{~l1{:~c:;t·~~~.1:i~·l;u~~! ,t.;;}Ji not tx rnaJ:Jr funds b~c,1m.c their re·1ern,1es are derii;.'ed frtinR othet ( .. 1i1y fu:1ds These rGvenue .. s Rf'C e,J.i.miuated iH the Clty-·y,1i<le- fhw.rn::ia.1 stalerHt',nts -:.uuJ .:;u.1y r.o;::~Jte·d profiH or !asset:; :aie retfilti't',d rn fht-:

acfrvitiers which c.n:·;,.ted thenl.; aking with any re,s.iduaJ net assecs of the intcrn~1J ~<:T1i(1! funds. Compads.orrn of hudgi:t and aduai \inancial inforTilc .. tion are presented only fnt the Ge:n:er:~l F1J:1d and other n:.o.jor funds that a.re :;}_)t:cia~ rr.:ve·nrn.:: fundr,.

Thr;:; (ily is d1¢ agent for c~rlain a:i!lt;&~mr;:nl <li:.,trids and several sma.H kx·a! agender.. ·1 he C~ty"~: fi{tu.ci~ry w.:frt·itit(.; .1re rep::_nt-eJ in lhc ~,.:partitc Sta1~n¥.::ni of Fiduciary Net At~8ets. These ,~ftivlfo:>.s a.re ex(:luded frnrn the. City\~ mber fi.n..1;K;J,riJ stnk·:rnerns becau~e the Ciiy c:mnor use tht'cSe as;::.f:r,:: tr: fltumce it~ ff.;:ln o~~rnrinn:.-:.

J'hl:c, ;:;_:taJysi!~ l~:lCuf.eS on rhe net 2-ssets and and BrJsinc.-ss-Type 1\ct]virir:s (Tables J., 2 ar~d Sbtcm.t:,J of Activ1!~e~- ihat f~;How.

in n~t ~-1.ssets of the City·~ G-ove:.nu11_c.ntal Adi viaic~. pres~nkd in the Cit~, ~1..v idc Sti:l!.cm:eut of Net Asset~ 3.Dd.

Cat:.h .arn.:! ii 1ve<;!H1cn'..~

()thcr a:,.se!::.. (\tpitftl 'J,!:.1Gt!~

Tou~i a.::~ets

Lonb-it:rrn liab!Htics Or:ht:r h;J~i\.r1f·1

Ne,~s:;d;;: ~1we~.ted i,1 c"'<ipiie1l ,is·;e:t:., Net of rela:ed de'::•t Rtstrict.;J Uurcstrk:ted.

l'ai>,e l Nd A,,~eL~ !It Jm,,; 3\l

(in u,,..u,a!l.ll~)

GnveJ1;rr~e::-nt,;1l Ru·-~i 1 !t'."-~~-t)p~~

___ ·-~E~~~~--- --~y_ A1?lvit1~.s ----··----

62,:B,.; B,615

____ 75,983

54,9'29 2l,9fr1

ftl:P_U~

9.961 S.762 __ _]}..JS6 ___ m f,U~:~.l.:

----- 17.0(7 -- 17.)97

J7)m4 4,J,(6

19511 4,'.~48

9.994 i i/faiO _______ J-1'±fD ______ )~1)5

___ .l}_/~~ ____ K155

72,524 6fl.::.t~tl l,lt48

o ____ ],,_-±_J_t ----~dli

80,638 ~ 74.440 22,76-1 'lfr,?5~?

--= J 4&.i,507 ·-~l )~.3t!Q

~·~-251__~!9§ ___ ]}8,99-J:

____ 1Q53V __ J.i.'15Q ___ ·}.Oi:V:Jl ___ 1,Li:tl

!47,442 i}~ )60 -1.27-i

____ 65JS?9 ______ 70).°'iO

nr;~t asse~s from govermut-.ml:01l a-ctivilies in.crca~ 1.:d $ i 1.2 mminn (!)tJh} to .1dA0.4 rniHion in 2{}03 million h.1 2002_ This jn.;:te.tse i5 the (J~ngt'.:' in t-..;d A.ssf_:.U> rcflt~ctrnJ 1n lh~ St,1reme:nt oi

aj JihO\.Vil ll1 'j'_:_:;1bk- 2" and 1s e;,qihi.iued hdu\V.

Cash an.J \nve~tr.1ents fr:crea:;e,d $7. 9 ff:iH1on p::iucit)ally as ~,1 re~;tdt ot im;rc~1~es of $.J.4 mW ion in the Oa~ Tax Rev<~nue :F1,.lrKJ te•~eh·ed .ind fo~ds a-t·curn1!.1.:.Hed f~1r fui..un'; ru.3.U'Nay sped lie-

pro}::·c:t~. g,n -rncrea~f· of $4.2 in n;2-j or c:1pit.al pn~jccui of City-\.v~de, bend.it, (Ill in.cre~1.se -:.1f $ L4

c:.1:;h i:€.:Scrvcs. to h.md. in lh~ Rcdcvdoprneut

5 6

A.gency resultlng fre.rn .i;:ignificant in{:n::ar.e.s in µr,,::-Jperty tax revenue, an 1n-cr,::usc of $1 .million in the General F\mtl a.s a r:::;ull of repa:v.:.nent i:>f Rtdevdop1n~nl Agency J.dvanc.>e::;, an increa~e in 1..he Sdf In~lim.i.mc-: Fund c:i."lh b.ifa.nce of $0Jj miJliGn Bfi. a ri:,~uH of Jisa,skr dairn.s reimbursements, ri.nd a decrease in fociernl grant ad-va1112e~:; df' :f:3.5 million it~ a rcswh of SfJemJin.g thc-~r.;: gnmt for.d_~.

Othe;- assets de\~rea.se<l $35 1rn Ul-~m ptun,;irily a1; rt res~;;H ol· a decrease in grants ;;111d other advQl.nces rec~!-iv:J.bk. and partkiHy re:fkx:ted in the increase m ca1~b note.rt above,.

Net a~sels i.nve:;ted in cRpi.tal as~,ets net of re fated debt im:n:~-'4:)ed $6. i. mH!ion primarily -dv.e to 1-hc Ci1:( s <:onthrned imrei:.rme.m in tnfrac,ttucture, h1dudjng i:;treets .:iirjd roa<lviays and. rn.ajor c~.piwJ irnprovt::ffit':t1t:.::.

Re~tr)cted net asset~ have nu ~omparnbl\? m11P1mt for 2{X)2, as t[fr.; js Lhf~ first y,.:;ar of n.,1-SB 34

irnplernent~tio.o..

l}nrest.ri(;te-ii net ass~t;.; is :J~e pt:u:l 0f net a~,sets that i.::an he u~ed to fi1u1n~c day·-to-dLly op·eratlom; ·~ lthout cnnstr:::rn:'Hi estahHshed debt cvvenatiLS or 0ther ieg.al requlferrierjt~. Urrrt·~tricied net iJ.~~ets r..1f $58.2 :-.11.dli.:m. are to firurnce day--to-~::.by opcmtk:HlS and \s)thcr ~.iq.1{:fu.hturt:5 app1ov{-5J by City C;.H;.nciL

The net a:~setg ~1fbu!-'J.tk':Ss--typ~ 3.dlvidf';:; lncrea.se-d $2.8 w.iHion ia fis-ca:i 2()G3. to a wtal vf l·8l 1nilhan. prinm:d!y as r.he ft~dt of app]yiHg casb r~serves w fund capiv1l J.HlJjccls. Thr.:re ,.,vtri; no s1gnifo:,'tH1t cha;iges 111 fund]ng .;;ourc~s or 0xperisc,.s J.uring the fi::;cal year.

CHANGES lN NET ASSETS

!!:;;: ir:;::~:~~~.:;::'.,;(~:!l,:~:~"~~~fd, ~~:~,:::sz~ct:~:1'~~!;~e0:,~ ;;g~:~;: ;:.1:::!,,t;~ i::::~l~t"~f fom~"ef:);i~,:tJ:~~~ in the funds Other ir~di~;idua1 mcreases and decrer~se::. are tmt considered E:.-~penses 10r ftsr-,a1 governmental acfrvi(-j_,es :3.re not ::i.vaila"ble for ,.;,:ornparative purposes as tfacail 20{)3 is the fir:.rt year of imp]ememation of GASB 34. I:h.i1.:ln.;;ss-type actbrity ex.p.en:~e.s i:ncrea:s,~d $1 m.iilion or 4.7 pe:rcelli, {>Orr.m1e.nsurate with bl).{Jf cost increases.

tot [,1!n·iccs Opc-nHing gr.:mts. & contr1bi.1(1cn~ Cr!pit11l gnint;; .f..{ L·untnl~ut!,tll~

'1 otal pr·:Jg-n;.:m rtvtn~c-s

Prop.:-: rry tax Sales Ln l"o·fri1m vehi;j(~ in-Ect:. Ofhe· t3:xe..:

ir:v'i.~."-tm::nts c.arrnng.~. Otl1c.:'

Totol rcvcr1u-=::s

l:!),pcn:-c<;::; Gener~i gc•>'crn,rcen! :Pub!i~ Puhhr St.red.:; & mtra~,tr·Jcture Cult1;.r~ & rccrc.aucn E,,.'unun:.i.c & C'omrnun1ty de·,. r,;<1rd1::partme!'lt.a l folcresi -ri11 k,11~-t<,;;tm debt Vh,.k,r dL~ily ~ S.·2:....,er Ch·],.-: r;ernter

Tr.an!;Jer FtatJc,r.

i1"L-C'.flfii-~,~.{dttreii~E') 1n ni.':! JS~,i."L'i.

h:?'fi:xt;; trnusfers

·fable 2 (:humi1;.,; iH Nd A~sd>1

For the \Tr.;;,rn End.erl Jum, 30 (~ rt thousands)

~: Jnvc1 nrr1c-ntaJ Az:tiv;1.t"~

12230 l.2,4;J;l 12.014 l3,26Q

.... }5197 .... _l.243 __ ;;_7:L7j_J_ _ ___ 2fr,2J2

]:.'l,426 !3,t)50 !\,<l'/:c 9A5S

!3.G02 tt.469 5.844

J,Sn:i 'J,, 963 _ • ........2.41 _ • .....J.J.JJi

_. __ 44J6E. ___ 4tJ 1:1

3.861 29.896

5}]2.0 1,909

l 1.472 HL!73

40(\

1.0:n

lLHi1

~,'A

_ .l-2~\2-24: ___ .N/A __

Husine~;;.-type> /\cr~-..,;1;~-:

385 ___ ld.:i1 ____ ??15?4

9J9

$ 2).19] 281

926

706 fl,'Vi

-~ZA~.l~- "·----·-!-l6 ______ ] .896 ----- l .8!17

__ 29.490 ___ 2728l

R,'i,iO J2,U5

7,6:i2 · 1:n1

627 TlO ___ J..2I1 ___ i 241 __ lld2J ~UAJ l

i .037 5,84t-

Total

S J.8/}iJ~ ,$ T! /10"2 12.399 l \54-1

___ 1l.4Jf _.,J~.3. ---~~tR')~ __ 5:~:c}~Ifi

16,:16:i tl.,9~\ ?i}}5ti 8,469 1\092 ·:: .SLJ.9 9,455 9,319 4.2Hl 3,798

___ . __ l.lY:2 ---~·lfo62

\SfA '29,8WJ

5.S20 1,909

ll.'!7;:: W,Zl3

1,t.tn ~,440

E1]15

_LIZI

Ni A

~·~ R7"l 2~ ~ N/A _ ..

13.975

GO'VER!'\IMl!:NTAL ACHVITHC:S

Tahk:. 3 prescr1ts tht: nd cn;c.;t of each of the Cjty's major rovcrnmcntal f•.for cn.s;t -.~ d~~fined as wta.l program (;Ost lesi£ thr~ rcv;;nw::; gr~n;;:~att~d those ::ipccifi.:- ;;wd ct..:,rrcspond:-:i to the .St:-:i1~11'i.t:flt of Acjvifa.:s .urrnJunt~. fo g,cner;;tl ienn.'l<, net cost lB'i...ll~irnle~ the firrn.nci,1l burden pbc(.:d on the taxpayers !.o hmd these e.!~r,?.ntia] C~ty f.en,·ke~. Crirnpar~frve. ;m~:unts .;;1ft; un;.::iv,i;lilable .;-1.s fi;:,i;~-i.l the first yci:rr of GASH 34 !.mpl::n!entufom.

Ta!Jle:i Gover~Irflfntat Achvitie:s

f'or t!i<: Year Enli<"d June j!\ 20()3 On 11.mtfiand~)

00vcn:unen1..al Activities

Gt"t,eral gc,vernment

Publk ~;afety

Public \vod-.::;

:}; 556 4,301

2/124 .l,179 6J2] 8,.6g4

$ 3,861 29~896

5,iQ.D l..,909

I !An W,27:l

.Net Revenue ff;xp~~n:,;e}

$. (Jr305) (?'i:;9,,

(3.1%) (730)

(:iJSJ) Streets & infr;1struGture c-:uiture ,&,., [t'£rcatj.:_1n

Ecoo.01.nic & corn.anmity dev.

.. \!l othr;~r ____ . __ :LY76 ··-----·-; ,JAO -----· 2 1 ·-;fi

Tot;.~! gavcrnmcntil iid1vities

At Jm~e 30. 2003, the goverrunenla1 fuJ1eds ·COnsiste~l of H.i~ Gem.:raJ Furn..L Gas Tax,. Rede•,,eJ,op111ei,u 1\~e,,~~cy. Proje.ct~) frm:ds. The frxu.$ of th;:: gov,·,r1tn:t1.:•ntal fonds is lo pn.:-vi•k 1r,t:c,rrG"tio11 on nGar .. b:;r~Tt !nHuw~. ouH10,.•,1:i, HiTl<l bahmcr;s l}f sncnd;:,bk: 1~sou.n.:.cs. Such ]~1fommi ion ii;:.

u..~efuI in assessing the City's financi~J slams. ~

The Gen~ra1 FundS unre::ierv~d fond b~bnc~ i[!!crease<l sHghdy, frmn $U.4 miUian at Jm1-e JO. 2002 to $11.7 rn11Eon at June 30. 2001~ or 2.7 p~ro.:::em. This !ncrea~e il) primarily due to th1.~ nornmi fiuct,Ji1tion!,; in balance sheet rtJceivable an.d payJ_bl~ J:ccounts, i'.S \VeH as a minor adjustnlf:nt a-5 J_ resu.!t c,f (iASB 34 irr1plementatinn. Um:(~SCf\ed fvmJ b1.~lance 21 pr:_·.rct~nt of Gt;nera1 Fund totaJ ex.pcndhutt.~-3 for fr5c.a! 1003. Revenue~ ?..nd cxpend.itur~s in (kncrn.l Fund. huVi.! na!. ~ccn d:urcgi! frorn the prior yi;;a.r .. n::fkchng m1iy v.:,;-r.y m.od(;:..:t grm,vtb. t11 total n·-;wcnut;s ~.nd ti;,:.t;,tl e:q,cnllil:ure •.

The GAS Tax Sui.:ci,~1 Re.ve.nU{'.o Fund had $ LB rnlH~rn1 Gf unre-M?:r11;;:1..:l fond bahw~.e as of Ju:ui: 30, 2003~ an increase of SS ~rni.lHon.. This Vl~de swing rt:suhed prim.arHy from ~t $..:t. 7 m.Illion re;;eiv~ble r,rer::ent ;e.t June JO~ 1.001_ d.1.JJ .-.~1~·:n1 collerk~d the '1'he $1. 8 rnj H~on of 11nre~er1..•e,-j fEmd bjfance reprt:~e11t:,.:; 1.rncnmm.itt1<::d funds that are let2"11Hy s.p~nt cm local roadw~,y projects

Ri.;,:k',dc,prriem Agem.:y unrescrvecl fund tkfi,~it of $29 rnllHon b: due to the !oni~-ter-rn advan~es payJ_bk to ibi.! Gcncr:il Fund. T1!e~,c advances !it'C: c:xpr.i:cted Lo b~ re-p;i~d frt)m future prcpeny mx .increment reve;j1;e~"

Th: Ch_y't: ·C~1pital F!.rnrl had $.n.5 rnHlion in unrt:.•:.:f:rved forJd ba.lance;, .ail desif11;Jted for .:0,pitu.l project; th.:.H. benefit the: cunmmnily ~:_;. ,;i \\ .. hole, j\fost signd~l'tnit of these ttr~ neu.: B;iysht1r,(; CmmrnJni\y c:r..~n.ka ~ml the r·~r:hv:cmcr.t of the \Var .i\1errionzJ Conrnmnity

Pr(Jprletary Ftuuis

The Cfty o[ Ddy City's proprk·tary fonds -provid;;.; the same type of inf:.1-nnation found ln the grwernrncnl­wldi.: fimrn{...1:d ~i!.Ht.::::n1ents, on~y 11~ rnon~ d~~ta11

·v·i/;1.k1 Utlhty 1cver:.uess grevv ;::1t ,:t_ppn::,ximately one per,~ent ,r::,v~r ~he- prt~vi0us _yJ.:;:ir, Thl~ growth ~ncluder. a 3.3 percent rair incrc~is-c. s.ho'.,-ing a <l{"'.C:-rC:;l.:':',<.": in v~·~ter usag~. even in a r:.or:droug;':1t p{\tlnJ_ At the -s:i:m1e

iBc.r-eased 83 pet·ct~nt, rrnJ~tl.y from pun:ha:::c<l ,-vater. i\ nine pe.rcem race ~i--.. crease has b.!en 2004.

Su.niv:,tl1.1n Dhtrkt ::e,,enut~~ grew 3.3 per(·e11t ovt!r tl'ie scv,,er .'!:crvj(.:e ..::t.arges ~ffe hlHt•Ai. based on the previous incrcas:.~ vva~ ;::idopred. for fisr.-ra1 2004.

.::md i:::xp,enses gre.v.; 3.1i percent. HeCiJdsc

'\.V imer ·Nater u:sage. a 5. 'l 5 per c:.::nt rnle

The l biennfoJ budge.ii.Bng proci.::'.-:s, i:ind n~crd ?rnn y,:~11 budi~~:-t yem!" .ar~ pmp•n,;;eJ 10 the Clty Elidbud.gct ~tdjusnne:rr::s. at th{! e~d of the first. nf tht: n~'i) This pnr.::e:'=~; rn.or-e oppo1'mrtity for k··rig ·Wnn planning. but d.uc'.I rcqulre: a-djus1ment on cnanging vn mxa~io:i ,:djustnicnts. to rhe firs~ ye.$t. AU-::r rn.i.dbudg-e.t. ai~.iw;tr::1ent:;.: b.;,th H~Vt',DJ.1e::; o.nd. expe,alil.un,s w~r~ ~n line with c.1q:.11.~ct~tion~. \\')th ~nme .r..:.av1r1g.s in ex.j)endiitH"e,~ t(:-.3Hz,~d f::'orn holding J~!r:1~t~~::!~~~ .:~upphe:s and c·th:=:r cJ1Jrge,s T.hc'.Sf.' sav1egs vr·trn rcaH:r.t:d consh;tend.y ov~r J.ll. operaiir:g

CAPITAL A'~SETS

At tht.: end of [~c.il 2t))3 the bro~d range nr carnta] a~set'l, :}~ financial statement~):

had $ 1~18.5 miHmn~ @w;t of arr.:un1.ub:i1.ed &..:~prc::-iathJi1. lll\'Cstcd in a 11: Tablt~ ii below (fu.,,'iher .:k·tail. _may be fotmd in Nute 4 10 ~ht:

Land & irnp:r,:::ivernen ts ~nfrrrs.tructnrr.:

\Valer ,rn.:ilH:s S.a:nitaii.on sub~~udace J.bc:s Se1,v~~gc f:.!~ilitk:s E~uJpment Furniture:~ & fh.t:nes Const.rnct~on -i.n progress

Tal1l;,4 Cap,HaJ i'!oSStt5 at Jm1~ 30

~tu tho¥.J~ands)

Busines.s-typc Cov'C'rnmer~t.1l

Activifo.'=S A..ctivtti~·;S T(~a-1 -·L-•-•L-•L--

$21.,044 13,S~,6 24Jr87

6.06"! Tl

_lJl,ll§

~~2f\'1 l l !5JJJ2 19,885

6~096 ")--";•'), .: . .:...:..

-·--------------------- -·---·---·---·-----A--

?QQ}

$ 2,861 $ 2,848 $ 23.907 j; 23)563 4,981 5,173 J8/-J77 20.20'i

24,(Jg'.' 19,886 3,229 3~278 3,219 3;278 4sSlf. 5,010 4,816 5,IJIO 9J.14 SA98 ')Jl4 8,498

E,637 10~2J4 12,637 ifl,214 221·142 23,830 22.742 23,830

3,078 3JR3 9.145 9;47'9 19 24 92 Z46

---~-J8j -- 6t2.24 ___ .19_,161. l40'{l

S.Z452l_t_ s~~~.1 iLdl'i.5fil :,111urn1

lO

~~J j{·::}~~tr~t:1~-1~~::~:~~: ~ ~~~\11:~;~;~:~:;~~ ~:~:~;:~1~:i:1e~e~~~:1 :~~~j tl~lt::i.;~~;:}::t~:;~~~~~~;;;1 r\ to~l l~ ttt:~e::;:~ ~~·: new iibrn.ry facitily. -.•md l:; locate.din [he Baysh,.)re neighborhood, ~hih a tcta! budget ~H2 million. th~­tN~1r t\1:emodal repb£.:t:·ment project is tb.e stngie n:v:;st significant prt~ject En the entire ma,lor rapH;,;l plan Thi., fa:dJil'.{ w·rn alsD hK·hd.e a [Et'.Vl 11braJy flldHty a!ong wltli t't"":crcatkm ~pac:..~ and cunununit.y ro,,1.n15.

Loca! roadv,:ay prnjec!:-: of varir.arn lype~ ;~1ere ~n the de:s\gn pha~t~ ar uader rorn=xrnclion, \.Vith f1 t·fJt~.l -3.\.·ailEJ:Jlt budget for the coming 2(.}(}4. fiscal year of $6.5 miBlon.

~~~;~~s i~~~;:t~,~~~:\~ !~~'.~l~~tti'..~~i·:;~:c~~:;',1';:::i, ~:,~;'~,;t;~~~~t,~; ~i~\:f Y -n,:~~~~~~,tt~~d;i ,~;;:: contdbut..~rl at:. a.J._-l.i.tloual $6.1 million Lu add to dk.: City's tnterpr!~~ fund it1fr~istruci~lrc n:pair;\ wpbeem.encs, v.w1 a<l.d~t!ons" 1\'fo~,t :1ignlfo.:~nt for tht.'.c Difrtnct vnU be lhc ~1;:rfo:JJ}' \~later tn~arm~nt syst{~ff1.. project. begua in fi:;.cal 2003, with a tot.al budget ,;::~f $6.9 rniHica.

IJEBT ADMlNlSTRA TlCiN

Fl.:ach of the Cl1y's. debt i~~Stii~$ \s di:.:.cuss1;-:-.d 1.n det;JH ~n Not-:~ 5 h:i tbe Dn~mchl i;tatemeuts. In 2003 the City refin~mced th~~ out~tar:d.rn_g SanHa.tion Di~\trkt certificate~ .. of f_)JJtidpatiou (COP)~), (t'd.Udog inJ.crc~t r:at~s fron15.0 t1:i- S.Tl5 µ,~ri::e.m to 2.U to 2.5 percem. :<\t }1;.rie 30, t.ho;; City'~ de."bt ~orn.plis~d:

Tahk5. Out;;t2mrling Debt

(in l.hou5ands)

2{)02' C.ipital Leas<'.~-· Energy Efficiency Prc:Jec.t 4.69"\, 1 du,~ 20 ! i

Lim.~ of Cr1.:dit .. _ Busines~ Center 5.7<Jt~, du~ 20{)6

!:J.u.sir:~s;,,· .. ty£Ye Actiiritfr.;:

2l,!i4,J2 v\'astC\Vate,r COP'S '.~('.7<,-2.Yi;, dnr; ~e!1aH_y to 20()9

5%,5,375''.?4:. rt)lunJc.J

ECONOM1C l:'"ACTORS ANll NEXT YEAR'S JHTDG!ff

2002

]20

$1.,065

$0

10,370

S:\375 Sl0.870

Th{: Cmnurner Price Index-.:\11 l.Jfb.::~rJ Cansr(rncrs \v,:,s. i.6 ~er-cent ff1t the S~n. Fmncisco-0.akhmd reg~rm, re 2. l p:ercent for the U.S. City A.verage .. as of .hme 2003. Th.is is 1ip s~ighdy fr<.m1 !he prior

,.vhen the lndex was 1.2 percer11 l::)raHy and L11-x~r~<~r.t irnJbrrnlly.

F-i.s;l::-8~ 2004 cc,nfrrrnes: ~Nkh fhc ~::-:kctiv>? hidn_g frr.,~ze tn .:~id. in h,1bnci:-1g the G,~n.erai Fun(i budget tli~

~·:~:~.i;;:f}~;,1 an!i~ipJ!tD~~::~f t~;:~O;~~,~~~!, :m· h~\~ir~~;~~::: a~~rri;i~ ;;~:;:t~'.l::~:~~~~:yro~i'\.~;; ihf: _M;s,.,;eHaneo:~~. ?tnd emptoyee. groups, re.spectJ;.,·(~Jy, in. fi.Sc.'.~'I.~ 2.(}04. tn fisca~ 2GOS r4t.'"i;:, \Vii! incr~~·:lsi:: t~1 pen;e.nt Jr:d 23.201 pe.recm iJf covered payroU; as bv C,JlFJ~RS. the tet:1Bt1i+.1Lioc1 -nf pw·.,..ious av-r-r:1ge r~.·,rcnue, grovvth no otht':r ~'leps should b~­

budgN.

The contii.wing Str:tt~ of ():dif·orni;) bu<lg(/~ ~hort.f,·.ilt new e:~:~in1at.t·U :.-rt $.14 biUi~Jn anmwJty. has th~ pnteni.is! lo 1.1p~ci. Lhi:'.> ddlc1.1!D bal~nce. Shrmid tb: Swt;.:: ch.;:.io~.:·\ ~1s ;( .ha:~ done, in tht:, pjJ;t, 10 w.ke local g"lwemmtut n~vermt~ h) hah--mi:c the S1:Jic- budgd, mon:: s:if;nificuat changes la City opcrntior1; \v..:;u]d. h~ n,~ces:sary,

ADDITIONAL ir,WONMATION

i2

AS~~~ET~·1 Ca~h :2U1d in\.l~:stnict1t5 (l•,ot.e-, Ir) Cash wHt fr;cal ar:en. CT'fot(; ff) A ;.,t;_;l;iir.h n.~r.,;:l,·a'.J1,:J

!°'!(·~es ~:;ce:'.·12bk (Nott>. 1-:1)

f11(:µ,;rty bdd for d;;:v;:k-pmcnt (No~c ; C)

c~i,il~I :;;.3~et~:, r~t1 C-'-h.,tc 4 J

Ar.'{:01..mrs pJ_','8bk

A:::tT't:,:::C ;:a}rn-!l Asxn:.";ii h.:.b!!Jt!(;S

Dq,no:;it~ rci.) cihl~

D\'.'"~·tr-u:d re,,enrn:·

Comp~n·:.r.;1ed od:-::rr;ccs 0·,i-01~ 1 J)

Ai:c~ued ;:lmm~ ?;,;ifuU<l(· Cf,[1)t:~ 10)

L(1:-1~·it:::t, dd_1, {Note 5):

Lh.Jt •.vith,n ()ti.I: yc:a: Due i·1 rn,J,e llia::1..'1 '1Hle )":;'.'1~

JVLl i\~Si:". I'S (Nott'.;

CHY OF DALY CfTY STAT1::,Jvi2.NT OF 'NET ASSi~'.TS

JHNE 3t\ 2.(H}J

A:th1 iiir...-. -·-----·----~·-'"" .--·-

4-,2'~9.7'9~

27 ·~ .h 1 ;~

1,1()\,,T:4

!2,:1:.12,(5Si'

--.. 75,:,8?,5,E>

~-f~·1,8<i7

l,0Jj,5J5

153 75·1

916/~i.9 5146,646

(i-,93l,70-1

2./05.100

rnv,on ,,... ... .,. .... __. ... 9fA.48"!· _

rr1•;ra:s~cd in ·:..J.i;it.:11 as~cts, ,1cr ,)fre:fal;:~i debL

Rea.tVCh:ij':n1tr:: pmjt:.Cl.~

Spe-ual n:1:er;t1e ;m.:y:-·c:~-::-:

T'lt61'1

--- (1/19-t,7:1~ _

7)2:5 .405

Drs!r.'!s.s-Typ.; A,cti·;!l.ic-s '!Na]

·-·---,-------- ---------------

$11.i,756, r!8 i 7',1,590",:_j9

! .047.65~ L,t}47,,~;q

2/0 5~•.150 6,7183-12 l;S!l,(l78 !,586,25"0

7'1,G!) •D3"lJfi

94,4'JJ.27.i ~-------------------·

3-)Ji.\ailCr

I 23,577

~1,2J~")

6':;1;14(,

l ,t:;:::,oeo 7_ 74{!,000 -~--~--~--~

lJA ~1 ]Jit<t , ____ ,..... __ _

~ .~H 7,6~,.~ ~.~---~·

1,HJ\7J·S 12.)92 J 5~}

14~505 4Jj

:,.060.297

1,)17,! I} 7·;3,7\9

")6f..7,1';

~J4G,6~-6

7/]39, l 5•) 1505, 1(10

--------- ~- '/0_£1 .48 ~ _

qG,_6~}5.662 -------------- - -

jJ],\"?/:'1'l-

7:.rn,66J

-----6,496,741,.

8,1'!.I,tJ-:.l) --·--~·-·---

:-.1,;:1s!:::p<i.r1m.:r:4a! mt~1,;>~~ ._::, 1u:,g t1:1m \'.::::ht

e~:,tnt>·o-11•pc A1:liv11.:1..-·s

\ \,' 1:! tr:) l. j ~ ! : ! t}'

l"rnr.~frc(" Su:f: 1~•11

s;:iiir11~8r1·::ir: Disti :~l

t"::.

L'l1!i!; mt.r.; i.21;\

fr.:.11dci~<.: :\·~·:;.

1\,fr:1<·)T ~-d1i~.Ie in iii."l•

li1<'!~fm\ir1! ~r1rn1rip,:.,

l'.-'.i3·)dl;.:r.e!-!\l~

':,1,1~ ~[..;.:•; (-,.;,:,;:; '")"\

en y Of PALY ClT''{

STATFrvrr-:r;-r OF ACTIVfflES

FUR 'nIE YEAR ENDED JUNE JG, 2003

Nc~il:!i'.:i1tmf:) Kt.v:::m,,:;,i,;,_:

________ .!!~~~,s~,:C~.-,-,-··:-- ·- ··,,:,, g« ;,, >:Ci h:·sic. -·-

1'J,%LH2 :;:,r,",e,W,}'i:i

\,:;i'9,t~iv

; l.-i.·n,--r1::; l[i,..;:1; •. :;5t,_

§Ht!:f

'.!·,-553.gj.) ~:,()•j.4,7t,;

1,~(1,t,,i)(I

.~_li\%2 :of.265

'6}/!4 s.;1,1100 6-l'i2.39:.:.

Jn.~··1lls -~;1~ ... H~'Y

!,35!:U-11 2,493,Sfi) r, 1fa!l,8B J,:;·34_1·,.}'S .i:~.1.,n2-

($?._1Cl4,97'4J (2J)'7:,.Ci6E) {},195/}40)

J'nsi.:r:..:~J {5J )i,(18J

_>,!MU)2J

BL1~,!,t"'-s'., 1ype

f-...ctivJ!ie~, ~---Tc:a! __

(P)'.i4,9-UO {.2'i-,5'15.GC,(,1

13,! 9).'J~C.;

(l,5~¥.J,Ji;J J-,16-& !•2!

~-~~\ '· ,D:\3 Ji\

S2.,!4'}P ;.u-P .. W7 2.42,(:14 ).,12 {c},i

~'2l,Jb J1UJ5

--·-~rn-~rn~ ~~J,:.:~~::12. •-~~-~~..-.,_ --·-• :::,429,'~6 J • ·-- .l,419.41-i 7 _

~~,4~6.4E2

B, ~'1-9 ,Siu~ 5.1~,6 .)tt,

2,:rni .:?.IJ.'i-

=.,::,,jJ)::9.i

,![1()_57•;

J;::6 .• :.:: i

(i 1'7,710}

l,2~ .1,!JJ4

!/J.17 iT~ 6,DYl.7{d

\i.Jl),,1i'1){',il) t.;Eu.i:Jt;~,610 _'ii:'JJ~.,114,4!;(,--·--·--·-- -~ :-------., '----- .:;;;;;;:_··"":.·==·=.:-

Ai::~os...r: 15 ft'rf:i1"2.i;lir, r,: ~

1111·•:1: . .:rir,~

L1,1~g_-t~r.m im<:rfl-lr.d r;:cePt:;ihii::1. ·;i-:,,m 7)

Pr0pi:::rtytic:~fordr':{:c·!lir .. ·;1,!{l'h,t iO

LJi\.Hfl.!Pi'.3

r,c-:r,,J1;11~ pay:;J,le::

.,\ ,:;~,lltt:j 011)· ,~,n f...::s:n.m:i 1,a!;.,dltc:-"i

D,::Jo~it.:: JH, 11.11.ble

Dl!ii'r:,r't:'r~

f~nd Dlifa.r1·~·.:(i"lot·.: lM)

Rt~~r::,,cd

I:nc-mT1b,:,=.1;.::(':.\!

Jn.,~·nl·Dn!.::;

Rf.~.n~.11::d r::.ii"f}:1',e:;

~m.~1-:1 .. 1, s~ ·1.ad~

1-lf!r~~C.f'rl!Q

C;::r.i,:i:1 p!(iJt'df.

O~t;;rndt1g ~::1p~';,.i

iJ,,,Jr-,'<:tmJ:c-d, l't~'.:l:1<:d l·

(;(-'i"j(·t,:! i::;w,d

CiTV nr DA.l,Y C!TY

(i-OVERt..:1vfENTAi_, FUt'-iDS B/\.LANCE .SHEET

~)9'..i,7Cl-6

n1,·1.~:1

JUNE 30, 2003

·--------- ---·-----·· ···- ~.?_,)5:_2 5? _

'(3-2.i}C

;'A'.',i,L

11,lJ'.'6 ·n-~

J ~ ,'l·:ll

n-1 . .:n 2!ti..1,'Hi

:t:25 ev~1.·:1t ~ ~ J ,I l i

Othej ·: 1~1.i:1

Governr1H:r3ta! Gov ;·:·ilmenti.i

:1:s:ir:.~-84

.:10,112

225

<:~jtlj_"l'!'CI

,;,~_qJ{l

~.1H\1)1 'i­

!l 1 _4g3

2.~ 1, I ';-2

l2,5<i..?,!'.'9

~-.~'M.M,$

Ci TY OF DALY ClTl./

Rr'J.;,::mrilbtion of tbt COVERNMEN'i\\L FUNDS -- f1.4.LA}-TCE SHEET

wlth1hc STATf,f,..{flJT OF NEl ,.\SSETS

J1JNE JU, 2003

C:1pifil! ~s~ch usd rn Gc;::::rmr.::-r:.t::li r'-.,;;H,,·:1ic;;. !Ir!~ i;ot r.c:rr~,r:: ;a,;;,;et:: ,(]!" ·i~i,:;.ri,: i$.'.i 1.:!\·)u~,;~~ <inO

:"rie.-cfr,rc ~""' :wl ,·rp•Ji:-;eJ ir, c~w C.:ovr;1,;r:;1r;:riOJl !·,rncl:s-.

l11s•.:n;=:i! ·;-'.'r·.·R·c.: iuo1,J~ «rt nc>i f.).:,vcrnm~mn1 fi.md5 Ho·.,;.~1,et. rh.e;· ar.:. ,.,~,d by ;r11m£:-m.~;,t :,)

,;im,~f '."iii.' :>1~::, ri tt-:rt,:rn ·1ctP·:ti('.~, :,1~,·.;1 a~ ;ni\tlrnn,:c: ::mJ ,;:-cr,:raJ scrvi~~ 1.r.~ ;n2irr::cm1 11 ,:;i;:

w l·~di ,,ici~:iil :';!;[i\'CH1WC''1\::1 I 1.111,c:~. !'~ (IC~ c1..r:rt:r..t aS<"{::~S Qf th~ irn~rmil <:;';;'"\>': ;;;; t':.; :ii:·, 3..ft'. ! !1c.n:fo1·(:

m1:iud-:::Q Fl G(,"CfTIF1r.:ni~1.,\.,;::ti\JLti..:.'.. i•'. the fo!l:JViJrig ii11r {1:;m" 1.-. ltc '.-:!r1Ji;:t1:::-nt :i( ~~'='~ Ag::;:::(,

an{! ·~'-C'iatrr:;~11ti

A•~rnc;iJn.;f,{1:i

'1.,~;;.i·:Jd 1;r,:;1!:-:-.;e;:-$

A1_:d·,.1cd .;lai:-1~ p<1y;.h1::

{ u:~1i"ir:n~;;.,:..d .i~J 3;';iK-C".

b_\\'RU:~\ OF f.,:()t,;c;;pµ,c:i-.rT :(t.\.'ENtTS ;. .. >-lD EXf-'EN"';[S

iZt,·.::r.iu(:C: wti,,;r; ;;Jr;;:d:-t?rnxi t:n C"'!;: F.:;;6 Ddlr..rit'.C :"Jl1ce.t~ G~r?.tt::,et\ :: 'E':'. tc(i( c!.Y1!11Hrtk ~,inerdy

t;·t t::,lxr: rn"'.o r-;,1c:r1u~ t'i ti!t St~lt:,w;Li qfAcit·,·)tit:t

U.)N(i TC!C\4 A5:-;~:T'.~ ,\!\[} ~ !A!--1-iUTIFS

1!n: ,i::,:~dc; nt1 !i;ihJl,1n·•; b,~low ;,:i,;• n•·r ,Jl1:, a11~I p,1y~blc: i,~ tk c.mf.'1lt p~.fi.Jd 1:1d chtr~fOLC ,fft not

'f!tt-c:rt~J 1r; ~h·: fin-:,js

6,((! ! .! ~ .~ (L[9)SS)

i._,·.,_.,·W.,) [).398)

f 1,0'64,;;rr;J

-A (5,~(l~,~J?.t

15

UTY Of DA.LY nrr G0\1:RN"M.ENTAL FUND~;

STAT:t.M[NT CF RE\.'T:;>-HJE'S, EX.PENDTTtRES ANDO t,NVES IN FUND B.AJ ..... \NCE f.;JR TUE YEAR END::::jJ J: INE 10, 2i}JJ

R2'/f::t-.:t:E.S ?ropr:11)· t:1>:

5.:ilt~ la:1<

U1!:i11· W~;!-:'"',i :.;:-:

r:rn~,f~~S<l foe~

O!het.1 1:ciP~'.

Pr"i1oLi;-i.1

lr(,,;:t,~1 ;,if!(, .'.1~:c;-;ii :ia.C!l_~c~;)

EXCfSS (DF:i'!Ci:£'\C'l'l (W ~-::.vn'l-l}E:S OVER EXrE~ DrTURES

8F~.r!.NJ'.iNO A.JND tl,CJju"-11:;1:,_.;

R;;d~ve\::r:;.mcrJ C~pit:.:ii ()ovemr1H'!l~11! ("i..1Y•;:n:1nm1:d

___ .J:.;:1~::'.:rJ ____ Ga."" Tax _____ A-een\'..'.y --· ___ P:o;~-cil.S _______ Ftmds _____ F':.rnd.•.

:il \416/</i.,~ :,:n·,S.?7'..'.i (,_,P1J.,J4t

-~):·l'.l.SM

1.::i1.:-('4

14°1,t;rn S!f.J.:::-;c, JJJ5SJ:U H:,"367 t I.S!.)74 j(',~_'5,'.}(i 1,N,.;.fJ1cJ. (! ~5U5:':

n7.q8:i 4£':3J44 ,":,(14~• .. :-1:~ )Jl :'JOU ':1,S r·, 4r;;.:

5;:in,'f§J !~.,t:.S:.:G :'r.'iJ3D J.17S/;!2: 7,32:~·.517

-·L-~_·i:,4,i,)::IL_ -·L-~_::1,M':l .. -·L-~_6,2?.5 ·~--L-~S0~,:·2.:i -~--L-5,1:::,t:45 ______ (,,~ll,l,C;f_,7 F

J,ri"::·S/i.';() :9.1 !'(8/::

.'l,'.ff7.170 9,!]U:·':'·i

.:.srn::iZf-

9).512

~~-=·~~ 41, .~g

H,9.S.9-D

lo,!U i:n.i.4:::c 6.Z0(:.:-,n:)

J/·6r i:i1.

29)f;,l,f':,.!

[i!,.;;:J),)69 l(·:2{.(J,?cia)

9\54-:

~~~.....J.1.E:.2 .. L

A~ .:.r1,::.1n~i.f ~r,.:,r:t::J 32.1"".'j .,J.1~'

16

CiTY or U1\LY C! rY

R~cor1c!\iaflc,r. c:f tbe

NET Ci'lA.NG~ [~ r1r~n B/,L··\NCES TOT/\L (;OvERNl·,r1EJ·.fTAt FUNDS

STATEr,.,H~NT OF i\CTP,l!T!ES

FOR THE YE.l11..R END LU .lUJ"·!E 30. 2Clr1

Tf:~ 0c:h,;dt1i~~ b~:vw r1;con,:, 1!f.s trir. Nc-t c-ti:1:r,_r..('s l:i rtrn;j B.:.ls.iicts rc..pcrt('.~ mi ti":t'. Gv..-crnmrntal f-tm.:l'i S~!:.t.."..J"(,c-;1t ol Hpcc<!irrrc.:, a,,,1 Ct,sn,:.;s i•r ?11nd Rtihmc~. v .. t1rh m~.!iSIJH'.~ on!~, ch.-1n~t·::i iri ;-urr,;;rit ri:-.::r;:1~ ar,t'. (;;LJH'l'rtt

lfabi.li~i'--"" en •;;.·i~h (Iv, Ctw.115t: fo }kt AI:f::rs ,,.1'. Gcvefr.mc;11w.t A.:tj;:(~tc,:; rtport~d ln chc !;r:,Krnc:·'i\ ,:;.{ 11,,cfren\,,, '¥hd i . .: rm::pued m: rht fi.1H ;;H:-::r~~: ha::;is

D,,,,,;: '"'''" os:p,,1.1< ;s r!cJ:.r~te::i from for:a bIElmv,e 1'-tpe,~st \) r1e1 'IJf ir1i{:rr.<i! 5acn·;,;,c !'i;m! ,h:pteci-aJ!.mi

c.if $] )·\ ! ,j 74 :,•,h!d, icas. abl:.'3.1..1) h~:-t:!1 :1IIPu1tt:d ln ~U'-'!·~:::..1 !imds)

R~tip,:-;,1:c4!t', c!·cap;t.t..! as,_,::~,;.

r1:1,..:tr':d( p::1·:H'tc r,;,_,,n:n! fip:11i..oi:.\ r5c,rJ,.11 1 •• t;·; to g,.;:,,·e:rrtTi-ental fon~.:., l1nt

1".-l:au;:1g <l~t=, trK~o.l~'ie~ 11::1.~··tem1 ii:J.biiitits i111:·1c Sl;:lt.e.;:1,;;r:1 !if t,,::.. Astch

,;,.q:1<':i:dlt1w:: ::-, ;:,n~ .F~ffvtrl'li:--,t.,itci! f,t,ii:\S, O:.it

":l.r: .~rNiww; btkt.1, indcdd lr1 rhe: St:1!(-rn-.'.1: a:,r.1~.r:1ivitits ik n~c p;(.,v!:k· JL \ce-quir,;:), ~J~·r.: v.'i-::· .:,l !,'!J<n:n\ l.i~,1h~:wl .::t:',l)1-1Ic~s ar!J '.h::,:foi~ P.rr: :l{)f c•;i-\c,rtcd 3i :·c:·(;Ji.iir.: ~it ~>:-rii::ii1in,r.::~ in

110'1~.me.:-1rn1fiJ1;:k

!i,krna! "ifr"l>'i: . .r f,Jnd'.!: arc: l.!H'.d '" c!!,arg, !!,,e rnst;;;f uocrc,,·, "'"''"'', ~L.1·:~1 ;:;.,;. CfJ!! ipmtmr au1,i!:.iti~)rJ. i.Jn;:l_~

Iii,: n1:l rt·/~flU!: (exT.r~~·•i.:) ::ii !hes:; imcrn:tl S.'-n-ir.l~ fm•d~ an,s;ir,~ o,et

(L:f'S.1,D70; (372,]5'!)

(5)-::J! f~Y,) c;;;T1.?-C.:~,;.

18

,_•::·:"/HFrlB•

i'H1?,..:h1•;·;:I~$

L-<~?i\>I;:; :ll~.~ Di!Hf!I(~

Fin~; ;,pJ f;: rf.;:, ~1:r~;

R,:,,,;;; 'lf,d ,,,rc;:r·:~r

r i,~,.;':, '!,Ii- •~r.>

;·,(1:c;:1'<,1,'L''

h~!i,:S.:.,l".I.)'

Pc-!1:"' ''-1!15.,.1: f.; .. ·elu­

V.'·.r '"· ·. ~

0:!1tr>'!:r,...kt$ ('=i.p1·-~I _.._,·:er 01!,~, ~~.r.151,..,

C!!'Y0!, ;JA!.YCrfV

Gi:.NE:l·V:..:. FlfNU STATE:,\f8NT ')F REVE'Nt:t.S.., E.XNJ<DITC'KES

Ar-JD CI-l/,J-~fif:~ fN ?UND BALA.':~YC. ES

'.',.!}1.,J·li;

~ .. ,:,; 1 (,4$

,,) ~t.OJ. ·' L~)f_.t,77

!f':)6'1'

7S?,9(t.': .;;,s;·:;;.rnj

-----··-- 'll_~c:_; --··---- s_;;,•N _ -----··-- -t:!rn ...

____ 1:,:.-ron ____ 11,0:,·:,%,i, _____ 1t,e:"'ic1:. ________ 53~~9_

~ r,:-~·?1! ~~4 ;-~.lj

;'.l}JG

--~-~:2J-.

Ubtl/~'t !5o.···n

er;~{ VF DAl. y cnY GEND~i\l, -r:UNIJ

STAl"E'Mt...'.i'T O!: !,!_f.\lEf-.!UE:). FXP!-.:f,J)1T1JRES 1\~-..,, •.:H1\i'V.rr:~ !t·J ~·t'l'.iU ~A ./'.M .. t'.).

·.v,_:r.r,·,.n

J•a:'.,v,;,,.,-,· •.>t!.,,.~ ,~ ~,r.;-.;.

''•r"s·,·,.·-t(ce,1.,:r.

~1 ~:,:-11,,el .;~r. ,:~.?;

···~1-,,,, ""r·,· "'' c~r,•1~i C>u'.lt.y

•:; dai•~~~

-;'"•·1·,r:·.1,1··

1 •• r,~f2 ~: Ff,~ f oreil .•r, r,r5,:, ••

E:s·::c''J :"!::-]-1(;1r.<.,.;'t1()>'kl "{H'>lUE:i

·:'"'H; ;-Xi"i-:-:j-H.:'.•i-:'~;;.1;::::;

5-EC:l'·YN[:>JC: [-lJND !i . .:..,1_.A···cr~r, As :,·igi,n: ,, f~f,lYt<'t~

FOR THf: YEAR ENDED JU1'E 2t))

__ ;~~~&__ ---- '..'.',ti(;:$_

" ~ !~ .',1 ' -----

;:,5(i!I

},',."l,4)1

~. ' .·~;. i9l

19 10

CTTY or DA I. y CtTY GAS TAX ~?P.C~AI, RE\'F:'r'·..f{)F p_;~JD

STATEMEN'I QF REVENUi!5, EXPENDfTt'RES AND C1fANGES 1N "t~uso h.ALANCE

HtTK.iET A!~D ACTl.iA.L

FO"R THE "\:'EAR ENDED Jt;NF HJ, ).GOJ

f~C.1~Ta! prrgnrnE J.i.E!.l gn,:,t:: Kt~Ct·.1pr,; t·i ,1•• c,·_lw.1 '1~t.' 1: Jr~'

ChAf!l;i'!; ao;d fer.·, Mi~::-di:ar;f;:CL",~

LXPE>HJ~rur...rs C1.!r 1 l.1i p:·cji:.~1~

:i--:xr::1-::/:; :, I )hHC:FI,) :v; OF;,( i:.vJ~NljFS

i.JV}·'.B. EXFf->HX"f :R l~S

OTHE~\ n.r·.1,\J-.ONG :',(,·.._1 :~C t'S (USES l Trn.r,sfo:::: 0~1

N'-:TCllAN(:[ 1.N FU1'.i1)BA1.ANCES

i .2.'.~1:, 779 ll{l,f)(j(l

ljf;f~,!()

'i l L:':~I

!)313,T:9 t2(i,\no

2.J/)0,8.:LI) ) I !,'.)~i 5!:~,{H.ill

__ !_-!/Wl_

L,144_fJSO

132/135 4,,-:ealJ?',1.

423)44

filwl B:Jd~;t!l

Po~!tivt

{>4."72~' i2A-J::

{!ii:t):1J'J"1

(.::lf.•/11..:U)

~--_2.!·il.~

-·----·- ~7,) !~ -

Rtii!,: ;;:·d :nlt:~·si.

Mi-s~c.!12ilf",-.~JS

CfTY Of DALY ;.=,rry REDEVELOPI\.fENI AGENC't SPECIAL REVENUE FUl'..f"D

S fATE~/!Et<T OF REVENUES, EXPENDITUfU~S t\~'lD cnANGES p,,;- Fc~,,;-o BALANCE

ffUCt~ET AND ACTUAL _-'OR 'IJ-fl~ YE.AR EN JED HJ:·fE 30., ::'.OOJ

~(II} ------

2S5,73C ;•-6,:il';

:)4,.:li5 375.-·1-;;9

i"!-d, :.i;:·-.ic;..<;

lw::1(·:;t.at:dfisc;,l,n;l1111t::".) --·--- l,671.'q~'- __ . ____ Lf.'::,51.'i _ ----- lJ-76,71()- _

FXCES.[ (rlEF1(:11=fKY,i (;~ li \.:\'tfJUE.S 1.Y~'[P, EXPG:~Dn!]<.[.S

tY[HER. fiNA!"1Ul\U ~OU:~CES (l;;jf/i) S2it: .>~ :iiO[')nt';,

! ,;rn~k~i ,1n1

i:'m1.,1';tJ1 ft:;r! l\,''lf;-lt:11, L'id- 1

1 {.1110 []l),'1 l ,Hl~/1,,;o

,:;n:1:A-:".-;':.

~---~t:7):~:i --

---~-1,208,l 71 _

·,.r ,H(!;D(f;. "~ 1th Fi:",ai B cldge.i:

"f\;~Jfr •. ,;

'12219

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22

C:;:;h'i~·J,:1,r•r;;Stmr;;r.5-&

Ci,J!-: with for:al ?o.~i:,~1

il,,_;;;.,:,,;,~i.:, r,~;;;r.'l'ri:l!.:,l,: r;r1

t'.1·~t.!ltr:r)~5

Prep;,i,c~

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.:,.:: v~.i,::;,;,~ lo r.,t!-1:01·~

f,t:iT'af-t:':-:'rn 1"'17r.:rfl!ri~ rnr.:fre1.bhi

i"'ll!p;!t! r\;':1::t..;;

L!l.Nd

,.;..i:·tm·~r! f~A',·rr,11 i~UJ•1-fJ':"115':,l';;:::, :!ili-:.i!,1-t;c~

D::.pt..J1tf r,a~·a~l,;:

Lr-r-.,r; ·~·1<· (lc;ti! ('.fn!? :c:) !J,1:fl ;\•,:!-.:,: ,:,,;l?J•(:'..fi

0;Je:nmmc\:~8ns1r:,: .. v.::&r

CT;:-Y Of DALY (.'!TY

PROFPJETARY fU;"t;DS

i,)t)(,?.:'"l

til,JX!.<1?-.4

_____ s:· .::!3{. _

; nw1.P.~1 ·--~--~--

Sai'1,1:;-itii:,t1

Disl.!11.al

SS1,39fi!,,t({, '!.J<i"IJ)j,i

_______ P;J!,2.{"

.'.J:J. ~·P JO~·.·~ jS,

~a.n·~ ~.(u

E:.dtiprise

F~;;li:,

],:;'~9 !t,tt b ,'} ;!- IJ'.C)~,

-~ ...... -- fl.~.1.l.f).

rc1!,'tl:li '~·-··-·-··-

,H,i97 {;J)),\}

i".~6:5,.()~(;

~\:15.C.Cl

Hl3~.J7~ ~','1 /; ~,;.

J~ ,:j '6

-----~1.23U_

,63~/):)f;

Go•,cnn11rnt~l

iu:i.,,·i:1~',­

!o1U:rr~ Servk,:

------- 75']

ff!,19~ :::.:'..l~ DJ

--·--- '.7)f,(}i);). ---·-----·----

\-cwtr ... e1,,.in::,;i-11,1i::.r:,

C:C'-m11;;1::i.~(11, 1.:h..!Tf.-.'.'.

i r!:r! :-;,;;; it:-~('!': t IE~

f;eq 1cl,r1g,fl;v,:.f'u,:-

·ro ~,~ i:~r ~ (;i ~ :,,1, ; kirge,

Util'.\iC~

Gb 1r. (k•:,,~.1 .. 11~ :mle {1f c~.f,\!]!J ~~3.:.t:, i :i~s a'.)n f('.ficnd i.;f, c·-k:,; ) °)

'c·,•e· ·.J - -" 1.•~0~,­

T,r.i':.;':f~~ !)i.'I (['.10\c 7)

CITV OF DAL'/ ('T1 V

PROP'iUErARl' HJ1H.JS

$ r A TEMEl\'T 01~ R.E'i/ENUES 1 EXPENSES

AND CHANGES lN Ft;ND NET ASSfT:C,

FOR THE YEAR Ef'JDED JUNE JO~ 2.Dt)J

_ 1.JtiEiy __ __ Dis!: le': _____ Funds ___ _

:.: . .11:;,_ 7~f;".

1,15'\l52 ';il~,,97.\;l:

h:\i).59

$L~,.54i,,C-J47

'.•'ic~,2150

'U2''U6-6 1,G.(4,1'J~

Tfii,985

LH,J32

l,f.l&,6}i

·1·;5,()i)-i,l

\) IIJ_g.J.I)

]67.'7}(j

uu; t4:)

12.1.:'-{d

LU.l2

·.n2_:)5t

I [fL:"11'; ---·-------s; !0,:1:-:1.,523

l:t..54!,047

i':f·9)tifi-3/S,(;(1C

5,6(\JjOJ

5 :44.f.'(,] 2A~q_:<:<;!

1 :216,84J 7,0,lr.J}tJO

!,J' •22

:, ;g l.~'12

},5::i8,~!:i2 ·t.,::r.'.7/H;(l

p;:9/."l"' 1 n,0,1:~ 1100,9)6 l)4i}'~

___ l,U~CrJnl ____ ,;·:2.~:n ___ /0,'iO_(, ______ l_Q?},&r> .. , ___ ('.!-LJ09_

91S.0U (;1771\i

l)~J,:·9; (9'9)04) 4:?,!,~_5ci

l,-,",c'.',ci27 -,-·H ________ N

:H !,'3~ 134,;:37 -··\),i(-t.))":,~) ~- i_i,f~,?,ll)l

23 24

;_ ~i.Si·J fl_OV}S .::"!ftOf,i Cif'!.:P.ATD'IC AC iVlT'.ES

Ra:c1pt:i i'.:,J,1'< c.u.,t•Jm::c,~

P:a:ynl;:~,r.s. !:• >: 111µ:ic.··~

P~y;r.;,:;",,·1,)t,:q:ilti:1ee;

·Ch,m1.'>~M1J

~n.trfon.~ .~0!1pts

i11t:::•fo.idp::iymt-u\.\

:i...~.y~.·.s.·l,~-:ar: ,:'. •.c!.p1!.~J a.:.;5d5

~-,-:,x~l;.;1> i'"r,,;~, :,21,;" t,r C<i,." t,al JIS'..c',~

P.;i,ymc;,iL :~· 1d·J11dnl rkli;, c;,n /IW <!~ei;!

t','jr;_:ipA!p<1yi!'li;c;"l-'VflC.<1j'•i1$1d,;.!)t

!,\ tr,:;-.~;;1 fMid

Rc,:::)n:::'.·in1ll~ri or D;.,:1re1.:rnJ ~11c.'.}:-n~ {Lt·~, !:1 C::t'.'-lo F:,_.,,,,_'.,

frpc1: !'~~°"-"H1t!'1'1;: _,;,_i..-l[l'ltii:~

.. \1~rnl!u•· w::,·.,· .-, ~le.··

]a!Y{'l;,c:r:,

Ollis.• ;,:i:5eis A,.;·.,::r;c,;:1,;;::emd cH,cc r~y,;,bli'.'.:5

/<.'-:1~<'-1{.\\ ~iiliiff,-3- ~;;)\'rtl'i~

.\Q:r,,r::C! ,,.i/ri,11 ~!1~l r,t.,JT' 1:er.•;a1et1 ~!::-.'.Ki.ct~

CHY fH· .UAL 'r r;J T "i

PR.CW.RH:: r~'\RY r\JNU~;

~;T.A.'Jf-:!',fM'-J'f flf. CA.SH Ff ,O\V':,

:$).(,.:! \P~. H -:.7;:.>:'tii ( i ~ ,.V.1~,'i(i";j

,: ~.:,::::; .::~:!,)

----·-··----·-··-- --·-··----·-··----·· ----·-··----·-··-- -·-··----·-··------ ____ (-i 11:i·J ·;'.:::)

c::1~,c.:1ff, 'i,l;i J;,,,J~f\)

(l,rntc:w:,

(li:.,'!C2) 1;<.i5,!l.::R) (:i-~ 5~~)

91,a:JtU

- ••- ••-••_j}~S,H(l,, - ••--a-•-- --u-n ~~-~,'J~~-~(~L

\2.";~•r,;.~N }3 H'J.i)77 ST:'! /'i')' tfi !}6629

~:,.,1yn !xiJS,l;-:0 :',i:.U.l'.:i ~--,-~ ! ;_7']

;,11Jp<l; 1!6.2~~ ~t\,:ll.'~ ,fLViti

(&~iJ.a:::·r J:lJ,G'P l~i,('/J?

.1.:i ·, ,(:;:'.>"~ Gr'.1Bl1 ?:il!i.6':n

( ~: i . 1 :'~_3iifi}

! 14(.")J..1

(::'.:', iJ ~,

8]i_2!.~

______ 'li.~·!W_ ~- t.12536 __ ---------· ~li--·~.!'!6 --- ,.·J.-:.' 11_

FTDUCfAR."\' f'LG~ns

5T!\TEMP~T Of flJ)UCIARY NET ASSETS

('.f:11b. and m; .. ~.Hm(r;IJ (? rot-:: : r;. Rn.t:i1:;,bk'.;

Ag~n.:.y Fi~n:::h ---------

--------- i;·(i~,S.?A __

25

CITY OF DALY ClTV

NOTbS TO BA.SJC FTNA!"JClt\L STATEf\-iEt<TS June 30. }r)O)

Note L

Tt.c accoc..rlting polic1e•i of the City confi•nn v/ilt to gcn.,,cmmerhs. The fc.=lh:nvi1.1g is a summary of fri:· rnore

A lJASlS OF f'RESEiVDi:flDJ,'

~~:::~~,~~' ~}~:~ c \~;,~:;t;\,;;;~t'.~'.t~::1~ ;~;'.'.:t'''.~;~;rj(:~'. .. ~~'~;~;:/i~f ;.;\'.~,~;:;~~::t~~;,r!:1:~~~~ P~~;il~~n;:~;!: ark.n01;vledged si.':t.ncbni sc;Uh1g b1.)d.y f,,.-.1r ,;;stab].ishir:g aGCl)U:n.ting ~1nd rina7:cln1 repc11fr1g sianchrds followed '.)y goverru:-H;ntal ·~ntitil-:s in th,; U S .A

The mx:cmpanyiog finan,jal statements are prc>sented on tbt>, basis s~.t t/irth in o~~ven11nent11] /-;.('G,)urnit,g Stnndan+~ Board S1atem.ent-; t•Jo. Ji:!., Ba.sic Financial ;51.utsrn.u~Js-·-ln-u.l Atfatuigemenr: 's

,J;:1;~~?<~::i;;:i~;~f ::e·~~:E::::~,::~:(:e~iiif h::E~,,~;:~,~:iJb:~:-;~;: rf r~:~~1:lf J~)(f :~I Governmcn(s; .fJmni'bus~ and NcL JJ5. Cenafn Financial S'taremnrt l./otc t)isclos: . .u·es.

:n 2.8

Govenunent-wide S.tater."1en1s:· The Stv:t~.\1.nent ,)f !".J~:::t Assets and the StMcrn.e11t of A.ctivhie;; di:ml::iv inf<.;ITna!!~n) about the g;Jvernr.a~nt (the. City) and i!~J ,.;on1pcnent umts. These sr.atcm.ent~~~

~~';~~~:at~~~; ~;:~:'~'.:!.n made to 1;,\~'li~:~ze0;r~;a,~~u~i;°c,;:~;:;{;,;''.~~1~'.~t:~~~~~~~t{~i1i:.;d:~:};:;: ,:~'~:~~~~;; d.istinguish betv,:ecn the governmen;tal ;1nd busine.ss·t),:_;?e tJclivitfos oft.he, City. Gr)ve.rnrnental acfrvities

i~~i~:1~~~:;::.~~t~;~~~:!~;:~tx~:~;;;~'1:~·:.~(;~;:·::·:~:~~ ~~'~::~le;;;,::~~,~~~e;,'.~~~~~~~~~~!~;,\ram,aclicim.

t~tlt{~tt?~i~I~f ii~J~~i?Il~li~~~~;I;~:~~iiJ:~\~ to me1,~fjng the operational n.,;;~eds of a pmiicuhu- pn.\~~rarn and fet~s~ grants and corrtribmior~s that ate rei;frit.1ed to fi:ai~ncing tht: u~q.Ji5ition oi ccm.struction of eapltal as~ets. Rcvcr!UC1'i !hiit art" not dassified a.s program revem1es, including an tax.r:s, ar\': presc:1ted as g,e.ner.a1

L t-1..:v,,:>.nues.

:;:'ct~::::/.;';:~'~t:.1:::t:::ti:a~:~;:~~;;·o~,~~: ~:.~~arJ:::1i1.~:g::::i~1~::~;\~~~~1~t'.;~;~~:~-~:::i~j:1;:~;;11c;.i;,·;; rec.t.ives and glves up er:;senfo1Uy equJl vaJues. Nonoperatinp, reverrue~:;~ ~uch as subsi<lies aad i;,_ve:,tmen~ eRrnb1g:1: resnh from noncxt:hange tran~af:tic.ns (ff anc]Ha1--y nctivities.

JJ. 1t:U10R FUNDS

GA.SB 34 d~fine-s m.aj0r funds 2 .. nd r·""q_uir"(;"' 'h·:d t1~e c~:t•j~<;: •·1a;or --·-pcrnr1"',.-t'~l -nd h··,~re.,~ ~ fonds be, identified and sq;;~:,;e!/i,~ th~· ~:mt:i~1~;1~·iai' st;i~\;,ents'. ''.~;·! ~:h~·/r~'~:,;/~~,;l:;: ncfu'l:rnjor f\.mds 1 an'. ~nd reJrorted in a :1ing!e. colurnn~ n.:gartllt:ss oftl1!.':ir ft.mil-type.

};1r.1jor .fonds are defi.ocd a.s fun-ds that have chhcr assets, !iabiiities, revenues or exp~ndi~t.H"t.'-,/;.;xpense.~ eq:.:mI to ten pen;eot of theh' £\uKl~i~ype total and five percerr! of th~ grand tot&L Tot~ Geni:r.;::.! Fw.nd ls 2..!viays a majur fund. The City may also select i)lhcr funds: ii. ~1e!ievts ~hould b1;: Di£e~~ent.e.d as n12\ior funds. · '

CEL"'H{RAL FLr·{D i::: fae general. operating fund of th(~ Clty. h ~~, Lt·:~d tu ;Kcornn f'.::u uU fin~:_nc.J,f rcsm.1rce'.--: lTa<l'i1kw~aUy as~,odaied l\'~Lth gover:unc:nt:~ ·,,vhid1 are not r·e,q-1.-1ired to be ~K-counied for in a separnte :fnnd.

GAS TAX SPE(..,L~L R.EVJiNUE }_,_l~D is· 1_1se1{ ro ac.c,~unt fur gas tax mnnks aliocat~J hJ1 ihc Srnte t;) th·~ City fer the ~1.treet~~ anti roads pc1)grnm.

REDEVfLOPJ\1l~Nl A.GENCY SPKC.lAl.- RE"/Ei'.fl:E ll.T'.'"a.l is i.1sed to account for rr,nnie~· res1ric1},~d fer th,.:· purp.-_ise cf elimlnatiug bltght in designated redevdo:;:nnt•,nt pmje(! ar~-;is. rhc Rtd~Yc.1opm1.:~nt .A .. genc:,ir wa; e.stab!isJ-":..e,d i-c 1971 fi:-r the pt!Ip<)st: of redevdJJJin~ cerw.i:-i pcrtlon) of the Cit~/s oldr.=:r buslt:c2s areas.. \:\T[iiie the RedeveLJpment _Ageney is k 1.:hnicaHy an ad1ninlst1ative unn of th~. Stak..~ r:x~:.n.:!slng Sta1.e fKJ\·\'ers: it i3 gov1.;;'-;:ncd and effectively cor~,n-oiled by thr City Ccmncll.

CA_PJTAL PRO.[ECTS }TTND is used to ~:L<~cot.mt ((H· financial re-::1tJm(:es tc be u~:;ed for the Ecq11isjt1on or con~truction of major cJplt.ai fa.c:Jirit;s othe,r than lhose bnan{:~ed by pr~Jprid:'.H)' frT,d~;,

Th~ City r{:poned the fbllov,..-ing ent::.rprisc fl11Hh as major funds in the ac2ompanytng: fi.nar~ci1l ~t.atcmcn~:s

l\-'ATER JJ'l'U .. JTV FUND is used tr.1 accoun1 il:r actjvity related. to providing residents v,:ith 1N-:;1.(r;;r

~ervke and hilling for garbage l~o!kl~tion st~rvice r,rc,Yfried hy Browning-Ferri~:; Industri;;;~ ·::,fCaEJi.;rni~1

S.At';UTATlON UISTRf(;T !"UND i.s u:;t~J lo ~iCC~)l.l.nt for ,,.cfrvity r,dated to prov1ding residents, \\itb !_S,f.J._litary sev,;er s.0rv1ce;:-;,

lntt:rnal S6Ervke f\uul;;. ,..fhe fumds account for rnotor vehicles, central ~~ervicei~. kkphewnc, bt--ild.ir:g n1a'.ntenar1.ce. i~frHTnatitm scrvk·.cs and st~lf~insun~nce~ a!~ rd. wbk:h ure provided to otLer departments on a ce,st<titntnirs~-::ment b£nls.

~~.~1:'.-'.'!:,~t/;\7~1,:;~ ,~~;:;:~~t~:'.~;,~1;,;7 ._::~:; :,:.,:(;,,~~~:.~\t\;,;,~:';r,~:[~l ::/.~;~i:~i:~f ~;e::: ~~:~!~ !;; (·xduded frc·rn the e-ntity~•Nid.e fmanc~al 51.:1.ternents~ hut an; pn.:5:~.:-nttd ir: separate i~dui'...·.iary fi.mJ financ ia.'l statements.

29 30

c. PROPERTY HEUJ FOR DETELOPM!il\'T

Pi-vper(V t:.dd fr)r d(~'ve1.!:ipment i:; ~luk:r! at Htc b\vf.:.r 1.)f historical cos:t o:c- nt.!t reaiizabk: v.JJuc {eqaa! to arree<l l:apon s:J..ks price 1f 3_ dit;position and development tigreement hai been reaeh~d w1th a dc\ .. t:iopcr).

JJ BASIS OF ACCOUNTING

;~'1;1~;;~~1;.~:~.::::d::}:::~~:.:::~ ,!;~is;-~;:/·:~~ ~1;;1 ,;:;,~~;;~;;,l~-~~~e'.~~:t; ,;::,t;~:·x;:;J,,;::~~! ~'.: rcc:onfod \:vhen earned a.nd exper:ses an:: recorded at tht ti.me: Ii~1biHtks ~rre mcurred: rcgan.ikss t:Y v<"hcn !he rebted cash flo\-V~ uikr: pLJce.

Govern.mentid f.m:..fa art~ reported_ lJSin.g the current financit1! resuurt;~., rner.isu:remcnt fo.t:,us and the ;noa."[fied cKcrual basis of accounting. t I nd1~r -rJ-'iis rnr:thod} ;.:-ev~:nues are recognized v,,,ht:n rn+..:a.suruble and ovaHt"Jl.ile. Tl1e City c:onsiders all revcrn.1c:-. r~ported in the gove:r.ru;1e~ital frrnds tote ava.ifabh: if the revenues arc coHecte!J v,.r)thin t-1ixty d?l.f~ ;~fte.1 year-end, Experidhurcs 2.re n~r:orded v,1ben the related fih1d ]JabiEty is incurred. e~-:ccpt fi.,r prin~-ipal and. interest on genend bng-lerm dch't, c.lnirns and

~~:~t~:~r\,,:~{~r;!<~~::~::t:::~;~!:~t::~:t wbivJ! are ;;t::1i,~~,'.~j :: :;:;;~;l~;i\::': ~~ ~~:,1::~~;[1~',:t)~.:;:~Y'C Proceed~ of gC=\'i::!tnt1:e:r11.::i1 !ong-H.~-:-Tn and acquit;itions undt:r capital lc;:;::o:es are wpcrted as other Financing s.1Jt:zce:s.

Prop:;rty iax and sµks tax ar~ considered rnea5Uriible arn.1 avf.lihlt::ik~ ,,;1.l'b('x:t j_n the h,:.u1ds of lntcrm~ditL-ry

:t: 1:.~~::~~p~i~:;; r~'.:~~;::,:,~;d i ~~:.1~et~;;,;~ :~(~ :~t:~,~~:::~:,;:, ~:~,~;;~~~- g1;~,:0s p:::t:~ ~·:r:~:;;~r:)l:t~:;;;:·~~~~ pc::-n2J1ies and orhe.r revr.~nv.e:~ ;1.re n:·Gorded as rever.me:~ '-.vhen reee.i.-n~d in c2.sh hecmtse H:ey tin! gcn~rn.lly :::ldt 1ne~-:::mrabie im.hl actually :-ecei·vecL

The City n~ay fo1id progr:u:ns vi1ith a {>)mbinatlon of 1..: • .:ist-rt:~mbursement gr:~nt.s, c:a.tcgoric;il bluci grants.. ~saJ. ~~~neral n~venuts --nws~ hoth n-~::r~ricted and un.ft;st:rided rH":t asS4..-~t;:. rnay be availabk- to fhHH!ct~

prograrn expe.nd!t1wes The (:fry\, poEcy i:o first apply re-strided grant n;:.;ources to such programs, fc,llo;..v~d by g-~ncral revenuei: if neces:s;a,:-y.

Ct:rtain indirect c:.osts art i.nchiJcC in probrram t:xpenses rnpnrted tOr individr;.ai fo.r1ciio11:; ~.nd activities.

1-:~(~~;:~:~ ::t:[~~:r:~11;:i::t~i;-;r ll&ing th:1;;::~:;g~~:~:t~,~:::~):~:~~11:~/;;~::.:,~~'.nu~~ltr:~~,:c,:;~~:::i~ Finan:.:;ial Accounti::-1i:r Standard statement; issu,::d on or before Noven1ber 3D~ 1989 \r..'h]ch do not cont1kt with Govcm~ent1-1: Ac-GO'tmbng Sta.ntl~rds Boa.rd statements.

~:

1

0:~:?~~~:·:~\~;;}f :;:~~;~:~~1;:~t;1~:1::~:t:~E~I: ,::~ji~i~~:~~::.i~l~iI:E::iLi:\;,~:::~:,~;~~~~~:~::~ entitlern,.xits, and cfonations is rez~ognlzed in the fis-;;;j.1 yea!. in \/vhk~h all eiigib.ihty requir,;rnt;nts hA.Ve;-;

b£-:;t\n sa.:i~fied.

E. BUllUETS, BlWGf:TARY ACCOUf\TflVl, A1VlJ ENCU.1\-:ffiRAl'iCES

Tbt: C~ry a(bpts :;in annual bud~_et tx~forc June JO: Ds-:r an fu.m.fo and eo.mnonwl unit-. otht~r than the

!~:,:;::~~: ~~1;~l~pa!~ci;~l;~,;l!~:,:;~bject In ac(~~;~;~·~c~~~~·~in;~,1~,;.~in~~k3 b\~~~:,;i.~, C,u,,.·.i[

bt.i.dgi:.':ts fr:!r any of its fond:':-. bm doe:; sc as a 1TH1tter of rr:an.agc:ric:l pchc.y. dudgets to tb.r;:~ City C\)uncd lndude b,1th propo.sed appr0-pdatior1~ ~1~1d the rn~'.ans nf End1·1cJng tho=.cTr. The '.~ity C-c1unci1 i1.?proves tot.a] appropnat~or:_~ ,:;n ~; fund by l\1nd bnsis.

'!~~; ~::~:~:::r:ri:11:1:~:~;'.';'.~! ~~::~~i~~~t;·;e:~~~;~~1°:;"n~:~:~:;3a,~1i~jl,:;::!~: ~!c;:~:~t:;r;~.::i~~·t:~ i-ong .=-ts ~JK: t-:11..aJ appropriatlc•1t> ofth.~ l"unds sre not exceeded. Ad.cHti,::irm! HppnJ_priatio~1s ni:)t ~n(:lu::-k:d in

criginai budget resolutk>in~ E~quire by the City CounciL Budgeicd am1,)1.nri~ ~fti.J;.-.,.·:n Hre a:, adcpted (:md [,.Jn(:nt1ed by the individual amendne.nts 1,:ver~! not rn.::lkriai in relation to the original appr~Jptlz.tion.s.. Budge-ts tl,e Cii"y's proprietary hmd':-> ar~ coa~Jidered as r.cemorandum budgets used fnr the of managernent contrvL I'he5e nonappropri2ted hudgcrn fttt not induded in. the F~a~"lic

,~;:;:;e~i;;,;~~c;,,;1~r~:~ui~~~~;~:.~ts ~~~;:~1,h:. ~:~n~::l:;~;;~~ ~'.!r 1;;~;~::~,1;~1~::1~f ,;~;~,~'.~~'.c'.i:~~ 1~;~::;c~~~ teser'FC thr±t ponkm of a.ppHcacle appropriadc-ns. Encumbmn.c{!~ out.:Jlanding ::i.t yc-ar~cnd ~:ire r~~ortlcd as reservations cf fiind equity si:n:::e rhey de not ctmi:tjtute ex_pendibJt;;!S or liabili1ie.s. Ou1"standing

:~~:;:;:~Z'.,~,~~;~o;~:;;;ti~~'.; r:~":~~~:~~·::;c~~~;t~,~~;;~~;';::; a1i;e!~~~~'.in~o::,~~r, ~;~~~:;~;;c~,~~j:~:; ~'.i:~~di ~, r,ol budgetedt:~·1~;~ /~-~~;;.:!;:z:~:.:;'tt~~.~·nt'.~~;; 1~1l:, i;.;~;;7;:l ~:~::i:::r!'.'{~:e,;~.:~; ;;1::::~:~1:~:~::1;:;;. cap~tal and each prcj,~ct year b·xlge'. (G/' ... :\J1 Basis) ~s appr(;_prialed se.pan:Jcly fa) an nt1-go;hg basis.

t: C-iSJJ A ND f1VVE'S17ifF.,\'rS

At Jrn:u:· 30: 2003_, tb· canyiug arnoi.1.nt of" :h~ City's d,:pcsits and ce.rt]fic:.1.tes .:Jf (kposiT w·a; ~1,041,899 and the bank balance \VSS $5,492 .4 l 2. Of the h~nk halanci;; Si )644, 12.S V(?.$ in'.·rnred by fed.era~ d?":posi:1)ry 1n~unrncr,; or CA1v~red Gollater.al held by the C~t~/s ag.:...~nt in tht City's narn.t\ and $3)~411)84 \V.J3

c.over~d by colbtentl in the pledging finantial institutions' tntsl. departrncn~ ;~~r ag(~nl ln Lh,: City's 1Knne

1 in acc(,rdm:cc ",vifr1 SectiFn 53f)5:,: oftbe- Cahfontla Goven:m.ent Code.

The C'.ii/s lnve~lrrn;;nt~ cf $77J!5 I /138 at J1,,mr; 30~ 2003 (e);:cluding certi !t .. '.:-i\,.~~; 1--:f ,l~po\i1 and mortg:age­backed sec-urh1es) consist ,)r- fanJs ·..;.n r.kp0s!t with th,; L'...1c:al Agc;1cy h1vest.n:1r:-nt Ftmd (State Tte2.sure~·1s Pocl) (il1d T.hf~ Sc.n fv1ateo County L'."!\'•!sltw:nt Pool. Tl:e inv::~s1ment p{)Ols are r.ot sub.Jee: tc :ri;k cate_gorizati-o:u because they are not 1~videnced by s.er;iurit]es th;-1.t ex;.,, or book entry forr:1 "h·i1h.,-·,rn).,-,1 reflects the partir.~p::.nt's di::.posits in tht> forrn 11f ~)h~rc~~

the pods is the sarne as the Ciiy''s deposit ba1ane,e.

T!Rt°" C'·tv f·as ]n\·e~~1'"'d ]n rrp~-j gaiw~h'.!ckic·d -.:e.:uritif-"S issued by 1he l.}nven:ment NatJorwJ fl-Aortgt:..ge .~·s.:\)ci;!ior~ viFl;~ch·-ia~ e:ide,;.c~~ b~Y -~iJ;c;ir1c i<lenGfiable securltks instru;nen~!_si. The City ~:(1kgnri1.~::;

sl~euriti:;~,; 1ns!TL~ments in asc-":rn.Eng order to ;i,:.fle1..-:t tbt~- relative risk of loss on tLesc i.nslnimcnts. Thi:; r~::.: .. k is caJle.d Credi1 Risk. The kn"'L:T tl1~ nu .. mht:r, the lower thi:": risk, Of the thrte k::\'d~ (;frisk presc.1ibc-d by generally accept.:Xi accou:ncing principks~ the Ci!.y\~ securities instrt1.rn-~11ts are consideied because tht: City has posses:.-;!on ofLtjese securities insrrnrnenls and ihey an; in -J1~~ City's :iamc. The value of thcf,;,:_: ser.:mitics ~.21stn.mten1S :at Jur~e 30, \V0.5. $] 1 598.307. Fi··il:: of tht-::-e ~e~~-uriLic~ insr.nunen:s ha:ve nrigina:t maturity tc:rrr.1s greuter than years. Durlng fiscal 2002, the City Council adopted a resolution v,;hieh l;.1ciud.:.x1 authorization fr}r tl:ie City· Trea'.,ur,~r tc itr:est ·!;,p to $4 rnilhon in ~nvestr11ents. \,vhich, m. the tln.1{~ (•f investn1en1 1 ha.Ye terrns rernai-~ing to m:rhn'itJ ~n excess of 5 yc::1rs.

fb: City's c2.s.h ·v..~t.h fiscal ;;:i.gentl as •Nd1 a:-:. cash 41u-1d in•.:estnJ.ents rereord!;;d iri. the C:hy\. agency flmds1 r<..re ri;:cp;fred to be ~xpended f()t the 1x1yn1t,;nt of t't:lfrfitales of prirticip.)tbri er asse;5;sment bond~~- Tbe c:..pcndilu.r~ cif suc:b CJ.sh and in\.estrn.cnts i.s govi~:.rn.ed by lntk:nt-urc i1Jrcc~menb1. :u~d othe~· age:Ky agrccme!lis. Th·.~ Ca._Efr1rnia Gov-~rmni:.nt Corle req1irns. thr;.s(~ mo11.ies to be !nvcsr.;,d in ae,:ord.ru1cc:- \~iritb any apphc.able City (H<l"lnafice~ n.:snhrtkm nr hond inde.uturt, v.nless there are speeific Stz!tr statutes g..1ven1ing thi-:ir inve:;Un¢n;:, idl tbese fimd~ ha:vc bc.::n ]nvested. cnly as pcnnitted by either the above Code or a_ppficablc City ordinan~·~

~:,::~;;;:~~~:"!:1)~~:~1:11;~)7~'~;;,';:~::,t;i:r:~i[:;j;~d~r;~-,~,f~:;:,:t:~c:::rt:i;!~;:~:th;;~:~2:1;~1:~

1;~~;!!11:~:~~;~

equivalent 1Jsed in the preparation i~Jthe :~tat.e1nent of.;::''.ash Hows,

C .. \leg(~ry lLS Governmen: .c\gency Secu;i1ie$ (Ci,oveimnenl. N;)tionJ·I tvfortgagc ,,\~:...odctt.icm)

NcJn -categorh:ed irrve:=.' .. m~itt:::~ Local l\gency inve~tme1r;· fund County of San i\:fa:_eo ~:nve-stment Pool U.S. Tre-a~ury .c;{.~.·.uritie; ;w.1tua! flmd lnvest1nent sgre.errtem

C2!sh [);posils v,.,-ith Bauk.s: Ceri:.iEcat1,,~:, of .D~posit Cas!i on band

('..ity C1:.sh and !nvt.sTm~ms· Cash ar;d inve.stments Inves~rnenis ~vith fts..:::a: r1gent

ridw.--.iary furn:h;: Cr1sh <Jnd inve.m1.nent~

25,674, f62 52,177.276

154 _._ l .. 0,:17,'.JOO _

I ,548,869 !,438,0(]0

7!)30 ~-n~-~-n~-~-n~-•

S79'/'.90,40Y ! J}47,6)4

_ 2,90\235 _

1ht: Cl'.y of Dn.ly Cil)· o_pcrai.::-.. i~'.'t in,?e:,.;tn1eql acdv~tJe:~: o.f'u.kr the piuC.cn'. invr.~:.;ior i-uk~ (C!.vH Code Sec. 226 l 1 et 'Thi::; afl.i..1rds the City a bt(\.9.d speetnlm nf invCilment as k1ng as tlHj

investment deen-:.ed prrn~.ent and is ;if:bv-)~Lble under c.ur.n:nt statutes the State c;f C:1tifi)mi1.1 (Goverrui1~nt Cod1;: Sec. 53600, et s&1.)

33

investrnents ax1~ ajkJ\1tted in rhe foJ:ov1U1g media:

•>

Coihneralized Certi ficat.es of DepDsil -~Jni!ed. Stat~=- Tr~~ury notcs1 bonds) bilJ.:3 or ceriifrcates {"Jf i1:Kle':-'1tedness Regl::1tered ~1:~rr.e i;,.•arran~s or tr.-..~asu.ry notes ..-:::r b(mds of the: s~ate of Cajfornia Borids~ rh.He~~ warrnnts nr cH.hei cvfdcm.::et; of 1ndebL~x!.ness crf s ... 1y J.ocal State ,)f C~Vf0rnia. £nduding those of the City 1Jr of any agency City (J~ligaticns is.sued by Oan.k:; and isuaranteed by s 11:drcrn..l ag,;ncy or Unhed. ~.l.al(L.s

government-sponsored enk;:pri.S<-3 Banker1 s acccpt:1r.cc~~ Ccmmcrcia.l papc1 Neg,Jtiable certifkates of deposit or ·time depo:-1ltr; piaced 1.~.:jff1 sonn11c1-c,la.i banks arnlior saving3 and iun;_1 cornpanlcs lV1utual Funds Local Agency lnvestt::i·::nt ~Fund (St2:1ite Trc~i.~urer's Poo!) Re.purchas~ ur rev·crsc n:.:pnrctM~c ag~e~~rneut~ SW1 h·fate~.:.i County Treasurer'~] Poc:i Passbook Savings Acccu.nts

The City"~ HiV 1:~ti:1:;;.nt pdicy states tha: the ''financia'. irt<;tltutifrn rr.ust have an offh:e hi Calif0Inia snJ that office L·:1u:.:~t perfi-1nn i.he t;fJ;~-;a~;:t]on:~ with the City··· As. of June :;o_ 2001, tbe Clty had $297,000 i:·i a Certificate of I}eposlt vvith r11;.; Fh·sl Natjunal BmLlc of t..1arin. The ban.k pre\.~iou~1y had a;:1 office i:1 San R21£1eL };larin County that ,.;:losed and moved to Las V~g;:1:s 1 J"\cvada, Th~ City intends to di~conriMK: the dtpf;:;i.t \.vith the banJ.:. vd1,;n. the f.'.~."TtificaH~ of deposit ;_natures in Jt1.nu:ny 1004,

The Cily\.1 inv-::stment3 f.i.Ie carried ::it .fair valtH\ flS 7t:~q1jire.d. by gencral"iy aci;ounfrng pnnciples. The Ci iy a(~justs t.he carrying vah1c of its investmeri':-$ f('t· reflect "i"heir 1:aluc at each fi.scal. year end 0 and it ]ndudes the effCcts of th~;,.,;,c adjusunents il"1 income for that fi:ical year.

The Ci: y vuluntarily invests m thr;. I..c,(al Agency Inve::;trncm. Fund fLAIF) that .is r,;-gulnted by Callf'omia. G~)vernrnr:nt Cude St,c-tion l 6429 un!Je,r Ihe o,,.ersigtt of die Tre:1:sun::r of Lb~ Swte. of C.uHfornia. The Cfry reports its frp .. ·e~lrnenl in LA.IF ut rhe foi.r 'ir.,Jue arnrn.1..nt provided hy LAJF. The bahmce availr:ble frn- 1.vithdra,vai is b.?..s~d on the w.:c ... n:JJting rei.:·ciJxfo rrnlnti:,ined by LAH\ which are recorded on an anv:r·tL~e:d co~t basii1. Included in L/\Jf"s investment portfolio .are colb.tern.lize:d rnortgagc ob!igati,:..1r1.\. sectiritks~ oth1;r a.:::.set-backeiJ. :se.<.·.uritir.:s, kt:tns to cerrnin s;rn.Le furtds, and flc.ating rate )h1-mcd by f;;,~ckrat agtn<.~~es~ grYver111neut spcmsored enterprist.:s, and c~Jf[.'H)rat!.on~,

G. f!V'i/ENTOR l'

Jnventory is vaked a: cos:, u~ing the thst-in~ first-out methoreL For t:h,~ {}c·.ncrai Fw\d) lnvent:_H·;t:;; contjst of i.:or.1.sumabl-c, supplies held for ccmstirnpticm, c..11.J d(; not constitute 11a,·ailabie .Sp.f:ndabli~ rcsc.1tE"c~·-;", even lhev art :1 t:omponent of net 1:.urrent ~ssets. ~-;ncO ;1.n,otm.ts ar,~ ccrinHy offset '.)y 3. :cc~cr,;;Jtion.

- For pr,.;prie.wxy fo.nds, ir .. vent:)rie;; reprecent materials and ;mpplies for opcrs-tirms. The ~;cnswnpt.ion n1tthcrd of ~ccounting is apphed to irrvcnlnrie!'i.

H. W,4 TF.FI firl.LfTY ACCOV:YTS l!ECt:lliA!Jl.E

1'hc biH8 u;;;ag{; J"o ... vn!er utility -;__:w4r.Hw~ni nn b~r.nonthly basis. Each cla/s rnet1..~r re~1dtngs •lri..", un 1he 1:c.~t busint~~s ,Ja)'·. At a.ny given frmc, an average of one 1nonth's usage: j~ ;n:cead nE<l

Tht·s.e unbJ.11,Jd cstim;:; .... ted usages h~.v,- been recogtiizc-d r.ts. n-:ve~1ue and n;cclvr1bJ~s Jn th~~ ·firnwc:ial _:;;taten;e.nts of the enterpri~:e fi.md.~

1.

~'~d:;~;;;;~:~:,''.!:!et~::~~;"~::1z:::~~:,ii{'t'~'.~~::~ :.t" i~;:~:;'.,';;;~Jn1::tg~~~'~);.;';;;:, ,:~;~;:,;;;:,;:,~:c,;:,~t:;r.;,:i;h~~ do not c(;nstiture avaiJabk r~.:~onn:.,es sit\ce rhr.y !1.re nC!t ;J con1ponent uf net -:.urre~t assets. These advar:ces :1cc111rJ.date sn.nuaUy rmd l°K·cau~e interest revenue J:: not expected to be collected ,..v1thn:._ the ne:i.::t year, the a~curttulated. int,~rcst has bien r(.;flect~~d as ddCrred rcvenrn: ln lhe Gcnns.l }\,nt.L (~urrtnt portkins nf !ong-tr~nn inil;rfund k1~ms rec.t.~iv~~blc (n~po;ted tn 1(due fro:n'1 asset ac:om1ts) nre Gun:--idercd avaiinblL: :~p:en-rlahk n~sc11rces.

). ACCl!MULA JED UNJ'AfD VACA TIO!'{, CIJ,H'Pl~"';SA TOJH' !iA'D SiC{( LEA Vi:"

Accurn.ub.ted unpaid taken by employef:~; ihelt r:mployment, lhe Cit~/ i:~ oblJga1ed tc, rnake cash payn:u.-:nts. tCI· tt11;;n:. 1:in tern1'.nation or retire:tt.iCT"Lt ~n the srclary rates then in effect Clty ern.ployees tec,;:.ivc f1orr. thli t..:t:r1 hi twer~iy-eight days vac1-.i.tion each yeJ.r.

1~:~i:;~:~:,~:{oc~;;.;~;~~;~; ;.~·;:~~:,~:o;~:\;~:;\::'.i~'., (!:ttr:~~;:n;:~1~~,)1f(:\,,:~:::1,;::1~/:f ~.~:,~:l~'~i';~:;:e~~j :~\;:i~::~~;,:i~i:;~~:·::,h~~~:;:;1:7~;~;~~;;:~:1'..~t~.~:;:dti~~"~g~e~.:e~~l;~~ ~z·i,~~:~~:\~: ::1:~;);~~;~~;~ 1n L~ffoct Tlu~ v;:ill.:e of ves:t~d sick leave LiabiHt:v fr)r all ,~mploye-es q~JJ.lified for retirem_et:..t on Ju11e 30 of e.aeh year if; accrut-d

35 36

Ba.lanc,e July L 20')2

A.ddhicms

Busin,;;ss Type

$613,0jj&

0125152

--- (4,41 \_532) --r.- _ _i~?JT5~~L

-~-1!':l:.:~. == $657,446_,

""''"""=-$38,616.

fo,al

5.755,503

Comp~~nsated ~bser,ces are liquidated hy the 1l1nd that hi.~ revonl.::d lhc IiablHty, ,_fl:c long=term. portfon of governr.n~ntal activities cornpe11sated abs,ence:; is liquidated prirrn:lrJiy by the Gcrn:rai Fund.

L. N?OPERTY TA){ LEVi'; COLLECTION, lrlAX.lJ'fVJHRATES

The· Stiite: Leg:i.·Jatnr~ ha:, d;,:tnmined th:, rndhod of distrihutk1n of rccetpts frorn the $ I .fJO tax iev:y rw;ong rhe co1mtyJ cities~ s,;:hoo! districts ar:.d other dis{rin~. Count.its~ cities and scl.io.:J] districts may

~.::n~:,:s;,·;,::;~·~~:::1,;::e;~: u:~ f~:; :~~:::~,;~~~ r!~;~:::; t::,;~:o;~:l1r~;~::::n:e::h:~:~:e Sar, Ma.co

Valuation daks Lien/J~vy dates Due Dc1tes

Dt:iinquent a~ of

f,.·b.a:h l JarnJ£ry 1 )OS-'0 on 1'..Xovern her 1 50~1t1 on Fehru~ry 1 December 10 ;"\prH 10

UNSECURED r\·farch 1 fammry l July]

J\ugrn:t 3 j

Th~ tem1 r'T_Jn:~ecurn1~ 11 refor~ t.n tD.xes on pr-c,perty' nm ~ecured. by liens: nn re2J prc..pfrty, Pror.ierty taxes lev~ed are recorde11 as revenue and receivables, nel of e~~tlmated uncoHectib:e arriom1l~~ ir.1 the fi~czd yezu:~ of kvy, Pn)~tt:rty taxes vvhj,:J1 cannot be recorded as (',Ur.rent year revenues: in accon .. hmre with the modified ~ccruaJ h.L~i;-;. of accm1t·1ting: have ht.'.e!', recorded ti_::; defcn .. ~d n:v:!rHH.:s

. M. RESER l·A T!ONS AND DESJGNA TlONS OP FL'ND EQUITY

fhe terrn 11 rest•ne··1 is used to Lndica1e that a portior, of repork~d ftm.d equity b 1-::>gally restricted to a spetifk use ur net avaik!ble f~)r apprnpriatinn (}r expenditure .. 'Tbe City C0u~ci1 or the City tvfa.1,agex o;,..vil; ~~flmellmi~:-:. dc:;ig;wJc fHfflion~i <1f u.nn.~scr,:ed furn.i ~quity ba~ed on tGntativ;,.: .f\.JJure ;-ip,.;nding pla:1s, s~tch plans are ~.ubject to change, have :net f.}..'!en legally 3.uthmi7.ed. cirtd may :1ot reim!t in expendi~1aes Unn::se;-ved undestgrn::Jed portions of fund. ieqrnty represent financ-ii:il resources l.egaH.y a\"aihble foij uses oth{~r than those tern.a.ti .:.rely planned_

H.c:?i·..::rved f\)r Enc.1mbrn.1K(S. ·· to ridkct ontsi-r.ir1di ng c~)ntrn,ctua.! oi·,E.~sntions tor wbich good:.; and •;er..rKe.as ht..tve rHJt 1-K::c:n -:'."i..::cc..ivcd.

Rr:~;erYed fo.:. P:-epaid~;l lnv1;n'~one::i, Note~-; Recciv~tbk>,, L0Gg--h::rrn h1h;rfund tt.:cci\·abks and Prcperty Held for De.,,,,:.~lopn:ern. - to rcfl~c1 that prepaid exp~nditur~s., invu1torie::i~ long-ten:n nutt~::i rece-:vabJt: and hmd heh=: for lrivc,:tr:1L'nt do m): ccnsdi.uk iJVtdL1bk s7.x:mlahlc n.:E-ou.rccs in t.h...: g~Jvt:rnrnt:ntal funds.

R1,.~scr-veJ for (:ap1tal Prnjects '" to account f;)r developer in°lien foe:1 and other monies restricted by sl..i1ll!k tc1 the d(:vdopmcnt and rnt::1·lntcm1nce of Ci1y capita1 proj~cr,;;.

Keserved f~x Ke.~tf!cted Purposes - the (jty recejves grants a-nd other re1/(~1m_es legal!~,., restr)cte.J frH ~cna; 7 1 fi.i_ndJ;-:in:;

Reserved for J.mpre~t C.:ish Funds thi:se D...mount~; reprc$t:.nt in vari.O!JS City de_purtrn!;ntB 1:J fa(.:i~it.ak: sm~]t nonrou,.tine,, pun.;has~::.

l)esigcaled fOr Lc~uipmen: RepJ;~_ct~rner:t - fries<'~~ m.oriies ;:-ire set .%id~ accor<ling \Vith t:1e depre·:.:iutiorj schedul~ fix a :;pecific piece of equiptT!ent. The reserv,,:. for eq_uiprr1.ent replncei-uerr!". increa:~es generaiiy i:c the s&.:.11c· amount as 1.iepreci,::.tion charged m ead1 ,:1f the intcnrnl scrv1cc :m1d eaterprise funds and lkcreases y,.,rJ:1::.>:n rnon~es ;;ue 11s.ed to b-uy t:~piac-:~rnent equ~pment

De.s~gnated for Fi:e /-1i.;.:1p.anm.ts - th1~~s~ monies a.r~; set aside fr,r expenJ.:.tu;cs specifii.::il.!1y for 1.hc replacement of fire equipment Becaus~: fire equipment i~ a YCf)' ca.~ita! il\3rn. the. City h::.1.:.; d1os:_:n to d{~~igr1at: lhc t1rnot.rn! g:e·;1ernUy dt:~tenn~:ned by the sc:hulnk R,r fire t"quiprne11t f1w future needs

}7 38

Dc:-ignated f.)r Recyding .. th;~:,'"-; rrmnl(;;-,; rJirc set as~<lc fr>r e:,.pcnditurcs r.o reduce lhe ·1mo'._rnt of n;.fo.se by f:ncou.::.1ging recycl~ng cf reusable materials

Dcisegmik:J fur Pnssi.He Fui1,ire Clatrns ·· Ihe City ha:1 a se]f.)n.s11r,1nce frmd th.r=il is 10. Mc,nies have l_x'.{:n §d 1).sidc !n thi~ ,-c::;~.:rve ~n thf: evetJi that the City \vil! he h1..t;.!Ie -cfairns. -fO:: p..:.rsonai lr.iury or a~c~dcnt o:· other sig:1:1ifica:r:::c cian:1age vi.:!thin the City .

Designated for Capital Projt:cb .. thr~~,}e fond~ n::prc:~t.·:111 amouiits rn1tlcipatcd to be e>~pended la the upcoming fiscal ye-~~r fiJ-r capital prc~je(ts

Dcslr;r1atmJ. for Capita~ these i.unounts rcpr~')tnt ~rs1imatcs; of' the cash requ.ire:d for e:<pe;:·HHtures ir: various v/~c:h are ncc('ssm-y to hddgc thi.: ~irrK'. per1o<l b-... -1~c-:,.·n yca~ .. (nU and the rece;p1 (1f 1najnr r~venucs~ s:;cb_ a5 propct1y W.xes a.nd se-:.-ver service fotes biUed \Vhh pt\-irerty taxes.

1,:mesnicto.t des.ig:rm.kd {Dr;

~ :qu!prn,::nr replacem::·nt R0eyclin5 C'lp!1.,.1I prn}x.ts

{Jnrestcic~e4- ;n,Jc~ignal..cd

tTnresH \('.ted., d·estgn.ated fr}r.

S9?9.,237 $5! 3.5()4 22.9(\'.i

2.594,415

__ 11264;8.97 - ------·· ---·----·--- ·--------

In fonr,ati c1r, S{~! f..

Ser;,1ic.es lnsur.:rnce -------- ----------------

EqGiprnt::u~ n:p!.11cen:ient Fin.: apparnti..is

S2, 167~282

Poss]h!;:; rt:.t'Llf"r-; ~-l2ims

lJ·~-re~trieted, u.rl.de~;igm1J,;::d __ 4_·7~,:,_.s_o_ ~~l3,66S -----·-

REPORTING E'.;iT!TY

The City's Bask Fin11m.:i~.l State1nents include. the financi.a.l activitjes of the City~ the Daly City (R.tdevelcpm.r.;t,!lt A,.genc:,·)., tht: l"•J0rfr1 San t./1.ateo Count:v Sar1itatiott f.h~lrict~ afa.!

the D2ily F2c:jli!.ies Finanelng Corp;:,ra::.ion "Th-ete· !Cnti1i~-s a!(' contro1kd by gcvern.ing ·Dna.rds cons1stmg m.embers of the Counc1L (\nmcH m.emb~rs are financially a.c:countH·:::de for these cnlJties' operatons and ap;nove debt i~s;u1;s ;::1,nd a<l-op1. budgets. C\)Jnp0n;;nt unit reprn't::: for the R~:d-::v~:!Dprnl:TI: /\gcncy can he obtained from the C11y of 01-":.ly Ciiy, 3.l1 90th S1n.T1, Da!y (jty·. Califomja 94CH 5 .. i 895.

TI.1c R..:~de;.'ekprncn.t Agency ,,,.,,r,_s ~:5tat.,tJsbt::d in 197 l fr_":t lhe rn.uvose of devekJp::"!g certain portions ofth;.:~ CU~/s oldej' busine~,; arez.s. and is i:.n,er:-;L:cn h) and depcndt:n~ tipon the (:ily Vlhik fr.e Redevdcpmt~r1t /;..g,e:ncy is o. separ?ce legal ond techn~c:dly an admini1;ttative arin of Jhe S1iie., extrd·~lng State

it is goven1e1d zn:J co1~trolled ty the Ci~y ('.ounciL The activities of the H.e:,icvel!:.:,p,,1H:nt Ag{-~ncy ,1re ind'..!(kd -:,.-vi.th the SprDci;:J.] Ri.:~vi:~nu~ F\md:;,

Effer;1jve July 1.i : 9(i5, the North sr~n ~--iateo County Sanitation District becan1e a sub5idiary district of the C1ty. The- City :--i:~t. 1:..1p ~Hl :-;,,nterprise- f.JPd tc· atccn.mt for the Di.str.k.t's OJk-:~t!Qn~,

Thi= activity of the Daly City Public: Fa.cij~ies Finan<.:ing Corpon:-!.tion (th{~ Curporntiun} i1: inchided in the Basic fin .. 1nc.ial si:atenl[.;>nt~ v,I~thin the North San !\bteo Cotmty Sanit:ni.on t)i~tri.et En:r.=;rprise fund hcc.a.-i1:1~~ th·~ Cit~.-- Cou.ncH ::-.its as the Bot=-trd fen \hi::; ·:ntiry. "I11e City established thf: Corporatlzm to facilirnte 1he is~nance ·::.tf Certificat~.s nf1izHtir.:lpation to ~:rnTil]iete m1 expa.mdu·n prnjcct !(_rr the Ni_·,rth San 1vf.eJec, Com1~y Sanit(!tjon Dh:trlct T:'1e Ccrpotmic,t'i a:.-:ts a~ a conduit for the leasing of';:hc facihtit] of the Sanitation District (Set~ l"-kte 5).

Note :t

At June 30~ 2UO.\. 1he Cif), had rnade cc.1mmitrne11ts of approximately $. l 3.9 rn.iii~crt fi)r constn.1ction 1.vork, legal c.nd ccm5uiliPg ib.::s, anl purcha~c.:..; of :..;uppiies and cquiprncnt.

Not, 4,

1:APf[ALA'c'.';ETS

:\H capital nsseB are valued at historical cost or estimated his1oric;:1l cost if .1ctual historical cosl !i not a.vr1ibb!e, Contributed t;apitul a5~ets at~ vdu.ed a::. 1heir estimated fair ffH:trkd va!l.t.:: nn lhe date :.,~-i11tribnt,::.cL

39 40

AH capital n~set~ are v~lu.ed at histor.ic~l~ cost or eJLirnated hi:::tor-ic::d cost if acttJa] his1orical rost ls not ava1labk. Con.tribu·u.:J capJtaJ as~~ets are ·v'alued at their e:;nm.a1ed i"iiir n:.a~kt~l valu.e on ~he tlBte contributed, The City~s policy ls to car)itafr .. -:c afl asseLc: v,:ith cost~: ex.cc~ding $25J)00 for infrastru,:turc, $ LOOO fr.ff aH r)t.her t.iassr~s of ca}lit,,:1] afisets~ and -,vi:h uscf'u1 Eves exceeding tvvo years.

"\Vith th~ im1;,lcment,1!i::n of (il\SH 3,:\ the Ci\y 1us rei::orded all iis public d;::,rnam (1::1fraS(l"lJcture) 1:.apiV1l assets. in~]udc- roads, bridges,. curbs a,11<l guu;:rs, stret't3 aml sidev,/alk$~ dn1inagc. ~yf,tems a..1d ligb!.ing sy~-tem3.

The City ({ep1·~~·~·-jah.~s capha~ a~sets over their estiirrn:c::d usefoJ lives. T:,e ~1·1r1)o"'e nf de0'"''·cci·J-iioi-1 :" i·e the cot;t of (.api1nl asset~ ~q1.J.itahJy mrwng uU users over the i·~~~. ~~1~ tl1e:e ;;Sm:.~ T::~ a~(~::1;1;

tci depr-cci.aiioa expense each )/ear reprcserits 1bat yer.1r"s pro xn.t~1 ~hare Gf th~ cest of capitzd

D,;prec-iution is pn.rvided u.;ing the strnight ... !in(; mdho<l, \Yhid.1 mt-rn,s the cost cf the ass.et i~, dlvi.f.k~d by it:,; ~.xrcctcd useful lifo in yt:ars :ind tl1e re;:;ulr is charged hJ Cl(.pcn~c <.:ach yea~· until the a:;sd i~. f\dly rlepr~-r:.iated. Tb.: City has a:;~igwed r.hc useful 1jves listed below to i;~.piL;J ~·.sets:

Uu")d~ng~ Equlprm.\nt. Furniture & fiKtme:; :::tn:'.ets. w-1d Infr21stn1cn1rc

S.tati0n:-i

2.0n)O ye.a.J's J-20 yea.::-s

2~-,~,o y~urs

40-50 ycms ,to--~·9 yea!: 5

S:s..nlml"ion Su:Jsu.rf1::t;ie: Lines \Vat:·r!Vl.;iins: S,;;,wage C\:.lk.,:rhn r.1c\!j1i~!s Sei..vageTrr;;it!nrem.F,1cJ:dt--"5 Se·~vii.ge Di_~po~,a! Facl!it1e~~

! Q._4iJ years 15 .. 50 years

·n1e C!i)' capitaLizi...:s m.,~jor asset pure.has es and 1mprovcm~:nts which. irr,:ri;;nse the useful life of the related assets_ 1\1.irnr purcha',ci:: and rrn.iiine nepair ~u1d maintenance costs ,u:e charg~d directly to expense

rifajor c-:utfo.ys for ccipital aS:it~ts and impro··nTncnl.s are {~upitrl1i,:t.':d as pro_ie,cts are t-onstruetcd. 1nterest incurred during thf; cc}nstn.:ctic:n ph~ise, i'3 reflt\.:ted ir1 the capita1Jz~~d va.lue- \,fth~-: asset tor1struetedl net ef m.t('rcst ean1cd on the in.vested proceeds ,,)Ver the srune peri.od,

A. C1.PTD!iL ASSET Al.WI1JO,YS .AND Rl::T!REME:VfS

4l 42

Cap(;il hss-d•, kfr:g r:ic:pr(~a;;i,1kd

dJik!\r1g·,

~;1;;\.•.·:i.~r:: fr,.c;.~l!ite$

V/d1::.F .... r·;.;n;p '\tatu:,n';,.

\Vtlt'!I it:l(r.11-iu·:,

B~!a_nc~· Ha.l~t:,:

. !"w.Pi: ·m, x1n2 . -~ ,J.~idtt1cJr1s .-- _ R~:irem~~·tt::: __ Cr ,~;,1:,;fl:rs ~· hffi.~ Jf), .?Of,}_

.)2,~·1S,2ti8 $14,3~ r

--~-,T23,51) _ 5.2~4/JS-3

7,]8,:!,0t;O t1/Jl6 :·.-~65.D81J.

45,8:i)(j,l:1(. Ll i, ~~5 i (~71/6,it~(I) 4$.l 2\607

S:.%JA!.7 rn:n10 (l05,59f,} 5.C 19,529

'1.J:,icj .9}7 Vb.WO) "1)08.,81!

:.:.2 A8!~)3 -~ 4 !)16,31;}, 2,42:'.i,6{! 2(;. 15 $,,107

6.2(19, 7~14 ,31ciD (J.4l(1.073) (4;2,27(i) 4,,B1,S7S

~\:?. l 1.375 2lf.."!J0

2t,%9,6D I;! 22,WJ'6 {TN,---,·~;

1, ... 12)/i'J~ HJ3.Lf!1 f9856&}

2,3?5 Gl3 l::<l,91& \l·i,573)

3 7~-~ 1._N'1' -t;n_a3z 2.iru;,7:1~ !_!L,,50? \!;04J5!))

R. CAPJTAE ASSET CONTRI.8DTrONS

Some ca_pi·tal ascSets may be a,:;quircd using fi;cforai ::!n:l Stah:" gran\ f~1:nd~\ or tfu..:y may be contribiJted by devt;lopers 0r other gov~~rruacn~s, Th;:~e r.;ontrlhuti•.ms tH='.: acc.o-unted C'Jr as rc-·,.re:}ues at the Li.en.: foe capital asset:~ are. c.:cntributett

c. J)EPRECJA norv ALLOCA TWN

Uc-picc'.~:Li(1n expense ·;~ charged to rJnctlor..s ·;.nd priJgrams ba~~ei:1 on th<': usag~ of th~ related a~:sets. The cn1101.mt:" HHr~cated tc, each fu.1:1.::-tion or prognun are l~cS fiJll0'.,,1~~:

?ubfa: safety f\ibiic work~;

Cuhu:·e ,md ri.'.:cse.(1tin,1

Ec·::;::oml,'._~ ;.ud C(!ifD.W~inity i:h;.\1elot~rn~nt

Str::,cif. ;,;r,d_ mfrastructun-;

>-i:-1mL:pa.r!rnerrraJ

C::&:p;tal a;;sc:ts ht•Jd by thee C:ily':; inh:r.m:d .'>CP/~t~e

fands charged 1.0 th{: ·',lario:a!s fund.ion'.~ Ll,:.l8>::£1 t:m their u~a:ge oftht :-:1~sets

Uu~i~t·;.;-Typc A,;:tivW:es

Vi;:11~r Uti!it't

r,~i1J.~fr:r Station

'.S:1n.lt~i"tlon D!1:trKt

l!5,P9

15,7{)]

~.0&3,265

403,59)

$85!1 ")91

26::;_3 .. 19

Note 5 LONG TERM Dt:tlT

Addit.!(51:S, Rs:,~rt.,11: .. uti.; J1-trt:: 3t\ ~VtlJ Porti1)11 ___ ,,,_ __ _ __ t...._.,..............._,__, ~--·--·~

$!•J0.()2J

, 1~1,~~n ~,----··-~

-·- l 0,870.0(1-0 _

On Au.gmit 13, 2001: tbe City cntcrc;d into:\ capifal l,;;~s~ agreen1en~· totaling ~Ll84/~-T7 to f11n(! the Civic Ccn'icr Energy lvia:nagemer..t Project to j-.nprr'.·~~:e the lighting~ heating ;Jnd ventilatlon of the building. Prmc.ipal and irit_~~re~t payrn.tJ1ts arc. due ~n1n·u~<1Hy on Au_r~{u:~t 13 u-:1til 2011. Dt~~b1 s,~rvice fa repayabh.: rro::r1 Ca_pita! flrojcet Fun<l resourc~;·s.

As of June ~~O, 2003 the Chy had a. bank. liue of credit bearing inLere:{t Jt 5.70 percent tvfrmth.ly interest payrnents ·.,tary and a final pay1.;i.ent v.rrn be thK~ on October 3~ 2005, The initial $1' 6(.000 dra,v-do-..vn on the hnc ',Nu:: m;ed to financ~ . .irnpnrvenv;nis ~o cffice space u::;ed ~n the ('.ity's Sn1al! Bu~1ini?ss h1c,)bator Prograrn. U:.1d1~1- thls .P:rograr:r, th~~ Ciiy assi~t~; t:tart-up companies by provkJ1ng ofli.c~ space and ::,;ccrerarial and ;:Kirnlnirit1abve ~ervke,s for n foe. Dehl servicf.:: is p.:lysble from !enls collected fr0m smaU businesses panic),pa(i;-1g in the~ Fr.:.igrarn.

Se,L,te:ntJer 2\ 2002~ rhe City issued. through u in.te;u1edia.ry caHed the: D~iy City PuhE1~ Fin:ancing Coq::,ora.tiun'l S ! 0.,475,000 of 2002 of Particip2tiz,n bear~ng intcn~'.,t 8~ 7.

perccn!. to 2T5 percent to retire $ :0,870/tOD of outstanding '1992 l?.,.efundmg Certificaks of Pairticii,c1tic,n bea.'ing interest a! 5 petccnt to S. 37~ pe~i:.:~nt.. Principal is due an1urnHy on June l. Jntcre.st due t.;emian:rn.mlly on cacl.1 Jum'; 1 and Dec.ei-nher ] J ,.1ntil 1 une l ~ 20(J9. Debt ~:ervi,.;i;;: fa repayj.bl.c fro:n San1t?.-ci~_m Db:tdt~t Enterpris~ fund opern.ting ~eve11ues. As a n::suh, 1he 1992 I-t~fUn1_fo1b~ (\:rtlf~~ak~, Di' Partk.ipat.ion ~re: considered !egaUy d~.Jea;i;,~d and~ o.:.-:; ofSepternbi.::r 24. 2Ul)L \\'t·n.~ no longer an obligation of the City. T:ie refuiiding :-eoul1t~d in :1n er,tirium]c gain of $699~093~ rerr-;-;senfong th1.;: present Yaiue. of the S2i025/H l reduc.tjon m fu(urt debt si:rviee pB,y-:nenb

Annual <lebt se~.,,rice r:.:'u_ufre:n.1(.::Jts are .shov./n bdow for aH 1ong .. term debt ·~,-.·hh. specified ~~epaymcnt te·rrn8:

20(14

20C:5

2006

2007

20C.S

$44)03

JG ,6 L?. 1,670.DOG

i 34.525

·114,767 29,559 ~,740,.0DO !C0,,'.2S

\20,l)U 24_~}6 ~,T70~;:100 /".;,.:.,··~,;.

395.J ·~,O 3 :·.6-1·;,• 855,000 2 L3'J5 ·--------~~·&-~- r-~-~-·----·--- ______ ,...,..,, _ _..,..,..._ ----·----·--~-·--

During fis~al 2COJ the C~ty ~uthcriztxi a $4:500,000 note payatk~ guaro.:11ecd. Ender 1.he Lkµ}t;trn~nt of Hou.sing and Di;veiop1ne:1.t's (HUD) SecTion t08 Luan G1.w.rantee Prog~·arn. Proceeds frorn the ruti:~ v~'d ! be us;.~d tu f"'inanc~ th~ dts\u1 rm.d c-on~1ructio11 of the B:;.y:,ho·?'e Co,rnrrnn1l1y Center. As .:;f JurK· J.Ot 200:J, 1be Cit;/ had rHrl ,Jr;;,\vn den.vu an:/ (,f Lh~ fi.iu<ls J . .va.llablt~ under th:~ lo~in agreement.

Cf\FIC1 CENTER ]:1 uH:d tu account for :renta~ ncfrvlty ofrea] property owned by the City in ~.he C~vit' Center area.

45 4(i

Fiscal 2003 ~egrneat infore1~tion is e.~ fUHows.

lJ,iJ:!1;1.es

{:mr<:".r.i-!:;:;bClrr.i~;

u~r..sm;;\,:,i

TC!i!.l.l.l tt=:t:IB....:ct:,

_____ lhJ,..Ci,7 _

~-2~~

C.~r-~J ~~tof fi'g\,'d;cf'W11s. ~~'1$~ ai'i<1

Dmngt.'!'S tn IV.et A$'i.1!<

C;.,i:!!~ f\r ~hVl"-°e';

t.."l!:l;,-~t~l!lr;'

D\!)r,;x.,mti,;-;;-1 ¢r.vm.~ CJ.}~ Qf1t~.-tlm£; ~1:-;;;t'il'3tJ

();.~'llti•1gir..>T,r!Pc

:1.;;.'Y::Jl.'.'.ifJ•!lf, rr,,.;;;.i.1..:;f loq:¢~~)

l':,V1'!i':l"mt;<K~LMl.lt;:,

NrJ1n',;:,rl~!it:ILkr;.tt.,-:;~)

rn,129' (4\s:r.<-"'

$$1}'!/l(,'5 (l(..J,.;91))

Noh:-7 fl',JTFRXUKI) B.ltLA:\{~l?.S

rh.: Sa.nit:J..frJH Eritt3Jp!i~;e Fund loaned $L2 minion~ ($833~267 at Ji.me 30~ 2003), to th\.': Cl,.,,J1.; Center En.l1..~1T1;-:~·;;. F1.rnd ~o finance. corhtn .. lcfo:m of' C:vt,.:: Cenlet l·k:rth H.~nHhldinb ;;.;ast:s, T1ns ]ong-terrn interfund adva.t1ct;: be~1.rs m.krt·~·;t ~t 5.119 r>::::cent and i~: jut', in monthly ir;.,(3!.:.iil.rn.cnt~; im:iw.ljng jnternst, \.Vith a r~n3'J payment due on Jun.-:: 30. 2009. The~ payments are bemg rnJd,e from Civic Center opcraLint1 I"l..:V\.~nuc:.:;.

Loa.ns pay.ni::sle fri.:lr.n tie ~<~·di..~v-i.-iopment :\gency tc'J r:,e Ger;eral Fu_nd h~ve no sched:..1led repnynv:nt date" tvfonJ~f.:~rn-ent ha:s j_ crish flov:-' (:f redevcloprner:J ri{:tivitie:, th:·ough fiscal

intcresT, to the expiration -:-.ifth('. proj,:~ct arc::is_ Loans cuffendy be~.n- :nterest a: 2.S91 thJ.;; rate adjusted annua!.ly based on the L/df rate 2.s defined in the agrectnent between

and Agency

and frt~ City. The fisctil 2003 ;;t.dditlons :o k~.ns p;:1y.1bJe .mi,onnt,n,; to $97G.,7 l 9 represent ini-eresti o.s the 1erms of the ~~greemt:!nt fi~ca! 2003, the i\.gency

that any· unpa.id interest be ad1,_kd to tht: pri".JcipaL During

47

fNTERFUND TRANSFERS

1·ransfors bctv.!cen funds: during the fiscal year ended June 30~ 2003 1;,rere as fol)ovvs.

}.m,:,1Jnl

--~Pu-ttd_~}.oi~:1.l~:m~"~Tr~;.Jf~i~~!a..._ __ ---- "rl.m,:i ?_(;~·~·111.~ T,:m·;f.cr ______ Tran'if=rtt~C. -·

Tri:!mforSt:.11lc.m S;m:t-.,.1nu Dl~tri.;.:I

c~11..:.il s~..f',-ii;I.'!, l"'li::::rna! S:=rvic,c fn,~{j

ln '"Cli ;ntilt-i~"-O: S:~rviv:~. lnt,::n;!:!I Sf:.:r..,ft";,t For.1

:-:;~!':l(':;-;.Jf-"!m4 Mc:JHH Ve.h..id·::,"!; LI1krmu 81;::Vc.··::: h.!mi h1tunn<t,:0ri St:, •.·:(,t:::s lm,:rn.a! St.,v:,:.e run~i Ft.:dern] Gi'l:ll,ts S[:-t.::fa! Rev~1l!f.~ Fund

Cir.rn::.r;<l fund l,;bm,4t1r,11 ~et\.'UX-~ lnkrn~l 'Si;:r•.,k,.':: FoJJt:l.

,::c1~crni Ftmd !fl!imTI,:1\;tllt ~;<'.,'\".,~::..:. iD~·;.nl~; s.~n'<C1; fL'"tK!

C-;s,J;·~'ll :;~1.·k.,e~. l!".t~r.al $\.1:vk .... ~ Fm1d

~! )95 4D'.U\8!

!,3il-?,6if2

---~~~·~~~-

-·--~th~~

111e p\.UfJOSe of the 1n:.~jority ef lran~fi::rs .i:, to reimburse a firnd that btt~ made an e:-:per!jditu.re on beh::,lf of ~1ctJ1i~.;:- .fund .. General. Fund trru1sfer:; out l)·p'.cally represent ~m operating ~ub~riJ.y or in the ;,,::~se of gr@Jts~ a match l~fanother frin.d:-:;~ expenditures:.

Internal b~1lances are pre:::ented iu tbe enHty .. wide financial stater:·,c:nts cn.ly. They represent the ner

Note 3.

RETlRENfENT PLAN

aik:r the climfrmtion of ,,.ii such b;;Jar~ce:s within

Suh,limfr1!!y aH City [:mployee:~ ::;_re eligible to paxti~ipak i;-:1 pi::n.t~frm phm1~ o!Tl:ri;,;d by the Califorria Puhhc Ernpbyees Re11rernent System (CALPERS)~ an agent rnuii~1pk detined benefit pens10n pln.11 Hmt w::s as a ·common inve~tment and admini~t·~:'.'ative agent fOr 1ts tnember eJYmi,:;v,~rs. C'ALPERS p:\r1ti0.~~. r1;tiremem and beuefits~ ann"c..m.l en-st of Hvbg r,djustrnf:nl'\ t:ealh be.1.ic[ts to plan mc:nben \i.-ho musj_ hr; employee~, ~nd hem:f:ciaric:::. n1e City\, empkiy~es pa~·t~<~Jpat,~ l.ri the separate r"':>;:i.fdy (police ?ind fire) and }.,1iscel1anet:nJs (aH (lther) ernploye(: pb:ns. Benefit provi::;icns w.nder aB p1t1,ns are estt1bilshed by State statute zi..!.1C- Cit~{ resolutic1.1- B~'.n~fi.t'.I f::te ba$t':d on y,:::rns of cred.ited se:.rvict.\ cq1....:.tl 1u ():lY yi:;ar r;f il..1H··ti.;.:nt: cmploy111~;.1t and fin4l comper:.3atk,n as ,Jefirn.;EJ in ;;ach 1,!at.. Henefirn for Safo:y Pbn rn~mh--=r~ may nvt cxC~'-cd 90~{) of f1nai ,xm1r,.,~n:satlon. Funding contribu::ions for these plans ilre determin~d :..1n.n.1..l~1Uy on <1 .. n ~ct"u~rial basis a::: of J 1.lne. ~VJ t,y CALP[RS.; the City nn1st corrtribute thes:e a.n.1otn-~ts.

I(.~t!reme:rJ age

nc--1nd.i.r.s, ?.<:: -a ''YO of ,:tnn11al ~a!ru} for each crcdik::...-J. s.:rvic,i..; ycM

Rl'{!t~m;:d ,:;m~·i.oy,.,: r•Jn:ributiori rates Re-qdred e:niplo)·1~r ,,,.-c11r::~L-1.itl,:i!:l mte.:s

monthly fqr Ui:-50

9%

rnr.mthJy fer rife 50

7%

nmnJ!ll:~ !nr lik

50

0%

49 50

CALPFRS deierrn_ine~ [:ontrlhi:Jjo:n requiremen~s trnlrt_e a rnndif'i.caiinn or1he Entry Ag;:•, T~on~'.1tt1 f'-.iethod Under this rne,rhod, the Cir.{'i; mtal rinrmsJ bene:t'lt cost for -e.aeh e:n-1ployee fr(::m date of hire to date of retiremer._t is expressed. as a levd ptn.:entage of the related total payroH cost. r-;crmal benefit cos~ under th1~ Jvfothod the leYe1 Dn-1c,1.m.t the ·~n~ployer rn_ust pay arrnual1y to i11nd an ;:;n1pk,yet~··s pn"Jjeckd

~~:.::~~;:~~

1

•

1 b•:;•;:11.~ci~::~~e·;:~1;:;:~.~~:ge of to co~;,:~;:"!c'.~t~~:~ti~:.8~:~~:t/1:en:::su:!~m:l]~;~ ':;;~t~~

comp11te the actuarial aecrued _!iabilit;y The City dc~-~s _not hBve a ne1 pfnsion obligalion sir~ce it pays these. actuariaUy required coirLributions 1nonth.ly.

L:ALPERS U;}t~:.,i i:he. 1narkct related 1ilal1.H; met.boj c·f ·valuir~g the Plat/s as~~e,ts. An i.n:ve~tm.e:nt r.rte:'. Df

~l:~:;:o'~t ~/ :5e;::;f~,,~~:~;"'.2\;~'fi::~~1::~i~~::nti1J~):~·1e';,~:1~;'.:!~~::.:~;;ei:5:~~::=t:~:i;:~:i:~~' ~~ chances ln actuaria] rnethnds axe c.rnmtized. a.~ a k:vel percentagf; of payToH on a. closed Oa'"'.;s over tv,.oenty ye:i:s. invesunent gains r,J:d. ]~)ss.e·-s are a.:::cm~Jufated as t}:iey an~ :realized artd te.n per::ent of:he net :>alaJ:.ce is 2hi-1101iized ar111.ually.

The ne:t r1sse1:s of the t\i;:,:~ i;tin~ are coinrn.ing}ed with the ntt assets of nH CALPt.:]{S. pbn:~ Jor lnv~:strm:nt pl..~fpGses The. faJ.r vahie of tbe net assets in the Plans changed as follows dw.ir:.g thr~ yei~ e-nckd .rt.we 30. 2002:

·q~:·girn1.~11.g na:a.~Ke June 30, 2.00 t Co-n1.r-;t·l.i~im:1s r._-r..:en·6d :-_kn:::fi!::~, Rcfon,L and .1Vl!.st:tdbitCous .A..dj 1.1-:;tcv;nts

Exp,~clt:d foi,,t::i;tm~ut Earnings Crr;.ditcd

Ex:r,eel.::%3 li.duar;il] Value uf A~sr:ts tVi of fimc 3C. 2001

$ l Jt~)02.Tl7

L3R3;545

(4:63~,3:16)

s j 00174~,7 59

l.58'.\:ns (}/123,445)

R~d,;:v;;h,prnem

A.~':SfJCj

~/![s.:.:dla11,;·o·,::; -------$44 r ,a:r-,

\.60])

36 922 -·----·---·-----·---

Annual pension costs~ r(~presenting t}·1i;-; of c:ontr1butior.:s required 1:iy Ci\.LP·£Rt.;, tOr the ti1:ree .fiscal. year~ en<l,.~d June 30! 200]~ ~,nd 2001 ~.rnount tn $3)68)07~ $2 .. 886,827 3n.d $';\S<;6!241 re~pi~ctiv~:Jy. The re,q_113red as the re!ciu.lt

rnade lh~.se contributions as rcqui.red~ 1ogci..her V/~th (:ertiin immt11f.~rial aJnmm.ts: payrncr.J of other addHlom"!l emplO)"'i}t; cornpensation.

'fhi.,: Plan~.-· adLta.rfal v:a)ue (whid1 differs fro.Ill fair value) and fi.mding p:-ogress uver the rnost recent tbre;.:-. yea.rs availabk is set forth below at thei_r acmarial vahrni.10:n date of .hn-H~ JO:

Entry .Ag:; Vahn1t!0n A·cc:n1i:d

.?.OQj

2002

___ Uabllfty __ v

S l05/,07,7J5 1 l6,4J9)7,i

l ?.9,247~025

En; ~-y t\~·~

'V3.h__;~d0n ,"'"\f"=:n..;e:d

··~·-Lit1~­$64,M9.749

?.OOl 7.fi,85),616 200? ! 001.554,045

En~·~1 A£e v~-dua~i,w Ac,~rur:~d

__ Lir-tbµ~i =~

$~03,~ '.'16

2(10 l W5)80 :1(}0~ ]4t\312

\h.t.!L!e of

f!...sger~ -----------··

$125,2.!J.,3\15 l34,1D2,.277 I :t:\60] ::rn l

"!00;749,759 rn,>,·~~l/i36

\'ahl.{.:Uf

447.8)9 433,SJ..;

Unfunded

( Dver fantkci)

(l'i'.862/103)

Unfi..mdo:-:d. (O\'~rfanded)

t23,89t), 14J) '',3C:l},(,09

Ui:iilr,ded (_().,_, ~I i.U!ldt::d)

U42/i59) {29})222)

Funded

Ra1:in JjS,6%

l 15.J''.·3) 94.9(%

iJLl%

Annual

Covered

13,~160,996

L4:.IJ4.C82

A.rr:1,n!! Co1.:er,;<l

19,871,926 2JJ,~9,nR~

UiifL;ncJed

(0·,;crfondcQ)

Liai.J~Hty ss ~'.,r;J

___ of PayrcJ! __ (l56 3%) f:_]2.7%)

J-J. l ~,;'.,

Unfi.indc:d (Overfomkd_~ UabiJiW['!.-;'1/11

Cnf1irK.k:<~

.:\.nr;!;.~j (Ov1;;-ri!.mded.) F:i,.;.nJed (\:n/1,3.;e.;.i L-'.~biJit:; ;1!; %1

__ ._PayroH ---

42).4~}ij N/A

30f:l,O~~· N;A

Audihxi \ffllU.K~l lin~mci?il ~-t~tcniGnl~. ~mi ten }'{)1U tr·'-.'.n.d infi)r:m:i.tk,n are available frt·,n1 CALPERS s.t P.(t Box 942709~ S:h~I'1"~rru-:nto: CA 942.ilY-2709,

51 52

DEFERRED CO[vfPENSATIO:"-~ PLAN_

City ernpJoyees mt1y defot a pc~rtion nf theEr com.pen,;a~icn ·11nder a Cit)' spo:1sor-ed deferred cnrLlpen~ation. pl~.n created in accon.la_}.,.e;c with lnremal Revenue Code. Se:~th:n .:157. lfnde.r ti1i~ pbnr partieipants are not taxed on Lhc Jcf'cfft:d pDrtlon of their compensation m1til disuibutcd to th(;tn; distributious 1r.rny lk.'.'. tTEidc

or,ly at tetmimitkm.~ retirement. <leat.l, or in an emergency as defined by the IrHt'.rnal R,;,..'.vcnue 8cnricc.

The hiv.rs gcvet--:c:i1~g defoned corr,_pensf.!tk1n plan nsset~ r~quire plan a~ssei5i to be held. by a tru.\t fi)t the exciusivc benefit of plun pr .. rtic1.pants and tht;~ir b(·nefirfaries, Since the assets held under these ncit the Cltyls. pro:)e:ty ::<.nd are not sul:ject tci Clty cor1trol 1 they h:.,v~ l'wcn exdu.dcd from rhcs~~ sta tenu::n!.s.

Note HJ.

'l11e Se!f·h1snrin1ce Anff.:rn:~i Serv·ic~ Fund w:.1.s .;;stahlish{':d as of January l., 1979~ HJ provide f.~>r payn1t1:nl of v.-orkers1 cornpensafo:,n clah-ns. At July i ~ l979: the Fund v.'a'.'I rx.p~n-~kd to cor.i.soiidate esscnfjal!y a;1 of tJ1e City"ii frsk managcm.ent progra.rtlS. fttnd revenues ccnsi:1t of intet\~st earnings; rcimbur~cn:.ents of c:lamu; paid by the fu11d an<l charge--; h) ol!"n.~T f(.!inds. The iatter is ictended to rnatch the charges iOr

~~r1~::~a~~~1:;1s~~';, ~~~:::;:@i•~x;:,~::: ~!,;~:~~E~:;;,~1:~~:o::;~;:;::,,:~1~:t;i~;~:::;:~; l~:~:~:~~g('!~~: c!uims.

fhe City h,15 2 se~f in.sun::d retention for !..he firs.1 $250))(}0 for general rmct autornobi:e liability cbin1s and m.2,.int~Ain~ ti $10~000 deductible fOr property LJSS(~s. L·osse~ 1n e:.;:ce~s of fo.e reten1io:n up lo $19)50:,000 on genera] and autom·:::-l1~h~ !!nbfoty a.re covt;n:-d by purchnsr;d ~xte~ss irnmran.i:-c. rhe Clry p-0.rchases

~~~!i:I~, :;::~;t,:~:::lii~:~t~~z~~!~,d ~~~'.~~;r;;,!~;: ~-~~t.:,:1~.:~:::;c~'.~:~f~:·~;~;:r~:g";~!gt~,'.\t;:; CiLy chiEges tt1 expense the incurred. liabilities for claims in CRses a.vhere &uch amcunb arc rea~nnab]y deknn1n ... '1ble t .. tid \.Vhere the 1ikeW10o<l tif !il1bflity exist.:::, ktcluded iite estirnates fr,r incurred but not reporte-d claims .. i;vhicJ1 Ztn; cak::ul~t~d based on dafrns t'.XJlerir:nci~. hl1 add.Hint\ 111e City ha.s reserved :-G~na1ning n::t ~ssc-fs (,.:11-'1:.ich provision fo no1 charge-0 to ex?en:se) ftPr posslbl1.~ Cu.tu.re c!airn5.

!n Febnia:cy 2U03, the City joined the Caii_fbrnia PHhfo:-. Ertlity Insurance A.uthority (CPEUi.). a ioint po\"ver autho-rliy ,vhich prnvlfh-!s excess v:orkcrn' ccHnpens:ition li::)b]lity claim:; cot'crage ahovt~ the City~s self-insured retention_ of $3)0~000 pe.:- occurrence. Losse-s ahove the ile1f~lnsured retention are ·pooi~·d \Vith exce&s re}u.surance pltrchaseci tu a S5t\01)0/i00 limit. CPl~lA. was establisb;·:d fbr the pm-pose of creating a risk rnanag..:n;cnt pool fix all Cabf~):--nia pubhc entitle~:;:. CPE1A is gJJvcmc,i hy a Board of ]Jirecrors con~ns(ing of reprict~en.tativcs of its rnernber puh\lc cnlitie:j. Dm1ng the. JiscaJ yc.ar end_ed Jnn~ J.0 1 2003, the City con1.ribu.t..,.'1 :S57A78 to C}lE\.i't,. fi . ..1r c:Jrreni ye.ar C.O'-'et':."ige. .A.udited frnaadal stak:m.ent.s fi::ri:: CPEIA arc available fror:J CS/\..C-L1,xcess InsJJrance J\.uthority at 30fi' C1c;1d Canal Dri\,e\ Suite 300. Rand10 CoTdnva: CA 95670

The City·,~, iiabll!ty fbr uninsured clain1s indu.dlng a provision !Or dairns. incu.rr{ .. '-d but not teported \Vas cornputed a.':i foUov::,; has;ed on. :..'lalms expcr.ii;rK':e for tbt: ye.;;..~; t!nderl .hrne 301 2003 and 2002:

Note H,

NET ASSETS

Bcgjmiing balance c,f dt1l1n~ p:.ly~:ib!e

lth:n-;(i.':\:; 1.n e.sfonated d::Uw~ habi lily

(.J.am1S paid

?.00.~ W02

$1,693,886

2,:100,936

~~--$2,505, 100 0

$!,.100.931

2,1 l7,Y22

G,\.SB 34 adds the ccnccpl of:t-.. k:t .,.1\s.sets~ · .. vh.ich ls nt.;asured on th1:: foil accrnai b.,::;~js, to the c<~ucepl of Fund BalatK:.:\ which i~ 1neasJ,tred t..m tht.~ mDdifi...;d accrual b.9sls.

-~ct Asset~ is the t:..-~c.ess cf' aJI the City\; assets ()vet all Sts UabilltieB~ n;ganlless of forn:l. :-let Assets ae divided into three: captions under GA;:-.1H 34. 11F.?;S{~ cap!.lons apply only to Net A5scts.) which is dc1cnl'Lned orj1y at the (.~·i,;~·rnrw~nt-1:1.ridc ~c\.c:L a:nd are described belov.•:

hwe.::.ted in Cup.ital Assets, net the curren1 net book value finance 1hes<! ass,!t~L

debt i..lescrihcs Lh1; portion ofl\Iet }·\ssets wbich is n.:prcser:ted by Cily's eap?tal assets, less the outstr.mdi.fig halancc of any debt· iss.:u,ij w

R,1.stric.:ted desc.ribes tb.e poti:ion t)fi'~d Assets which is restricted a:, t.:~ use hv t"be tr;n-i-is and corrditi\ln~ of agr-:ements 1~vith out:;ide p211ics .. gq,v(;rrm:eErnl reg1lh1~.i.;)ns:1 fa.ws? or other: restri,:.:tions vv'hich the Cit v cm:u1u!. u.J~tflaterally alter Th1..\)t~ include (hwt:loner fees received fnr u.se on capita.l. pn)~ect~, debt :,;ervk:c rcquiremr:-tiJf£~ arid 1;JB1ds re.strict~d. to low and moder~crtc ~ncGrm:. purpose: )

53 S4

P-ursu.ant h::i 1h~~ n~IJ!Jirerw:.;nb of (JASB 34, t2.s nf Juty 1~ 2002~ the City ren1ov~.".d an advance nf' S3:~J~27,969 rei;;on.t~d in the Cencrnl Lon.g-T ~:nr1 Ob!i g;:,tion;-"; Acco-..rnt G·roup ~nd recorded it r~1 t..~e Redevelopment Spec1~:i.l Reve.:1ue Fund. The effijcl of thi'.£: thn.11ge w~ts t·.) eH::ninatt· iiabil.itie:;

Long~Terrn Ghlj~H:!.lic)!ns Account Group, und :-f;cord the Ealiility aul a.

:~:~·i~::~;~~~, i:~:c~t:;~t~~~ !:10:~~t~:!;J(~)~;~~~~:~le;~,;:~~~t :~.~c~;~i~~;~~:1~~~~ ~:~~.m~; ~i'~:~ii;}~; Ci!y

As of Juiy 1 ~ 200L 1he- City recaLt'goriz.ed $81))96 of depo;.)its in the Speda! D~posit t1~1t;eu.:y Fu;1d 1.;}

the Ceneral Fund.

A.~ of July ·1 ! 2GCO.~ 1hc C1iy chmiged h~; method. of met~uring the current portion of c·{)rn.r.ien.~ated abse.:-.;.ces to confr~rn1 to {JASB ':,4 n:q:.1ir.:.~rrw111:;, Thi; ch,1nge resulted i.c an i11crease of the (kneml Fund compcnsa.kd abs~n.ces ]iabHlty and (l reducfo.:ir ofi.i.md ho lances by$'.? J i,634.

Al~o~ as re-1.{Ltjn.:J by (iJi.SB 34,. as of July l, 2002: the City closed ~ml!Tih~ttt~r.i capital in the :1mou11t of $76~96.2 and $HJ,647.AO! to beginning net a-ssets recorded in In1err,al Service and 1_;:nteJT,rise Fund:.::, respective~y

Noto: 12.

!~11RIJiJ{/~rfAffTT>..:: SPF~C:[AkASSESS!vU'.}<[T DIST1UCT

;~/ ~~~U~~~!~,:;;;! \;~,:~:;01::~S:~'.:::l~:n '~;;~;l:t il~s:,'~:~~~~;:i;,~· S;~::E:~;;,:;~'t~;:eri!~::~~Jj~;~ i~1~;~:;z3 principal .amount spei:ial a;;;scssrnenl bonds. ir1 July 198\ and subst:::4m;ntly perffx-n1ed refbancing an_d reass, ... ssrnents of C\srter/JvJardn ln July 1987 and again in December j 993, Prin:2ipn! mnrn.1nt ol' the Dicx!ern.be:-1993 refi.mding ·Unprovement bonds1 1Ssued n ... ~der the 1915 Impro'vccncrJt Act. ·was :f~i:,245~0i)O at Jun~ 3t\ 2003.

The City is nvt obligated ·h any ttH.lrin~;r for the sp·edal assessment debt, In foat lf1e bt_1nr,h: ~t.T,: n.-)1 the genttal oblig~tions of tl:c Clly, .nor i:, tb:· (:r~·dit ot' taxing pcr\\1er c.f the City pledged for payr:1enl. 1..)f the bt.~nds~ a.n<l the (~ity is undtt no obligation to odv{mcc ::''t1.nc1::1 ir1 the event of d-e.foult b:~· e prnperty o~".'.1er.

;~:tr :l~;:;~l~:~~;:;7il~:;:!::~1~~~:1:fa~;~~;~~~::~:r~:if ~;::f~~:,~if ·~~~,:~J>~f :~If ii f~f !~~~; fund.

Noie B.

The City .aJ.rnini;:;1.crs ;;1,. housing rehabilitation program. using Housing .and CGrnmllI'city D<~vdopmcat Dlo1;i.:. Grnnt hmd~~ thli.t is a(:.t;(.Yo.nted for in r.he Cornrrnm.ity Bleck (]rant Spe,."-fol Rev{;nuc Fund. Cnder frJ.s program; individuals 1.i..1ith income,; b~kiw a certain ~e'Vel are eligible to recci1/t~ io\.v ink:re:;t bans., sccun;d by dec:d5 of tru.st5 fer constru.cbon ;.vn~k on their homts Although these loans a:i:d nctes are

~?::;;'.:i~ '.,;~1'.~:~eE;:i:

1~~\~~~,,:~;i:~~~hnce has lx,m offset. by defem:d revc:nve r.::, they are not ;;xpected"'

DL~rinr the p.-.:::d ended June 31\ '.200:\ the Chy rn~de lean~. ~o s1x p~uti,::;ipants u':lder 1h:s program and ~J:10 1A's the folkv:ing activH:,,r

$ ! ):! G,58!

:0,109

Ending Balance

:·1K- C~t;r :10.s ~ note receivable '-~f $201}3 l at Jur1(; 30, 20CY\ due from rhe s~:ir1 f'...1at,::o Pte-Hospital l-:mergency Servicx:s Prov.iders Group, a jointly orgm.1-izath'in estnbiisheJ to p~ramedic st.•rvices to con.s.tituent!;. of :member The Group used proc;_;::"tb nf !h'l: b fin~1.n,.;1~ the 11c4uis1tlon and insti:dlation c:if ~~:o:rrnnu:ni.c;'.'J.tiomi equiprnent :1nJ h_g_;:; agree:.l le, rtpHy tbe note :_n rnonihly installrnentri rn·rr a :six-year tr:rm v,~ith the last in!tiaHrner1t -::i'uC'. January 1, 2005 The balance outstanding on the note bears ]merest at the rate t.fffncd on th-::.~ Citfs inv0~tment:1 in the L,ocal .i\gency Tnvesunent Fund fo:· tht: prior j'i;;ar, plus cne-half of one p(~ri::ent (-2.052 pt'n:ent at June ~10; 20ff;). ThG -inlcrco,t 1atc is atUusted ct1Gh .J!Jly l b;-i_sed on th;:. prior year L/Hr rate. ·1he (;roup ha~ piedge-d 3ll asse:5 purch~sed v1ith proceed:; of the. note as ~.ecu.rity.

55 56

'j 'ht~ ,A1.ger~cy has l:! Disposition J.ad Deveio·pn-J:n.t Agreernent V{ith a dcv(<opi:;t under \Vhich iht~ di:velo;ier has con~!ru.(·,tcd the finn tYvo of a four phase., $200 rrillfo:xn project Phases I and U co;'1sitt of an cight~irLory office b~tilding groiJnd flr1or retail spa·::e~ :rt-:~taurnnts ax:d sho.t?s; surr-:H.:mding a c~ntral event phiza~ a t.h1·e,:-:11.ory d1cater cornplex~ and [1,vo parking str-d<:.tures. The Developt>:r ha . .-..: ohtain(;d a $350~000 i.nevocah!e fett~=-~r of eredi.t in favor of th\; .i\gency to act HS the perfCim·mntt~ deposit required under the ,\_greeJYiei~t.

As of .h.me ~:;c\ :21JO:\ the rcrnai:1ing Hot1;;l Phase parcels .cmd Phase !II parccL \ven~ stiH i.:ii.-vnt~d by the A.g,ew::.v. rhr:.s~ p.arcc}·~ tln'.' ii) he sold. to the De·velopcr and used. fOr f.n~111:: improvements required w1dt:r th~ igret.",1.1:1cnt indudina a hotet a sec-ond uf.lh:e b~tHdir.g '<·\-·iJh ground tloor reta.lL, additional parking., larnh;c·.{.~ping~ and ~1..-n cl1~vated pcdestn?in bridge.

N{}H~• L5o

FUt<D I)f:FlfII

-rhe Red;,.:vcbprnc:nt Fund had£~ deficit ac·1otmlfr~g r.o $ ! ,\642)34 and the Buikfrng Jv1vin!ei:t.ance Jntemal Service Fund ha:d a ddkit arnouut.ing tc, Si64,8.2.8 at June JO, 20fft The d.dlnis ,viH be dimlnated vvith 1Utu:re reve-r~ues.

[Trns PAGE INTENTIONALLY LEFT BLANK]

ity of erce M'erced, California

Cornprelwnsive .ilnnual Financial R .. eport

For the year ended June JO, 2003

PREPARED BY THE CfTY OF i\-fERCED, C/\1.J.FORNIA

Gty (if Merced cc~mpre-hen~ivt'! A1u,1J_al ::Finartda1 Report For th<c year ended June :30, 2()1)3

Table or C\m.tents

fiNAJ-ilCIAt Sl;CTION

Stah!'"rnen1. r:f Rcver,.11esT E:x_peT1djtu.rPf; and Cb.iul§(\S in f..:md B.?..lAfKe.s.

R.c,cn:ncilia.t:on of the Gove1nmenh1l F11nds. ~~t.a'i.·1:"-:-:n.en.t rrf Revenues. Expt::uditurl:'.S a...nd c::nariges in h .. JI1d Bnh:1.r.1{):':'.", to tl,~: GovernJJ",(~ntr.V-Vit!i-.:' Statf:lil{1 Ht of Arbt;'i~i.es ....... n-a•••····--

Prnprietn0;f Tw1d Financial Swtcmrnf:~~

Stctt~rnt:?nt af CJ~sh _Fkrws ..

F:du:."iff'f~! hmd Pinartcfrd Statenunt:s St.ateni~?n:t cf Pidu1,.i;~ry· Net A!S~t't~ .

S'!aterr!i0nt of (JtangrE":3 i:n tiduciRry ~Jet Ass2b .

...•.. 2-

... 17

.18

,,. .. , ... 24

..... 26

,-.,.28

. ...... '<!'.

, .. 3(;

,J9

fo thP f-frJn~:~L;:d,le ~Vn_yor anci ~'1e1.nllf~H; of the CI~y CctuKiJ of the

lvlen:::edc

\'\:e L:iv,~ a'l1r.Utc.d H"it' a<:1:ornpao._ylng Bnc.1Ki~""--1 st&.trz:m-e.n.t-; o[ g,;·vernn1erl1LL1 c.1d.ivitk~-_. th<~ hu~tinest?~typr: activitfos, each £11.nd,. and ih~e ... ford uf thi~1 Ctty ,_,f ['vfeTc>Fd, California (City} as nf an.d th{~ yC!ar 301 2(J(13_. eolLY.:-tive.ty <:·o.u:rprfo~ t.ht: ha!~k firw.ridal .sh:1t:en1.ents .21s lJst~.J in tbe tah1r.:~ of contc:.nts. T.h~s"i.? f11'lan-daf .lit.iltcmer..U;: i:iEJ the rn,;pc,nsitbii\ty of t~e C.ity"s n-1..."1...vtager.r .. ent Our re:;;pc)rt.1!1n1H.y i1 h'J Express an 01:-rl1U.on on {h~:r.;1..-: bci:Jk fin.a-ridaI str1.t('1n0 .. ::··d.s ;XJ.diL

~;''.~ ~·:~:~cf;t:~; :;~,~:[~~::~,:c~~:~.:~,~~e :·::l!,e:~:::~~;;:ct;~,.:::~~:1:f ::;:~:\~~r!,:~:ti~:;:1:~;;~; ·~;,~ Comptrolii:r Gcnf"ro1 of thr:~ Unil.td. St.a.tt:..'S 11-ir,~e stnndards fe-g_u.b:t:: that \Ve pieh~t c.n.d perfoTm the audit to (~·bt,:t.U.1 :reascnab1e a=--sti.t:uKe about \:vh-Pther i:h(: h.a:si1.~ fir.a.._-ricial staten1es1t;-; zire fr~e c=f nwte..ri.al misst~tc:mi::.;·iJ;. A:n .lud!it irK1n~i.e:s exttr.n.i:nin.g. o.n a ti.--'.St has.is, f;..,·iderJ(·e f.1..tp_porLll.lf Ll1~ .;;ntounl.';: o..'ln<l dt:;dcsut~/; iP the basic .fi~"l1Zi nci....i l st.ater;r;c,nt;:,. Ar~ audit r.J~o includes fJS~t?'S8ing tl1c ust~d .and signtlic11tu e.stim.a.tes .rnad-e by Irmn.:1gen1e:r:ttc .a:<i •nr-eH as f:v.aJu.afrng tl1e ff.,..,ex'all V•l~ b-eli':'v€ t11at m:..r H1.1dit providz,s a rei'nmn.c1.hlE: lv,siH iur {H..i.r opinion

sud1 bask"' frnarn::ia1 staten1ents reh:rred to above p-E~sr:·nt fa.idy,. in aH n•..'.'itctiul respects, t1le pu:i;i.tion of th;=: gov1:?rnn1f~ntal acd~,dtie::; .. thF '1.Cti.v.iiio:~s, each .IT',ajo.r fund, ~"!:n:d the

aggn""g.:1 h:• -i:ema .. i.nlng fund mfrHTnabm:l of thz; as of itine 2rtJ3_. i;i_ru.i the_ ch2,:x,g<'.S in fin.1.1nciaJ 11os1i1.o-n dl':.J e~sh fio'"~">'5. 1:,,:h{~r,e the;cof tor t1,e. ye:ar thE~n ended. :enrifon11i~y· with_ f/·~t\e:10..lly a(;cx~p!:(;d llGi:OUrttlng prlncipte~

As desC'rihe-d in Note '1 to a-~,.= b2iffiC finanda[ sti:!U?ments, th1:: (.:i ty sW.h:·n1i:,nt~· of the Govern1nentai Accmmbing Standard.·s 8cP:rd No. 3,t Basic Fmr.:ncii~~ .St::::femcnts-:m~i M,1roeve1,;r,d's f}iscu:gsrn:i anfl i\Tt~H;l'ts "''

Stott: tm.d GN1entrn.enf:s_; No. 37, [{a.Sf..:: Ff1:;iw,:af St,;1.teirt,':'t1J-s.--an.d },r1ana,g~;rrumt.~ Dfo.::·w;sioY: und ,;,1:,,;y·sis-jot Stai'.-:: :.1.nd G'x:.al Gm:-ern.1w.·;~ts: Om.nlims; and No. 38, Ct'thriH hn.rur.cWI 5f.,,f:?11t-cn.r· ,r\k)te Ditxiosun~~-

(}nr at1d,.t v~r:1s c:r.,nduded fC1r t}w purpose of .[onnlng cphlion~; cm i:}v . .-: frni':l..nci.al sJ,:1tern,=?nr:J that coHectiveiy c .. ,rrrpdse foe Ci.tf s '?-:J.1s]_c tU1anda} statr:rnenrs T},~'. infr:.rrnati~)n is p-1·e:-r-ent1.::.d fnT t 1f additinnal and is not a part ba-,ic fit"'taHd?J s:tat~·rtt(::nt~- ThP

.c.:·qj-)·,ecteri tn th~ t1udii-irw applied tD the ;.rudtt of the bmnc frna:::1.di.1J .".JtaJ.e·n1ents and,. in oar opi!;i~,r-i:~ -~ff·f~id}~ ·~t;~t~d· ut rrKHt'.1fal respec~~'-1 in n::-lation tD tJv:: ~s1c. fft:1::.r1d0J .. ~t:-i-t~ownl:1 ti'3.kPn as a. whalf·. Tfo; stdion a_n.d st~b.:,t::..·a1 t.1.ble" fo-rve nc~t bl~.::-n su..bf f?,_'tf'.d -::o the a.udUiu~ pnK'.edurE:~ appht~d fr~ the audit 'the bH~ic fi.ni:a.n,:.ial stB'tFiir\('11{5- rt.nd acc(ndfr1gly1

'i.Vi7: ~·.:-press no :::,p)nion on t}i.e-n'\..

,m_r,1i;; ,::i'm1.I111;r,·, fU. Sl:i'.,c i·I~• A'u;1.r·<Til,:_',:-·.u-.or~·, 9~~])')

In .8..Ci)Jn.:La .... "1ce with Cnv·P?Tln:~i::r!t 200:\ on ciu..r coi:1~idE!aTion of th:::

:~-~t..3n,d.;u·d~1· ri"-,,-t; have a.fao ~.ssued a int.:.~rna} controI ovEr firt.iLTlcial

dutt:J ::,..~ptf·:r=·tber 12. and rn.u tt'.:St'i of it1

'TJ1:e R.,::qy.i.t,~d Jni,;,11·ntatio:nf such a::;. :ma.nagem::•r.fs d.i.:""r-us:si.nn and i."iina.!y{1is1

bu.dgetary and 1..nfi)rn.1.aJio.n a~ listi.=d. in the t-)_bk, -of co1tf.;.~n.L~ aff:: uot a reqt1irt;:d part c,f the b21~,iC frnancfal st~ !:e1n21its hut is suppien.1enta1.r °t}'lion-:-n . .0:1.hon by the

~:::;:~;n~/ i~~~:~::~t:~r !'.::~:;:!:;~~'::~,;;~;:~::: ';,~~~:~~~e~t~;"':~::::: ~1~~'~:~t;:~scnlcttlon uf th,c Rr.-"1...1u.irP.:d Snppl-eo1.;::.·nt~ry h\.furrmr.i.:ior,. H.c)1A.~E'vi::.r,. "vle ttid. rv11· audit 1h,::- iJ:-iJcrr:t""i.ation an(J: express no Cip{1ck.n

rnn it

('~4,,',,..,__,: 'f Ct'.i-·t,.,H"''--"'--~ I ,

Oak.fo.rH1, Cdl1forn~ Septei:aber 1.2, 2(;03

MANAGEMENT'S D!SCUSSJON AND ANAJ.YSIS

/\.s miJn.agernent of the Cit"y of },foi:ced (Cityl, ive uffay n.·C\JeI:_;; uf Hw° CHy's finflricial state,1nentg lllis nat"I'i:1ti.ve overviev,r and ana.lyfiis of the finandtil nctivj_ti£~s of fhe City for fhe: fifK:al yea? et;ided Jt.m.e ?..O,. 2.0P.3. VVe en(~l)uragc read.1.~rs to cor1Side-r the IT~f11n1-,,:1tioH pre~enjj-:_-d h.t~e u, n1njun.rt:io~ wifr1 BdditJnrn:-d_ Urforma.tfon that is iun!.lshfld in thj;i !-ett\:ar of ir~nsmfrtaij which ~u1

be found u1 tht~ inb:odudo:sy s~chon .:if thi~ report end the Cit.y"s Firt:'1_1\("J.i'.d SteJf:"rner.ts.,. '".:hkh follows f}-11~ di~K~L~t:iic;n. Th(! Cit)! impl•::r.r"t.s::rrted Governrn_ental Accou:nting Strmdiilds Bo,'.lfd.

}~1~s;:1,;:;:,~~~~:'.:j ;t,!:,~i~n~~:,;:~'.~~;,~:,~:::: :: l!:;sagement's Discussion and t\i1,tlysis

FfNANCIAI. HlGHUGh"TS

;;, ~~: ~;;~~~.::~~;,:~·~,~"ci:~::,,:~,~c~<"~:e~t~~e~e:;\~fr~'.:~ ::~~e:;,:i;:~:::~~:~:;::·::·::!:~'~ inc.rE~-il.5£-d hy $:'.,.6 :i:n:dlkn'L

;# h,.s, shov,.:r1 \~! the StaterrH:-:~rt e:i l·Jet Ass~t5, th~ a~set.s uf Lhe Clly ex.:.eeded its li&bJitief, ~t Uv::, ;lose of frte hsc2J yeaT by $356 rrdHicm.

;,"'- /\t lh-c end of the 01nent Hsca.l tht." uirre..~erv..-...::J fu .. ad. bcthui.ce ftJr th_~ henerui fund

Pro;'~1~c An:2i #'.2 actrvities ttnd d. $4- fftHEon HUD h-::m::-:" .. ng mUts.

ov ERV lE1N or THL HNANClAL STA TE',ffr.rrs

loan for 204 D:~ulii-faniily

The focu:-; i::, cm bf.\t.h the C1ty ;;s;; ~ 'f.·vholf.: .;:J.nd Llh' fund. fi.rhuKia! St{"!.ti:'tnl:;'nts, i;h:~ 1:n.ajc.r indl\:jdt~:::..l fo.:n:& .. ~ (~f fhe and ,:ategori-E'S, ;;is w~U as f.h:b,;ciary fo.n.:.fa, (by L:ni:.! type) ;:Jw cornponr:nt ut:lts. ik)dl govennnent-w;ide and fund iiJi~n:..~i.clI sh::1t{;mf:n.ts (:. .... ·.ith .. ln the baaic .hn?.11t".::i-t2l t~bi.krni;?~nl.;;) 01t1:r;ori;:r! ucL{v:ltie:'-e ;;1..,i"; t~ifne:.1:·

!~~::::::;:;:: ::};~:.~·~;:}~';.;~~' a:~~.:~:cf~:r:::'~;:vi;~:;:;,;::t:,~\' a c,::,t{)~~:~::.d t~::, t;;; coht.trtn.., and ~u·p 1"t.'fl.'::~ctcd,. on a fuU a..::\:::rual,. cco:tt:n.,.:..h:: n·!:s(n.:r.rce b,-~sis, ·virldch i.ricoxporatei lor1g-

;::~;,,~:;e::,,:';;\,,r::;~~;~;;,!i;~/~::'~!~';,,,!:;;;;~:~; ~~j:;'.o~~:il~:::";if~~;;~:~~;r, :~:;: :~~s;:~;,t,::~ gc-v-e-rnmer1t:~1) t1...1 t:nha.n(c H1c:: usduh:n?.Ss, of tb.e info;rr.n.a.tion.

;;-~" ,;:~;,;::~::t ,:;! ~~:.;:>~::t~'~:e:~:,:::1~~~:t~~~i<~,;:~::al~:;~}:~!;v~:,~::!~, ::J}!:~~:,:sil~';;;~ ~:s;:~:'.':;'a:;e ,,, i\ w,,,fr1l indkator d -.vhethc'r the iin..:nd~J pos,l.i(,n of the Cit,· ls i.mpmvmg

'fhP: 5t&J.crn1:nl of At·liv.irics prr.-sent.'.'f in..fot1r-..nHo:n 5;[,o:.·ving holv th~ gov:i2rrunenrs n,;;t af;t+~tr. ch.e.;nged during th,:> fL~.,~dt year- A1I changes ki net a:ss.;:t~;. ?J.:n• 1·i:p"'.i:rted ab sn(,n as tht" illH.iat:r 1;rin.g ~7t;:r1t givmg rfot1. ti:. the d1,)nge c}C"etJc;;;, rcgi]rd1~ss of f:h(' thning of n2lat<:?d ctnh flo;;~ars. Th-s.1_.,1 :rcvEn!1.es and .are .i'i:pntte-ci in this stat-en1f~:n.t for so·mc ih-.tns th.-.it i.viU only r~~i..1H in. .;";a..~h flow~ iri. futunt period.s (e.g. u:m __ 1)il~ctr~d tctxcs and con1p.::·.nsated abs2ncf',L

Both ot the govcrnr:o.enf.·wid,e .finar~dal slaternenrri (fu,U1:ig7.J..1:-;l-1 fun.ctions of t'tu~ City tha.r- 2!n-:

~~~::;riJ'.f 1~:£:f i::~:i]::::~J:i':~!i i~f~~:;,:~';,i~~:~;:~:;:: (g:::::~[:~:i1i::~:~~~~~'.~~i~ gc1wr.al {~ovi--rn.rnent pnblk: :;sfoty~ park.$1 of Ht-e C'iiy i.:ndw __ i(:" an a.i1JF)l't water .. wasif~V1-'<1tc.r :,.nd ,eh,s;· servi,ces.

Titc :g.:_y;..•ermncnt-wkh-°' ti.!i.t:mda.l st.:xle·rn_f.·nts in.dud,..:: noi cmly· thE! City its•~lf

~;,~~}:.,::.~r:''~:~,1 h,,an,2:~;;:l!1;:~r;,.!~~:f :~hl~~;!;tc:::' :~~:ti:~:i:1;~1,; h fr,fi,, na,ocl,)_Uy

reported ffi the llcti_t'.ilii~S ol t.he G,a,ve1Cl-DCtWJ:lt-,vki:Cs Fund ru:1erncc,>L! S'ta,~.'.l·W:1\S,

:Fi.,nd Firun-:.:i.al Sfa.temenh;--A f11nd ii n of rt~it.!ted. a-ccm.t::th, that iD u~.fd to Hl8.b:1t.ain .~;;:,ectiic ::v_·frdti~s or objf~::ti.v~s. Th-e C-ity"

fund :.10:01:61ti-ng tD e-r~::,we ari.d d~morts-!TEJtC Ail of fchf; funds (tf thf.:: cw~ be div-ide.d

pr~tpfl~~rary fun.is ... ;.:1.nd Hdu,dary

{unction}·.~ reportt:d" .as gov(:rnn1.(~f.\.t.a1 :activitie.H \n. tht': f}J'VP-.rrnn~·nt--v..-ide statements.

~:~:::~~:';;; ·:::~;; o~~':1!~~;:;;;;'':~~,:,i_'!\;,~~-~:,;:t:;;:,~:r:;~~d:~~:e: :::~~~:~. i~;·\:,;t:~·,~:~ balz.:n.ccs ava:iklbt~ a.t L~2 er,,d i:Jf th(: fiscal y".:·\3J". Snch in.for:maticn m1:1y b,e

u;;d-.il in ev,,lu.1\irlf'. ,:

govcs1riJr.,c;nfs. rw-:3..:-tcn1, govenune..11.tai fund

fi1!":.ds is t1.r.t.tr'OW1.!J.:r tl,a:n. thnt of tl;~·! govf:rr,.:rr1ent-·;NJ.d,,::, the ininm1atiun pr2s(~nted for g,'t'i/e'n1t11er;t;,d fnnd:s

the ?/)Vernrr1,cnt-·-\vid.i:: irnp:.wt r,;f thf' slwct ~u-td the

a r-:.~on~Jfation tc fa~iHtate this compnrjsun acUrihe.s.

.maint~l15 t}J11-y ttv3.ivi:1ua1 ~vvei-nrn~nJai fltnd.s. lrJ.onrmb.un is '"''~r.r>tPiv in thi::! C<:•ve1Tmner1tal Fund Bafa.:tKe"'"'Sh.;~et and in the Gov£~rn.r1tc:1taJ Fund ""''"''n~1.:.r.

.Reve,~m .. e!-i}" Ex1>~nc.Hturns.. and Cha.ng,.=-s in Furt:d Balqnc4'!s for the GeneraJ Fund,. Redev~1op,:ri.€nt Agency Debt Scrv'ice l;und and t.'11~ RE:dl:-velopn1.en.t At;("'.ncy Capital Pruj~Lt 1-i'und, i;t/hi..::-h an?.: r.:'m1s-id-f'r,!!d tc, be- rn:1[01 fu.n.d.s. Data from H,e oth.~r six f-1...,f,tl:, c~-e

~:.:~:';;:;:'!":1~1~1tt'n;~g~,!;:;:,~t~:~::,;:~~1~~i~'.:~:~:~!:•~~~:;,1rn1:::;:~~~1:::s:.111~:.: t£-po1t.

The Chv Hdovts an i£r1rn.1.al b:1:.dgct .fm :~1J ib: funds ... A bu.dgeta:ry .:cmpariM:in 11.as ber.!n r;ovid.~d. for the Ftmd ir~ th(: F~~quired S11ppi~~n:t~nta;ry ln.for_rn:arion f:c de_monsh:ate corriplian-c~e vii.th the fmdget.

P,ropdeta:ry Fi1.11ti.,--Th::- City rnoin.GJins twn diffon::nt typt;'.~ of propr}2bry· fw::sd:: EnterprL~e P-..1.nds are ns,.:!d hJ n.~po-rt th.e .$Gm.e hr:nction . .s p:r·.~~enlJ?d ns busines..·:1-typ.e, activ:.We3 in t-he

ls pr!::::,~~,l ;;:::~;~;t,n ~;e c;;~~~:i.~:'.~':t:~~;,~::11~~u~~' 'c!~:.ts:,:~ng: Fropr.iety Staterncnt nf Rr~v:~'r..ue:::}, Ex.peIL"i~ a.mi C:hangt~s Tn Ftt11d !'-:et- i .. ~ss1:'t':i fo:r .th.e \AlastewateI

¥Vr1.st21-"--r.:?itcr Irr1.pro..,1emEnt Rr.:::.::;,n.--iaed \'-V(1.t4:r--V·leUs. ~'l/0::1.ter :..n.:. P.£.:.t:,..<: .. ,.v."-"'·"'"'H -y.;LHIL1~.;,. ;..,:itkh ·~ue r"Ort.i..;idr;;;ed rr1ajor ftt:vis. Dat-a fro.m .. the frnn ft.tn .. :i.s .:-1..rt=

combirred into a sragle, p-t<:'sc.nhttiun. Ir1-divid1.u .. d fr~_nd .1.at.':'l. for ,:.·:--;!c!1: of thi:.\st: aor:.-rnaJ;:-:,.r pH.rpri•;tar_y funds p.n ... 1,;/ided in the fortn of con1binlng r:~uh~n1e:nt~ ~ts.;:vlhtrc in thi~ report. lnh:<:.Ttal s-er>:ke funds at'e at! device u:~,l:'d to ar_;.:u_n.-1uL:1tE. and all.oc;,;rtt~ ..:::(1.1ts

ln.W:r-rral1y t.11.e City' .s vari.oi.1s h.:rn.dfo1.1.s. City 1...rne"f. interr1.a! servk,.~ funds to accrn.n1.i. fc~r rts {..V .. ::rb.:'1.,-~;; Li.:.-i.biJit:y IJ"i,5urance, Un(·rnploy::aw-11L E.rnpfoyt~e Bt:"J..V~f.Hs, Fleet Nfanctgen1t?n.t anJ f.udU.ty ·}..·'1.alnkn.aJ.1.ce..- [.:-uppust Sp-rvkc~ and P-eT;,;~Jna! Co:,:n.put:er \·bint.E'·11.an.c"t? fun,~.s. tt.1e!:~ sc.rvii.~es prr2:dt}-tnin.antly h.·uefit goV(':rm__r1t:1nt3.1 t:;thr:r th.,111

bct~jpt.,," 'y~)P funcr-· H.;_ th~v have: bf't:'.n £.n.::inded wHhi:n a(:1,1'vii.i(-'$ in the (~·;v~;;~:~,~t--w:cfo F~~; .~·a1 Stat.:·r::lt:Ht-t. In:Hvidual furtd dab:i lhe int~rnal ::;enrir;e hffi.ds "is JHO"vid.P:s.i in lh.e fOJi.Ti\ -of -...--:o-rnbi-..1in:s r.te.t,ew..e.nts:.

;~~~~~~";,,t~:~:d~;.:i~~;;;;;";~~~:Js "'~ u~ed :~:_,;~ft;~:\;.~t /~~;::::~;'~'lt!~ ~:;~:;:,~:::~'.},'.;t fl!1ancii1::l sta.te-rnt·nt becnu;-;c-: Hw resottt(c:s J+-;ose fu ... nds are 11::~t avai..tab(e tn ll-i.c Cit~i's

'l1w .accrn~nti..nf us?.d for fidm: iary furu.fa. is rnt!ch 1ike th-:::st

Noi.t::S< tu thlf> Bask f'in~,1ni:--iBl Sttli:~rne:nts--:n1e notes e-s.-:.eri_rln] to a h1·H m:ide.r:-:.t:1.-rid.irig ot ttw data

firr~·mciJ.l s.lattnt~r•W.

n-::kiitionai inftJr:o::ati'--m th3t is J.n th~ g.O"-'CIHTt"li'=:tit-\vi.ch:~ and h.trid

Other lnforrnJ:tfon- !:n addihon to the= b~sic financfa1 ;tat~rnent-.; a.:nd ,,u:m,~pt1n]'·i1·,R notes, tl1i:-;.

:~P;:!~:t~,~t\~;"~:~1:;,::~:; r;?}~:,:ide pemion contp,1.dsnn BrhPdu1es for tlK:- General Pu .. nCL

J)fOf/1.=.S:S

budt-?~t.e:ry

Currc-nt J.1n1~ oUii~r 8:-s.:;r:-its

C8pital a8S(.'itS

To:2: as.seils

lrmr~-t~m:1 !tabin~1~s Otl"!<-.ff ~1Rb1~Jtk::~

Tol,ii l';ibiWie,,

b;ie.<;;:tt~a Jr1 capf,:;zJ a•;:s:u~s, net of deht

F:.:Ji>lrk~tf,~d

UnresMctBd

CH·y af M~l'eMi

Survn1·u.u"'·y of Nd Assets

/l,r, of June 30, 200:l

Govemmental

235,0b2,801

'35,3 !-r1 .73~~

}1)342. :~o . ~···"''-'• a

__ . ____ J. JJO~M- .. fi6?

:32/iG3,JG6

1h)'tl,1U8 267,5:i6. lb7

35J23J~2:t

FH\eer1 percent of the City':'la nd assets r?prese:nt .re~ource.-;: that are subjcd to exte1r1a! reDtr:ktio:ns un how t.rned- "fht! n:r.n.aining bafon{~t'.' of $53 rrwlion .ir; the ·,mre~trktE:d net asr~ets that n:my to n1e-e1 the gnvenunenr'!; or1going obli~t'i1tions t(, citi.zens J.rld.

cred.:itor:t.

A .. t th.i:: end of Hre c.Ttrr--::nt fi.~Jcal tl,e City is abfo. b:} report pDsitivt; h:tla.rn.::es in all tlrree Ci)tf\godc-s of n~t a.s.;;ets1 both the gove1n!TH:1nt as a '\.i.,'hofa,.. as 11t'.aii ~1.s f1..1r its sepa:rah-: _go11ern.1.:ru;xtt.al ;t.n.d business-type uct:vi\.i,~s.

,.t\.:n;:ilj•si;; nf the 'L.:it·.:/E> 'l)pet~Jiu:rrn-Th.;;: foBG'!•llng table p:rovicks; .r1 surrn:::n.iH)' of t\e orf::tatton~ .for th;;, fE·£n ,endt:d )une 3D~ 2003. As noted e::1:i;lier., in the _fi._rst year Gi•,.SB i:rn._pkrm=.ated., the Ciiy :rs not reqm1·ed to _-pres.<?Ht comparn:Hve data fo:r the prior year

Ci!'/ uf i'd'1H'Ced Chang{;}~ jn Net. il\s$Mfa

For th~ Fiscaf Year Er:dic,O Jun~ :':ttJ 1 20(13

Pn)gra.:·-r1 :evBnrJt s: Cht~ri_t-~$. for ::~.l';cfv\ces

Opetal":ng n,ranls O:Vid ~.::-cmtrltmtirn:s Capit~~ ~,,anh, and c~irtribu~ions

Gen~r::.1! rev<:..:rn.1-e::, and fr·a··1:c-J6'rs

Ot!'":f't' l.3iCE>S

Tmnsfets Oit'aer

Exp8n'!i>.:'f, Governn:1Rnt:.::il ac.t:Vl'iies

GenB/;.)l go\.er-nmt:-ni

Public SaT(:cty

Public Vl/u::irk~

Rv:;;lne;;s-typ-e 13i::::tiviti·es: VVasi.ev•:aier syslem \Nastewa!er :rripro,/Btlt~nt

ReBtrk;tf_:(j vvs.ter~wf~l!s

\,\later $.V-Stem R.Gfuse (h\!ecilon

8the1 pivp; ietary f1_;:;1d$

lvh~l twp,;;;-n.,;;r;.s

hKteas.a- in. n.E~t assets

Gn·,t·t:rnmenta! Bu·sine:;s.--type. Totr=.:l

-· _. Acfr.rf~~e~s ·-· . ·-·-~.ci:i1.r'!'.l1i3~ ---~· ___ G~ver~~,man r. ·-

i 5);37 ,20(.1 7.533. •16;~

191,7'.3.5

a, ~.t1.1,. ,3 ·"f ~;

9}9~,97:i 3,"t:N.2?0

15,221.042

~7,863,"!42 :\ 1~}2.106 .~.,4 ... :f .2:J,j

14,0fi0,6·J4

$ 23.27 l.800

53"!,1:An

< 3.i?2/-!.~'3~

?,09~,722

200.B77

1G4 1 i32

5,588,Dil9 7,650,4916

$ ;}8,S15,00t,

:t/:i3'.\16.2 1~}i,735

8,334.315 0,79~5:rn; 3,'J''.Srl,27C

(21:rn;,)

-·-- i-OA?,£i.82.s J9,32l.513

1s.221,c~·12

1"?",853, 142 ~i.75:!.1D6

7,094)'22 2go_317

15ri.'J'.32 5,588 [189

7.il5iJ,496

__ -·-··-·-·--~---- ---.-·-----5~;~,Gfi4: --·-··~--- 559/15~~ -----· 54,30tf,077 ---- -~1.:327.:?,70 ____ i5,63_.i_,4~J

~!=.U~!:290~ ~J~.,;;,=";,;_;;:.,;,,;~,;;; ,=a,~,·~~,.,;;;;;;~;,:,~.\~

!S

Gov,en1mentaJ f'1J:f:1...,,Uif!;y.. Gt::.,vr.rm.ra:n.taI Acfr,l'i!i.c.s dccr~Gl'.d the Citf s tto::t qssr.~ts $.i .5 .tnillion. Re:vi:~:nut:!i7 and h"a.nsf-e.rs fro1n gcr'..:c:rnn10:nfai i.~Ctfv:tt_1.es totah.-:cJ ~'-(52.:1 rnilJj,:,n. provid1;~d 4?'::\l of the n2-venue ::.md (:h.rir_g£·~; for se:tv:i.::e$ pn..1vided 2'f}:;i of tkic rc:'Y,~nu<: :t"e(;eivt:d

during th-2 y0:.:-u.

The f•.:,llo"Ning trJbk: ~;.htn1,.:s th.e cusi {if e~.ic:h of r.h1:i r;.Hy' ~ n:mjor fH"ogn:1.n,1.'!; and the net c.)st c..f Uu.'.

progTa.rns Net n)t-t i~ th:t:: total rost ler,s- fe.er::. and ether direct r<..:vc:n.ue by the .~ctiviiie:~ Th,3 nd c:os'f ref1~<ts the ffna.nc.in1 bHtcfon lb~-i;t r~",?;*~S piac,21.l nn tht ,~ach nf the progra:r.n . .s.

City s:,f Mern~ti Net Cost of G6vt~rnm~ntar iA,cti'!rPtles

For tho FJscni Tear End~d .Jtm1: S!J~ 20ff3

c;e~H::ral Gove(~1rnr:!r:\

Put)iit'; Si:1k~ry-

Pubk: VVt1:l\t.

Pal'Y.1::. ·Jiht:ii

Toti:1 1

15.,·tL.'l,'t:+5

1.~>4l.U~.33 3,407 ,203 it 722'<-i]?

··- '14))6'.~~·~'_1-4_·-·~· ___ 10,548,?~t:_._,_._

,Hi"2S'Ei·n,_! ___ s ;i_ 1f"V74 __ ~"

'D\•:: coe~ foi aU. :,;;ove:rr,I>ii'JOt;,'c ndh,ih;:.,s dKtd"'W 1-1-.,·. y!:-.3.- .,verr $54..3 rniW.on,, whkh 72% of total 1."';.cpt.:Ti.Sf~.,.. ;: ...... ~· ,. h - i-:1/ i,;; ·n;·:l~!ic:r;.- r~t these costs. Fc:es_ r;r;-i.:nw a..n.d

fJ.usin-ess 4 iypr: a.-::hv:itl;?:..; incrE:2s,::d the City's :uei· ;'.l:':::,.t;:l:S l)y is 6 rnimon. 1hi~; incJ·e:;,..se •.:011.t1i;b_., of fr-12":- for futur,2 cJ.pitdl p.:'o~ec1s:.. The _rPvenue:.•t, and tn.=u1s{ri;:1rs

!~::\~:,,1;::~;,~:~~;J;.!;c~i~'.!.~:,~;:'tx~!::~:~'.7~~~in:::~t~;:~ revenue; o!' 1h2 1msmess-

Ati- no'u .. ~d. earhcr, th0 C'ity 1.1.:-1eS' h1nd nr.c~·,u.ntin,g to enBm·t Z;_nd J2rnori...,:tr,::l!.f.' cont.phi!.t1J...>:: w·ith fm.atl{'e~_rd.akd lt~ga t r{:qu ~er_ ~·.:.mts.

Govr~m1ncut~J Fur .. d.s-'fb:.• fc.<:u.~ of t:-i,-? C:i.-ty'.t: gcnrlt'!rrtrnentaJ f, .. 'fft::Js is ir:: .. fonnaLon 01.1 m.~ru·-t~rc, infhw;s .. ou1f\.Js;-;1t, and b~larKes of .spt..:ndaf.ih-~ n.~soun.:,~s 1nfo.rmation is t<.s,~fut in a~sessi:r.g- tte Ctly"s .finarici11g: require-rnc.:·,t,,. 1n F3rti.ctda:r' .. th.e w1-rt·~r:.'rve.d fund babncs:· ni.ay serve i.1.S a. w.sefu1 n1c-c:1~~1Jn:': of" a g0'i/1:;":rnr.11.cn(s n~t rc~~ou.r~·P.i; -;"...Y·,1ilaht1~ for sp;?:f':di11g at flx· ~nd (,f the fiscal year:.

Tbt: C1ly'~ ,I;GV<2::mn,c1,tt1l f-un(L'i- r11ported tr .:.··o-n1L1inf;'.d fund l\;).fance at fu.ne JO, 2(11]:i, of .$5:?i 3 rnDJlon., t,-1:n. mi Won.

The General FtffH.i is the rhiRf or.:.:rating fuc.d. of th~ J..,~Ity. At the c:11-d of the cu_rrent fLv.::a.1 yr.~i..i.r.

~~:~:,:1,~:;~;t ;.~t~,2e:~::·:: ~:=:!,:;,~1~t! 1~:. ~~;'.~:~;i;~11~~;'~'~;;:~~~;~\:';,~:ta::1:f':~

cc•mp~1r2 b·etl1 u..nn .. ~~J.-erv(";d hrnd bab.ncs:" and tomt frrY1d b-alance k= total e:Xj.X:.ndih.uE.•S, Thl-?: unr~;SeFt:ed hmd balanf'..(? rep.n~sent; 35·:;,;; of \otai c;e-ncra~ fund ~,(pendjtu.n:s.

TI1e fu.nd balan(."l:: of the City" s General Furid liKTeased hy $1 r.niltv.: .. m du..ring the fi.s.::aJ' year- Thf: int:rease in th~ G-ener.;.ti Fund ts attribttlaf'.'I~ tc· grot-vth. :t-e:ki.t~:tl r12venue .:.i-w::h a.s _p:,opert_r t;·i-xes, ~al.es klx aI~d ClJJS fr.:es "-l-n.d the trnsp~ni appropriafo.:iru;;. '1he incrt'asc in th,; Gc-:r.1end Fu.1"1d. ·will h~ 1.1.sed to du.c to the S'ttitii/~ budgd. cr.i,;i)s.

Oth('1· ..::h~ngc:8 in :fu.nd bala.nc-es ll1d11cle ili'f-~ foHow:in.g: R1:;d2vra1opn1en, Age:rn:y Del1t ~.ervicc- iun.d-

'rrds. :rnaj()r fund Jn.crea.!K'd hy lh??,09.:f tr .. illion. The J.ncrea~-E ts d.1H.' to tax in~rnrnent revcnuf• rr;_:,:x··hted. This r,eve:rrue ,viJl l-x::, u~ed in [utu.re ·veara to rn.._~J~e the dd.::~. :H .. 'fl/lCC

pj_yn1ents. Rt1d.evelupn1ent Ag-e11J.:y c~piiiJ:l Pt,)j~ts hL.'1,l·

:;:~~,e~~z;e,~t::\1 ~;~:~~-;~a;);,;;;!,:c:~~l;:~~,d At L1:.c nefl:r iuti..'!.re.

.ln.1pi:1t:t Fee.s ~rw·cial Revenue; ftu-id-TJ-l.!s fo:nd ·ii tu.~~d to ur-z:ont'J..t {ot t:.h~ fadlitler~ foe::; ..:·oli~cte.d for t"ht:;

traffic :~Ign.3.is, fh'l;:. _park,,:-:_, i:ncreasr::~d by :f.15 rrdUio:n 1~r1d will br·

Fnnn"id;,r,; 'f"t:.rtdf:.·-Thf:l Cit(.s ;.mir;;:i<'tiarv fiti.'l.d.s t:rro\·ii.3e the sc~:,ie type uf lnfo-tr.ru.:,tiori fcau.n,;:J_ in (HO.I-(? d,et11i1.

Thi? n.n.n~stri.cted Itf~t a5sets of th.t'. Gm ... enn:(_e.nt~I ~t> .. ctnrit!:,:-5 [.nh:n1~11 Servke }~u:nd'-> 'NAS $1 {},3 wilHon.. T1,2 u11reslt~ctrd D.ct asr~ets at alI t.he oth~r fHn(ls · ~,,;;t:t $30.1 rni11ionT nw totai oi-J-ter Dn)m.ic;t:uv

finances type B(l..f.-vitil:'~.

GENERAr. fiJND !lUDGEIARY HICHUCUTS

Du.ring tht:1 A~;c.;11 ye-:;u thr.2 C:ity Ccun6! appn.,pri;sticrtS, v/hkh i.r-Pcrea~i~J ;;.ppn,p:·btior,.s

n~vi:~:fons fer suppietn.r-ntal snci. b:i.1..tBfoT~ i:>:::hve-"21l

''"f'he cViff~r2n,..:t; betwP2n 1-J,c nrigir,.:i.l budget a:i.nd the fir~Ed budg~t Hr~s an (n(Tt'C.H:~e nf $'.22.4 r:niWon. 95% of this incr:2as2 i>; at'i-ribnu.:ble ro In .. ]:ddfrh_~,n. th~· incre~se inciud.::s

~;:~rt~;:~ ~:~~.:~t~~1~d:;i~~r~:~::t;!nts '.1m~:r:~:c~,.w1:~~~(~r:i:;;:;,,, the Agency sou..ffe~ !iVe:re thun .antkipatc'ti; prop;:rty tax, sccl1:,,1,., ~ax an-d uther taxes n,:.,Jfod;;-.:J; rt.nd de·velo-pn:a.~nl

C.Af'lTAl. ASSET AND DEBT ADMINISTRATION

(:«pitai At1.~.Pts-Tf12 City o{ JVk~rced's inv\~stt'ft(:nt in -capita1 ')::tset~ for H,~ g0vr:tn.1nentr1-1 n~ld f:usit.1.es~ t~-'Pt ~::tivith:5 .as ot Jv.ne 30, 200]~ cn.:;:l·)ffnt~d t0 $308.7 rrtil.l:ion. 'lliis. invr~sbnent h1 (-apit~tl dS~(~l:s irn.::lud~s }and rU)f.l Lt!lpn)Vtn"J_t.~.nls,. con5tt1.1cdon bniJ.dlng·s and stru.ctu_re1-, V:l.achl.11er:1--· ~m<l equtpw.ent,. L1np.ro·1...-t~nH~nt.s other. m1m1xrlld'm~.s, frn.p1 O''l/~~n:-,0nt.

N'on-dr~r,recfobfr~ A:.:.sct..;· L.1.tuJ. and improven1ents Co-11~.;h-"'u . .::rion in pr:XP%

]'owI nond!?:pr·E-0:)b:;'J as·;;;ts

Dt'pr•?Ci11bh: l"-!.:;sch.;.·

Ctry· of Merced Ct1.:pitat ft...,..:;:~et.~ Jum0 3il, ZDl'-3

Ht1Ddings .smd stn~ch.rre6 4,'ki9,41.2 f·+/lac.hi11ery a11!.l s,q-u.iprr1eni 2::t0:16,835 Lrrq.:1ro-..·er.ne·:·1t:,:; ofh,::r thar:. buHJings.

ftriJr_birt~s .. a-11d Jo.rid imp.!'Ovc:rnr:.1 1!5-)(i5,4!i9

1.nfr?,gtruci.-liE· 2.98_,239.,75~~

2;14'-1:.,434 3iSl,9.3?,

·-~ 3~>3,014,488 --r:,~:;-316-l..e-s~ iJ.t'C~in.1.'PJ]di-er.J der,reciati'l!n_

TQt.11 {h~rrr...::iablt· ·~ssr:L.;;1 net

(19.5)530,-611) ..,,...._. __ z"i9 .. 66'~"J>.[3'~ ----·--·~-~

Pha.sc IE qf thr: \,Vast,:wate!.' Tre.:1h:1er.1t r·t·rn.t 1.o2n{Yv~tiun ym:\1ccf with over $7 uUlli.on i..n ('Onstrurti.<.Yn :.::ost5.

() The ?~HCh.::'U3(' :-'-:tlH--I co.nstn1ct:\on of \V~;U ~;;ite 108 _fry~· ~m,,,·c,x;rnal.elv The ;::if:V-Pk:irr~:ni;-:.:1t of T'8t.dY;r" Schud P-atk faJ.te. vhth l'.:osts ,·J<c•,,in '"'"

,;:; T'n•2" pu:n:h:;:t~•:: ~1-rn-1 rcnoY?J:J;JrI of- the h.i:t~.Dri.c 1vlen::~:-d TheaC.'t~ for $7~10,.0011

debt consi8hng of tax allocation b(mds~ te1enu{.-l!; l:i:r:rllrv-...·em.1:-:nt bond~, p,,rf:i,,;pati,:;, df:v~~top.1-ru:-ni. ~greer..n~nts, iri?lns F·J.)'a:ihle. 1i:,an gtt.J.t;;-11t1:'C:ii: pay.c\l:de. and .:.:ihs~nc0~.;;.

l1.H of thr~ df'bt t.va.s ;,;r~c..--:u-,;!d bv spedfic. re~-~~n.,ie sou~·cr2s

Clty o! Merea,d

Oufatand~~g DQ-bt ,Jun<, io, 2003

Tax t..1!k!t;..stian bonds pa;t'B1'titi

P:n.rtlclp,3[ion gnd 1j~vc[op-mr~nt agroc,mo::nts Ltvr'ln p$ysb'.e

725,t'H)O V•,. l~1,2,.2B8

668.,228

'?25.0.GO

5.753:298 G68,.~·2s

2.,410.000 L.n?.o guarantr:~ Fi·.eve;nue bonds p3yable l!nµrnv;.~ment bon:Js paya:bie

Cornpens.ait.:1d ab5encE>..S

:i, 125,000 3, 125,000 -- 2.226/3_54 _________ 447-,[~~-- _____ .~'.,674,396 __

Tot~! .. _$_ M~.~*26~20:5,.. , $ __ 5fa8?".~:;:~__,1;. 46,95§_J:4.7 __

Th~ Cit:'/s tc~tal cieht h:c'!e~std in('!t.'t:.SE 1-vas do.t: to ~he it·ft.:u.:Hl!i~f:

S] 1.7 trUHii:n or 31 % J:;le nu'r~~n.t fis(cd year. Th~.· $<-i rniVi.ion :t..:-1 Tax Allocii.ti{)f;. fo.r the Rt:deveiopnu-:::nt

ECONO:\HC I'A(TOl{'i AND NEXT YEAR'S llUDGET

TI1t! City n1ust b·e .. '\.11 H~Vf·nW.'.S rlu.::::- to

current ct.~rc se.·r----'l"kt:~• v.;iB G'll,J.ti..1'\l.H:~ to bz-:: deliv.~red daring the fo~cal year 20:03-2004. Con"l'.::·n:a~;,e~:- 1Tv1::rn_ie "'/en.: usl':.:3 to i:l",.:02d pn".~nh_ .. ~g iti: 1a1n:.1Ji~1-ir

expedZ1tion uf a.v;.~ilab!e '[Ju-: Cl~;,~ (- (1m:1cil' ~ printifo~s ~.vcrh~r.,

wc1~l1,w;,Jpr Hn<i st.)rn, dtainage, fo~;;r~f~~,~~:~:;:,;:!c.:··',t;::~i;,.,oTi.ti<;s w~r,: guidt,,; in

rm··n3rn!ian r,f ·the, hndv.,H"r,rthr, fi.sc.:\l p::a8_( 2DDJ-2{JD,t ,1.nd 1,..,;·usb.?Vvf1h:'r rates ~·vU.l .Lnr rE:asP on January ·1 2004 a1u.i again C'V\"?I{ J::E"nrnry

LLntl} 2007. Re.fo..:.;e r.::ttes \Vill bi-.: revle·i11Ied for n-:~cnrru:.1H:'nr:L1ti•m. c•f fill i1:.-1.crfase in.. J.an.uary bused on Hu~ rha.t\gc: in the CTI.

REQUEST FOR INHJRMATJON

Th.is !iD..;:1.J.tdal n:po1'f is to pruvid~ n g-(--n~_0ral ov.erviev/ (;[ the CI!y of [·1 .• .fern"'d's fir~<.lfic::-":.5-

for those v;]th aJ1. int-er~·~">~ tl-.i.e gov:::~rrn.r1r:':Plrs D..11J.t1.cf::.;.. (,2-rJe::i:tic·n.s cor:ce:rning of thP infonnatkm JH'o·vidcd fo thi1:< rep.:.)1t OJ ior addiUorn~I fin2.nda1 infc·r.m.ati().n i:>€ i:lddn=.:ss.ed to tl11:: .F.l:1nancE- Officer: (jty 678 ~{Vest 1s,h St-n!(t,. lviaced,. CA\., 95340.

flASfC HNANC.AI. STATEMENTS

LOVEllNMENT-lVIDE flNANCIAl STA HMENT5

14

16

C1ty of Merced St.>.tem,?nt of Net As,:ets

Ju.ne 30r 2{M)3

t\l!'!I, .:s,:tli ,~'ru'i-'~Ji.!1 <1.;i,_{1:::.-.,.~tmr:nls

G,~b: 'r-sibi l>y~ f!iKJil ;>eg-,,.11•.

.A-:~da.!;;~,;,\y;;i\J\,;,

fo~tr~.>i N>,-.;-.i·,~;,!o,.

1nli•.d1mdt'.O'J!;jr.cc:::.;

r.,('p:--dd;:~:'.!'l~

·..; ,t,,,41 :dv,ik~E'

\]''\<!S't,:t!c'l.tlCL!.:i...--.,;-s!'.J

l:ITI:,~ mpi;;,J fl."*tf

~ ,n; 0: .. ,,·.i.L:.Wl J,,,,r·ena!_•J1,

T..:i~ z~plt.;,iJ -1~~-·t~. 1·,N

L.,-.11!!!...lrJ=iS (U.\':r~"L'.Ji li..l\<li..9\J~5.

f:,·1w-'n,,, 1:-('fC-H-?dac•.,~1.--:.e

S. TJ"Jt""J ,•.1, .l~-~ ~· - ;2.,!L,· lmig-t•2tw. -:'\f:l,1. a::.~~ ,,.,-,r~i.1ri c,,;vc ,,~~

·:·:itl-,1n l~c,b.w(!\"\a

L.:u .. !lDa3ili'' L,nt!':"r··,t.c &·n':01.1.fbot,±,pni'.t!:1!.1"

~':'.:1, •r::i··em,?(I~ ()i'i·S~ cJ' ·01:

t•.a[.'.:J~,!·,,_::n,:n,•',u.:/·, ~l.:fi Ow, • .-tJ·1· ;'l:e:;1::!,i~WC, fo~-

fJttbt ,;,c1n:,~'1'

G_,.>e"J.1.:.,11~·-t ,

---- Aft:~·11:k-,; -~---

S7._~,SS2 ~)i.lM.ti(:G

5.fi"J..~B~ !n!'i:E",.',

~\.tE'r,·f,J,! 1,143.~~

82.11i"

13:7,~·· Zt.J.),l,J(l'i'

(,Y,l-itl&#l. l~r,,B:".?58

;.%~.4-12

'l<J-,l!.1-.",i,].':,

~-Ol49J. 1,g • .,3/'/

:."<58 '.i'.l'.i-OJJ3?

j}·~r)?',

.!,U:',JM

~j".j~,~.:s2.~

-::,::.;;t\J ':.,.:"·k"if:::,

1'.:.0:l'.-'.~I;

!~Yi..%':. '1B70R'."l,0

.~4.l5.12]'G 4LW. ~:_,u

~<-'.!..{Jf.l

J..345,.].'.,,5

'2~{..6~s­(l,9i)~.l.l'-;.'O)

:,:,51,; •7 ~s.1,-,,·,

1..--m,,t.;..J ;J.,;l:1 ~1:G

'.L\.S·>~;~i;;

Ji.E:'/3fi

1/,~L 't'.:>11 (,.(l'~.6 J.:'l S,}l)/hl'J

111'.',,XJ-:: ~,tmt,/~:(,

----- Zi.~?9J,"\1 _ -~--.),l;l.2:~,:,':;',Q

$ ='--~.1%::,~<J.'.r'.-t __ ..!z-:.. .. ;;n,.;~l-

..... A •. ,,!~.~ ~.-a~·.z:i

],J3,'l,/I_"',

t-1.~'J

,!,{l,&,2,9:,"5

.::a;1.'<fi-_,,~,,:)

~';i.l:'l,[~4:G 2'7_1ffli"j_;·(,~

U-'~~ cl.7.i1

·¥.-t:,'",1"'

'K.Oh'!fJ 2.\:.:¥.i,;;...'f.'

't1,.;;,1ct7

:!,t,;:',r.·M

2,),l.;:,;.,S.:;',

57:iJlOG ·}'iS.,. :"ct

().T,,~')

:.i,l.',5'.,.!{J(

1.-*-',\J,-.'<:i<•

City of Merced Staiemenl of Ai:tl.vities

f"or the y~~u· eni::kd Junt~ .3{t. 2lHJ3

Fa:::n.::~rru:,f Pi.'O~'Tc:u::n.~ --~---·-·----­

~::{n'l.'!n;n~::,,t;.•J ,:1..r.fr~'1t"ic·.ai~

t'1:i:bli-: :--ill~t.:·

Pubilcwurks

iJt,alk>CKted d.e;;ted:,=;ti.c!';

lrn:cr,u~t on k1C1fttt'>1!.J ,:fo_h!

l7,B63,14.2

\'~5L1 fif~

1,,Nfi.lD2

11/..-02,6? .. .rii

____ l~l\l !_)':/:~-

f;,,fi9(1,;1:'_'(!'

2,.'!El,99:~

L932,'l3-5

1.m1,s::n 3,511,IJltl

1.4-~5/1~1

2:.·H:iJi7.t

t1,·~41,73';

526,&D

i(l~,4:"A

6.53,..24,S

'?7,:570 13Jt:.c,0+1.

•l'.\,361 2,1,n,w:1 ?'l,ZXkl 2,1·11,.::,·;7-,

11..841.<'lJ

),j,l.\,•,;li,

Net (1:.%pf:r,.,e; tlev~u·~

-----.. ---~- a.i-v! CL:1ng~:, Jn r-1,_>t ,.',.5~ets ~--~----··

(l.].2'.2,,32)

~·-~ (l/Hl.55.!).

....... ~-- (::',l,JJ.,;J/1'/·t.)

':,.'1'.:,92'7 C, --·--·--·-

:;::9•]A'.:il)J.YLJ ----------------

2,13-;f.,S-41

':r2,M!'.\

(1'..\t,.A) ---------· l .. ~~11},J ~'.{L

------· ------· -----

5 ,:;:;,~)9,4!;,5 =J:ll""...r--=-=-~-=-;:""'--,

Tut.clJ

{15,n.:.H5'}

~1,611,533)

(i1.,6fi2.,6:0)

__ M __ (',1i1 ;,.-:~?)

(:'..ll/i--~1874) --------------

:i=s.;:--,.:,,...,r9

I.S

FUND flNANC1AL STATEMENTS

21

City of M,!rced B~ance Sheet

Gov~xnnteJ'lltal Ilu.11d~

Jun<, 3iJ, 2003

Cs'!ir.<.f: !:ef t~~ by fi:e.Cf'.i :~.r;~3:l

A\'.:l'\"it!ib: 1"t',:611,ab~t:

p1).'I! IT\.~?}\ 91.1\('J,!' C,:f_:•:f?11111H~:)'!5

Oi.:!" i..n1,m \'.:other fo~vi:,:

fo•,;:o.nt,:;.ry

Lailld ~;:,Ji:) fer ~f-Cl::t

UA.In!.lTTESAND.'FON.U»A1 ,\NCES

A:e;-,:,.nc.)'

----'~::~~-- _; __ ~~:~::~:_:_ .. c.apt~J fi:t',;ffl-, F~md..~ TmtJ --~----..--~

W,3:;;~.8(}7

9?',f:23

)o/J,3S2

L.:.~,!!71!

2,1-!9,__,~Q~

l[)'.;',2,;.?

17J'.4;'.I

1,flJs;,:::,;. t~,t:5:~))94 ~ia:_z-:·1"J"_,v1-~ ~1,:~·:if.n:--6

?.[;,..~..J,,W.2 11;~-•. s ?,.5%3{!0

~ ... '31J. l?H7 S_A-11)H5

8,43(. :~),..'.."'_2!j 7.fi.,9"S[£ S'J5:9f(1

't.'1G . .2.J2 :i,2'-!CJX·l 3.l Ui},'"i'l

n1.,.:;;~} './. .. 2ll7A2,l

4.C.:0-~)/1[1(1 .:,1?(),.321 :..5,0-~·l'h'l9 ~1,33-2'l,Hl9

i!)}':~

15n2j: !-i~·4.71li .l ... ~7?,%9

s t::~,J,056 $ u.,n1.1,:.::il6 :;; &.,1J1.J1,1~:17 i ?i:;,;1~?,&~2 _...=....;:y~ ----='7=-~:::;;; ~~-~~~~. -;--w:.~-r~~--~=::,:".;.7.'l,~~

4._rcno;:,.,00

<Jtfu~

'if!t.-.~'.-?i'

(;9,1~~

1?3.t:93

:0,63!,'.iSS

:'}J.;3~9.U.?i!. ---'"°---·-S .!7,'.l.21-UO,l "$ Jn..G6.L857 $ :~,"71:'lY!k:l.

;."Oll=~---;;_~~ =:~,-----a= Y~.;:;"'-__;_,..::;,--

of Merced R(l:t(H\c:il:ia.tion t,f f.hl':; (;ov~tTUllt'.l'tbd funds Bafance- Sht!t11

to the Gii)vernrnerd:..,\'\11dt! State;ment of f{et A3set:s

J;.me 30, 20()3

/uno:mb 'l'C'p-:oJi,""() Irr ,gove,-run.::nlili an.J:~·ihi:-.s.. ID. tl)t!: S'm.-:f-.1w-:nt. ot N<::.'". A~~:-m :i_te di.ffs•ft=::.lf be,-ilute:

r~171·o!ch"bl~

L0i.'i ;_.1,".'L-.. nw.U.<rri:<l tli::pff,c_'.icd:1.0n

T~:.· alk,,:;::;;Hm, 1-nnd.,., p;,;:'f.1.t.1li11, ne!

r.:..:HilL'JpJ:iti.On .:!t'ld d(!"'-?Ior,~<('n! ~.g.;.·.,:-enK;ntE

h,k~·.~~t ~1c1y.:1b1e 1,r: ~<•tug· k"2JI -ci;.:bt .';.1J'::S .r.",f:I. r?•l'i_h:~ (surr;nt fl:t1-:ii:::'d:ii ~;c,.'>CJ.c,r•:S "'. h,:.rd,-,:,,::e!,

1.nl-:~n>_~r p:•yai1l;,, !.:. not tO:f\1:{c,j J.~ ,J ),,.J,:_l.;j~..- L:: i.h~~ Cov>•rcn,~(';-it<'J F1.c.1v.l:· he.Jtr-!r~: .Sher\

$ ?:J)Ot.,'!3.f.

'.E·6,t79,3?9

-·-- fl61 124DS·:~"i;)

\~~L6"Uj....,..,;

~725.0:){J)

City of !v1erced Staternent of Revern..1es: ExJ?f~iidJtMres and Changef, in Foo1d Ba]?J:u..-:e-s Goi:er.n.n1.~nfal l\utd§

h>r !he y<c,ir ended June 30, 2((!3

L~a;;:~;.'l'\t~s ,>11d p,3-rn11 L:;

in.t:;rgn•,e.n-1-.rnenta.?

S.-.:::1."!i':iCl'Lh.r.irg.t.'&

fin,t., brf~'.iurc.-; w·;d P'"'~1;lltic~

Oti.~r

(~en(?ri'J :gnv2,-;;;;,r.:er,j

P!lb!i(·;:11-Jet;·

C:.•.p1ti!.~ ,:iut!r1:,

D:c}Jl:.'Sh;;!.'Y{\'~

f'n~C'f'dil frf',rn,d.<;bt

Pr,)H'l'd3 bm~ ;z .. k vi land

r:,.::·cv,;,,,5(;-'l 4~7-n_.'!:i!5 f/!h:Yi '.!:)"·\7 J_..:f.,'.)

am ~m ~~?.nt :.'7,37n ::',&0.1_11,-s:.;,e 1-1,%5.t~:it.

3,~10.Si-..S .PI,/!'.!-,, 'i';~,s.51·•i:-, 1."l..-~"A;-,.$8-1

1,240;7,!.'.i

1~~1~9/:81}. ··-·---··-----·

12,71;,,min

U.,'\il.J

-~ .... ,-- -f:'.!.i(P

1 f,/,9t.tX,5 -------... ·~-,--·

:l,{b2.14J.

------ J/)-foA32 .•

14.7:i:Ue?.t

i,S9U.1·95 -------•. ,--

l'':12.'144 i..r..;.c1:-s-~ 2,7t..3.Mt ".:·T.''';\. 12,.u-11,.:.::t

..__.,., (\'::Z.7.\113} ·-~- {7,'.i_33,:i6"11_ -··----· (7f/J_:U5) ··~--(f_91~'.J',9.:~SJ &-~- fiJX:>:Y;t-::,t..\

---..-. (2.'l9.:t:.211f ·-- (tF·3,%:~} ~~:SE:_ 4,223..761 -~--- l4]·1::,£f!J ..

1J}:':07.Jt2 ----·---··

24

Citv of Merr~,ct Rt?c-:)1t{·.ilLlHon of th.P (ivvenunentrtl F-unih:1 Stah~.rnent of Revenuesr }J.'itpenditu1',~§. iOnd. Ch~;_inges

fo l1 und Balance to thE: Governmenl:-V\!Ii!e St.it!c'ment ,,f Adivitier.

fo.r the yi:ar ended June :;u, 2003 ----==~~~"--~~.=:.-;:;:,~.._;;,~~cs-·--:;:;:,_...:;:;,,~-=-=-::.=-~...:---=-::-=~";.---...=~-::.~--.:....=-~--==----·-·---~-·-~~-~---.----,=·

C"'Ni_;l':nmc:i:al fu.r1,1t, ro:p1..•1t o_rpfooJ.l o:H:.a;" i.B e:<.:per:.dJI 1~.,ei::.s, Hr:we>;.(·f, ~n tl:t G,,-,rip;.,--:..r.n,-,--x..t~~.'fidf'

S!:<l:~nn:::rJ ,:.Ii A,::fiviries, .tiit~ rnst ni 1i:i(,'.~:· ~M'J.':t.,; i'< .e')le.c.1i~"<i P\'(..r ti:rohr ('S~llrct.t.Pd us1?f..il kv"'s: J1S

.:k,pt.: .. ~·i.r.ti.:1:i;"\i:'<~'f~

[~J"-r.G.1il..'X'. ·~..i.pr-n'*' .;:,r1 (:.;.-pU ... <t..!. .i;-,',{'i'",i.. ·w,ca'i rep.:,1:k.5 i1, fu,;,. {~01<1:.rnr'i':i'.:'J1t~'\i\1l.--:.i:-'.:-ililkr-1en~ Qf

Act1vitie5, lr;i< .it ,J;..:;'l r,.•"lt tt'<i LUX!: tl':f u. .. :.,. ftl Lt~lt l::n.i~1i::.-..a! .n'.S,,)i.:.,,"'CE.$. Tht~• ctl.:,fC!c d'i!':prk-'.l-~tw:1

,es,ep,2,1.:-i:,:• w~ n::,t rf'f-Cth."\.i ro 1:xper<d.itn ... ".-::.:;i ltl gri~'l'n·.incnlai fo11<lr.

S<:ri.d p-tXl:f'r±, pu>;,,,·k:h: n ... rn.•nt {i."'"l,m,'i.cr! ;,·,e-,,i..'W('.~>:;: ~EJ ::;o~·ri.1·nmt-r!.bJ tim.ds, ·1,iJ:t is..suinf; <li'.\.1:i

m~':r"t"35f:'." icittg;-tenti'f li:1i}il-iti.:?"i in !h€''.l.t(,,t•!rrv::n-t d ~ii"!t.aea,.-;,-~s- R<:p;,yn',i'l'H t.:f bfcy,d pti~":ip,"1.is, -i:rt

s.'")..f,f!>1dih1..n3 b t!".:;: );i)\".:'Y!ln'l~nw ft.1.n&., PUt fat 7€:}-ld)'7H('r'.\:-RJ.11o..Y.-S1u,tg t~1.n ;i,:1h;i...iti.1:'~ in 1.hf::'

st:1f!.~n~e:d 1,.),: n.:>f .1~~'t",. Ihit i.~ it.\· r:l:U1i.'.lilJi.1C t,y \,.+Jd, pr(~.:~d:e, l:'x•ci~d:;'d H'·pd)'\!·2-nt},

l_t,}f\j?,~iY'tw debt pro::ee-rb

""':,,tc,:l ,n me c;·,v,·rc>nont VVi;:1\e-f;,t,1trme11l of A,,~tivid12s,

1,0,H,.,,., d•,, cc•;!t ""'"'"' fr,.· ""' drnn··,,, • ! ,;.,,.,""'" t<e<nc"'''' r-: w,,-f,~,n,, ;C'IJ 1"';;'3~ "x.",~n 'L ~, r::ct rer,,,Y,, ,,.:, ,.,,,ei,i;l,..u·,,qn ,:;..,w,,,m,•m:•lFo:,o,1, Th fd!c>~ot.1:\t;· .-:i..i.:miu.::"il repri-~c"n!::; th;:;· ,:·h;;.-i,::;r

indi,. ,dq.1l fi.mds. Ti,e•• ael: iecpc::•,e)•of fr,drctwi,,\ ,-,Fb, l'u·.,ih '>I<fo,·Se•d """' '<•.,ven:,c,i1cn<"l

:;;-(tl'.-"\til:.!i.

25

Ciiry ,-,,f rvlerced Sta.t'lement. of N<'t Assets Ptnpriet.ary 'ftL.'1.ds

J,me 3!i, 2003

.Ci.lH'l.'(\!0!0'v.:!t;.·

·c~.~1. ,;.a.i,h ~q,s•rsl~ri~;: llrnl u,w.,.;w,.:nts

L.:dP.1:lcS~ IT:1"'1.il'JJ'bk

~r~rkf< du1rg~ H:!'.'f!Witl.:il..e

N11t<o-;,!'(--,::<i!ivl:!bl<:1.:r:i;·..:.tcpa,"t±ts

.i\i!'lf.;;,n~ai.".; t<J c,th:::r fos·ds

~J.d€rrcd >-h:.lrg-"5

H1,1i!(ilHy.5 ,md -~::!"i.·~~f,~

!t.tdc.b~i;::'"-'ct':, ll1:~_1d_ eili:i!.f-'BIFO,t

·:r.,t.Ji:~ctlt,J..lfl,:;,i1-·,$

'f,;:,u.l::1<.l'r,.::tu,-:·H:.c:::;si:t:.

Cun:r:nk tctb~.lki.f'..,.;

,\1:..::oP.liTh'ft ~.1,~t,lE­

LIJl'poz;.)t'>

r_~,'!';aed :1::o1,;i:cu~

)_NJ2to,1,•cl,.c·1f,.,,rf~$

A1..·~ ,,~-'c"r.i t1it..:"t·.;i;t 1t11iy;:.~1!r.

Neif'j,'~H'E!\t 11~/:ti]Jt"t~~·

f.~·\•,1_,ci;:,e;. it"tJl'.l.1 tl!\1.~r bo!!i•,

R:i:wm.1t>2 h-1ruh pi! r·.ibk~

IT. pr,:1verr1,:>iU hon,;\:;: \.'.'!,y;;b!..-

J,,'.[X'.',.f_;''} $ !l,'.;:J7_}.:!(ti.

4!.fl,iB~

t.'i~~7,; 2J'Ji:3{J

2~.Sll

-ti•m.~1 i[i',U'':'.A

1.16'.;'V7l;l/

tl-,7((,',f>'l.7

J.7@":,44~

it'fi.U.".I

J.5,.).$<:-J

M,X.l(l

\V5{1

1 2u:: Bl,:i

------ t'ti':??'li)- , __ , __ :':3:.??-:?;'L

J.i,l~tr.--We•ii.: ·--.. --. ·-----~-

r:a~-:)_'!4u

J{)!M~2t-

.31-ci.:~1 f

:?$$:!

4,3-ill,~1.i"';'9

1J.1j:f1

.l,42.&,'."!..:,:

J,H~,..:,[J~

-i,.2V!,9~~ 1.3::% .. .fi.,io

2f<,~!'>::., H,1,11;~

5'](~)?'': .:t(137t0

ai-/il,".5

~,3-,i."l

--- ---~--------·-~--n•··-

1',,295

~~%6.::i.21 '!3-i.SS.3-fu,J,;•p i. 5:J'i':·~

01,','{}'7 Utf1,7:,.1,

r:i,t_)J9)::ii.'..! 7,ue:,;,_7sJ

()'ii:tl'l'

Nr:,1M,i,1'.r' l·:i~

lk.l~l,.~f.';~,:r(}JW ~_:.<;:i.,s("i,~-:typt

__ Fur~--

't(J!)l},~\,'-0

Y.7tfo

51/A':5

1"23.:if9ij.

'!)ll% ,t ~'}···

r,~1w'.fa ------

$ .::4,H!:17/0

4:.'1'9,1R':-i-

;n2.A1r,r .1.;1,4'3,355

2"'-J.-1;6.'.-S

., .,J~r.:. ~.;m.::..21}

~::o9;?J.1

.".!12.?.Ct!lil

l,&.lO,G,..~l'i

4(~.Ji-!'il

·---- ?0.12ii.~~: _

r,,.ocr..,;jJ &1n,·1t'1:Fl.!.{1d.s ~----

~t .. ~'55t,

.3¥.,.%:'

9Z~Z"....S

~,1\(1

1)'it-~·

69,Wl --u,m5~

2.Ht,fi'i

27

City of Merced Sta{e1.nent of RevenJ.tesF Expcn:Bl'.s and Changi!s ht Net Assets

Pr.cprfotary huiiis Fo.- the y~ai· e:ru:;hd June 30, 201.l3

),tc1,t-.T.@.!s,. iFJ_rplll:!!i .:1nd ~fth~r s1ir.,k•:""

fli'J:.1!'1;;-11l.it!i,n

AdtrJl.~,;:t:r..rlvt; filu1!-!'f! cr,,J:i>:<,&i::'·S

Cb:i-~ a:ppll~;J i;ibo,·, m:_i.l-t"({a.i'"-

:!i'lippl.:~~: cit)iJ. SfCIJi°l'f:<£

;',if)NOlt'f.R1i TlNG

KFVI\NUES (:':Xr"fi1':SI.S).

hr~1:·r~s 1 se:IHJ. j;rr.tr.'.'itt• ,5""rit fLJJn;n~:.,

• n.'t.~..:;~ ,;_r,c"\_ s:;in--ed' ,: .. p.!V•5

i.N"CONi.~ (LL\~S~ EEY:ORt

O'f'f:R.ilTlNG nu~SH··ns

$ 5.776,:?J.·) $ :l.4.L"i.626 ~--~ .... ,-i____ - ----·-~-~,.~---,--2,34,i,1,174 .--------........ ·----

51'.l,1."12, (5'",I:'1'<. ------...---- ----~---------<• (;;·"'.·•,;'~'~ 1,-.1-'"" ·~~---·-~-- --~- --------

s-97716 9'j~,'.l5S ------------"- ---·-·------~--- ~-~-------"- ----¥------2"!""1.373 ~-·-·----

L!l0.~Y5 ------~~--------

------------ t}l33)

ii 6,.~i:<4,53:t -~_,,_...,,_,--,...,.,_,_, ____ _

.... ?]~_~'?-· ------------

2,u~~ ·--~----~------

f·.i:,d.J:; f.1;1.)(i~ "'·-------··-•- ••·--~---~P-

l 7'4',. l ~"4·

!'77,.2.S..~

.l7})!4?

28,624

~.56.578 ·--~----~--..._,_

(2, ~?6/

l~~~2.

1.170,.12\

4.~,:..:."1l-l:J W,.!-,2543~

J:,515,69.:;,-

1/WJ,2M

1,(,Tl)G?, -·---d----·

2.>\'.?4,22') ~~-------..--

Ul5-;)t·:;

(9'2:\7WJ

:l_.;:,1;:-_.tt\~ -~·----

l.i-;t~msl

f!.:p111:<: f1m_1h ··---~------...--·-·

2,.®l,'.l'."!:S'

::;,:;,u1.1%

1,w:.Y:i?

411,1.?..&

1,551.1,{!'.':'d ~--------

''J'•.·,-,' l

1:.:...:n.5.14-6 _.. __ u..,_ ... __ u•,·-- •

City of Merced St;i>.ernent of Cash f.fows Proprietary l'm1d5 '.For t.h~c yei?ir e.nd,:-d Jun.e 30_. 2003

G:oh t"-Xt'>"• e,1 ttotc <:t'l.'>l\J.ti:\.er:, 1w:bdi.J."::~ ,:;.'!ti d<t:f•'"Jc'ii~

Cu'l'h p.'..Jid m s.1;:ppJlr:r.::

C:a:._.h pi'l i.& tr.i ~"l-r1.pl!-1y w~s

(':ASH 1F!..Ol·~'S \'.'ROM t.J(J~CliPffAt,

'Fl1..JANCD'K; ACfJV!TfE.S·

Al.'hvu 'rl;'a h{,11: c~her [ 1.1:1< ct;.

Adv"'~rtr:~,; en olh~! f.rn;i-­

Tr~"\Sfi"-:e:S f,(.}[!1 oih..:'.':~ \.;r.,~s

C A,$',H }1..0'!/;,::j HlOM CPl,J-"ff Af h.t,JD

13.f..Lii.T?.:-D Hl\\A~~C.!.N(; AC!'l.VI{U::S::

Pi·lj,··.-·;·d:-; :::n &~l·: lJ!' n•:.:::d ,b:_..;::-:;.

/1i''!:J;UUi~1Jn .:itt:1 ,c::0::,_-;\rnr·!:!c;\ Gf )n.;:n ar;r..o:h

:'l"i·ii!tt""ar.lt pHivlde(". \u~es!\ ~lY ,:;,pl~.il .1.ml

ff~(,4~,e,& fln,.,·,ci.J'\t; ~.~tiv.if;_,e!!

[rr;~tmei\! it:?i\.'.iny,s

N~r>:~ tu pdY.-J~.C:- parli1::r

C.,.l.:ih i;.(l.J. c1;;(l 1!<.l\!.>;1aleri!~ ,1,c-,.J ,-il ye:.;;.:·, ia!f.'l-uding

5,1(:<;;T% 111 c,1r.'1 h.:i.J ty (1.K,:1! 2i&E·fi.r~

,!7~5",0J.-5€:S)

(l,7!J,4.li.'1J

1:_;0-.:uu-1_:J

1.JJq/}S--0

lii57,7.8i. p_,~':iS,\!.1.-~~

{l,,1:i•Li,-58]

(.-;·:.t,,~r:74~

{1'.;~}

!4~Y7?.,::,19J

(i.;,G.'.J,..JJ •• ~

(7%VH9)

______ -:2:~::.~-- ~--------------- ---~·--0,>--L--~ ---~-·-95)!~~- "_,., ___ -- 2.:J~~'

!5(l'.:)):r,'l)

t.',11}:,stfl'1

~·,-_$::ra ------ ______ _.....,._

11-'5.?,01 -»--------~----·

:1u

('c\.1'3.4}/'2)

-\~JX/::l'!

!17.1,t$4)

~1S,..-".12,4J

(31 .. 745)

1)11,5

6,)1,ii<"L

(1{1(l_i)(l{l;,

·:,;.;_rU51

\S,82(\44:i)

,J,6.,1{),Jj}))

l,{Q,2S'j

375/,fQ

,t_;'.~1.?r:J.

(1.00},'.\"l-1

()H,1.0C,)

2':l}JP

(J.,2tr'J,'l&5)

1,"2Jr-Ji,;:t-;J

(~/"1~;."·0i

t7 57,B'.':-Di

1t/;j)i,'.?

('1-f;.{?1)

----~?:?2.. ----- .. ..:-::!:::'1x --,---•----~- -°"""---·--.:~~~L -=-"' l,1'J,,~:,,?.,f7_~ •••--w)"2~.%F;

l.Tli-,1~1.

City of Merced St,;ten1ent of C;,sh flow.s

Pmpriel:ary Fund~, Confo:med l~o.r n.,, year ended Juno' 30, ;,mo.3.

Rt.t:cn,ic1u AYff.!=K OF (lPERAUNG

P.J(.O~!E i~) TO .Nl?r CASH P.Rt'.l"i•1DFtl

(USEDJ ~y Of'f.RA !H·lC .t~crivn:1rs:

c:,:'lh pwvidi.'.d :1i:::ec.) by 1.'1pt'r-a;:!ii::1.i :u·!i·,·:tks

L'.'f::pJ'i'dA!:.i.-:m

At.'WUl\':.S K'>-'l..'1Vlll.\-.'.e

&:'n•!·Cc' ·,::h.::.1?,E~ f~'"~,:·iv:i:.h!,­

Prtcf.1:u:d iffn:is

l.1ttt f_tDn; (•tlw,- g.~i,'('Hu ,/'11b

De;1usit~

L1f'fon1:J revfT])_i<,:

Syt,b:.-qi, imptcVi:":;·.e.rt }V?.!!i.3 $:_i:str;,.u.. Colk-d::iun -------·-~-·-~ --·---------~ ~--·---- ~~·--~--~ --~------------,-

t,.i;,i'.!'6 ({:J:,j% i.54.LlZ 5,91,)"i'i-7

('.74,{!3,:_i) p, .. C.t,6"3.(J) (:U93-11) ?-3,::i%

(}::(/:

lfv& »A,·!

:J.?;,01.2 \ ,'127 . .:s,~.! (6.,LfJ} (9S n::::1X1

(l,_}~:2; c:JO,S5'1

t:, 421 fl_;,1JBq ·:?_F.'.: J/j!,?7

_______ !::-~~- ----~-- ·--- 0----- --=----a -----~~~~?!___ -~- 1J,2,'§~

LP.3:1.:i:': ----------

32

lntr::m,Jl

.Fw1-:::La:. F~mti~ .S,u, 0: I\m··5 --~~~-- ---~-~--- ,,,__, ________ ~~-·

{2i.H.36Q)

i'.-,-6J7

'.i,.4.°'?·\i~31:

~3~.3671

28.i

;1 ::·u J-:12. ~·17 --------------- ----------·--· ----

1,Ti'l,9?.-""J ·-·--~---~ ... ~- -----~--------- - ----------···-

City of Men:ed Siate.1:i1."nt of Hilw:iiUJ' Ncl Asset~ fi.dudary f-1,mfa Jmui 30, 2003

·rnrn• ·---·---·-·--·-13,~n;efa ___ .. _______ , .. ~

(:a.th, 1:~h c·qi~~w1lt~1ll't:i ,·u-,.d tr:.vesbncal••

ilH.P-ff:~lri:Ci!i•,:.:.hk

1.3'J.l S 37,(ll? l7i),,U11

li.'2

'[}~.,;_(~ §,:,!'HT1 ,.Jth€~- [_t)'~"~-:tl'Un.'!~-tl~

Depo:>.!ts

Adv<1.nc..as i.u ~Yllit; .fJu1ds

11

'So }7J·,'T! ';ic> 'l71,Z.!J: ----- ---=·---=~= =~--.,,.;;_-=,= $ 'Hl,\+1t --= -::::.--- .,:::::..----~-

F:...-.nds Tnt",.J --·~·"c--____ ..._._,.. ----·-·------

$ ,t65B,:1-P.1

io,1ui

35.-S.1~0

]7,08Y.

3s,1.1so

23~.s~f/~";

.:;;.''..'7J.W:: -----~-----

35

City of I\k:rced Sfatemcnt of Changes in Hducfa.;:y Net A.8sets

!'hh:idary I'tmds Fo:r the yo;,iil' eridi><l June 30, 20il3

ADDITIONS:

[nv~h.m'.nt Earnfr1gt:

Tran~;f~.:;l-n

J.JEf"'1CTlONS-

Ge~:it~"t.J g0v-t~m.m!:!nt

TnuwlenOut

P;{;gw1:mf~ ;;)l )1P<l1

I~ .... d ,Jf ye:a:r

">"k fc·,,-,.,:: Trt1.r.si~. i:'r,,.1}',,rnil1:t; tvk..i..'i!m.ls's Han

-·-- ir-,H:t~·-- - f.1"'t-:efit _ __,_ Enth",'r;/Ul.~'f",t. _ T~!.5'l. -~ -~Tm."it ~

1-5

----- ----w- 61177'1' ----- -----

---~- '761 .-------- U,., ----~ 65.95] ------~ 25~_,, _ _ ---4~'.~·~·~~

J.6 (5,9(,'3) (l,053)

l;)tili -·------·~--·-

9,532

!;"il,774 , _______ _

• ....., .... _....___ -10.!JIB)

____ ~!.'.'.:::~.

t9.7l:t

17

3S

City of l'.forced Nott:s to Bask Finnndal Stat-e:n:tenh.~ t\Jr the y;,,u etided f 1me 30,. 2mn

1. SUMMARY or S[GNJH(A_'.\IT ACCOUNT!NG I'OL!Crns

The basic .financiaJ s\-dh-11-rti::·nts (if the (\ty cl f\1~:reed, Ci:ilifornia: {City) lu-iw_. been pr~par~d in conformity with £~enerally ao::ept~1J. principles (CA.i\.P) as r.ipplh:·:d tG PFJ~ndt>s. The-Cover1l111entaJ A,."'.countirig Sta.1Kli:\nfa (G ASB) is the ao:-epted set.ting fra ~stablfahin:t;~ govern:i;n.ental accom1tfn.g and hn:.nKi~l :rt:p,.xHng p1.-incipJes. 'Hip TIKffE: t"ig.r'.:ifica:1.t 0£ d1t! accnu.ntin.g po~fde.s aYE' rh~S(".l''i°:\t;d. b~fow.

111.e;: City 'illf..3 Ap:r.H 1, 1889, Tr:1::~ C'.h.a-rter fnr the· CHy·'s go0ve1T'tme11t was ratifi~d eiect:or:~ on April '12, 1949; ap·pr-(lv<;:<l by dv2' lE·gis.Iature of th·~ State of Csiliforiua on I\lfa.y Tl and iv1ay 1.9,-19. Th.e City C'}~{~tah:t• l.i.n.d12r a Crnlrtcil::t-.,frm.ager fnrn1 nf' i~~:,.ve11·1_r-r,~·nt ittK1 J-HGvides the fo.Hr;;.viftg $1~1vin~s: ~;aidy (police and fire). h.:.;_gh'\.v-;i,.ys a:n.d. s-U,s·ets: 1:vater, 1·d1Ji,.e 12nd ">->.ratih=!watPr, parks (ind n:erlf!aticn, pfann~ng D..rn .. i zm;irig, airpon., and ge:ner.:t.1 adntird!it:·ative s0-v-kes

The finru:-K:iJ.l. rf:p;:utBng 1;-:::1dty1 -9<'.t defined by the Gove:m:tr1t:.ntal St;:3ndards P1f1ard ,c.zm:i:~£,s'.:s of !ht~ -prit11ary gu·1.rc1n.n1ent, t..11.e City, orgc.,r.L~atio:ns f-ot which pYiTitmy g:01.•etnrrJ.2:nt

acceu.:ntat.,I~,. ;;_nd any othe.r orga.ni.zation f,:tr v.,.-hieh frw natnie J.nd sigr1i£icance of their rel,it,r,mi:,jp ·.:ove1:ncore,.>t ;(;~r~~ su-cL Hut e-xdu~ior:; ~vou]d CfW5fl tJ-u~ reprJr.ting ertt:Ltf§ frn.anc1a1 :-;;ta1.,ern,e.!1b; or L.'1.com.pI.etc·.

T:be

As a rE:s.uH: . ., the:~r~ oqyJniz.z tin~~: an-: ,:cn.sider-t~d cotnponc=nt. ur:1ts of th~~ Ci!y ;1.nd a.n.> L""'idudc-:-d ,vithL"1 the finj;i:ncfol st.;:,_t,er:1-eD~-.~ tif the th0 blr:nded :rt'l1A.h.od. A ,':,Cpz.n1te fln1::1n!·f3f stateme:ni· £or the Re,ct,;s,1d,0pm~nl Agc:rH:y fr,nn the Cit.y' s fu1anc2 Dt:~paJ'.'~xncnl lo-,.:·.2ftc:-:l at th~ (Jty of t...:tf-tlX~\i.

TJ.?;]5 estiJ.bhsh2d ptH:SU;?.,i_flt to the sra.oc of CJlifornia tirnn :i'.·lUIJil,. ,,i:,litlt'd c,,mr:,,.•,mity J<ect,eH:lo,rn,ent Lc,w. is

cut the !mprnve£nenL rEh.::-'li:,jJlts.J~on a.nd r<'<:1e,,\'.l<}pt-.:,e1nt o-[

H1.Yuts of the City.

The ;)nd. been c:r>::ated ,n Atig:i;:st '°''" ''"" , ... ,~

is L.:; provi;_fr for t..~e fu:u-1r..cillg of or a pn:.:scdbeci. ci.-:.st aru.~ Fxp1::'Itse of .101_ui.~s:it10.n, ci:-,nst1'1.1cho11 and i..rn-,tallutjnn of al1.thc·rized _pub.Jc. cap-li=.i1,.l

~:~~::;;:.,:~;~:::;,:~; ,'.'.':ti'.'';:~:::~;":;~~~~!:'. a.ny £m~ndng; prnc,xlmes l.q~ally avaihbi.e 10 thi' m2mhds. All

pra:,~tidt: .... ~i and inve:=?,hng se-rvk·'t"~ fo.r tvt,2:c::cd f.ti .. 1:ripos,.3. Ta@k F\:m.:t? an.d h1t::rced StYrnoto whc~e funds ar~ ln th;.:, Cit/ti C,%h fer in·v-estirig only, The does

not. h.-iV(: tll-':e abiliiy to exercise ~nflu;2-: Kt:' nvn th-eh~fori;: th12se the :::1n:a-mpa.:.1ying. tir.1,.1.ncEt: :.tatf:n1c'nis.

39

CHy of Men:ed r~otes to B.t1~k fi:na.ndal St:1fente:nts" Continued 1:or the fffil' ende';!d Junfl'" .30, 200.'..l

.1.. SUMMARY Of SlCNI.HCANT ACCOUNTfNG i'OL!CffiS, C,mtlnued

The basic finan~·i2tL St.'ltEm~~ntf, 1.nclwJe both govenn1\ent,,wide: (bas.";":d on the City $~'.• a whok) and fr.m.d fi.naxidaJ stah?I!1E:~nts. h1lil€ the pn~vk:m~. repo:tti.tlg· model fmtph.asiZ{!tl fund typ(;S (the total of aJl .f..:m.ds ,:-,fa

ri:~:;olar "' ii:~ct1;,w mod,0

1 the:;~; ~::~:!:'h~~:j;~~h:~: :e;~:~:. :~;:n~~!::~~!'~~ expr:<nse~, a;:;;s!-!~:, o:r lfo'trilith~s a~\: at 1.Ea'3t te:n percent (.~f ti¥..:: conespo11ding tot.?ds for oJ? gov~rrm1ent;tl or cnter;,,ri;,P funds and. at foa:,t 5 of rh~ .;,:igi;;rt.~gate a.m.c;;o:i:1t f,.Jr aJJ i:ind enterprise fund.~ for sa-u.ie jt;;:nL Thf..' i'3 ahvay.,: ~,: rn.t.qor fund a11d any _g!._l'Vf~r1u:ae:nt or enterp:ds:: fu.t'i<l rnay be reporh;;,:l as a fund if ~°'1e .govcrnmt?nt believl2~s t.~at fond is parli.cubdy J.rr1portant to h_nandal sf.atern~nt u .. w.rt:..

The zov.errm,.ent--1·,.tid.e, fJr;_an,-ia.1 stdte-i:r'A~nts (rl:.~. th.e &tatmne11.t of net a::,sA.ts t:..nd fih~ :~.t.itte:rnen.t of n::11o;t iri.fr)nnation on all ·,)f Lh~: ncm_foln,j_ary a.ctivH:ics of !}ie For HK.' .1nvst pa.~t thi;: e.fkct intr2.'.hn1.d activity h;,5 been rernnvPd fror.n th.e:;,e sta.:f:r:.t'Bx~nts. .:Jidrvide-s1 1.,vhich normt1~Uy ctr!;' ;buppo:r:ted t.:.Axes .:1r1;:.1 irrl:ergow:·rnrrI•~nta.i revenues, are re_porh~d separntely lwrn. husiness-lype artivitfr"s, which :rely sig:nifica.nt extent on foes and chfilgt\'-.i for ii:n.1ppo:rt,

The sfa;.le.rrt::.?nt of ?J.Cti.vJties de1nonstrrl.t~~:-, the d-2t;t'.f!t. .. to v,thid.1 tl1t: d.iJ'f:ct of a given h1.11:_'tior~ CJ.fe;-:'

offs,:t by pn~1gnun revenues:. D1.1·e,:;;t (!'l-,pen.13E'-S ar~ fit(:50 th~.t are- c:k:;1dy spic:dfk frn1.ctkrn

:;;~;ta::,:~,:;;:'t":,,indmJ. 1) ,h;~;~~l:t~t~";;',~:, :,~' grants ;:~ •;ro~~~:~~ii:~,'.''~~::!r~: :::,;~'~.t~:,l;~,1:~:;~~~d Ln ;~;~::

1,~r;:i,;:n:'.:'~:l/:~1:::;~~:·~:t~:,:~;:ia;,::~;1~~e!ui;ction Taxes and otfo,r items

St:'fhU-ate fi.t.1and4( statcxnf~£~f.s :r.H-::::· for gc1ven1111J.::ntr::l Jund ... ~, h1..r1cb:,. and fiduda:ry hrnd.3 .. -1.::ven thrn.i.gh tb~ i . .:1UCT are frc.un t.~-c govc-rn.nwnt.-1-v1de- state:linf:nts. h,,fajor trldj vidu_al govermrn,;,,ta! fund.~. and .(tia.jcJr frd!.vidua.1 ent~rpti.s.e funds ;.:.i.rr: rr~poirb.•d ~s S€:par21te coio:u:HIS in the fu.n;J

staterne:nts.

The govemnv:~nt~wkie financ1ttI stG.k.m,?.nls are r~p-orted thf- ecvncnTii(' res•J\ll'Ccs .H'1i!1:E:iurem~:rit fc(us ar-,d t.h,2 .nccnrnl basis of as are ilH? rnoprieta .. r}' and {~nd. H.us11iciHl staten·;.enrs. Revenues urP ret'nrded .. 't•i'1H::n and e;,.,_p-ev_;.~s ar,;e re-(:.J.rdt:cl ~'i.-hen a 1s ~\CJ.Jrred, regard.ie:ss oi

:·:,:~m~{;.,::t.:"~~~~;i~::t:/1~::~·;, :::'.''~::::~,:::~~ :;~;:~:'.::::~~:,t:~~~::;;~,tli!/:;:~~:::.~:;~:~ i;~;;;.~:~,~ by th~ pt0\1idt:!r ha·v,~ b.r::er: iH-?L

Governn1ent-Bi fond financial ~•t•ttt:mt~nt.:i Cert- rq __ \ort,ed using the c·(n:rent filta.n{jal reSintuT't:5 1neasurt21nE·nt

~~~::u:~~i!~tl::;~,:~:g:t1tt\~:~.;:;·~~~ :~:i:::,:.;:;':!;1 t~p~·;!i:~::1r:;:,, 1::i~::;;~~:-~:. :!c'~~;~l',.~~it~;.'.1~,~-~~:;·~:i; ;:::.:,:;~r~~~~:':!.::,i':~'::~.'.::,:!~' ~1~:~'::-~'::ta\~!~ t/:;t:U:;~~11c;:~t~:.:' ~'i~~;:1~f''''"1;., for 1fos the fi..,;;caI pedod. Exp~ndUtue,~1 gf~m:~nd1y are r~corded. in t!~,e ar·rounrillg perkd.1n fr1'} reWtf:d Habmty i..s incurred

40

City of l.'vl:erced Notei; to Bz,sk Finam:ial Stat!i!JJWnl.s, ConHrn,r:d Fu:r the ye;;,.r end•cd. ]tm.;, ':JU, 2JJQ3

=-·--~-~--------~-=;.--------------,.,-=;:;~------~-- ----·---- -- ---- ~ -·---

The goven:·.Jnent reports the following ntajor go~·e:r1H1K:ntai fo,nds:

Tlir Rl,;_,:d.c•;.'1~lopm('nt Ag~nry C;-::p.it,::d Prcji:~ct. T\,1..nd. l~ 1rn2d fr:,r p:rnji.:~cts ('::":.tcied out 'S~,;-J_iJd.n the

Hcdf'veh;prn.e:nt Ag~';'ncy.

Th_~ \r/ :?!Stev,rater

Thi:. fund -coHec:t'.':l Fu.nd is r~.spor..slb:1:- fer tht~ trPah1\ent of i.tichJ}Ji.rlai :::.;nd dor.nr:stic 'f..vaste,vat~.

user fees a.r~.d ciishur:Se5 ;~H expenditures fot this purposf.:.

Tilt.>: R.::.-fusr=- Collec-tic:n Pend j$ w,t!d. t.v collect and dispo~3P cf umnk:ipa-11 snHd :,va!:cte for ~..r1dni;txiaL

t'l-)nlfM~rcn 1 ,rr.d H!·sid,;:::nti~l n1strnn2rs.

41

City of M~,r~'.ed Notes to Bask H,w.ndal Stat,,ments, Continued For the year i:nded l ,me .30, 200::,

1, :SIJ!v'LMARY Oi' S1GNH-1CAl',H ACC,)UNf1:',;G P(lUCIES, Continued

Uit'2':n13i ~J{:1_·11-i((! F~..1.n,Lit'> ·R~e u.sied to, aci.:ou._nr for :9e.ri.ices provi.:::i;;d tn other depm·ttncnt_q uf th.e

f:/''ffe,ntrr'o't'' nv,t;, .. :~~.,:~. '~5~::p~~::~::~,:~:~c:, ~:~:i:;"!~~.~:::~:.\ s:::p1;,~:n:% i:: r~~:;.~rr:'.;~: Mene-fit:6, Fk·i!.t 1"·,:!"ar~ar;etn~nt, Pk:i:'.:t R,epiacemerit." Fat.:Hity [\fa_iri.tcn1:)JJC2; Support St::rvkt·s Hnd H:~Isorv:ti Cornputei 7vf;::ti.~tenwec.

'Hie Priv.a~t'. I-''urDNk: Trust Fu.'l.d.~, a,re us~d to ea<.:cr..runt for resou.rcPs kf;aHy held in tnt:it for the Task Fon i:? 1.rust,. Tt;:u~:sit B~s .. ,"fit 'rrust,. Yuu.ih P1·og-rinns Endo"t"".i1.nent, l'vicC:ornb' 5 l ru~i .. ~f1~d tbt- VVahnda Hall Tni:st

Certsln f•lb:Y1i11atior~ havt: l){:'t?n :rnad~ -3.5 prcscribE·i~ ;th.-Hvities, atd H'i:T~ivabfo1; AH ir,.\e;n,:-J in the St.r,item('ni !:,f Nt:t

.1cti1,itips_ w~:~;;r:~,t;),e ,cpr,~:::,}~,~~;i::~~:2!:,:;;~€::i!:::;~~t;''.~~!, ;~!t~:-'.:e,::f!~'.r~ninmn_ St,;;1t~tm:·.nt ,)f intfrnaJ ~"iervirc fund tran,':.•a;,::foJr..S have h-2,;;;n efuninated. I-·h:,•Never, tranr.: .. "tt'tiDn~ between go-..·e-::n:rne\'l.t2.J and hu-sin.e;:::~.1-type acti:.r'i!.i·~s h-avr: -riot be,.~n <::iirninated.

A1'nrn .. ~nts ff:p<Jrtt'd as. rcv<~nu.~~ includ~, .. ~ 1) lo cusf;,xn~rt, fot servi.ces, 2) Cf}P.2::-attn.g. g,:-c.rits -and ~~ontributi.cr .. :,::,. capl..t.JJ gra.ntl::: arid in.ch~dLng sped.al !4~se--ssn.:<ntE Internally d.-~dlcat"=!d :tesounJ!.B ? . .re: rr2.port.ed ~HS £t,1ri~r1d n:1:·v.e11u,.,_: ratlu:..r than as pro~7P1.t:tl re,•enues, Like-1.'/l:Stl, ge:;.1e.ra1 t-etre.imes 1ndud~: a U !axes.

Thr:City cu.r .. renJy ail,::}!~~a;~,;~~'i:U::~:~:;:~~:::';,',t:;;~~~lJ::~!e~I:;::[£~:~:~~~~~i~~1P:.\nJ5',0",,'tu1:C<'1:1w,,its.

{"r·A,SB) St.,"iien.w:ni':-; a.nd interp1.etatim1s, Ar::cm1nJ:in;r, Pru,c:ij:k,, U,::,,,,,ct {APB) Opin.i.on..-3, ii.lf'!d Accmrnr1_ng Research P..uHf~t':n5 (i\Rl1) oE fhe o-)r!tmittce on Acco1.mt,ng Pn:ic,0d""'' '111e City applies aH Statef:n(:ntf.i a.rd lni:~rpretatl0t1:; issued after N,·,ven'il:,;,r30. ti1osB t"hat c-:•nfUct

42

City o:f Merced Not~~ t.o 8.;,sk f,.iruut,cial Btat~n1.e:nts1 Contfnu~-.d for !he year encl,id Jmw .30, 2.003

1. SUMMARY OF SfGNlHCANT A(:G)UNTL"lG l:'OUCIES. Continu-,d

i/li-h"2-K\ an is JJ::1n1rrf':i for purposes for vvhi.ch both resb:icb-~d ,ru-~d um'Pt:trictr-d nf~t a 5.5<.'ts o.re ~lViJjfa,b}e, th,, Cihi's ,1c,ii,,c 'Ls to .!:1pply Tf;:"3{riz-teti f'l(:( as~~~i::5 first.

The City :_,1 an i.nv:.:st-1.1t;nt poo( h,~ the: State (,.if CE.HforniJ tided Lcw.:aJ ln.\·'-£:'~t11,12nl \.a,.r.h.1-:..:h hat< invPt~r,::d a of .. ih.1.~ pPnl fo.n.d.s in Stnu:ttl!C::'fi Ni}te,s a.t' .. d b1:1..t.::iPc.t S-::curttie.s investrti,i~nr.s i..,n:- subj.s-,:t to ct-ed..lr risk 'iiVi1Ji tbE: foJ.l 1uith snd CTli::d.1( of th.'!.:; State nf CaLifot.nia: coliat.t:-ra1i.r.1.!1g tl.1est! irrvest.n1eflt~.. !n ;;i.dd:fr:iqn, th~se Stntctured J\Totes an.d Assd-backed ~i=-n~r]b<:.?:s aJ'f.' sul?~ed !'·:) r.na:·ket ri~k ask· chan,q:- in interest .rat-es.

Ail T";:CC:ivables at~~ .shcvitn n~t t,.;,f "11:. ullowru1<·e. for dou~itf~U a<::,;,.~OilI\(S. Sf.:'rv_h.-_~ r-::vt-::nucs (1N;,1r-Er,

svr01er rutd. rE·f-us<:~ collection) are t.:-::cord-r~d :dS billed tu {_'1j8t\)JYl.i!.!fH (ln a r.:yc.:...iGJ.l l-;~tsis. utiJ.:;ty cu~tc•rnersi

.are bfiled n:Kmthh. An1.-:r11nW ·unbWeJ at June 30 an;- rc.·cord1:'d tis a ·i·eci:'Jvabh"l and recogni?r,J r,s re1.'c-.nue.

Adv.-)1:(es- ro and iJd·:r'~:nc'.;-S fr<n:n. other .fu:nds /':..dva11,:i;:s b::.tv,.re.en h .. mds a!'e: oHset by 3. fu.-!\d

in.t.Prh1nd lo.rln.s -:in fue fu.nd fina.r1cJi1l sta.tr;;m:f.\nls. d,:.~ferred re'i.1 enut: ir1 1::·1~ applic1bk

govcn1.11'!_enta! funds to indicat: 1-h.';!.i H.1~Jt are not expendlablr J1va.ibbfo

All other outs.tan~_.:hn.g b;:..1,n:_r:e$ bct"Vv1.:S1.:."n {r.1ni.G iUE' rcpor~0rl c .. s du,,:. u.1 and due f:ran.1 (b.tl-:.e.r f--wi..ds. Tlws2 arc· genn·nlly repaid '1NJJln:n the follmvj_r~g fiscal y?crs.

/1..ny n>s'ldual h . .-•J?.n.:-es out511H1<(1ng bt-:h1,ree11 tlv.:- gfJ"Vernn1.entQ\ acL.ivitie-s and bnffln~3;;---typ.=:· a.;..:tivitii-'.;:;; a1·,;:: rc-p,:'irted. in tll~·? '~i11ter.n;~·1 b.rt}?,nc(':s.''

City of Mer,ed Not:,;. tG Basic Hn;mdal St.1tem.ents, ConH:11u0i:d Fo:r the y1c.it end;;d June 31l, Z(l(l.3

1. !iUMMAR'\I OF S1GNIHCANT ACCOUNTING :!'OUOES, Continneci

Inve:rrtor1,, i~ val;_v:d at cosl, wfrkh ;~pptox_\nl.Jt~s- ~~ost as deL12n:n.incd i}rt a firsl~1n·first~rru .. t br:.si.5. lnven{orY in tbE! Cenel'al ccnl3ists of expendable su.p•phes held for consumption. by ail deparll:nents u.f t1;e City. The cost±.-:; r-Pcc-rd~d ..1s an exp.,~nditurQ OJ expense in the fur:.d at d~P tirne h1.d.ividui1.'1 1nvent,:}ry ih;:,.:us an~ \v\Lhd:r·a1,\'n for -u.sc (con.sHn1.ption tn(;lhod). F-..i_.:.Kl .invt'ntory an1ou.nt k~ e,prnJly offs:::t by a fund balance 1-c.sc.r11.?atic.n,. v~1hkh indicate8 that ir ,foe5 n.ot r...'or1.~tj_tote exp .. '!ndabh:­avaihtb·iit· f.ina..11d~f resrn.Ece~L Inven.tc:tie!- i:n fu_e fH0p1'1et;..uy fi..;,.nd.s are f'{~~~ord0.d at ('OSl., ';:l'.thkh .appro:-d.tn.a!e~

rl'kb~keL

Land h;:Jd for resaJc -consbt<; of land artd pr<>j.:!ct c.oste1 n.:~la~ll'~z to proper·~y acquited e-r cnn.stru.cted whjch "i-Vill he sold ~ui.d!.:'t tcnn.s of di3position and dffve1nrmient ag1·-ee:rr1e-:nts bet"'\V(:'en the de~.;e.k:i-p{~rs." The fa:nd. held .for r·~st;ih_:c j5 n:!corded at tJ:u.~ lower of ;.:o~t tH" esJJJni.1\t:d n€t -..-alu{:, Reported a.:tii.rn.1nis F.::.-re fully r2se:n:0d, 1,,vhich :indicates tli.at do not con<:;tif-nte exp1:)ni:fablr. avaib.blc t'2:SOurces. In the F:t.,11\-d F:1nanddi Slatc::,rrn:•nK ru1 muount equal to carryi..n.g vaku~ of L:--i.11d it.; n?~-lf•r\,,~;d in h!nd. baJ.cmc~ beca1L'4 .. e :sur:h a.:,st~t.,; c1:re t\C.-\: .:>,v·i~ih:tbie. "'m fi .. n.and: frtP CHy\:~ cuni_::nt open3:fo;i:""1..,,'3.

n:1d. ;;tmf:l•JJt."!i'~. :.m1in:v,:u1:ents o~her fJu-1n O\t.HdL~t~-;, ;;,;.tru.:lureB an{ land eqn:ipr:n.:::-nt1 ccns--:ructicn in pror::-:·e-_~s a ... f'ld inJrn:stn~cture asf:,::-i:s a-Xf.' rq:iorlPd in thi.; iJ:_pphcahle-govr2~1unPntal -or i':ru:.l1\e5~_:-iyp1.~ i.n -the G-:_lvFl"HJ'fJ .. cnt-V'ijde Stati2trn::nt~ .. Ca.pit-Gil u.s·.:,.2L\; ar~ re-co.rd~d at hist,::.r.H:t.~l co:::~ or e3tifn.ated h.i·s-tnrk.al cost ti <Ktua! cc'..!sl i:-:; not ava.1iable. Dc•n;(t-;;:•d nsscts a;r:' v:~iu~d at their e,~::;tir.r:~::-d.·cd L:.1ir -..!.:':Jhtr~ t!;u~ ;:btc dnr:~1'iytt City poHc} h.as :$;et th~ capHaii-?atioa th1\~~,hu.1ds for r-er~orLtng- capital assets ut th~= fol~ov/i-og:

Gen:cr::il caF~f"'"Al a:s~;ets

Infu};trnd1-ire capit2i1 ass:~h•

in{r;1-s'<:ri.\·.:tx1.re.

~~~;~;~!:,::;:; .:!~:·;::t~~:~ buildmgs 1\!::;;d·-.J.ne-17 and equ1JHYWJT,.t

500

1:n )1.u'lc l99Y._, th:2 Guvo .. r.11.1.ent•il A, .. , .. ,,,·ml"'r'",., ~,t~1.wianb 'Board (Gl\.SB) ]~~'.'llH~d Stat.e:rn:-t:nt No 3A- 1vhich

reqt::d.n:-s the indus10n of infrastru.:::h.iI't ba:sJ( fir:.s.rn:i.~l ,;t.tJ.l..l'me-nts. In f~C(:orda..r1.c:: ,,vith G_hSR Statem.ent Ne an ir1.frc.structurt> in tJ1(:· 2DG2-03 h.a:-ik fin .. 1ncfa.t !:?ta h~1-nent::"-i

City of Merced Ncte,c lo Bai'!k Fimmdal 5U,teme.nts, Cnntkfued For the year ;:,n&ed Jmw 3-0, 2003

The City d.-::J·i:.1es h:-tlrastn·HJ:t:ITe as the b8!Sir ·physkal asa,et5 ill;.ljt a.11.::JW tt,e C1ty tt) fr.:m.c:riot'L The ,~ssets h"""ldude .streets) ;;,rat~J .. ,md :.::e,A•er s.yst.-.;u-ts-" park lam:!., ;:;111d ot.h.e:r strn;Jar iter.ns. Each majc-r infrristtu,r:hu~ sys-tern ca11. be d~vided into subHystf:rns. F~'.):r @).:J:nnp1e .. tbt;' stre1:-?i sysrPrn can t,e ~mbdt,vided into p~ven·rent, cu:rb an.d. gultersf side~vaJJ.:.:,, mi;:.Jhuns. ;Stl':.~8:.lightsf land..sc'.\1pin.g an_d ia:nd.. Th,~s.€ sub6ysh.:rn .. ~ WE·re n(;.t deiin-eated in the h~.si~..: frn?.ndaL ::t.dre1nen:UJ.

The City elE"-Ct12d to us.~ tht: Basic Approad1 as defined hy GASB StaJem011t I·-.iv. 34 for infntstruchm? reporting. Th-2- City coti.Tn1fasi.on.~d an a.pprnhmi of CHy o,vrn~d U:J-nmtrucCT.u:(' ,llLd pror1f"•?ty as of fune 301 2003. Th~ a_pptGisa! dt1terr1,iined t.he uri[r,.n.al cc:lEit whkh is d~fio..::d a~ h.iaSb:.nicaJ c,1st. or e:~tfrnct.tfld historical

ii~~:f £~~ ~~~~~~~:i~:i~:~·r 1~I:.~2~::::~~~~tii;';}~f: I~:~:~~~::o,rh~:·::,:::1~~~:~,l:."~::~,,::~;,i~t: t~;

~1~j.f;; H.(COU..ntS for <'<',m,a>ensat,,d ab~pnr·P~ ~~:,~.COrdance l~rit!;l;,::~:~tJ~;~;~~1

~~~~,:~~;~~ll~:;; lri:.~~~~t~:::1 bPisi:< of a, Tt1<BTr.ti..ng, t-:arn, .. ~1...L

com_pen'3 1ltr2:d t.:b.sern::es. .i:H'f" r(•O)tdc~d as lia.hiliti•:;;s .:.16 vestt~d and

J.U t..he C-0vt:1":rnr:..w-r.7-\1Vl.J!-:._ F£n.311.~-.::k11 5t.a.l~ment':.} ::1.t'1d Fu ... nd l-;ir:.ano.;J.l Statement8., d .. :forr-2.d .rcven:ae ~ tt::C)rded !Yhen h·ansa.ct.lon,.s ha.ve not yd .rn~! t~l;:--' ;c-,,:e:m~e ·i\.::cog.nhiou ~tit,-::r!zi lm:~!f'd .. i.)n clte mud~fit_1d ac-c~uai basis (;,f The City recan::1•; deferred rf":"Vf•tme f,)..r trai1,s:actJom; for wltkh ;:·e1.'etn1es h,:!'.V(: nnt been ear:ntd., c,r iur funds are not avffr_hbl1: to rn-=.·d current iinand.a..l <Jl:ihgati::1ns, tra..nsa.<:tious for vvhich tfofr!rred n-;vi:~nue is r£cc,rd.ed. ari:~ fDr re·venues r?ceiVt'<l but notyet-t.•aJnc~d and tE'ct:lvahfo.

;i~~;~:~:1:~:;:~:l::!:~i:;i!~~; ·~~:cm:,::: ;;l g:~t1f~~:f i;:,i,; FE,::::,[:~'.;:~l~~::~~~i,;~:~i~(;i: payahh·~ arc t;;--~p.:Yrted net oi lhe a.pplkabk: ·pre1-niu rn or di~:c:.:i11.nt. L-Gsuae.1.r.1.0:~ r:os!~~ .fl.re rnporl.f~d as expenditu:rcS>.

ln lhl1 Fund .Fi_;rnnda} St,tcmeni.s .. gnver.nm(:'.nl.al tnnd types .r.x-ogni..~i:' l:·,1.:rnd pt€Jlbiurn ... c:i 21.nd discutr:-its.c fiS

v~rr,11 !c~i b·ond issuarn: e r:o.sts, during the ru·n:<:nt p-u:1od. The fa(.'e ,3Jn;.>unt uf the debt l,g.::rne(t is r~:-po:tE>d i:IS

~:~~;, ~~;:~~t ~;','-';;:t i,~:;:~:~:~'::;c~:;;~;;:J'a:0,~~~:,;·::~~:ir~i;'\.,:!:}r~,~::u::,;::1:';~t~';:.:c:~;~,;:~;~c:: (•xpcnd1tu rt~$ ..

City of 'rvlerced Nc,te;; to Bask Finarad;-;J Stat.enwnts, C,mhmied Pnr !he year >'m.fod Ji.me 30, Wff'l

0 . .Net Assets .an.1. Fw1uf Equity

l!rJ!f-5ifl;J.fu._f~ilill. l}S~:;:f;§_,j~leJ..S!.fl':.:.dEtfsf.___1)_:f..~!.t. -- This an1.otmt ~~on~ist.; cf capital as~,iets net of a.:curnubtcd deprcciaton and n~,,:.h1-:J:±d by ou.tsr..a1·1dh1g d~bt tltat- .Te, aitrlbuted to the r:t,;;~qub .. ition, ~Y,n!1tnlction" 0r i,npr(JV{:~.n:wnt oi the as~t.::..

F'.esfrifk:4 Ncf ... £'1.ss'.:'3'1;_ .... This a:n.u1tm.t \$ r~st_rtcl~d by extern.al cr,ed.itm:s1- gra1.1tors, co:rd.:rib-otor13, or l?.n,q:: or 1,::2.gufaH.ons of ,'.J,::he:r goverr,.rnents.

i::L'r1<l d"f!'sig;r,.atiorn.;; c.f ft·md hctfan(C'S (:J gov:2:1Tti--::ne:ntai furn.fa and 1.rnJ~t1tricte-1.l pr<,pri€tarv h.m.ds a]·e t'r-eat.ed to ei'4-,.cr C\.W"etliHlts., b"'1.duding St-?ite hnvs, that

fu.11d c-.: . .p!l\.Y be s~gn:'"gat,;d o-r the part.ion. ~:.r tb.~ -h.1t'"id equity !\OE

fu.h:ir.-2 ~::,..~pc;:vJ-11-urt:"·S.

n·,f-" pr.:..•).;1.~a'l,i-1. ··if fi·rnm·--ctl ~:i~a1.P'LG-P/1tr £11 {JJ1l.tO:;;:Jnit~~ v,:d:li .:i·~:tf_~J!te;

1 ;a~~~~t:r~~'.jnt1

1:1· -T:.~al-.c Fsti1.ni!tc'S ~md. i1Ss:;urnf:tir;ir1s disdo"J:1.Ue.G. 1\~:,··ardingly. Hctual ri:~:-mHs: could cHffr.r from those >.;•stim.a.t-cs.

ai:cot1.nling prf.r1ciples n--rwrted arn,J-U.Hts an.d

In . .fwc,,.d yeat 2on1_. th,~ n~M; a.ci,:)1ffe1ting s.b:1.J1.d.:uds in ord.:1;.~r to conio:rL'1 to tJ,e folk>'Ylring Go,,cn\nwnta} i\cc,:•1c1nl:1.ni'. ~dt.".11:dards Board. Sta.\-2.rnents;

Stah::rn~nt >lo. 3,t B£t'.'1.t Fir;.:mci{Jl RV:~f1~ments and [..,fanagen!ertt';-, Orsc:u,;sh•n and Aru1iysis -< fol Stat~ {lHd

Ur,:-11{ (;avcn1t1·1~uts

St<1i-en1e;:tl T<ti. 37,. Bt1.-.;u· Financi!~l Staten:1:nts and A·1arrngem{·n.trs f>i5cus~;iiUl m·ul A,-wl_ysi~: -for St;;:.ti: ur:.t Lorn/ C«.!':):!n1m1:~nh::~ Om.nitus

Gl~,.SB St,"1ternent No. ·3:1 i:.; :.! nevi-' iiwm·cirtl n:·por6r:g r,egn:rPrnent tm- State ~nd Loc,.;-~l Covernrn.1:nts i.n the Urtited StnilC~~. The City h-n:-1 1Ji"1.1plen1.ent;d frti.8 pr,,noo.::·tn~anent .~rnd .ii.a:1 restn.w.tured m.ud1 of the 1rJorrt"k.!!:ion thdt i~ ha~ in fhe past The 1:n..:an gnaJ is to nt~kc the n•porh• n1orn c:..1:rnr1'{tht'nslv(: .i.,rn-d (~.asiftr t0 unckl'Sta,r,.c',

City of Mte,ced Notes W Bask -Finanrfia:1 Stafen1ente,. Co:nti:nv,~d For iii" y;•;u· ends'd .lv.n<' 30, 2003

GAS!l Sta temmt;~tN~~ :t.::~;,;;:!:t;t:~:~1:sn:t~i ":~·t;:;:,~,~:r~i .;t~~::::::::, ~~d ;,~:.,;~:~::~')(:;%~': Local ThEs1~ St",.a\en:.vi;~:r,.ts rrud,;~- selective chanit=-s ind-udirJ.:.g ao:ou11tir.g f·:.)! F.3-...::heat

~'forlagem.e:n.Ls: Diseussion and Anaiysls1 C.apital-12:w.Hon of Construction-Period ::nb~:rest, Jvi.odififti for Reporting lnfrustr.w:.:t11n.: .. Prog.ranL l{e1.1 e.m1.~~ ,and £\>laj;"}r P.tttKi. Cdberia.

GASB t:,tate1.ncat "!'.:o. 38 Establish~:, and 1_nodifie~? disdosure r~guirf'nw11ts H'!!Ak,J t3 Suxri.rnary i..\f :;ignffkarl!.t Ai·c._:nxnting Policies1 ;]ctions taken to a:idre:1,::,: viol:1.tione: of ,s-iv1ifk-1.~nt. fU1an.ce-N;·bted legal ai..:o.d c<tntractu.~J pt'o,.risir:.ns .. di,:bt a:n.d foasr-~ r,bligr.if.iO:t...~. sh,.:;Jt-l1;~:r-rrt dftbl, dfaaggregi-;tion of rect:i-vabk m1d ?aya.bi.e: baJa.nces, und interf1.1.rd bdi.3...t).C(~S m1<l tra.n.sfr..:rs.

~,. CASH Als.l'l) !'VVESTMJ.:NTS

11:1€" C"ity i.n,:~.lnta\n~ ~.t .::::i:-ih an.d itwcsr-mcnt pooI., i;1:rh]ch D-.1(:iudt:s. caNh b;~for'.ces: and aulho:·ized. itlVi~sh::nent;. Qf all funds, vdUc.!: th . .?:~ l'irn1n,;_'£' Off:::('.er kn,~·~st? to ~::nhanct: intcre.1r e.a.:r:n.1.ng~s. The p1)0i1;:-jd intf.2ff.•st eaJ.T1ed 15 ali.ncated lo ~bi...~ f nnds t"'-"i.5~!d. :.:n rnon.U.1~end. c?t.~-h and 1n·,:e:stn\ent bah.1.i:1res 1 .. n. th.t:::;;1::• fr1.r_ds.

::~-~\~~:~ !~' 20m, ,!;~ ';,~~~'.1}~~:n)u;{;'.;t~~,-~=~r,;li~::~~:~!~!~: ... ::t,~f of :~:t~~:r::.'.crn ii, City\ ;v .. -:-{:·nunt l/l:?t~ 5'4,:'."!],066 a.:111 ~~vi::re f11lly h1sur,2d and cnJl,;i;.teHtlizHl ~v1t1, scct1.rities held by the inE.bt1-tt1ons in the City'$ n.,:u.c1.;; as discu-:.s,~d bek;v,'". The diJf.eren.cc bi-_.::jy,.'"f-'en

the carryi.rig_ at::,ount reprt>.s.P.-r1tS· ~,utRt.andin.g c.iu .. ~k.~ and d~F·osits b trant.,~t.

rhe Ca.tif.c:rrd~ C~o-vcr:n . .n·,€nt Code l'-\~-i...}ui.ri:!"s Cal.!lQr.nio (_ia.nk..: and savi.n.g-s and ln.a.n ass(ic:i~1ti~-,n.s to St'.f'Uf'C t.ht; City' .s cash dermslts hy sccc.rHies a:; o:JiH:lteraL This (:c,de statr;,s Lh;:.11t collaterai pl2dgeJ in_ th.fa

~::::~:: s1~~~~11~,,·r_~~:rnl for h1te>r:\,:':~~}',~:1t,~~~-~ ~;:: i;~,~:';~~r~;' ,;~:::r:r u,:v, cs,snuffprn,,c-,. \:Sllin•tYt1a l?.-.-", aLS\·:, 21\b"\-\'G it"Lltit-.. i:hans

City dc·,x,·-.·)t-:; 8. va.i.ue of "!50% c:f the Ci~1,/s total - 'Il~~ i".~':1~;" rnay which ~re h.i.Hy insured 1.:i-; t'c

''" ,.·,n ,.,,.,,., __ ,, t'ii~ Fe:it~wl Dep.;:1sit ~-n~,1.Erln.ce C•::;,rporz.:tbn.

47

Citv u.f Ji.forced Noi'ef:-i to Ha_si.c Fina.ndc.d Statem!f!:.nts, Continut~d f1u lhe y!;;;r r:,1de!d .hme 30, 2003

:;i:, CASH AND INV.1::STM!2NT5, C.:mfamd

The ·is authnr.1Zl:d. ·by Stat.;:, staluteF, and in acaffd.am:e ~vilh th€ City':::; r:nvr:sU.nent Policy (the .Policy) to irIV(;:St the folkiv,·iP~

US. TreastHJ' rmJ U.S. Nnn=r· .. Jegntli:1H1;:• CJ.?rtificat·~s DepuKit C-ilik1n1.la Lo.cal Agmicy IT1:ve~l:c-1rm;1 fund. (LAlF) Gove.r:ninent fi.onds and Notes P2,:.3r-:hi ... ·1(}k S.'i·t:-iz~gs

lri~ Po1ky. l..-.1. ~ddition to SLlfo: ~tatutes. :::·~tHbfo:;.hC's ihcti {u.1:1&1 on ~fopo3.iJ .in ban}.s D"ta.st be ff!J*"~rilly .1J1.sured or .:::ollaf.t:--,r:il{.zt;>:d ahd i,n.,.estr1wnf!. 5holl havr;- a n-:.a.xln-1.ttrn. 1:;1.a.fffnty not to e"" ... :ce,:,.f fiv~ t."2 l,;idtl~red ar,d 'basi;:;d. en Ca$h fiow fr.rDt·:~('~SL'S;. nnd st.\h,JE:'"'2t to l\rri:H,\dons t-;.) fot e0.ch of th~ aut.horiz?ti ir, ve~tu1\=nts.

In iH .. ',r.:nrd-2ince vdu', G..:\.SB St:u.te1nenl: ND .. 31. Accounting til'lti. FintmC.t/;} ]°(.i:,"ptniing ji)r Cet!.:iin Irn;t:ribtll~ffb ami jf.,,­E:ntn·tal l1o·t.Vt=inu.~1ts Pool-s, invc-:sb:n .. ents ~re st3.ted ut L:tir vaJ.as.

lr1 accord.ancc ·with G.!".i:1E Sl:at-<.:"·::r1;;;;;1t No. :S,. cr.t~h d.epusil5 Jnd 3nveslrm ... nts ait: cat-eg•:irf1ed seraratL-'ly to gtv-e an indi~·atiOll c:il Uw iei-1:J of risk c:J$Stt.r-r1ed by the City. ('.,~,;h depo:;iL~ and inv.estr.n,2nts not sul:+-'ct io su.d, ca({:gorizatizYr: m1der (~A~B Sl:.;ternenl No ~1 arc- ir.h:?11.biir;;,,'•1.:i a~ 1ir..u1cai:ego.rized.'1 Thi::- City·'.:; t:a~b. deposU:s .a:nd 111-vt-.. sb:n,ents a:.:f~ categ,:--;ri.?1.::d li1 t.hc iolbwittg~ uw.runer:

""'se".i',,','.!."--=- - D .. ~pJsits which aa• in.svred by th.l~ rD1C or ~oHJtt:n!.Iizcd with ~:.cn.irlhe? <lnd hdd bv tht: ag-erJ: in Lt1:-1;.' O~-y's nmr,.(•.

"""'"'4

'"'.j'-S: ., r~:~t~:Cl:;;;i~,~ l~~~d ~~·~~;~r~:~e~;i:;t::~:'.::::ri~~1ti~1l~:~~~~ by

agent bc.:.t not nt the Cit:)•:s rl?..B1t?.

ha;-it~. ba.1ano:· the.. t is tntSt d..-.·partrr,.e.nt er

City of l\:ierced Nott:-~ to B.ask Finandal Statif!n:1er1ts. Continued Fm th" year ended June 30, 21.lil.3

(J!-tf:Z.Q!.!J.1, .. Ii1vE~hn.enb '1/i?hit·h .are urti.n.su.red or l1nre,g:lsrese1.t but ate heki. in th~ iinandd fr.L5'.tH1.ifr:x-(s

trust de:rm.1 .. "tnenl and. ~.re ret::OTt-h:"d. in the City's nanX:'.

k:Vf::','1.:rnents-, which a_re rtnl.i:.u.:~u_n~d or un:registcri2J, -<.md t...:rn he!d in tfw ftnandai jr::..s:tltutiun' s tn11st,1,>·pa'ct.U1ten,l JJnc.1 at~ not .reco:rded in tht" City" s: _nam£:.

:01:alc,,mentNo. '.l.

P{)(Jk•d cash. an-.1 i.r~\tc~~i:.inenm. i.ra.·l1_Jt..Hn.g (a.."-.ih. with fiscal i"lg~.nt v-;12:tr.: c1a8::;ifiE:d l..,y ri'9k cnt<:'gm..ie:s a.:, fol'tow:-:i, at June 30., 'Z:)CY.J

{:JJ-y Tt\'"c.,w.ry;

11e:,na11.dn:i!p'.1.~ii11

Cas;h U~on:'l1~

fov~iini.c-1::;~.

TJ .. :), Go-W·!1l"!!'l!!n! Mnt'Li,11 Fr.mu L0o·;a ! Agl:!.fltT in·"c".-6!:'".ner:f l~ni,d..;;

if\:d:«i:in;'e~1u,,.-:1H:;

r!l.,.:.<dAg-.:r<J;i:;·.

$.r:,:-u:ri!:jc::: r..f US. Go'l"2rt<.1W'.nt ,i.~N""1t•:.

TotaffiH.at~;:r.r:.r.it,

(~tt:.ri-!C"y'

l ·-----·~-··~---· c:2.1.::cr,oty

' ---~-----

s --·--------

--·-- _ :,.005,95•)

:i,005,969

·5-~o;;,~sr ~-------=----

Rr:--i:::im.::iB.iatii;;itt c1f tr.>Ui p-0,:;,!td Cil.Sh ax;d ;";_·'<'.:c.tw,•aar.1"1 fi!t~f i;ir.:;;ra'iJtl ;,l'.a~t1nin~~ h>.:;r:::1<,1.:s:d

r<t;pt1::t-s,d un.der Gcv~i·t,_ll''.(:'1'!.ii .• a.l A::'it.•.;.unhu~:;; St;ui..L>.J,;ls. En.;i_,tl St.'\.h:lT:-i:Hi (G,\SO} N@, :i-:

F•)u.le,Q Ca~h c..-,J lrv~r.t..ni:nts, i,er l!:ldw~d •;:!"Jll:>u1l.'ni'>

C~:ct '\l\.'JtL-; fL,;;c.iJ 1\gi:-r1t. per 1°irnV'.d ... 1~ 1>t~l':'1.t~,·nt·

Ca_·;!., H'l.1;;:_r)(',;> uf M, ... ·n:-e~ ~ M,:,q"'·'~"' Tdtl:. f.:;ff·e Ceish n . .-,Jv.:,-:t• oi Ivf1~rr.1:d , Marip,:)·v. T.:itlk .Fi~d,:r;.J.i :?11.:;ring C.,» h 8,1\.anl":,2 o( hiHc,_.d - ::-~.::1.ni>':.) Si.~~i (: Ily

"(iHai 1!<1-..">.l:l ~:~1ci :n-.0 €:.iwJ:'nlt,

-------------5 71J~19,:\2) -=----"----'

C.c1.n;ti.n& -~._1~1;:,u.;.·.~ ·--~-------

253_.2'.?4

\5-.7~5

City t1f Men:ed Not<'if to "B,1sk .Fi.naw.:li!l Statements, c,,nlin~e<l For nie year end..,d Jmw 3il, 2003

2. CASH AND Il',"VESTMENTS, C,mtinued

,,_.u,~""'-'-"'-'"·'·".-'' are di:bt $ecudh!::•3 {oth<;r lhan. assN-back~d :..-;(?CUTil.!e.s) who~E~ ca-:;h-finw cha:ractE.rLi;hts rai-ct reder.t~ytkm w110unt~ -or stated n:i.hbJ:rtty) dq.1e-nd i".1.pon on.-e :...~· C'.Ol'.''2. indices 2.11d./ {::~r ti\at b:~we

en'i!x,·,jdle·d frJnvmdr:1 or t)f'ljons.

Asset--f,r£1::ked5~,;,.·u-ri~1lJr the bull. <Jf ~,vhkh are 1xw1.:tgage~!iac.ki;.xl secUTitict-;, cnUth.• Ll;tcir pu-rd1-r:\ts;e:rs to receive a :jb..,,.'11'.t~ cl tht'-'. C?.i..s.h fi.ows fr:jrn. a pod of t'WS(:ls S;uch aB :principill >!:tnd fr~tCI'P&t rep-ayn~,:,ntt.; fn"jm .8

yoo-1 of -ourrt:;;ages {smJ, :as Cl\,10r sJ o:r credit Cd rd :rer:eivahlt!s.

,\s of J"une 30, 20CG, tb£· City had $74/ir?Jl32 ir.vc<Jtt~U in LJUF, tvhich had ~nve.sb~d 2.327~~{i of the i11vr~slrnen.t fund~ fr1 Stnu..:tu.:reQ Not.es and A~s~t-Backcd. '.::1t!cu~dties. ThE'.· l .AiF fa_i_r vak.u? fader

was u.s,ed iT) c<1h::ufr.ah-.: J1P fr-.ir v;;-!lu.e nf tht: i.nvestmr:ntt. in. L:'.\.H~.

inv-e:::,b:ne11t sgtt-er11t'nts, ;"~J.1.d

At Jun~ 30{ 200:3,, the go\•T:.-rr~rrlenl~\·VH]f~ fin£-1.n.c\a] stater::12rli ... \ sh01..1i, tho? f0Hov::.t"".!1g rf-:tciva'bles Hd i.A a1k,war.:cea fnr uncoi.lf-x:rib!P .:-n:nau ... t?t:3:

,A,.;_'-.'Oth-!i's ff'--"'.:.-":iV;,l-_i'j1c

fott-~·,e::;i_ ii;f"civd::-~

'.3,,-.:n·l::..'E' ch~rses r.;,;}.'·ivnbl'c':

0.Je fmm cJf·.f-r ~·,.,veynnll;:Hl'-:

No'.£-5 N>;(':.:ivo::l•}l;'

GT'i~1"fiJ11P.rttrl1 H~~:n~::..s-Typc A,:::fivi~e~ A::tidti% Tow~ =--·L ________ .. -.... ·~- ·-•• ---·~·~-·--- .....,.. ...... ~------V-·---

5.it.'1J .. l:32 ::, __ .{.:)i.,,13.:

S9SJ.9S 312,(.'.61 9:!(i,2t{:1

2.,:~h;3~l5

C.!4 .. 63~

____ 3~J,L~ .. ·-~·-- 59,3&'~ ----~~-472,S~

~ Jo ... i:.,01.oso -~--~--

City of llvler·C>i'!d Notes to Ba.8k '.P:huu:idal Statemenis!" Continued For the ye.;rr ,~nded June 30 .. 20i)3

:t f!FCEIVABLES, Continued

fwtd Fimmq'al Siaf1,.-7,:1.e~f-:;

.Acco,1,cnts rt:"'.:civabk· cor.1.sfated of ru:n.(it1nU; ar.:ctt.K'd 1..n fue o.rd.iri.ary cou.rr.P of ope-taUons. The ~ccotr:'1l°S receivable as of Jw.,e 3ft 2003~ wi:w os folk,v,.-~s: ~

G~\'>i"n":r.ru.:-;1.utl f•ttnd.5": Ge:t1Era\ Fu,"ui Nr)t"::m.:,joJ -(}:,vemcu\c'11ta:l h .. t.:'ld;;

'1\:·ta( go·.--en:Lm.,.··ut::.1 for-td.s

lunds au.,or,1,r-•;7; t-(, u:-,,_~.!.i': •r:!l'Kiu1.g ca-sh bai;i$_r_c~ a.: fi1e-by l:h.12· City, vvhlt."'h is distributed Mno.r:g the

nf iJ;.e ;::.i,:..'c(m_nf..ng per·io,:L 'fhP interest reccivab'i:-1

as of Jun<? :~·O, \-.'St;S us k,Hov.rs.:

(;,y.,•uiirnerd-.;;i fund,~

(~,c>nf'::'31 ~-;U.'l'J

F·~""~eve1opmc-H~ lJet:t .S;;_.~,,fC,., .h.111.d

!.':,:ii2v~:or;rn~1.H Cop~t~J f-'r• . .).J':'>.;~ h.!rKi

Nn~i.Sc·1~~1r Gf'!\'(·J ;a-;1:::s1ta! ~rn,;::h:

hrt?~.i";,;;a.-r:1 fu;:u,t~;

i./,_'.;t:;i.>::'l'l'·~t~r 5'qI,'.i"ITI f:.md

Vn~.::".:1:-~ <Aiei hn p,.__-,,.,<:':mem .F t.,.,_"1.c.1

Ri:;:-tri,:;·celi. Watl.".:r-h'r~lh; F!-l.ritd

VJ:.lit-r.S7.:el.:'n~ 1::mr.l

R0;:J.St': C1Ui:('"\J(IJ'! "fi;__Jt<d

:t·Jo:1.."'rt:J1)0: :-'WF?i,""i~'l>y fund;;

Tot,1,J prnr<ldny tlrndt.

hi.tt'!TI:,::£ ~t:;,</jl~('. Ei i"".dr.

1obJ.

'• ~1ctHt .:'1'\J'£!"1J~! 12.::r:1.tJ.wrr,':'.J~i h~n{:l

,~,1c(.::JJrr:b't Tn.1s1 Fru~d'

\.\'.:~hr~=e'l'.1\ [-fo11 1 n.1·,t Fu.r\J

Ag,~ncy ~·-e-!itdt:

T.ib.l fltv.dr..ry for.c'Jc,c

Yol:.;.I c.nt+.!U:¢ n~u,'S:f'liNt:

JiJ,G7(i

55,:.W5 1qt,0~'.t·

21 1,21"~

l~.9'12

·~----·~--

1

'.1, TJ O

<;'10,1.'"i-6 -·--·-~-

City of Merced Ncites to Jj,il;i;k I1h~ndal St.mtement~.p CQnH.1ru1ed For the ye,nc ended June JU, 2003

Pr._:9deotary I?i.1,i.d:-.:

J-V('l.'ite1r1;ar,;:··r Sys,cm !'ill'l(l

~Vr,si,ewotfil' Impn~wer.n~·n~ Fi?.:::1

Rr;;;;;:irid~~d Vl~~>t:t'·h''S'.its rut1~

WM-r:1·Sy.i'kn:1 F!J.ud

Rct\1sf' ·C,)He,,.::h.or. Fu~;J.

'i'·~OfltHa_ior Propdet2tl'}' Furu.t.~

319,)11

lnlen,ovcnir.n,:i:ta.i recdva.ble.s a.re JJ1.cusre-d. a.s a t\~.u;u}t of g:.-.;u1i:& a_nd otl1_\'.r l11:te,·1~n-.,arm,en,tAl re"..14!.n.t.1.1'? tht not yet i"('\..'.Piv-cd. 'fhe dwe ro (;ther g.ov!::.nm·1Pdu-, 8.t ,h .. m.e 30; 'Pr'AS a.:-: h)!ki=..vH

~Si1):l.1

---- 1_.2·=i:).$0~ _

.\!jS•.n:.r ------------

?(1]41

2':f-1.t .... :;9 ---_..-..,N ____ •

:t567 -------3:AH.11} ~------

City of Merced No,f~g t.u Basif. fitlan.ii~1al Statren.1.'i?.nts1 Co1,Hn-ued For. the ye;a.r ended J sme .'lO, '.:!.()03

97,2,1,9

k!;"d•?'l'2bpn;,ent rJebt SPr,rk:~"' P-,J.nd ·1,UlW.i,fJOU

f{:ei..iw~kiFtncnt C;1p:-:-r.rsJ Pt,tij~·t!;; .Pund 2,i '.lH . .31J

Nnn:=:i:H.jf:r G, .. .-vfcmm,;,.'nta.l }'und.s. _ 15,-i)'.:i/.619 .•

1otAf guv.;:.rr.mf!nt,,d f~.und.2:- .... __ "'.l~ ~3'\.l~

Pt{1pd1d.i:r}' fm:~ds:

\V,1.s.t-2·~.'a;,c., S_y-.stem Fund

'1V,'!.sl1::t••atcr lmpmvemf:Jtt Fm!t1

Re::,trkktl Viir:rt-~r~ltVe!ls Fund

\-V-hier Syst~m Fu!:d

i'\"orn::.Mjc.n: ~':.>rr.:,prid;-u-y Fr.mds

'fr,t.ill pt\Ji~t~t'tuxy fund&

"'· Il>?I.D:i.Fl!ND TR.<\NSACTlON:S

15 . .3'./4

26.3fP

2~,fJ,'J~~

4;ll)5

.......__ ___ 15-fD.Sf.;

893}5{1 _____ ,;,.,....,. __

; """'~-m--•-·L c~l\.'El'l1'.'.~~(hl .•\dj,:itif!'; .,-..,-,L-~-·L-~

Niri'l-'.",\::.';L»

B;x;i.nr:&'!-lY!_X'A;::1.-f'...'iti~,.

\\:;:,~\C'~_._·,:.l':."l S\:rti::01

53

l;A)GJ)f,)

tf:l-145

G.)\'f;Cf'Jl'l1Yti11l

City of Merced Nr{J{es t(i Bask finand.11 '.:ft,.tternengr- ContlriJ.1.ed Fm the year ended J ,me 30,. Z,lfl:3

-·- <Ji;,-,_:f~1w.:.m~1A,:J,n1:,,-; __ _,,_.~·--·-~-~·---.. ~~-·-~!il!l,t·l~l;;A.;s~,-.1r.c~ ~-~- ~---~--

W -:.;,•,iur ~V-~lp•;.u A..ru''1,,d

~--~-~- ::;(~'\·Zfr-...·w:ilh1,·\,:-:·bti'1".,~ ____ --- - !~1~w.$j-A~3':'VI:•· __

ft;,ci,;><"{:'bf•Jm ,.,, R~tl.:>v.JJ.-::,pl~!C:\lt

City of Men::ed Nokes t.:; lk1sk Fin.andai Staten-ientsf Continued For Uu, y1,,rr <!ndcd Jun"' 30,, 2003

6. C,b,_Prr AL ASSETS

r·J::m-d't'p1P.'.'i":il1l,; As~,eb-.

l ~r1J r;1nd. impr.:~,v~rie.:i_t-.;;

T.8711%9 -------~,;:.

o~·.r.z-t::aJ.rton in rr•x'!"S$ _____ A>1-:7,-1~.s ____ 17.:161,~12. _____ :lt:,~9s,~"rl! _

Tu"f",;1! n\_i~Rkpn:x:i:-~bl~~ MS"..'IS -··---- 7L~4:-i .. 3JS::_ ___ l.l).'1fi.Jl3t~ ----~~!,,g)~:._

Depn--c.:able J!-..;:~f:.et_·::

Bmldmr,-7 r.:n,1 :,:.t,1_:r._Tt::ur-:;: 4;969,4"12 2.,1-44.4:34 ?.41::.\8,1/.,

Mzidll.!!t~' and .?iqU!prr•Pi-1l ,,v,-:.ti,:Yj ?,r\.Sl,?3~~ L'l,1::< ... ~8..l61.~

1':npmven;;;:nts nt:lwr th.an htd..idut~s..

5lt~Wn•::s. 1md fand 1r,~pTO<.-'~.'WP-I:I:,, 45',7frSA8(l 36,136,-949 SL9S\4"l~~

inf-r,15b:v.;~l"ure -~~:. -~-_.. ..... .._ __ , ___ ,_J~~_._239 .. ~~ 37J,014,AS8 r12,4Et:t:n6 41.5,497,&_'i.:I.

L-f'S:S .i'!CCUJ'fLttfa.~.:ed d~~pn:da'.'i.Jli ~---- (17.),Xi.7 .. S'T.J} ·-~~r~~ (2?,2:63,0:-~6) _ ...... ~5,B3':)/~1J

['o~r depra:,~~·k· a.F;St"\;~, fl['~ _._ __ l:~.4·:i).}.1:'i '.!, ·--- W,J:'.:·,O LJ.t(J _ ·---~·-, _Z19,~.:i7,l n

f1.1tai c,rpJJaj asja;;t~ u-L.-:.~~~~-

City of Merced Nol;e~ to Basic Financial Stak~m~nt!:'3r Continued For I.he year ended Jm1e 30, 2.Ul3

6. CAPITAL ASSETS, C,mHmtEd

i~e.-..::!e1,.l!~~i.,k1lf.: i· .. ~t.."!B:

LtirKi ~n.d impnwei:11<"'..n-:.<:,

(C-;·1;3trt.11:tion ir: prog~"-':i

T,ot-31 J:Km.,:terfi:l.."':'ll!bit: ;t,:;5~

l)ept~i:11:t;e- Assets

1hri.k.linf..p a;)rtd S?f'LJid"lJ!! ... ~

~,,fu.;.:Jlj:rli.;rr-ii,nd "~'\lrJip:nent ln1rrow~menl.~.,-: r:i!J1et building ...

thru: bu~dillg5, 5t,u,:::tt.t"t:>s,

b.1',.d l.a_·1d unpn.-,~111ewt-s

u~ . .r.t-a·:;t_r1.((-h;U;'L"

J):116.6%

22$],389

,:-,c·,J35/t,±6

2;197,714 (745,(PJO) 4.969,412

'.!,65~)''.f'fl {1Y9.f~j',) 2.~t/X36):..35

2}/-~J_,194. {i,;~1{;,1-'.i_'_~,) {221,008) 4"i,7fi.8.·1...'ii9

___ n1~:0,'Z..':O)_ ~ 1,'JY::Y-2U, -~----3,15~t6.~ _ ,m~ (!~1l,i1.~),HP,~, ~- (i73:.56'1)J7:,)

c~rven:unenta.l activities Jcpn:cic;iic,n S13/32'1,.5ti"J, ·vthi,_h llx!udet;

~

~bsets L1.r th(~ y,i.s1r 2ndt!d Ju.ne 30. 2003 wa.<; w.,."u.,a, ,,., v.,.,e funds dept-2daHon.

56

City of Merc.:·d ~Jofes to Bask FinattdaJ. Sfadi~rn,ents,. Co11tinu.f.?d For the year ended Jun~ 3-0_. 2003

6. CAPi'J'AL ASSET$,. Cimtlr,ued

lJ:.nd. ur~ irr,,.pwv~:r,~nt:;

C::i~trt1>.."ti01'1 \n r ro_g,.f."l'5-~

Ts'.lil'U n, .. n<lep:-td;ib{~ -ru:,.:;i-rt_,;

D-(::"f::l'F.<..'.Jah!e A~,;ety

Bt;ild,ng:s a:nd st.rrn~ti.111::-~;

1·lid~i.nery ~nd equlj:Y.K.'n'.

I1np1'~''."fi"JT~JI~- o-h~::-1 bdkhng:,,

than b1..:ildmzg .. stf1,.:-tu1 t-:,.

,;,.ncl land 1J:npn>1,=e.:11enn

ln!'r,1st'1lc1J.J~·e

{7.X1;)

5.?i2,H61

Hu_siness~typc .:ictivHies depr~datinn, expense fur cap.ital iriS.Sf::t;; for i.h:..~ yt;;ar ended Jm:w 30, 2003., were ,:l.fi fuiic\ws.

W<t."J.tr:c·w;;::.i~i Sy~;t.-:Iu H..l:'"'J.

:Vil,:l':,tt:'..-v:,o1:tt,r :mplDve-:m•f.,"'l.t Fie rid

Ri:..-"-.irkii".d \-Vot.er- iVt.--.Jb Pu:r.d

\-Vat..;-... S-y~h:-·:n, Frn1d

P-,ef-u...e;:e C:'.>H'<'·dion Fu::::d

N0nf::k<!.pr Prnr-:-ief;u"V F1.1.J>&,

1si;a:: 391,l'P

:~~.19.8

-~-··~-r•- 177,S.~,

'"'i:'"'.r~.::: fo.v.d fi.n.1Jnc-ml st.sterncnts do :not pX!:·~t:n! general govc:-n.rn.i.-mt c:apit.:al Hs5-(.;;ts but they nr-e shov,.,.n in the _Reconc.HiaUo.t· of the Gove:rnment:1.l f'un:ds HaiiiTH:e '3h•2"1::1" h..• the- Ceavernment-V.Jklo::~ Statement of i'--Jif't ./i.wit-;t~.

City of fv'foirced N'ot~ti, hJ Basfr Einandal Shlt~m~nti.;, Continau:d Fnr the year ended. J m,e 30, 2003

l..t\t~g~t·an dd1t d1.te v.:Hhln o,1i:; y'i!a;!'

Nnnc.11,f'nl po.b.t>n r,t Lf1:1g-tt__"n11. cteht~

Ta:.- alloc_,,s:1:ti,:-;·n bon..::Ls r.a:yt!.t:e

P,wHdp,1i1or. ,md d'f:--vc-k1rmfi1.t agr~"i'.'.tiJe'Tlts

r.a-a..""'.;?ayz.J::lr~

Lo;;m guara.n.~

P.=-!:;,'"E'1:A-!f!: b•,:):,t~~s pay~1bk

J1-.1\:.e:;s.me.:lif i:t.:,nd.s p.ly.s.b1E·

T;-:1t.1J :-ccw11:;trT<:nt p_,rtion ,:_;J Jong~tf'0·rr1 J,...h;-

T..'!r. .Atoci1ticm B(•r:ch P-:nrb_dpa11....-::~n i!nd

c~·'Jt':lopm.::nt ,\gre:•men.t:l

L~::i;:1.:;. Fayabt<::

L1).:1J:::1 (;u;;1.1·<inhi.e

C:rrnp(.:ns.ated At·~ency~:;

l,705/lQO

72£,,976

!.216.929 ~.925

575J¥)J

5/1%)\}5

6,,)7~4,_{l,[l

i,9J7,(6l

oso.nrnJ) p,7l)J,8H)

{60;748)

2,125,000

___ 3l~%,~~ •-~-r~=-~ \ 131,542 •

Tl:J .• 001_1

!).,.753.:::98

30.]5?_,f..25

575,(~JO

!:,.,.._196,7DS

&iJ7h~n

7.:354,593

?~'J:25,LUt

2.&9.}JXO ---·---·---·

Duem

HlO~"I[:: tbm

~75,\ft)(,

5,)%,70')

~P',11~;;'.:i

Jr_:i,),000

7,:;:e,50·.;

City of Merced Not~s to Bask Finanda! Staten1(~tt11.tsF Co1~1t.irn.1ed Fm the yea,' t•nded June 31:\ 2003

···----·---·=~------.=--:..-.------~~---:,;r:;-:m;=:-----:;=--=-:-:.;==~i--~,.--_ ,,-:------------------"------------------ '~-~~

,. LONG-TERM DEBT, Conllmi'.'.d

Ta.-:{ alkx:atio ... 11 bond.r~ payable at June 30" 2003, co:t,sifottx.{ of the foJiov;ing:

J999 $?3,l}Oi.'),OO{&Tax 1\Uo,:;utio:n Barn-if,, Serie.,; A

2D(H $2;~C't0/)00 T2..-x A~fo,.~JJetfr:-n Bond:5_. S.eriE>,..s .A

2[(13 $9Jlfi7 ,,..f.J?-5 T.'.!.,.;: A.n..Jcalicn Rrn.:r!'!i. :';;:rit~:-o A

1.0,2.05 .. {fa1)j

1{J99 $2:J,C-00,.CHJO Ta·;:;_ 1~1-oca~ion bonds, Sc.d.E:s Ar Redt'.v~~inptm~nt $},100,00G lo $1.!975,JJUO p:rindp,:d pny3J1JE annu~.Dy, int";:i:f':St at .3.50% to ~1.75·1;~., pi~y~blr-:: .<;,••mi·anr.'.,afrv, n::.30.u!;:.:,; 2015, sec1.i:tt;1d by tax Jf-!Vem1r:s.

Fnr th:-::Y,:,-u:,

·-·-- End{-ri:f_: iun:~_30 .. -.--. __ T'r_'.lKtpt:l __ ,-..... ~~-- ~-_2~:2_~----

2UVS

2()07

2008 ?0)9-2013

j. yi(jfl()q

1,2iJ5)))(J

j,JJ\l,POO

iJ-6ll,i.!OO

tVfJ)XJ

?,'.'.,'70;C(HJ

82.S,')32. 2,1.is.m2

133,,54 2,'."-.:SP,,,'J.'lt\-

73~;,,;i;;:i 2,[li5:StVi

fifl..t.521', 2:.M-'i,52..S 629/!,(Jf; 2,C'39,B0-6

2,2DB,1~t 10,17fUS4

City of 1\-fon:ed Not,w to Basic Fin~.nda! St~b.:1nt!11t:s, Co.rdhn.u~,;:l

!'Ill' th,e }'(,at ;,;r,J~d Ju.ne :30 .. 2003

7. i.J)NG-TERM DHJT, C,mtinm,d

2(KH $2A00,.00(! Tax A.Hocation BondsF Sedt:h A, R,;.dcveloprfl(":rtt Ag'!:n\:y, $--1-0,00C to $80,.tlOO of pdn,cip:1.! ;YayHbk~ M!'rilt:.ily., intPc;r~.;;~ al 5.00 to 5.60~~'6 ... p;;tyabl.P sprr,i-ann.uaTiyr Tf!.i.rh.ire~ 2i}3'1, ... sec7..H'f.',;_l .. by t1=1x .re1/i.'.:T.iu.0~;.

2014..-:u.ns 2019~2.G"i]

40,C'!IK)

"' ,t:O,OC{J

4fJJ)JO

~~~)JOO

1.5J)f)J

2ri5,;)..lO

-:>r:.:J,(f.'3

4:.·kto::m :;.;so,~\.:,o

'132Jl'% -i'3al,\19B

t:l.H,f":-:3 1"~:,9~,.,.j

l23,72J ·~•11,~!s/

5lf!1)t0

,it.ii-&27

262,RH

i'71,(19f;

16l<,i.l\i8

170,973

]63.,72'3

S21J,5R?

K>:i,ff 1 c~ fG4,S2?

M2,H! i

~ .. ~-~'.E~1:?2 ______ :?..~~ ·--~~:.?]!_

zocn $9,007$25 Tax: A.!iocation B··-~ntL~.· S2ncs i\. Ri:>J1~vdoprn,~~nt. c.,J $1_.4ff~1,00U Cuxrent b.1.t,z.-rc~,: E01,1ds and $'7)'<22,P.25 Appn:r.:Ldil?n Bonds., pl"incipa!. p;.:;yM..bk

to5.15%.

ir1_h:'.n,;,st pf·,.y~ He~ matures 10231 5;.icu.r>:tJ by tJ), ri2v,:-'n-.::.~;i. "'rhre ir~t<:~fl:'st r~H: c,n th(., Rund::, i~ 21:)1~{! t,:J 3.(1::5%. The yield to tnaU.!.r~ty on t"h~ C":.pit.aJ Appn~ciat"io.n Bnnd~ iB 4 . .5%

:BJJ6

200?

'll'Clil

2.IX~-201)

2(J1eJ--2G"iS

,m~-2112:.t

?3:}00D

-'i9C!,'JfX1

·:l-2.fi:-f:i

11,!l,'.,QC.

33,945

t41.55S

?.&,).27 514?956

City of Merced. i'~{1tc~ to J)a.&i,,.: Finand,;11 Statem:ent~ .... Contirt~1~d Fm the ye.ill' end,!d June 31), 2illH

199'.7' :MG(l_..000 !?Jt5JX!5iti.on 9.nd De"·d.:)pm~nt ...\gr~tm1:?.nt

1997 $&t)i),0(.:(l Piu·tl-1."1pa~nn Agreement

Tot;d

$ 150,Cf!D

1997 $30U.,OGO Di':ivosiihon and JJe"\,,-elorm>;::nt Agreen11~11~ bet',,,,leen tht: City of Ivieru:d R£:d-tv2k,pr11<7~nt Agency .and a d.,.-:~veiopi::?r. Th{~ Agen..::-y ~[rref:d to pay an. r.u::nount not to excPi?d $50,000 anrt(l.ally of the p:ror,e:rty tax rrlcr121ne.r:it fer ~ijx y·ear.&-

The J.n.nua:! debt servic~ :re-qui.rern.-;nts for tl\e lY:97 $300,00Ct L'1.spo$itic1n and. Devt::·lo~ornent AgTf-".eini2nt arc as foHe·ws:

Tntal'

J.'aJctki,,;;,.tion f\g_reernt·:1.t betwc:f:1~

ior and c::~pital e.qu.tpm(;nt. l\a:\istar,t.:i'

:''-.:rth:, Y,e-,11~

---- Ern:lme fu1te ?lfl, ___ _

i.Ut14

2GOB

,rJll9

J 5GJJOO

E!i).000

WJ;:JQO

60 61

City of Me-reed Not~:; to Ba$k 1--:ina.nd;;;;l Statements, Contiru1Ed 11ui: the ye,rr end>.'d June .,o, :wo::t _...--------------------.:::.'."-":a-=·...o=-cc ... ~-~-.. ---------·-""---------==-------=-=--=-~-=-::. ... =-..="'----·-----·- '----

19-98, ~fl,.3?-D,i1tiQ Lrn~r ... <:. Fayahk·

?0{0$1,020/hlO Lo:e .. m:, J:tayablf'

2.l)O:J. $'.i,/J;JO,Ot)J L<ntn..-:s Yayuble

2{JCr."?: $118,2:J,~ RBS..1 Estate Loan P.c.11yahle

1,62t),000

-t-Ofi{),(!{lfy

__ J-_J~~~-

-i993 $] ,.3~1l\ODO Cc.r.ttact for Loan C~nzxn.111-<~1~ Ai;s.Istdnc~ tu·lder S.~cho,;. 108 of the Di::::!vek:p::nent Act of "i97-1:. "fhe agreed ic $13-iJfGOG ~-rmuaHy .. lnte1est is .2% the rate "\<VA'i a_pproxin:-m.tdy 2.0975%. 11tfaxi_rru.1_1_11 a·::tv .. ~_n.__f: ln:HJ~T this prog:rar:n i::. $2,60{),i)OU.

2003 $L62D)JOO lorrn for D'=~ve.lc,prnent /-,,n uf ·1 •::i)'4 q_uartQdy

~.,M,mt,,~'s assist;:.ncc llndcr Sr~·cfinn 108 ,_::,f th.e 1.1c1ymi:.:·.nl~ aH.1 $1~10.00U amrnaUy. fntE·rc:.st: l.S

J(!fk)

2Dl.J7 2ll08

'.:Q(,';-201"3

i..lOJIOO

l30.-l71)0

~i3t\000

1.3fJ,0;XJ

Dtl,ODCt

b;j,ij.l}GO

6·'lJ(!U 194,6'.20

62,14H 1~12,]43

S8,6?"!. 13~,6:'l ":'";·'1.fIB:) lM,-~S

,19.?72 179,772 164)39 ::n4,139

.and. Curnrr:tu.."litv to 65% payable

City of l\tk:rn:d Noi~s ho Ba5fr:: f_inancfal Si:iit{tme11hs,. Cunti.n~Jed For th!': y,~.,,. end.ed Jrme :m. :wc,3

~;;;~~~:~::::c1}/:f ,:;;:i1~~~:.!i~::,~;:;;,";ec:,~:i:t;:;;o~:;:,;;:t!;'i';. 1r~'.~e;;"1; ::f ~;t::'~.[~:~~::~n :!Z a.'1.ttually ~

.FO! the 'le~:r.~·s,

A- fatdmg Jurle 30.. _ ...... P.r:in~- _ U:.~er~".:.~ _A ~fotni

H-ti)J93 $ 84,5S'3

2fX!,O(W.1 173,S1G JT:)310

2'1JOJlOG 170,&,1 )?f.,13:60

20!)/({! 1(•t~,7:10 3~,~·1n :1.m,JiYJ 11:r1:r,o ".)61,:~30

1,ff..JO,O(J(l 694.,~-4C 1.694,7.;lJ ·tclX>c<iMJ 461.8".W J.%1J310

l.UX:AiOO 1S;tJ.2'.UD 1.196,2;)~'

2~J:1 $129_.:!09 R~.,i?.1 E@tate P-utdwse Ar,re,,n\•crn frir the _F1.nchose ·,>[ pn:.rp~rty in a Re:de\";-:-:Iopmr-nt p.:·:-'.ljert arc1i. \for1foly pay1112n:s arc $"j,626 for :l2r) mon,.hs.

For th~ Y~~'"

i-- EiidmgJune)Oj ... ;

2ClfN--2tH:!.

Tobtl

F~,SJ.:l

.19,512.

19.5'12

1.9.51'.?.

·-~ -,--~::::?.~:._

City o:f fvfer!".ed f"~otes to Bask Fina:ndaJ F:H:~letnt~rd&, Ct~ntirrucd }';;,, the JViIT en.:focl. ,l\l.ne 3!l, 200.3

2001 $739/124: Debt Service Ft~n.d.ing Agn.i.eine:nt x,..'ith D~Yelor·er. Dev,"loper lo trt9kf• fhe tt.KlnChly par:1:ent~ to ifr~e C~ty o'i J\·1,:=:ro~·d Rc;~Jevd{1prnl:\{1! fo:r the rcrt,:yrn•2nt. its ·k:ian wnh 1,) financfad tencr.er. The f-:.eds:::vetc,pn1ent guara.nh~s the p-?.1.y-ments to the fonder. Th€ R~,dev"-·l>)pl1H.'.11~ Ai~2nt.y has a n~.€:d a') a T€"bf!f'..'t.!. P3ya1e:nts .at;.: $5.()62:.3::i for '156 munth.s.

2014-1!)16

'!i">)L:tr

60,'?18

$),748

61J,7J8

60,748

T}w City's 8,!.JV;l;~filll1811ta[

(or v~·sh::1d and unpaid coHtps.::n!iG.f:t..,id a.b:;enr\":'s (accn1~d \·aca.:i.or\ and ~ick 1my) typr-:s JJ;: $~ .. 226,854

Revflsl,c Bondt~ F'.::yi-:..bk

!mprcvcffl~n1 Ho..: .. ds !:i,8','~ibk"

.$-, 'J .. .f.g[',,l}\1{)

:ii,::;Uf:/;'.)0

City of Merced Ni:)tefii tu Basic Fin..:t.n<'ial Stat.einen.ls., Cont:in"4ted I'm the year ended June 30, 2003

7. tONG·TERM D[UT. Cunlimwd

Eff4 $4,520)JOO &;wi::r Rcvem_H! Bnndsr 1N.ast,~l<l\rat•'.!r .h.u1rJ, $85,000 to $370,000 prindpal pay~b.le aTuwaHy~ intert·st at J2i5% 4.'?5%, pa\tai;•J,:,;u:ni-·Bn,mally, :.natures 2ffL\ sectrred by WEi}"ile\.i1n~te-r rP.Venues.

·~·-- EnQ~jtrne3G,. -·~· ~--- P'rin.dpiU -·~ ____ Interest_ ---·~To:;,,~~----

285,;}t;(I s 107};')7 ](JJ,707

J.C1i)}.X}IJ ·~\.S.l'.i Wi,Sl.J

:Jb,UOQ 79,~~ft/ "194 .. 2\17

-:.BS.,IX.10 f.3,"769' 398,769

'.l.>i.1.(:00 47,500 397,5~(1

7'},5,_.\-0\1 !3J.Sr;'/ ,%$,~)}

1[)14-

tmon.Nesrrnsnt t;,,Jnrfa. N:.:irth """u·u ,;c,ec·,,ve, Jm1.m:,v,,n.,;nl F:c:fonding Rc"~:~;ses:;rnent f>istrkt, .i,26:1,.3.Hl to prlncip2i.i payabk~ rmr,uaEy, t,:,i ~.55"ii p.:ir;:;h!e s.;;fnlh:HL!lt.Ei.Hy. rn.tl.!JJJ"r:·.s 2012 .. JSf:'l'.~urcd by ,;::.:-;s·'.:'\~srntc\nh:

Th~

7.!A;'.J!.l.JU .'i~ l 1:..~:,::51 )6:.,oon H::,,9M;

;'(lJF

200'-i-201:!,

275.00U

:1')5,000

'.".;(fi,00{)

ac.:-ow1ts icr comprnsai'('d ai::~~:ri{'f:S- in thte! Ente,xJxi,"· ar~'. carnL:>d. T1v:1 [fabiEty for tltc co.mpPn.-;.at~~d

1!.8A~Vi

iOJ,.2-;2

40.1,2~;1

,nn,s,io

4n:s,--.·:.i:,

__ _;:2!J,XT~

City nf 1\'ia-ced Not<:~ hJ Basic Financh,l .State:n::terJ.::}1 ConHnu{!d Fo, the yea, ended Jime 30, 2011:'i

,. LONG-TERM DEBT, Confomed

TiH! frmJ finan.dal ~ffiterr~~nt:-, do not pre~ent gF:nc.ral f/P:errrmErtt k,:ng ... t'=::.1:r~ ..:h::·bt b'ct.t lt is shovvn in th-::'. Re,~r~ncili::rtinn of thr1 c-; .. ovcn\.~ne.n.t;;ti 1.-;unds Bulan.ce Sheet to tli.e Go,,'i_~n1nwnt-VV1de Statr.>:ment of 1"Jc! Assets.

'"111.e Ciry of rvter·-:~d has ni:)

~~~~~:!~!~t ~:~:~;~l~~;ries. lLabiUty ·\n:Hh l'~sp'2t..::t. to the pH'j,7 n~i.::r~t oJ a:ny irulebtnJ;;~ss ~,f tht!

feli.mns Pmk Ass2-,~aricnt. Disb:'(c[ ;:Jri:d tla~ 16~... Stre(i!

~·he City acts soJ,~~o ~:11i1~~1-::,~~:1:h~~:? !~::1,;:;~~s ~~:.1~(:~;;·::o:~~~d 1n !Jle

s!:al:l::Incnt:o:, Thf:"' n111ow~t of outstai':1dinri debt vf t..he above f)1stricts w.~~.5

Jn gcn,r,;,::.r,run.t:ntiJ funds. de~i..gndtions at'! pn::scnkd lt5 a .:--;:·nponen~ 0£ fund h~Lrtni.·,~ as folk~\·1;-·s.

fo'.·t:!n.tiory

L.;u,d hdd fGr n.::,r-k

Ch.dd iJ.~2veJ::tpt!-l.<?:·.-..t

'f'Jxk pl,u:,ni.ng zrn,e­

[~bt ;')'E!!Vk:t.'

C.r;nfrn.g.,...ncies

r~.f.~!tp r"1":;)lii..~Tii~.llb

futu~ rears

TntM v.nn:·s~n-'o.'<l ..

R:t'~J;::·~-<"iup.tn"=":ni Rcdi:w•[;1p;rn.;mi Oth,;!r

1'(,1!,~l ---~-------

td ,,r~..?-7. '\46'7.f126 1:61.l,:tl'i 07•0..,.·:.::r)

1 95:J 1,95(

97_.1.:JS 2,l7fi,3?.! ;, .3].\}}=tf~' J .. n.,:·.~:)J1

Tf,.$911 17)i90

i.~~23,251 s::.,~,nr, 1,8'//;:ff.P

1,'::'_':l,q~c~97 15.932 ~,.~) •• ,.4.,·>:.·

40,141 110,64.4

'1t:?,S7Y. 41'7 .. ~79

--------- ____ 1.,214,_!\19 --~--·-·-~ ~---~ &lS,14.'9 ~ ____ j.832,~liS

____ }c~ii,Gtr~ ---i~?.14.~~ -~--6,9s':~·~~{:,q·s -·--_:3569,S:,,.% ____ ~s:7a2,U?

192.,(,63

1A,2JLfol

4)}()0,0tJ!)

'lq:,'.,6n3

·1,4?8,6h1

4,.71•:lS,t':i 1.6:Z],~1?1 6)7G.8t-*J ·----.--~-------• ---~·-----•,,,_.--. __ -·--·---~-·---m,._,. -,--.•---v-.--....,.-- -• ----• ----·----

3.079.3Z;J JO, f42.S22 13,.063,.91.9 3l,23tiJr:'·'1 ·-·-~---·=~--L··-- -·L-~--·-~-~---... --..~ ------------ '----~-,----... ---··------

City of Men:: .. ~d Nr1t!~.~ to Bask _fh-1a.ncfa'.~ Stateme.ntsl ContinJ.:H::d .For thr:-.1 y-ea.r ended Ju.nc .30,. 200-3

9. RISK MANAGEMENT

Th.:=~ Ci~'l n1a\nt~Jns intt~nW sendc.e f-0.nds tn ac-c,~n1nt f::r: tlu-: Citr/ s liability· insurance and v,10::ke.rn' C(ff{l .. peis~.tion "ltlS1.11ance, ldl urrpaid r·lain'lS that W(';f.€ prob:ib1~ th:at rn:-cu:ned pdor to the year·

ernl a.nrl that vverf' f'':'J!l.i"1flkd based on a.ch.rru-':i.al studie:s or· hi.sfodea! data ,..ve11·(: IE~:oTd~::d in acco.rdance 1Mith Gi\.S!i N·:), 10. At; vf ]t1ne 30, 200.3, c1ain1s fnr gcnera1 Li..-1b1lity iven~ $2-13,288r a:nd i\rorken/ compen:;11tion wr;re $2,890,.&±7.

'I'b.e UabW.ty f.riJ-iUJ'"ance .F-a.nd is used to ac.:::ou.nt fo1 all general. Ha_bilit.y da1rn.s .c.1gairt.~t the (:tty~ except for .Prope:ttJ. Auto, and .Airport 'J'he fund pro·ddes fo,r ~ n1axh11un1 of $500,000 for i:~ach d.airn_ The Ci'ry p:11·.;:_:ha.ses ctHHD.1(~!da_i io5utn11ce _fox dairr'<..S in f~xcess o.f ihe co ve.ragc provided j n tit{-! hmd, ~~ttleJ cJahns have not exccede.:l the oJmm.er~:iaI cfaini..s in a.~"1.Y fisc.11 Yf~r. 'I1lae ch.?a-:geF. JJ1 ilie general r.fo.rrr~s liab\hty V>.'E-1'!~ as follJ)"\'v'S;

Fnd,:Xl

Tht· \·VoTkr:r.s' Co,m1,cn,sat.km

<:_~;3h·.st thr· Chy.

Ended

Fi3('«'1 'r~~ar

C'hiri:;.;s;and

C.h«.nv~ . .i.n

£.,,1:iraates ~-~---------~ f:>1;,£,;fj:i"J9)

(5-5~.169f

(f,(J9,IJ67)

P;,;y~'ibit

__ i__ ]11,w 30 __ _

5?,9.<643

589.2.[9

U3tx:l i:O ;:J.ccnru---i.t for aH 1vnrkc;>.r,;,' COn\f)ff1SG.iiOn

:fr.>r a rn.axlr.t,1..u:n of ~~2~JD,OOD for each claini..

Cfa,m5

Payable

-~ Ju.hr l ~----

'i/f1JY!8

2)]{,(:.,485

2,2j6,.425

C.lbv~e,;; in

·-·- Estin1..1U::5.: __

SS2_.3,H

!/{·4/128

(]tlJmS

--~:!..':~t~-('l2~:A1l)

(52i-2.-393)

i.6~),fi0/7)

(),;i;-ms

PsjCi!He

li.,_ne3G ------~---

Gty of Men'1c•d Notes h..J ilasjc Finandn1 Sr.at~il'ient!:-, ConHn.il1e-d For fae Y-'i!.f ended June 30 .. Wfl'.i

w. RETHU:.:..n:t,rr PLANS

.Pif!.tLf::f_~r.:.riJ!.f.:!-!J.ti - 1l1c City contributes to tlw California f~\1bLic Einpf.l.'..'lye1;~s Retu-e:rneni Systerr1 (PERS). ,:i,n iig..-;rit r:.1cdtipfr:-er..nploy-::~r public ,E~1.n_p.loyer! &.-~fined. b-;J-1f"'.fit: pEwion pfan. P'ER.S ptovi<l~~.s :rcti.terr1_ent and disability· ben:Pfits1 aa\ri.m11 r-:ost··of-Uvi...111; adj11.Gt1nents,. ..:md death bt•nefH:s to pfa.n rn.eni1x:rn and ben.efo.:-J:.1z-1e:=;:, PERS a(:1:s :a:s a crnT,r~_on i:n.v'?strn'<!nt arvj .. :<lministrr.11tive ~fl:nt fqr participating r,ublk encith~s vri:<::hin tl",_{! State 0f (.:::'af.i.fnrni,,::, Be:n€fo; rprcivisfr'1ns aJ:\d ail -nth.1~r re.:p1J.Je:me:nt'5 are €St~bfo:,h.f.~d hy st.ate f,t~1tt1h~

and dty 01d.:irtM":.D?, of PEI'6' arn1uo] .f.in.:anda1 rep.'.:nt may 1:.P (1bf.ained frow thEir E:..e:enti've Oi:ti ... ~e h.x\1t~:.d di 400 P Stret:t, (.'i~liiornia 95-814.

"""'"""''•-"-''-"""'- - Active pfo·n !rl!!'..'"mbe.r:s. are required by shite sbtu.te to contrib·ntc 7% -for mi<so.:!lanf'ous o.rv.1. is':m_p1oyees <:f thPir m1._""1Uul CO"'.'cn:d sab-..1·y. \fH:: t~untribt1ti.on ·,.-v.1~ paid by an1·;.:,-..ur~ted. t,) $1,.026,54.8 fer the ended jt1ne is req_u.itQd to

(.entdbute for f.iscal ye~u- 20()2-2.003 at an dt?ti:~i-rnined rate of of a.:m-lw .. -tl CO'\-"'CtE·d p3yroll for n1.isceE2:meou.:= . ..t.ruJ safety respc,.:frvt::ly. ::;~e thf: Reqaire:d SuppJ~n-1.e.r1tai-y ln..forrrLntion f0r th,:· $;.:lw.dale of fur1dL1g Pru,g7ess.

Fnr h(,ca.l yt:ar 2!i'Ct2~2i.KX\ tb,e Ch:y-' s a:nr1u?.i c,)~~t. v.1a~ ·.~7:",6,5r};J, The t'Dn.ttib.1tice:a:-; w,~:::~: $"71$,32.\J, Th~ r{:qui:t:ed was d.,~t~nni..n.t:d as 1nt.:t of

a.-.-_ltJdri.aL v.8.lu.atJ"-Jn U:s"iing the entry ruJr:rnaJ actuari~J rc:ost Tt'IJ .. 't:hc"':!d. The adu.a::i..,:i:

:~:~~:r'mLS u~;;;;~::t:~:;2~;!g~1~;;!:'~';,~" ~:1:0 ~(,u % forr::,,~1;:~::~::~;:~iv e 5l?:ri.rirT', and of emp'k,y.ment.. rn1d ~.?~~ 1

;{, per actu.a.riai

nm.Et-YEAR TREND lNTORMATION FOR J'ERS

6/W/10.:n $ :l<.:.S,:1%

6/J{,_l/2.:Y...r.:. o4;E,99

6/Jri/:ne hi,":f:JS

n l'OST-RFHREMfNT HEALTH CARE m,NFHTS

f'er,.::':'.n.:ag,~ 1.!f AR ..

liXl% WU;'{,

1()0"*'

s D

City of 1Vlerced Notfs 1o Ba~k Fim,.:nda:I Sta.lei.rien!:,;, Cuntim1ed Fo:r the year end~d Jm•;;,, 30, 2003

12. SEGMENT 1NH3RMATlON f'OR PROF!U1'TARY 11.JNIJS

The rr.air1t:1ins ,e:nterpr.isF fund5,. whlt:Ji .}fe ~ntended to be sE>lf~s.u.pporting: through user f~t~:; chatge'1 for to Lh.c p-ubli,--:. Conder~ed "F1'Lnanci11d Segi.nent !nio:nt~rtion as of and for the ye.ar f:nded June 30,-2003; is prer;ent.:~d as follows·

\.)p!':U,lHl'i:, ~l'J!~~:,-~.:,

DE:pre-i;i.::iai,:,t, fa:i.p<:•n5e

f:r:-.1i11r, Cle"-!;!!',.-;-;-;[~

N<£! a:.~.;h i;-rc'\'l:J~,r (~\s~cl) b'.,

·=i.1-·il:.,! ;ic;j r~~ .. H!:t1 F;;:;1;,1,-,Gt1?;: 11~·1.lvitJ.e-f.

fo,n~o.-i.:g.1cfr;.·itit1-;.

.. _frf!~!!"'-· I:mr,1":1·,·~il1..::c1 W.&~:-;,·-·W31}.s •. _f.:z:t':U!._. _ Cc!}:;':'~cr1 __ hm.::i-: __ ___ ,_2~~-1_. __ $ !;};rie,?.73 :f. n,.!::25,0,1a:: ~ 9'"J.tt>,'.*!J $ 4;?1!j, ,n 3,~·~o, ·; .u~ : r ~ '..17 ,,c),a -;·55

G-,Z.35.-441 8.'::tG.z.80 1.rn1,: .. 1>t5 lLL'~11,.?"lS 5,s'.l;·~·::iJ.1•)9

WJ",4:?:: ,1.;,J:rj" '±,4G9,?.'..! l..'..!;'f3

1,Pn.:xr ~.7 B.!.3B1 iJ)2.7J~ ~.,.\",,45~

5,j~(],::i '14 2,4.5~',(WC 1.•2,1:.48 U·:56 . .5.J/

37<Xl.<n i, 18:'"2,:i~,-i:; 1V'. .... :?1,7:-'B -5,:iJZDt'~ ?,,Z:HJ/12 :'"··.SCIS_ . .,,f,fi

1.0,,,b .;o·~ 111,v

15w1.;;•;'.i 7.:59?,-S!.i.:. -=3,:--,,s1;i,·•1g 3.ii'fl '..H:S- J.11A,11 i,

5,7::~.4 ~5 ) .~.i :-1,62'6 ;':,)43,0"'ici s.@u.:-·,~;; t,ll9-}.~Jl

0,'3-.'i7,4'.t-t :::J_4J? 'i:'J-'J.,i~2 ~.Sfr-6t1:» 'i,H'.\.~9'l

:::;.:s..:.,t11, {,'.\t% 154-,-1:l.l ."i:J"l.19'.l 'J[{..J.,.!'S~

(5l'JL2J!,; ].':!f.J.'-,1f.'' "~,t!!,!.,'N2 o:J:::._5.'i~ P!'.<O'.:iti

"l,l i "?.~r';(J }!i4,f~j} 4§.{CI•: "i,C'C9,W7 85 )21_.

t .!>i,-E·: (3-b. :,.:-,~) ,),'.>'l6-\ (91S3',Nilj

5}1.7.fl.l ~, .. 11.1 ~~

(2'.)C.~17; i.4r.1~/t42 1.63"7",~·.;ti J,Ui>>'l-·~ ;67(i,0J7;,

~,no.-:i-i::.7 'J.S,lJJi.t'.':>'?, ~'.!,'.T,?'• \J.:1::.0,~~1 ?.13!-;.,765

lt,,610-,4);; i{,9jh_5'.l(l "!4,'7~1,'l.13 (1,'11\:/\lli'i

5',lJ.·H~ ""-Y"'.:W3 f..,'·J:i,!52 ('37U.!l\.16]

1.{l[l.fi.19.'.' 71:.u ?,~,, ,.,.., 0-ti1,J;:i g3,:;,:.rn

~1,, ,-;,,,.3.'1 t? ,:...,,,.ll) (i·1rJ,f,lJ/ n.o:n_rJMy p::5'.,_3.~:i)

ns_.;:01 3:':11::,i;Fi .'.h'ii.162 liL,'.<,'.)'.' 87.259

3,-+:i5,i,Gt

·2,r,;;-;,soo

City of Merced Noics, to Bask Finandai StaJernf;•nt&,. Co-.ntim:ued Fm the y,:,ar ended .Jmw 30, 200.3

·======-=---=--=- -... , -- --~--

J.3, COMMlTME!<s"TS AND COJ\,TlXGfNT UAlHLrfIES

.~\s. ot Junrt- 30, 2003 the 1.-;•as -?i party -to V-1.tiou~ lav1,·tmil.5 !avul··.inf~ e:rrrin-2nt du:rn.ai.n and :invexs,:~ c.:mdt!nu1;1tlon proc-ee-dings the oplll.1cn of cm.mset t]1{:' c,.;1,tidpat0d tihi...t1Qh.:: liabilir:y for tlw ac,111i.sition of th.ese, 1-'\>~m noi e)-:C,;.'.i~d -the Cit~/~ appraisal~. I1:.ere <-ff,2 cer:s:tl!.~ personal i1,j11ry l,.vhi.f'h

City Cr)unci1. Th.~· outn:n:ae dud £-vir.:ntua1 lirJhiUty tu th.t-~ (:ity, il any, :J1 the~c-:: cEJ.~f"-~ )..5 not kt1.ov.rn .at ful'tCo t\ft?.t l'.t"'."'.J'it".v-:Zng these L.rv:sa:Hs: w)th legal cuunse!, D'1¢1Tli1,8;f.:::H.ent \;::·sfu:r1.!"::ites d)at Hu-:: pot~ntial dai:rns qgriil1.st th;;; Ctty,, :not ,covf:::ct.-'.d by in ... ~ur.r-1-nc~~, re.i.;u)ti.ng fy,c,m_ such htigab(in. 1,vou1d nol rnat~1JaHy affect tht'._~ f.inanch1l ;;.vi,ten,cnts cf the City.

H. P.fllOR l'EJUOD ADJUSTMENT

T}u=~ Cjty h.::'is :ripcoTdcd the frnpJe-1:ne:ntatk:.n of nevv GASB ptorJ.-(Yuncern_c:nt:S tr:.'! c<wrt>r~ pciur yf;;'.ar ,:Jccountbf. Atcordh tgiy., the City's f•quity ,1s nf July J, 2fXJ? hEiS bet.~ restated. ~s follows:

J-,~,-:.Hy •.t:, I-:n;)kn:K2.1t1.:,tii)r Rf.:QUJRED SV.PPLf:.,1.Ef'".JT ARY INFOHM,..\ TI(lN pr.evi.ous!y r.-f pe-~,· (';ASP, hlei: A.s:."::ts

Totili

Equity as previ_c,t:81\i hu:uJ.s pku..s the gs?.nerai

in.ciud:(:s L..tnd. baJa.nu::.s reporlt~d in g-:,H:e-1"1u--ri2nt.1.l fo.2.1rlr, and i.n\~-rnal .!"i~.!rvi,;:·l::

assets and lor' .. g· tr~nn dc:bt ~.ccount gr~1ups

ReJt-:'.~cle,•prneni /i.gm(?·Captt:t! f~·u.)KiS

(Jti1e:t'.' !"·-.lun-cn.ajui

}D

Fur:d Ba.Lif,(Y'

.li..5F'J:S.bh.-'d ---·-----$ :(;7,T"'5

[Trns PAGE INTENTIONALLY LEFT BLANK]

Citv of ?v1illbrae .I .·

California

Con1prehensive Annual Financial Report

Fm the year ended June 30, 2003

Cvn~p:rehcus,ve Amurnl F'inam,ia] Rrpm-t Fo.r me Yes.,· E,id,·,J .fone J(i, 20!)..l

TAllLE: OF C'ONTE:Yl'S

Surnmenr ofN:;;t Assets

RecvncihaHon ofi.hc Gov0rmncn1al Fnnds-13~Jance Sh~et with th~~ s;~,=;tiermmt c,f f\!et A~sct;:;;.

.... ,3

..... JS

... ,., 19

.. 22

.. .. 2?;

ZE& ASSOCIATES

ACCOUAfTANC'Y' CORf10FUi.TlON 19;.?.t San MJguel Drive - Suite 10C

~Vafnut Gre;.:1k1 Cr4llfotrtia 94596 INPti'ENDENT Al.mJTOllS' tl!';J'URT ON , FAX (925) :1.3(1-0138

BASJC fINANCTAL STATF111l"U,::fiTS m.>az,[email protected]~ssso:ciaties.co.m t,\,,Cb1;.ite: ww,,..r.mazeass.:JccDtRs,oon;

\v'f: h,we audited ~tie b.a.~j,; fin~1n:i;:ial ~Lllf.~n}tnts of the gove,mmenta! a.cfrvhks, C:e lm~tfii:-'!;s,.typt :,c!lvrdes, each fli.IHl; ;md the ft'.trn:dnfag fond iriiormittiffO :)!'rt.e CHJ' C!frr'1H!bn·.e ,-i.~ ufund G~ir thr year ended Ju~v: 3-0.

~;~~:i~l st~t~Jneats :~l~::j~CS:~~~n~:r;~~' ~~~~~~ ~~:;,\~1~~a~::~:~1~~:; ~u;i~;~:~n~]~j~:~~it;r!1!: :~~~{~:i:::!P1~~~-~::., ~r::1: b,n.~ic fif'..:i:'l0!~f ':\(~ij;ema;::uts bi~!e.:i on rnE /lU(ht.s.

,;-;ondu.r..:red om· aut_Ht !ri accord.ince v\'l1h ~..ccept1.~d aa<.Htlng :-;t:-njar,Js in ·the UtHiW States of Art~(·d~tL 1St.·\ndnrda rcq1.:.1re t,1r:.t we p~an mtd ant.Et tD ohr"31n f(;;;~:i.~rinahi-e. EtS$1Jtar.0;.~ rB to ·•,;•.:}.edher th.e t;zar.,k

.i'1rEmc.iai sta!cwent:; .:1rt: free of rnatcr~1) n!fa:3t:::r.rernent Ar: audit. ,no1, .. 1," e:rn«11n1r,g th{: .:immmt; .e.n.J di.:idni=.t1r~~s l~ fae b:iiik fin,:rn:;)3t :Jl. .. ~mi;::rnmJ1: .. Ari liHri.it ~!so inc!!ud,,s t.',j~SSir,g cite ,,cc,,untinr, pr·ind,ples U:Jif~ 1od ,;;lg;1Efica1it c..:tim~'lks .:r~a-J~· by m~1n&;f;;~n1:;nt, a\ weH s.s e~!tah..Jaling tM c,ver:;.n V./0 l:dk:vr.: that rJo.ff E\.Ul,fa proo/i,;fo~ a reasonubk bar1i!.'~ for ~::.tr opini,:1n

fo GW' epinioil, lfa.': basic fin:e1n-:-fo.! ':i-ta1.emtfl1s ~foIT-eJ to (';ib(YVf.:· ,>re.Jr.mt th!:: rn.ip.cclh•t;-fins1,l.1.:\C<! of th-e- g,o;,.:i;,1mnenta! acfrdtk:.:\ the. 2.ntsine:M;-typ,e and the 21ggJ:;og-J.ile

infrmnatkm fif the City of"J\:IUJhrae. m-. for,-e ·!o~ 2003 am: mo.res·mrn ui1;.;;up,:rn.t:",m; ano tht ca.s1~ flov-.s.. th~reof· foi th.:, year th~2~ er;dc:r:t in cri-nforrn!ty '<•dth g-tn~raHy

The h,1::;k. finan.eiat ";:iJJtei:m~rn.s rdf'.rn:·:1 w ;:t!.-:i•.:,ve foEovt t.be r~q'JirernenIB of '1..he G::..JY~rmncnt Ac:01mti11~ Siw ... ,~la:rds B:1'.i3.:-rf5; Sta~meut No 341 B.r.1}:ic. '>Jaic ar .. ,d !.,ocal

c:~m1ibus, 3-nd N,1 .. 38; C1;:-. ... t .. 1it1 .::.~fr,.:m.:w{ St;:;(,;rn,r.?H Nrx;: Df'.Jc./1N.:ur-.!s1 v;J: dhn1:s.:~e~] bi 1\lntr, ~ fr:, U°J.e Bask, flH.;.f_1ci1~1

..St1teme-tns.

!'·,{rmagan.enCs Discus.~ion t?ncl ,i.J1::::ly1nt3 a..'1.<l H~e bod~t!a...r-y compns!:.wn for !he G-ener;-:1 F:J.!",d arin ~•pet~;1.l revt~nu,: mn,is :;;,oreq,,.r<v.1 by rh~- G1:,v,cn1fr,c-_,it Av.:,o,rntim; $t?1nd;Mdi1- Hcz.rct., b~~t i:i rto: ""0, ,.r,f.-,-.,,,,,,, "''"'""''''! ,uw1e,,,er,ts. ';.Jt.., h:;-i.H· certak: h:-dted 1.0 this, infr1nnAf~::w,,

ii.

prf_,c,,,_'ltm:s

f""'-':;:,;:,"f.s •n

Tiv: sFrn::.;tkai :;.ec:don U-1:1!:::d In t'rir; Tahk: of C(~11t-en!s w,g r,(1! :::mdik:d by lJ'.<;_, ~nd zfo tl:·J,t exp,€'-S:l an cpil1!e:tl on !nforciJ:tion.

MANAGF:MEN'I"S HISC!.JSSlON AND ANJILYSlS

fiscal 20fn is 1ht~ fir~l. Jear ,he to fo1::.1!e its fmaiicii:d shforrn;nts i:t the format presr._;dbed the provisions of GGYernment Stana:1anh B~"'>:!rd Stut¢~ticnt 34 (GASH '1llJ1!Ch n:,pt~P.;~ Chy to provide this <)v13rview nf it'j fbr l~C fiscai ye-ar. Please iH COT\junctfon

,vith th,;;, accompanying 'fra-nsrnittal Lett,::r and Bask .FimifwiaJ Statorn,nts.

The

•,ver~ r:1iHiv.r~ in ,;,,, .. a.,.c,.,c,,,,

]\Jet a:;;.sets in Gnvl'::rnmentai fond~ wect:: $10 mHHon, whifo n,;t a:;;scls. in buslne,Ss acfrvltii;:.s ' . .:v;.~re $i4 .milhon,

mHHon. mil f Jon in fisc.;,1J 200J.

Rev;;:.riue8 from Bwrni,e.s~-l)rp,: sct,v,n,, w~~,re $7J ml!Uon in fi~ai 2(~03. Ex.p::::n,i;es: ofBus(n~ss~Typt (k,:ntrni Fund revt:.r.=.m.~ tot.~Jed $1 l .million ind e.;\pe;nditlffes were S! 2 mW ion, ·which re,pre:~enkd a dccrea:-.~. •Jf $1 mdUon over the prior yua.r r1rnount5. (Jcn~'.rai Fund bu1,1m:,e r!f.~! .3 minion ar.1ht: 200J fi:F:-Bi year ·~n<l.

OVK!{VH'.W OF THE COMI':RlmENSJ.VE ANNVAL FINANCIAL REPORT

I) 2)

Li in ~ix parts: the Tr,111.:H:nithd Lt!He;· aud gentrnt infonni1tkin,

M;;,mi!gefl11ettt's Db~trns]on and ,t.n.;.1y.si:9 -i:·inan..-:ia! ,Si;ih::E:ienh:\ i,,vluch '"''"'"'" '''" Gnv·.~tr.rnt.~nt--wide; and ti1c .Fund finauGiaJ

.st&~emui.'i.~~ alcng \.!,;·Hh the t·{m.e~ to thf,·:;:;.: fin::incia'i ~;rntem-entr., 4) Re~iui:r~d Supplemental l11for.mct1D11, )) st:ite:rner:rn fr:r ;-,,.fon~rnd:_jcr Gov.r;=rnmentai Fumis, f.) iafrnmafoJn.

~;~~t·!~~~;~f~l~:~:;i;~!1(~,~~:~1:::;~n~~~:;,;~~]:~:.:r:·~~1;,~1~;·;:~,~~;~d:i~1::: t/n::~:~:in~::~./:~ t1;:; t~;~~ fJ: :l~~~!:{ ~cth...-it1es rind fin,1n.ota1 p0.sitlon.

AH uf th~ acdvhies are grouped intQ Go1.-cm.c(1-~nt A •. ctivitic:s and ~ush::iess-type activit~es~ as exuhtin.ed idl the 11mmmts tn the Stakrnent ,:)f.Ni:.t Asse\i and the 81..Hement nf Activities are 1-ePanlted m.ti.r G:oven,mcntal lti;tivit!cs ami .Busirn~ss~typc Activiti~~& in ordf;r to provide a sunmwry of thr}~~ t\Yo \ltt]vit~es cf th~ City as ~ wb1::·k.

Th~ Fuud ViHane,!ai Stav;m-ients rnport the; City's operations in more demit thsn ti1e govemmi;;nt-wid.e

}tt~:~:~ent}~:;1dF~~~~tsrf.~-~i~;:~iys~:1!!~~~,~~;)r1~~~~-~~:r:c:;:;~~:j~!:!~ ~~~~·:~;~e::~~aJ e~~~~d~:~e~rh;d hahmccs; they cXl'-kide c:.apitl:!il ns~t!ts: l-ong-term debt and other long-term amounts,

l\1aj•,}r :Funds act'.(H.mf fix tht.'.: firnJgci-tl activitits of the City and .n.1\":

the act.ivEri~ of f·.Jon-rn1<1jor am prer.;.;·nted in .,--.·ith sulmn1tinate detail. fer each of tbese other ilm.ds. !vfajm:·· Funds aw bebw.

Bu.J:hu.r.s·-typ,t 'F-C,_(h/tft.?:S"'--_- .?\:1J ~ity 's 0:rt~rprlsc a<:t_i v it~~~~; ~;·e i"·1;:,Jp1ctr:,!n:r·:1;"~<l,JJei•itf,l /c1·1,~,'.:~ •• :~,!1,ge,',·~~,~,,;:t~~~r,~v,.,~,;~::~,~~ watei- ueatmen1 tactlity (samtat10n\ r1n<l ~torr.a drnm. ,JohKe F> ~ " ... ,~ ... v ~-.. '"""~

E.re suppnrtBd by ch!irge.s paid by ti:1ers tased on the asnoum

"Th(~ (--..ity·~v;itie fin;indai 3tukrr:1.:ni:; are o·f :1.H .;;~cnnern!C r~s.JurGt~s uf\h:.:: City~.:,. a

4

;1,';;:it~':f:~hm>si:;l/~;~r~:'."~'.('.! [~'.;:·:;,~~ ,:t~~:t~, /;;::L:~:;,',~';h~bl~:~~1:~\'!'a~i~r'.~~~ ~\J~~ :~~st ·Nari e.~tr1tdish~d H.t\SH ::,1.ak.tnc:;:1t 34 and r~piacr;;s the: co.nee.pt vf comldning Eke furnb and nn,.se,,,irm,e· them. in totai, rn~k~~ltt eai:;h ?vfa}:H· Fund is presemed indiv~duany, \\']Ht aU N-mHnajor FtuH]:~ surnmari;ted and mnly in ~J siugfo .;.:ultunn. Subunhrmte schedule.:_; pre:K:iif 1hc dt,ta!l of thes,:,: N,::in-mrijor

~,i_~jor Funds pMsent Ha~ acriv~tie.<:: of th•.:; City for th·2 year~ Bind mHy cbaAge: frorn y<:a.1· to year BS a t\:';Sult of chariig~:s in the :1tt"l'i>itit:"'l.

Fu\lJ.d fi"inanc.tal Str.1terne11t~ ~th:.'dude gc\vnmm:r;.-Ud, ,:_:anicrprese and n.nem~,j $i:;';tVii~e fmu:i1 ~~s. (fo,.,.aJi~1~-.:t,1J be-~ov~·,

G·ov::rrnm-.·nta! Furi;d Finan:::iai Statemen!s are pr~pan:-d on thr~ m8difit:d ~1ccruai •,,vhkh m~atts th.:~v mellsu.cc finet1drd rns.>Uurcc;s ~nd uses. C:a:pirai assets ;m.d otfu;r a.'5:-~ts~ along with l-ong-teu11 ar;; no\ yrese.nt~,d in thtJ Govern.mentia] I'1w .. d. Ftnanclal Statmn€nts.

T:-:~.tHerprlse i'ind Jnteroai Service Fund financi.nl c;til.temenls ar~ prep;lr,;;:d on the ru:1 EH.:cnr.:d basis, a~ in the: r9s;. ::md include aU their :nser.s arid Habnitks~ ~inrent anrl bng-rc-rm.

Sim:-c the Cit:/:; IHternaJ St~rvlcc Funds provide goods ~nd -~\~rvke.'.; to T.b1: Clty'~ gover.nm~~nfal ~md d1t:,. ad"'~ ·-i•[e•' 'If''" "'""p"Jrt""l onJ-,.., in toiat ;-.t Rh= icvd. 1nto-.tnai Servk.e Fund~

,.ic.,,c.. ''"'"'' (.;;;~:a~s;.\}r·e·~-~;.e""v~:~o~es·:~:rn <l~/r1~\.r~:-d ;:,,;);~ ~~tt~,;;r Cl':v Fund~. The~;e revence~; are e!!mln~1ted in Cfty .. wide fin:andat stzi.tcmt~nt~. and a~:.y rd~ted profits: ;Jr ;.et:t:e.s are returned to the A;::dvhu..:s -;,.;f: tch 1~r1;;c1icd tb.~.ru, <llong 1;:.1ith 3f1.~' re-si1Ju.;t.l net a;_.;;s~ts of foe lntem~i Servk•.a Fumh.

o,,m1mr.,srnn8 t:f Budget and Actual fins.twiat infonn11dm1 -Me t'.'re.ser~ted Drdy f~r the (Ji,::rn:::n:1-l F~mi and c,th;..~r fund~ th~t are Speci~d Rn·emw Funds.

Th~s ?,n.al-vsis fi;-icu.:S~$ on dioe W.Jt 1J.~set~', t-iild

tTabies 1: 2 imd 3) ,mct t!!;1;,11w,.ss-,y1,ic r,'""""'"',, Net lt5Sf.;':t.5 aniJ ,»a:rn,~"""

Govemment~l AmtvBtie::i Chy-wide Statemem: of

T~bie 1 G-ovt'rrunt.uiial !'-J.(fi A~st:is 2! June J{)'r' 2H03

{in I\-tmkm~)

CaBh and invc~tmc::n~ Other m1:-;:ets

1.crng-t.crrn debt ou:t;ia.nding

0th-st Hah1Hti~~:

Notas;i'ets:

illveste-d in capitrJ a.s;seti:\ n.et of de-bt

Res.trfotcd

Unrnstrict,;;:d

_____ _!J

37

n

27

___ __(7}

······-·}1\1

!~:~ i~·:rr;: S 2~~~2~~?;t~ s f~~~:;;:;::e~]l~l):n~;~;~;~~~V l~~ ~;[ i:!e~:~~~~:~\~~t{;~\-~~:i ~~ -i~~~ 1 ;~~~::n~~l~ zi;~A~~~~;~i!J~ ( ;i~ shovrn in .. rable 2 1 and is exp?11incd below:

Cash and inve,stm~nts d;,;cr~ased $2.3 milHon d~crease in Llbr8XY C\1pit~l f.:cJ~ct I1mid dur:. to cmHtt1ic1:ion ""'''"""''"· ,w,,. million ·Jt)crnm·;e in str{.~et3 i:mprovc.mrJnt fund'!!-.1 and $'0.6 n1i!lion Storm Fund io dos.1-J out gr~mts and 1ransfot 1.'.) rdmburse Gcm.:n.d }' ur.d rnr arlmlnistrn.tive co~ts h1cun·~d tbr th0 prnjeJ.;t

t,mg-tenn debt (k :r{::1:..:t:d a~ no new .:fobt .,.,,as i:ssuc::d faz-.d 1.nrmaJ d.\;.s,bt pdntipa] fJayments were rmt(Jg

6

Net tlSSl~ts inv,.:.~~r.cd in capild a8s~ls Eet 1.)f rnhte:d debt totn1ed ,$6.7 mimon, con:=dsting of $12.8 mHHno .Jf capital as:ie,ts a.ud l6.1 m~Ukn1 or rnbted debt. -

Rf.srrk~r;d net ass~ts totabd t9.9 mi!U:~a1, ..,vhi;-.;h inciud~~.s $0. l r:niihou restricted for eapitai pr,Jjt;ct.si 1~1 ,4 mt[liun t~t:trj1.·t1;;d fbr dt;bt· setvke., $7 rniLfam fcstrktcd fr,r r~dcvek,prrn~nt~ lmd $1 A t(::3tritted for ~pe.daJ rev.;11,u;;- programs.

Unrestdcted n~l assets ha. .. -., a deUtit ;.rf $6.9 minion prima:rlly due to long-tt:Hn debt which dot5fj aor r:.;qufre t,;;; m;,:;; •)f CJJ.rrem. ass,ets t(, b!;' Hquidi:ti.t·KL

7

t:,,'.\11':l;:;-p.;-,~n,t

14-'%

J(m1r.Uo.SA.ni Exp-rm1r, fri:,.~it~I QFJ

A~ th·~· S\sHJrce"> ufRevern-4:;;: Chan :1b,o1;e sh.1) 1.,vs, $5 4 mlHinn1 or 2,Jf1i offh~ Chy'5 Vi.sen\ 20H3 rev:;~n;}e~ came from _Property Tffll'.es nrvem .. w3. Sal~s: Tax;~~ and. Transk~nt Occu.pa11cy 'fax acc..:.n.mted for $2 fitfillic·n Jnd $2.,3 mHhon n·,sptGfr,.·d:;'. ·nK~ total gt:~nl.~ri.J r~wermes of $J.}.4 mini<m~ accounted for 72·:r,,~ 1):f rt,e 2UOJ Gcivenunena.al revenues.

The P-nH<,.-:tkin.a1 E:tp~i~.')t.;\~ Ch;:\rt- above inr;ln<le~; cm!y cmH~nt )'~~.r exp~m:es3 which &t.:l dis1:;ussed la detail he!ov~' it -i.foei, nnt in..::h,de cnpiml nutlays~ \\l.ic:h tff0 nDw athfod to &~,~ CHy 1 s. capita.! :.1~::;ets. In Hscal 2U{H 1• tJ.-,c Cit)" added $L5 n1Hi.kn 11' g0Yen1.m1mt11i ;:.apital a.s~cts, :t!; shet\Vn U1 det~ii ilt Tabh::~ 6.

The StJ.i:~~merii: of Activities pi-esems program Teve::rucs and .::x.p1.::nscs tind gcn;::::rnl rnver,ut..;s in d,;h)iL AH these 3"n3 clements; in the- Charges. J.n G·iy.rerrHwint:?,1 J·fot Asg.\.;4.o i·:urnmtl.ri;.:;ed bdmv.

F..irpe11~e£

~~~;~:;~~:;.~~111v;n~ Higl; ~·h\y arid s.i,~1)',il Cultart :lad r~i.!r~.:aL1o;;3

f.il~n~rr.J 1,ei,,-t;"11:1t:~

T~;,..es~

lciX{:.3

Trnr..sicr;! oe::cupar.cy ta:, Otlle-r t:;;.:es.

Moh,1 vi.:.hick in E~\J fovc~r.i1:v.:-t1.! mGrJin::.

Transfors

;~::: ;;~;1:~~~:11·,pw:'.~

Ch:rnies ir, ·(112-t M,$-e:l.si

T:rb!o2 ChanB:t.5 !.n Gov~rh~tnt~i N'et },.sr:r1i~

- Hn i\!Hliim:rn)

S. L4 &.Ii ~·.l

----·--- u tQ.l

.:.o Lr5

5A

Pnhlk: Safoty

Higtn1i1ay ~md streets. Cuttrn--f; ,rn.3 r ei:n;a1.ion

Cvn-:;mun~:y DeveiGµm3Jll

fote.r~st on Lc.ug-terin Or:;bt

T;.1hltJ Govt:rmmmtid A~livitfos

(in 1\-'!i! !ions)

Ne:t (Exp!!nxt~) Re.,mn11;::

____ l''rom S-e:n·i.,~_~s

9

;(Jll)::!

($LO)

(7.9)

(L6} ((i.'.I)

(2.2)

-- --,--(~i]

T~l>le4 n~sh1.ess-Typc Nd Assrt.;

(hs 1\1iHfous)

Bu:i,i1tes~-J~-p_t Achvltif.t:i:

~!i__Q:i

Ca.sJJ iMd JnvestmenJs

Od1r;;r l:UUt:Hl f1S,St1s-

Long-1.:;n11 rt1obt uu-t:.:te:n{Hng,

Other Habilid~s

SLS.7

l.1-6

L09 12..:i,6

L47 ()),\;!

------------

2: .. ?9

J0.98

--·,-----·1,6J

T1u: ne:l .t1B'.5d~ of Hus{n~sB-!:-1fK~ A~;1h·i.ti,:8 ~ncn:a;:,ed $0.5 milHon in fiscal 200.5: primarHy as a re:$t.dt 1)f • .. vat.er and s:e-wei ram ~r...r:,rt:.ases ltnd !:r.,ves.tt'.:'lerrt <'.Urnlng~~.

i'~M,;5 Ch~tt~1;S in Bnsln~:'i,s;AT:"re :....r~t Assets

(in Mim,rn,]

R~\-f.:IH.Jes from B=-1sinc~;,;~JAyp:;; a{.tivit],:s

YNas~~; \Vt;Jt:r T'n~:~1nE;nt F2ciUty (S:-lnita~i,Ju)

Sti.mn Drr1.in

B.n1?iiJ~:1_~~I:o:lt~ Acti\idc~

S<J.17

0.27

_____ _(OW)

------ J!l:!4 Operafa1g revenues of !!hi::frness-type ..i\;;tiv1ties increa~.e<l 10.3 rniHiL:n ir. i~.0;c.aJ 200}) and these 1\cfrvitiet; r,1s a vvhoic 1,-vc.:n~ pr·J-fitable. ~,k;,t r,"Jvt;rm1;s over expern;e.:j 9Je.re $1l l 7 111:iUioo for \Vat.~r frn:1.d and $0.2';

millkm for Sanitation f'un,J The Storm Drain Fund exricrk:m!ed a net k1s~ :Jf~O, l ruillion. Th~ Eh .. ~!:iim;.~,~­t:"/pi; A.:::.bviLiw1 f;IB whofo e11dt~d 1,.vith a ga;1, -~f ~:l},'34 rnilllon for ih.e yem.

Howe¥tr, a'j ~~ha":r.,.·n in the Staf..em;;nt ofCF.!sh thi; cn.:,h k-dan..:t;~ of most nflhc:ae Furnfa decrease(~ prin:.~ri!y be.nnJ'.';lj a:;~ fr~m the Sar:.lrntion Fur.d t:c1 c.o\'er other foncl3~ ,;:,a'ih drficirs £1S June f.\rzd '1 trnnsfor out ofSG. I rni)huu frurn Storm Dra..in Ftu:1d t,1 repay the Gen~nd Fund for prior yer1.L'i' Cieue1ai Fund itub;;;idies.

A! Jvrt~ }OJ 2003) the City\. govc!11m12,Hg{-d fund;; .r¢pnrted (,;otnbii1ed fU.11d bn!anccs ct $19,6 miHtj,}o.~

;~i~Je~e~tj~:i:~}~ :~fc\/ ~~:;.!~:e~r ;\~:~ $~~P:~ti<::l1:i::~:\i;~; )~i1~:-~;2rt ,if ti ii \~;~~~c:~~,;.::~~~~:;~;l :: rnirnon ~nd Hu~ Storm. Re.hef Grru:t F~md d©ctea.'ied $0.7 miHitJn, 11H,.a: vra:; primm-Hy ~n cth.er non .. ft.,1i~~or funds .. whk.h incr-case3 (,ffiet l'rlt.t~ dec:i·cssc5 at Juno 30~ 200:J

Gove.rnrnenial fb:nd rnvt::nuos decrease,d ~o a 111.:w h"lhil uf Sl9.4 mimon. The G:.mern~ rund accmrnted for 1S% oi this decreased $4.7 million th~;, ye~r to a u;;iw Wtnl of$2i.9 mHhon. Oftf!ls dccre~1;,E;, ${t9 rnil1k1n W3:> in th~ Ge,neral Fund, $2,8 rniHlon in the US HJ] f'diHhtae Ave11ue Caphal Prr;~ect l;;u.nrls, $0.2 rurnlon in the kD.A Capita! Project ;]nd 1bir,;

n~nv ... in<ll':r~ was r,timari.ly in fnnd:i. rhe non-·ftfajor· fur1d5 thd Sii..nm Fund decreas1;:;rl $0.8 mflEon and the Strc~.t Project de.erca.s·Drl $0 6 rniJ!irin. On the ot!Kr hand, th<;:' Library Capit~l Pro.icr..t Fund ~x.pt:~d.ihrrc.~ inc.rf'r.'1scd $1 .J miiUon and t)w RD.A ·De,bt St'.rvi~1e. Fumi inGr~~e<l $0.2 m!Hlon.

Euterprfa;e Fund. net asset~ ~<)foJo;:i.i $14 G mmion a! June 10= ?J}03} l1n incrc..:fii..~ 0f$G.6 miHim1. Ero:erpri!ie revenu!;:: Vfr,rc $7.3 rndlkn, th~s ap $03 md.!ion fm.m tnst year. Cxd.Tli1ution3 .t.uuf net

tT.msfcr~ {O .$0,1 rnWfr.'n ir: fif:;cal down $!)JJ9 miHi{;,n from the pr~or yt:"ar.

,J

(kucrai ·Fm!d ,e1,pu1d!rurr;;-s r-ci.:h.its.cd ${L9 rnmiort ci:imp~r~ng to .tk:{;a.! year 2002 JS ~ r1;,suh of an im,p}vm(~tlt...itin:n ii tht General Fund bu.1.ig.::t mcu..•mff.•s. Generrd Governmen.L Cmnmunity De\,~bpmeirit1 culture and n~creatfvD.;.~ .. ~~'ld Highwayi Street:~ c:-:.ptnditm'>;~ <l•::crea~cd $1.mtliion. lh~ decrense ·was .a rfsuit Qf more O"Y~rh('.~d c.ost~ hefog atto~~~t~d to citu:r fonds ~nd ~!su

~~·~!~~~~!~; v~~;::~~~f:~TJ~e~~::::;~:~~~:t~ns wt:rkl;;:.1rp:::~1~~!j~;c·:~:;~; x:~~~!~:r axisth'.,g (;lty

n fire tn.tmk be!J:lJi. in fisf;a.l ye:ar an~:! no major capllai put~tmst- ~a£ authori,l~d in 2003. Publ!~ "" on the other hand~ we.re. lncre.ased $0.5 mi~lion due to mcre&~ed pe.rsonnel and.

:l~~f~;~."ib~~~?~~~i: u~::;;~i:f ~1;;~!i~?~~~~:r~11If, 1~~nefas. 1~(i:;·:a:,~:~~~~~?ii~:~:;,~:~! ::i::: Tr~1:11sfers fo jncre~1sed $0.g miHicn &.:!)d Tnmsfors r)lJt dcen.~.:l~t;d $0 . .2 mHfo.:;n tu _refled (he Chy C?un_cirs decisi,~ns- oftnu1sfordng s?,,·lnJ~ fr,.1m 1Jthe1 fnnds a~t<l l,n ri;:rln·:e the -<1rnarnlt of Ch.mer.r,l Fund ~~nbsiily to other funds<

.At Jmm 30, 2.003\ j)1(": Oc11~r.ai Furid Baian,::e t.'-On:rp~ised $ L3 mi!Ecn. r-.":serv-t":d alruost erititely fo~ encumbmswes and udvances to cth::.\r fnr.ds with .$0.2 rmifom ldl for unreserved an.cl lmd~:;;igrrn.t-rd fond bah.1:nee, the unreserved portlm1 re~res~nt5 a.vaUa.bk hq·J1d re~euree~-;~ ::iince the rns:•::rvt':d portion is repre~ented non-ca.sh -l'"S:,sets 1)t by o peH ptwchase ord.<!-rs.

The tax ~ric,r.emen1 revi:-nucs incrf:-a.sed .$0.3 mi!lion ~a 2003 drn:: to ntW' coming un J;.m: ir1 lhi:. Redevi~k1prmC;n!: Projed A:n.~<J beforn 2003. in fi~ 1e:fl! yc-.ar 2U0l the Redev~lnprn,:>.nt Agency re-

f ~ "• fl ·r, \':, :i- F. "'"l · tl.i , .. ,.t"· tJ-i,.. ~,ffqhr·1e $1;;ht1:.1! Dbtrfot (N'lESD) and ;~vith

;g§;~.:::::!:~:l~t?~:~;,,"t:.~;;;;;~::i::i'.~J:~;,::·~::E:iit' nptiun. Th~ ,:l.ccmnulated S'fvH:tDJ WJ.s rni::;-::J fn~m '2/J% l0

ve~r 1'~te V/J.i;\ rt!d\jcc.d from w 25(~,:,. The11e aericms tnc.rnas:~d the M·rnhrne Rnd.e;,.aeiopment Ag~ncy'.:»

~ ~'t ::: :1'!;~~' f;:~~ :'~~i~,I~~ Lb;L:: ~:~\~ :: 1(,'.'.:1~~l ~ i: 7 ~!1,~1 r~~id,:t~:,~P;~;:~ ~;~;::i, ;::;~;;;:;:Jc;~;:.'.:;~:;i~:;; .. d :md $0.·~ millior:. ft) 1!a~ RDA C~p~tal Pi u.~c:;;1 }t1i1d, The,se :hmds need~d fur,d;ng b kee.p ope~3.t-!v-e. At ._hme 30, 2003 1!!~ ciihre HJ)A Debt S£:rvke fuud b~t1rtee YV.9'; re.served for debt s-~,;vi0e, cl:Hipdon5. The out:Jtamiing Ad;.·Lrnce from 0th.et Funds \Vas Si .7 mi!Eon at yC;.artmd.

t2

The k~dcvi;.k,pm,~mt Agent~y Co.ptttil Prnj~i.::ts Fr.rnds ar~ composed vi the RD.A }\dmJn;,stratkm OpernUng1

the RDA Capital Pr(ij~..:-.~ and ilH!s 1:bu;;;ing C~pitu! J'rnjt~~T fuf,d~, Them ,vere mitwr capit.:1l outi\1y efforts in .fis-cul year 2003. funds wern p.rovkied .for the US 101 Ivl{Hbrn.c.Av,:mu,~ foto:::r{;hange Pr~)jed and th{l VJastt ,.V1/:1ter Treahnem Plant red~iign. 01h-erwl.~2} the A,.gt~rwy Board decided to bold pr(~ectx ~Ju.i;~ U) iho in1::reaq,~ in ptHiS thr.~;:.<ugh p~ymi;ints. At June 30~ 2003 thi; FJ}A Capitzil Pro}ect~ fond balance -~No.:-J

.$4.9 rn~1!i\Jn. n1sjnrfty belonged 1·,.:, foe Ikusing Capital Proj1;11~t 'Fund 1.:-.1!th an e:.1ding: fond baL'i.n.ce of $J-4 miHion.

The Lihr.ary C~pira, Pro.le-ct fut.1d.. babncc- rcR2rved $7.4 mi1Hon for ub;ig~tiou~ and .$1,J niillfon 1:vm~ designated fer other L~brnry ProJt~ct approxin1a1·ety $2 mlHh::n V·c'~S spent on the Libtmy :r1rqject, SL3 mi!Hon cons1niction costs fmd 0,7 mmiorr for the m·chitec.tui'ai. sti1lfo~, a t~mpora.ry Hbrnry set up~ and l"'ie ·variou:~ {:ontr~1ctua! .st!rvtces. Thr:. pmj,'::et began on .A.pdl i ~ 2003 arid is expet:tect compl~tkm in .,uly 2004.

Thr; li'S lOli't..'!i~Jbnle Avenue Cap~tcd P1:~j.~ct i}; cun:.1plek·,d us .~uno 30~ 200J vdth ~ fo·1-~ ptm;;::h lh:t ~t.en1s. Since the ptoject costs wert; r~~i:rnbtH's-:~d &n arrertrsi the D10ney, nut rer~ivcd

:~:;~~-i~f(:~~:~;~e:~~~~1~~::~;~:(~;~ ;,~::~:~;~able a~; weH as

Thes,e fonds are not s.':para!~·:y info-.~ £;Hi.c h:nauvial 31atemt·1HS, Lut ar~ imJ1viduaHy presented as Sui,)pknnentaJ !niurn·,:iti:on.

~~~~~:t;O~l;;~:c!'~~~~ ~:~!t:~ri:~H,c<l W 4 1~;~~'.;,~~:r~il,;t:~l~::!:~''n:~l'.~,~~;:;i~'.~ ~~;e;:,~·:~i:~,;1 rt.1~

rnHHon ~n Tm .. nsfors fo fmm Sanit;;jt\On ·whi1Ji \V$/; !J5ed to pay for ~1. portion of the fvfotcr Proj~\.:t loan ~hat is nMigitts:d hy tb.e Sanitation fund.

The Sanit.:iti.on Fund rtt>t .~3s.,,~ts lm~rea;-.,':d .1m 3 miHion in fo~ .. i;.:al h1c~fl;.!3,~1;;1, c:nmp!'i1.1t.d $0.5 m.iHion ~n Upern.tlng !ncmne nttted find Tr;;1nsfon: out

2003 to u r0~3.l c:f $6.7 mnlton, T'h~::­a $0.2 rniHion Jc1s.~ in No.n~Op,'.ratiog

/\ tot~i of 111.9 rr.lHion of th~ 1:·5.7 mi.Ilion Suni1[!t\n~; Fnnd Nfl Assets \1ii3S 'l.Ere:;tric.ted nt the fi::- .. :al y~~m e£1d.

The Srorm Drnin fund m,;c a~~sets d.0etr,1sed $0.06 m~rncn n.s i1.re,.m11 ,_if a $0.04 mil!fon incom,3 bo"forc trnnsf,;;t~ nett-ed with u Tr.:msfe-rs Out of $0.1 mHhon t-o th~~- Gen~rnl F1.md.

CAPH AL ASSETS

Ai th~ ~nd ,_, f fee~] 2fHB ·.he, as~:et& used in governmientai t(,, the finandril ~t(i.ten1ent~).'

Land f-2,.n-d im prnvernents

Buildings {?nd irnprr.,n:c~rm~n1 ~

,'\ntornobiles. and J'rucks

l~frn.itrw.;fur(~

B w:hu.'§J."··fJ'[1e Actii1itte-s

Land Lmd irnprnvcmenis

fqu.ipnwit1

h1frnqt,rucb1r~

Tst!ol<l6

,.k,rrnci:stior., inve~t~d in a broad range capital he''""' r tmt!,-",,. detail n:i.ay bt found in Note 6

C~plta! A@~~ts M Year·eml (h, M.iliim,a)

~ Govs,nunwJ:ActM*~ ·--·-·---·-·- 2003 -·-·---·-·-- 2002

$U8 0.86

2.95

us .. _ --·- (6.22)

$0.0

0.38

4.Fi8

7/i5

1435

.li5

_ (l 4.36)

$2.44

IUJ

B.25

Ll2

$0J8

7.25

.()5

-- ___ (l_~·_.29)

~1;~jor cut!ays fur Gr:ipitai as.sets and ,m1m.,•cerrJ.<,r1t, i:m:.rn:red <luting t.he crn15tructinn pha~c lnter·cst eCitned l:,n the. !nve.3{e.d pro-~:eeds over the sa:m~

WBTAHMINJ8TRATION

T:!lble 7 o~ts.ra,~di:ag nei,t

{inMllli@s)

T l:t..X A] !o\.'.ado,n lkmd~, (jSSH~d by 1hc

Rectcvdopment .Agem~;,:)

Cettifie.ates of Pzrrticlpr1tion Publlc L1br3.ry Project Bow.ts Storm Yt/trtet D]sf.rict #l Rnnds

Naturnl Disa:"}i:et itsshtant,e L..£;t~J1

Emi,.,ess-1ype Acth#ic.~ \\iate.r Rt~ve-nuc Bor.ds

\Va1-:levh1ivr COPs

-~ ':l)tP ---·· 200.2

$ 5.13 $ S.?.3 1,,85 3.96

rn.r, l(Ui

IJ.06 ().()9

2.42 2 29 ----------~ ·~--··-~-

1.47

$0.22

l.66

At June 3t\ 2003, j total ]n sp~cia! a~..iessment d1s,Tkt dtif}f wr.i.s o·u,tst.·1.nding Spedal /\.s~1,;;;~SEH.'ril ~fr~trk.t. debt i•; seciircd special as1:~v.ssn1ent::i on th,.; d(s~~i~~t ri 11• th·~bi and is 110t 1h~ City~·~ Bithou,,_,h the Cit\/ C.c,e;~ ud as: , . . .. ·- .· £;~d t{};~hih;~:·o~e ~f ;i~:.<'::srnent~. ,

lr0.1'NOMIC OUTLOOK AND MAJOR INlllAT!V:ES

Th,: e.r::.onon1y of ti!e City and !ts raajor ln]tiativ6 for th~ 1;..:nning yertr a1~~ ;_fo.;cuss.eJ in dtt'-U fri th~ accm1:pnn,y!ng Trnrr:m1it1,.,.d Lt.:tTer.

CONTA-CI'ING nm CITY'R FINA'iC!Al MANAG}~MFNT

Ih]s ~·\nrn.w.i Firnm::ia: cr{;;dito:r& $ genernl 0\''0iYi 1,;w c:fthe h) Chri.stine Ivb __ Vinr-ti1cird S::::wk,:is lviagno!iu /:i..v6nue. lvlll1brJ.c_, C,"'if~forni~

is ,;ni.,~rhitd tn provirk citi;~;;ns., taxp1t}"f;.".f5. Hlvest,ot.\ i:..nd financ.;:.s. Questions hbout this Repofl :,,h,..1u!d he d1rcth;d

Finani..:~ Dtpart:me.nt of the Cit-; of 1\1.iHlnae~ m 62 !

.lS

The Statnnent of Nd A~;st,;-:ts and the Stitem·ent of ./\clivitics f1.rn cndr·ety ricw s,tm:ements reqult"ed by G~JvunJTu~n!t AC',cnooting Sf?.:ndard~; T.-kard Siaternent J'"!. ]hc~it puqx:r~:: is tn smnmui~·.e the, ontfre Cirf~> flri1"n1c~f![ ,1divfrie~ und flnun,;.:.iai ;ire ptepared on the sM1r: basis as ls :u.':!ed. by mv:J hut-iine:·M.i~r:: •,.vhieh rnet·i.:ts they asset~ ~:md all irn JiJbH1ti,~s;, ~,:. w~H ;>£ aH its revenues and exp~osi.::s. This is knav.m as tho foU. accn.wJ b;:~sis---thf.; efi\~;.;t of aU th{;l CHy~s trnnsactkms is trtkon int~:. o.coomrt, o[ v,.il1dh~r m v,-11.e-n oa:;h cha..'1.ges hands, bin .:iH makrla! ~:nk,rrnd trans4crions b,;;:tween City

The Stateinem -nf Net t-~ssgts the diffor~nce between tbc- City\; total a:-:st,t.1 and the C'ify'1 S t•.>taI lfabnitfos} including aH the .;a_pjta1 assets aud an iis tong-ti:nn debt. l1he Stateroi.·m~ o-fl"ld A::.,set? pre&ent~; slmlfar lnformatio.n tu th,~ oM bafanc~- sheet fi)t'ln'Wtt~ but ,prts~!nB it in a ·Nay th.at focu~eR th~ reader on !'he cr,mposition of the City'.s nc:t assets~ by ;ubir-1:cting tofa_[ ]iJibiiiti{:S fn:mn tt1t~l assets.

The .S·!aterneni ofNer. A;:mcts smnm:-rdzer. the fi.nanoijai of aH the in a shigk column, and th~ finam:.qtd pus~tfon af C~tj1 1s coturn.H· these c~Jiumins arn foHoivcd by a Total c:oiumn. the~: pn;:.~-cnts the Ci1y

Gov?;rm.nent:::al Ac"tjvbes t!:..!..:tlvWes in a singk po.~b(m o-f Hw errr_Pr::;

T'h~ Ci1y}s (io\'~rnmental Activities in;;lude the w:ijv!Ui.:'.1 of its Genet·~] f'und1 with !.i.H itis Re-vcrH.H!, Capit1i PnJ}.:~:t.:.~ ~md Debt Servko Fund.:;. 8111\:e the, Cit:""··~ lntemd Serv.k~e S""tr~:r•.""

Fim<l;,:;~ thdr anlvitk:j .rn.-..: comoJid;:..tvd with G:.wernrnentai Ar~'frvltres~ alter eHminat"!ng int.er,.Jimd trans.:ac,rio;J::; and buitmce3. '"H~e City~.t: Bu.=-:incss type Activities include aa it~ Enterprise Fuu<l' m:;ijvities.

Thi; Stuternem of A;.,1 ivlti~~ n.~pmts ini::ma~:"!.S. and decrnas.es in th'3' City's net a:.;sct~. the foH ~.crna! bast~~ ti~htc'.-3 .meruB !t !.r:H.:hidr.i a1J the Cfry\: n.,v~nui;;s and all it5 whi::~= C$iSh hands. This di.tfon:. ~~riJm thfa '1rn·Jdlthi 'accruar~ \'.'.as~s used ;;~ah;_mi.;!l1tS~

fc"Kper~ditures,

H i-s ahu pr~.p.ar~d on rGga.n.ik.:&~ nf

the F ,rnd financial

The form;,:-t of the Stfl_tem;;"";nt oLA_cUvitks tHffers cmtsid,:;.rz!i.bly from thos.v use,d in the ps.'.:!-t. !t pn:;~cnt . .s, Hw first k;l~d by a.nd foHnv.rs the;:)st: v;iih the e>ql\~nses of !ts bus~m:-,s~-type

r_;e!h-i1i,0s. reve:nue.~ v:1h~,d1 tm.~ gen:rakd dinx:l"ly ·by· the~;e programs.----a.re prngr::im:; o::-:q;·n-is·~$ to ardvt at the net f:~pen~i.;:, of c:11,;.~h ['.}.n·1;~rnmenrn.i ~md busineS~i­

The Ciw\s -a:0n,:rnl re1;enH0:.,;. ar.e the-n 1i~ttd. in th~ G<>VC.1nrnenta.1 A!~t(v!llt-::i 'l)i' Business~ coir .. u~n 1 -a:i uf)p.ropriatc~ and the Ch.1ng:;; i~ Net A£~Ct'.-; i5 cmnput\-!d and rncor1ci~e<l with the

oft-kt Asset:;.

But.h \he.se Statemients indude the, fir:an,~wJ ~:ii _,;_~-·\s of tlh:: City., ~nd tb-': City 0f Ivil!!b(a~ R-. ... di..:velopmtml Agen.q\ ·~\"hkh is .legally S(~p1;1rn\e btlt are ,:mnprment 1.mit of "the City l~ecfnJse it i~, contio!kd by lhc Ci!y, 1hhkh b: fin;·md4Hy ac~.01.rn.tabk for the nftti.ir.; tntity,

The.ti.'.· rW'v\· fmnnc.l1d sta~ement.s aking 1vith the fond finan~ud :~Jakmenl-; fl.rid footnote;s are calLe<l Ba},'it Fintau:iol 5'tare;?icn.fs.; 1he t<:-nn Ge.n.s:r.-1i }\.:.rr:nsie Finai.1::;!at ~~t,11te~ne.n~ is nu 1ong~r '..-"'~e:c1

17

ASSETS C~i~h :and inv,r,stmeo!S (N,:.n;e J]

CtVih .,.~w, fis-.;al 1~g~nt (Nr.:h~ 3)

A c::--:-,u~'!J: - ncl

1--.i:·.:r!.it~d liJ.t0r~Jt

Du,~ (liirti. -.:'rttier ,govi.~i'Mflcnfa1J agr.::m:l~s: ta::,aJl3 (N,.)te .5~ S1x!cta~ asserurneu~ (.!'k1!-e 8)

lntt,ITUli !i~.ia.'1Cr:.:.. (Ncif-e 4Dl Pn:pi:.!d ~knY>

Ei.m,6 is·;.·ila~~(:f: t(l"-t, ner (N:rl.e iJ

ClTY OF lvIILLHR,U', STATEMEN'T OF NTT /1.S8IiTS

JUNE 30, 2003

(;,;r,r{l:mm~~/.'il .B11~il'itss-Type:

·--~~i.::~l10._____ ·-----~:..~~L~:~ -·---

}i20JS1,282 9ilJ_,()!.1i

525.93 l 337AW li7,9%

8.J3,47Q ~~{)(!_t)f,'Q

(!,IJ%,J1'(,,)

8,747

Caµit~~ ~;C;ets. ru;~ .:.f an:·.2~;iuh1ti-:-(! r.fop<'.'.d;;:,.ikt.n (N~1.e 6) __ _.....-___ 12.~-00/H~ tl 14Hi

12,4:~1)20~

LlABTUTlES A,;~}.nm.t£ Pl-ly,:ible !:n~~~t p-3:yz.l}:e Depos!t5

Cunpen[~[i.tei:'! absec.,;e~~ fr·: ok l G) .A~;::rned a::::if-io.s.urnnC'~ (N.ote Li) Long-terrr1. {kbt n,k,te:,; 7 ;ma. 8)

}\:,nfr•r: du!'.", w!rhtn n~1e yc~i Po.1;,.)i.m .J, .. ~ il1 ~1'1',"Hi,';: fa(',:1 t"l~,t;: y:;-.u

NET ASSETS (Note 9·i !r1•:l\:'S.:d in t::1pit.-1] C)S!-ers. ot"rei;:iir:d (id:;~

R~:.tni;td for: (\1;it~J pr--.-~k,ct: DtJ,f S~(vlce

Rdcveldpmtni Spe-d~ll ;,~.,_-,~nt~t- prog:r::J.n)1

1.384,621

113.J)j 1,955,Ml3

400,754

7X~I/J12

2,'.Sl6 :tJ.617}.5

l 72,6! 9

410,0C.C 2Jl\9U0

__ _2~)9,~~ ___ .;;l.;.c,:2.;;.la,~''-'(!("',8-

!.TH,2fr1 't,[•3~;,04 S

kui -·--·---~----·-·---·-··

171.946 J.'i-7,,569

833/l'iO 300,000

8,741 ll,41.S

J;"'i).52, l j2

lJ11'J.,593 29;~1!)

3?7,46"/ U\llo

Z,12.t.,(iOi ti{3),751/

bJ{i,900

l3,177,i21~

l,]74,26,i

?~t)3jJ)4.'5

lJB-9,9?2

-C~;rrim~mly ..J~"~!otRner:, ls1!-e..rt~1,·Y., ii.·i~ t;;:-rm debt

fl().itai?-!I~ Cf;~11,.~nc.1· u.; .. Oth~rU!..H~f..

1~',Jtor v~·br:k 171 lk1~

t~,-~'\\.S( k1•;{Hl",F.

!ir,~~l,l\lnt~ c::1ni,1i":f~

Mi.w~ i1tLnc~1:J.~

CITY OF MiU.P.kAB

,STATEMENT OF A.CTlVIT1ES FOR ··n-n·; YLA..R r;\iQEfl- JL1NE :m. 20iB

P,,H·mm~rit>il B{l':ilfo~~s,cypot.

_!'._-£wi_ri~~ ~ _ Acti,1i.tec, -·--- --·-- rot;,! __

!iil'J'!.(1t7 1.i?,746

---- ~-------- ________ t'!-<!,7il'",1)

~1a2.fiM J.U.~£µ. ,---·----·- --·--,.-....................

i9

GASB 34 revts~s the fonnat of the Fm!d Fb.1u.1rii~l St~.tements so tlrn.t. DnJy ind~vidual m~jor fond.a.; JJ't:

pres-ented, whih:~ n.on--m..jj•.."l-r ·fimd:; ure i;;onJbim.:d in a slngk cohm:irL MaJ~,r fonds are defined generally as fotving ::;igrdficam acthdfae:s or ba1anc~;s in the ctirreo:t Nn ffrsfrnction is made bttv,·-e0n FuDd t•/JX:s and the of .,:.ornbining like fonds and !heir tuttils iu ,~c.t:.m:m.s (Combh1ed

Swt.ellse,,t,;) has been .ctiscontlu:ue2l~ along with us-.e or HH~ Long-·U.:nn D~bt /t_cc(:-1mt (-1.wups.

The forah i.fo~'.~ribi;;d belm;v 'i.H:re d.etennincd tu bee M~jor F\m{°fu by th,~ City in f]~H::l] 2003. fn<l_h.1 iduaJ non~nH-1jor fond;.; m::.y be fot.md in the Supp!erncr.tsJ ~t~c,tkm.

rh.e G,;;nerni hm<l i.s estahUshe.d to accmw1 for th.e rcvern~cs ~nd 10xp,~n.<l.in:ire$ to cany 0ut ba;;k goverr.miental tt~~tivM,!~ of th:~ C~ty such a~ genern! g0Yemn1em1 pub1k~ sn:foty, puhHc work8~ and p.ark5 and r:;;cre;,{itiort. This fond a~OWi!S lbr all. finam.:i~i (rr ... ns:iction.s not ac,;t)Ut1.t~d for ·in the oth-Gi fluid~.

To 21ccm.n1t fot th~ ~cc-i..nrull.:ttirn1 cf rnsrn.w(;e:, for payrnent of pri:rn;::ipal anU hrterest en Ivifl!hrac Rede\'";!npmcnt Agt:ncy {l(;:bt. ·1n.e Ager,c.y re-;.;e-ive::-~ teve-t.:rne:,; :finrn pn1pc-i-ty t~c-"-.: incn .. :nF:n;.!s

11:iWKVl,;Lon,u~NT AGENCY CAPITAL I'ROJECT Fl,ND

Tn r1t.···,cnun~ for th.:.• .. M.HJbrae Rc<lev{+_:•pment .,.\g;;-ncy~:a: r{:!so-urr.ed for adrninJ:-;1nH·iv~:: ~;,::•sts~ (,::apira: projet!.3 ~nd lonq/1e.rm debt Gb!igatk,,n,

UHRARY CAPHAL l'fl.0,1.ECTS !WNO

r,s l(i!fl\!HU.BHAEAVE CAPITAL l'ROSl~CTS FUND

21

,- 1.h %,d i~l"'='-"'i! ~ew; 'r<l're \; Cat!: .,,,fa~[\~:,! !.:).;':\ii a'<vt,;,, ~IJ r,~..,.~,:il"~!::l.1;:;

F.t1,;.1.,r..1h(.1!,;,C·~i

:.;,d,1:; .. _,;-.,.,.,1;

CiTY OF 1-1E .. LBR:-\E GOVERNN~f.NTAL FfJMOS'.

B-AJ_J\f'JC't ~}IF.ET Jr, rNE 3i.'t '.UJG3

'J.:":>,,(;'2.,4(,~

'.l9'.'):(!.\ PSJ:'itl,,;:?.4

!i,l5,i)6)

!.iiY,mm LrC·:,tJ, lOO

- ··-- . ··--~- l;,!i'l ·-~---!2:!1..

fi:-15,4~4 1,$Xt,l!fi

1.,!!C•\'a.~,Sl'l

-----· 010,;S?). ----~D,fiVi

CiJ"Y OF t\liLLBR.AE 7{c.-x,odtl.1:1fom of th:-:

CiOV1:.!·'.N1vH',N'1'AL flJN[IS ·-B;\LAr'-f-CE 81-fEET

v'ill.h ~he S1 J..1 !:'.lvtCNT (_if, NET AS8F.r.s,;

.HJ1"-iE 3C~ 20{~3

A::·1(,tmti~ rz:c.1,:;r::ed fot Oc•·,~rnni~~n~i~! A;;fr.'itir::~ IJ1 the- ~~tal{,rn~n~ ufN-:.~ A~'i.ets rm: dlffori;!i\t from "Ch.:ii;e r.:po1t:::<l in t~ic- G,)v::rn(ll(;I!!L'II. Fu'!)d'.~ -lhD1.,: bei:'.~l~~e: of lht': tollo'Hiq!.:

Ca1_1\rni as£ets used i,1 G,h·ccr~1:r.1r;;nW.l !\.,;::frvi~!e~ fL'.'<:: n~;=;: ~LHT~m '1Sse~ ;;.w fir.ani:-J::.J rc~.:'J1n;.:es :.m<l 1:h~n:fme arr.:: nut 1~po11c:<l in the Gcv~~1Hnt~tal hi.rids. (NCJ!f..'. 6)

p,U l)CA.'nnN Of' frfI'ERN.P:.L SERVICE FUND N£r /tSSETS

Irsti::mi.! s.ljr,h::-.: fi.:m.ds Ri't: r11..:~ govermncntaJ fundtL Hc-w-cvcr, th.;y li-«"1 mt;,! b:; rna:,~,~em~;,it to ctrn.r,g:c th•.J cnst!'i of c-;':rta:in J:\ • .tijvife;,:, ,;u.;;h 11,-s fo:i\e.1wce ).i.ld 1.;el1tf;,\ ~i:,rvic:r.:.; w1d n;·a.i11.Lr.:.•1i1w;,e

to hidivid1..:.a! g,wernrnenfa.l fi.mrfa. The nd cnrre.nt 11:<:<i;eB .:.if(.'lr'; intern~l S:;;rikt" Fu.n<ls ar::. therefore ki.:-:lu;_fod ~n Go:.emm,;.at~l ;\ctivi.tfos i.ii. tliit fo!!o,..,,.l.nJ iit.~ ,V:m~ ii~ th::- StAt~ni,~~t-ofN~t As.bets,

C:uplMa-.,get3 ,;1~Ca'.::(:,1JU"!:s pt:.J-'.cl.!:-1,r;

Co-:-np6;-i.5.f!.t9d i:ibsc:uc::i:

t\c<.ntcd :;.c!f:-ir1\urr1"i11.r:

ACCRUAL Of' NON~CU.RR.H,r; R.EVE_r>,H.\ES Al-.IL• EKl't-:,t-.:SEt~ R..::·n.:nut~~ whf.:h Mt ddi".1'H'·r.'. ·:"1'i rh-e Fund IbLtm::-r.: ~,hed1; hB,.;H-1.s~~ t}ley <1re nm a~,~:t.;.b!>:\ <.:nrr::.u.·dy

inc t~ke-n l:nto reve.ilnc iH tl!e :Stak,ra,~n.t (,f f\.;::tivllfo;o.

LON(J TER~·i .iL,SSETS At-tD LiABlUTlES

n~e:- .:1:'•~t:t:,; thd ktbHitie~ bc!ow arc !HYC dt~c r,.1id ;ayub~c l!1 tb {'.um.mi pr.1rw(l ~rd. ihcmfme :m; not

21

t,2.lf9,s,rn 816A92

l]!l,74r., P4/.i6£)

{400,754}

{2-'2,J59,0%)

----.. (l,941,01.5)

C~e,:rll! ~"'Jti;1,31 w".~! ~, •. )~~

l'··mei;>~,i

IP~~'~··· "11·::l f;!(;,:j,'(!.\<i)\'.!j.

G:,'.\!AS~ \t1Efi'C!.!N'~'(1 Of R!J',1-~;,:1.,:;\;S i)•f[.;;_l~l"''(P>(Hf!ffl.f"Rl;\-5

l3:!;lj~~cJ~NS/ f·l.JH) ~,\'.' .• ~.:r-;,,:i~,;; ~,s AD..nJSf:'..f.lt1''l(ffE<J·}

CHY \)F !\1::11.,LBR.'\E (!r(.!V~K1.'il·f~.}iTAJ., f·lJND;$

:Sl -ti Ei',m~ur (W '.{.EVE)IU:i-:8. E .. ~{ilffi'flXn;n.cs AND CH.l.NCiEi rN FUND BAl.A:'ICE f-'Ok 'Li.{E '{b1\....'i! (jN.)ED m1n: :HI, ,';!,Q(lJ

7 .. .,,si~\-~h,prnt~: 1~ \,~r·;,,, ,t

A[,,.,.,)~? \~,::,·,~,

2.4

CIT'{ OF MILLBRAf:

Rci::orJ;:;i!iari.:.--n of L.~~

i"-fET CHANGE !ff FUI'JD BA LANCES ~ TOTAL GOV.':~'JtN:Mt:NTAL FUNDS with the

STATEl•'lEN'f OF !'.Cf!V!nES FOH nw "(EA"R ENDED j'...JNE JO~ 2:GD.3

ALL.OCA ! lUN or lF'ff.f:iKNAt &EH VICE M'.1ND M'. nvtf'.'

r,f 1:}cjr irl,15f.-.::n,-:-11~. ,.:d·f! ,;;j,·11<:nir:r,t<;)!;d fc,.mr.L,s i~ ~rmi<;:d with g,)V!r~r:r;s:nHd il\t1·1"hi1;:;,

!;ec;,1:st !!·,ey .:SM'S';r:t (bo~£: i.s:~iHiJ..,i. CJ1J'<t~c 111 \!d ,;.:.;~..;i::,. ,, ?\,U :ntm'.~: ;Servi::-;; I\md9

25

2,529/130

J7C,fJ(:rJ

Pr0prii:Tary funds :¥:~~~our.t for

::~~:;:~;, :~~:~;~'~::~~i~\~;~::'. open~tions fim:lnc0d ;md {)fr(:'ratt<l in ~i mm1nt:']f similar to a pflvrtt.i;

City 1~ that the) .;;.ost of providing gnotl."t :-rrnl sr~rvic>.-1;3 h0 financed

·rho ronc;l;pt of major fi.mds e ... ;;tablfahed by GASS SUitcment 34 extend'} ttr firoprieta:y Fuuds. Ths City bn:~ idcnt~fi~<l the hri.:1d;c.; bdvw as m3jor ptOf)tH:trrr; funds in fi.e;i,:,r.\ ?/)03.

GASB 34 dnes: no{ ftJtKl~ thaf P..rn n1 ajc,r

STORM DRAIN !i'UND

27

(]TY OF MH_,Lf_H:_AE

PlUJFlUE'fAR Y NfN"DS

STATEM.El'ff OF NCI ASSllTS

FOR T}IE YEA .. R Ef.11.)ED JUJ'{E 30, :~V0:3

U,_i;·~i.-i,n~::nt!J

.\:;'.Liviti.f!S ;'):,;n,, ;lirt':m:'!.i~t'D11,;~

Ac~·•m:irs, rwt Due 1i ,x11 J!J1.!;'1 ,;,,.,ic (i"'">e- -l c,J

~f}!t:<ii ll.~h., riclnf .:ic;c-cilllttilil(;,] d~firs,:i;illrn1 {Nn'._eh't B.:-11·,d fa.:swmct', l'..ast. n;:,i (N,1t-:. 1)

UARH .. !.TIBS

Ad.vitit~c:; fr<::am -,or.her fi.m.i-i: (Nola ·iB) _•\,:c:fftr.',d:;t)f.j.'J£,nffH)(?.(i:fot•tJJ)

:1,c:111;,H,'jf:>L!.;!;bi.lN.G!f:7}

Uui;.:: ~\·1~irn ;;-,ne ycnr

DJ~!.! trttn.; r.haJJ. ,}j)t;: Y·,M.r

5'.lO_W}O

J;'.04,~4-J

·~-·- Drnilf; _____ =·~-.. 'f.:-,tz.ts; ---· ---· Fi:.itli\_1:: __

----------- ----------~-~'-!l,.!l'i:l.](:4

------ l I ;'H.S

-~ ~,(;'ff;

i JJ,911

:~:,n.~UiJ ____ 1.i.XH .O~-L,

172/,9 31,(c,7!5

5C'.O)il

___ 1 __ ~--

,1,,n5Jt~2 :.t9-1k·,~1t 1(:/•52.J.:iD- sio.,;n ___ .!.Jill~ ·----~- 0.)J2 --~ H'Ni_O<;i ----~69.20:_

S~i'::,~ r,itK1.,t;b i't';lJ,:.f,e,1 f;,,r bt.<}i!lt~S~-.:.'..'f-~~ <K-tir Lties h1 1J~~ ::Ji::~\~[',Ji;f",f if N,:.i. A~;\::iS f!W !.!:df:r:f;:(

ru=..cm.u1! cttt.!.ii~ i,'!.t.:':t"na! ~i:l"'iiu· 5:.Jr!d m~ts c:..:--.,: fr:t1.-ii!id.::c~ X"-:! :n:::i·,1;!:;,:! \:';'\th fl"..J,<~,:a.t:~.iAy;-,~ ~ct!~1cit:.s

28

Woters:1)f;:;

S.:;,·wcs: ~ervi.,;,i; foc~

CPbflJ,.Tfr:'Q EXl'Pt.;.r:s. f"ern~m<iid .;~;vk-~c Clrntr.tct"JLii ~·k:i:...~ M~!trta:s. ;;;nrplie.~ tm!.i: v!l1itr ~~n,fce<i \V;H~r ~t•rd• 115~.s

L"ff:1ire-c·j4tfor. litil!tic~

NONOPSR.AT[N-!J RE\'L.'.Nt;ES (EXITNS'ES) f•ri1,:;e:c-cl~ f:ro;.-, ~File: ,1-r p.cip--;o~J

l,:1~.:; ,j;r. ,;hspc~c11 )f,x1pitai ;(:i~~:~

:nttH'.Br r.::'i<~n·,~] J:;(On,·;:.t,;;,:,p;:,n:;~

C{rf OF MTLLBRA.D

PROPlUlIT/iliY FUND~

STA1T:J.,iENT OF RE\1 ENUE. EX'fHNSES

AND CHANGES fN FUND NET ASSETS

FOR "THE YEAR ENDED JLfNr·30. 2003

Dct..ii~ Trit:1!s f.'i.!.r.1'.'.l: ---·----·---- ----·---~-~~ -~------

tli:,,642

510(}..{}{,0

i/i2s,s~s.

___ 4Sv _ __11.47& --~---lb,73~'- ------'"~~--

i.!:7~}\.U 14•).9152 7,T.'4J}Ji; 46., _1rn i;:~ i'' i; 9Ll,S.;:.~1 iJ)ti·!.,"10~ l4S.11,,. •Hl,5~i2 !5,3'73 '7).i?,i;&,) !01.301

LlVS.UR UC5,12.8 :!iS:.fi:.GS9 12.il.S '.i55,rn !'i(.;211 H1S:)t~ '1.%2 li.JJ..620

-;c.gi;14

~·- o ,L1t1 __ ·---~'.:1.~6,.t:i>1J

i{lJ,821 !(11,-S-).I

__ c:u__;_1_2

~r-tnr: srr,,1c!,;t.;; •cr·i:,1:~1d f,,i L~L~int:..~-l:::w;: ~l.'.tiv 1~11;:y in th:: ~m;.t.,!'l~tf :;f A-Cli'r[;t~:~ nrc <lifff:"re11! bf.Cf,i!i;c f !:mr!Jnn nf 1'~1:; i.l-t:'i iru:1,!fii:" ,)'j v:::-rtaitl i:iv:r;-i~: ;y1,;n,')l'-l; TI1n~Js. ~:,': repr)t"[2i.1 win: th;; btiS.i;"i'i:,)S-!ypc i:IC~iv\He~ c11f!li(,b ;:,ti"ii; 1\i:xis s.crn:;,: ·--u-- (.t7,"'I :z1.

Rtc~:r,1.,~ fmm cu;,twner~ ~Cl\.'•Cl~!lto,TC1~ll·Jtl11f1::0[S

f'.A.SH nmvs FROM NON( A?ITM.

l ~r-.~ri:hmJ !Jfl'f'IT,~flf~

b<,erfitn1~~·}.J:1if,(5

T~':;W'i~fe:~ m

il:.ciui!>lm.:m tf,;;a)'.-i'0l.! ~;;;?B fri:,..,;t~i~ ft{1.:o1: br,:;:: r..:rni d.:ht P~tncl~·~t _r.;:,:.ym;>•cc1i-e~1 f"i-11.:i,I ;;h!,,t l•1:1.r::,:is~ 1mxi

CA'.").H H.GW!:i FhO!Y! lN\1l'Sflf.;(.< AC'nvrm-:i;

:1,1e1'°~~

CT'T'Y GF MJLLBRA.E

P.R.\'.JPfUET,,UlY FUNDS

8TATE!;1ENT o;.; C;\SH Fi.H'W.S

Mi;rm.b11!

1/{.l':;ef

;:y...:t.e.m

:\':'·!,Hfa'i/t':ltWti::I.F..

ltV~wr !n,1;.1rni;tt::. t:;:,:in~

St·::,mi

r-........£:.~--_., --...- T ~·L~I~ ~~-

"', ',Jtu. 1,1 $:1,7,U)~H :i:'..M:J,J91 ~7A5t~,~{)3 10,0,:: :;;2,:,0 {&~Y1i\ P\."('.>3)

(:,i.:.1J)7~) tl.:'.n:j,! N,) :_H.;~52.8; (3,l:a:2,t17§:.)

t'£!IM;,oo.!;i 1,l,,0..),5:. 1 (~4;) ~:rn; (1.'t:i~,D36)

390)5J

(}it):~i·

c-•-•L-•_11,3.:i-4),

!r1t~rnalSiJ:'rlct

-~~---

lf::S,SCi;$

l•?.13J4)

•)cicm~1!\~ ,ri,,:,)im: {!:;s::;.'J :,:;t1i,Jl1:i, '~ 0t71i-_r,ip .:,:~f,1!)1) 'i:1ii},4fi' (·ii·iG.:i)(r)

:!'.d)u~:mcnt;; l;: iw:.m..::ik :::pa:if.l!:i:,,:: io,x,m~ (L:.m) l,.:o ,:~.sh '.k;-w:,

1.:-th~~r ~.;~·nid ~-xpc:11.:,e:,;

Ref~1idatile.\1rr:-:~llt

115,4i3.

(,:7,2.)S.'J

(l1,,-.iN;

!df,)'{, -~-·· ·---··--~ l;.,,L

~-------··-··-··-··---------------------------------------------- .

I CITY OF MU.LilRAE j L_ --- r~!$S ~ F1ru,mtb~~Sfa)!mf;fi!& __ .......... .......... .......... .......... ..! .----------------------------- .•..... ---- ----------·--------------, ~ .... ,on; 1 - SUMlV[ARI{ Of1 SIGNIFICANT ACCOIJNTiNG POUCntS . ....J

A.

B.

'Th:: City of Mi!~brae t.vas !!.'! a ge.neral lavr dry tn ·1948, Tht~ Ci~y opera.Jes nncivr t~e Cm~ncH .. Admi:nistrntor form governnAent ~.:ud p:rn...-idcii the, folkn,-1,:ir:ig s-r;rvkes: pubHc ~afety (polk1.~ mi:d fire\ highways znd. streets, s.ew~t, ~~·'trier., :recri;.mlc11, public. frnptnvmncnfa.

1 pfam.frng irnd

zoning"' bulUh1g in8pt:ctiun8, gt!ttt:ial at.hn~nistrz\th;m se!vke;;, ;:' . .nd red~velopment.

The financt~l ~ratern1;m~ find acc·::rnnfrog imlicJ!;;s uf th,: City i.:-onforn1 whh ac,,rn.t.t1tiru, principles t{J The G;:rverrnne~1tal Ac:crn~ntmg

the body fot ~stabiishing ,1~1:mmting arnJ Signifit~mH at.c.ounting polk:ks .ir~ summarb.ed beh),,1:

'JJ1c firmncid stn.ff,n1ents of the C.~ty of }.{iUbrn.~ indu<le the financiaJ ru:ti.vitie.~ o:f thi;. (:ity and tfo::; J\IHU:>:rat· RcdevefopmerPt Ag'lmts:r,

Thi:; t .. 1mbr.'le RJ;Xiuvdupment Agency is a separtt~_ gov~mment emHy created ln 19i58 tmd.er the pn1visjons ofih~ Crnm:m.mlty Red~~vdopmint Law (CaHfomia Hea..lth and Ct.idej to assist in revitalizing: of :ln!a:~ v,..frbh1. th~ City PfMl.Hbrac.:: whic11. am da-h·mniried to tH: in;; d<,dini11,;, ,;,mdition. Tho Agem;y m controHed. the City un.d f'uJS th·~~ s.i:.nnc governing board as 1hc ~..,:hk:.h abo p~rfi .. i::-1lJs ruH ucc.nm1Hng ndmin[stra1ivc fh:ntTi3:;ns for tl.1e, Agm1,.:.y. The Rs,de,eic,pm:,.nl Agency'!) fin..and,l1 ~\ct.ivltie.s ha.Vi; beeti ::Lf;f;'T·~gmed and mCE'f:.-~xl (tcnned abfomkd1

~) 1.vith thos-3 of thf: Ci~y in the fo1.~.nd~J ·:;;tat(:3n1r.n{s. Spr;;:cifo.:aHy they fiJ~ induded tl:H;

Redevdoprnent Spr:;,~ia~ Revf.';nu.e Fnnd. the Redevelopment Agency Cap1ti1] Pr~~~ct f~md~ the A.gcncy Debt Senrk.e Fund~ nnd fh,; Ge-m~·-raJ :f'i~~~d Assets and ( ,ong.,Term ObHg;Ition::: Ac:t;ount Grrn__i_r,s,

Bm:;·ic Finandal ~taiem~nts am prnparnd 1n .;:onform?.ty with acconn.Hng accepted in tf1e 1!n1-!ed States of America, l he UoV{JnmKHif Accounting lht- ackn0ic,uk.dg~.;d -stan(k1r<l for estubfr:-:hing accounting and frrnr.claJ

r~pmting :~mn<l.-:m'i~ fr;i]ur"icd hy in ihe ·c,S.A.

/\ccLrtJnting Bc1ard StatemeDt.s No. 34, Ba;dr._. FitwnciaJ S't(.:,tp1Nents· --and A1an.r:gf;:m-ent 1s DJsn;j\'/iun r.uzd Anai).:n:.s--fc?· State cY:d Lo,:{1.f Gove;-r:.rnent.::\ ~"'fo 36 ..

~-:crU;.fr. _Nann((_';.di.i:rige. Revifi".Ues, rm A11wndment r:fGASFt S!m'er.nnf l"'~O. Swt~':.l':'ffJrts--.and Df5·cus.;tor; and and

Lcn>.ii (ih)-.er?mu3nf'1; (hnUhu.~·, 3:i.i,J Ne;. ]8~

r----- ·----·----·----·----·----·----·-crr~;-(5r:;r~frfrjjrv~E ----------------------1

I No1~ to J''fom1da! St~te:rmm.t~ ~ !..__..._.,_..._,__._~rn-~rn-~rn-~rn-~rn-~rn-~~--___,........,.-'__,_....,.~rn-- ------------------

{i'm:'enunent,,,~i.,Ue· Statenu-:.nts: The Stat~nwnt of N1.::t Assets and th~ Sw.t~1r.1.ent of Attivitit'":.S g",·ur,rne,u (the City) an<l tts component t.mh.°'\:. The.sc

s~1temer&t'i include 1he firtru1.;}iaJ of tht11 ovr.raH City g,:rvcrnment e:--r,lopt fiJr thtudary activlt!1:t~. EHmint.i!icns h,;rvc been made to mi.ni.nfr:.:'.e thf; duobie ~01.mting: uf lnterm~l aGtivitie:-., These st;;tem.ents dl.:Jtingc1ish ·betv,~en the governinemot anJ busim:3:,-iypt; r.4Cb?itieY ·uf' th1! CHy. Gt."vernmr:nti;.l a.;.~dviti~ g1,;,n-cnJ..H;y ar,; fi:nanctd thr-ough t::t<t-:r;, in{erguv1-Jnm.i.mnal H~-ve:ime.s, and other nor10xchange u1msactkn1s. llustnessrt,·pi1i aGfrvihes ~re fi.nanv~;1d in ,vhoi!; or in part by _fo~s di,ar g¢d to ext;;rn;,J p?.rties.

The Stit~m~nt of Activi\i.r..-'ls pres.ents ?t Gotnp.1rison betvit;~t~n d~n-;r.:! t.::Xp~r!:l-(:~i and tJF)gr~.rn n.-;vcnui.:8 for each scg':rn .... mt oft.he busin·eBs--typi;: a,.~ttvithJ:~ nf the City :-iind for eru~l! fundion of d~re Cih(s n,overmn~ntal ucfr.;~Jies .. Din.~d ~xpens>::s an-; thos~ tJu1J i:tre s.pecificaUy assoi:-iatl;"d lVith a pror'grru.~. ot fi.mctice111 and.~ tiNt(;tbr~\ ,,,ro cfo,arly id~utifhib!e.tn a partieufa.r f~m:.t~on, Pmi~iam rnvenu~i~ i1:.G1ude p~id by 1ht reGipien~ of good:s or services offered by m.;; ptQgfl~i11.s~

(b) z1,t.1nL; ;~nd that ,\re H)&~r!l~:t.e:;.d to m~c:ting the 1:Jpt;iatlonal ni~d:'.-i o~ i:>. partk:uh1r prcgrnm ibmi fr) fo~ci~ grn.nt:i am1 cont:dbuti,.ms th11t are restricb;;d tn frrKt.n(.'-ing the mt'.qu.isitl.011 or lC~";;'.nstrm:oth.m Dt~ capha-1 ~ssets., · Revl'!nlJ.es tbat are not cfas5Lffod JS program PJvenut:.sr indmting aH trtX~s\'- are prnsent~d as w .. mc~~ ai re.vociuie.:;.

FMnd J:foanciff.i .Stateme11ds-.~ Tiw fund finandai sfatcmenl's p:rnvide infmma.fom abt:,ut th;) City1s fm1ds, iinc.luding fi<ludnry fo:nd~ afid b~ended t".Omponent units. Separate ~tatcm.e.m& for na.~h

1t:~~~:r!~:!:.:~:l:.,::1::~:~{;,r;~;;;~:~~::; ;,:~.~~~:'.~::;;~;~~"a;:::;;~;:~1fo:.~:, ~::~~':'/~~~:.!t'',~ -tli~~p1nyed_ in a a1:eparate .. col~n-u~, All rtmai1dng _go 11ernrnf":ntrd ar;,d. ent1~rpd!:2e fonds am ag,gre{ipted .·uind n~po,Jted as n,c,nrn:aJ or fonds.

P1·opdetary fund. trnnsi:tctfons ~-~soclated t!::;~::~~::a/~'it7vi~; of 1he E:~:~;~;~ i:::~\i~:;:r~,:.:~~:~7=

up 1:.sse,ntiaHy eqmiJ v:a.lucs. Nvnoperatinf{ n'.lvcrme:i1 su~h ~s s~~~bsidi0.s t:;.nd in,;c.stmcIJ.\ ,~~rilll!ii.l,. r.:::.l1H from n\w1ex.chanp;1.=-: t!<11Js.;?.ctk1ns or an~:~i.brJ ~..-;ttvlii0s.

GASB Statement 34 defines m~J-<g fi.mdg and reqi1lres H-,at th;; City's. frnijor governmental antl bi:sint.~5-typ;_~ f~nds be 3denti.fo:.<l m1Q prnst::nkd in tJ1e fond fitt3ndd :11aterneiiN. AU othrr fm1<ls1 u,;ath-.,;d nnn-rnajor foD.d~~ f..lT

th~ ir fund .. typ~

rvfojnr fo;nds are th:Si:1c<l 3.s fonds foat have dtl1er 1.1ss.;;rs~ liab1iirie:t, revenues or w te.n p-erce-n1. -cf their t\md-type tot:1i ~n-1.{ fiv{\ fff~rcr;;'::nt of the

Tl1e: Gi;nend ,;-dw~;;.y~ a m~ji:ir f1.1nd. The- -City may ~1.su sc-::lcc.t otb-t~r -ftmd~'} ~-;;h·ould. he presented n:; m;~jor fiHds.

Th, ('.it;.r' r~p\;rtr;::d th:;; i{Jlk.1vving m.aJ~-)r g,o-vernrff.:ntal fonds in th.;; ::i<..~compt·mying fo1Ene!i.d 5:-tatenients:

l2

,-.----·---·---·---·---·---·---·---·-------~ -··--·--- -----•---- --------- ---·.,---·----·---·---·---·--~ I crTY OF 1vm,UlRAf; I !_____ ·- ·- ·- . Not~.a w ~·1rumcta1 s:1a1.e'!"mt, . ---~ -·----------·· r:--····--··· ···---·--·-·-·-·-·-·-·-·-·-·--·--·-·-·-·-·-·-·-·----------------------·---·---- . , J!:OTE_ l ·· S_!J!'iffl'.IARY O~ SIGNll?ICANT ACCOL'NTING I'OLICIES (Cco.1;.,.,td) _

.0.

,.::xp{;nditure~ to nut br-,._i._ic gm,cmmentai ac-t.ivitie:, of th;; pab!ic s:=dt't]'i ·~vork.s~ i.nd pe.rks m~d r-r;:::(·H:ui]ou. This tr1:msactio:ns not :accounted for in th1, o(lx~r ftuv.h.

such as general governm~nt~ ::1ceounts for 8.H financial

REDE'VKL,QI1il\-H-:J:ff AG-:CNC"'f DEU'I S.KRVICE YtJND ,r To aci:~tMrt fo1· the ac..cnnu]atfon ofre[;c~ur(~~.'; for pay1m.mt ofpr1rn.::i_pi1. m1d lnte.fcst on IdiHbme H .. e<lrtYeiuprnent i,gency debL Th~ /\gen.:;:-y n.:ttfr,,rm rnvcnm.';s fn.nn. pf"OfH:iny bx inere'lments:

R!WtVl:::,i..OPMENT AGl'i'N{;Y CAPITAL PROJECTS I<'UND- To ac::oum for the Millbrae t'tede,i/elopmeut .-\geHcy 1 s rn~ou.rcet~ f~1r adrnini~tr~th,c e{;sts~ capit.a1 prrdect~, 4mi kmg·rt~rm d~bt obligatjon

UIIRARY CAPITAL PRO.JECT F'UNI) .. Tu account fo,· prnjc,,ct cost, hmdtd by proceed., o-f the :'..W01 G~nern1 ObHgation Bonds.

US HllliV!iLLHR,'\£ AVE CAl:'HAL PROJJcCT .FUND· To ;,;,coun! for g:rnn! imm<iys rec:eivcd for the 1JS 1(}!/fvtlJlhr~.c f\.venue fo.t1..·:rch-:mg;o irnprovement project.

The City r~pnrti~i aH its ,;nt~rprfo~ fund:; JS major fonds in tlrn ac-.con1.peiny~ng ffoundai state.meat~~

lVHJNJCIPAL 'Vt'AT.KR SYSTEi\'1.FlJN.D ·· To r1cci::n.mt for a.cthdt~es rd~ued tP prn•;i,1iug 1..\·atcr 3crvk.e to t~e :v.rtm:11·~1e .n~side:11ts,

MUNICIPAL WAST!<: WATER T!lJ:ATl\·rENl' FACH..fTY FlJJ\J.l .. To oceoun, for .1t,rdce.s of t.~1e coHect!on~ treuti:rv::nt and admmistr~tion cf the (Jt(s san~tatim1 system

STORT.\1 D.P, . .AIN FUNJJ: - Tii ;u~coum ±(,r tho re;1ources .and cnsts of maim.t~mni'.~e iwd improverm.;n!l) ufth(: City\ storm drains

'T'he City a]so r~porn-; ttt:e fr.:diowing fond types:

inttn·u~l S£rvke '.Fuuids:. Th,~ funds acccnwt for a:armr,,. 1;erv1,,e,. -i:,..'(irker;-s compensatmn, genen~J lirJ::iiHty r.:..nd l~su!"a:.iee; .aH nf a,rt; pre-vide-d t<J orh0r de.panments (\11 t1. co~t--

The gc,ve-."nrnt:n!~wlde. pn:·prittary~ auJ fo.h1ci~try fund firrn.nc.!a~ ~~.;-itF)rrtr:nl~ :He reported u~ing the t;colJomf:_; _..L:mui·r:es i'ru:a5.1.u·;~r;u~nt f(Jcus and tbt: foH (J:ccr,,,,if basis Rt;:·veri.ue.s m·c re:cc•Hied ·•,....·fl.en :-;o;.-r:.~d and ~ m\; r.;.\CO!\h:~d at the: timt liabiri1ies HI,:': regard.!e~s of 1,,vh_e.11 tbe reiiJt,.-:.,rj c.'.l.;1h flm.vs pfaue.

:n

l~~ ·--=~=~~=~~=~~~~== !\Q:.:;~~\~~:~~~i~~t!~:n~ ~=~~=~~=~~=~~=~~=~~~~] --··----··----··----··----··----··----··----··----··----··----··----··-- ---·----···--·-·· -----··-- ---· -----··-1

(8:im1 -SUl'l·i.M,Ut'r OF SIGNU'ICANT ACCOUNTING POLlCU:S(Cm,l:lmm:l) _,j

E.

Go~·ea:nmentaJ funds arc reported 1Jsing the currenr jlnancial resc.urces m~-asurcment foi:.us and th!:l mod[fied accrual basis of uccounting. Under this r:neth(id~ r,~venu~s are rec,~g,,fr;•:ed V.'hcn measurable imd l1.vailable, The City cor.s.iders aH rev,~nues reporte-rl fr1 the- governmental fu.nd.s to be :!vailaMe if the n;vr;,ru;~s ~re coHr.;,'!ted w~thin ;;ixty days rliter year-end. Expenditures are rctor<lcd v,ih,.~n the rdattd fund H~hHity is ~w::urre-d, ex.i.~ept l\.":r pflndp:cd 8-nd interest on general lang-tr:n:n df~bt.i d:aimr.; :::iJ.H..I judJ}llt::Ol~~:- and cump.ensat{~d a,b,'H.!n•;or~, which. z~rn- r,~c;ognfa~d as: e)qJemHtures to the f-Xte-nt they have matm-ed. Govcnurwntfl~ {:ap!taJ ~ss(:t ac{1ui:;Jtions are rep-cirtcd as fcXp~ndimres ~n g::rven:~m.ent.J.i fand5. t·n.xee:d::;: of governrn,entai long"-tt.enn d.d/t and ~1cquisitioM 1.mdcr capital fo;.tses are rnporte<l as ot}terji"r..:mcmg sow·ces.

Th;)_:-:~ rev~r1uc~ ':lUscepHMe to i}Ccn.;,a1 .:u~ tr:11-res~ .sperizJ a:is?.':ssments~ Hc-enses ihr servi-c<::s rev.:;--::r11,1c. rin~:s1 for scrvl.ccs are iwt sus;;cptihlc tc~ ?..c:c-rnal b~i~aUS¢· they are not m~i.t:nJrabie ~mW n;-l;.e~.ved Jn

r;Jou_.,0x1:h,;:,,,ngc trnn.-sactkm':i: tn. whkh the Ch:y gh·:;~s nt r~.:dver:: vahlt wlthotr!. {b.n;;cdy r,;>;(:r.ivjng, or g):ving eqrlllr value f11 .;~xt~ha.ng~~ indude tax:;:1;~ grant~ .. e.nfalenH::nlJ:;, ~md d1:m:Lth>rm .. On the t]Ccrna1 basts, tffVenu.e from tax~s As ·;reccgr')it.e<l in the k:..cal. year t(:ir which the foxe1 are: ~.e,vk~d 01· Gs~e:;:ied.

R~·ienue from entitiem~nt~1 and don.!t!C,!1.".l i<:; rec-0gnize.d m the flscru year in which aH ·diJ:(ibmt1r r,;,,q,;ire1n0;1!s have boon sadifo)d.

TI-.e Clty may fund prct;rruns with a cvmbinmkn of cost-reimburs{}ment grant.3~ categnrfoai bk1,:'.k and g~;ncra~ n;v{;:nw;.s, 11ms, boti-1 r,,;;~"itricti;-;-.;-1 :i_.nd 1m.rn.stric.te.d ne1 35-:.~·~t~ :may be:: a:vaih,.bie t-o pr,Q.@Jmn ~xpend.Jtu.re:~. The City's poilcy is to flr~t apply rc~td,;;:t~~d grar.l rc.~1Hf'..;;t:s to $u..::;h

pn)g-.ra.11-is~ foBo~~·\'l<l hy ge.neraJ r~venues ~f £H.e:ces%U),

Ct;rtah1 tndJrnc-t -co~ts am i.nclm~~::d ir, progrnm expmrn•J.s rep·o11ed for io.dividuat .b.u:1ctk1ns and actjvH~-es.

±:::,Uows statements ai,d f.n.terpretat~ons ofr11e Fh.1~mcial Ac•::iot,nting~ St3ndards Board and its prs,d,,,;,,s,,;ors lhitt were i15:;1,ir~d on ar be.fore Nov=:.mbi;r :JO~ l9~.9, in .~1ccom1tlng for ~ts busine.ss­TYP<-" .;v~tivitk·1~ lm~e:,s 1·hey co!lfH1~t 1ivith Gove.mm.ent Aci::om:i.ting StatHJards Board µrunou:h-:-t.:m.e,nts.

Rc,cts'~"' 1- 'lF'

p,r(fr iditd hut. not ten(krcd ·.o cu::ihJmi:;~r::.. R,t:,v~~UUt't; for services

arc .a~rrncd.

i". Properly Ta,r

St?.!c- C"'.-:m~{t!tutio11 A-rtidr;;: j ·1 $100 of rLs~c;~~~.:d v.aiu;::.

for a nvlxl1mtHJ. th~ th:ne of1ransfo·r

lJ; ·::id1er.v~.: ~,;;:~bsc<l vaiue i$

~:::~'1;":"~~s'!;::.:: ~::~::r;;,;i~~;;-t;: ,:::~,~~,:,~ ~~1,~1:'.,1.~.',,,;:;,1~~:~';}~:;1;1~1~~:i,~a; ;;~;isl:;: ;:;;~~m!::: the (~ttie.s, sch,)oi di~tric.t:s,. and c,ther di:rtrfots. C.ountie,si cities and schooi cfo;tdct:=. m~y kvy· rmr:h iax niw a-s ~'3 rte'..'.-C~~-1:ty to proviJc for voter approvtd -debt.

'r·---~~~~~~~~---_-_ .. _ .. -----~~·~~·__;~·.;...;,('.~l~T~Y~(~)~F~~~l~I[~,J~,ij~'~~~A~x~~~- ... ·-----------. --. ~1

1

~-----------~ Notc\'::<s t(ri Fim'*'-m.::iitl Statemellt~ ----------- _ ___ ___ _

The Crmniy1 of S.:m ]\.farer, ms~s~~es prop.-~rtie~ ;E;.d blJ ts for and. t-o lkcts pr.ope-r:y taxes <)n beh-:.!lf of 1.hs;: City on lhe ~chrnkl~ that follow:\:

Lien/Lev)' Dates

Db-':Dat~:;

foly I

:10~;,_. on Nov.;;mh,;~· i S0~1·~ on Fdmmry i

D.;:c~m~r iO April 10

August 3I

Property t'.iL1!i n..>:vemJ0s rm; rcl:or_;~i:;~d i11 th{'; fisca! ye-ar for ,~,hk:h th:c taJ(\!S have b·::~e.n 11:~v~e.J.~ provided the:y he,:o-ri1e ava.fl:1.hk:. Avaifabk rn~~.ns due~ ,.:_--;r pazt..-du.c an1-al rccd.vaMe ·within ~he currant period and Ct..)!it;;ted 1.vh.h~r1 fJw GlffrnnJ period {lf expected ill b~ ceHecit;d s-i~on wough there~-1Ste:r (,'.) be used to pay hn.bmtie~ (1fUi(:· cr1.rient p.;:~riod, u:-cua\Jy within. t;{}.days ofyeaf eu:J

The R~edevek,prn.ent /tgen.cy has pr.:.-ipe.rt,y t;ix p~~s--througb agrc.ernents e:i.:er.u.t,.::d in 191.,--!-'! Vil 1th the Comity e.f -S:m lvfat~o, Sa1t, !vfateo Ci.Ju::m:y Off1c~ of Ed:uc~1.tion, San f,'lateo County C'.omtm.u:ciry (\:,H0ge [H:;;Hct:, S.-m Wii-.u.co Cnicn High Schooi District~ ~md \1iHbrae E~enKntary Schon! Distric-tl tht taxirig 11gen.cie:s in {1.xisif.\f.Ke when the Plan Ar~a r~w.1.s formed. U:ndt~r U:1.2:t::e ngre-ernt.'1Jtt.ii the Agenc.y passt,s through to these agencies~~ pwpe:rt-' ta:;{ ~nc:u.;,!uc:nt:; ~t wooM othe.r\,tiSe;) have rcccivo<l. In,;rements rotalirtg. have been pas£erl thr,:,ugh tr] these t1gen.c?ces dtirtng. fise-ai 2C;IJ2-2f103 ..

Ccmpensati:.i:d a.bs,:ncos unpaid vavatiou and the ve~ted portion of ::!ck !e.tn.{~ which are accrt~ed as ,earned The ii.ability for cmnpcn~akd ab.l{oncc~{ iS rccmdcct in variou~

;;:oav.~:::~;~! :::;:,~:1 :: r;;~;;r~f30;,~~~1:e:::~pr~t'.,i~~(l:~1: :::~'.,i~J':~. (;~ll ;:en,;:::d:il~:~.';~·:i~ fi~ii:.Wt·ciar F~·SOUF.:es He N,Ctir'de\1 ;;1s fond Habittrie.s; the ]:ong tenn portien tec0rd.ed in ':he Siut-1...~m~;n( efNe.t Al:lt::.e:.,;.

35

; . ~ . CIT'( OF l'tHLLRRAE ---i I T'{otei to Finandfd 8tatcm.cnb J . .....,..,__....,,._....,,._..._ _ _._....,._.._..,., __ .______ .. --·-- .. ____ .. _______ _

Reg3nnlt!ig Bab.nee /"'tldilions 'Paymem,s

Current Poniun

Co.rnp,Bns;}:t~d itbse.nce.s an, portii1.:,n of governn.1.e:ma! Fund.

I)uring. fiscal 20(_}3~ i:bt R.ev~;JJ.ue Fund to 2.1;et•mrt i\J~rn. devf!-loprw)nt pr~iect.. d~J:dng th·!~ year.

Gc)vtmm~ntat BJJ.1>in,e.~;$-_2ct~·vj~~t.:;:i, __ly~- ..... Tn~~d -·--

$ t,878,009 165.942

Sl67,6!8 '39})83

$2~045l}27 2,fJS,930

by th~ fo.nd thlt~ has rtt.eorded th~ lfo.bHity. The kmg .. tenn cornperns;:t~d abs..er1ces i~ liquidated pdn1.:irHy by the_ Genernl

~t!tablhh.od tlrn lvfi Ubrac Sts:dmi Area D~ve.lopct Pe,t,: Sp-,di!l foes to be ·,xiitect.cd tr<_un tlie Jevetoptrs of the MjHbrac Sta1ion

The City aiso do5'.00 the Gas T~1x C(nmty C~~}ital Pmjrn .. :ts Fund

Ir. even n.mr.d:;(~.n;d yea.rs. th~ Ad!ninistr~:nor s,1tnt1:its t!:; 1he Chy Couu.c~l a propo-se=.i bi~n.nL1I ,)~;rating, f)11dg~t ti-:,r th<: t',iVO fo~c-01 years. The opetating ?tKiget ]n~Iruk-:s pn)p03C-d

:~r~::1:~::; l~~dc~~:.::1:~:0~'.f f~::~:;~;;a::::~~ :~ !:~;~c;~~du:~\ l~::,;~g~r;~~l~~~:~~!~::~:~~:.::l~! v/hh;h time (he prnpos¢d expenditures ~ee-ome ::tppr,npriatiom; tc- the various .City departrn:::nf.s. Tirn

~,'.::~t!,~EJ~:;~:'.~;i:f ~::::,'.::i ,~ th:~;~~~I:.2:~f ,\:[,:~~~:,!~;I!;1~if i:::i.l,.~!i~i~~t;~ exet-ss. of $20,{KiO rnusr be appwvod by th,; City CounctL E:;-q:;eiHilhlt"t~ JD.ay nnt exc~ed. apprnpriatkms .J.t the dep,1ttrne:nta.~ level. AU apprnptiatinr.5 lap;:,i:: at year ,;:nd. Sup)kT;.v~mta] apprnprhrti~)ns 'W(~re adi}[He(! by City CourK::i! ntid hnve bf-~n itJd:ud~d in the lmdgd; ve~u'.'l ;;1.::-1u,o:il s.t~ternent.t.

Budgets are adopted on .a br:,.sI.s con.sistent v.'ith geo.ernHy ac:-ep~ed accounting for i11! fnrnJ~, (~Xct:pt for C~pit;"i~ P:·t:jGct FtmJ~} vlhich arc buJgeted crn pr'"J)f.!Ct

En1c:q1;-is.e Funds.

(GAAi') ba;s]s, a.rid

-·---·--·-·--·------ --·· .. -·---·---·---·---·---···----··-·----··-~--~---~~~--......--~-~--~-~~ i crrY Oii MXLLiiRM l I __.._..........................................!f!tcs tfl ~'i;1.a~1cial s:~tt;.m~nl?~'l -·-~---~---~---...---- I

D.

T!ie City use~~ an t:nc1.1rnbrani;e- a(counting s~·Stt:m u.r.iile-r whk.b ptischn.~e Gtdcr:;, ccntracts af::ci other -ci:rn1mitcaent::~ far the. exp,,mdHurn of :rnoneys ilte re .. .;c11.;:J:.:d in Gider h:. reservr~ that portion o:f the appi]cabfo· aµprupdat!mi. 11:w~mmbnn-Jc ::~-Gtltmling \.s c1:1pfoyed as an exten.s~Oi1 of !hitrt~·:,.; budgetMy integration iG1 a.H budg~t1..,'Xl fUnds. Enrumhrnn~es outstaiuling u; y,;;:ar ,:ml are reported as reservation~ of G.md. bahmDr.:Ji sinm; di:.11 not cons,ti11rte ,expern:Htun:.s or 1i~1bWHe1 unfi nre. reappmpri~tcd ~rt the :frfalhl1vi.ng; r~~ff, approprii:.i-l,.1m; i:lp~e at y~tar e.nd and mi;;:.')t be: re:Jpp1o_pdated 1n Ht<.~ fol]:,wlng year.

Amount in E;,,.,,.;t:ss

·~~-~~-~~--~ Fund./I)cJ?:mtment --------- -2f.:.~!-~3.tion~ R~devel.opn:n.nH :A.gency Debt Senkx~

Pttym~nts: to property t.'2x pass thrcughs .~18,349

to $2/!51/229 ~nd :esp~-ctiveiy~ fr,r fist~al 2002-~2003 and repre::ienl 19% am:l 21%, rcs,pec,11vc:ly, of101BI Gen~r.1-1 Fund rcvcnm~~. ·Toesti rev:~nue :i;ouri:es havt: dccfo1etl $2.5 mrnion

!ls:~~ l 200 ·1 -·20i}O ,JS a n ... suh a f 9/ 11 imp~ct:·:. (ff! Jo1.:ai trnve l to and from tfa·. Saa Fram:.Jscu A.lrr,of1. 3.nd. th·~ conthrni.ng ee,onoraic chnvnhl.rn affecting sm~.oi1

Be,(.:ause of fa!Hng Geni:.ra! F:.md rnvenues, the.: over th~ r,vo fo.:.c-ai Hoi:v-ever

and dedined t-n $\300/l;•{i at .ltm.e 30. 2003,

institul~d <1 v::.•rrii.:.tv of C-0.'3-1 cntting mf:,iir;;;ur~s

~xp·i!m:W-un::1 for. f'i,1t.;nl 2.f:(i2··26(i) t(1t::1kd by $474~L55. G1t,nern! hm<l bo.h!!K.e had

h-1:magenv.,;nt net deficits J.n ilsc.nJ 2fl03-20f.i...i 1md 20f}J,,.M2005 of :trno .. UH0 tn<l $2.0 :11i.Hior1.;. These ire dut~ to a ViUie.ty of cost tn·:::rnas-;;3~ the m~.~t Di' whic:!1 an-:- incr~af.e::; to tl10 Ch:(.:; CiH .. PEl'?..[1 ,)t-fi.11e<l bem:.fit retirenH.:nt

J7

11H~ City inve~ts aB fi.mdi, ex_r:;;.~~t C:ish wHh fiscal Jg,~nts, !n invo::tmtnt p00Jg, Tho goal is to jnvest ;ctt tJ1c rna:~i'n:wm yldd,, ..:omsisl~fit with and liqt1idit)\ ;.vhHe individual ftimh; ~~n prcc,;;~ss

fi1r eaxpend~n.i.re,cs ,:,;t any time. !n.vc~!menis art..- lJ:-lrrie<l a-l fair vufue~ .a::1 n.•--quireci ge:nernny n.rn;epted ar..::mmtlng pri11r~rir:-i. Chy Rdj1mts the ~ucy·i..ng Yr.Jnc nf !ts ina;,·1.,~st1nent<)

1X'.! teflect 1hdt fah- value at e~ii:.h fiscal y?-r.r end, and ft indudet; the effects of the:-;;;; ~djustnk:nt:j ;u in,:;o.me for that f~s~~.ai yet1t.

The Ci,y an.cl its. fir.rca:J agents fo:vi:;st in inrliv~dual jnv(!lstments .:md in ir.tvestm~nt fod~vidua1

~;:··:~,:~:~=~ e,;;;Yw,ed hy the ;>:!fii~~~1t;~:1J! ~7;~: lnstltmion issuit:;';~':::,u;: caHed tim book smry ~;,stem. fn onkr to ma.'timizc secmity1 th;1 City cmpfoys the trust depa..~mmt of a bank as !be custodian of an City manag1~d h1vestrJ.&ent:;p mgttrdi~ss of their form ..

cans1go,ri,;:g ft&, individu;li sec-urltir.:s ktstrurue:nts ln asc,~~nding {.:-rder to ref1ei;.~t the rf;!ative '"°' c..1r "''"'"' hHi.rt:mcnts, Thi.s d:3k_ is \~a]le-d Credit Rlsl-.., th~~ lower the number, th~ lower the

dsk. The tl'.u';;Je ievek-1 of ri~k. pres.,;ri!10d. by genernl1:il accept£d f!.t'COHnt]ng prin~:iplt;.; are described beiow·

0-;;'t.:_fl'ft'J 1 -- Secnritl.es im;.inJrn~nt:i: ~n fois cu.t0gory .~.re ifi th.,;, C.ity~,~ n.~mr; am1 are. in the of the trust dep&tt..'llent ef the bank employi:~:! t')·· 1h¢ Cit.; ;i;okl.y k~: th(;; puq:iose. Th,.: rcgist-.::rcd uvfmn- of.'!:ec:uv.itlcs held l.n t-c,i.ik entry form by the b~a1k~s trnst<lepart:ment

('ategr,,:y 2 ~ Secu-d.tk.s instn.Hn,;:nts and lXPDk euky foim SlGur~tie~ ln I.his category ari;:; in the bar!k's narrttJ ~ 1he City\t agent.~ but rue held by its tru~t dt1partmr:,t1.t h1 the Cit:fs name.

3 -· Invcst.rrmn~ in this c .. ategc,ry include onJy City-u\vned 3(';ClJTitie·$ insr.rnm.ent~ or book wen;: 1wt in H1e City'~ ::!SJ.IM.: 1..)r nul fo:.Jd b_:) I.he ba.uk's irusl d,.;parilrn;-ni,

P-aoled bH/e.e;.;'t1n<.Jrm,.- ~ Pookd iuv93tr.m:mts are not r.:atr.:-g·orized be-:;;rrus{~ of tJ.-rnir _po0fo,c1, rather than intHvklua.l. n~ture.

C!c:ilf'i.:tQ' 2 irn:e!!JtH.M!~&!'>;

U,S .. GO"{f.l(i1lhf.Jlfl1 $,;:',~)~l[j~~~;;

N OtH:e~t,11g(I,! h:i:~~ h:'\'rt,~tl!l ii:{tia!

Loc.J! $L50L5J0 w,981_ ~n

1,sao _____ J2,1,'&7g

~.P0,:.6!

\,:'i08,53D 2t•.981.1;g,

37i"J, !,51 i,5,!]0

--·~~-22'i,618._

B.

c

D.

·n1e CJty dues net aHncak invc.Q,tmetjts b} frmd. f~;i,:,;h proprietary fond's po1ticn of C1is.h and lnvostm~llt; AwaHablc for Op1.m1t1ons £s ~n :mbjian·.~t; it demand deposit ava~l?..bk to fim-rnce operntlons~ f'lrtd is co11s1dered a ca3:h equ~v:aknt in prepai·]ng the st.atemer:.t of .::a~h f~ow~.

h1sured (~2itegory l) or coilarernUzed by an ;1gem1 of the insHtutfon hokling 2). ({J,Vifomia h:t\'11 banks ;:ind s~.villgs ru1d lor...n

H:- ph;dge ,vith a m.a...rket value of·foe deposit (if first tn.t5t deed rri<.H'lgfrg~: ~mk~; witin a vz,,..luc of i'.30% of the deposit as coHateral for {iH mtinki.ped deposits. Th~s coHatiernJ remains ,.vith the i.nstitutkm~ hut ls ~om:ddcred to b: ht~M in tho City·~s n<~e .::iml places ·tbe nh.e~d of gc:rn-.:;rnl c-redito1s of !he 1.'15f.itt.uti;)n. The C1ty ha::1 waived .;;.oHate~.~ re~1uirtme·nrs 01t; portion of depo.sits c(n,'c:red by f-e1:k;r~J dr:-pn.sit !n~n.:rr.j?l,m,>;\

Th~ ctrt)'ing a::mnmt of the, ,:-ash dep~.,:;its '?las $224})1f.t at Jm,e 30, 2003. Hauk hahLaiCC~

of which $129,192 ,1-n.Is insl1n.d (c-ategory 1), $707A72 \Va~ 7JdiJre rnGom:iHn.g items ',¥ere­enllaternJl,1~d (n:!1cgory -Z) as discus~:C'1d

The Cl!y\; Inv~srmtnt Policy &.rld lhe Ctt~Hbrnia Guv,;;mmizrri (,t;d,~- aHow tii{J Ch)' tv in\'(;!81 lu the fo Hovring .. provkk,d thi;a ~.red}t tMings tif the issuer::; an~ acceptabf.~ to tht; CH:y

Local Air,.ui:cy .tn.ve.stm.e.n.t Fund Si1n flfateG Co,.-.nt-;v 1~1v,;:-sirm:nt Fu.nd U.S i re.o :ur,1 B~H, U.S. Tre,q__-imy t1.Jote:; U.S. Tre3m.u-y Bond~ tLS. C~0vtJ:-nme11t Agcney' ,~~UC'.:':1 Ba.uku's /1.cceptanceL; Collatem1iz.Jd CA.-.,rtificl\res of Deposit with Bank..s or Savings&.: Loons. N!.!gnLi.,:abk Ct~rtificat..s ufDcpGslt Comrue.rciaJ Paper Gov~r':Im~nt Si;;curit~e:s }\:~d-R1;::purr:ha~;e Agre1::1rat~n1s

Jn the Loc.~J Ag:e1.ri.:y Inve!;tm(,ml hmd (LAH') that is regul.;:ned Section I 6429 tmd.cr the ovrrsight of the TreK~surer of the Su:te its inv;:>.str.n::.':nt in LA.ff ;:\! the fair vakt- am;:,unt by

for -,.vifriUrawai i:, baseU {HJ th1; a~co11:1tin,g; recods by ia.vs)strnent pon:fo-!io

obJigatior1~ ~n<:·~tgage-backed stit )J_: iti~.'.,~ •Jther ui-::,\,et-biick~d :.:t.cur~t!-e~. :-:;nd ilo:-it:.ng rJ.tG se.;;.uritles 1ssued b:,· fotlerni .:igendes, gov~;i--nrnen:­

~~h:in.s(:red (~11C1,,-:r~x;::,-.~s~ MHJ corµ:,rnlivns_

r------------------------- · ---<::xTv (Jiiviiii:ii.;;:i---------------------------1 L _________________ N,otcs tc, Fitu1nd11l §t11tem,,nts .------------------·j

[Eoo 3. CASH 4.Nri INVESTMENTS(C,:,ntimm!LJ

A,

Ji

The ('.ity is a voluntary panici.p~m rti th.e Sau ·MaWo Cuunty fo;i.'estrrn;nt i'\md {S!vlCff j thzl. i:i rnr.:ufated bv California G·ovt-nmumt Code Seci.fon. 5:),~00 umk1r tltc over5ight of th.c treasm.1:.:r of th; Co-unfv. of San J,,.i.µ.f~.rJ. Th;'; City reports it::: investm.=.:n1 in SJv!ClF lH th~ fa.Jr vrllue an,ount pn:,vld~d l;y Siv[Cff. TJ1~ balance ;vaifablc for with<lr?;_Vt:tl hi hil,1~;::d on the tcc-nr<ls

:~·:;~:~~~:: ~ 1!!~~i~IF;~:vhG'~_,ir{\::~~:;~ed un "\~~·;~:;::! \~:,~e~~s~sy il[::,~~f:; !';. the U.S.

Gc-v~rnrn~nt, tAff) cvrp,nraie notts, coUateraJjZt,d obHg.~lion.s, m(iitgagc-iH)i.:k~d sec.:uriiics~ 01.lwr ~s:sct-bacJ.:_;;:d and floating rnt~ is:sutx! by f~~d(>:n:;J :i:!$./3ni;:cl\.·s;. :g.o\'e-rnme.nt.,,3ponsorcd cnkrprisc:s~ and corpor~ti,:i11s.

c~irrent interfurd balances ~irise in th:;,; norrn.:-11i ,co:Jr.z;e uf business and a.rt exp~ctred to be n;,paid. 5hortly ;J:ler thr; end ofdH} fis~~J year. At June JO" 2003 iffK'rfond batam::.es "\,,ere a~ foH{)WS~

f\.'hlllVd:p~dVVci.;1~ \\-3krTn::aminr·F~il~y US lOi/~v~ff.Jr.:l!-~A:.1,'f.C~iMPrqjcctl $134593

N:u-j\·11jGfG_1',1Rm-~ii 2~_,<qL_

r;~1~%~ai:, ·~~:/~~:;:;;:.t;::h .. ~': !() ~~~:~r s:,~~:t:p~~;,(;;i ~;:;r;!r:;;,, <>;;::~~s'.1:,::_;

adrninistrafrvu eKpenditure.s of th,~ ,hJ,gcncj·, /\dvanci;!S bc:ar amme-t interest 8t the higher of or th,;."- rat!;: h1t0r~~;~. i.~ i;;~ned on Uw City's. investment in tht. Lnc;:.l Inveatme;nt Fund.

Ad,1~mce:; frc.rn the: Gi":'.neui i?um.t ].,.1uni;.:ipL'il Vi/:;:i.ter Sy~~h::n'L P1:1.:rk fo,sf,Sn,sc,"''

~r::::~~::n~~t:;,s ~::Jt~;e~'.·~~tc:,~:~;~;t:t L~: ~;::1c~~.c~\::::!~~1:t~11;:J tc{~

Gen tr~, Fn[l1}. R~~l-.:·;1;/r.:'?ill~;1~ ;\ger,1.y ).)~!,;.{ S~r\•1c-~ F1.1111~ $-')U:J,! Dil 3W1m 011d11 Ei1tc,-p--1.~G ~ ... rnd i•J.GtW

":'<J:&!1~M 2j1;:· Gcv,;;rnnH:Ilt~! .R:::!.1~·11;;!c:~m(;;.it .a.~er.,y DcM !:iff'< ~r.~ f 1.rn,;i ! 1-'J,UUO

.\-1 Hlll:ip~! W s'Jlfr 8y~t::m Ent-c;r--r,,nc.;;;: F ~..rid ~ ttl!:'r'f.:kl'lfiH.:M Agr(1cy L•clbt Se.i v)r.e Pur.i} l;~(i,GQf-

'VV"~th Cor1...:rvJ.! a~,prffv£d~ rnsu:Jrce;:; may be transfor:-cd frnrn cne Chy lhnd to frnotfler-. b(!twee?~ fon<ls d1iring the foocal year e-nd~d JmH; 30~ :!003 were ;1-:; foikrw:'.l:

Gi~1i'iln;1i Fnn:d 'Non··I',fak1r. r.f>.1-vt'fflm(:11w.l F:.ffu.h

S-;.om."i D,·aln 'E:ntl;lT1.ri~e Fm1d

Imerru:il Servk,::: }'11.mfa

64·;.536 C

!UO/l{l-0 ('

6"N,99/.

rnu12 B

'l,i6G,OOO A

HJ.:dCT-1J.opm:;;~:t AgtJ.~' Del!~ S<t~'ice Fwntll

R«l"·,!-0,m10:1~t .,-1\..g't" ... ·i.i*' Cap]~! J.lrq~ocm 1'Ukld

L~b~·s:r;; C..11pU~i P~<ijm,r;ts Ft!:th.i

Nor1-i~jor Gii.vt:n~rntiiltid :Fi:m,l

N.:?J.1··:lVfu~ or fr<.:V\':.'1ltriet;tJ.i Fw.r,ll:l.;

Redr..-,,cJop:1.ncnt Agcr..(,y Uebt -~~r,j,;.e, Fm~d

Nvn~Mizj or Gi:.N:;.i"'fil'.:il-""!~t,:t.l I!..!nd.,;

(k,nenU Fic>,.-ict

3,'.HJ J'!i

TS0.964 A,R

:tJ61i 1i

A To f.md .:-le:·v1;!r::-t'cilt;:f1( 0

-l:::~h·~tle~

ll fo ftmd d,,:bi . .S~'.P;k:c p.t.yrr.P.ni:.s ..

C ro ,c~lmbr;r:.e lite (jt'n-::r-rd f-·1.,Hl for co>ra inf.i.1rred. for !be brn::JJr nfft.)1:d.~ :n;;,klq_?; iht'." t<~nsfoL

i) To tmnsfrir ~;idual cf·.i;;r r,f;_:-:~un;l1;e fi!n.ds

r;::-~-;r~ ------~-·--- ----- ----- -------] ~ 5 - ,,OANS RJ<'.C'IHVABLF _

Th!.' Lu""v and ~li<"rderrite focom-?. First Time Flom<:, Buyf.~r Pr1Jgr:am was e~rnbHshed tn pn>vi!fo for up lo 20 ef:Sc:hrroi l)_istrfots 1._1cated v,-ith.in the City. lri orde1 tn quaJi(v

p~1,icioums must U~ ,_;,f !he.sc Di,trkts and thf;>;y :::runt bi.; hom?. buyers iri. krw an.-.:1 tle·:eh)prner,,·; •.i.,·hn do no! qm;liiy f(1r <1 !wme withvui rim'dl

paym,:;,nt ~1.ss:Estance. Th{~se k.irff,::i mi h~t~rest nor f-i;:it(Hire p~yrnc:nts the fir~t tP.!'.i year$ of thi; kni.n or i • .mt~_] th~ partk-ipa.ni -:(:a::;es employnJent ~vah the Dl,::~ri~i: whk:h evi)r if> r11rHer. After

;;;~:,:i:::.: ::'.~,}1::;~/';:•:,c,:1<l of t:·~~:~e;:'!~~:: fi1,~ i'~:~~:;, "~~):,~!: ;:.,!ii:";::1~a;t;~:1:~c; :'.~

thi; tt-rn1 and rnust lm repaid ;n f~U tf rh1~ prl•Jxrty i11 ::rtild to a unqualified buyer. At First T'irne Hrnn~ Ruyer Lmms fo: the arrwnn, ·~)f$33\470 were!.: outstanding.

41

!-------------------~----~~?·-~~~-~~-----... : . .,, - - -e - • ------ ·, .! -~---- - - - - - - -1 !_ ____________________ r·for?; !-0\;~~,!:!~~!:'::~~lJ[§ _____________ I NOH~

AJ! (\;1.pirat :i.%~)ts; a.rr~ valued ac hi5todcal <~o~t or estimat~d bsioricdl ca;it ~f ~1n:m1i hf~iotiea! cast is i:wt av.difabk:. (\m.tributed ..;a:vit-al ~.s~.~ts :ii.re valued at thdr C-',',;ft.:n3~ed fofr m?1tket value (HJ H1~ 1._httt;: (ontritrm:-::d. '1 hr.; City dcfim.:~ capiH-d asset;: with an kdthl bcHviduai cost of nwre tban. $1,000 mid an ~}.,;;,limatc<l u~;cful 'Jjfo in. e.'\ees~ cf three ycJ.r.~.

GA._S~J Stav:rn.tmt 34 :rrHol'vs the City up tn frmr years tt1 reecrd dl !ts in-frastrn,;t~tre a.:;~ets at June 30:-2003. t{foa-odca! ,,a!nes :for Infmst11,,~rurn aSii'.E::rl.~ vlii! be r~cnrded in fiscal ye.;1: 2004.

OASB Si:at,.1m~-nt 34 refiuire±: thr,t ;'::U .:apittd 1!s.::.et.!, rivith Ernlt1.'.'-ci tisefut livt:~.\\ he. cbprt:~dated over their ~sthnnted lxi;eHii Hve'.,. Altern81i\1eiy~ th~ ''tnoditfod approach-.~ ma.y be use.d for Cc';'1ti~in cnpita~ asi;et!'. i~ nttt provided 1n:Kki:r t.hfa a.pproitch~ but aH 1;:x:pen<thl1wes on i:hese '1.ss;:1s unle,..is Hrny Jire additions or ~rnprov~:menls. -

Tha purp0,~e nf deprn(;fo.ttern is tr~ sprefid the cvst nf e,apitoJ a.s.sets equltab1y among aH user'S •;we:r the: lifo of these ~s.s,;ts. Thg ~unount t~b.a.rged to depreciation ;1:xp~n5(1 ?acb year represenlfJ that Y'Q·::tr' s pn.) rata share- of th~ (:Ost of capit~t ~.ssets.

l)(:_preciar.-i..::m ~s pn:1vitfod using H,1~ Hn...-; method \:lirhk·,h m.erm.s th~ CtJ~;l. ,:J-f thi: as8ct i~ rHv~.Jed by its expected useful Hfo in y;;ar.s 1esult is chl"lrged to ";:i,,:p,.mse ,:ac,h uot~t the ~sser is fuBy dsprieciaJc>rl rhe City has asc;.ig.ned the mmfuJ lives 1i3kd bdo1s-v tu a.SS\~b:

ViltHe:r and \fiaste ¥-later 1v1afos, Lines n.11d Tto.r.ks. BuJlditigs c;nd IJn.provement~ Fm'D\iure:1 F·txturet=- and Equipment Au.tomohiics ami Tn~cks Jnfrastn.1.ctuto

15-20 yea:rs 5 i)-65 ye: ... 1rs.

05 years

}-.,fa.j,ff v~;iUays for ,;::apitai as:icts and JmpnJvcnh=;nts am l-L'i prujc1.a1; H.r...: t:r_mstructm.L lnternst fr:n~uHcd during the ir:onstn.:nctkH! pha~e i~ in the ..::apita!i2ed value of the a.x,i;;et constructed. net of interest Barned on ibe inve'.1tf;;:d proceeds i.;vi;:-.r the same pt;riod.

~---~U-•- --,u---·-•---·-·------~ --- __ -- ~ ~---- -----i NOTE 6 i CA~lrAL ASSETS (Co,.l1li;u~rl) ___ _j

Got:crfllml:'ntai ;;H.:-dvtties

Cap~:ai a'J:'l;Jts n.nt belng ck::predsJ:ed· L11nd

foiai caph:ril assets not belng dt.rpreciated 2;44!~~U3 i __ i __ • ..,._, ___ ·---·--- 0~061,53~:~) ____ 1~.38(\396

Capital ~sets be.ing de;:({edar.ed~

Land lmprovemems Bu-i[ding ar1<l 1mp:rovemt';nt;

FurnitJ.re, Fixmres and Eq~~ipment Autmn,)hik::'!, ,;.1rn.l TnK'.k&

Lf.'$S ilCCUHH~I.rt!ed de,,:1rei::~d.60:n for;

L-.md hnpr-ovemen::.s:

Bulk1ki.g and h-npro'lt:nK~nt~

ftrrniti,1.n.:,. Fix.tur-::~s nnJ b.;uip:-r1c~n1

Ain.-on~obEer~ .:m<l Trncks

S,246,.&59 3,185,882 2,838,56?

570,320

1)6l~iT!

(1658,406

I.,99},91:~

43

$12/145 l/?89,437

62.553

2U04

3:\.583

l6S\298

207, l rn 223:-~56

(Ji.35,097) 982,512 859,85() (416,13()} 1W,t165 Y.J900J)31 C2~t594) (l ,MO) 2. 9:.i2,80 l {"507~6-53) .:..lci~ ~ ~ ,t; 2~530~914

(91/J'.2'~) 5 J.4~)85

f26JJ36)) 1.,667,l to (263?24:JJ i,6fl2J7l (329,]47) l,892,022

l "IOTE Ii· CAPHAL ASSETS (Conll.rn.xl) ____ J

}JtWl;ii.!.?.,S:!Ht)'r--t' Hii"vtt;,e,:~

Car~itai a-:self-, 11or bting depreciated.. Land

Co.p!til ~s~eL!., bf:lng dt=.'r'r•.!t:~a!c,J:

L~nd lmpmvemer1ts Buih!Hng 1:and 1 mpr(~v-eme,as

_Futniturt.; Fixtures an·:l Eq·iJrrn~nt

:ttfr/_t.'Jhtlt1u:rt'.-

.'\utvmobi!t~s ai:1(~ Trud;,s

Les;:. ':itcrn:riulmli!d dcpr;;:clnik·n fc,r;

L~d lmprm-cmcrit.s

3uilding: .i:md. lmprn\.·.;::mcr..t.,;,

Fumin.rre, flxiur~.5 an-I Equlprr.ent Auro11}c."lbi~~~;;: ~11id Trn,;.~ks

4,9M.,4''H

7,;:43,185

160,122:

2.284,~35 4JJiJ8,44fi

$428,385

l:W,]13

19,405

94,:.m.5 ";46,62~

{$21,(:.00)

(9!,88'.-)

($382,W8}

t:J~u,rns 4,,,~·z,84 !

7;f}4S~l86

14,343.644

}T9::Y27

2J6S,756

i4,(it1,(l 6,2'1{; 20,936

. 7)32~\J':3. i,19_ 1&0., --~ -·~-<-_.,,___. ____ .,....,......... ~.0!5_543

44

f ---·----- -- CITY OI-1 ftULLBR.AlT. . . --1 t___________~!~~!!:_!!!::.!~~~~~~~--~--·-~--=-~--·~~--~--_J

Som1) 0apit[1! asstt:1 m1~y be Mquir,::d fod~ra.i 3nd. St:-1te _grant fimd--~i or ihey may be conh·Jbuwd by devebp~rs- ,;ir Qfo~r gi,_w,;.rnnh:nts. Stat:Jn(:nt 34 t~quin ... ·,;; thgt these contrfbutk)ns b-~ n.CC5Hmi.t.:d for HS J\:::-1... enm~.:1 M the t~m~; the c-ap1tDJ a.'.;s,:~ts are cnntribnt.ed.

I.)eprn..:iatl-01! eJtpense is dm:rp.~rl l{') functions imd progrnms: ba:.;e-d or: the.fr nsage of th,;;, relat:;;::d U$~ets.. The arnour:N aHocat-cd tu each firnc1~-on or program a!e as fo·!krqi£;

f.(l,,,;)40

1.~.14-3

]',!6,2!7 --------"-

$255,] 8.1

----- .\)'.~~-~

i ------··-·--·-·-··-·---------1 .. ,,-,,,,,c, "1 1 """(" 'f"'"'' I'•'""' ] ~~IL..lli£., •• , ..,\..)'~, :, E..in. .. ti: _J'.,,,!i"'t,.

..... ------------· Tll,, usefol

debt to .fl.wmce projects or pm·c,hase r ... .:;~ets ·rvhich 'i,.-m h;~-ve t:qtf..'ll tn m· ,mea,lf,r· t!,:,m th~ rr;lut~<l <kbt.

Tti,~ Ut.mer~i Lo:1g ftrm Ob]lgatic,n:~ ..-\,::count Grnq:i prnvidr:.;s- conLrol. ffV·~r 1hc princip:1l of tbc City\: kmg H.:1.m. cif>bt This d'.3b~ ·0/m be repaid cniy fond;-:: but is r·n:id, ·~count;;"; ~:,,~::r fonds because this deb! doa,s n;:;( ,·,;quir~ .~1 r<pproptfatk>ri or ,.ixpcndin,n,

Prnpriet1ry fund t bx,rcr1,r1,c) J.t,nfHt::nn d.-;:bt i~: ;,u:;ci:.JHnted for In th,::, repay lh::: debt becnuse fnr,d~ ar·~ c1ccotmt,td for on. the ll.lil.-~ccrn,.u comn"Lt;rc:la! opt"'-.rati·)n,s.

45

1-------------------------------------cny OF MIUJIRAE -1 i N,;(~s to l'immdal St,,teme11ts , !------·-----·--·-------------- ------·---·-------------------~ !NOTE 7 ·LONGTERM. nnn.· {Continued) :J

8.

c.

Ctidavd ir.<:rn fk'!l;,nce:: fW~

Orm1mv.td.Attivf.fyfui':t;

(lft~(l.1J.l~:frimful.ds

,s;,;rnK '\.\1Ji~·0:;1.i1.1 rJ[,

].{l'1~dn::(-J~!"},,,X6

·-· A'1:11WtJ _ .. JU'F'31l..2D"Jl ·~ __ Ad:f.t.·,x!ii ~- HIDro.1n:n •• J1.n':!), '?.1).D

ti~ OYU!{i~i~ .A .Vi:.r'Jt!Pfler.m ,15-'.'i.S75%i J;c ]!'J:'.iON

[~!)l~!?.:;"~L,;;t>k'".!ii::Ln:m

lkd~nx.. Zl~:-.Aol'.i!{f Dt:ht:

F~:::r,pi,~-"?i~d::~ 1?.-:18~ 1=mtkt~Jl'i;;.ruJ1.""".!1r.,;· W~t~·

q::o,-:r ~f,l.".X'(:ti,,;t!( VWJ~:. ;)JI'$!"~ rtpd1! i !i~_:V,?l)J!.

J?,~· &1t...lf:s"m· ta1l',n.y :~t i+,:jat,

·tS:.i%, dxi ;.it'2C!Jit

um !;tJ r®~-& ro oh€.:lli'i.i:i:ro.k,a

i:ur:;.:r:..:

,.~!.?"!:~-

~?OJ)))

of :!VfiHbr,~e r~fonidp,£1i Storm \llatcr Disirid No. 1 Bor~ds itr. the principai ~rn.:)unt 19'115 Th:;.::se bc-nds we"ft:: is/::ueJ tn pay for the ~cqui.-:itii.m) construc~km and

~;~;;;'\"~,~~ ~;-,'.~;; ! ,~~;:;;;;~t;~a~~;~·;~:~~1~:";~,}';n~-:a~:;~,:~:!'~;:;~;,':,;:.~~y ,~~,!:'\~~·,::~"~,; ::: ~urposes"

C~n Augu':,t 7~ 2001~ the ~~~ity is...::u,;d 20(.ll ~J(~~nr;,1,1,l (Jbt,ga~ion il0~ufo in the ainot~m of,$~{}~6GO)JOO,

~~:r:;,:n~;~;;~~::~i~a~"::i~~-:~:;~scc: m reno::;e;i::'!;:;~'~;,~~:~:,:!;' e;c:~~,:;:~~'.;~al ·~:~:1~e :;:,~'.;;;:~ :~\' ~'.~ due (,;i ~ aht,, Angu;-;t l

1 20J6. I'hese bonds rir~

ropayah~c v::;~~~~~;~~1

1:~,·<t;;.:J ti;K h:,vfod f~)r thut purpnse.

46

i - - CITY m• MH.,Ll!RAE --- ------! i ,,,,,.... ........................... =·---·----·---- Notes tn J'?nandai ~tah~me:r,.ts ______________ ! r-·.c-- -----~-----------------""'.·---------------~ I NUTE 7 • LONG 'HRM rmnT (Cm:itlfill!fci) _ ...... J .D.

G.

0~1 Dec-;}mber 21~ 1999 the City iss•Jed Certifo:at3"s of Pm1l,·.ipatkm (COPs) in tb.: tLrnmmt uf $4~!05,{H)O. COPs \Vere, usr~cl for finandng the oxpansion 2:nd r0nnv:.:Ik;n of rhe prc::!ic~ d;;:parGmcn(_ of a ,.;c;c.rnrmm\ty n.:1-0;:n, h.mding a r'l;'servl;!- fund, an.Ci pay:uenl tiJr c(J.>,;t_~ of fa:-Jub1g the C()P:}.

tntcnmt p#ymtmls due on MHrch l and September 1 c;f f!e.c.h yeut rmd pdnd~1al du~ on Man:h 1 ;:ne repayaM~.:. fiem Gt.r1crn! Fund ri.:ive:nu~.

~f;/~J{~~;1 :;:!~~s1~dt~i ;;::;li~~::~r;;;t;r!~~;:bf~:1;a!~;~t;!~::1\;:~:t;;~~c~~-l~~!~~\::g1-~t~e~,;r~~L~~: luim is 5.39j"t'U compo;!jnded annuaHy. Prindpat and interesr payrnents Rr~ de.t~aed for 3 w~th arn:uiai Interest du(j {:urm.11r:incing June '9. 2.00•!. Durin~ fiscal $124,059 in uupaid ink.rest v.-~s .~dded to pr;nc.ipal

Cm August 20, 1993 the Re.de..vek,pmf,nt Agt:.ncy issued 11J9J 'i ax AJk,c:atlon P.nnds. The pmct:eds Vf{;n~ o:s~:d :;)r gsmt~r~J rudevelopment p1.1rp,.,se.s ti;;; be-;nefit .fho R!',devt\1oprntQnff prl','.JJe.ct area inci1.Kiing c.erl.ah1 d(rwtW,:J\;rn 'ltr,;>t:t ;f}nd l,tr,.r;(l.<.;t:a~ impJ"ovcntGDJs~ i'lffonJable hnusU1g prn-g-ra .. 1ns,1 th,:~ fanding of a res,.;,ri;~ fond1 .and th~ pa;;,1m,:ni of ~asts of i.:,suing tb.e Bonds.

duo vn _t.,{arch l and s~~ternber l of car.;h year and f1tin(;.ir~al due on Sept~mber 1 from tax ]:n,r.;.rement reve:1nies ~.Hu<~Ut(!d to ~ht.: Rcdcvc:lnpment Agr:.n0y rmd certaiti

On November L 1997 th, C~ity c,f t,.fHHbrne cuter.:.d into a MlSter Lmt.'Je "jNith Avreem,~11L t(> fu;1tl the renla·~e;,Kmt ui wa~er rneters \.V!th electrnnk read mcu•:r:; ~,~l~kd ~oth~·an:. /\.nn~;al anJ irrti;~res1. is due Nov~mber 15 :rrni

w Pun;ha.sc the purch~se: n:if

fron:

nf ivfldbrae prcvk,u:~:!_y finan..::d the r1nd ::t':nst:ru,:Jion. of <::ertain saIJita:rv s:e"i.ver rl1r-·u,,J, ·J f'c,.~mc·"'t"" or Pmbcipaum, (1~fS9 COP) jqgued on Aug:11s~- 1, 1989

the• ongmai principnJ a~o:~; ::1/$';lo2;:iJoo'_

47

r ~w~u~ I ! --------~--- ~off_;s to Fi11~m:fal Stnemi!t'i\ts ------------ ....!

I.

On !vV1y l, 1997 tbc Ciry obtaJned a 1997 Bzm.Y. Loan in tht.~ from Hu:. lUi.~n were use:c! to pur..-:h.1~~e OS !Fver,,un,:,ulsese;unn,,s trn~t 10 provide :fo-r aU fotut(: prin~lpjl on Sc:ptembe-r 1., }998.

Under ~he l 997 Bani. Loan, ~ri.tere:"-t t8 Hf.x:rue,~t .';ll ,'2 rn.te cf 5 .se;'o 1 ,md }.1;:wch 1 C$.~h y~~H 11~.<l the prlndp:d ls due 8eptc-rntH;r ! . 20[18.

Annual deht si;:rvice re-qu.irements r.lre shown below:

arno1mt $2/743~ 70U. PnJte~ds w;-_;( ~--; lH Ml itreVL)l.\l'"JUe

COP.:: were retired

i.t1..mtest is dui~ Septembm mfffures en s~Jptcai:bcr l ,

___ (i,y,;;,:rnmcnm1 ,'\cth!"~lr;5 -~ ·-- Bv:.~:t1e:Ss~"f~i\.cti·y~t~'ll'~, ~·­""{ cac' t (' ,.Eng

fone 10: _ ___f.!.~L..... .,..,.....,._ hH:~:{:s, ...,.__, _ __f_x~aj__- --~!:.~·1'.::~t __

2008 2',009<{0 i 'j

2(H4<2Hlt