HomeMy WebLinkAbout06.A- City Manager 6.A
DOC I D: 4129 A
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Set Workshop
From: Allen Parker M/CC Meeting Date: 11/02/2015
Prepared by: Nita McKay,
Dept: City Manager Ward(s):
Subject:
Presentation of Audited Fiscal Year 2012-13 Basic Financial Statements of the City of
San Bernardino
Current Business Registration Certificate:
Financial Impact:
No Financial Impact.
Motion: Receive and File the Audited Basic Financial Statements for Fiscal Year
2012-13.
Background:
Each year an independent audit of the City is conducted in conformity with Generally
Accepted Auditing Standards (GAAS). Those standards require that an independent
Certified Public Accountant (CPA) plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. The
independent auditor examines evidence to support the amounts and disclosures in the
financial statements. The auditor also expresses an opinion on the fairness of the
presentation of the financial position and the results of operations of the government's
basic financial statements in conformity with Generally Accepted Accounting Principles
(GAAP).
The Basic Financial Statements are primarily designed for external readers, citizens or
bond-rating services. Authoritative accounting and financial reporting standards require
that the basic financial statements of a local government be preceded by Management's
Discussion and Analysis (MD&A). The MD&A is prepared by City staff to furnish an
objective and easily readable analysis of a government's financial activities.
On August 1, 2012, the City of San Bernardino filed an emergency petition for Chapter 9
Bankruptcy with the United States Bankruptcy Court. The Fiscal Year 2012-13 attached
Basic Financial Statements encompass the period of time that the City struggled with
insolvency, the loss of redevelopment as an economic development tool and the
beginning of a slow economic recovery. Many of the City's General Fund revenues
increased as a result of the economic recovery.
It is important to keep in mind that the City's financial statements include the net position
and results of operations of the City's enterprise funds, e.g. Water and Sewer, which are
JC part of the Water Department. As summarized in the entity-wide financial statements, the
City's assets exceeded its liabilities by $616.2 million (net position). The City's total net
Updated: 10/29/2015 by Georgeann "Gigi" Hanna A I Packet Pg.434
4129
position increased $3.4 million during the fiscal year. Although the City's governmental
activities (basic services, including the General Fund) decreased $6.1 million, business-
type activities (Water, Sewer, and Integrated Waste) increased $9.5 million.
The City's General Fund, which is the general operating fund of the City, completed Fiscal
Year 2012-13 with revenues and transfers in exceeding expenditures and transfers out by
$4.5 million, bringing the ending fund balance to a negative $7.1 million at June 30, 2013.
Total General Fund revenues increased $5.5 million, due primarily to an increase in tax
revenues, including sales taxes, property taxes and utility users' taxes, of$4.3 million.
Total General Fund expenditures decreased by $13.6 million, specifically personnel
costs as through the City's Pendency Plan, positions were reduced through layoffs and
attrition. These personnel reductions occurred across all functions, with reductions to
general government of $4.3 million, public safety of $5.5 million, streets of $6.7 million,
and culture and recreation of $1.3 million. Additionally, with the dissolution of the
Economic Development Agency in the prior year, the General Fund incurred $4.5 million
in community development costs.
Supporting Documents:
Annual Financial Report Year Ended June 30, 2013 (PDF)
APR*-
Updated: 10/29/2015 by Georgeann "Gigi" Hanna A
YPacket Pg 435 t7,
6.A.a
CITY O F SAN BERNARDINO,
CALIFORNIA
E
A U
M
T
N
O
� p N
L
d
}
d
r^ T
N
O
M
W
L
.�
0
Q.
d
.0
LL
Q
ANNUAL FINANCIAL REPORT E
w
YEAR ENDED JUNE 3012013
Packet Pg :436''..=.
N
C
d
E
d
r
r+
R
U
C
tC
C
LL
2
N
R
m
M
T
N
T
O
N
L
V
N
LL
d
'a
O
Q
O
This page intentionally left blank. M
T
O
N
O
M
d
C
d
C
LU
t0
d
O
CL
d
i0
C
O
C
I.L
7
C
C
Q
C
d
E
s
c�
w
Q
Packe.,.,. '
CITY 0FSAN BERNARDINO,CALIFORNIA
Year Ended June 3O,2Ol3
Table mrCbntents
Page(s)
co
IndependentAuditor's Report....................................................................................................................... i
MD&A..........................................................................................................................................................»
Basic Financial Statements:
Government-wide Financial Btatemonto' m
' :o
Statement of Net Puxiduu--------------------------------------- 19 vo
Statementof Activities.........................................................................................................................22 �
Fund Financial Statements: C14
Governmental Funds: m
BalanceSheet....................................................................................................................................24 '
Reconciliation of the Balance Sheet o[Govoonocu1a �uudotutb� ��utou��u�of�ut9oad�u� 2O �
Governmental J�
Statement ofRevenues,Expenditures and Changes iu Fund Balances.............................................3O u'
Reconciliation of the Statement ofRevenues,Expenditures and Changes bn Fund Balances
of Governmental Funds tothe Statement of Activities..................................................................32
Proprietary Funds:
N
Statement of Net Position 33
-------------------------------------- T11
Statement of Revenues,Expenses and Changes iu Fund Net Position.............................................35 ~�
Statement of Cash Flows .3h
Fiduciary Funds:
Statement of Fiduciary Net Position.................................................................................................39
Statement of Changes iu Fiduciary Net Position--------------------------40 5
Notes noBasic Financial Statements........................................................................................................4l
Ui
Required Supplementary Information: m
Schedule of Funding Progress — City Miscellaneous, City Safety, and Successor Agency Defined
Benefit Plans of the California Public Employees' Retirement System.............................................. l27
SubuJnleu o[Funding Progress and Employer Contributions—
Other Post-Employment Benefit Plans................................................................................................. 128
Budgetary Comparison Schedule: �
U.
General Fund----------------------.--------------------'—' 129
l�otoxtoRequired 8 ou1urylutornzu1iou—..-------------------------.'' 131
Supplementary Statements and Schedules: �
Noom �or{}ovoozn�oo1uJ�uoda�
Combining Balance Sbeot---------------------------..------.---- 133
Combining Statement of Revenues,Expenditures and Changes in Fund Balances........................... 134
�E6Aa
CITY OF SAN BERNARDINO,CALIFORNIA
Year Ended June 30,2013
Table of Contents(Continued)
N
a
Page(s) 0
E
m
c�
m
Nonmajor Special Revenue Funds:
CombiningBalance Sheet.................................................................................................................. 137
Combining Statement of Revenues,Expenditures and Changes in Fund Balances........................... 139
U.
Nonmajor Debt Service Funds: 2
.y
CombiningBalance Sheet.................................................................................................................. 143
m
Combining Statement of Revenues,Expenditures and Changes in Fund Balances........................... 144 M
N
Nonmajor Capital Projects Funds: N
CombiningBalance Sheet.................................................................................................................. 146 L
Combining Statement of Revenues,Expenditures and Changes in Fund Balances........................... 150
y
Internal Service Funds: U-
Combining Statement of Net Position................................................................................................ 156 d
Combining Statement of Revenues,Expenses and Changes in Fund Net Position............................ 158 5
Combining Statement of Cash Flows................................................................................................. 160 Q
Agency Funds:
Combining Statement of Fiduciary Assets and Liabilities............................................................... 167
Combining Statement of Changes in Fiduciary Assets and Liabilities............................................ 168
0
N
O
M
d
C
.a
d
C
W
L
d
L
O
Q.
d
C
U.
3
C
C
Q
C
d
E
V
f0
y.+
r
Q
IN�W110 X�r
111111111110111101 0400 Certified Sacramento
Public
Accountants Walnut Cree
Oaklan
Los Angele
N
Y
Century Cil
Independent Auditor's Report Newport Beac
Y
San Dieg 2
To the Mayor and City Council
City of San Bernardino,California
c
We have audited the accompanying financial statements of the governmental activities, the business-type U.
activities, each major fund, and the aggregate remaining fund information of the City of San Bernardino, N
California (the City), as of and for the year ended June 30, 2013, and the related notes to the financial m
statements, which collectively comprise the City's basic financial statements as listed in the table of M
contents. cy
0
N
Management's Responsibility for the Financial Statements
(D
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes N
the design, implementation, and maintenance of internal control relevant to the preparation and fair "-
presentation of financial statements that are free from material misstatement,whether due to fraud or error.
A uditor's Responsibility Q
a�
Our responsibility is to express opinions on these financial statements based on our audit. We did not
audit the financial statements of the Water Enterprise Fund and the Sewer Enterprise Fund(major funds),
which collectively represent 97%, 100%,and 74%,respectively, of the assets, net position and revenues of
the business-type activities. Those statements were audited by other auditors whose report has been N
furnished to us,and our opinion,insofar as it relates to the amounts included for the Water Enterprise Fund
and the Sewer Enterprise Fund,is based solely on the report of the other auditors.We conducted our audit in c
accordance with auditing standards generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial m
statements are free from material misstatement.
W
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the M
financial statements.The procedures selected depend on the auditor's judgment, including the assessment >-
Y
of the risks of material misstatement of the financial statements,whether due to fraud or error. In making `o
those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair 0
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control.Accordingly,we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by S U.
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our Q
audit opinions.
m
E
Y
Y
a
Macias Gini&O'Connell LLP
777 S.Figueroa Street, Suite 2500 `
Los Angeles,CA 90017R1C�C£t
Summary of Opinions
Opinion unit Type of Opinion N
Governmental Activities Qualified w
Business-Type Activities Unmodified E
m
General Fund Unmodified
Federal and State Grants Special Revenue Fund Qualified N_
Low and Moderate Income Housing Special Revenue Fund Qualified a
Sales and Road Special Revenue Fund Unmodified
Integrated Waste Enterprise Fund Unmodified =_
Water Enterprise Fund Unmodified U-
Sewer Enterprise Fund Unmodified
Aggregate Remaining Fund Information Qualified m
M
T
Basis for Qualified Opinion on Governmental Activities,Major Federal and State Grants Special Revenue C4
Fund,Major Low and Moderate Income Housing Special Revenue Fund and the Aggregate Remaining N
Fund Information
d
Management has not adopted a methodology for reviewing the collectability of notes receivable in the
governmental activities, major federal and state grant special revenue fund, major low and moderate )
income housing special revenue fund and the aggregate remaining fund information and, accordingly, has U.
not considered the need to provide an allowance for uncollectible amounts. Accounting principles Q;
generally accepted in the United States of America require that an adequate allowance be provided for
uncollectible receivables, which would decrease the assets and net position or fund balance and change a
the expenses or expenditures in the governmental activities, major federal and state grant special revenue N
fund, major low and moderate income housing special revenue fund and the aggregate remaining fund
information.The amount by which this departure would affect the assets,net position or fund balance and
M
expenses or expenditures of the governmental activities, major federal and state grant special revenue c
fund, major low and moderate income housing special revenue fund and the aggregate remaining fund N
information has not been determined. �°
d
Management has not adopted a methodology for reviewing the valuation of property held for resale
in the governmental activities,major federal and state grant special revenue fund,major low and moderate
m
income housing special revenue fund and the aggregate remaining fund information in order to determine
the net realizable value of the property and,accordingly,property held for resale is reported at acquisition W
L
cost plus improvement costs. Accounting principles generally accepted in the United States of America
require that the carrying amount of the property held for resale should not exceed the net realizable value,
which would decrease the assets and net position or fund balance and change the expenses or expenditures 0 CL
in the governmental activities, major federal and state grant special revenue fund, major low and 4)
moderate income housing special revenue fund and the aggregate remaining fund information.The amount
by which this departure would affect the assets, net position or fund balance and expenses or expenditures
of the governmental activities, major federal and state grant special revenue fund, major low and moderate
income housing special revenue fund and the aggregate remaining fund information has not been determined. LL
a
w
m
E
t
c�
w
Q
2 Pa�¢ket,Pg X441"`:
=spa
Qualified Opinions
In our opinion, except for the effects of the matters described in the "Basis for Qualified Opinion on
Governmental Activities,Major Federal and State Grants Special Revenue Fund,Major Low and Moderate
Income Housing Special Revenue Fund and the Aggregate Remaining Fund Information" paragraph, the 4,
financial statements referred to above present fairly, in all material respects, the respective financial
position of the governmental activities, major federal and state grant special revenue fund,major low and m
moderate income housing special revenue fund and the aggregate remaining fund information of the City
of San Bernardino,California,as of June 30,2013,and the respective changes in financial position thereof
for the year then ended in accordance with accounting principles generally accepted in the United States of
America.
.y
R3
Unmodified Opinions m
N
In our opinion,based on our audit and the report of other auditors,the financial statements referred to above c
present fairly, in all material respects, the respective financial position of the business-type activities, the `L
general fund,the major sales and road special revenue fund,the major integrated waste enterprise fund,the
major water enterprise fund and the major sewer enterprise fund of the City of San Bernardino,California, }
as of June 30, 2013, and the respective changes in financial position and, where applicable, cash flows N
thereof for the year then ended in accordance with accounting principles generally accepted in the United U.
States of America.
m
t.
Emphasis of Matter Uncertainty Regarding Going Concern Q
The accompanying financial statements have been prepared assuming that the City of San Bernardino, r
California, will continue as a going concern.As discussed in Note 2 to the financial statements,on August
1, 2012, the City filed a case seeking bankruptcy protection and the adjustment of its liabilities under M
Chapter 9 of the United States Bankruptcy Code.These conditions raise substantial doubt about the City's N
ability to continue as a going concern. Management's plans regarding those matters also are described in o
Note 2.The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.Our opinion is not modified with respect to this matter.
Emphasis of Matter Regarding Restatement of Prior Year Financial Statements
_
W
As discussed in Note 23 to the financial statements,various account balances were restated.We audited the
adjustments described in Note 23 that were applied to restate the June 30,2012 basic financial statements.
In our opinion, such adjustments are appropriate and have been properly applied. Our opinion is not c
modified with respect to this matter.
Other Matters 2
Required Supplementary Information =
U_
Accounting principles generally accepted in the United States of America require that the management's n
discussion and analysis,the schedules of funding progress for the pension and other post-employment =
defined benefit plans, and budgetary comparison schedule for the general fund, as listed in the table of a
contents,be presented to supplement the basic financial statements. Such information,although not a part of m
the basic financial statements,is required by the Governmental Accounting Standards Board who considers E
s
it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We and other auditors have applied certain limited Q
procedures to the required supplementary information in accordance with auditing standards generally
3 PacketPg
�.,
��6Aa
accepted in the United States of America,which consisted of inquiries of management about the methods
of preparing the information and comparing the information for consistency with management's responses
to our inquiries,the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the information E
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide },
any assurance. N
Other Information U
m
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The accompanying combining nonmajor fund financial 2
statements are presented for purposes of additional analysis and are not a required part of the basic m
financial statements.
T
N
The combining nonmajor fund financial statements are the responsibility of management and were derived c
from and relate directly to the underlying accounting and other records used to prepare the basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit of the }
basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial N
statements or to the basic financial statements themselves, and other additional procedures in accordance i%
with auditing standards generally accepted in the United States of America.In our opinion,the combining
nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic
financial statements as a whole. '
Q
6-4V
/ M
Los Angeles,California o
October 22,2015
0
M
d
C
3
7
d
C
W
L
.N
L
O
LL
LL
R
7
C
C
Q
.i+
C
E
t
V
R
Q
4 Packet Pg 443`:
� 6Aa
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis
June 30,2013
The following discussion and analysis of the financial performance of the City of San Bernardino(the City)
_
provides an overview of the City's financial activities for the fiscal year ended June 30, 2013. The
information presented herein should be considered in conjunction with the financial statements identified
in the accompanying table of contents. 0
Cn
Using the Accompanying Financial Statements
�a
c
This annual report consists of a series of financial statements. The government-wide statements,including ii
the Statement of Net Position and the Statement of Activities, provide information about the activities of 2
.N
the City as a whole and present a longer-term view of the City's finances. Also included in the
m
accompanying report are fund financial statements. The fund financial statements tell how these services r>
were financed in the short-term as well as what remains for future spending.Fund financial statements also N
report the City's operations in more detail than the government-wide statements by providing information o
about the City's most significant funds. The remaining statements provide financial information about N
activities for which the City acts solely as a trustee or agent for the benefit of those outside of the
government.
R
U
N
Financial Highlights U_
d
On August 1,2012,the City of San Bernardino filed an emergency petition for Chapter 9 Bankruptcy with =a
the United States Bankruptcy Court for the Central District of California, Riverside Division. The Mayor Q
and Common Council declared a fiscal emergency shortly before filing the petition noting that the City
would not be able to pay its financial obligations in the next 60 days.Following the petition,a pre-pendency T
and a pendency plan were filed that allowed the City to operate while it completed a Plan of Adjustment to
regain solvency. The City filed its Plan of Adjustment with the bankruptcy court on May 29, 2015, along
with a companion document entitled,"Recovery Plan in Support of Plan of Adjustment", a detailed report
which provides potential revenue enhancements, opportunities for expenditure reductions and a financial M
model,which incorporates a financial reserve to support not only a fiscally solvent City in the future,but a c
service solvent City, as well. City officials are currently negotiating with various creditor groups to reach
agreement in support of the confirmation of the Plan of Adjustment. For further details, see note 2 to the -a
financial statements.
W
All changes in financial condition relate to Fiscal Year 2012-13.Please note that each of these changes will m
be discussed in detail in the appropriate section of this analysis.
0
• The assets of the City exceeded its liabilities at the close of the fiscal year by $616.2 million (net
position).This amount includes net position from(i)governmental activities of$353.6 million and(ii)
business-type activities of$262.6 million.
• During the year, the City's total net position increased by $3.4 million, governmental activities
decreasing$6.1 million and business-type activities increasing$9.5 million.
• Total City long-term liabilities increased by$17.9 million. Q
c
• As of the close of the fiscal year, the City's governmental funds reported combined ending fund E
balances of$98.3 million,a net increase of$8.3 million,comprised of revenues exceeding expenditures U
of$9.5 million and a decrease of$1.2 million due to prior period adjustments. See note 23 in the notes Y
to the basic financial statements.
44
5
Packet Pg 4
a
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
June 30,2013
Overview of the Financial Statements
c
m
The annual report consists of four parts—management's discussion and analysis (this section), the basic
financial statements, required supplementary information, and a supplemental section that presents
Cn
combining statements for nonmajor governmental funds, internal service funds, and agency funds. The
basic financial statements include two kinds of statements that present different views of the City:
c�
c
• The first two statements are government-wide financial statements that provide both long-term and ii
short-term information about the City's overall financial status. •2
m
• The remaining statements are fund financial statements that focus on individual parts of the City
government,reporting the City's operations in more detail than the government-wide statements. C:
0
N
• The governmental fund statements tell how general government services, like public safety, were M
financed in the short-term as well as what remains for future spending. }
• Proprietary fund statements offer short- and long-term financial information about the activities the N
LL
government operates like businesses,such as the water and sewer utility systems.
d
• Fiduciary fund statements provide information about the fiduciary relationships,like the agency funds '
Q
of the City, in which the City acts solely as an agent or trustee for the benefit of others, to whom the
resources in question belong. r
The financial statements also include notes that explain some of the information in the financial statements
and provide more detailed data. The basic financial statements are followed by a section of required N
supplementary information that provided additional financial and budgetary information. c
M
d
Reporting the City as a Whole =
The accompanying government-wide financial statements include two statements that present financial data W
for the City of San Bernardino as a whole. The Statement of Net Position and the Statement of Activities w
report information about the City as a whole and about its activities. These statements include all assets,
deferred outflows of resources,and liabilities using the accrual basis of accounting, which is similar to the r
accounting used by most private-sector companies. All of the current year's revenues and expenses are c
taken into account regardless of when cash is received or paid. m
These two statements report the City's net position and changes in net position. The City's net position,
which is the difference between assets,deferred outflows of resources,and liabilities,is one way to measure r_
the City's financial health,or financial position.Over time,increases and decreases in the City's net position E
are one indicator of whether its financial health is improving or deteriorating. Other non-financial factors, ""
however, such as changes in the City's property tax base or sales tax base and the condition of the City's
roads, should be considered to assess the overall health of the City. a
w
In the Statement of Net Position and the Statement of Activities,two types of activities are presented:
E
t
• Governmental activities —Most of the City's basic services, such as public safety, streets and roads,
and parks and recreation, are reported here. Sales taxes,property taxes,other taxes, state subventions, a
and other revenues finance most of these activities.
6 Packet Fg�4t1�`-
;6Aa
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
June 30,2013
• Business-type activities—The City charges a fee to customers to help it cover the costs of the services
accounted for in these funds. These activities include the City's water, sewer and integrated waste
operations.
Cn
The activities of the Successor Agency of the former redevelopment agency can be found in the Fiduciary
Fund Section of the Financial Statements as a Private-Purpose Trust Fund.
c
ReportinL the City's Most Significant Funds ii
U)
The fund financial statements provide detailed information about the City's most significant funds,not the
m
City as a whole. Some funds are required to be established by State law or by bond covenants. However, r�
Common Council establishes many other funds to help it control and manage resources for particular v
purposes or to show that it is meeting administrative responsibilities for using certain taxes,grants,or other o
funding sources. The City's two kinds of funds, governmental and proprietary, use different accounting
cm
approaches. }
I �
• Governmental Funds — Most of the City's basic services are reported in governmental funds, which N
focus on how money flows into and out of those funds and the balances left at year-end that are available "-
for spending.These funds are reported using the modified accrual accounting method,which measures
cash and all other current financial assets that can readily be converted to cash.The governmental fund
statements provide a detailed short-term view of the City's general government operations and the basic Q
services it provides. Governmental fund information helps to determine whether there were sufficient a,
financial resources to fund current period activities,and whether there are remaining resources that can
be spent in the near future to finance the City's programs. The relationship or differences between
I governmental activities reported in the Statement of Net Position and the Statement of Activities and
governmental funds, are described in reconciliations following each of the fund financial statements, N
respectively. M
m
c
Proprietary funds—When the City charges customers for the services it provides,whether to outside
customers or to other units of the City, these services are generally reported in proprietary funds. a
Proprietary funds are reported in the same way that all activities are reported in the Statement of Net
Position and the Statement of Activities.The City's enterprise funds(a component of proprietary funds) W
are the same as the business-type activities reported in the government-wide statements, but provide
more detail and additional information,such as cash flows.Internal service funds(the other component }
of proprietary funds)are used to report activities that provide supplies and services for the City's other c
CL
programs and activities.
Reporting the City's Fiduciary Responsibilities
c�
The City is an agent for certain assets held for,and under the control of,other organizations and individuals.
U.
All of the City's fiduciary activities are reported in separate fiduciary funds. These activities are not
included in the government-wide financial statements because the City cannot use these assets to finance
its operations. The City is responsible for ensuring that the assets reported in these funds are used for their Q
intended purposes.
c
m
E
t
Q
7 Packet Pg X446,
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
June 30 2013
Government-wide Financial Statements
c
a�
A summary of the government-wide statement of net position at June 30,2013 and 2012 follows: m
R
U)
Table 1
Net Position c
R
June 30,2013 and 2012 =_
iL
(in millions) 2
'u�
R
m
2013 2012 r
Govt. Bus-type Govt. Bus-type
Activities Activities Total Activities Activities Total
L
R
d
Current and other assets $ 134.4 $ 152.8 $ 287.2 $ 115.6 $ 137.0 $ 252.6
R
Capital assets 408.7 236.8 645.5 425.3 255.1 680.4 y
Total Assets 543.1 389.6 932.7 540.9 392.1 933.0 U.
d
Deferred outflows Q
of resources - 0.2 0.2 - - -
N
Long-term liabilities 157.5 61.9 219.4 142.0 59.5 201.5 `r
M
Other liabilities 32.0 65.3 97.3 18.5 72.2 90.7 c
Total Liabilities 189.5 127.2 316.7 160.5 131.7 292.2 `V
0
M
d
Net position:
Net investment
a�
in capital assets 377.3 191.1 568.4 394.6 212.3 606.9
C
Restricted 109.4 7.8 117.2 112.6 7.4 120.0 w
L
Unrestricted (133.1) 63.7 (69.4) (126.8) 40.7 (86.1) }
Total net position $ 353.6 $ 262.6 $ 616.2 $ 380.4 $ 260.4 $ 640.8
0
CL
a�
m
C
R
C
U.
R
C
C
Q
C
d
E
s
R
.r
Q
8
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
June 30,2013
Table 2
c
Changes in Net Position
E
Years Ended June 30,2013 and 2012
(in millions)
N
2013 2012 U
c
Govt. Bus-type Govt. Bus-type
Activities Activities Total Activities Activities Total u-
y
Program Revenues: m
Charges for services $ 27.6 $ 89.2 $ 116.8 $ 24.6 $ 87.4 $ 112.0 r
Operating contributions N
and grants 14.6 3.1 17.7 26.3 1.8 28.0 N
Capital contributions
and grants 9.6 4.9 14.5 11.3 3.1 14.4 >_
General revenue:
Sales tax 34.3 - 34.3 32.4 - 32.4 N
LL
Property tax 28.1 - 28.1 46.7 - 46.7
Other taxes 36.2 - 36.2 34.2 - 34.2 a'
Other general 5.7 0.6 6.3 4.8 2.4 7.2
Q
Total revenue 156.1 97.8 253.8 180.2 94.7 274.9
N
Program expenses
General government 19.9 - 19.9 22.9 - 22.9 M
Public safety 95.8 - 95.8 108.9 - 108.9 c
N
Streets 27.6 - 27.6 30.1 - 30.1 c
M
Culture and recreation 6.3 - 6.3 7.7 - 7.7 y
Community development 6.1 - 6.1 9.6 - 9.6
Economic development - - - 24.1 - 24.1
Community service 6.4 - 6.4 7.8 - 7.8
Integrated Waste - 24.6 24.6 - 26.9 26.9 w
Water - 38.3 38.3 - 40.0 40.0 m
Sewer - 23.2 23.2 - 23.3 23.3
Interest on long-term debt 2.3 - 2.3 7.2 - 7.2 p
Total expenses 164.4 86.1 250.5 218.3 90.2 308.6 m
Excess(deficiency)
before transfers and M
c
extraordinary item: (8.3) 11.7 3.4 (38.1) 4.5 (33.6) LL
Transfers 2.2 (2.2) - (0.1) 0.1 -
Extraordinary item: c
c
Gain on dissolution Q
of Economic
c
Development Agency - - - 49.8 - 49.8
E
Increase(decrease)in s
net position (6.1) 9.5 3.4 11.6 4.6 16.2
Q
Beginning net position 380.4 260.4 640.8 362.5 254.1 616.6
Prior period adjustment (20.7) (7.3) (28.0) 6.3 1.7 8.0
Ending net position $ 353.6 $ 262.6 $ 616.2 $ 380.4 $ 260.4 $ 640.8
9
Packet Pg 448:
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
June 30,2013
The increase or decrease in net position can provide an indication as to whether the overall financial position
of the City improved or deteriorated during the year. The net position of the City's governmental activities
decreased by 7.0% (from $380.4 million to $353.6 million). The primary contributor to the $26.8 million d
decrease was the prior period adjustment of$20.7 million recording accreted interest payable, reducing
unearned revenue, recording a HUD section 108 note payable missed in the prior financial statements,
adjusting for a property tax liability, and the reclassification of fiscal agent cash. See note 23 in the notes
to the basic financial statements for more detail.The largest decrease in revenues was in the area of property =
taxes, with a decline of $18.6 million primarily due to the reduction of $19.0 million in property tax iz
increment as a result of the dissolution of the Economic Development Agency. Expenses declined as well, 2
but not to the extent that revenues declined for the same period. Public safety expenses decreased $13.1 N
c�
m
million because of decreases to personnel costs and economic development expenses were eliminated r>
(decrease of$24.1 million) with the dissolution of the Economic Development Agency. Unrestricted net N
position,the portion of net position that can be used to finance day-to-day operations without constraints, o
was a $133.1 million deficit at the end of the fiscal year. The net position of the City's business-type
activities increased by 0.8%during the year(from$260.4 million to$262.6 million). }
m
Governmental Activities "
U.
The cost of all governmental activities during the fiscal year was $164.4 million. As reported in the 'a 4)
Statement of Activities,the amount that the City's taxpayers ultimately financed for these activities through 5
City taxes and other sources was only$104.3 million. The remaining$51.8 million was paid by those who a
directly benefited from the programs ($27.6 million) or by other governments and organizations that a;
subsidized certain programs with grants and contributions ($24.2 million). The City paid for the $112.6 N
million remaining"public benefit"portion with$104.3 million in taxes(some of which could only be used `t
for certain programs) and with other revenues, such as interest and general entitlements.
0
N
Revenues by Source—Governmental Activities M
m
$156.1 million
v
a�
Revenue By Source - Governmental Activities W
L
�Q
L
O
Q.
NN�
1.1.
■Charges for services $27.6 M u'
�o
■Operating contributions and grants
$14.6 M Q
9 Capital contributions and grants
$9.6 M
now s Sales tax $34.3 M .�
ca
■Property tax $28.1 M Q
■Other taxes $36.2 M
■Other general $5.7 M
10 Packet Pg.449
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
June 30,2013
Expenses by Function—Governmental Activities =
m
$164.4 million
ca
Expenses By Function - Governmental Activities
c
LL
N
Rf
m
M
T_
N
V_
O
•General government $19.9 M
•Public safety $95.8 M
•Streets $27.6 M U
N_
•Culture and recreation $6.3 M "-
•Community development $6.1 M
=a
•Community service $6.4 M
• Q
Interest on long-term debt $2.3 M
N
T
M
r
O
N
O
M
d
c
Business-Type Activities m
c
Current year operating revenues of the City's business-type activities increased by 2.4% for Integrated w
Waste, 2.0% for the Water Utility, and 2.0% for the Sewer Utility. Capital contributions to the Water and M
a)
Sewer Utilities were equal to 9.0%and 5.6%of operating revenues,respectively.Net position for the Water >'
.r
Utility increased by 4.0%,after prior period adjustments of$2.2 million to remove salvage values in capital `ou.
assets and capitalize interest costs.The net position for the Sewer Utility increased by$5.0 million,but the m
increase was offset by a $5.0 million prior period adjustment to beginning net position to remove salvage
values in capital assets, capitalize interest costs, and adjust the value of the investment in joint venture.
Both the Water Utility and the Sewer Utility net positions improved because of a full year of revenue rate cc
increases and a reduction in administrative expenses in the Water Utility Fund.The Integrated Waste Fund's LL
net position decreased by$1.8 million for the fiscal year because of the transfer to the City's General Fund
to pay for public safety, capital assets and right-of-way maintenance.
c
a
w
c
E
s
M
a
11
Packet'Pg.450
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
June 30,2013
Revenues b Source—Business-type Activities
Y tYp c
d
$97.8 million m
Cn
Revenues By Source - Business-type Activities
U
.N
•Charges for services $89.2 M m
T
N
•Operating grants and contributions c
$3.1 M N
L
•Capital grants and contributions y
$4.9 M >'
•Other general revenues $0.6 M
N
LL
Q
N
r
<t'
Expenses by Function—Business-type Activities
M
r
$86.1 Million `4
N
O
M
d
C
Expenses By Function - Business-type Activities
W
L
�Q
d
a-+
L
O
Q.
®Integrated Waste $24.6 M
■Water $38.3 M f°
c
Sewer $23.2 M
c
'u.
c
c
Q
c
d
E
t
12
WPM-
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
. June 30,2013
Major Funds r
As previously noted,the City uses fund accounting to provide proper financial management of the City's
resources and to demonstrate compliance with finance-related legal requirements. N
Major Governmental Funds—The General Fund is the chief operating fund of the City. At the end of the
current fiscal year, there was a negative $7.2 million unassigned fund balance in the General Fund. Total
fund balance increased by $4.5 million during the fiscal year. The General Fund had no commitments or U.
assignments of fund balances at June 30, 2013.
.N
m
The reasons for significant changes in the revenues, expenditures, and other financing sources and uses of
the City's General Fund from the prior year are as follows: N
0
• Total revenues increased by $5.5 million, due primarily to an increase in tax revenue, including sales L
taxes,property taxes and utility users'taxes,of$4.3 million and an increase in miscellaneous revenues
of$1.4 million.
_N
• Total expenditures decreased by $13.6 million, specifically personnel costs as through the City's U_
Pendency Plan, positions were reduced through layoffs and attrition. These personnel reductions d
occurred across all functions, with reductions to general government of$4.3 million,public safety of
$5.5 million, streets of$6.7 million, and culture and recreation of$1.3 million. In addition, with the Q
dissolution of the Economic Development Agency in the prior year, the General Fund incurred $4.5 C„
million in community development costs.
• Other financing sources and uses decreased by $3.6 million due to decreases in net transfers in from c
other funds. N
0
M
Federal and State Grants Fund—reports a number of federal grant funds of the City. The City's federal c
grants are subject to a Single Audit under Office of Management and Budget Circular A-133, Audits of
States,Local Governments, and Non-Profit Organizations. The results of the Single Audit are available in
a separate report received by the City.
W
At the end of the current fiscal year,this fund had a$10.9 million fund balance,which is restricted for grant
m
purposes. The reasons for significant changes in the revenues, expenditures, and other financing sources >'
and uses of the City's Federal and State Grants Fund from the prior year are as follows: `o
M
Q
• Total revenues decreased by$5.7 million,due primarily to a decrease in grant revenues of$2.9 million W
and a decrease in other revenues,or program income, of$2.8 million.
• Total expenditures decreased by $5.3 million, specifically personnel costs as through the City's U.
Pendency Plan, positions were reduced through layoffs and attrition. These personnel reductions
occurred across all functions, with reductions to general government of$1.0 million, public safety of =
$2.0 million and community development of $3.0 million. The reductions were offset by a small Q
increase to debt service of$0.5 million.
d
E
The Low and Moderate Income Housing Fund was established as a separate major fund of the City on
February 1,2012,when the City became the Housing Successor Agency,upon dissolution of the Economic
Development Agency(EDA).At the end of the current fiscal year,the Low and Moderate Income Housing Q
Fund reported$63.9 million fund balance,of which$0.2 million is made up of nonspendable deposits and
$63.7 million is restricted for low and moderate income housing.During the current fiscal year,no major
13 _
6.A.a
i
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
June 30,2013
Maior Funds (continued)
c
m
housing project or activity was undertaken and the reduction of the fund balance in fiscal year 2012-13 was
primarily due to a prior period adjustment of$3.8 million to the beginning fund balance to reclassify cash
with fiscal agents to the Successor Agency fiduciary fund.
U
The City's Sales and Road Fund was set up as a separate major fund to account for revenues received for
Measure I, the County of San Bernardino's half cent sales tax dedicated to transportation and the U.
expenditures related to the improvement of the City's streets/roads. The Sales and Road Fund ended the 2
fiscal year with a total fund balance of $6.2 million, all of which is restricted for use on the City's N
streets/roads.Both revenues and expenditures remained static with only slight increases when compared to m
the prior year. N
0
Major Enterprise Funds—At June 30,2013,unrestricted net position of the Sewer Fund was$56.1 million, 04
the Water Fund was $12.1 million and a deficit of$4.5 million existed in the Integrated Waste Fund. The
change in net position for the funds was an increase of$5.0 million for the Sewer Fund(offset by a prior
period adjustment decrease of$5.0 million), an increase of$6.4 million for the Water Fund (offset by a N
prior period adjustment decrease of$2.2 million), and a decrease of$1.8 million for the Integrated Waste L=
Fund. Other factors concerning the finances of these funds were previously addressed in the discussion of w
the City's business-type activities.
Q
The Water Fund's operating revenues increased by $0.8 million due to a slight increase in customer a;
consumption and a 10%rate increase implemented in January 2012 (the last of a series of three approved r-
increases).This is the second year in a row that customer consumption increased following four consecutive �-
years of decreased consumption. Operating expenses decreased by $1.7 million due to a decrease in
purchases of supplemental recharge water. N
C
M
The Sewer Fund's operating revenues increased by $0.5 million primarily due to a 10% rate increase d
implemented in January 2012(the last of a series of three approved increases)being applicable to the entire
fiscal year. Operating expenses of the Sewer Fund increased by $0.2 million due to inflationary factors. -o
Other expenses remain consistent between the fiscal years. v
C
W
The City's Integrated Waste Fund remained static for fiscal year 2012-13 with expenses decreasing slightly a
from the prior fiscal year due to reductions in personnel costs as discussed previously for the City's other r
major funds. o
CL
4)
General Fund Budget Of
7i
Q
There were no significant changes to the budget during the fiscal year. The original $127.1 million budget C
appropriations of the General Fund were increased by $1.6 million, for an amended appropriation amount
U.
of$128.7 million. The primary reason for the increase in appropriations was to provide for increased legal
and contractual service costs related to the City's bankruptcy. _
c
Q
C
0)
E
t
U
w
Q
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
June 30,2013
Major deviations between the final total budget of the General Fund and its actual operating results were as
follows:
E
m
Total tax revenues exceeded estimated revenues by $3.6 million in the areas of other taxes, which !9
includes pass through payments related to the former redevelopment tax increment, sales tax revenues
U)
and utility users' tax revenues.
_
Other miscellaneous revenues exceeded final budget by$1.4 million.Included in this group of revenues U_
is the master services agreement payment from the City's Water Department. .2
M
Police Department expenditures completed the fiscal year over budget by $1.4 million because of m
payouts of accrued leave balances associated with retiring employees. These accrued leave payouts N
were not included in the operating budget. o
N
L
Fire Department expenditures were under budget by $2.9 million, Community Development
Department expenditures were under budget by $2.4 million, and Public Works Department
expenditures were under budget by$5.7 million, all due to vacancy salary and benefit savings for the m
fiscal year. L_
a�
Capital Assets �a
Q
Capital Assets
N
(net of depreciation) V,
June 30,2013 and 2012
M
(in millions) c
N
O
2013 2012 o
Govt. Bus-type Govt. Bus-type
Activities Activities Total Activities Activities Total
c
Land $ 113.8 $ 17.2 $ 130.9 $ 113.8 $ 15.7 $ 129.5 W
L
Infrastructure 256.9 - 256.9 269.2 - 269.2 ac0i
Systems,pumping,wells - 144.9 144.9 - 147.7 147.7
L
Building and Q,
improvements 15.7 39.2 54.8 17.2 75.6 92.8
Machinery and equipment 6.9 10.9 17.8 9.5 6.5 16.0 f°
Intangble assets 4.5 - 4.5 5.1 - 5.1 =
Construction in progress 10.9 24.7 35.6 10.5 9.6 20.1 =
U.
Total $ 408.7 $ 236.8 $ 645.5 $ 425.3 $ 255.1 $ 680.4 �a
c
The opening balances as of June 30,2012 were restated for a$0.3 million reclassification of land reported a
as depreciable assets in prior years, an increase in the distribution system of$0.8 million and an increase
in plant and store yards of$1.4 million for capitalized interest capitalized as part of the adoption of GASB E
No. 62,a decrease of$8.6 million as the Water Department policy is not to record salvage values and a
net decrease of$23.1 million to reclassify the beginning balance of the Sewer Fund's investment in joint r
venture in a separate asset category. `t
��54i-
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
June 30,2013
The major changes to capital assets during the year ended June 30,2013 were as follows:
c
E
• Construction in progress increased $15.5 million due to an increase in water and sewer infrastructure
projects during the fiscal year.
Cn
r
• Infrastructure decreased$12.4 million due to depreciation and no additional completed improvements
to the City's infrastructure. _
ii
Commitments in the form of signed contracts for costs to complete construction projects amounted to$4.2 N
million for business-type activities. m
M
T
Additional information on the City's capital assets can be found in the Capital Assets Note 5 in the C4
accompanying financial statements as listed in the table of contents. N
L
Long-term Liabilities
At the end of the current fiscal year,the City had bonded debt outstanding of$75.8 million and additional N
obligations of$143.6 million. Bonded indebtedness included $51.9 million of pension obligation bonds, U.
$7.5 million of revenue bonds and$16.4 million of certificates of participation.
�a
The City's total long-term liabilities increased by $17.9 million, primarily due to recording restatements Q
for accreted interest of$5.7 million on the Taxable Pension Obligation Bonds,a note payable of$7.5 million a,
recorded in the Successor Agency in the previous year,and$2.0 million due to the Department of Housing
and Urban Development.
M
r
The City's other long-term liabilities were restated at June 30,2012 to include$5.0 in pollution remediation N
debt previously reported as a current liability. See note 20 in the notes to the financial statements for further C;
explanation. d
Outstanding Debt and Long-term Liabilities a
a�
June 30,2013 and 2012 =
(in millions) w
ca
a�
2013 2012 0
Govt. Bus-type Govt. Bus-type
Activities Activities Total Activities Activities Total
Revenue bonds $ 7.5 $ - $ 7.5 $ 9.8 $ - $ 9.8
Infrastructure loans 6.7 - 6.7 8.0 - 8.0 U_
Notes payable 12.4 29.5 41.9 5.7 31.5 37.2 3
Certificates of participation 4.3 12.1 16.4 4.5 14.8 19.3
Pension obligation bonds 51.9 - 51.9 46.1 - 46.1 a
Other 74.7 20.3 95.0 67.9 13.2 81.1 a=i
Total $ 157.5 $ 61.9 $ 219.4 $ 142.0 $ 59.5 $ 201.5 _
4
jr...�
Packet Pg
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Management's Discussion and Analysis(Continued)
June 30,2013
Additional information on the City's long-term debt can be found in the long-term liabilities notes 8 and 9
in the accompanying financial statements as listed in the table of contents.
E
U
r
Requests for Information
This financial report is designed to provide a general overview of the City's finances and to show the City's
accountability for the financial resources it receives for all those with an interest in the City's finances. _
Questions concerning any of the information provided in this report or requests for additional financial U=
information should be addressed to the City Manager's Office,City of San Bernardino,300 N."D"St., San .2
Bernardino,California 92418. t°
m
M
P
N
P
O
N
L
W
U
_N
LL
d
a
O
N
M
P
O
N
O
M
d
C
7
d
.a
C
W
L
C1
y+
L
O
Q
LL .
�Q
M
LL
3
C
C
a
r
G
U
E
t
U
fC
w
a
V7 i
6.A.a
c
m
E
is
c
R
i-
U
.N
c�
m
M
T-
C4
T"
O
N
L
tC
CD
N
U
N
LL
.a
d
..a
Q
a)
This page intentionally left blank. M
0
N
O
M
d
C
U
C
W
d
O
Q.
d
R
•V
C
lS3
C
tL
C
C
Q
r
C
d
t
U
O
w
Q
Packet Pg45�
N
C
N
Y
co
•V
U-
U
�Ul
fB
m
M
V-
04
d'
BASIC FINANCIAL STATEMENTS M
T
0
N
O
M
d
7
N
C
W
I-
CU
d
y+
L
O
Q.
.0
Q
i+
c(D
G
V
a
Parke#�Pg X58 ',
c
m
m
cn
U
C
tS3
_G
LL
U
.N
ftS
C11
M
r
N
r
O
N
L
ca
V
_0
LL
Q
N
r
This page intentionally left blank.
r
0
N
O
M
C
N
C
W
L
cu
d
w
L
0
Q
NNQ�
LL
Q
E
V
.F+
i.�
Q
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Net Position
June 30,2013
Governmental Business-type
Activities Activities Total m
Assets:
W
Cash and investments $ 39,810,674 $ 45,912,986 $ 85,723,660
Cash and investments with fiscal agents 1,276,167 - 1,276,167
Receivables,net:
LL
Accounts 4,644,927 10,381,505 15,026,432 U
Interest 34,367 110,611 144,978 m
Special assessments 267,093 - 267,093 M
T
Deposits 268,015 - 268,015 c5
Inventory 252,086 1,572,462 1,824,548 N
Prepaids 132,744 958,422 1,091,166
Due from other governments 10,431,947 3,156,559 13,588,506 >-
Property held for resale 34,721,732 - 34,721,732
M
Notes receivable,net 42,304,604 - 42,304,604 L
Other assets 214,671 - 214,671 d
Investments in joint venture - 24,836,034 24,836,034
Restricted cash - 9,265,196 9,265,196 a
Restricted investments-Consent Decree - 19,540,918 19,540,918 N
Restricted-other assets - 37,093,872 37,093,872
Capital assets: M
Not being depreciated 124,752,102 41,932,437 166,684,539 °
Being depreciated,net 279,443,710 194,850,607 474,294,317 c
M
Intangible assets,net 4,509,298 - 4,509,298 d
c
Total assets 543,064,137 389,611,609 932,675,746 —'
m
Deferred Outflows of Resources: w
Deferred charge on refunding - 150,948 150,948
L
(Continued)
c
c
U.
�o
c
a
c
E
a
19 Packe#Pg X60
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Net Position(Continued)
June 30,2013
N
ar
Governmental Business-type aci
Activities Activities Total m
Liabilities:
Accounts payable and accrued expenses $ 10,204,666 $ 5,568,896 $ 15,773,562
Accrued interest payable 428,599 614,298 1,042,897
Retentions payable 135,730 - 135,730 =
LL
Internal balances 498,104 (498,104) -
Pa
Deposits able 54,109 3,447,275 3,501,384
P Y m
Unearned revenue 507,560 54,900,768 55,408,328 M
T
Due to Ca1PERS 13,109,223 539,223 13,648,446 A
Due to other governments 4,783,937 748,257 5,532,194 N
Due to Successor Agency 2,232,925 - 2,232,925 M
Noncurrent liabilities: >-
Due within one year 71,424,199 10,972,323 82,396,522 N
Due in more than one year 86,077,406 50,880,879 136,958,285 'u.
Total liabilities 189,456,458 127,173,815 316,630,273 m
=a
Net Position: `t
Net investment in capital assets 377,287,488 191,109,595 568,397,083 N
Restricted for:
Public safety 2,165,248 - 2,165,248 M
Streets and capital projects 29,372,567 - 29,372,567
Culture and recreation 1,282,052 - 1,282,052
M
Community development 75,703,278 - 75,703,278
Community service 844,573 - 844,573
Debt service 80,934 - 80,934
a
Capital related fees - 7,799,773 7,799,773 =
W
Unrestricted(deficit) (133,128,461) 63,679,374 (69,449,087)
Total net position $ 353,607,679 $ 262,588,742 $ 616,196,421 >'
0
CL
m
o:
�a
c
ca
c
U.
R
c
c
a
c
E
a
The accompanying notes are an integral part of these financial statements.
20
Packet P g.`461
°
..6Aa
N
C
U
d
r
t6
U
C
Rf
C
U-
.2
N
Rf
LO
M
T-
N
T-
CD
N
L
d
U
N_
U-
d
7
Q
CD
d'
This page intentionally left blank. M
TI-
0
N
O
M
d
C
7
7
'C
d
W
L
m
d
.V
L
O
Q
d
LL
Q
�f+
U
lC
r+
Q
�� Packef Pg 462 ;v
6Aa
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Activities
For the Year Ended June 30,2013
Program Revenues d
Operating Capital E
Charges for Contributions Contributions
Functions/Programs Expenses Services and Grants and Grants
R
Governmental activities: U
General government $ 19,896,979 $ 4,738,387 $ 352,827 $ -
Public safety 95,824,587 8,210,410 6,670,815 -
LL
Streets 27,584,040 8,405,822 - 9,562,325 2
Culture and recreation 6,258,991 1,278,495 - - m
Community development 6,123,668 4,621,495 4,904,558 - M
Community service 6,360,346 329,359 2,692,594 - y
Interest on long-term debt 2,383,832
N
L
Total governmental activities 164,432,443 27,583,968 14,620,794 9,562,325 }
�a
Business-type activities: N
Integrated Waste 24,643,145 24,968,040 - - "-
Water 38,302,554 37,868,846 3,110,201 3,421,521 m
Sewer 23,231,158 26,414,653 - 1,475,400
Q
Total business-type activities 86,176,857 89,251,539 3,110,201 4,896,921 N
T
Total $ 250,609,300 $ 116,835,507 $ 17,730,995 $ 14,459,246
M
r
O
General revenues: N
Taxes: c
M
Sales tax m
c
Property taxes
Other taxes
Franchises
c
Investment income,unrestricted W
L
Other
d
Transfers }
t
Total general revenues and transfers oQ
m
Change in net position
Net position,beginning of year,as previously reported
c
Prior period adjustments(Note 23) U-
Net position,beginning of year,as restated =
c
a
Net position,end of year
m
E
(Continued) M
w
a
The accompanying notes are an integral part of these financial statements.
22 Packet Pg 46
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Activities(Continued)
For the Year Ended June 30,2013
N
Net(Expense)Revenue and a=i
Changes in Net Position E
r
Governmental Business-type c13
Activities Activities Total
$ (14,805,765) $ - $ (14,805,765) c
(80,943,362) - (80,943,362)
(9,615,893) - (9,615,893) U
(4,980,496) - (4,980,496) m
3,402,385 - 3,402,385 M
(3,338,393) - (3,338,393) N
(2,383,832) - (2,383,832) c
N
(112,665,356) - (112,665,356) w
N_
- 324,895 324,895 V-
6,098,014 6,098,014 m
- 4,658,895 4,658,895
a
11,081,804 11,081,804 rn
N
P
M
r
O
N
O
M
34,337,173 - 34,337,173 =
28,103,713 - 28,103,713
32,873,019 - 32,873,019
3,356,643 - 3,356,643 =
688,248 287,469 975,717 W
L
4,991,985 296,440 5,288,425 d
2,200,000 (2,200,000) -
106,550,781 (1,616,091) 104,934,690 a
m
(6,114,575) 9,465,713 3,351,138
R
380,458,181 260,372,778 640,830,959
(20,735,927) (7,249,749) (27,985,676) W
i
359,722,254 253,123,029 612,845,283 =
a
$ 353,607,679 $ 262,588,742 $ 616,196,421
c
m
E
M
U
Q
23 .Packet P,g 464
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Balance Sheet
Governmental Funds
June 30, 2013
N
Special Revenue a=i
Low and m
r
Moderate
r
Federal and Income N
16
General State Grants Housing
_
Assets: c
Cash and investments $ 908,601 $ - $ 93,963 U-
Cash and investments with 2
N
fiscal agents 1,276,167 - - 1°
m
Deposits 68,015 - 200,000 M
Receivables,net: C�
Accounts 3,741,423 829,620 - N
Interest 10,629 - 277 L-
Notes - 3,496,788 38,807,816
Special assessments - - -
Prepaids 6,361 - - N
Due from other governments 5,393,019 3,495,859 342,260 �
Due from other funds 2,054,756 - -
Advances to other funds - - 9,477,033 :3
Other assets - - - Q
Property held for resale - 16,296,266 18,425,466 N
Total Assets $ 13,458,971 $ 24,118,533 $ 67,346,815
M
r
O
N
(Continued) M
a�
c
a�
_
W
M
m
0
CL
d
o:
�a
_
M
c
U.
ca
c
a
E
w
Q
The accompanying notes are an integral part of these financial statements. Packet Pg.465
24
CITY OF SAN BERNARDINO,CALIFORNIA
Balance Sheet(Continued)
Governmental Funds
June 30, 2013
Special Revenue a=i
E
am
Sales Nonmajor Total
and Governmental Governmental N
R
Road Funds Funds U
c
M
c
$ 5,760,804 $ 28,285,768 $ 35,049,136 U.
2
U)
- - 1,276,167 m
268,015 M
N
- 60,814 4,631,857 N
4,195 19,266 34,367 �
- - 42,304,604
267,093 267,093
- - 6,361 N
LL
564,571 536,015 10,331,724 -0
- - 2,054,756 d
164,000 9,641,033
214,671 214,671 `t
- - 34,721,732 N
$ 6,329,570 $ 29,547,627 $ 140,801,516 `t
M
r
O
N
C
M
Q
C
7
"a
C
W
L
d
L
O
Q
Ndy
LL
LL
Q
E
V
25 packet Pg 466 -,
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Balance Sheet
Governmental Funds
June 30, 2013
w
Special Revenue a0i
Low and
Moderate �+
r
Federal and Income U)
�a
General State Grants Housing
Liabilities: c�a
Accounts payable $ 4,941,026 $ 728,433 $ 15,654 E
Accrued expenses 103,519 73,276 -
Due to other funds 294,503 277,365 24,451 m
Retentions payable - 25,307 - M
Accrued interest payable 30,000 - - N
Deposits - - - o
Unearned revenue - 507,560 - I-
M
Due to CalPERS 12,214,167 206,656 - }
Advances from other funds - 9,347,333 -
Due to other governments 427,902 940,880 3,415,155 _y
Due to Successor Agency 2,232,925 - - u_
Total Liabilities 20,244,042 12,106,810 3,455,260 d
=a
Deferred Inflows of Resources: a
Unavailable revenues 361,084 1,087,555 - N
T
Fund Balances(Deficit):
Nonspendable: M
Deposits 68,015 - 200,000 C)
Prepaids 6,361 - - c
M
Restricted for: d
Low-Moderate Income Housing - - 63,691,555
Special revenue funds - 10,924,168
Debt service - -
Capital projects - - - �j
Unassigned (7,220,531) - -
Total Fund Balances(Deficit) (7,146,155) 10,924,168 63,891,555
0
CL
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances(Deficit) $ 13,458,971 $ 24,118,533 $ 67,346,815
C
0
(Continued) _
LL
C
C
a
C
E
w
a
The accompanying notes are an integral part of these financial statements.
26 Packet Pg 46T:-
f A a PM P
CITY OF SAN BERNARDINO,CALIFORNIA
Balance Sheet(Continued)
Governmental Funds
June 30,2013
Special Revenue
Sales Nonmajor Total
and Governmental Governmental y
�a
Road Funds Funds
c
c�
$ 30,548 $ 2,133,537 $ 7,849,198
LL
- 331 177,126 2
1,777,391 2,373,710 m
- 110,423 135,730 c)
- 30,000 N
54,109 54,109 c
- - 507,560 04
c�
12,317 243,610 12,676,750
- 293,700 9,641,033
- 4,783,937 _N
- - 2,232,925 L-
42,865 4,613,101 40,462,078
Q
42,339 567,156 2,058,134 N
Cl)
T-
- - 268,015 N
6,361 c
M
Q
- - 63,691,555
6,244,366 6,363,741 23,532,275
- 80,934 80,934
- 20,426,940 20,426,940 to
- (2,504,245) (9,724,776)
6,244,366 24,367,370 98,281,304
0
a
m
$ 6,329,570 $ 29,547,627 $ 140,801,516
c
ca
c
'u.
R
C
c
Q
c
m
E
t
U
R
w
Q
et
27 PackPg 4�8
,6Aa
CITY OF SAN BERNARDINO,CALIFORNIA
Reconciliation of the Balance Sheet of
Governmental Funds to the Statement of Net Position
June 30,2013
Fund balances of governmental funds $ 98,281,304
m
Amounts reported for governmental activities in the statement of net position
are difference because: N
�a
Capital assets used in governmental activities are not financial resources and,
therefore,are not reported in the funds. U.
v
U)
Capital assets not being depreciated 124,752,102 m
Capital assets being depreciated,net of accumulated depreciation 278,289,098
T
N
Some liabilities, including bonds payable,are not due and payable in the c
N
current period and,therefore,are not reported in funds. M
m
Pension obligation bonds $ (46,140,860)
Certificates of participation (4,270,000) '-
Notes payable (8,366,000) d
Lease revenue bonds (7,505,000)
OPEB obligation payable (28,097,857) Q
Capital leases payable (1,386,874)
N
Compensated absences (11,626,511)
Accrued interest payable (398,599) r�
Accreted interest payable (5,721,622) N
California Infrastructure Bank lease agreement (6,672,290) M
HUD CDBG liability (2,064,243) (122,249,856)
Internal service funds are used by management to charge various costs to
individual funds. The assets and liabilities of the internal service funds are
c
included in the governmental activities in the statement of net position. (27,523,103) w
L
Certain accounts receivable and intergovernmental receivables are not >-
available to pay current expenditures in the governmental funds. 2,058,134 c
CL
co
Net position of governmental activities $ 353,607,679
_
U.
�a
Q
c
m
E
t
ca
Q
The accompanying notes are an integral part of these financial statements.
9
28 °Packet P.g 46 it
N
C
d
E
d
a+
R!
cn
�V
C
t0
C
U-
2
N
m
m
M
r
N
r
O
N
L
V
N_
LL
d
Q
N
T
This page intentionally left blank. M
r
CO
N
O
M
d
C
7
d
C
W
L
d
O
Q.
NNd
I.L
LL
Q
Y
E
V
.N
r
a
29 �,.4Pac�ket�Pg $70;;
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Revenues,Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30,2013
N
Special Revenue d
Low and E
Moderate
Federal and Income
General State Grants Housing
Revenues: v
C
Taxes $ 92,938,293 $ $ -
Licenses and permits 9,610,001 -
LL
Impact fees - v_
Fines and forfeitures 1,844,472
M
Investment income 781,805 38,688 20,908 M
Lease - - 12,942 r
Intergovernmental 2,069,546 12,866,778 - N
Charges for services 7,714,126 2,469 - o
Other 5,996,558 23,327 342,260 L
Total revenues 120,954,801 12,931,262 376,110
d
Expenditures: V
Current: N
U-
General government 15,180,419 1,019,341
Public safety 87,895,396 4,753,493 a;
Streets 1,130,164 601,394 - 'a
Culture and recreation 4,289,420 966,786 - Q
Community development 4,506,448 886,031 214,635 0
Community service 1,712,292 3,639,310 - N
T
Debt service:
Principal 2,736,731 823,466 M
Interest and fiscal charges 877,552 454,312 - c
Total expenditures 118,328,422 13,144,133 214,635 N
0
Excess(deficiency)of revenues over(under)expenditures 2,626,379 (212,871) 161,475 Cl)
d
C
Other financing sources(uses):
Proceeds from sale of property 1,243 78,345 62,885 a
d
Transfers in 2,231,852 - -
Transfers out (384,374) - W
Total other financing sources(uses) 1,848,721 78,345 62,885 M
d
Net change in fund balances 4,475,100 (134,526) 224,360 0
O.
Fund balances(deficit),beginning of year, W
as previously reported (11,541,823) 8,624,303 67,486,574
c
Prior period adjustments(Note 23) (79,432) 2,434,391 (3,819,379)
LL
Fund balances(deficit),July 1,2012,as restated (11,621,255) 11,058,694 63,667,195
3
C
Fund balances(deficit),June 30,2013 $ (7,146,155) $ 10,924,168 $ 63,891,555 Q
r
(Continued)
E
V
M
r
Q
The accompanying notes are an integral part of these financial statements.
Racket Pg 471
30
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Revenues,Expenditures and Changes in Fund Balances(Continued)
Governmental Funds
For the Year Ended June 30,2013
N
r
Special Revenue
E
Sales Nonmajor Total
and Governmental Governmental
Road Funds Funds
.v
C
$ $ 1,995,515 $ 94,933,808 =
1,026,855 10,636,856 LL
- 1,771,424 1,771,424 v
- 1,844,472
cC
(4,130) (149,023) 688,248 m
- - 12,942 M
r
3,075,930 7,785,208 25,797,462 N
- 4,375,301 12,091,896 N
8,170 6,370,315
3,071,800 16,813,450 154,147,423 y
v
N_
LL
93,502 16,293,262 a
- 1,459,883 94,108,772 a;
1,077,685 11,176,747 13,985,990
- 11,435 5,267,641 Q
- 5,607,114
6,521 5,358,123 r
d'
1,224,286 4,784,483 c)
- 206,152 1,538,016 c
1,077,685 14,178,526 146,943,401 N
0
1,994,115 2,634,924 7,204,022 Cl)
d
C
O
- - 142,473
250,000 134,374 2,616,226 =
- (31,852) (416,226) u1
250,000 102,522 2,342,473 M
d
2,244,115 2,737,446 9,546,495 i
O
CL
O
fY
3,790,720 21,629,924 89,989,698
U
209,531 - (1,254,889) M
a
U-
4,000,251 21,629,924 88,734,809
3
$ 6,244,366 $ 24,367,370 $ 98,281,304 Q
c
d
)_
s
Q
31 PacketPg 472
,, �- SFr
6 Aga
CITY OF SAN BERNARDINO,CALIFORNIA
Reconciliation of the Statement of Revenues,
Expenditures,and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
For the Year Ended June 30,2013
c
d
E
Net change in fund balances-total governmental funds $ 9,546,495 N
r
Amounts reported for governmental activities in the statement of activities are different
because: c=c
_
Governmental funds report capital outlays as expenditures. However, in the statement L
of activities the cost of those assets is allocated over their estimated useful lives and
co
reported as depreciation expense. This is the amount by which capital outlay was m
M
exceeded by depreciation,net of disposals. N
Capital outlay $ 3,343,257 CM
Depreciation (18,257,446) (14,914,189)
m
Certain revenues in the governmental funds are deferred because they are measurable
but not available under the modified accrual basis of accounting. However, the
revenues are included under the accrual basis of accounting used in the government-
wide statements. This amount represents the change during the year. 1,001,618 a
Payment of debt principal are reported as expenditures in governmental funds but N
reduce long-term liabilities in the statement of net assets. 4,784,483
M
Some expenses reported in the statement of activities do not require the use of current c
financial resources and therefore are not reported as expenditures in governmental N
0
funds.
d
Change in compensated absences $ 6,748,489
Change in accrued interest payable (779,722)
Change in unfunded OPEB obligation (3,029,256) w
Change in HUD CDBG liability (2,064,243) 875,268
m
Internal service funds are used by management to charge costs of activities involved }
in rendering services to departments within the City. The changes in net position of o
M
the internal service funds are included in the statement of activities. (7,408,250)
Change in net position of governmental activities $ (6,114,575)
c
c�
_
U_
�a
c
Q
w
m
E
U
r
Q
The accompanying notes are an integral part of these financial statements.
32 P cket}P,9 4 3 t
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Net Position
Proprietary Funds
June 30,2013
N
Governmental
d
Business-type Activities-Enterprise Funds Activities E
Integrated Internal Service
Waste Water Sewer Total Funds +'
Assets:
tC
Current assets: V
Cash and cash equivalents $ 3,863,601 $ 3,907,967 $ 8,450,693 $ 16,222,261 $ 4,761,539
Investments - 8,115,075 21,575,650 29,690,725 - _G
Receivables,net: U_
Accounts 20,258 7,041,416 3,319,831 10,381,505 13,070 0
Interest - 28,632 81,979 110,611 - N
t4
Inventory - 1,572,462 - 1,572,462 252,086 CD
Prepaids - 111,030 122,911 233,941 126,383 M
Due from other governments - 2,598,632 557,927 3,156,559 100,223 `-
N
Due from other funds 2,477,405 485,311 12,793 2,975,509 2,193,448 C
Total current assets 6,361,264 23,860,525 34,121,784 64,343,573 7,446,749 N
L
Noncurrent assets: CD
41
Prepaids 724,481 724,481 >_
Investments in joint venture 24,836,034 24,836,034 V
Restricted assets: N
Cash-Capital-related fees - 7,799,773 7,799,773 U.
Cash-Consent Decree 1,465,423 - 1,465,423
Investments-Consent Decree 19,540,918 19,540,918 r
Interest receivable 67,693 67,693 'a
Prepaid insurance-Consent Decree 33,826,734 33,826,734 Q
Note proceeds held by State 3,199,445 - 3,199,445
Capital assets: N
Land and easements 24,185,954 17,746,483 41,932,437 - r
Intangible assets,net 4,509,298
Capital assets being cM
r
depreciated,net 6,987,336 150,808,068 37,055,203 194,850,607 1,154,612 0
N
Total noncurrent assets 6,987,336 233,094,235 88,161,974 328,243,545 5,663,910 C
Total assets 13,348,600 256,954,760 122,283,758 392,587,118 13,110,659 M
d
C
Deferred Outflows of Resources: O
Deferred charge on refunding 150,948 150,948 D
d
.a
C
W
(Continued) ti.
M
d
O
CL
M
W
�9
U
C
M
G
LL
cC
7
C
C
Q
r..
C
d
E
L
V
R
w
r-+
Q
The accompanying notes are an integral part of these financial statements.
Packet�:g 474''
33 N
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Net Position(Continued)
Proprietary Funds
June 30, 2013
Governmental
O
Business-type Activities-Enterprise Funds Activities E
Integrated Internal Service +;
Waste Water Sewer Total Funds y
Liabilities: to
Current liabilities: @
Accounts payable $ 906,752 $ 2,086,385 $ 1,577,386 $ 4,570,523 $ 2,177,185 U
Accrued payroll - 717,096 281,277 998,373 - R
Accrued liabilities - - - - 1,158 =
Interest payable 49,262 276,918 288,118 614,298 - U-
Due to other funds - 2,208,547 268,858 2,477,405 2,372,598 .N V
Due to other governments 748,257 - - 748,257 - m
Deposits payable - 478,512 478,512 -
Due to CalPERS 539,223 - - 539,223 432,473 Cl)
Claims and judgments payable - 568,849 268,225 837,074 3,815,102 N
Compensated absences 283,603 590,873 296,450 1,170,926 43,920
0
Capital leases payable 2,550,418 - - 2,550,418 67,840 tV
Due to New World - - - - 528,381
Notes payable - 1,658,268 1,619,090 3,277,358 - }
Certificates of participation - - 2,785,324 2,785,324
OPEB obligation 351,223 - - 351,223 - N
Total current liabilities 5,428,738 8,585,448 7,384,728 21,398,914 9,438,657 LL
N
Noncurrent liabilities:
Consumer deposits - 2,968,763 2,968,763
Accrued liabilities 7,080,360 - 7,080,360 Q
Claims and judgments payable - - - 26,919,940 M
Compensated absences 128,758 672,562 132,505 933,825 377,761 N
Unearned revenue-Consent Decree - 54,900,768 - 54,900,768 -
Capital leases payable 4,792,949 - 4,792,949 390,540
Due to New World - - - - 3,506,864
Notes payable 22,800,342 3,374,135 26,174,477 - N
Certificates of participation - - 9,292,368 9,292,368 C
OPEB obligation 819,521 1,158,116 629,263 2,606,900 - M
d
Total noncurrent liabilities 12,821,588 82,500,551 13,428,271 108,750,410 31,195,105 =
O
Total liabilities 18,250,326 91,085,999 20,812,999 130,149,324 40,633,762 -a
d
Net Position:
C
Net investment in capital assets (356,031) 153,734,857 37,730,769 191,109,595 1,170,285 W
Restricted for: L
R
Capital related fees - 7,799,773 7,799,773 - tv
Unrestricted(deficit) (4,545,695) 12,133,904 56,091,165 63,679,374 (28,693,388)
O
Total net position(deficit) $ (4,901,726) $ 165,868,761 $ 101,621,707 $ 262,588,742 $ (27,523,103) iz
d
lY
C
cv
C
LL
t0
C
C
Q
C
O
E
M
U
M
Q
34
Paet Pg
ck 475
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Revenues,Expenses and Changes in Fund Net Position
Proprietary Funds
For the Year Ended June 30,2013
Governmental =
d
Business-type Activities-Enterprise Funds Activities E
Integrated Internal Service
Waste Water Sewer Total Funds +
Operating revenues:
Charges for services $ 24,897,368 $ 35,427,095 $ 25,261,792 $ 85,586,255 $ 23,666,904 v
Other operating revenues 70,672 2,441,751 1,152,861 3,665,284 -
Total operating revenues 24,968,040 37,868,846 26,414,653 89,251,539 23,666,904 =
u.
Operating expenses: v
y
Cost of sales and services 12,611,875 - - 12,611,875 15,633,676 m
Administration 6,521,704 9,568,608 1,653,263 17,743,575 - M
Engineering,operations and
distribution administration - 6,581,180 2,801,450 9,382,630 N
r
Plant operations 7,089,520 9,448,306 16,537,826
N
Maintenance - 1,888,236 3,392,868 5,281,104
Environmental control 2,073,416 - 592,589 2,666,005
Distribution - 3,983,818 - 3,983,818
Engineering 2,813,459 2,813,459 - V
Claims expense - - - - 14,482,412 N
Depreciation and amortization 3,058,127 5,505,403 4,408,721 12,972,251 1,719,326 LL
•>3
Total operating expenses 24,265,122 37,430,224 22,297,197 83,992,543 31,835,414 0�
:a
Operating income(loss) 702,918 438,622 4,117,456 5,258,996 (8,168,510)
Q
Nonoperating revenues(expenses):
Investment income/(loss) 26,061 (79,281) 340,689 287,469 (25,213) C14
Rental income 122,826 22,574 145,400
Noncapital grants 3,110,201 - 3,110,201 ch
Interest expense and fiscal charges (378,023) (610,384) (828,129) (1,816,536) (66,017) p
Loss on disposal of capital N
assets - (261,946) (11,644) (273,590) V)
M
Amortization of issuance costs (94,188) (94,188) y
Miscellaneous income - - 851,490 =
Other 211,032 (59,992) 151,040 -
d
Total nonoperating revenues(expenses) (351,962) 2,492,448 (630,690) 1,509,796 760,260
Income(loss)before contributions LV
and transfers 350,956 2,931,070 3,486,766 6,768,792 (7,408,250)
Contributions and transfers: L
Capital contributions 3,421,521 1,475,400 4,896,921 0
Q
Transfers out (2,200,000) - - (2,200,000) )
Total contributions and transfers (2,200,000) 3,421,521 1,475,400 2,696,921
.0
Change in net position (1,849,044) 6,352,591 4,962,166 9,465,713 (7,408,250) C
Net position(deficit),beginning of =
year,as previously stated (3,052,682) 161,762,619 101,662,841 260,372,778 (20,129,262) E
Prior period adjustments(Note 23) (2,246,449) (5,003,300) (7,249,749) 14,409 N
Total net position,July 1,2012,as =
restated (3,052,682) 159,516,170 96,659,541 253,123,029 (20,114,853)
Q
r
Total net position(deficit),June 30,2013 $ (4,901,726) $ 165,868,761 $ 101,621,707 $ 262,588,742 $ (27,523,103)
E
s
Q
The accompanying notes are an integral part of these financial statements.
35 #?acket
a
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30,2013
Governmental =
d
Business-type Activities-Enterprise Funds Activities d
Integrated Internal Service
Waste Water Sewer Total Funds
Cash flows from operating activities:
Cash received from customers $ 24,687,631 $ 35,386,571 $ 26,069,504 $ 86,143,706 $ -
Cash received from user departments - - - - 23,631,759
Cash payments to suppliers for goods E LL
and services (18,152,785) (18,392,370) (12,636,813) (49,181,968) (15,427,686) v
Cash payments for claims and
insurance - - - (4,578,232) m
Cash payments to employees for
services (10,540,313) (4,268,951) (14,809,264) N
Cash received from(paid for) N
other activities 70,672 333,858 (37,418) 367,112 725,106 L
Net cash provided by M
operating activities 6,605,518 6,787,746 9,126,322 22,519,586 4,350,947
V
N
LL
Cash flows from noncapital a
financing activities:
Cash paid to RIX joint venture - (9,483) (9,483) -
Transfer to other funds (2,200,000) - (2,200,000) - Q
Proceeds(disbursements) interfund loans (511,855) - - (511,855) 1,246,593
Consent decree insurance drawdowns 2,272,184 2,272,184 - N
Net cash provided by(used for)
noncapital financing activities (2,711,855) 2,272,184 (9,483) (449,154) 1,246,593
r
0
Cash flows from capital and related N
financing activities: M
Acquisition of capital assets (19,222,613) (2,923,265) (22,145,878)
Proceeds from capital debt 6,800,555 6,800,555 -
Principal payments on long-term debt (2,936,690) (1,227,491) (4,724,227) (8,888,408) (690,358)
Interest paid on long-term debt (328,761) (547,616) (757,010) (1,633,387) (120,838)
Proceeds from/(cost of)disposal C
of capital assets - (77,283) (1,982) (79,265) W
L
Charges to property owners for
capital projects 2,760,023 1,475,400 4,235,423 - >-
Grant proceeds received 661,498 - 661,498
Net cash used for capital and Q
related financing activities (3,265,451) (10,852,927) (6,931,084) (21,049,462) (811,196) W
(Continued) U
C
R
C
LL
t0
C
C
Q
C
d
E
L
V
r
Q
The accompanying notes are an integral part of these financial statements.
36 Packet Pg j47�7;-
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Cash Flows(Continued)
Proprietary Funds
For the Year Ended June 30,2013
Governmental
d
Business-type Activities-Enterprise Funds Activities E
Integrated Internal Service
Waste Water Sewer Total Funds
Cash flows from investing activities:
Sale of investments $ $ 12,732,392 $ 2,288,725 $ 15,021,117 $
Purchase of investments - (20,866,636) (23,994,336) (44,860,972)
Investment income/(loss) 26,061 442,818 1,322,120 1,790,999 (24,805) U-
Net cash provided by(used for) 2
investing activities 26,061 (7,691,426) (20,383,491) (28,048,856) (24,805)
m
Net increase(decrease)in cash and M
T
cash equivalents 654,273 (9,484,423) (18,197,736) (27,027,886) 4,761,539 cv
0
Cash and cash equivalents,beginning i
of year 3,209,328 14,857,813 34,448,202 52,515,343 - y
Cash and cash equivalents,end of year $ 3,863,601 $ 5,373,390 $ 16,250,466 $ 25,487,457 $ 4,761,539 v
N_
IL
Reconciliation of cash and cash equivalents
to amounts reported on statement of
net position:
Q
Cash and cash equivalents $ 3,863,601 $ 3,907,967 $ 8,450,693 $ 16,222,261 $ 4,761,539
Cash and investments: - - N
Restricted for capital related fees 7,799,773 7,799,773 p
Restricted for Consent Decree 1,465,423 1,465,423 M
r
0
Cash and cash equivalents,end of year $ 3,863,601 $ 5,373,390 $ 16,250,466 $ 25,487,457 $ 4,761,539 N
0
M
d
C
(Continued) �
d
C
W
L
d
L
0
M
d
0
0
0
U.
0
3
0
Q
•i+
E
t�
0
i.+
Y
Q
The accompanying notes are an integral part of these financial statements.
37
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Cash Flows(Continued)
Proprietary Funds
For the Year Ended June 30,2013
Governmental O
d
Business-type Activities-Enterprise Funds Activities d
Integrated Internal Service
Waste Water Sewer Total Funds
Reconciliation of operating income
(loss)to net cash provided by V
C
operating activities: _
Operating income(loss) $ 702,918 $ 438,622 $ 4,117,456 $ 5,258,996 $ (8,168,510) Li
Adjustments to reconcile operating 2
income(loss)to net cash provided
by operating activities: m
Depreciation and amortization 3,058,127 5,505,403 4,408,721 12,972,251 1,719,326 r
Other nonoperating revenues N
(expenses) - 333,858 (37,418) 296,440 851,488 N
(Increase)decrease in assets:
Accounts receivable (16,840) (429,273) (130,635) (576,748) (10,095)
Other receivables - - 931
Inventory - 43,288 - 43,288 (35,705) V
Prepaids - 1,029,356 73,223 1,102,579 (126,383) N
U-
Due from other governments 19,519 (1,807,808) (214,514) (2,002,803) (24,118) .a
Due from other funds (212,416) 278,711 (66,295) - O
w
Increase(decrease)in liabilities:
Accounts payable and Q
accrued payroll (428,809) 220,013 288,514 79,718 380,607
Accrued liabilities 2,080,360 2,080,360 156,022 N
Deposits payable - (245,194) - (245,194) -
Claims and judgments payable 240,861 171,772 412,633 9,813,070 M
Compensated absences (307,308) 21,793 (113,765) (399,280) (466,592) c
Due to CalPERS 539,223 - - 539,223 262,768 N
OPEB obligation 1,170,744 1,158,116 629,263 2,958,123 - M
d
Net cash provided by
operating activities $ 6,605,518 $ 6,787,746 $ 9,126,322 $ 22,519,586 $ 4,350,947
m
Noncash investing,capital,and C
financing activities: ILI
Acquisition of capital asset through
note payable $ $ 1,117,500 $ $ 1,117,500 $ >-
Changes in fair value of investments - (114,068) (114,068) It!
O
M
d
Q.
C
c0
C
LL
3
C
C
a
4i
Q
E
Q
The accompanying notes are an integral part of these financial statements.
3 8 Pat:ket Pg w 479
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Fiduciary Net Position
June 30,2013
M
Redevelopment E
Obligation Water
Retirement Fund Department to
(Successor OPEB Trust
Agency) Fund Agency Funds
Assets: t4
_
Cash and investments $ 23,384,622 $ 9,711,947 $ 4,432,576 ji
Cash with fiscal agents 30,007,728 - - _v
Accounts receivable,net 133,764 - 16,650 w
Prepaids - - 238 M
M
Interest receivable 16,534 - -
Notes receivable 3,878,406 - N
r
Property held for resale 48,880,924 - - N
Capital assets:
Not being depreciated 11,631,572 - -
Being depreciated,net 8,031,274 - -
v
Total assets 125,964,824 9,711,947 $ 4,449,464 N
LL
Deferred Outflows of Resources:
Loss on refundings of bonds 1,755,033
O
Q
Liabilities:
Accounts payable 436,801 - $ 227,693 N
Retention payable 143,505 j
Deposits payable 4,532 - 3,704,083 M
Interest payable 2,201,550 - - c
Long-tern liabilities: N
Due within one year 9,353,944 - - M
Due in more than one year 157,360,558 - - c
Due to bond holders - - 517,688
Due to other governments 703,469 - - -a
d
Total liabilities 170,204,359 - $ 4,449,464
_
W
L
Net Position(Deficit)
Restricted for dissolution of economic redevelopment agency (42,484,502) t
O
Restricted for the payment of other post-employment benefits - 9,711,947 Q-
d
Total net position(deficit) $ (42,484,502) $ 9,711,947
.v
_
R
_
io
_
_
Q
w
_
O
E
v
R
Q
The accompanying notes are an integral part of these financial statements.
et
39 Pack I',g 480
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30,2013
w
c
Redevelopment
Obligation Water a)
Retirement Fund Department a
(Successor OPEB Trust
Agency) Fund
w
Additions:
Taxes and special assessments $ 24,271,655 $ -
Employer contributions - 573,621 LL
v
Employee contributions - 138,538 y
Investment income 334,333 1,022,577
m
Lease revenue 2,261,346 - Cl)
r
Other revenues 424,016 - N
Total additions 27,291,350 1,734,736 c°14
L
Deductions: 4)
Redevelopment 8,568,359 - }
Debt service-interest 10,195,766 N
Benefits payments - 712,159
Trust fees - 4,465
Depreciation and amortization 665,095 -
Total deductions 19,429,220 716,624 <
Q
Change in net position 7,862,130 1,018,112
N
r
Net position,beginning of year (57,431,777) 8,693,835 d
Prior year adjustments(Note 25) 7,085,145 - c
Net position(deficit),beginning of year,as restated (50,346,632) 8,693,835 N
0
Net position(deficit),end of year $ (42,484,502) $ 9,711,947
d
d
c
W
cC
d
}
L
O
a
C
Q
id
E
s
c�
r
Q
The accompanying notes are an integral part of these financial statements.
40 Packet Pg 481
'6Aa
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements
Year Ended June 30,2013
(1) Summary of Significant Accounting Policies
a�
The City of San Bernardino, California(City) was incorporated on April 13, 1854, as a Charter City.
The City operates under a Mayor/Council/City Manager form of government and provides the
following services: public safety (police and fire), highways and streets, health and social services,
culture-recreation, public improvements, community development (planning, building and zoning),
public utilities(water,sewage and solid waste), and general administrative services.
c
ii
(a) Reporting Entity V
N
co
m
Blended component units, although legally separate entities are, in substance, part of the primary M
government's operations and so data from these units is combined with data of the primary v
government. Component units should be included in the reporting entity financial statements N
using the blended method in any of the following circumstances:
m
i. The component unit's governing body is substantially the same as the governing body of the >-
75
primary government (the City) and (1) the existence of a financial benefit or burden relationship N
between them or (2) management of the City has operational responsibility for the component L-
unit.
=a
ii. The component unit provides services entirely, or almost entirely, to the primary government or Q
otherwise exclusively, or almost exclusively, benefits the primary government even though it a;
does not provide services directly to the City. r
iii. The component unit's total debt outstanding, including leases, is expected to be repaid entirely or
almost entirely with City resources. c°�
0
M
The component units discussed below are included in the reporting unit because the City Council c
serves as the governing board and the City's management has operational responsibility over
them. -a
m
v
On December 16, 2009, the Economic Development Agency (EDA) acquired the Global Mobile w
home Park Corporation,a not-for-profit corporation(501(c)(3)),from the Redevelopment Agency d
of the City of Pomona for the redevelopment purposes of the EDA as authorized by Resolution >-
2009-16 of the Community Development Commission of the City of San Bernardino on May 4, o
2009, and approved on May 5, 2009. The mayor and common council of the City of San
Bernardino serve ex officio as the chairperson and members of the Community Development
Commission of the City of San Bernardino, respectively. On September 23, 2009, the
Corporation amended its Articles of Incorporation to rename the Corporation the "Affordable
Housing Solutions of San Bernardino Inc." (AHS), which was endorsed and filed in the office of
the Secretary of State of the State of California on October 9, 2009. AHS is not currently active
3
and has no assets. _
c
Q
The San Bernardino Joint Powers Financing Authority (Authority) was established pursuant to a
Joint Exercise of Powers Agreement dated August 21, 1989, by and between the City and the
EDA. The EDA was dissolved during fiscal year 2012 leaving the City the only member of the
Authority. Please see the next paragraph for further details. The Authority was created for the
purpose of providing financing for redevelopment activities for the City, the EDA, or other local Q
agencies in the State of California,the acquisition, construction or installation by the Authority of
482M
41 PacketvPgr
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
"* Year Ended June 30,2013
public capital improvements and/or the purchase by the Authority of public obligations within the
meaning of the Marks-Roos Act. The Authority is authorized pursuant to the Marks-Roos Act to
borrow money for the purpose of financing the acquisition of bonds, notes and other obligations d
of, or for the purpose of making loans to, the City, the EDA, or such other local agencies to N
provide financing for redevelopment activities of the City or the EDA. The Authority is governed
by a board composed of the City's elected council. There are no individual financial statements
issued for the Authority.
U.
The following organization is considered a fiduciary type component unit of the City. 9
U)
m
The Redevelopment Obligation Retirement Fund (Successor Agency) was created to serve as a M
custodian for the assets and to wind down the affairs of the EDA on February 1, 2012, by state N
law. The Successor Agency is a separate public entity from the City, subject to the direction of N
an oversight board. The City Council serves as the governing board of the Successor Agency.
In general, the Successor Agency's assets can only be used to pay enforceable obligations in }
existence at the date of dissolution (including the completion of any unfinished projects that
were subject to legally enforceable contractual commitments). In future fiscal years, the H
Successor Agency will only be allocated revenue in the amount that is necessary to pay the E
estimated annual installment payments on enforceable obligations of the former EDA until all
enforceable obligations of the former EDA have been paid in full and all assets have been 5
liquidated. Based upon the nature of the Successor Agency's custodial role, the Successor Q
Agency is reported in a fiduciary fund(private-purpose trust fund). a;
N
T
(b) Basis of Accounting and Measurement Focus
M
r
The basic financial statements of the City are composed of the following: c°.i
0
M
• Government-wide financial statements c
• Fund financial statements
• Notes to basic financial statements
m
a
Financial reporting is based upon all Governmental Accounting Standards Board (GASB) W
pronouncements.
Government-wide Financial Statements o
CL
d
Government-wide financial statements (i.e. the statement of net position and the statement of -
activities) report information about the reporting government as a whole, except for its fiduciary 0
activities. These statements include separate columns for the governmental and business-type c
activities of the primary government (including its blended component units), as well as any
U.
discretely presented component units. The City has no discretely presented component units. i
Eliminations have been made in the statement of activities so that certain allocated expenses are c
recorded only once (by the function to which they were allocated). However, general government a
expenses have not been allocated as direct expenses to the various functions of the City.
Government-wide financial statements are presented using the economic resources
measurement focus and the accrual basis of accounting. Under the economic resources ;a
fir A
measurement focus, all (both current and long-term) economic resources and obligations of the
42 Packet Pg 483;-.
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
reporting government are reported in the government-wide financial statements. Basis of
accounting refers to when revenues and expenses are recognized in the accounts and reported in
the financial statements. Under the accrual basis of accounting, revenues, expenses, gains,
losses, assets, deferred outflows of resources, liabilities and deferred inflows of resources
resulting from exchange and exchange-like transactions are recognized when the exchange )
takes place. Revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities 0
and deferred inflows of resources resulting from nonexchange transactions are recognized in =
accordance with the requirements of GASB Statement No. 33. U_
v
N
As a general rule, the effect of interfund activity has been eliminated from the government- M
m
wide financial statements. An exception to this general rule is other charges for goods or M
services provided by one fund to another. Elimination of these would distort the direct costs N
and program revenues reported for the various functions concerned. c
N
L
Program revenues include charges for services, special assessments, and payments made by W
parties outside of the reporting government's citizenry if that money is restricted to a particular
program. Program revenues are netted with program expenses in the statement of activities to
present the net cost of each program. .0)
Amounts paid to acquire capital assets are capitalized as assets in the government-wide
m
financial statements, rather than reported as an expenditure. Proceeds of long-term debt are Q
recorded as a liability in the government-wide financial statements, rather than as another
financing source. Amounts paid to reduce long-term indebtedness of the reporting government N
are reported as a reduction of the related liability,rather than as an expenditure.
M
In the government-wide statements, when an expense is incurred for purposes for which both
restricted and unrestricted net position are available, the City's policy is to apply restricted net N
position first. c°o
m
c
Fund Financial Statements
M
d
The underlying accounting system of the City is organized and operated on the basis of separate
funds, each of which is considered to be a separate accounting entity. The operations of each W
fund are accounted for with a separate set of self-balancing accounts that comprise its assets,
liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental >_
resources are allocated to and accounted for in individual funds based upon the purposes for c
which they are to be spent and the means by which spending activities are controlled.
Fund financial statements for the primary government's governmental, proprietary, and
fiduciary unds are resented after the government-wide financial statements. These statements =
rY p g �
display information about major funds individually and nonmaJ or funds in the aggregate for =
U_
governmental and proprietary funds. Fiduciary statements include financial information for
g p p rY rY
fiduciary funds and similar component units. Fiduciary funds of the City primarily represent
_
assets held by the City in a custodial capacity for other individuals or organizations.
a
Governmental Funds
E
In the fund financial statements, governmental funds are presented using the modified-accrual 0
basis of accounting. Their revenues are recognized when they become measurable and available r
as net current assets. Measurable means that the amounts can be estimated, or otherwise a
a� Packet Pg-�844z
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
determined. Available means that the amounts were collected during the reporting period or
soon enough thereafter to be available to finance the expenditures accrued for the reporting M
period. The City uses an availability period of 60 days for all revenues except reimbursable
grants,which use a six month availability period.
Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle in-lieu, transient
occupancy taxes, grants and interest associated with the current fiscal period are all considered
to be susceptible to accrual and so have been recognized as revenues of the current fiscal period U.
to the extent normally collected within the availability period. Other revenue items are U
considered to be measurable and available when cash is received by the government. m
M
Revenue recognition is subject to the measurable and available criteria for the governmental
funds in the fund financial statements. Exchange transactions are recognized as revenues in c
the period in which they are earned (i.e., the related goods or services are provided). Locally N
imposed derived tax revenues are recognized as revenues in the period in which the underlying
exchange transaction upon which they are based takes place. Imposed nonexchange >"
transactions are recognized as revenues in the period for which they were imposed. If the N
period of use is not specified, they are recognized as revenues when an enforceable legal claim A
to the revenues arises or when they are received, whichever occurs first. Government-
mandated and voluntary nonexchange transactions have been recognized as revenues when
all applicable eligibility requirements have been met.
Q
In the fund financial statements, governmental funds are presented using the current financial r
resources measurement focus. This means that only current assets and current liabilities are
generally included on their balance sheets. The reported fund balance (net current assets) is M
considered to be a measure of"available spendable resources." Governmental fund operating c
N
statements present increases (revenues and other financing sources) and decreases c
(expenditures and other financing uses) in net current assets. Accordingly, they are said to
present a summary of sources and uses of"available spendable resources" during a period.
Noncurrent portions of long-term receivables due to governmental funds are reported on their
balance sheets in spite of their spending measurement focus. However, special reporting =
W
treatments are used to indicate that they should not be considered "available spendable
resources," since they do not represent net current assets. Recognition of governmental fund
type revenue represented by noncurrent receivables is deferred until they become current
receivables. °a
Due to the nature of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by noncurrent liabilities. Since they do =
not affect net current assets, such long-term amounts are not recognized as governmental fund c
type expenditures or fund liabilities. u-
�a
Amounts expended to acquire capital assets are recorded as expenditures in the year that
resources were expended, rather than as fund assets. The proceeds of long-term debt are Q
recorded as other financing sources rather than as a fund liability. Amounts paid to reduce
long-term indebtedness are reported as fund expenditures. E
s
U
When expenditures are incurred for purposes for which both restricted and unrestricted
(committed, assigned, or unassigned) fund balances are available, the City's policy is to apply
Q
restricted first. When expenditures are incurred for purposes for which committed, assigned, or
unassigned fund balances are available, the City's policy is to apply committed fund balance
first,then assigned fund balance, and finally unassigned fund balance.
AA jacket P 485
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Proprietary Funds
d
The City's enterprise and internal service funds are proprietary funds. In the fund financial
statements, proprietary funds and fiduciary funds are presented using the accrual basis of
co
accounting. Revenues are recognized when they are earned and expenses are recognized when the
related goods or services are delivered. In the fund financial statements, proprietary funds and 0
fiduciary funds are presented using the economic resources measurement focus. This means that
all assets and all liabilities (whether current or noncurrent) associated with their activity are U.
included on their statements of net position. Proprietary fund type operating statements present 2
.y
increases(revenues) and decreases(expenses)in total net position.
m
M
Proprietary fund operating revenues, such as charges for services, result from exchange C,
transactions associated with principal activity of the fund. Exchange transactions are those in o
which each party receives and gives up essentially equal values. Operating expenses for the
proprietary funds include the cost of sales and services, administrative expenses,and depreciation
on capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses. Nonoperating revenues, such as subsidies, taxes and N
investment earnings result from nonexchange transactions or ancillary activities.Amounts paid to U_
acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather
than reported as expenditures. Proceeds of long-term debt are recorded as liabilities in the 5
proprietary fund financial statements, rather than as other financing sources. Amounts paid to Q
reduce long-term indebtedness of the proprietary funds are reported as a reduction of the related a;
liability,rather than as expenditures. r
Fiduciary Funds
0
N
The City maintains two fiduciary fund types. The first is a private-purpose trust fund, c
M
which uses the economic resources measurement focus and the accrual basis of accounting.
Private-purpose trust funds are used to report trust arrangements under which principal and
income benefit individuals, private organizations, or other governments. The second is an
agency fund, which has no measurement focus. Agency funds are custodial in nature (assets a
equal liabilities) and do not involve the recording of City revenues and expenses. The w
Successor Agency and the Water Department OPEB Trust Fund are reported as private- M
purpose trust funds within these statements.
0
(c) Fund Classifications d
The funds designated as major funds are determined by a mathematical calculation
consistent with GASB Statement No. 34. In addition, the City may elect to classify any
fund as major when management believes that the fund is particularly important to
U_
financial statement users.
c
The City reports the following major governmental funds:
Q
General Fund—This is the primary operating fund of the City. It accounts for all activities of
the general government, except those required to be accounted for in another fund.
c�
a
45
Packel�Pg�486 ;'
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Federal and State Grants Fund—This fund is used to report various grants awarded to the City
c
by the Federal, State and local governments not otherwise accounted for in the General Fund or d
Capital Projects Funds. A detailed report by program is available under a separate report m
meeting the criteria of the Office of Management and Budget Circular A-133,Audits of States,
Cn
Local Governments, and Non-Profit Organizations, for all federal grants received by the City.
Low and Moderate Income Housing Fund— This fund is used for the continued maintenance
and operations of low and moderate income housing project activities of the former 'U_
redevelopment agency. This fund was established on February 1, 2012, when the City elected
.N
to become the Housing Successor to the housing related activities of the former redevelopment
m
agency. ch
T
N
Sales and Road Fund — This fund is used to account for the local street improvements as o
provided for by San Bernardino County Measure I Sales Tax.
m
The City reports the following major enterprise funds:
N
Integrated Waste Fund— This fund is used to account for the provision of refuse collection to U_
the residential, commercial and industrial segments of the City. All activities necessary to .�
provide such services are accounted for in this fund, including, but not limited to, =a
administration, operations, maintenance, financing and related debt service, and billing and Q
collection. a;
N_
Water Fund — This fund is used to account for the provision of water services to the `t
residential, commercial and industrial segments of the City. All activities necessary to provide
such services are accounted for in this fund, including, but not limited to, administration, c°v
operations,maintenance, financing and related debt service, and billing and collection. M
CD
Sewer Fund — This fund is used to account for the provision of wastewater collection and
treatment to residential, commercial and industrial segments of the City. All activities -a
necessary to provide such services are accounted for in this fund, including, but not limited to,
administration, operations, maintenance, financing and related debt service, and billing and w
collection.
d
The City's fund structure also includes the following fund types: o
CL
m
Special Revenue Funds—These funds are used to account for the proceeds of specific revenue
sources that are legally restricted or committed and expended for specified purposes other than
debt service or capital projects.
c
LL
Debt Service Funds — These funds are used to account for the accumulation of resources that
are restricted, committed or assigned for, and the payment of principal, interest, and related =
costs of the long-term debt of the governmental funds. _
a
Capital Projects Funds — These funds are used to account for financial resources that are m
restricted, committed or assigned for the acquisition or construction of major capital facilities t
(other than those financed by proprietary funds).
a
a�
-ac 's 487
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Internal Service Funds — These funds are used to account for the financing of goods or
c
services provided by one department to other departments of the City on a cost-reimbursement
basis. These services include unemployment insurance, workers' compensation, liability d
insurance,motorpool,telephone support, information systems,utility and central services. N
Agency Funds — These funds are used to account for money and property held by the City as
trustee or custodian. Such funds include Special Deposits, Cemetery Perpetual Care, San =
Bernardino Regional Water Resource Authority, and Sturges Center for the Arts. They are also U_
used to account for various assessment districts for which the City acts as an agent for debt 2
.y
service activity, as the City is prohibited from levying additional taxes for these districts. Such CU
m
funds include Assessment District's#961,#977A, #977B, and#1003. r>
T
N
(d) Cash and Investments N
L
Investments are reported in the accompanying financial statements at fair value, except for }
certain investment contracts that are reported at cost because they are not transferable and they
have terms that are not affected by changes in market interest rates. Changes in fair value that y
occur during a fiscal year are recognized as investment income reported for that fiscal year, U_
and may result in negative investment income in the accompanying financial statements.
Investment income includes interest earnings, changes in fair value, and any gains or losses
realized upon the liquidation,maturity, or sale of investments. Q
The City pools cash and investments of all funds, except for cash and investments separately
identified for certain enterprise funds and cash and investments held by fiscal agents. Each `r
fund's share in this pool is reported in the accompanying financial statements as cash and
investments. Investment income earned by the pooled investments is allocated to the various c°4
funds based on each fund's average cash and investment balance, except for investment income M
associated with funds not legally required to receive pooled investment income which has been c
assigned to and recorded as revenue of the general fund, as provided by California Government
Code Section 53647. -a
m
(e) Cash Equivalents w
L
For purposes of the statement of cash flows, amounts reported as cash and cash equivalents,
include amounts on deposit in the City pool and any short-term, highly liquid investments that o
are both readily convertible to known amounts of cash or so near their maturity that they present C
insignificant risk of changes in value because of changes in interest rates. Cash equivalents
have an original maturity date of three months or less from the date of purchase.
Ca
(� Receivables =
LL
Customer or trade receivables are reported as "accounts receivable" and are shown net of an
allowance for uncollectible accounts based on historical and management estimates. Activity =
Q
between funds that are representative of lending/borrowing arrangements outstanding at the end 4i
of the fiscal year are referred to as either"due to/from other funds" (i.e., the current portion of E
interfund loans) or "advances to/from other funds" (i.e., the noncurrent portion of interfund t
loans). Long-term interfund advances are recorded as advances to other funds and as w
nonspendable fund balance by the advancing governmental fund. Q
47
;Packet Pg 488 !
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Noncurrent portions of long-term receivables (e.g. "notes receivable") due to governmental fund
types are reported in their respective balance sheets despite their spending measurement focus.
Recognition of governmental fund type revenues represented by noncurrent receivables are
deferred until they become current receivables.Noncurrent portions of long-term notes receivable co
are offset by nonspendable fund balance in the general fund, and by restricted, committed or m
assigned fund balance in other funds.
c�
c
(g) Inventory ii
y
Inventories are valued on the average cost method. Inventory balances represent expendable M
m
supplies held for consumption. Inventory is reported under the consumption method whereby ch
expenditures are reported at the time inventory is used. Inventory reported in governmental funds N
is offset with nonspendable fund balance to show that inventories do not constitute available N
spendable resources,even though they are a component of fund balance.
m
(h) Prepaids
Prepaid items are reported in the governmental funds under the consumption method and are u-
reported as a nonspendable component of fund balance to indicate that they are not spendable for d
appropriation and are not expendable financial resources.
Q
,., (i) Property Held for Resale N
T
Property held for resale represents land, structures, and related improvements that were acquired
for resale as part of the City's redevelopment and grant activities. Property held for resale is c
recorded at acquisition cost plus improvement costs. Property held for resale, which is not N
available for current expenditure, is reported in the governmental funds balance sheet as restricted M
fund balance when proceeds from the sale must be used for restricted purposes or as
nonspendable fund balance when such proceeds are not restricted.
v
(j) Restricted Assets
w
Amounts reported as restricted assets in the enterprise funds have been restricted by bond
indentures or are to be used for specified purposes based on contract provisions, such as bonded
debt service. o
d
(k) Capital Assets
Capital assets, which include land, buildings and improvements, machinery, vehicles, equipment
(including furniture) and infrastructure assets, are reported in the applicable activity columns in
the accompanying government-wide statement of net position and the proprietary funds statement
of net position. Capital assets are defined using guidelines established by the City. Such =
guidelines provide that assets with an initial individual cost of more than $5,000 ($200,000 for a
infrastructure)and an estimated useful life of at least two years are considered to be capital assets.
Such capital assets are recorded at cost where historical records are available and at an estimated
original cost where no historical records exist. Contributed capital assets are valued at their
estimated fair value at the date of the contribution. The cost of normal maintenance and repairs w
that do not add to the value of the assets or materially extend asset lives are not capitalized. Q
Major outlays for capital assets and improvements are capitalized as projects are constructed.
48 I' cket P_g 48
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements (Continued)
Year Ended June 30,2013
Capital assets include public domain (infrastructure) consisting of certain improvements other
than buildings, including pavement, curbs and gutters, streets and sidewalks, drainage systems,
traffic control devices, streetlights, and right-of-way corridors within the City. m
Capital assets used in operations are depreciated over their estimated useful lives using the n Cn
straight-line method in the government-wide financial statements and in the financial statements
of the proprietary funds. Depreciation is charged as an expense against operations and =
accumulated depreciation is reported on the respective statement of net position.
The ranges of lives used for depreciation purposes for each capital asset class are:
m
M
T
Years c5
0
N
Buildings and improvements 10-40 M
Infrastructure 20-50 >-
Wells,pumping plants,reservoirs,and distribution system 8-50
N
Interceptor lines 50 ii
Disposal plant 35-50 m
Leasehold improvements 5 -25
Q
Shops,offices,stores and yards 10-20 ..
Ar
Tools and equipment 4-20
N
Office equipment 5 -20
Communication equipment 7- 10
Computer equipment 5-10 c°•,
Automotive equipment 3 -8 c)
m
(l) Bond Discounts and Premiums
a�
Bond discounts and premiums are deferred and amortized over the term of the bonds using the =
straight-line method, which materially approximates the effective interest method. Bond w
R
premiums are
p P
discounts and i resented as a reduction or an increase of the face amount of bonds m
payable. L
0
CL
(m)Deferred Outflows/Inflows of Resources
R
The difference between the reacquisition price of refunding bonds and the net carrying amount of
refunded debt (deferred amount on refunding) is amortized over the shorter of the lives of the
c
refunding debt or remaining life of the refunded debt. Unamortized portions of the loss on U.
refunding debt are reported as deferred outflows of resources. When an asset is recorded in the M
governmental fund financial statements but the revenue is not available, a deferred inflow of =
c
resources is reported until such time as the revenue becomes available. Q
c
(n) Compensated Absences
E
t
All compensated absences are accrued when earned in the government-wide and proprietary
p g
.�
funds financial statements. Compensated absences are recorded as a liability and expenditure in Q
the governmental funds when due and payable, as it is the City's policy to liquidate any unpaid
vacation or sick leave at June 30 from future resources rather than currently available expendable
resources.
49 :Packet. 490.;
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(o) Fund Balances
m
As prescribed by GASB Statement No. 54, governmental funds report fund balance in
nor constraints on
M
classifications based primarily on the extent to which the City is bound to honor
the specific purposes for which amounts in the funds can be spent. As of June 30, 2013, fund
balances for governmental funds are made up of the following:
CU
• Nonspendable Fund Balance—includes amounts that are (a)not in a spendable form, or(b) 'u.
legally or contractually required to be maintained intact. The "not in spendable form" y
criterion includes items that are not expected to be converted to cash,for example: deposits m
and prepaids.
N
• Restricted Fund Balance — includes amounts that are restricted for specific purposes N
stipulated by external resources providers, constitutionally or through enabling legislation. I-
Restrictions may effectively be changed or lifted with the consent of resource providers. (D
6
• Committed Fund Balance—includes amounts that have been limited to specific purposes or N
through adoption of a resolution or an ordinance by the Mayor and Common Council LL
(M&CC), the highest level of decision making authority of the City, and resources that d
have been specifically committed for use in satisfying contractual obligations, as in i5
agreements with third parties. The City has determined that both a resolution and an Q
ordinance are equally binding. These commitments may be changed or lifted, but only by N
the same formal action that was used to impose the constraint originally. M&CC action to
commit fund balance must occur within the fiscal reporting period while the amount
committed may be subsequently determined.
0
N
• Assigned Fund Balance — includes amounts that are intended to be used by the City for
specific purposes. Intent is expressed by (a) the M&CC or (b) a body or official to which
the M&CC has delegated the authority to assign amounts to be used for a specific purpose.
m
• Unassigned Fund Balance — includes amounts within the General Fund, the residual =
resources, either positive or negative in excess of what can be properly classified in one of W
the other four fund balance categories. Unassigned amounts are technically available for d
any purpose. Other governmental funds may only report a negative unassigned balance
that was created after classification of fund balance in the nonspendable, restricted or Q
committed categories. m
7i
In circumstances when an expenditure is made for a purpose for which amounts are available in
multiple fund balance classifications, fund balance is depleted in order of restricted, committed
assigned and unassigned. LL
76
(p) Net Position
4
The financial statements utilize a net position presentation. Net position is classified as follows:
d
E
• Net Investment in Capital Assets —This category of net position consists of capital assets,
net of accumulated depreciation and reduced by any debt outstanding and any deferred R
outflows of resources related to such borrowings that are attributable to the acquisition, Q
construction or improvement of those assets. If there are significant unspent related debt
proceeds at year-end, the portion of the debt attributable to the unspent proceeds is not
included in the calculation of net investment in capital assets. Rather, that portion of the
debt is offset by unspent proceeds.
4V
50 `
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
• Restricted Net Position—This category presents restricted assets reduced by liabilities and
deferred inflows of resources related to those assets. Those assets are restricted due to m
E
external restrictions imposed by creditors (such as through bond covenants), grantors or m
laws and regulations of other governments and restrictions imposed through constitutional tQ
Cn
provisions or enabling legislation. i
_
• Unrestricted—This category represents net position of the City that is not restricted for any =
project or other purpose. U-
2
.N
When both restricted and unrestricted resources are available for use, the City's policy is to use m
restricted resources first,then unrestricted resources that are needed. r
N
r
(q) Property Taxes c
N
L
Property tax revenue is recognized in the fiscal year for which the taxes have been levied m
providing they become available. Available means due, or past due and receivable within the
current period and collected within the current period or expected to be collected soon enough N
thereafter(not to exceed 60 days)to be used to pay liabilities in the current period. U.
Under California law, property taxes are assessed and collected by the counties at up to 1% of
assessed value, plus other increases approved by the voters. The County of San Bernardino, bills Q
and collects the property taxes and remits them to the City at various times throughout the year. a,
Property taxes are attached as an enforceable lien on property as of January 1. Taxes are levied on T-
July 1 and are due in two installments. The first installment is due on November 1, and is payable
through December 10 without penalty. The second installment is due February 1, and is payable c
through April 10 without penalty. N
0
M
(r) Capital Contributions
c
Contributions in aid of construction represent cash and utility plant additions contributed to the m
City by property owners or developers desiring services that require capital expenditures or a
capacity commitment. W
L
d
(s) Use of Estimates >'
0
CL
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions, in some cases when
applicable, that affect the amounts in the financial statements and the accompanying notes.
Actual results could differ from the estimates. c=o
c
LL
(t) New Governmental Accounting Standards Implemented During Year Ended June 30, 2013
The requirements of the following accounting standards are effective for the purpose of Q
implementation, if applicable to the City, for the year ended June 30, 2013. The City also has
elected to early implement, effective for the year ended June 30, 2013, GASB Statements No. 65 m
and No. 66. The financial statements included herein apply the requirements and provisions of
these statements,including necessary retroactive adjustments to financial statement classifications
and presentations. Q
5t ?acket Pg 49Z
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
GASB Statement No. 60
c
In November 2010, GASB issued Statement No. 60, Accounting and Financial Reporting for
Service Concession Arrangements. This statement addresses service concession arrangements m
(SCAs), which are a type of public-private or public-public partnership. This statement requires
co
disclosures about SCAB including a general description of the arrangement and information about
the associated assets, liabilities, and deferred inflows, the rights granted and retained, and
guarantees and commitments.This statement had no impact on the City's financial statements. _
ii
GASB Statement No. 61 2
.y
In November 2010, GASB issued Statement No. 61, The Financial Reporting Entity: Omnibus–
m
an amendment of GASB Statements No. 14 and No. 34. This statement modifies certain M
requirements for inclusion of component units in the financial reporting entity. The requirements N
of this statement result in financial reporting entity financial statements being more relevant by o
improving guidance for including, presenting and disclosing information about component units
and equity interest transactions of a financial reporting entity. This statement had no impact on }
the City's financial statements.
N
GASB Statement No. 62 LL
In December 2010, GASB issued Statement No. 62, Codification of Accounting and Financial
Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements.
The objective of this statement is to incorporate into the GASB's authoritative literature certain a
accounting and financial reporting guidance that is included in the following pronouncements
issued on or before November 30, 1989, which does not conflict with or contradict GASB r
pronouncements:
M
r
1. Financial Accounting Standards Board("FASB") Statements and Interpretations C14
2.Accounting Principles Board Opinions M
3.Accounting Research Bulletins of the American Institute of Certified Public
4.Accountants' ("AICPA")Committee on Accounting Procedure
This statement will improve financial reporting by contributing to the GASB's efforts to codify 'a
all sources of generally accepted accounting principles for state and local governments so that w
they derive from a single source. This statement had no material impact on the City's financial d
statements. >-
0
GASB Statement No. 63 Q-
m
In June 2011, GASB issued Statement No. 63, Financial Reporting of Deferred Outflows of
Resources, Deferred Inflows of Resources, and Net Position. This statement provides financial
reporting guidance for deferred outflows of resources and deferred inflows of resources. This
statement also amends the net asset reporting requirements in Statement No. 34,Basic Financial
U.
Statements—and Management's Discussion and Analysis for State and Local Governments, and
other pronouncements by incorporating deferred outflows of resources and deferred inflows of =
resources into the definitions of the required components of the residual measure and by =
a
renaming that measure as net position, rather than net assets. This statement had no material
impact on the City's financial statements.
t
ca
a
52 ��ac)tet � 493
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements (Continued)
Year Ended June 30,2013
GASB Statement No. 65
c
In March 2012, the GASB issued Statement No. 65, Items Previously Reported as Assets and
Liabilities,which is intended to clarify the appropriate reporting of deferred outflows of resources
and deferred inflows of resources to ensure consistency in financial reporting. The
Cn
implementation of this statement resulted in reclassification of assets and liabilities as deferred
outflows of resources and deferred inflows of resources and recognition of outflows of resources
or inflows or resources for certain items that had previously been reported as assets and liabilities,
such as bond issuance costs. Accounting changes adopted to conform to the provisions of this i,=
Statement were applied retroactively by restating the City's beginning net position for the .2
Redevelopment Obligation Retirement Fund. The restatements resulted from expensing cost of
m
issuance, which was previously reported as deferred charges, excluding prepaid bond insurance. r>
(See Note 23 regarding beginning net position restatement related to the implementation of this N
statement). N
L
GASB Statement No. 66
m
In March 2012, the GASB issued Statement No. 66, Technical Corrections — 2012- an r
�s
amendment of GASB Statements No. 10 and No. 62, to resolve conflicting accounting and N
financial reporting guidance that could diminish the consistency of financial reporting. This U.
statement amends Statement No. 10,Accounting and Financial Reporting for Risk Financing and
Related Insurance Issues, by removing the provision that limits fund-based reporting of a state
and local government's risk financing activities to the general fund and the internal service fund Q
type. This statement also amends Statement No. 62, Codification of Accounting and Financial a;
Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, r
by modifying the specific guidance on accounting for(1)operating lease payments that vary from
a straight-line basis, (2) the difference between the initial investment (purchase price) and the
principal amount of a purchased loan or group of loans, and(3) servicing fees related to mortgage cC4
loans that are sold when the stated service fee rate differs significantly from a current (normal) r°>
servicing fee rate.This statement had no impact on the City's financial statements. 0
Upcoming Governmental Accounting Standards Implementation
'a
The City is currently analyzing its accounting practices to determine the potential impact on the w
financial statements for the following GASB statements:
GASB Statement No. 68
0
In June 2012, the GASB issued Statement No. 68, Accounting and Financial Reporting for
Pensions-an amendment of GASB Statement No. 27,to improve the guidance for accounting and
reporting on the pensions that governments provide to their employees. 2
c�
Key changes include: _
LL
• Separating how the accounting and financial reporting is determined from how pensions =
are funded.
a
• Employers with defined benefit pension plans will recognize a net pension liability, as
defined by the standard, in their government-wide, proprietary and fiduciary fund m
financial statements. _
• Incorporating ad hoc cost-of-living adjustments and other ad hoc post-employment
benefit changes into projections of benefit payments, if an employer's past practice and Q
future expectations of granting them indicate they are essentially automatic.
°Packet Pg 494'`
53
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
• Using a discount rate that applies (a) the expected long-term rate of return on pension
plan investments for which plan assets are expected to be available to make projected
E
benefit payments, and(b) a yield or index rate for 20-year,tax-exempt general obligation
municipal bonds with an average rating of AA/Aa or higher to projected benefit `Q
payments to the extent that the conditions in(a)are not met.
• Adopting a single actuarial cost allocation method— entry age normal — rather than the
current choice among six actuarial cost methods.
• Requiring more extensive note disclosures and required supplementary information. U_
2
to
The statement relates to accounting and financial reporting and does not apply to how m
governments approach the funding of their pension plans. At present, there generally is a close M
connection between the way many governments fund pensions and how they account for and C5
report information about them in financial statements. The statement would separate how the N
accounting and financial reporting is determined from how pensions are funded. Application of
Statement 68 is effective for the City's fiscal year ending June 30,2015.
�s
GASB Statement No. 69 ai
In January 2013, the GASB issued Statement No. 69, Government Combinations and Disposals U.
Of Government Operations, which provides new accounting and financial reporting standards for
government mergers and acquisitions and for government operations that have been transferred or
sold.Application of this statement is effective for the City's fiscal year ending June 30,2015. Q
GASB Statement No. 70 `V
In April 2013, the GASB issued Statement No. 70, Accounting and Financial Reporting for
Nonexchange Financial Guarantees, which provides accounting and financial reporting guidance c
to state and local governments that offer nonexchange financial guarantees and for governments N
that receive guarantees on their obligations. Application of this statement is effective for the
City's fiscal year ending June 30,2014. c
GASB Statement No. 71 a
In November 2013, the GASB issued Statement No. 71, Pension Transition for Contributions 'a
a
Made Subsequent to the Measurement Date-an amendment of GASB Statement No. 68, which w
L
P rovides guidance to state and local governments clarifying the transition provisions for GASB
d
No. 68 regarding p ension contributions made after the measurement date. Application of this >'
L
statement is effective for the City's fiscal year ending June 30 2015. o
d CL
GASB Statement No. 72
In February 2015,the GASB issued Statement No. 72,Fair Value Measurement and Application,
which provides guidance for determining a fair value measurement for financial reporting
purposes. This statement also provides guidance for applying fair value to certain investments and E
disclosure related to all fair value measurements. Application of this statement is effective for the �a
City's fiscal year ending June 30,2016. c
c
Q
GASB Statement No. 73
In June 2015, the GASB issued Statement No. 73, Accounting and Financial Reporting for
Pension and Related Assets That Are Not within the Scope of GASB Statement 68, and
Amendments to Certain Provisions of GASB Statements 67 and 68. This statement establishes
AF A
requirements for those pensions and pension plans that are not administered through a trust
54
�Pac7cet Pg 495
W
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
meeting specified criteria(those not covered by GASB Statements 67 and 68).Application of this
statement is effective for the City's fiscal year ending June 30, 2016, except those provisions that
address employers and governmental nonemployer contributing entities that are not within the
scope of GASB Statement 68, which are effective for financial statements for fiscal year ending N
June 30,2017.
_
GASB Statement No. 74
In June 2015, the GASB issued Statement No. 74, Financial Reporting for Postemployment L.L
Benefit Plans Other Than Pension Plans, which addresses reporting by postemployment benefits 2
.y
other than pensions (OPEB) plans that administer benefits on behalf of governments. This M
m
statement basically parallels GASB Statement 67 and replaces GASB Statement 43. Application e�
of this statement is effective for the City's fiscal year ending June 30,2017. N
0
GASB Statement No. 75 `V
L
In June 2015, the GASB issued Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions. This statement applies to government employers
who provide OPEB to their employees and for governments that finance OPEB for employees of w
other governments. This statement basically parallels GASB Statement 68 and replaces GASB U.
Statement 45. Application of this statement is effective for the City's fiscal year ending June 30, m
2018. �a
Q
GASB Statement No. 76 a;
In June 2015, the GASB issued Statement No. 76, The Hierarchy of Generally Accepted
Accounting Principles for State and Local Governments. This statement reduces the generally
accepted accounting principles (GAAP) hierarchy to two categories of authoritative GAAP from
the four categories under GASB Statement No. 55, The Hierarchy of Generally Accepted N
Accounting Principles for State and Local Governments. The first category of authoritative M
GAAP consists of GASB Statements of Governmental Accounting Standards. The second c
category comprises GASB Technical Bulletins and Implementation Guides, as well as guidance
from the American Institute of Certified Public Accountants that is cleared by the GASB.
Application of this statement is effective for the City's fiscal year ending June 30,2016.
W
GASB Statement No. 77 cLa
In August 2015,the GASB issued Statement No. 77, Tax Abatement Disclosures. This statement >-
establishes financial reporting standards for tax abatement agreements entered into by state and c
local governments. Application of this statement is effective for the City's fiscal year ending
June 30,2017.
(2) Bankruptcy
c
U-
Factors Precipitating the City's Chapter 9 Bankruptcy Filing on August 1,2012
3
_
Beginning in or around May of 2012, the City's Finance Department led by a newly hired Finance Q
Director began the process of preparing a proposed budget for the City's 2012-13 fiscal year. In late
June 2012, the City's Finance Department completed a report entitled, "San Bernardino Budgetary
Analysis and Recommendations for Budget Stabilization" (the "Budget Report"), which determined
that: (i)the City faced a projected budget deficit of over$45.8 million in the 2012-13 fiscal year and U
' the budget deficit was projected to grow even larger for each of the following five years due to, Q
among other things, continued stagnation in General Fund revenues, the poor housing market and
ss '�'acke��Pg 4g6,y`
i
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
economy, increasing pension and other post-employment benefit costs, and unfunded liabilities in the
City's retiree health, worker's compensation and general liability accounts, (ii) the City had depleted a)
all of its General Fund' reserves to cover substantial budget deficits for four consecutive fiscal years
beginning with the 2008-2009 fiscal year and had an estimated$18.2 million negative cash balance in cyn
its General Fund, (iii) immediate and substantial action had to be taken to reduce spending and
preserve cash for the City to continue to provide essential services to its residents, (iv) an analysis of
the City's General Fund revealed that the fund balances at the start of fiscal years 2010-2011 and =
2011-2012 had been erroneously reported by City staff and that fund balances had actually totaled at ii
least $4.5 million (estimated) less than reported, and (v) the City did not have sufficient unrestricted 2
.y
cash available to pay its financial obligations as and when they were due or to become due and owing.
m
M
Several factors led to the late discovery of the scope and extent of the City's financial problems. N
Beginning in late 2011 and continuing through early May of 2012, key City management personnel N
retired or resigned, and the City's Finance Department fell behind in performing various financial
tasks, which was exacerbated by the implementation of a new financial software system. As late as }
April of 2012, and in connection with the City's mid-year budget review, the City Manager at that
time believed that the City's estimated budget shortfall for fiscal year 2011-12 would be just over N
$3.1 million and could be remedied by cuts to department budgets, continuing a hiring freeze on U_
filling vacant positions and making revenue adjustments. d
=a
The Budget Report found that the City had been hit hard by the major recession that began in late Q
2007. In addition,the housing market collapse in the Inland Empire region,the loss of redevelopment a;
r.,. funds and declines in revenue to the General Fund from sales tax, property tax, franchise fees, utility
users' tax and licenses and permits all had significant detrimental impact on the City. The Budget
Report also found that the City's operational costs continued to exceed revenues despite the City's
efforts to cut costs by negotiated reductions in employee costs,job cuts, service cuts, sales of assets, N
implementation of revenue measures, increased transfers from other funds, and use and then M
exhaustion of its General Fund reserves. As of June of 2012, the City's unemployment rate was c
16.9% (more than double the national unemployment rate), and the City had one of the highest home
foreclosure rates in the nation. -a
m
The City also prepared a Staff Report(the"Staff Report")dated July 18,2012,which determined that w
(i) it was unlikely that at that time the City could meet its payroll and other financial obligations in the m
next thirty (30) to sixty (60) days (including debt obligations and lease payments for critical City >_
assets), (ii) an unusually large number of employees were retiring and leaving the City triggering c
immediate cash-outs of vacation and sick leave accruals, (iii) the City's credit line had been
terminated, (iv) vendors were demanding cash up front before providing essential materials, goods
and services to the City, (v) the City had no ability to access short-term credit markets to solve its
cash flow problems and no General Fund reserves, and (vi) cash flow projections showed that the
City had projected monthly General Fund deficits ranging between$2 million and $5.6 million from c
LL
July through September.
c
On July 18, 2012, the Mayor and Common Council of the City enacted Resolution No. 2012-205 c
Q
declaring a fiscal emergency (the "Fiscal Emergency Resolution") based on information presented in
the Budget Report, Staff Report and at public meetings of the Mayor and Common Council held on E
s
1 The City's General Fund is unrestricted and used to pay for most general municipal services and obligations.
Certain other funds of the City, however, are legally restricted either by contract, law or grant and can only be Q
used for specific purposes.
1?�ac'et�g�497'r
5(,
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
July 10, July 16 and July 18, 2012. Pursuant to the Fiscal Emergency Resolution, the Common
Council found that the City was unable to pay its obligations within the next sixty (60) days and that d
the financial state of the City jeopardized the health, safety or well-being of the City's residents a�Ei
absent the protections of Chapter 9 of the Bankruptcy Code and given the City's dire financial y
condition it was in the best interest of the City to declare a fiscal emergency. On July 18, 2012, the �a
Mayor and Common Council of the City also enacted Resolution No. 2012-206, which determined U
that the City was insolvent in its current fiscal year and unable to meet its payroll without the _
protections afforded by Chapter 9 of the Bankruptcy Code, which would endanger the health, safety ii
and welfare of its residents, and authorized and directed certain City officials and employees to 2
N
execute and file all petitions, schedules, lists and other papers and to take any and all actions M
necessary and proper to file a petition under Chapter 9 of the Bankruptcy Code. m
T
N
As an initial step in a multi-phase and multi-step process of developing a budget for operating in c
bankruptcy called a Pendency Plan, on July 24, 2012 the City approved a "Fiscal Emergency L'
Operating Plan — July 2012 to September 2012" (the "Fiscal Emergency Plan"). Pursuant to the }
Fiscal Emergency Plan, the City did not make payments for (i) debt payments due, including a
payment for pension bond obligations due on July 20,2012 in the amount of over$3.3 million, (ii)bi-
monthly payments to fund retiree health obligations due in the first quarter in the amount of over$2.2 U.
million, (iii) deferred equipment purchases and capital projects, (iv) payment on a note for its
financial accounting software system, and (v) other trade payables due and owing in an amount over
$6 million. In addition,the City did not make over$1.4 million in payments under certain settlement Q
agreements in three lawsuits. Pursuant to the Fiscal Emergency Plan, City staff also determined that a;
the City would not be able to borrow money from the private credit markets to meet its obligations
because it could not demonstrate the ability to pay such debts back with revenues generated in the `r
current fiscal year. Following the implementation of the City's Fiscal Emergency Plan, the City
CD
found itself facing creditor actions that threatened to exacerbate the City's dire liquidity crisis. For 04
example, on around July 24, 2012, after the City was unable to make required settlement payments M
under settlement agreements due to its liquidity crisis,the plaintiffs in three separate lawsuits filed ex m
parse applications seeking Court orders to compel payment of $1,461,000 within 24 hours and
threatened to bring enforcement proceedings on an emergency basis and seek writs of execution to
levy on the City's assets. Although the City opposed the requests for orders to compel payment,
orders were entered directing that judgments be entered against the City and based on the court's w
decision, the City reasonably believed that plaintiffs could obtain such writs of execution permitting u
the plaintiffs to levy on the City's bank account on an expedited basis and, as a result,the City would
be unable to make its August payroll obligations and vendor payments resulting in the inability to 0
provide essential services to its residents. C
The City's Chapter 9 Bankruptcy Filing 2
Given the City's financial crisis described above, on August 1, 2012 ("Petition Date") the City
U.
commenced a bankruptcy case under Chapter 9 of the Bankruptcy Code (the "Bankruptcy Case") by
filing a voluntary petition for relief in the United States Bankruptcy Court for the Central District of
California(Riverside Division)(the"Bankruptcy Court")on an emergency basis. On August 3,2012, _
Q
Judge Meredith A. Jury was designated as the bankruptcy judge overseeing the City's Chapter 9 ;r
Bankruptcy Case.
E
t
Q
Reference is made to Title 11 of the United States Code(the"Bankruptcy Code").
498
57 P.acketPg X
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Approval and Implementation of the City's Pendency Plan and Budgets
d
The City promptly took the next step in the multi-step and multi-phase process of formulating its m
Pendency Plan by preparing its Pre-Pendency Plan. On August 30, 2012, a budget for fiscal year co
2012-2013 was presented to the City's Common Council to remain effective until a Pendency Plan o
was finalized and approved. On September 17, 2012 and October 1, 2012, the Common Council
approved certain cuts and budget offsets set forth in the Pre-Pendency Plan and a 9 Point Adjustment
Plan, which the City estimated would eliminate approximately $29.78 million of the City's overall ii
$45.8 million budget deficit. During this time, the City deferred payment of certain obligations in 2
N
order to curtail the increasing deficit in the General Fund and the City's dire liquidity crisis. These M
M
deferred payments include employer pension contribution payments to the California Public ch
Employees'Retirement System("Ca1PERS"),bond debt and certain trade debt. N
0
On November 26, 2012,the Common Council adopted a Pendency Plan,which incorporated the Pre-
Pendency Plan. The Pendency Plan served to balance the City's budget during the Bankruptcy Case }
using tools available under Chapter 9 of the Bankruptcy Code. The City implemented its Pendency
Plan through, among other things, the process o£ (a) meeting, conferring and negotiating with all N
seven of its unions, including participating in mediation with two of its unions; (b) implementing LL
changes to collective bargaining agreements with the three unions for which the City was unable to d
reach consensual resolutions through resolutions adopted by the City's Common Council; and (c) is
rejecting the collective bargaining agreements with the three dissenting unions as described below. Q
0
On February 19, 2013, the City Manager issued and made available the Budget Message and the
Fiscal Year 2012-13 and Fiscal Year 2013-14 Proposed Budget for the General Fund. On April 22, �-
2013, the City adopted its budget for the General Fund and other funds for fiscal years 2012-13 and
2013-14. On June 30, 2014, the City adopted its budget for fiscal year 2014-15, which continued
certain of the expenditure reductions in the Pendency Plan and implemented other measures to align M
expenditures with revenues. On June 30, 2015, the City adopted its budget for fiscal year 2015-16 c
which again continued certain of the expenditure reductions in the Pendency Plan and implemented
other measures to align expenditures with revenues. These efforts have enabled the City to survive
financially, manage its ongoing fiscal emergency, and provide essential governmental services to its
residents until a plan of adjustment is approved. w
The Bankruptcy Court's Determination That the City Is Eligible for Chapter 9 Relief
0
In the first few weeks of the Bankruptcy Case,the City filed a motion requesting that the Court set a
deadline to file objections to the City's eligibility for Chapter 9 relief. On August 24,2012,the Court
entered its "Order Directing And Approving Form Of Notice And Setting Deadline For Filing
Objections To The City Of San Bernardino, California's Petition" which established the deadline to
file and serve all objections to eligibility as October 24, 2012. Prior to October 12, 2012, the City c U.
provided over 15,000 pages of documents pursuant to stipulations with various creditors respecting its
financial condition and eligibility for Chapter 9 relief. Although the City has numerous creditors —
U.S. and German financial institutions holding the City's bonds, Wall Street bond insurers, hundreds Q
of trade creditors, thousands of retirees receiving pensions and retiree health care benefits, and seven r
unions representing the City's current employees — only one creditor, the California Public Q
Employees' Retirement System ("Ca1PERS"), objected to the City's eligibility to be a chapter 9 s
V
debtor.' With respect to Ca1PERS,the City dedicated substantial resources in its Finance Department
..,
to providing information,running numbers,attending meetings and responding to CalPERS' requests. Q
The City provided additional documents totaling over 40,000 pages of documents in the hope that
Ca1PERS would withdraw its objection to the City's eligibility.
s The SBPEA also filed an objection to the City's eligibility,but later withdrew its objection.
5 R Packet�P�X499>`;'
[Tro 6 a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
At a status conference in June 2013, the Bankruptcy Court set a briefing schedule for a motion for
summary judgment on the City's eligibility for Chapter 9 relief. CalPERS objected and asserted that
it was entitled to additional discovery on the City's eligibility. On August 28, 2013, after extensive a;
briefing by the City and CalPERS,the Bankruptcy Court determined based upon uncontroverted facts N
that the City had satisfied the requirements for eligibility in Bankruptcy Code section 109(c) and that
it had filed its petition in good faith pursuant to Bankruptcy Code section 921(c), and subsequently
issued orders to that effect (the "Eligibility Orders"). The Bankruptcy Court found that the City was
authorized under California law to be a chapter 9 debtor,the City was insolvent,the City had filed its U.
bankruptcy case in good faith and with the desire to effect a plan of adjustment of debts, and, under 2
N
the circumstances, it was impracticable for the City to have conducted pre-bankruptcy negotiations
m
with its creditors. c�
T
N
Mediation Respecting the Terms of a Chapter 9 Plan of Adjustment o
N
L
In October 2013,the Bankruptcy Court appointed the Honorable Gregg Zive, U.S. Bankruptcy Judge }
for the District of Nevada, as case and plan mediator, and ordered the City, CalPERS and the other
principal creditors into mediation over the terms of a chapter 9 plan of adjustment. The Bankruptcy N
Court appointed Judge Zive to act as mediator with the stated purpose of getting the principal parties LL
to agree on a consensual chapter 9 plan of adjustment for the City. The City, CalPERS, the City's m
bondholders,the unions and a committee of retirees were actively involved in mediation to achieve a a
consensual chapter 9 plan of adjustment and the City continues to negotiate with creditors regarding Q
the plan of adjustment.
N
CalPERS' Appeal of the Bankruptcy Court's Eligibility Orders �-
M
r
CalPERS appealed from the Eligibility Orders, and the U.S. District Court for the Central District of c°�
California certified the appeal for review by this U.S. Court of Appeals for the Ninth Circuit. The M
Ninth Circuit granted CalPERS' petition for leave to appeal the Eligibility Orders, established a c
briefing schedule and set oral argument on CalPERS' appeal on its August 2014 calendar. By its
appeal, CalPERS is challenging the Bankruptcy Court's Eligibility Orders and seeks dismissal of the -a
City's chapter 9 case. The City believes that dismissal of its chapter 9 case would be a catastrophic
blow to the City and its citizens as they struggle to recover from the effects of the economic downturn w
and housing bubble burst. Such a dismissal would deny the City the tools and breathing room
afforded municipalities under bankruptcy law to reorganize and adjust its debts, and establish a plan >_
of adjustment for a sound financial future. The CAPERS appeal remains pending, but CalPERS is c
not pursuing the appeal as long as the City complies with the CalPERS Interim Agreement. m
a:
Deferral of CalPERS Payments,Litigation and Settlement with CalPERS f°
C
R
The City deferred payment of the employer portion of retirement contributions to CalPERS for a =
U_
period of time due to its severe liquidity crisis. The deferrals of the City's employer portion of
retirement contributions to CalPERS first occurred on July 31,2012,as reported by the City in a press
release dated October 29, 2012. On November 27, 2012, CalPERS filed a motion for relief from the =
Q
automatic stay to pursue the City in relation to the deferral, alleging that the City had violated, among
other laws, the Public Employees Retirement Law (Cal. Gov. Code, § 20000, et seq.), the California E
Labor Code and the California Constitution. CalPERS sought relief from the stay in order to _
commence a state court action against the City to attempt to recoup the deferred payments, and to
compel the payment of future pension contributions from the City. The Bankruptcy Court denied Q
CalPERS' motion for relief from the automatic stay. Beginning in July 2013, the City resumed
payments of the City's employer portion of retirement contributions to CalPERS.
59 C, e,
gs
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
The unpaid arrearage for the period from August 1, 2012 through June 30, 2013 amounted to $13.6
million (the "Arrearage"). Because CaIPERS could have asserted a contract termination claim that
alone exceeded all other claims against the City combined, and an additional large claim for penalties a;
associated with the Arrearage, and the City's unions and retirees had a substantial stake in the N
resolution of the CaIPERS' claims and the City's contractual relationship with CaIPERS, the City
first focused its mediation efforts on reaching a settlement with CaIPERS. An interim agreement
between the City and CaIPERS entitled"Mediator's Order"was approved by the Judge Zive on June @
c
9, 2014, and became what is now known as the "CaIPERS Interim Agreement." The CaIPERS iz
Interim Agreement addressed the understanding between the City and CaIPERS and provided for, 2
.N
among other things: (i) payment of certain arrearages to CaIPERS; (ii)payment of certain additional @
m
administrative costs of CaIPERS;and(iii) a covenant not to impair CaIPERS under the Plan. r,
N
Labor Negotiations and Litigation with Certain Unions N
L
Following the Petition Date,the City's labor negotiating team began discussions with all seven of the
City's bargaining units: (i) General Employees Unit, (ii) Mid-Management Unit (represented by the
San Bernardino Public Employees Association ("SBPEA"), (iii) Management/Confidential Unit, (iv) N
Police Safety Unit represented by the San Bernardino Police Officers Association ("SBPOA"), (v) U.
Police Management, (vi) Fire Safety Unit (represented by the San Bernardino City Professional
Firefighters Local 891 "SBCPF") and (vii) Fire Management Unit. In September 2012, the City 5
engaged Linda Daube to perform services for the City as the City's principal representative and chief Q
negotiator to meet and confer with representatives of all of the City's bargaining units. The City a;
reached agreements with four of its seven unions (the General Bargaining Unit,the Fire Management
Bargaining Unit, the Police Management Bargaining Unit, and the Management/Confidential
Cn
Bargaining Unit) on modifications to the terms and conditions of employment, and those
modifications took effect on February 1,2013 as set forth in Common Council Resolution Nos. 2013- N
22, 2013-23, 2013-24, and 2013-25. The City did not reach agreements with its three other M
bargaining units on the modifications of the terms and conditions of employment (the Middle
Management Unit, the Police Safety Unit and the Fire Safety Unit) and, on January 28, 2013, the
Common Council voted to impose modifications to the terms and conditions of employment on these
three bargaining units as set forth in Resolution Nos. 2013-18,2013-19, and 2013-20.
w
In February and March 2013, the SBPEA representing the Middle Management Unit, the SBPOA M
representing the Police Safe Unit and the SBCPF representing the Fire Safe Unit filed motions for >-
p g Safety p g t3'
relief from stay to exercise remedies to contest the City's unilateral modification of their collective a
bargaining agreements (the "POA Stay Motion" and the "SBCPF Stay Motion"), and the City filed a m
motion to reject its collective bargaining agreements with those three unions ("Rejection Motion"). W
ro
The City subsequently reached an agreement with the Middle Management Unit in August 2013 as
set forth in Resolution Nos. 2013-239 and 2014-249, and the SBPEA withdrew its motion for relief
from stay. _
U_
After the SBCPF requested to be released from the Mediation Order in June 2014, the Rejection =
Motion as to the SBCPF was set for hearing and granted in part on September 11, 2014. On C
Q
September 19, 2014, this Bankruptcy Court entered its "Order Granting in Part and Denying in Part
City Of San Bernardino's Motion Authorizing Rejection of Collective Bargaining Agreement with E
the San Bernardino City Professional Firefighters" ("Fire Rejection Order"), which authorized the =
City's rejection of the collective bargaining agreement with the SBCPF. The SBCPF filed an appeal
from the Fire Rejection Order. On May 7,2015,the Honorable Otis D.Wright,II,U.S.District Court Q
Judge for the Central District of California, affirmed the Fire Rejection Order in full in Case No.
5:14-cv-02073 ODW.
�n RPacket 'g 501
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
On December 3, 2014, the Bankruptcy Court denied the SBCPF Stay Motion. On December 11,
c
2014, the Bankruptcy Court entered its "Amended Order Continuing in Effect the Automatic Stay
Pending Final Hearing on the Motions for Relief From Automatic Stay Filed by the San Bernardino
City Professional Firefighters Local 891 and the San Bernardino Police Officers Association Pending N
Final Hearing On Those Motions" ("Stay Continuation Order"). On December 19, 2014, the
Bankruptcy Court entered its "Order Denying San Bernardino City Professional Firefighters Local
891's Motion for Relief from the Automatic Stay Under 11 U.S.C. §362." The SBCPF appealed from
both the Stay Continuation Order and the Stay Order. On May 7, 2015, Judge Wright issued his U.
opinion dismissing the SBCPF's appeal of the Stay Continuation Order on jurisdictional grounds. 2
The briefing on the SBCPF's appeal from the Stay Order has been completed but Judge Wright has
m
not issued a decision at this time. c�
N
On July 21, 2014, the SBCPF filed a second motion for relief from stay to challenge notices sent to N
several SBCPF members related to layoffs or job demotions, and changes to Fire Department
operations necessitated by the City's budget for fiscal year 2014 45. Ultimately, no firefighters were
laid off and the four firefighters that had been demoted for budgetary reasons were reinstated to their
original positions as soon as openings in such positions became available. On November 13, 2014, y
the Bankruptcy Court entered its "Order Denying Motion of San Bernardino City Professional LL
Firefighters for Relief From the Automatic Stay" ("July 2014 Stay Order"). The SBCPF filed an
appeal from the July 2014 Stay Order,and on May 7,2015,Judge Wright affirmed the July 2014 Stay 5
Order in full. Q
On November 6, 2014, the SBPOA requested that the court set a hearing on the Rejection Motion r
with respect to the SBPOA's collective bargaining agreement. At a hearing on March 17, 2015, the
Court authorized the City to reject its collective bargaining agreement with the SBPOA. On April 15,
2015, the Bankruptcy Court entered its "Order Under 11 U.S.C. § 365 Granting Debtor's Motion to
Reject Collective Bargaining Agreement With San Bernardino Police Officers Association." At a M
hearing held on July 29,2015,the POA Stay Motion was taken off the calendar because the City and c
the San Bernardino Police Officers Association anticipated finalizing a settlement of the disputes.
On April 9, 2015, the SBCPF commenced adversary proceeding no. 6:15-ap-01116-MJ by filing a
complaint against the City alleging a purported claim for declaratory relief respecting the City's w
actions to balance its budget and align its expenditures with its revenues through its Pendency Plan
and budgets for fiscal years 2012-13,2013-14 and 2014-15 by implementing changes to certain terms >_
and conditions of employment of members of the fire safety bargaining unit represented by the o
SBCPF. Specifically, the SBCPF requested that the Court declare and adjudge that: (1) the City
unilaterally implemented its interim modifications to the terms and conditions of employment for
employees represented by the SBCPF on or about January 28, 2013, and thereafter was obligated to `-°
comply with any and all state law requirements, including those set forth in Government Code §3500,
et seq.,regarding changes in the wages,hours and teens and conditions of employment for employees
iL
represented by the SBCPF; and(2) the City may not unilaterally implement additional modifications
to the terms and condition of employment of employees represented by the SBCPF effective February =
1, 2013, without fully complying with Government Code §3500, et seq., and/or consent of the =
Q
SBCPF, or in the alternative, the City must follow non-bankruptcy laws after the collective
bargaining agreement with employees represented by the SBCPF was rejected. On July 22, 2015,the
City filed a motion to dismiss ("MTD") the complaint, and the hearing on that motion was set for _
August 19, 2015. Instead of opposing the MTD, the SBCPF filed a first amended complaint
("FAC"). The FAC essentially restated the "meet and confer" claims in the original complaint and Q
added a new claim challenging the City's issuance of the Request for Proposals for Delivery of Fire,
i
�� Packe#Pg K,502y c,"
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Emergency Medical First Response, and Related Emergency Services ("RFP") by which it sought
proposals for the delivery of fire and emergency medical services from third parties, such as the
County of San Bernardino. On August 5, 2015, the SBCPF filed a motion for injunctive relief(the d
"Injunction Motion") seeking to stop the City from contracting out the services that the City's fire N
department currently provides; the Bankruptcy Court heard the motion the next day, found that there -
was no basis for seeking a temporary restraining order on an emergency basis, and continued the 0
hearing on the Injunction Motion to September 17, 2015. On August 20, 2015, the City filed a
c
motion to dismiss the first and third claims of the FAC. On September 17, 2015, the bankruptcy U.
court denied the motion to dismiss the FAC and the City must file its response to the FAC by no later
than November 5, 2015. On September 17, 2015, the court also granted certain injunctive relief
m
requested by the SBCPF. On October 13, 2015, the bankruptcy court entered an order that provides M
until further order of the bankruptcy court,the City is: (a)enjoined from implementing any interim or N
final contract with the County of San Bernardino or any other party which would replace or contract N
out the fire and/or emergency medical services currently performed by employees represented by the
SBCPF; (b) enjoined from giving any layoff notices or taking other affirmative steps which would }
result in the separation of employment from the City of any employees represented by the SBCPF;
and(c) ordered to meet and confer under state law with the SBCPF on the City's decision to contract N
out Fire Services and the effects of the decision on the employees represented by the SBCPF prior to U.
implementing any contract for fire and/or emergency medical services and prior to laying off any
employees represented by the SBCPF in conjunction with such contract. The City is not prevented
from taking other actions related to the contracting out of Fire Services, including continuing its Q
discussions and negotiations with the County of San Bernardino, the County Fire Protection District
and the San Bernardino County Local Agency Formation Commission and their affiliated entities
related to the annexation process and any interim or final contract. The bankruptcy court's order is
subject to modification depending on the progress of the City's meet and confer with the SBCPF.
The City and the SBCPF are now engaging in the meet and confer process. c°.i
0
M
On April 10, 2015, the SBCPF and seven City fire safety employees (together "Plaintiffs") c
commenced adversary proceeding no. 6:15—ap-01119—MJ by filing a complaint against the City and
Alan Parker, the City Manager (both as an individual and in his official capacity) alleging purported -a
claims for violations of federal civil rights (42 U.S.C. § 1983), the Fair Labor Standards Act (29 c
U.S.C. § 201), a writ of mandate (C.C.P. § 1085 - PERL), a writ of mandate (C.C.P. § 1085 - w
Charter), violations of the California Labor Code and Declaratory Relief. All of these purported m
claims are based on the City's efforts to balance its budget and align its expenditures with its revenues >-
through its Pendency Plan and budgets for fiscal years 2012-13, 2013-14 and 2014-15 by -
implementing changes to require employees (including fire safety employees) to pay 50% of the
normal cost of their own pension benefits and other necessary modifications to the terms and
conditions of employment. Plaintiffs also contend the City's efforts to reduce the cost of City services
to its residents by exploring contracting for fire protection services from outside agencies and placing
Measure Q on the ballot for voter decision constitute retaliatory efforts against the Plaintiffs in
U.
violation of their civil rights under 42 U.S.C. § 1983 and other laws. [Subsequent to the �a
commencement of adversary proceeding no. 6:15—ap-01119—MJ, the Plaintiffs filed a motion to
withdraw the reference to the Bankruptcy Court of the matters raised by the Plaintiffs in their
Q
complaint (the "Withdrawal Motion"). The City responded to the Withdrawal Motion on May 11,
2015. The City's response to this complaint will be due within thirty days after the District Court
decides the Withdrawal Motion. On June 24, 2015, the City filed a motion to dismiss the Plaintiffs' t
sixth claim that asked for the Bankruptcy Court to declare that certain services performed by the
employees of the City's Fire Department represented by the SBCPF could not be contracted out. The Q
Bankruptcy Court granted that motion on July 16, 2015, and the SBCPF appealed that order to the
62 Packet Pg 503
i
+a .4
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
District Court. The SBCPF also filed an ex parte motion in the District Court for a stay or injunctive =
relief pending the appeal of that order. The District Court concluded that there was no basis for ex
parte relief, a stay or an injunction and denied each of those requests in its order entered on August
31, 2015. On September 24, 2015, the SBCPF and the other appellants filed their opening brief, the
City filed its response brief on October 8, 2015, and appellants must file any reply brief by no later n
than October 22. The SBCPF and other appellants also filed a petition for writ of mandamus in the
Ninth Circuit seeking a writ directing the District Court to issue an injunction or stay of the
Bankruptcy Court's order pending the appeal in the District Court. As of October 18,2015,the Ninth u.
Circuit has not taken action on the petition for a write of mandamus. 2
c�
m
• The City's Debt Obligations and Creditor Claims — The total gain expected to occur by M
adjusting the City's debts pursuant to the proposed Plan is not reasonably measured or estimated v
given that the settlements with all creditors have not been reached and the Plan has not been N
confirmed by the Bankruptcy Court as of the date of this report. The Bankruptcy Court
established February 7,2014,as the deadline for all creditors other than governmental units to file
proofs of claims, and March 21, 2014, as the deadline for governmental units to file proofs of
claims. The City's proposed plan of adjustment will address claims timely filed against the City y
and the City's outstanding obligations including, but not limited to, the following, which were in U_
existence as of August 31,2012 (unless otherwise noted): d
• Unsecured Pension Costs and Unfunded Pension Liabilities — As of June 30, 2013, the City Q
has outstanding unfunded liability owed to Ca1PERS. o,
N
• Other Post-Employment Benefits — The City's retirement plans provide for other post-
employment benefits ("OPEBs"), consisting primarily of retiree medical care. As of June 30,
0
2013,the City has an outstanding unfunded liability for OPEBs. C14
0
M
• Pension Obligation Bond Indebtedness—To address growing public safety pension obligations, _
the City issued pension obligation bonds ("POBs") in 2005, which reduced unfunded pension
liabilities. The City has not made payments under the POB's since prior to the Petition Date.
a
c
• Lease and Other Financial Obligations -The City has outstanding lease obligations for critical w
L
City assets such as City Hall and police,library and fire facilities. The City also leases equipment
critical to the health, safety and welfare of its residents such as fire engines, police vehicles, fire
station alerting system,refuse trucks and other critical equipment. Q
m
Q_
• Capital Improvement Loans - In addition to its bonded indebtedness, loans, and capital leases,
the City has infrastructure loans for capital improvements.
c
Debt service obligations paid from dedicated special use restricted resources and/or funds that are U.
not within the General Fund, such as sewer improvement bonds and infrastructure bank loans 3
secured by restricted "special revenues," and/or obligations paid from dedicated special/restricted =
funds, are currently unimpaired and remain unimpaired under the City's proposed plan of Q
adjustment.
m
E
• Component Units and Restricted Funds - The Bankruptcy Case seeks the adjustment of the
obligations of the City, and does not extend to the City's component units that are separate legal �f4,
entities. In addition,the City's restricted resources and/or special use funds are funds of the City a
61 .PadkEt.P.g
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
and as such, are accounted for in the City's Bankruptcy Case. As noted above, obligations of the
restricted/special funds are currently unimpaired and remain unimpaired under the City's
E
proposed plan of adjustment.
c�
r
U)
• Impact of the Bankruptcy Case on the City's Ability to Provide Services-The City continues 6
to provide essential services to its residents and is committed to continuing to provide such
services throughout the Bankruptcy Case. The goal for the Chapter 9 process is to allow the City
the time it needs to correct its structural budget imbalance and cash flow problems and set it on a ii
sound financial course moving forward. The Plan does not contemplate termination of services,
N
discontinuance of operations,or termination of the City. m
M
T
Litigation with Other Creditors for Relief from the Automatic Stay c�
0
In October 2012, the City commenced an adversary proceeding and a motion against two individuals
seeking a declaration that the automatic stay imposed by 11 U.S.C. § 922 directly applied and/or the
automatic stay imposed§ 362(a) should be extended to halt the continued prosecution of two separate
lawsuits alleging, among other things, personal injury and civil rights claims against certain non- y
debtor individual police officers. The Bankruptcy Court granted the City's motion and held that Code U-
§ 922 stayed the lawsuits against the individual police officers and, as an alternative ground, the
Bankruptcy Court also found that the stay should be extended to the police officers under 11 U.S.C.
§§ 362(a)(1) and 362(a)(3) based on the "unusual circumstances" doctrine. One party appealed the Q
Bankruptcy Court's ruling to the Bankruptcy Appellate Panel for the Ninth Circuit Court of Appeals a,
and that appeal has been resolved. `-
v
Over 20 motions seeking orders for relief from the automatic stay have been filed by plaintiffs that c
are parties to lawsuits pending in other courts to recover damages against the City primarily based on N
alleged personal injuries and/or violations of civil rights. The City has successfully opposed or M
favorably resolved almost all of these motions for relief from the automatic stay. In one case,
movants Raymond Newberry and others("Newberry")filed a motion for relief to obtain an injunction
to keep the City from inspecting apartments pursuant to inspection warrants requested that the
Bankruptcy Court deny relief from stay "with prejudice" so that Newberry could appeal the ruling,
and the Court did so, Newberry appealed the Bankruptcy Court order to the District Court, and then ui
filed a motion in the Bankruptcy Court seeking an award of attorneys' fees. Newberry filed their
opening brief and the City's response is due on November 2,2015.
0
Litigation with POB Creditors
In 2005, the City issued the POBs and approximately $51.9 million remains due on the POBs as of
June 30, 2013. The City deposited the proceeds of the POBs to CalPERS to pay the unfunded c=o
liability amount in the Safety Plan. The holder of the POBs is Erste Europaische Pfandbrief-und
U.
Kommunalkreditbank AG("EEPK"), a subsidiary of Commerzbank,the second largest German bank.
Ambac Assurance Corporation ("Ambac", with EEPK, the "POB Creditors") is the insurer of a c
portion of the bonds for the benefit of the bondholders. The POBs are unsecured. On January 7, _
Q
2015, Ambac and EEPK commenced adversary proceeding no. 6:15-ap-01004-MJ by filing a
complaint against the City for declaratory relief. Ambac and EEPK assert that that they are entitled to d
a priority that would require the City to pay their claims in full under a Chapter 9 plan, regardless of M
what the City pays other unsecured creditors under the plan. The City disputes that assertion. ;a
Q
64 :Packs#�g�505
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
On March 20, 2015, the City filed a motion to dismiss the complaint for failure to state a claim upon
which relief can be granted,and on May 26,2015,the Bankruptcy Court entered its order granting the
City's motion and dismissing the complaint. The POB Creditors appealed that order to the d
Bankruptcy Appellate Panel,the POB Creditors' opening brief is due on October 22,2015,the City's N
responsive brief is due 45 days after service of the POB Creditors' opening brief, and the POB
Creditor's reply brief is due 20 days after the City's brief.
Settlement with Retirees LL.
2
N
The City and the City's retirees reached a settlement through mediation facilitated by Judge Zive. M
m
Pursuant to the Retiree Settlement, retirement benefits for current and future employees will be r�
reduced. These reductions in health care savings will save the City approximately $40 million in N
avoided OPEB costs. A decrease in the number of City employees already has reduced the City's N
labor costs,which has the additional effect of lowering the City's pension benefit costs. L-
m
The City's Plan of Adjustment and Disclosure Statement
N
On May 18, 2015, the City Council approved a Recovery Plan in support of the Plan of Adjustment. U-
The City continues to work towards a consensual plan of adjustment with its creditors and, if a d
consensual plan cannot be achieved, then confirmation of a plan of adjustment over potential
objections from creditors. Q
CD
The bankruptcy court established May 30, 2015 as the deadline for the City to file a plan of r
adjustment. The City filed its Plan of Adjustment and disclosure statement on May 29, 2015. Some
creditors filed objections to the adequacy of the disclosure statement and the City filed a response to
those objections on October 1, 2015. On October 8, 2015,the bankruptcy court held a hearing on the
adequacy of the disclosure statement. At the October 8,2015 hearing,the Court set a schedule for the M
City to file an amended disclosure statement on November 25, 2015, any objections to the amended c
disclosure statement are due on December 16, 2015, and the City's response to any objections to the
amended disclosure statement is due on December 21, 2015. The bankruptcy court also scheduled a -a
hearing on the disclosure statement and status conference for December 23,2015.
w
In addition, on May 18, 2015, the City Council approved a Recovery Plan in support of the plan of m
adjustment. The City continues to work towards a consensual plan of adjustment with its creditors >-
and, if a consensual plan cannot be achieved,then confirmation of a plan of adjustment over potential o
objections from creditors will be sought. The City's Plan of Adjustment and Disclosure Statement
CL
can be obtained at the following sources:
R
• http://www.sbcity.org/home_nav/chapter_9_bankruptcy/default.asp
U.
�o
_
c
Q
c
m
E
t
1 Q
65
�,acksx�Pgr�5fl6 ;
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(3) Cash and Investments
m
Cash and investments, excluding the Water Department OPEB Trust Fund, are presented in the Q
accompanying financial statements at June 30,2013, as follows: c°
Statement of net position: _
Cash and investments $ 85,723,660 c
Restricted cash and investments 28,806,114 U_
Statement of fiduciary net position: co
Cash and investments-Redevelopment Obligation m
Retirement Fund 23,384,622 N
Cash and investments-Agency Funds 4,432,576 N
L
Total cash and investments 142,346,972 }
m
Statement of net position: A
N
LL
Cash and investments with fiscal agents 1,276,167 -a
Statement of fiduciary net position:
Cash and investments with fiscal agents-Redevelopment a
Obligation Retirement Fund 30,007,728 a;
N
Total cash and investments with fiscal agents 31,283,895 �-
M
r
Total $ 173,630,867 N
0
M
d
C
Cash and investments at June 30,2013,consisted of the following:
m
Cash on hand $ 13,075 w
Demand deposits 40,470,931 }
Investments 133,146,861
0
CL
m
Total cash and investments $ 173,630,867
As part of the City's investment guidelines, the City continually seeks ways to increase investment
while not risking investment principal. One way the City accomplishes this is by
.r-
income
"sweeping", on a nightly basis, any excess cash held in its non-interest bearing checking account to
an interest bearing money market account with the same bank.
Q
E
ca
r
Q
7
6 F
PacCet Pg 50
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Cash and investments held by a third party trustee for the Water Department OPEB Trust Fund at
June 30, 2013, consisted of the following:
E
Statement of fiduciary net position: N
Cash and investments OPEB Trust $ 9,711,947 R
c
Money Market Mutual Funds $ 21,319
Mutual Funds-Equity 6,092,574 2
.y
Mutual Funds-Fixed Income 3,598,054 f°
m
M
r
Total cash and investments $ 9,711,947
0
N
Investments Authorized by the California Government Code and the City's Investment Policy }
The table below identifies the investment types that are authorized for the City by the California N
Government Code and the City's investment policy. The table also identifies certain provisions ofu-
the California Government Code (or the City's investment policy, if more restrictive) that address w
interest rate risk and concentration of credit risk. Due to its long-term nature,the Water Department =a
Consent Decree has been explicitly exempted from maximum maturity requirements of the Q
California Government Code, which limits maturity of most investments to five years. This table a;
does not address investments of debt proceeds held by bond trustees that are governed by the
provisions of debt agreements of the City, rather than the general provisions of the California
Government Code or the City's investment policy:
0
Maximum Maximum N
Maximum Percentage of Investment in co
Authorized Investment Types Maturity Portfolio One Issuer* c
United States Treasury Obligations 5 years None None -'
Unites States Federal Agency Securities 5 years None None -(D
Bonds,Notes or Registered Warrants w
Issued by the State of California or Local
Agencies within the State of California 5 years None None L
Bankers'Acceptances 180 days 40% 30% a
Commercial Paper 270 days 25% 10%
Negotiable Certificates of Deposit 5 years 30% None
Time Certificates of Deposit N/A 25% None
Medium-term Corporate Notes 5 years 30% 15% U.
Money Market Mutual Funds N/A 20% 10%
Mortgage Pass-through Securities 5 years 20% None Q
Local Agency Investment Fund(LAIF) N/A None $50 million
c
d
* Based on state law requirements or City investment policy requirements, whichever is more t
restrictive. c�a
w
Q
67 Pac6t°Pg508 `'
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Investments Authorized by Debt Agreements
Investment of debt proceeds held by fiscal agent's are governed by provisions of the debt agreements,
rather than the general provisions of the California Government Code or the City's investment policy. in
The table below identifies the investment types that are authorized for investments held by fiscal
agents. The table also identifies certain provisions of these debt agreements that address interest rate
risk and concentration of credit risk.
ii
Maximum `2
.y
Maximum Maximum Investment in m
Authorized Investment Types Maturity Percentage Allowed One Issuer r
United States Treasury Obligations None None N/A c
Unites States Federal Agency Securities None None None
Bonds,Notes or Registered Warrants
Issued by the State of California or Local
Agencies within the State of California None None None LL
Bankers'Acceptances 180-360 days None None
Commercial Paper 92- 180 days None None
Medium-term Corporate Notes None None None Q
Money Market Mutual Funds N/A None None N
Investment Contracts None None None
M
r
Disclosures Relating to Interest Rate Risk 04
C
Interest rate risk is the risk that changes in market interest will adversely affect the fair value of an m
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair
value to changes in market interest rates. One of the ways that the City manages its exposure to
interest rate risk is by purchasing a combination of shorter term and longer term investments and by
timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to w
maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
d
Information about the sensitivity of the fair values of the City's investments (including investments
0
held by bond trustee)to market interest rate fluctuations is provided by the following table that shows a
4)
the distribution of the City's investments by maturity.For purposes of the schedule shown below, any W
callable securities are assumed to be held to maturity. f°
_
_
U_
�o
_
c
Q
c
m
E
t
Q
68
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Remaining Maturity
12 Months 13 to 24 25 Months
E
Investment Type Total or Less Months or More
Local Agency Investment Fund N
(State Investment Pool) $ 47,310,219 $47,310,219 $ - $ - �a
Commercial Paper 489,612 489,612 - -
Money Market Mutual Funds 4,400,367 4,400,367
Certificates of Deposit 249,828 - 249,828 U_-
Negotiable Certificates of
Deposit 2,220,615 - 2,220,615 - m
Cl)
Federal Agency Securities 26,778,222 4,002,264 6,143,607 16,632,351 `;
N
U.S.Treasury Securities 8,377,495 450,297 1,650,662 6,276,536 c
Medium-term Corporate Notes 11,291,161 1,849,635 794,324 8,647,202 cL
Asset Backed Securities 747,240 - - 747,240 }
Held by Bond Trustee:
Money Market Funds 26,204,033 26,204,033 - - y_
U.S.Treasury Securities 4,022,069 4,022,069 - - U.
Investment Contracts 1,056,000 - - 1,056,000 m
Total $ 133,146,861 $88,728,496 $ 11,059,036 $33,359,329
Q
The following table shows the distribution of the investments subject to interest rate risk of the Water N
Department OPEB Trust Fund by maturity: I
M
Remaining Maturity N
12 Months 60 Months c
Investment Type Total or Less or More
Money Market Mutual Funds $ 21,319 $ 21,319 $ -
Mutual Funds-Fixed Income 3,598,054 - 3,598,054
Total $ 3,619,373 $ 21,319 $ 3,598,054
c
w
L
d
Disclosures Relating to Credit Risk >'
0
CL
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally recognized
statistical rating organization. Presented below is the minimum rating required by (where applicable)
the California Government Code, the City's investment policy, or debt agreements, and the actual
rating as of year-end for each investment type. LL
�a
c
Q
d
E
t
ca
r
Q
Pac1cetPgs70µ'
69
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Minimum Ratings Rating N
c
Legal at Year-End at Year End Not a)
E
Investment Type Total Rating AA or AAA A Rated +;
R
r
Local Agency Investment Fund
(State Investment Pool) $ 47,310,219 N/A $ $ - $ 47,310,219
Commercial Paper 489,612 A-1 - 489,612 - _
Money Market Mutual Funds 4,400,367 AA+ 382,793 - 4,017,574 LL
Certificates of Deposit 249,828 N/A - - 249,828 N
Negotiable Certificates of Deposit 2,220,615 A 497,584 975,418 747,613 m
Federal Agency Securities 26,778,222 AA 26,778,222 - - r
U.S.Treasury Securities 8,377,495 N/A 8,377,495 - - c14
Medium-term Corporate Notes 11,291,161 A 10,403,875 887,286 -
N
Asset Backed Securities 747,240 AA 747,240 - -
Held by Bond Trustee: -
Money Market Funds 26,204,033 AA+ - - 26,204,033
U.S.Treasury Securities 4,022,069 N/A - - 4,022,069 N
Investment Contracts 1,056,000 N/A - - 1,056,000 LL
Total $ 133,146,861 $47,187,209 $ 2,352,316 $ 83,607,336 a)
The following table displays the credit risk relating to the Water Department OPEB Trust Fund as of `t
June 30,2013: N
Minimum Ratings Rating ce)
Legal at Year-End at Year End Not N
Investment Type Total Rating AA or AAA A Rated o
M
d
Money Market Mutual Funds $ 21,319 N/A $ - $ - $ 21,319
Mutual Funds-Fixed Income 3,598,054 N/A - 3,598,054
a
Total $ 3,619,373 $ - $ - $ 3,619,373
v
W
ca
Concentration of Credit Risk
0
The investment policy of the City contains no limitations on the amount that can be invested in any
one issuer beyond that stipulated by the California Government Code. Investments in any one issuer
(other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5%
or more of total City investments are as follows:
c
U.
Reported Percentage of E
Issuer Investment Type Amount Portfolio c
Federal National Mortgage Association Federal Agency Security $ 13,142,999 10% Q
Federal Home Loan Mortgage Corp. Federal Agency Security 7,020,801 5% c
d
E
z
v
c�
a
70 P4ck6t Pg 591; r
Aar`
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Custodial Credit Risk w
c
d
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial d
institution, a government will not be able to recover its deposits or will not be able to recover
collateral securities that are in the possession of an outside party. The custodial credit risk for
investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a
transaction, a government will not be able to recover the value of its investment or collateral
securities that are in the possession of another party. The California Government Code and the City's U=
investment policy do not contain legal or policy requirements that would limit the exposure to 2
.N
custodial credit risk for deposits or investments, other than the following provision for deposits.
m
The California Government Code requires that a financial institution secure deposits made by state or M
local governmental units by pledging securities in an undivided collateral pool held by a depository N
regulated under state law (unless so waived by the governmental unit). The market value of the N
pledged securities in the collateral pool must equal at least 110% of the total amount deposited by L
the public agencies. California law also allows financial institutions to secure City deposits by }
pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At
June 30,2013,the City's deposits(bank balances)were collateralized under California Law. w
LL
Investment in State Investment Pool w
The City is a voluntary participant in the Local Agency Investment Fund (LAIF)that is regulated by Q
California Government Code Section 16429 under the oversight of the Treasurer of the State of a;
California. The fair value of the City's investment in this pool is reported in the accompanying r
financial statements at amounts based upon the City's pro-rata share of the fair value provided by
LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance
available for withdrawal is based on the accounting records maintained by LAIF, which are recorded N
on an amortized cost basis.
M
W
The total amount invested by all public agencies in LAIF as of June 30, 2013, is $21.2 billion. LAIF
is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2013, had a -a
balance of$58.8 billion. Of that amount, 98% was invested in non-derivative financial products and �a
2% in structured notes and asset-backed securities. The weighted average maturity of LAIF was 278 w
days as of June 30,2013.
(4) Notes Receivable o
CL
Notes receivable represent loan agreements entered into between the City and unrelated non-
governmental entities as part of the City's redevelopment activities, including single-family home
buyer assistance, and real estate development and construction loans. At June 30, 2013,
approximately $6.9 million of notes receivable, net of $3.4 million allowance for doubtful
U_
accounts, were reported in the Federal and State Grants Fund. At June 30, 2013, the Low and
Moderate Income Housing Fund reported approximately $38.8 million of notes receivable; _
however, the City has not performed an analysis of the collectability of these notes receivable.
Q
Collection of these notes receivable are subject to the terms of each individual loan agreement.
c
E
c�
w
a
71 �P,acket Pg X512"':
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(5) Interfund Receivables,Payables and Transfers
a�
E
Due To/From Other Funds a;
r
to
Amounts due to and due from other funds at June 30,2013, are summarized as follows:
c
Due From Other Funds(asset): to
Integrated Waste Water Sewer Internal =
Il
General Enterprise Enterprise Enterprise Service V
Fund Fund Fund Fund Funds Total u1
Due To Other
m
Funds(liability): M
General Fund $ - $ $ 289,423 $ 5,080 $ $ 294,503 N
Federal and State Grants T_
Fund 277,365 - - 277,365 N
Low and Moderate
Income Housing Fund - 22,080 2,371 24,451 d
Nonmajor Governmental
Funds 1,777,391 - - 1,777,391 N
Water Enterprise Fund - 2,208,547 2,208,547 LL
Sewer Enterprise Fund 268,858 - - 268,858 -p
Internal Service Funds - 173,808 5,342 2,193,448 2,372,598 4;
.a
Total $ 2,054,756 $ 2,477,405 $ 485,311 $ 12,793 $ 2,193,448 $ 7,223,713
Q
N
T
Amounts due to and due from other funds reflect(a) Monies owed to the Integrated Waste Enterprise `!
(IWE) Fund from Water Enterprise and Sewer Enterprise funds for monies for services collected by co
the Water Department on behalf of the IWE Fund; and (b) inter-fund borrowings to cover short-term
operating deficits and cash overdrafts. M
a�
Advances To/From Other Funds
a
Advance to and advances from other funds at June 30,2013, are summarized as follows:
_
W
Advances To R
d
Other Funds(asset) >'
Low and G
CL
Moderate Nonmajor
Income Governmental
Housing Fund Funds Total
Advances From Other =
U.
Funds(liability):
c
Federal and State Grants Fund $ 9,347,333 $ - $ 9,347,333 Q
Y
Nonmajor Governmental Funds 129,700 164,000 293,700 d
E
Total $ 9,477,033 $ 164,000 $ 9,641,033
Q
The interfund advances above resulted from loans to fund infrastructure and other capital
improvements.
Packet°Pg `513
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
is
Transfers u'
c
d
Interfund transfers during the year ended June 30,2013, consisted of the following:
co
U)
Transfers out:
c
Nonmajor Integrated Waste
General Governmental Enterprise U.
Fund Funds Fund Total N
Transfers in: m
General Fund $ - $ 31,852 $ 2,200,000 $ 2,231,852
T
Sales and Road Fund 250,000 - - 250,000
Nonmajor Governmental Funds 134,374 - - 134,374 N
L
Total $ 384,374 $ 31,852 $ 2,200,000 $ 2,616,226
Cu
R
Interfund transfers were principally used to fund (a) operating deficits in nonmajor funds, (b) debt y
service payments, and (c) reimbursement of costs of the General Fund related to accomplishing 'u.
activities of other funds.
�a
(6) Property Held for Resale Q
Property held for resale represents single-family, multi-family, commercial, and retail real estate
acquired by the City under its Low and Moderate Income Housing Fund and the Federal and State `r
Grants Fund. Approximately 60 properties are reported in the Federal and State Grants Fund (a
major special revenue fund) ranging in amounts from approximately $78,000 to $640,000, and C°14
totaling $16.3 million. The Low and Moderate Income Housing Fund (a major special revenue M
fund) includes approximately 30 properties ranging in amounts from approximately $5,000 to $11.8
million, and totaling $18.4 million. Property held for resale is recorded at acquisition cost plus
improvement costs. These costs will be charged to current year project expenditures when the related -a
properties are sold or disposed.
W
L
d
L
O
Q.
LL
U.
Q
d.+
E
V
i+
Q
73 :Packet Pg 5'14,::_
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(7) Capital Assets =
d
Capital asset activity for governmental activities for the year ended June 30,2013,was as follows:
Balance Balance
June 30,2012 Additions Deletions June 30,2013 c
Governmental activities: LL
Capital assets,not being depreciated: n
Land $ 113,844,359 $ - $ - $ 113,844,359 m
Construction in progress 10,455,431 2,612,943 (2,160,631) 10,907,743 M
Total capital assets,not being depreciated 124,299,790 2,612,943 (2,160,631) 124,752,102 r
N
r
O
Capital assets,being depreciated: cL
Infrastructure 546,097,921 2,160,631 - 548,258,552 m
d
Buildings&improvements 74,263,662 - - 74,263,662
Machinery,vehicles&equipment 55,019,568 744,728 (720,600) 55,043,696 v
Total capital assets,being depreciated 675,381,151 2,905,359 (720,600) 677,565,910 A
d
Less accumulated depreciation for:
Infrastructure (276,893,834) (14,557,326) (291,451,160) Q
Buildings&improvements (57,051,789) (1,487,327) - (58,539,116)
Machinery,vehicles&equipment (45,515,038) (3,337,486) 720,600 (48,131,924) N
Total accumulated depreciation (379,460,661) (19,382,139) 720,600 (398,122,200) .
M
Total capital assets,being depreciated,net 295,920,490 (16,476,780) - 279,443,710 c
N
O
Intangible assets 5,946,327 - - 5,946,327 M
Less accumulated amortization (842,396) (594,633) - (1,437,029) c
Total intangible assets,net 5,103,931 (594,633) 4,509,298
Governmental activities a)
m
capital assets,net $ 425,324,211 $ (14,458,470) $ (2,160,631) $ 408,705,110
W
L
d
Y
L
Q
0.
N(D
N
U-
Q
Cd
G
V
.F+
Q
74
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Capital asset activity for business-type activities for the year ended June 30,2013,was as follows:
d
E
Balance m
r
June 30,2012, Balance N
Restated Additions Deletions June 30,2013
R
Business-type activities: v
Capital assets,not being depreciated:
Land and easements $ 15,788,554 $ 1,419,100 $ $ 17,207,654
LL
Construction in progress 9,617,367 20,165,688 (5,058,272) 24,724,783 v
Total capital assets,not being depreciated 25,405,921 21,584,788 (5,058,272) 41,932,437
m
M
Capital assets,being depreciated: V_
Water rights,wells&pumping 83,226,631 369,690 (182,127) 83,414,194 N
Distribution systems 119,814,832 5,175,373 124,990,205 N
Building,plant,&store yards 122,188,323 863,910 (71,849) 122,980,384
Other capital assets 43,235,286 327,889 (1,069,523) 42,493,652 >,
Total capital assets,being depreciated 368,465,072 6,736,862 (1,323,499) 373,878,435 R
U
N_
Less accumulated depreciation for: L"
Water rights,wells&pumping (30,179,486) (2,187,915) 176,677 (32,190,724) d
Distribution systems (28,976,409) (2,392,217) - (31,368,626)
Building,plant,&store yards (80,510,891) (3,390,766) 69,231 (83,832,426) Q
Other capital assets (28,526,837) (3,992,481) 883,266 (31,636,052)
Total accumulated depreciation (168,193,623) (11,963,379) 1,129,174 (179,027,828) N
Total capital assets,being depreciated,net 200,271,449 (5,226,517) (194,325) 194,850,607 M
Business-type activities capital assets,net $ 225,677,370 $ 16,358,271 $ (5,252,597) $ 236,783,044 c
N
O
M
The opening balances as of June 30, 2012 were restated for a$3 million reclassification of land reported
as depreciable assets in prior years, an increase in the distribution system of$0.8 million and an increase -�
in plant and store yards of$1.4 million for capitalized interest capitalized as part of the adoption of GASB
No. 62, a decrease of$8.6 million as the Water Department policy is not to record salvage values and a w
net decrease of$23.1 million to reclassify the beginning balance of the Sewer Fund's investment in joint
venture in a separate asset category.
L
O
NN�
LL
Q
E
V
Q
75 �
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Depreciation expense was charged to the following functions in the statement of activities:
a�
E
Governmental Business-type
activities activities
Function:
U
General government $ 135,581 $ -
Public safety 1,751,343 -
Streets 15,212,263 - 2
N
Culture and recreation 559,342 - m
Community services 598,917 -
Integrated waste enterprise fund - 3,058,127 CM
Water enterprise fund - 5,505,403 N
L
Sewer enterprise fund - 3,399,849 d
Capital assets held by the government's internal
�v
service funds are charged to the various w
functions based on their usage of the assets 1,719,326 - u-
w
Total depreciation expense $ 19,976,772 $ 11,963,379 Q
N
T
M
r
O
N
O
M
d
C
7
7
.a
d
C
W
d
L
O
Q.
d
U
C
!9
C
LL
R
7
C
C
Q
G
d
E
t
V
Q
P-ticket Pg 517
76
{6Aa,
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(8) Long-Term Liabilities—Governmental Activities
a�
Changes in the long-term liabilities of the governmental activities for the year ended June 30,2013, d
were as follows:
�a
Balance t�
June 30,2012, Balance Due Within
ctY
Restated Additions Reductions June 30,2013 One Year
Governmental activities: U.
Capital leases payable $ 2,584,734 $ - $ (739,480) $ 1,845,254 $ 625,124 V
.N
Claims and judgments 20,921,972 12,935,634 (3,122,564) 30,735,042 3,815,102
m
Compensated absences 19,263,272 - (7,215,080) 12,048,192 3,614,458 M
r
Other post-employment benefits obligation 25,068,601 4,376,256 (1,347,000) 28,097,857 8,429,357 tV
0
Notes payable: C14
HUD section 108
Arden Guthrie 7,500,000 (334,000) 7,166,000 344,000 >_
Fire maintenance facility note 1,200,000 1,200,000 -
New World note payable 4,548,785 (513,540) 4,035,245 528,381 V
N
Total notes payable 13,248,785 (847,540) 12,401,245 872,381 W
Lease revenue bonds: _
Public Facilities Lease
7
(Lease Revenues Refunding 1997,Series A) 1,755,000 (1,755,000) Q
City Hall Lease
(Refunding Bonds,Series 1996) 8,055,000 (550,000) 7,505,000 580,000 N
T
Total lease revenue bonds 9,810,000 (2,305,000) 7,505,000 580,000
M
r
O
California Infrastructure and Economic Development Bank: N
Fire Station Lease 2,067,029 (88,919) 1,978,110 91,515 M
Street Construction 4,705,483 (1,135,367) 3,570,116 1,162,275
Harriman Place Street Extension Lease 1,232,522 (108,458) 1,124,064 111,505 =
7
Total California Infrastructure and Economic
Development Bank 8,005,034 (1,332,744) 6,672,290 1,365,295 4)
Certificates of Participation: _
W
1999 Certificates of participation 4,520,000 (250,000) 4,270,000 260,000
d
Pension Obligation Bonds: >_
Taxable Pension Obligation Bonds,2005 Series A 46,140,860 46,140,860 46,140,860 i
Add:interest accretion 4,904,248 817,374 5,721,622 5,721,622 0
tZ
4)
Total pension obligation bonds 51,045,108 817,374 51,862,482 51,862,482 M
HUD CDBG liability - 2,064,243 2,064,243 -
C
Total governmental activities long-term liabilities $ 154,467,506 $ 20,193,507 $ (17,159,408) $ 157,501,605 $ 71,424,199 G
U.
iC
Internal service funds predominantly serve the governmental funds.Accordingly, long-term liabilities
c
for internal service funds are included as part of the above totals for governmental activities. At
June 30 2013 $458,380 of capital leases payable, $30,735,042 of claims and judgments,ments $421 681 of Q
P pY � J g w
compensated absences, and $4,035,245 of notes payable (New World) for internal service funds are
included in the above amounts for governmental activities. For governmental activities, compensated t
absences and other post-employment benefit obligations (OPEB) are generally liquidated by the U
General Fund. a
77 1?acket Pg�518, ,;
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
The following payment schedules of the City are based on the agreements currently in place with the
City's creditors. These amounts are subject to change as a result of the bankruptcy filing by the City.
Please see Note 2 for further details. 4)
co
A. Capital Leases Payable
Amount
Outstanding at
June 30,2013 u
The City has entered into several lease agreements for the financing of fire 2
.N
vehicles and equipment, air conditioners, and police vehicles. These lease m
agreements qualify as capital leases for accounting purposes and,therefore,have M
been recorded at the present value of future minimum lease payments as of the N
date of inception. $ 1,845 254 CD
L
M
d
Assets acquired through capital leases are as follows:
Amount
Machinery,vehicles and equipment $ 5,347,420 u-
Less: accumulated depreciation (3,803,954) d
=a
Total $ 1,543,466
rn
N
The following schedule summarizes the debt to maturity payments for capital leases:
M
r
Year ending N
June 30, Principal Interest Total
m
c
2014 $ 625,124 $ 67,514 $ 692,638 -'
2015 622,010 43,920 665,930 v
2016 309,764 21,578 331,342 w
2017 121,228 1 1,542 132,770
2018 81,632 6,877 88,509
2019 85,496 3,013 88,509 0�
d
Totals $ 1,845,254 $ 154,444 $ 1,999,698
M
B. Notes Payable E
Amount
Outstanding at
June 30,2013 Q
Arden-Guthrie Focused Neighborhood Revitalization Project
E
The City of San Bernardino entered into a Contract for Loan Guarantee a
Assistance, a Master Fiscal Agency Agreement, and executed a promissory note Q
7R Packet Pg 599 ,
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
with the United States Department of Housing and Urban Development pursuant
to Section 108 of the Housing and Community Development Act of 1974, as 0
amended (Section 108 Loan). The proceeds of the loan were then loaned to the
Economic Development Agency (EDA) to be used for the Arden-Guthrie N
Focused Neighborhood Revitalization Project, which affects approximately 20
acres of land located at the northwest corner of Arden Avenue and 20th Street
c
(Arden-Guthrie Site). Once the Arden-Guthrie Site is sold to a third-party, the �+
c
proceeds of the sale are required to be paid to the City. All of the debt service U_
payments on the Section 108 Loan are the responsibility of the City. The source 2
U)
of funds available for the repayment of the Loan is the CDBG Program Revenue
m
of the City. co
T
N
During the initial phase, interest is payable from the date of each advance to the o
"Public Offering Date", shall accrue on the unpaid principal balance of the Note
and shall be paid in quarterly installments on the first day of February, May, }
August and November, "Interim Payment Date". The amount of interest payable
on each Interim Payment Date will represent interest accrued on the unpaid N
balance during the three month period ending before the Interim Payment Date, in U.
the case of the first Interim Payment Date,the period from the date of this Note to
the day before the first Interim Payment Date. The initial interest rate will be set =a
on the date of such advance at a rate per annum equal to 20 basis points (.2%) Q
above the Applicable LIBOR Rate on such Reset Date. a;
N
r
Interest payments are due semiannually on February 1 and August 1 and continue
through August 1, 2026. Principal payments are due annually on August 1, and
continue through August 1,2026. $ 7,166,000 c°4
0
M
Fire Maintenance Facility Note =
On August 1, 2009,the City entered into a note agreement with a property owner
for the purchase of land to be used for the City's Fire Department Maintenance
Facility. The note is for the amount of$1,200,000 with a maturity date of July 1, w
2019 and bears interest of 5.0% per annum. Principal payment is due on July 1,
2019, but the City has an option to prepay the principal. The City made a >_
principal payment of $100,000 in December 2014. Interest payments are due o
semiannually on January 1 and July 1, commencing on January 1, 2010 through
July 1,2019. 1,200,000
New World Note Payable _
U_
�a
In 2011, the City entered into a subscription agreement for the acquisition of =
computer software. The agreement has the substance of a note payable for =
Q
accounting purposes and has been recorded at the present value of the annual r
payments of $645,000, calculated using a discount rate of 2.89%. The final
payment is due July 1,2019. 4,035,245 =
AVIN
Total notes payable $ 12,401,245 Q
70
�Packet Pg X20,_;,>
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
The following schedule summarizes the debt to maturity payments for notes payable:
c
m
Year ending
June 30, Principal Interest Total N
m
2014 $ 872,381 $ 560,994 $ 1,433,375
2015 997,652 495,564 1,493,216
U-
2016 943,363 488,606 1,431,969 2
2017 979,529 452,345 1,431,874 m
2018 1,016,162 414,154 1,430,316
2019-2023 5,016,158 1,268,547 6,284,705
0
2024-2027 2,576,000 293,441 2,869,441 L
W
Totals $ 12,401,245 $ 3,973,651 $ 16,374,896 �-
U.
C. Lease Revenue Bonds m
Amount =c
Outstanding at Q
June 30,2013 a;
Public Facilities Lease Revenue Refunding Bonds, 1997 Series A N
$10,370,000 of Public Facilities Lease Revenue Refunding Bonds, issue of 1997,
Series A, were issued for the purpose of refunding the EDA's Public Facilities N
Lease Revenue Bonds, 1989 Series A, and to provide funds for the construction
and leasing of a fueling station. The bonds bear interest at 5.0% per annum. c
Interest is payable semiannually on March 1, and September 1. The bonds shall
be redeemed prior to maturity beginning September 1,2008 to September 1,2013
from the Term Bond Sinking Fund. _
w
The bonds were subject to optional redemption before maturity from available
funds. As of June 30, 2013, outstanding bond principal totaling $1,755,000 was >-
called and fully paid by the City. o
$ - m
�a
c
U-
3
c
c
Q
:.c
c
d
E
s
c�
Q
Packet`Pg
Qn n
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Lease Revenue Refunding Bonds(City Hall Project),Series 1996
c
as
$16,320,000 of Lease Revenue Refunding Bonds(City Hall Project), Series 1996,
E
were issued to refund the Central City Project, $12,000,000 Certificates of t°
Participation (Series 1992) and to finance the acquisition of certain equipment
and other capital improvements by the City. These bonds consisted of:
$4,235,000 of serial bonds with interest rates varying from 4.15% to 5.00%; and =
$1,690,000 of term bonds bearing interest at 5.10%; $865,000 of term bonds, ii
bearing interest of 5.30%; $3,215,000 of term bonds, bearing interest at 5.60% 2
and $6,315,000 of term bonds, bearing interest at 5.70%. Interest is payable m
semiannually on January 1 and July 1. Remaining term bonds are due January 1, r>
2015, and January 1, 2023, and shall be called and redeemed before maturity N
from money deposited into the Term Bond Sinking Fund. o
N
L
The bonds are subject to optional redemption as a whole or in part at the times
and prices (expressed as a percentage of the principal amount so redeemed)as set
forth in the bond documents. A reserve account is required to be maintained in N
accordance with the bond documents. As of June 30, 2013, the reserve U.
requirement was $1,008,190 and the amount actually held in the reserve account d
was$1,262,720. 5
a
The bonds and the interest thereon were previously payable from, and secured by a;
a pledge of, lease payments to be paid by the City of San Bernardino pursuant to r
a Lease Purchase Agreement between the EDA as lessor and the City as lessee. In `t
order for the City to secure its obligations pursuant to the Lease Agreement, the
City will grant to the former EDA, which will be assigned to First Trust of
California National Association, as trustee, its interest in the Lease Agreement, M
which includes its rights to acquire the Leased Premises, upon payment of
principal of and interest on the bonds. Upon dissolution of the EDA, the bonds
became a liability of the City.
m
$ 7,505,000 w
L
�Q
Total lease revenue bonds $ 7,505,000
L
0
a
m
a_
ca
c
U-
c
c
Q
c
d
E
.c
a
R� �Packet�Pg 522-
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
The following schedule summarizes the debt to maturity payments for lease revenue bonds:
m
E
Year ending
June 30, Principal Interest Total v�
U
2014 $ 580,000 $ 441,995 $ 1,021,995
2015 610,000 410,355 1,020,355 U-
2016 645,000 377,035 1,022,035 w
2017 685,000 341,573 1,026,573 m
2018 720,000 303,668 1,023,668 r
2019- 2023 4,265,000 898,463 5,163,463
0
N
Totals $ 7,505,000 $ 2,773,089 $ 10,278,089
a�
D. California Infrastructure and Economic Development Bank v
Amount -
ii
Outstanding at
June 30,2013
Fire Station Lease
a
On August 2, 2004, the California Infrastructure and Economic Development N
T
Bank (CIEDB) and the City entered into a lease agreement in regard to the �!
purchase of a Fire Station for an amount of$2,550,000. Subject to the provisions M
of the lease,the City agrees to pay to the CIEDB, as rental for use and occupancy N
of the Fire Station, lease payments upon a term of 25 years from the effective day o
at an interest rate of 2.92% per annum. The base rental payments are due on d
February 1 and August 1 of each year, commencing on February 1,2005,through
August 1,2029. $ 1,978,110
d
v
Street Construction =
W
L
�Q
On September 27,2005,the California Infrastructure and Economic Development
Bank (CIEDB) and the City entered into a financing agreement for pavement o
reconstruction and 25.5 miles of pavement rehabilitation projects on public streets C
throughout the City for an amount of $10,000,000. Interest rate is 2.37% per
annum. The City agrees to pay the CIEDB on August 1 and February 1,
commencing on August 1,2006,through August 1,2015. 3,570,116
c
LL
�o
3
c
a
m
E
t
U
ca
.r
a
Q�
Packet Pg 523x.
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements (Continued)
Year Ended June 30,2013
Harriman Place Street Extension Lease
d
On August 28, 2001, the California Infrastructure and Economic Development
Bank (CIEDB) and the City entered into a lease agreement in regard to the co
Harriman Place Street Extension Project (Project) for an amount of$2,000,000. 6
Interest rate is 2.81% per annum. The Project is located on real property owned
by the City. Subject to the provisions of the lease, the City agrees to pay to the
c
CIEDB as rental for use and occupancy of the Harriman Street Extension lease ii
payments on February 1 and August 1 of each year, commencing on August 1, 2
2004,through August 1,2021. 1,124,064 N
m
M
Total California Infrastructure and Economic Development Bank liabilities $ 6,672,290 N
0
N
The following schedule summarizes the debt to maturity payments for California Infrastructure
and Economic Development Bank liabilities: }
�o
Year ending
N
U.
June 30, Principal Interest Total -a
d
=a
2014 $ 1,365,295 $ 157,284 $ 1,522,579 Q
2015 1,398,648 123,522 1,522,170 N
2016 1,432,818 88,933 1,521,751 T-
2017 220,941 68,268 289,209
2018 227,259 61,859 289,118 N
2019-2023 1,094,485 208,577 1,303,062 C
2024-2028 646,877 90,060 736,937
2029-2030 285,967 8,410 294,377
Totals $ 6,672,290 $ 806,913 $ 7,479,203
_
W
L
E. Certificates of Participation
1999 Certificates of Participation C
On September 23, 1999, the San Bernardino Joint Powers Financing Authority issued '4
$15,480,000 of Refunding Certificates of Participation (Certificates). The Certificates were
issued to retire $2,325,000 outstanding of Refunding Certificates of Participation (South Valle
Public Improvement Project) dated April 1, 1987, and $5,910,000 outstanding of Certificates of LL
Participation (1995 Police Station Financing Project) dated April 1, 1995, and to provide funds
for capital improvements (201 Building Projects). a
The Certificates mature on September 1 of each year through September 1, 2024, in amounts
ranging from $330,000 to $1,080,000. The interest represented by the Certificates is calculated E
t
on the basis of a 360-day year of twelve 30-day months, from September 1, 1999, at the rates per U
annum set forth in the bond documents and will represent the sum of the portions of the lease Q
payments designated as interest coming due during the six months preceding each interest
payment date. The interest rates will range approximately from 3.70% to 5.50% per annum.
A3 Packet'" X24
�6Aa
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
The Certificates maturing on September 1, 2020, are subject to mandatory sinking fund
c
redemption in part on September 1 in each year on or after September 1, 2010, from the principal
components of the lease payments required to be paid by the City pursuant to the Lease m
Agreements with respect to each such redemption date, at a redemption price equal to the principal r
amount thereof to be redeemed, together with interest accrued thereon to the date fixed for
redemption,without premium, in accordance with the terms identified in the bond documents. The
Certificates maturing on September 1, 2024, are subject to mandatory sinking fund redemption in =
part on September 1, 2021, from the principal components of the lease payments required to be ii
p aid by the City p ursuant to the Lease Agreements with respect to each such redemption tion date, at a '—
�n
redemption rice equal to the principal amount thereof to be redeemed, together with interest
P p q p
m
accrued thereon to the date fixed for redemption, without premium, in accordance with the terms M
r-
identified in the bond documents. N
0
The Certificates represent direct,undivided fractional interest in lease payments to be made by the
City under the lease agreements.A reserve fund is required to be maintained in an amount equal to (D
the maximum annual debt service. At June 30, 2013,the reserve requirement was $1,147,000 and
the amount actually held in the reserve account was $1,156,533. The total outstanding balance of N
the Certificates at June 30, 2013 was $9,825,000 of which $4,270,000 is reported as a long-term LL
liability of the City, which is the portion of the Certificates that represent the Police Station d
portion. Repayment of this portion of the Certificates is funded from the City's general revenues M
under the terms of the lease agreement. The remaining $5,555,000 outstanding balance of the Q
e� Certificates at June 30, 2013, is reported as a long-term liability of the Successor Agency, which a)
is the portion of the Certificates that represents the South Valle Refunding and 201 Building T_
Projects portions. Please see Note 25 (E). .�
M
r
The following schedule summarizes the debt to maturity payments for the Certificates: c°.i
0
M
Year ending =
June 30, Principal Interest Total
m
2014 $ 260,000 $ 227,700 $ 487,700 w
2015 275,000 212,988 487,988
2016 290,000 197,451 487,451
2017 305,000 181,088 486,088 0
2018 325,000 163,763 488,763
2019-2023 1,900,000 523,880 2,423,880
2024-2025 915,000 51,013 966,013
c
Totals $ 4,270,000 $ 1,557,883 $ 5,827,883 U.
_
c
a
_
d
E
v
Y
Q
Ra Packet Pg 525
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
F. Pension Obligation Bonds
Y
Q
Taxable Pension Obligation Bonds,2005 Series A
c�
r
In October 2005, the City issued City of San Bernardino Taxable Pension Obligation Bonds,
2005 Series A, consisting of$36,050,000 principal amount of Taxable Pension Obligation Bonds,
Series A-1 (standard bonds) and $14,351,583 principal amount of Taxable Pension Obligation =
Bonds,2005 Series A-2(capital appreciation bonds).The City issued the bonds in order to prepay ii
its unfunded accrued actuarial liability related to the City's safety retirement plan. .
cc
m
The standard bonds are dated October 1, 2005, with an interest rate of 5.628% per annum, M
maturing annually commencing October 1, 2024, through October 1, 2035. Interest is due N
semiannually on April 1 and October 1, commencing on October 1, 2006 through October 1, c
2035. The capital appreciation bonds are dated October 1, 2005, with interest rates varying from
4.993% to 5.877% per annum, maturing annually commencing October 1, 2007, through
October 1, 2024. Interest is due semiannually on April 1 and October 1, 2006 through October 1,
2035.
A
U-
The City is in default on these bonds since the City did not pay interest or principal on these
bonds beginning in fiscal year 2012-13 and has recorded the full amount of the outstanding =a
principal as a current portion of their long-term debt. Please see Note 2 Bankruptcy. Q
The following schedule summarizes the debt to maturity payments for pension obligation bonds
as per the original payment schedule as set forth in the bond agreement:
M
r
Year ending N
June 30, Principal Interest Total M
d
2014 $ 1,811,418 $ 2,887,477 $ 4,698,895
CD
2015 873,241 2,565,653 3,438,894
2016 856,483 2,637,411 3,493,894 w
L
2017 833,750 2,715,144 3,548,894 m
2018 807,687 2,791,207 3,598,894
2019-2023 3,701,451 15,138,018 18,839,469 n.
2024-2028 8,516,830 11,797,736 20,314,566 W
2029-2033 15,910,000 6,386,787 22,296,787
2034-2036 12,830,000 1,118,005 13,948,005 v
Totals $ 46,140,860 $ 48,037,438 $ 94,178,298 LL
c
a
G. HUD CDBG liability
E
The City was subject to an audit of its Community Development Block Grant Program (CDBG),
administered by the United States Department of Housing and Urban Development (HUD). The r
audit was conducted by the Office of the Inspector General of HUD. The City has accrued the Q
total of$2,064,243 owed to its CDBG line of credit as a liability of the governmental activities
opinion unit. Please see Note 22 Contingencies.
Q� Packet Pgt 526
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(9) Long-Term Liabilities—Business-type Activities
d
Changes in the long-term liabilities of the business-type activities for the year ended June 30, 2013, d
were as follows:
in
Balance
R
June 30,2012, Balance Due Within
Restated Additions Reductions June 30,2013 One Year
Business-type activities: LL
Capital leases payable $ 10,280,057 $ $ (2,936,690) $ 7,343,367 $ 2,550,418 v
Claims payable 424,441 623,037 (210,404) 837,074 837,074 R
Compensated absences 2,504,031 1,682,673 (2,081,953) 2,104,751 1,170,926 m
Cl)
Pollution remediation 4,974,000 2,106,360 7,080,360 - T
OPEB obligation - 3,531,744 (573,621) 2,958,123 351,223
Notes payable 31,547,225 1,117,500 (3,212,890) 29,451,835 3,277,358 c°14
L
Certificates of participation:
Refunding sewer revenues COPs 14,795,000 (2,650,000) 12,145,000 2,805,000 >_
Less:unamortized discount (87,668) - 20,360 (67,308) (19,676) v
N_
Subtotal 14,707,332 (2,629,640) 12,077,692 2,785,324 u-
d
Water bonds payable 15,000 (15,000) - 'a
Q
Total business-type activities
long-term liabilities $ 64,452,086 $ 9,061,314 $ (11,660,198) $ 61,853,202 $ 10,972,323 r
M
The June 30,2012 balance was restated for the reclassification of the pollution remediation amount of c
$4,974,000 from a current liability to a long-term liability. N
0
M
A. Capital Leases Payable
These lease agreements qualify as capital leases for accounting purposes, and therefore, have
d
been recorded at the present value of the future minimum lease payments as of the date of =
inception. w
d
Amount >'
Outstanding at a
June 30,2013
Integrated Waste equipment
The City entered into several lease purchase agreements for the financing of the
acquisition of refuse trucks and street sweepers. The terms of leases are 84 UL
months each, with individual semi-annual payments ranging from $165,999 to Ii
$945,575. Interest rate ranges from 2.89% to 3.78%. These lease agreements =
qualify as capital leases for accounting purposes and, therefore, have been Q
recorded at the present value of future minimum lease payments as of the date of
inception. $ 7,343,367
E
4
PC, PacketPg 527- i
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Assets acquired through capital leases are as follows:
m
E
Amount
r
Machinery,vehicles and equipment $ 19,972,082 co
Less:accumulated depreciation (13,362,254) R
U
c
Total $ 6,609,828 E
U.
2
'w
The following schedule summarizes the debt to maturity payments for capital leases: m
r�
Year ending N
June 30, Principal Interest Total N
L
d
2014 $ 2,550,418 $ 225,007 $ 2,775,425 }
2015 2,140,362 145,780 2,286,142 N
2016 1,438,444 78,821 1,517,265 U-
2017 889,209 32,560 921,769
2018 324,934 7,060 331,994 Q
Totals $ 7,343,367 $ 489,228 $ 7,832,595 N
B. Notes Payable
Amount c°•i
Outstanding at M
June 30,2013 =
California Infrastructure and Economic Development Bank(CIEDB)
In April 2002, CIEDB issued a$10,000,000 note to the City Water Department to w
provide funding for transmission mains,booster stations and a reservoir identified
in the Water System Reliability Schedule of Improvements. The note was issued >-
.r
with an interest rate of 3.34% per annum with interest payable semiannually on o
February 1 and August 1.Principal payments are due annually on February 1. $ 5,733,883
In July 2007, CIEDB issued a $10,000,000 note to the City Water Department to
provide funding for booster stations and transmission mains in the Verdemont
area. The note was issued with an interest rate of 2.71% per annum with interest
payable semiannually on February 1 and August 1. Principal payments are due
annually on August 1. 7,826,282
c
d
In May 2012, CIEDB issued a$10,000,000 note to the City Water Department to
provide funding for the construction of the 12 million gallon Ogden Reservoir
and certain pipeline improvements. The note was issued with an interest rate of
2.61% per annum with interest payable semiannually on February 1 and a
August 1.Principal payments are due annually on August 1. 10,000,000 4
27
Packet;Pg 5�8
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
San Bernardino Valley Municipal Water District (SBVMWD) SARI Line
Rights
m
r
The City Water Department entered into an agreement with the SBVMWD for
the purchase of 2.5 million gallons per day of discharge rights in the Santa Ana
Regional Interceptor (SARI) pipeline (now called the Inland Empire Brine Line).
SBVMWD issued a note to the City Water Department in the amount of
c
$5,084,723 with an interest rate of 7.25% per annum, annual debt service U.
payments of$456,250, and a maturity of 2013. As of June 30, 2013,the note was 2
fully paid. - m
M
San Bernardino Valley Municipal Water District(SBVMWD) N
0
In July 2012,the Department closed escrow on the purchase of real property from
the San Bernardino Valley Municipal Water District (SBVMWD), which
included a down payment of$1,000,000 and a promissory note of$1,117,500 to
be paid in sixty(60)monthly installments due on or before the 1st of each month. 898,445 y
U.
State Revolving Fund o
=a
The State Water Resources Control Board issued a note to Santa Ana Watershed Q
Authority to provide funding for the San Bernardino/Colton Rapid Infiltration a;
Extraction (RIX) project for the amount of $25,978,599. In April 2001, the r
agreement was amended to transfer the note obligation to the successors in `t
interest being the City of San Bernardino Board of Water Commissioners, and the
City of Colton. The City Water Department will use revenues from the sewer c°v
treatment utility fund towards repayment of the note. The note matures in 2016 M
and bear interest at a rate of 2.80%per annum. 4,993,225 4)
Total notes payable $ 29,451,835 M
The following schedule summarizes the debt to maturity payments for notes payable: W
L
Year ending
L
June 30, Principal Interest Total Q°.
m
2014 $ 3,277,358 $ 800,664 $ 4,078,022 f°
2015 3,366,951 710,757 4,077,708
2016 3,457,764 618,306 4,076,070 LL
2017 1,794,884 523,274 2,318,158
2018 1,612,782 475,811 2,088,593 c
2019-2023 8,053,153 1,636,273 9,689,426 a
2024-2028 5,359,102 657,823 6,016,925
_
E
2029-2032 2,529,841 134 183 2,664,024
._
ca
Totals $ 29,451,835 $ 5,557,091 $ 35,008,926 a
88 Packet,Pg..529 ;
:6 Ar
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
C. Certificates of Participation
,r
a�
1998 Refunding Sewer Revenue Certificates of Participation
In 1998,the sewer treatment utility issued$36,230,000 in Certificates of Participation to advance n
refund the 1992 Sewer Certificates of Participation and fund additional capital improvements.
The 1992 Certificates originally provided for the construction of certain capital improvements.
The proceeds of the 1998 Certificates were invested and used to pay interest on the 1998 issue U-
until February 1, 2001, when the 1992 Certificates were called at a prepayment premium of two 2
.N
percent. The City Water Department now pays the installment payments on the 1998 Certificates
m
from the net revenues of the sewer treatments stem. Interest is payable semiannual) on r�
Y pY Y
February 1, and August 1. The issue has interest rates ranging between 3.95% and 5.25% per N
annum,annual debt service payments ranging from$1,697,000 to$3,474,000,and a maturity date o
of 2017. L
c�
The following schedule summarizes the debt to maturity payments for the certificates of
participation: N
U.
Year ending
m
June 30, Principal Interest Total
Q
2014 $ 2,805,000 $ 607,650 $ 3,412,650
2015 2,965,000 474,412 3,439,412
2016 3,155,000 318,750 3,473,750
0
2017 3,220,000 161,000 3,381,000 C`'
C
M
Totals $ 12,145,000 $ 1,561,812 $ 13,706,812
a�
(10) Operating Leases =
W
Effective December 15, 2008, the City's Water Department took possession of leased space from M
W
Superior Homes LLC for administrative office and warehouse space for a term of ten years. The >'
Water Department has options to extend the lease for 3 additional 5 year terms, up to a total of 15 `o
years. The following is a schedule of minimum lease payments as of June 30,2013.
�a
Year ending Water Sewer
c
June 30, Utility Utility Total c
LL
2014 $ 228,408 $ 31,152 $ 259,560
2015 228,408 31,152 259,560 a
2016 228,408 31,152 259,560
2017 228,408 31,152 259,560 E
2018 228,408 31,152 259,560
Totals $ 1,142,040 $ 155,760 $ 1,297,800 Q
30
99 NP,acket P„g 5 .
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(11) Compensated Absences Liability =
r
m
City employees receive between 10 and 25 vacation days each year depending upon length of service.
An employee may accumulate earned vacation time to a maximum not to exceed 60 days. Upon CO
termination, employees are paid the full value of their unused vacation time determined at their O
present salary rate. City employees receive 12 personal necessity/sick leave days each year. Upon
separation from the City, employees having six or more years of service, shall convert unused sick =
leave to a post-employment health care plan or a 401(a) as follows: 288 hours or less accrued = 0; U_
289-479 hours =20% of accrued sick leave; 480-959 hours=25%; 960 or more hours= 35%. Prior .2
to Mayor and Common Council adoption of the Side Letter Agreements to the City's bargaining
m
groups' Memorandums of Understanding, all groups were paid 50% of their accrued sick leave r�
balances at time of separation. During the Fiscal year 2012-13, the City suspended leave accrual N
payments for separated employees. The $1.3 million in unpaid leave is included in the total leave o
balance outstanding as of June 30, 2013. The reduction in cash out of sick leave balances
implemented in February 2013 is the main reason for the reduction in accrued compensated absences }
liability balances at June 30, 2013. At June 30, 2013, $12,048,192 and $2,104,751 of vacation and
leave have been accrued for governmental and business-type activities,respectively. w
U.
(12) Claims and Judgments Payable
'a
The City of San Bernardino is self-insured for its liability, unemployment and long-term disability Q
programs. The accrued liability for estimated claims represents an estimate of the eventual loss on a;
claims arising prior to year-end including claims incurred but not yet reported and estimates of loss r
adjustment expense. �-
M
V_
CD
Changes in the claims liability for the governmental activities for the years ended June 30, 2013, and N
2012,are as follows: M
Incurred Claims =
and Changes in Payments on
Governmental Activities Beginning Balance Estimated Claims Claims Ending Balance v
a�
2011 -2012: _
Workers'compensation $ 10,408,449 $ 4,889,070 $ (2,697,797) $ 12,599,722 w
Liability Claims 9,733,570 741,863 (2,153,183) 8,322,250
Total 2011 -2012 $ 20,142,019 $ 5,630,933 $ (4,850,980) $ 20,921,972
0
m
2012-2013:
Workers'compensation $ 12,599,722 $ 13,135,834 $ (3,121,931) $ 22,613,625 2
Liability Claims 8,322,250 (200,200) (633) 8,121,417
Total 2012-2013 $ 20,921,972 $ 12,935,634 $ (3,122,564) $ 30,735,042 U_
3
C
C
Q
r
C
d
E
t
U
Q
90 Packet Pg. 531
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Changes in the claims liability for the business-type activities for the years ended June 30,2013, and
c
2012,are as follows:
E
m
r
Incurred Claims
and Changes in Payments on
Business-type Activities Beginning Balance Estimated Claims Claims Ending Balance U
2011-2012:
Workers'compensation $ 288,683 $ 233,438 $ (97,680) $ 424,441 "°
U
Total 2011 -2012 $ 288,683 $ 233,438 $ (97,680) $ 424,441
m
2012-2013:
Workers'compensation $ 424,441 $ 623,037 $ (210,404) $ 837,074
0
Total 2012-2013 $ 424,441 $ 623,037 $ (210,404) $ 837,074
L
Currently, the City is a member of the Big Independent Cities Excess Pool (BICEP), which covers M
general liability claims. BICEP pools catastrophic general liability, automobile liability, and public y
official's errors and omissions losses. BICEP intends to pool covered catastrophic losses incurred by U.
its members, thereby eliminating the need for excess commercial insurance protection. As a result,
each member's share of pooled costs will depend on the catastrophic losses of all the members. In
addition, the cost of a member city will also depend on that member's own loss experience. Entities Q
with a consistent record of costly claims will pay more than entities with a consistent record of N
limited serious claims activity. The following public entities are members of BICEP: Huntington
Beach,Oxnard,West Covina, San Bernardino and Santa Ana. M
0
For liability claims,the City is self-insured for the first $1 million. The first million in excess of the N
self-insured limit is divided up proportionately among the BICEP members. In addition,the City has M
obtained excess liability coverage using a tiered system with three carriers totaling $25 million per c
occurrence. �
a
m
Currently, the City is a member of the CSAC Excess Insurance Authority (the Authority) for its °
C
workers' compensation claims. For these claims,the City is self-insured for the first$1 million. The w
first $4 million in excess of the self-insured limit is insured through the Authority. In addition, for
amounts in excess of the $5 million self-insurance and Authority coverage, the City has obtained an
additional$45 million in liability coverage from ACE American Insurance Company. a
a�
Settled claims for general liability and workers' compensation have not exceeded insurance coverage
during the past three years.
C
c
U_
c
c
Q
c
d
E
t
U
c�
r
Q
9 Packet Pg 532 4
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(13) Fund Deficits and Expenditures in Excess of Appropriations =
m
At June 30, 2013, the following governmental funds have deficits that are anticipated to be funded
from other revenues and operating transfers: c�
Deficit Amount
c
General Fund $ 7,146,155
M
Debt Service Fund: m
M
Assessment District#1015 253,124 N
0
N
Capital Projects Funds:
Special Assessments 395,904 >-
Street Construction 1,855,217
N
U-
At June 30,2013,the following proprietary funds have accumulated deficits:
�a
Deficit Amount
Enterprise Fund a;
Integrated Waste $ 4,901,726
M
Internal Service Funds: o
N
Unemployment Insurance 306,942 c
Cq
Workers'Compensation 23,631,790
Liability Insurance 4,711,871
Utility 2,265,308
Central Services 130,656 =
W
L
As of June 30, 2013, the General Fund does not have the financial capacity to fund such
accumulated deficits. Therefore, management expects that funding for the accumulated deficits will }
take years to accomplish. The accumulated deficit of the Workers' Compensation Internal Service Q
Fund, which accounts for self-insurance activities, is due to higher claims experienced versus 0)
amounts charged to the various departments.
The General Fund reported expenditures in excess of appropriations for the year ended June 30,
based on the level of budgetary control:
.r-
2013,
�o
Variance with
c
Final Budget Actual Amounts Final Budget ¢
General Fund:
m
City Clerk $ 1,021,179 $ 1,197,503 $ (176,324) _
Finance 1,262,928 1,634,964 (372,036) _
Police 55,765,861 57,128,660 (1,362,799) ¢
Principal 1,538,689 2,736,731 (1,198,042)
Interest Charges 308,311 877,552 (569,241)
9� -Packet P„g:.533
CITY OF SAN BERNARDINO CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(14) Net Investment in Capital Assets
a�
The government-wide statement of net position reports net investment in capital assets as follows:
ca
r
Governmental Business-type R
Activities Activities Total
ca
LL
Total capital assets,net $ 408,705,110 $ 236,783,044 $ 645,488,154
Less related debt: m
Capital leases payable (1,845,254) (7,343,367) (9,188,621) M
T
Notes payable (12,401,245) (26,252,390) (38,653,635) C�
Lease revenue bonds (6,228,833) - (6,228,833) cN�
California Infrastructure Bank (6,672,290) - (6,672,290)
a�
Certificates of participation (4,270,000) (12,077,692) (16,347,692) y'
N
Net investment in capital assets $ 377,287,488 $ 191,109,595 $ 568,397,083 "-
a
d
w
=a
(15) Defined Benefit Pension Plan
Q
Plan Description r
The City of San Bernardino contributes to the California Public Employees' Retirement System M
(PERS), an agent multiple-employer public employee defined benefit pension plan. PERS N
provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to c
plan members and beneficiaries. PERS acts as a common investment and administrative agent for m
participating public entities within the State of California. Benefit provisions and all other C
requirements are established by state statute and City contracts with employee bargaining groups. "n
Copies of PERS' annual financial report may be obtained from its executive office at 400 "P"
Street, Sacramento, California 95814, or at www.calpers.ca.gov. w
L
The Governor, in September 2012, signed AB 340 and A 197, two bills, which enacted the d
California Public Employees' Pension Reform Act of 2013 (PEPRA). AB 340 made several o
changes to the pension benefits that may be offered to employees hired on or after January 1, d
2013, including setting a new maximum benefit, a lower-cost pension formula for safety and non-
safety employees with requirements to work longer in order to reach full retirement age and a cap
on the amount used to calculate a pension. Among other things, AB 340 also enacted pension r_
spiking reform for new and existing employees, required three-year averaging of final =_
compensation for new employees, and provided employers with new authority to negotiate cost- "'
sharing agreements with current employees. AB 340 also contained limitations on the use of
retired annuitants, requiring that an annuitant have a six-month break in service prior to returning Q
to work. The legislation created mandatory benefits tiers for new employees who have not worked
for another Ca1PERS agency hired beginning January 1, 2013 ranging from 2.0% at age 50 to a a=i
maximum of 2.7% at age 57 for police safety and fire safety employees and 1.1% at age 50 to a t
maximum of 2.4% at age 62 for miscellaneous employees.
r
Q
9� PacketP,g,534
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements (Continued)
Year Ended June 30,2013
Funding Policy
m
Participants are required to contribute 9.304% (13.989% for safety employees) of their annual d
covered salary. These rates were set as part of the City's Pendency Plan on November 27, 2012. Cn
The City makes the contributions required of City employees on their behalf and for their account. n
Under GASB 27, an employer reports an annual pension cost (APC) equal to the annual required
contribution (ARC) plus an adjustment for the cumulative difference between the APC and the ii
employer's actual plan contributions for the year. The cumulative difference is called the net H
pension obligation (NPO). The ARC for the period July 1, 2012 to June 30, 2013 has been
m
determined by an actuarial valuation of the plan as of June 30, 2010. The contribution rate ch
indicated for the year ended June 30, 2013, was 30.115% of covered payroll for the safety plan N
and 17.355% for the miscellaneous plan. In order to calculate the dollar value of the ARC for o
inclusion in financial statements prepared as of June 30, 2013, these contribution rates would be
multiplied by the payroll of covered employees that was actually paid during the period July 1,
2012,to June 30, 2013.
N
Actuarial Methods and Assumptions U-
d
Initial unfunded liabilities are amortized over a closed period that depends on the plan's date of
entry into PERS. Subsequent plan amendments are amortized as a level percent of pay over a a
closed 20-year period. Gains and losses that occur in the operation of the plan are amortized over a a;
rolling period, which results in an amortization of 6% of unamortized gains and losses each year.
If the plan's accrued liability exceeds the actuarial value of plan assets, then the amortization `t
period may not be lower than the payment calculated over a 30-year amortization period.
0
N
C
M
d
C
W
W
L
�Q
L
O
Q
.0
�Q
LL
a
E
V
a
94 ;Packet Pg 535
i
6.A:a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Contributions
c
W
E
The following is the three-year trend information for contributions to PERS: a;
(Dollar amounts in thousands)
City-Miscellaneous c
c
ii
Annual Pension Percentage of Net Pension
Fiscal Year Ended Cost(APC) APC Contributed Obligation m
June 30,2011 $ 4,375 100% $ - c�
T
June 30,2012 5,608 100% - c5
June 30,2013 5,523 13% 4,801 N
L
ca
d
City-Safety
�o
N_
Annual Pension Percentage of Net Pension U_
Fiscal Year Ended Cost(APC) APC contributed Obligation 2?
June 30,2011 $ 11,042 100% $ -
June 30,2012 13,077 100% -
° N
June 30,2013 9,909 13% 8 613 r
�r
Successor Agency
0
C
Annual Pension Percentage of Net Pension co
m
Fiscal Year Ended Cost(APC) APC contributed Obligation
June 30,2011 $ 400 100% $ -
d
June 30,2012 680 100% -
c
June 30,2013 269 13% 234 w
co
a�
Benefits L
0
a
All full-time City employees are eligible to participate in PERS, with benefits vesting after 5 years of
credited service. Classic members who retire at age 50 with at least 5 years of credited service are
entitled to a service retirement benefit, payable monthly for life, equal to the product of the benefit
factor,years of service, and final compensation. The years of service is the amount credited by PERS
to a member while he or she is employed in the group. The benefit factors come from the 2.0% at 55, L-
2.7%at 55 and 2.0%at 62 Miscellaneous benefit factor tables,the 3.0%at 50,3.0%at 55 and 2.7%at
57 Safety benefit factor table, and the 2.0% at 55 and 3.0% at 60 SA benefit factor tables, and =
depends on the member's age at retirement. The factors range from 1.426% at age 50 to 3.0% at age Q
63 and up. Final compensation for members is the monthly average of the member's highest 36 or 12 c
consecutive months' full-time equivalent monthly pay. The Miscellaneous service retirement benefit E
is not capped.The Safety service retirement benefit is capped at 90%of final compensation.
R
a
95
Racket Pg:536
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Funded Status and Funding Progress
m
As of the most recent actuarial valuation dates of June 30, 2013, the funded status of the m
Miscellaneous, Safety, and SA plans were as follows:
Members Plan U
C
Valuation Date c
(June 30,2013) City City Successor Agency U.
Miscellaneous Safety Miscellaneous
Entry age normal accrued m
liability $ 462,716,487 $ 633,088,050 $ 19,072,933 N
Actuarial value of assets $ 346,176,839 $ 463,930,661 $ 14,909,317 N
Unfunded actuarial accrued
liability(UAAL) $ 116,539,648 $ 169,157,389 $ 4,163,616 }
Funded ratio 74.8% 73.3% 78.2%
Annual covered payroll $ 39,974,288 $ 38,561,701 $ 437,864 LL
UAAL as a percentage of payroll
291.5% 438.7% 950.7%
¢
The schedule of funding progress,presented as Required Supplementary Information(RSI) following N
the notes to the financial statements,presents multi-year trend information about whether the actuarial t-
�,,,. value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for
benefits.
0
N
The assumptions for the City's Miscellaneous Plan are as follows: M
m
Actuarial cost method Entry age normal cost method
Amortization method Level percent of payroll
w
Average remaining period None for the valuation date as of June 30, 2013 and 25 years for the
valuation date as of June 30,2010 >-
L
O
Asset valuation method Market value for June 30, 2013 and 15 years smoothed market for
June 30,2010
Discount rate 7.50% (net of administrative expenses)for June 30,2013
7.75% (net of administrative expenses) for June 30,2010 S
�a
Projected salary increases 3.30% to 14.20% depending on age, service and type of
employment for June 30,2013 a
3.55% to 14.45% depending on age, service and type of
employment for June 30,2010 E
s
Inflation 2.75%for June 30,2013 and 3.00%for June 30,2010
Payroll growth 3.00%for June 30,2013 and 3.25%for June 30,2010
�� = P,,acket Pg`537
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
N
_
Individual salary growth A merit scale varying by duration of employment coupled with an
assumed annual inflation growth of 2.75% and an annual
production growth of 0.25%for June 30,2013.
rn
A merit scale varying by duration of employment coupled with an
assumed annual inflation growth of 3.00% and an annual
production growth of 0.25% for June 30,2010. U-
.2
The assumptions for the City Safety Plan are as follows: m
M
r
Actuarial cost method Entry age normal cost method N
0
Amortization method Level percent of payroll
a
m
Average remaining period None for the valuation date as of June 30, 2013 and 29 years for the
valuation date as of June 30,2010
N
U-
Asset valuation method Market value for June 30, 2013 and 15 years smoothed market for m
June 30,2010
Q
Discount rate 7.50% (net of administrative expenses)for June 30,2013 a;
N
T-
7.75% (net of administrative expenses) for June 30,2010
M
Projected salary increases 3.30%to 14.20% depending on age, service and type of employment N
for June 30,2013 M
4)
3.55%to 13.15% depending on age, service and type of employment
for June 30,2010
Inflation 2.75%for June 30,2013 and 3.00%for June 30,2010 w
Payroll growth 3.00% for June 30,2013 and 3.25%for June 30,2010
w
L
0
CL
Individual salary growth A merit scale varying by duration of employment coupled with an
assumed annual inflation growth of 2.75% and an annual production
growth of 0.25%for June 30,2013.
A merit scale varying by duration of employment coupled with an
U.
assumed annual inflation growth of 3.00% and an annual production
growth of 0.25%for June 30,2010.
c
Q
_
a�
E
t
c�
Q
Q'7 P,acket Pg 5384;
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
The assumptions for the SA Miscellaneous Plan are as follows: _
Q
E
m
Actuarial cost method Entry age normal cost method
Amortization method Level percent of payroll
c
Average remaining period None for the valuation date as of June 30,2013 and 17 years for the 'U_
valuation date as of June 30,2010 2
N
M
M
Asset valuation method Market value for June 30, 2013 and 15 years smoothed market for cr,
June 30,2010 N
0
Discount rate 7.50% (net of administrative expenses) for June 30,2013 N
m
7.75%(net of administrative expenses)for June 30,2010
N
Projected salary increases 3.30% to 14.20% depending on age, service and type of U-
employment for June 30,2013 d
3.55% to 14.45% depending on age, service and type of
employment for June 30,2010 a;
N
T
Inflation 2.75%for June 30,2013 and 3.00%for June 30,2010
M
r
Payroll growth 3.00%for June 30,2013 and 3.25%for June 30,2010 04
0
M
Individual salary growth A merit scale varying by duration of employment coupled with an c
assumed annual inflation growth of 2.75% and an annual
production growth of 0.25% for June 30,2013.
a�
A merit scale varying by duration of employment coupled with an w
assumed annual inflation growth of 3.00% and an annual M
production growth of 0.25%for June 30, 2010. >-
0
CL
(16) Other Post-Employment Benefits (OPEB)
City(Excluding Water Department) 2
Plan Description =
ii
'a
The City administers a single employer defined benefit healthcare plan (the Plan). The Plan currently
provides healthcare and life insurance for eligible retirees and their surviving spouses through the =
4
City's group health insurance plan,which is administered by Mercer.Life insurance premiums are paid
100%by retirees. The Plan covers both active and retired members.Benefits provisions are established
through negotiations between the City and various union bargaining groups. The Plan does not issue a
publicly available financial report.
4
f)o Packet Pg:.°539
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Funding Policy
Contribution requirements of the Plan are established through negotiations between the City and
union representatives. The required contribution is based on pay-as-you-go financing requirements.
Cn
For fiscal year 2012-13, the City contributed $567,000 to the Plan. The City currently contributes
$115 per month of the required premium costs of active employees. Retired employees are permitted
to participate with active employees in the health-care plan, but retirees must pay all premiums as
calculated by Mercer, less the City's payment of$115 per month, assigned to them, except for sworn U_
police employees. The City's monthly contribution for sworn police employees is in accordance with .2
the following schedule: m
M
Years of service Monthly Contribution N
20 $ 200 0
25 350 L'
ca
30 450
�a
Annual OPEB Cost and Net OPEB Obligation N
LL
The City's annual other OPEB cost(expense) is calculated based on the annual required contribution m
(ARC) of the employer, an amount actuarially determined in accordance with the parameters of
GASB Statement No.45. The ARC represents a level of funding that, if paid on an ongoing basis, is Q
projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding a)
excess) over a period not to exceed thirty years. The following table shows the components of the
City's annual OPEB cost for the year,the amount actually contributed to the Plan, and changes in the
City's net OPEB obligation:
0
N
Annual Required Contribution(ARC) $ 4,482,000
Interest on net OPEB obligation 1,065,000 c
Adjustment of annual required contribution -
Annual OPEB cost(expense) 5,547,000
Contributions Made w
Benefit payments(cash subsidy) (567,000) d
Benefit payments(implied subsidy) (780,000)
Total contributions made (1,347,000) °Q
a�
o!
Increase in net OPEB obligation 4,200,000 1°
Net OPEB obligation-beginning of the year 25,068,601
Net OPEB obligation-end of year $ 29,268,601
U.
�a
_
c
a
w
_
E
w
_ Q
00 Packd P 540
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the
net OPEB obligation for 2012-13 and the two preceding years were as follows: °'
E
m
Percentage of y
r
Fiscal Year Annual OPEB Annual OPEB Net OPEB
Ended Cost Cost Contributed Obligation
June 30,2011 $ 6,197,000 19% $ 19,956,601 =
LL
June 30,2012 6,625,000 23% 25,068,601 0
June 30,2013 5,547,000 24% 29,268,601 m
M
r
N
Funded Status and Funding Progress N
L
The funded status of the plan as of June 30, 2012,the most recent valuation date,was as follows:
Actuarial accrued liability(AAL) $ 48,819,000
Actuarial value of plan assets - U.
Unfunded actuarial accrued liability(UAAL) $ 48,819,000
Funded ratio(actuarial value of plan assets/AAL) 0% a
Covered payroll(active plan members) $ 84,166,000
UAAL as a percentage of covered payroll 58%
M
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and c
assumptions about the probability of occurrence of events far into the future. Examples include N
assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined M
regarding the funded status of the Plan and the annual required contributions of the employer are c
subject to continual revision as actual results are compared with past expectations and new estimates
are made about the future. The schedule of funding progress, presented as required supplementary
information following the notes to the financial statements, presents multi-year trend information c
about whether the actuarial value of plan assets is increasing or decreasing over time relative to the W
actuarial accrued liabilities for the benefits. d
Actuarial Methods and Assumptions °_
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the
c
time of each valuation and the historical pattern of sharing of benefit costs between employer and c
plan members to that point. The actuarial methods and assumptions used include techniques that are U_
designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial M
assets, consistent with long-term perspective of the calculations.
4
In the June 30, 2012 actuarial valuation, which was used to determine the ARC for fiscal year 2013, c
the actuarial cost method used for determining the benefit obligations is the entry age normal cost E
method. The actuarial assumptions included a 4.25% discount rate, which is the assumed rate of the
expected long-term investment returns on plan assets calculated based on the funded level of the plan
at the valuation date, and an annual healthcare cost trend rate of 8.5% initially,reduced by increments
NMW Q
of 0.5% per year to an ultimate rate of 5.0%. The unfunded actuarial accrued liability UAAL at
y
p ty ( )
June 30, 2012 is being amortized as a level percent of payroll over a 21-year fixed (closed) period.
100
Packet;Pg.`,X41
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Future assumption changes,plan changes,and gain/losses are amortized over a 15-year fixed(closed)
c
period. The maximum combined period amortization is 30-years. It is assumed the City's payroll will
E
increase 3.25%per year. 4)
Water Department
c
Plan Description
U_
The City Water Department (Department)provides health benefits to all qualifying retirees and their
N
spouses in accordance with Memorandums of Understanding under various labor agreements. The 0
m
Department maintains the financial activity of the plan as a trust fund, which is reported on the M
Statement of Fiduciary Net Position as the Water Department OPEB Trust Fund. Employees are N
eligible for retiree health benefits if they retire from the Department on or after age 50 with at least o
10, 12, or 15 years of service,depending on bargaining unit,and are eligible for a PERS pension.
m
Funding Policy
N
The contribution requirements of plan members and the Department are established and may be L_
amended by the Board of Water Commissioners. The required contribution is based on projected pay-
as-you-go financing requirements, with an additional amount to prefund benefits as determined
annually by the Board of Water Commissioners. For fiscal year 2012-13, the Department has funded Q
$573,621 for the current year. Plan members receiving benefits contributed$138,538 (approximately a;
19.4% of total premiums) through their required contribution. The Department pays up to the entire r
cost of health benefits for eligible retirees and their spouses, subject to the City's vesting schedule.
M
r
Annual OPEB Cost and Net OPEB Obligation c°14
C
M
The Department's annual other post-employment benefit (OPEB) cost (expense) is calculated based =
on the annual required contribution (ARC) of the employer, an amount actuarially determined in
accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding
that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any a
unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The w
following table shows the components of the Department's annual OPEB cost for the year, the
amount actually contributed to the plan,and changes in the Department's net OPEB obligation: >-
0
CL
Annual Required Contribution(ARC) $ 2,361,000
Interest on new OPEB obligation -
Amortization of net OPEB obligation -
Annual OPEB cost(expense) 2,361,000 c
Contributions made (573,621) "'
m
Increase in net OPEB obligation 1,787,379
Net OPEB obligation-beginning of year - Q
Net OPEB obligation-end of year $ 1,787,379
m
E
ca
Q
101 ,Packetk,,Pg„542.
,A
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
The Department's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan,
and the net OPEB obligation for 2012-13 and the two preceding years were as follows:
E
Percentage
of Annual ra
Fiscal Year Annual OPEB OPEB Cost Net OPEB
c
Ended Cost Contributed Obligation LL
June 30,2011 $ 2,355,000 29% $ 6,530,000
June 30,2012 2,510,000 360% - m
June 30,2013 2,361,000 24% 1,787,379
N
O
Funded Status and Funding Progress N
L
The funded status of the plan as of June 30,2012,the most recent valuation date,was as follows:
U
N
Actuarial Accrued Liability(AAL) $ 28,831,000 U_
Actuarial value of plan assets 8,556,000 2
Unfunded actuarial accrued liability(UAAL) $ 20,275,000
Funded ratio(actuarial value of plan assets/AAL) 30% a
Covered payroll(active plan members) $ 14,765,000 N
UAAL as a percentage of covered payroll 137% �-
M
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and N
assumptions about the probability of occurrence of events far into the future. Examples include M
assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined c
regarding the funded status of the Plan and the annual required contributions of the employer are
subject to continual revision as actual results are compared with past expectations and new estimates m
are made about the future. The schedule of funding progress, presented as required supplementary
information following the notes to the financial statements, presents multi-year trend information W
about whether the actuarial value of plan assets is increasing or decreasing over time relative to the
actuarial accrued liabilities for the benefits. >-
L
O
Post-Employment Welfare Benefits Program Trust
Pursuant to the California Government Code, the Department established an irrevocable Post-
Employment Welfare Benefits Program Trust (Trust) for the purpose of holding and investing assets
to pre-fund the other postemployment benefits for the Department retirees. On July 5, 2011, the S
Department entered into a trust and investment services agreement with U.S. Bank National
Association to act as trustee and PFM Asset Management, LLC as Trust Administrator. During FY =
2012-13, the Department did not make any contributions to the Trust. As of June 30, 2013 the Net Q
Position of the Trust fund was $9.7 million.
m
Actuarial Methods and Assumptions
R
Projections of benefits for financial reporting purposes are based on the substantive plan(the plan as
understood by the employer and the plan members) and include the types of benefits provided at the
time of each valuation and the historical pattern of sharing of benefit costs between employer and
n2 „P.a66t.Pg.343
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
, "'"• Year Ended June 30,2013
plan members to that point. The actuarial methods and assumptions used include techniques that are
designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial
assets,consistent with long-term perspective of the calculations. Cn
In the June 30, 2012 actuarial valuation, the entry age actuarial cost method was used. The actuarial n
assumptions included a rate of return of 6.25% and annual healthcare costs trend rates of 8.5%
initially, reduced by increments to an ultimate rate of 5% after ten years. Both rates included a 3%
inflation assumption. The actuarial value of assets was determined using techniques that spread the ii
effects of short-term volatility in the market value of investments over a five-year period. The UAAL 2
.N
is being amortized as a level percentage of projected payroll on an open basis. The remaining W
m
amortization period at June 30,2013 was 21 years. ch
N
Successor Agency o
N
L
Plan Description }
The Successor Agency (SA) administers a single employer defined benefit healthcare plan (the Plan). N
The SA provides medical and dental plan coverage for retirees and their eligible surviving U.
dependents. This coverage is available for employees who satisfy the requirements for retirement
under the California Public Employees' Retirement System (PERS), which is age 50 or older with at
least eight years of SA service. The Plan does not issue a publicly available financial report. Q
rn
Funding Policy r
et
The contribution requirements of the SA are established and may be amended by the SA's Board. The
required contribution is based on pay-as-you-go financing requirements. For fiscal year 2012-13, the c°�
SA contributed$19,992 to the plan,which was 100%of the total current premiums.
m
Annual OPEB Cost and Net OPEB Obligation
The SA's annual other OPEB cost (expense) is calculated based on the annual required contribution 'aa
(ARC) of the employer,an amount determined using an alternative method in accordance with GASB w
Statement No.45.At June 30,2013,the SA estimated its OPEB liability as$1,135,975.
Funded Status and Funding Progress e
Q.
m
The funded status of the plan as of June 30,2008,the most recent valuation date,was as follows:
Actuarial accrued liability(AAL) $ 749,208 M
S
Acturial value of plan assets - S U.
Unfunded actuarial accrued liability(UAAL) $ 749,208
Funded ratio(actuarial value of plan assets/AAL) 0%
Covered payroll(active plan members) $ 1,763,100 `t
UAAL as a percentage of covered payroll 42%
E
t
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include Q
assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined
103
Packe#Pg 544
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
regarding the funded status of the Plan and the annual required contributions of the employer are
c
subject to continual revision as actual results are compared with past expectations and new estimates
are made about the future. The schedule of funding progress, presented as required supplementary d
information following the notes to the financial statements, presents multi-year trend information N
about whether the actuarial value of plan assets is increasing or decreasing over time relative to the
actuarial accrued liabilities for the benefits.
is
Actuarial Methods and Assumptions _
U
Projections of benefits for financial reporting purposes are based on the substantive plan(the plan as
m
understood by the employer and the plan members) and include the types of benefits provided at the r,
time of each valuation and the historical pattern of sharing of benefit costs between employer and C,
plan members to that point. The actuarial methods and assumptions used include techniques that are o
designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial N
L
assets,consistent with long-term perspective of the calculations. W
The actuarial cost method used for determining the benefit obligations is the entry age normal cost y
method. The actuarial assumptions included a 4.5% discount rate, which is the assumed rate of the U_
expected long-term investment returns on plan assets calculated based on the funded level of the Plan m
at the valuation date,and an annual healthcare cost trend rate of zero percent initially,which increases =a
o �
to 5.0/o in the fourteenth year. The UAAL is being amortized as level percentage of projected payroll Q
over 20 years. a;
N
(17) Other Retirement Plan (PARS) �-
M
T_
Effective January 1, 2004, pursuant to sections 401(a) and 501(a) of the Internal Revenue Code, the c°.i
City adopted a tax-qualified governmental defined benefit plan, the City of San Bernardino Public M
Agency Retirement System (PARS)—Retirement Enhancement Plan(the Plan). The Plan established d
a trust administered by PARS to provide certain police safety or police management employees
employed as of January 1, 2004, meeting specific requirements as outlined in the Plan document, -a
supplemental retirement benefits in addition to the benefits employees will receive from the 'a
pp
_
California Public Employees' Retirement System (CalPERS . The Plan is entirely funded through
w
City contributions amounting to 1.7% of employee salaries. Due to the Bankruptcy, the City M
suspended their PARS payments and has an accrued benefit liability at June 30, 2013 in the amount
of$449,222.The City's contributions to the Plan amounted to$21,141 in 2012-13. o
a�
(18) Jointly Governed Organizations and Joint Venture
Inland Valley Development Agency
_
LL
In January 1990, the City entered into a joint powers agreement with the Cities of Colton and Loma
Linda and the County of San Bernardino to form the Inland Valley Development Agency (IVDA). 3
_
The IVDA adopted a redevelopment plan,and its primary purpose is to promote the redevelopment of _
Q
the former Norton Air Force Base and other areas within its project area. The IVDA board is r
comprised of three members from the City and two each from the other members. The primary E
sources of funding are tax increment and lease income. Additional financial information can be s
obtained by contacting the IVDA at 1601 E.Third Street, San Bernardino, CA 92408,
Q
104 Packet-Pg_545
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
San Bernardino International Airport Authority c
m
In May 1992, the City entered into a joint powers agreement with the Cities of Colton, Loma Linda, m
Highland and Redlands and the County of San Bernardino to form the San Bernardino International
Airport Authority (SBIAA). SBIAA was created primarily for the purpose of acquiring, operating,
repairing,maintaining and administering the aviation related portions of the former Norton Air Force
Base property located in San Bernardino. Effective April 19, 1996, the City of Redlands withdrew ro
c
from its membership in SBIAA. The board is comprised of two members from the City and one each U.
from the other members. The primary sources of funding are loans, federal grants and lease income.
.y
Additional financial information can be obtained by contacting SBIAA at 1601 E. Third Street, San
m
Bernardino, CA 92408. M
r
N
San Bernardino Regional Water Resource Authority N
L
In August 1998, the City entered into a joint powers agreement with the Inland Valley }
Development Agency (IVDA) and the San Bernardino Valley Municipal Water District (the
District) to form the San Bernardino Regional Water Resources Authority (the Authority). The
N
Authority was created primarily for the purpose of conducting a water resource and storage project. �-
The Authority board is comprised of three members from the City, one member from IVDA and m
two from the District. The primary sources of funding are loans and grants. Additional financial
information can be obtained by contacting the Authority at 201 North "E" Street, Third Floor, San Q
Bernardino, CA 92401. a;
N
Colton/San Bernardino Regional Tertiary Treatment and Water Reclamation Authority �
M
r
On August 2, 1994, the City of San Bernardino, through the Water Department formed a joint
powers authority with the City of Colton to construct, operate, use and maintain tertiary wastewater M
treatment, disposal and water reclamations systems, including the Regional Rapid Infiltration and c
Extraction Facility (RIX). This authority is governed by a separate board consisting of four
members; two appointed by the City through the Water Department's Board of Water
Commissioners and two appointed by the City Council of the City of Colton. Construction of RIX 'a
was administered by the Santa Ana Watershed Project Authority and was substantially completed w
during 1996. Administration and operation was turned over at that time. The cities of San cu
Bernardino and Colton each have an undivided interest in the real property and any related debt of >-
the RIX projects based on an 80% / 20% split, respectively. Substantially all of the assets of RIX o
are in the form of capital assets. RIX has no liabilities. Annual revenues (in the form of
contributions from the two member cities) are equal to annual expenses. The Water Department's
equity interest in this joint venture has been reported as an investment in joint venture in the
accompanying statement of net position.
CU
U-
San Bernardino Public Safety Authority
c
On April 1, 1968, the City of San Bernardino and the County of San Bernardino formed the San =
Q
Bernardino Public Safety Authority (PSA), a joint powers authority, as a financing vehicle to
construct public safety buildings and improvements to the wastewater treatment plant. In accordance
with the terms of an installment purchase agreement, title to the capital assets financed through the s
PSA were recognized as capital assets of the City at the inception of the installment purchase c�a
agreement between the City and the PSA. The City's remaining interest in the joint venture is in the Q
form of cash and investments held by the PSA for debt service related activity. The Water
Department's equity interest in these assets has been recognized in the accompanying statement of net
position as an investment in joint venture.
105 PackefPgry`546
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
West End Water Development, Treatment and Conservation Joint Powers Authority =
d
On August 15, 1990, the City of San Bernardino joined the West End Water Development, m
Treatment and Conservation Joint Powers Authority (WEJPA) as a financing vehicle for
construction of water facilities. A three-member board consisting of one representative from each
agency's governing body governs the WEJPA. This joint venture was formed to provide a financing
vehicle for the three member agencies. This joint venture is currently inactive.
c
'u.
(19) Consent Decree 2
y
M
M
In 1996, the City of San Bernardino filed a complaint against the United States of America, M
Department of the Army to recover damages,response costs and other available remedies relating to N
contamination alleged to have originated at a World War II army installation known as Camp Ono. o
In March 2005, the United States District Court, Central Division entered judgment, in the form of a
Consent Decree, in the matter of City of San Bernardino v. United States of America. The Consent
Decree settles the City's and the State's claims arising from the groundwater contamination
allegedly caused by the Army. The Consent Decree contains a number of provisions obligating the N
City (through the City's Water Department) to operate and maintain the Newmark Groundwater U.
Superfund site (Site). The Site consists of two operable units, the Newmark Operable Unit and the a
Muscoy Operable Unit. The Newmark Operable Unit was declared operational and functional in
1998. The Muscoy Operable unit was declared operational and functional in 2007. Q
rn
The Consent Decree provided for a payment of $69 million from the Army to the City for r
performance of the work outlined in the Consent Decree. Upon acceptance of the Consent Decree,
the Department received title to all facilities constructed by the United States Environmental
Protection Agency (EPA) of the Site and agreed to operate and maintain the groundwater extraction c°•�
and treatment system for a period of 50 years. The $69 million payment consisted of$59 million for M
operations and maintenance and $10 million for the construction of certain capital facilities that c
would be required in the future; the funds are subject to strict limitations, contained in the Consent
Decree, as to how the money may be spent.
Pursuant to the Consent Decree, $10 million, including interest earned, has been set aside to be used w
only for (i) funding construction of treatment and directly related transmission systems that expand d
the Water Department's capacity to deliver potable water and (ii) funding work performed by the >_
Water Department to complete construction of the Muscoy Operable Unit extraction system. These o
capital facility funds may not be used for costs incurred to operate, maintain, repair or retrofit m
components of the site extraction of treatment systems constructed by EPA.
In March 2006, the Water Department entered into a Guaranteed Investment Contract with AIG
Match Funding Corporation. The Department invested$16,482,039 of excess Consent Decree funds =
U.
into an interest bearing Escrow Fund investment with an interest rate of 4.95% per annum. These
funds were invested to pay costs associated with the water facilities defined in the Consent Decree
for years 2035-2056. An additional $50 million was used to purchase a blended insurance policy to =
Q
provide a financial vehicle that provides cost cap coverage for the first 30 years of expenses.
m
The terms of the Guaranteed Investment Contract only provided the Department with the position of
a secured creditor with respect to an AIG bankruptcy. As concerns rose regarding AIG's financial
credibility, in October 2009, the Department negotiated and accepted a "payout" in the amount of Q
$18,661,876, which represented the principal and accrued interest as of that date. These funds are
currently invested in a diversified portfolio managed by PFM Asset Management.
106
Packet.Pg 547
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(20) Pollution Remediation =
d
The City operated a municipal non-hazardous solid waste facility, identified as the "Waterman m
Landfill", from 1950 to 1960. The City is the primary responsible party for pollution remediation 2 Cn
obligations related to the Waterman Landfill. During the 1990s, groundwater monitoring wells n
were installed and placed into service as part of the overall remediation plan. In 2004, it was .5
determined that additional work was required to comply with state regulations. State regulatory =
agencies approved a plan for final closure of the Waterman Landfill in 2012. The City is currently U=
in the design phase of the remediation project, and anticipates the construction phase to begin in 2
2016. Pollution remediation costs for the closure of the Waterman Landfill are estimated at
m
$7,080,360, measured using the expected cash flow technique. This estimate is subject to change M
in future periods due to various factors including changes in the remediation plan or operating N
conditions, the type of equipment and services that will be used, price increases or reductions for N
specific outlay elements, such as ongoing monitoring requirements, changes in technology, or
changes in legal or regulatory requirements. The liability is reported in the Integrated Waste Fund
in the accompanying financial statements.
U
N_
(21) Commitments U-
-a
m
Contractual Obligations
Q
Commitments in the form of signed contracts for costs to complete construction projects or other a;
improvements, including street repairs and infrastructure improvements, at June 30, 2013, amounted r
to$1,969,479 in the Water Enterprise Fund and$2,195,963 in the Sewer Enterprise Fund.
M
r
(22) Contingencies c°•�
0
M
Federal and State Grants
Amounts received or receivable from grantor agencies are subject to audits or adjustments by grantor
agencies, principally the federal and state governments. Such audits could lead to disallowed claims
under the terms of the grants, including amounts already collected, which may constitute a liability w
of the City. The City has not complied with the reporting requirements of Federal OMB Circular A-
133, which requires that entities which expend $500,000 or greater in Federal awards during the >_
fiscal cycle have an independent auditor conduct an audit of said federal funds, known as a Single o
Audit, for fiscal year 2012-13 and fiscal year 2013-14. m
The City was subject to an audit of its Community Development Block Grant Program (CDBG),
administered by the United States Department of Housing and Urban Development (HUD). The =
audit was conducted by the Office of the Inspector General of HUD. The audit report, dated
U.
April 23, 2013, identified approximately $7.16 million of reimbursed expenses as ineligible or i
unsupported, $168,761 of program income not reported and $472,102 of Recovery Act funds
procurement activities not adequately supported. The City, on behalf of the Successor Agency =
a
(and former Economic Development Agency (EDA)) has responded to the audit report, and c
submitted documentation to reduce and/or eliminate certain specific findings. On November 12, E
2014, the City and HUD agreed on actions to resolve these monetary findings as approved by
Resolution #3720 dated February 17, 2015, of the Mayor and Common Council of the City as
follows: Q
107
Packet Pg„548,
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Q� Year Ended June 30,2013
• Payment of $168,761 was made by the City to the City's CDBG line of credit with non-
federal funds on February 24,2015 to be used for future CDBG-eligible activities.
E
• Payment of $500,000 was made by the City to the City's CDBG line of credit with non- a;
federal funds on July 1,2015 to be used for future CDBG-eligible activities. Cn
• Payment of$500,000 will be made by the City to the City's CDBG line of credit with non- @
federal funds on July 1,2016 to be used for future CDBG-eligible activities. c
• Payment of$895,482 will be made by the City to the City's CDBG line of credit with non- c
federal funds on July 1, 2017 to be used for future CDBG-eligible activities. U.
U_
fA
The City has accrued the total of$2,064,243 owed to its CDBG line of credit as a liability of its m
governmental activities opinion unit. The City has acknowledged that if it does not honor this
payment schedule, it will result in funds being reduced from the City's CDBG line of credit.
0
N
Property Taxes Due @
d
Properties Transferred to Non-Governmental Entities
_N
On March 17 2011, the Economic Development Agency of the City of San Bernardino (EDA) U.
authorized the transfer of legal title of certain real estate assets (Transferred Assets) under its
control to the Economic Development Corporation of San Bernardino (SBEDC) and the
Affordable Housing Solutions of San Bernardino Incorporated (AHS) in response to anticipated Q
redevelopment dissolution legislation. The transfers of the Transferred Assets to not-for-profit, N
non-governmental entities resulted in the San Bernardino County Tax Collector (County) adding ,
the Transferred Assets to the property tax roll. The EDA, its successor,the Successor Agency for
the Redevelopment Agency of the City of San Bernardino (Successor Agency), or the City did not M
0
pay the property taxes levied by the County. The California State Controller's Office conducted an N
Asset Transfer Review (ATR) and in its report dated March 2013, found that Transferred Assets �°,
had not been transferred to the Successor Agency in accordance with California Health and Safety
Code (HSC) section 34167.5., but had been transferred to SBEDC. The California State
Controller's Office ordered the City to reverse the transfer of assets pursuant to HSC sections
34167.5 and 34167.10. Subsequent to the ATR and in conjunction with redevelopment dissolution
wind down activities, the California State Department of Finance (DOF) took the position that the W
L
City was responsible for the property taxes because they would not have been levied on the
Transferred Assets if the proper transfer had been made. The City's property tax related liability
due the County of San Bernardino at June 30, 2013 is $303,466. The City and Successor Agency Q
have requested the County of San Bernardino Auditor-Controller/Treasurer/Tax Collector to
cancel the property taxes levied during the period SBEDC and AHS were the property owners of
record.
c
�o
Properties Acquired Through Foreclosure i
�a
Property taxes due the County became liabilities of the Successor Agency and the City of San c
Bernardino (City) through the EDA's foreclosure on nine parcels known as the Carousel Mall Q
properties. The previous owner of the Carousel Mall properties had not paid $509,444 in property
taxes, penalties, and costs due the County for property tax years 2009 and 2010 at the date the m
foreclosure occurred. The City has accrued this liability as of June 30, 2013. Upon acquiring the
Carousel Mall properties on February 14, 2011 through foreclosure, the Successor Agency
assumed all assets and liabilities of the Carousel Mall properties. Beginning July 1, 2010 and Q
108 =Packetr'P„g ;549
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
2011, the previous owner's unpaid property taxes for property tax years 2009 and 2010,
respectively, became delinquent and were assessed 1.5 percent per month in interest on the unpaid
property taxes, which at June 30, 2013, were $110,691 in interest charges for the year ended June d
30, 2012 and $83,334 for the year ended June 30, 2013. On March 18, 2011, the Successor N
Agency transferred legal title on the Carousel Mall properties to the San Bernardino Economic
Development Corporation (SBEDC), a non-profit, non-government component unit of the City.
On December 19,2011,the Carousel Mall properties were transferred to the Carousel Mall LLC, a
non-government entity. The transfers of the Carousel Mall properties to SBEDC and Carousel ii
Mall LLC resulted in the County adding the Carousel Mall properties to the property tax roll and 2
the assessment of property taxes in tax year 2012 for $113,042 to SBEDC, which were not paid y
m
and resulted in penalties and costs for an additional $11,394, for a total amount due at June 30, ch
2013, to the County of San Bernardino for tax year 2012 of$124,436. The aggregate amount due N
the County of San Bernardino at June 30, 2013 is $827,905 of which $703,469 is owed by the o
Successor Agency and $124,436 is owed by the City. The City and Successor Agency have L_
requested the County of San Bernardino Auditor-Controller/Treasurer/Tax Collector cancel the }
property taxes levied during the period SBEDC and Carousel Mall LLC were the property owners
of record.
N
LL
Gas Tax Revenues m
The City is subject to periodic audits of its use of gas tax revenues by the State Controller's Office. Q
The City used a portion of gas tax revenues to make certain debt service payments on a note payable a;
related to pavement rehabilitation (street-related) projects. State guidelines relating to gas tax r
expenditures limit the amount of revenue available for debt service expenditures, as well as the type
of debt that may be paid. State regulatory authorities have not issued an opinion on the matter and
the potential exposure to the City's General Fund is uncertain, and therefore, no contingent liability cm
related to this matter has been accrued in the accompanying financial statements. M
CD
c
Litigation
The City is a defendant in numerous lawsuits and is also subject to other claims,including claims for "aa
workers' compensation payments. The City uses in-house and, where necessary, outside counsel to w
adjudicate lawsuits. Each case is initially rated by the City Supervising or Senior attorney handling d
or overseeing the case with respect to its viability for success against the City. Only cases rated >_
'probable' for recovery from the City are reported for financial statement purposes. The dollar value o
reserved for any eventual payout on any said case is based upon the facts of the case, industry
standards relative to the type of injury or damage involved, and the experience of the Supervising or
Senior attorney. The legal reserve as of June 30, 2013, is a product of this analysis. The City used a
third-party actuary to perform a workers' compensation reserve analysis (estimated loss reserve) as =
m
of June 30, 2013. The actuary used a general approach that relied upon actual loss development
U_
patterns for the City of San Bernardino to the extent they are available, and is augmented with
industry benchmark loss development patterns based on insurance industry sources and patterns to =
project ultimate losses. While it is not possible to project the final outcome of these lawsuits and
Q
claims, the City and its legal department have estimated that the liability for all such litigation and ;
claims totaled approximately $30.7 million for the primary government as of June 30, 2013. In
addition, these lawsuits and claims may be compromised and/or discharged pursuant to a plan of ,a
adjustment confirmed in the Bankruptcy Case.
.r
Q
109 Packe#Pg 550�. ,'
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
CaIPERS Penalty
m
The City deferred making certain payments to Ca1PERS during FY 2012-13. The City shall pay to
Ca1PERS the amount of$2,000,000 commencing on the earlier to occur of(a)entry of the first order N
confirming or denying confirmation of the City's Chapter 9 Plan or (b) dismissal of the City's o
bankruptcy case.
c
c
(23) Restatement of Prior Year Balances ii
U
N
The beginning net position for governmental activities and the beginning fund balances for certain M
m
governmental funds at July 1,2012,were restated to report corrections of errors as follows: ch
N
Governmental o
N
Activities
w
Adjustment to record accreted interest payable $ (4,397,024)
Adjustment to reduce the unearned revenue (7,598,423) LL
Adjustment to record HUD section 108 Arden Guthrie notes payable (7,500,000) m
Adjustment to reconcile accounts receivable general ledger balance
to the sub-ledger of the General Fund 72,301 `t
Adjustment to record property Y tax expense incurred from transfer N
r
of RDA properties to taxable entities(AHS and EDC) (151,733) �!
Adjustment to record revenues 3,596,981
0
Adjustment to reclassify grant revenues recorded to the General Fund 281,179 N
i
Adjustment to record grant revenues in the proper year 209,531 <°
a�
r deferred fl (1,456,167) =
Adjustment to reclassify revenue recorded to d d inows of resources
Adjustment to reconcile accounts receivable general ledger balance to the
sub-ledger of the Federal and State Grants Fund 31,204
Adjustment to reclassify cash recorded to CDBG incorrectly w
during the software conversion (18,806)
Adjustment to reclassify cash with fiscal agents to the Successor Agency (3,819,379)
Adjustment to record capital asset additions in the prior year 14,409 °a
Prior Year Adjustments $ (20,735,927)
m
c
U_
a
a.:
m
E
t
a
110 Packet�g 551
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Special Revenue .y.
Federal and Low and Moderate Sales and
General State Grants Income Housing Road E
R
Adjustment to reconcile accounts receivable general ledger
U)
balance to the sub-ledger $ 72,301 $ $ $
Adjustment to record property tax expense incurred from transfer V
of RDA properties to taxable entities(AHS and EDQ (151,733) -
cC
Adjustment to record revenues 3,596,981 C
Adjustment to reclassify grant revenues recorded U.
to the General Fund 281,179 2
Adjustment to record grant revenues in the proper year - 209,531
Adjustment to reclassify revenue recorded to deferred inflows of m
resources (1,456,167) M
r
Adjustment to reconcile accounts receivable general ledger to N
the sub-ledger 31,204 p
Adjustment to reclassify cashed booked to CDBG incorrectly C14
during the software conversion (18,806) +�
Q
Adjustment to reclassify cash with fiscal agents to the Successor >_
Agency - (3,819,379) -
V
N
Prior Year Adjustments $ (79,432) $ 2,434,391 $ (3,819,379) $ 209,531 LL
The beginning net position at July 1, 2012, for the business-type activities and the Internal Services
Funds were restated to report corrections of errors for the following: Q
o�
N
Business-type Activities-Enterprise Funds Internal j
Water Sewer Total Service Funds
M
r
O
Adjustment to capitalize interest costs $ 776,821 $ 1,670,848 $ 2,447,669 $ - N
Adjustment to remove salvage c°
values included in capital assets (3,023,270) (5,584,046) (8,607,316) -
Adjustment to adjust the value of
the investment in joint venture-RIX - (1,090,102) (1,090,102) - m
Adjustment to record capital asset =
additions for the prior year - - 14,409 w
Prior Year Adjustments $ (2,246,449) $ (5,003,300) $ (7,249,749) $ 14,409
L
0
CL
(24) Subsequent Events
Correspondence with California Department of Finance c
c
A March 21, 2014, letter from the California Department of Finance (DOF) indicated that "-
$3,413,155 of Low and Moderate Income Housing Fund (LMIHF) balances are to be transferred
from the LMIHF to the County Auditor-Controller for distribution to the affected taxing entities.The c
City does not contest $200,000 of this total balance. Through correspondence with the DOF Q
subsequent to the issuance of their letter on March 21, 2014, the DOF acknowledged that it did not C
m
have a complete data set with respect to the disputed items. The City intends to forward the missing E
data to the DOF for its review. If the DOF determines that the data received provides sufficient
justification,the amount in dispute may be adjusted or eliminated.No amounts have been accrued in Q
the accompanying financial statements.
111 "-Packet
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(25) Successor Agency Trust for Assets of Former Redevelopment Agency
c
m
On December 29, 2011, the California Supreme Court upheld Assembly Bill XI 26 (the "Bill") that m
provides for the dissolution of all redevelopment agencies in the State of California. This action 2
impacted the reporting entity of the City since the City had previously reported its redevelopment
agency (commonly referred to as the "Economic Development Agency" or "EDA") as a blended
component unit on the City's financial statements.
_
ii
The Bill provides that upon dissolution of the redevelopment agency, either the city or another unit
of local government may serve as the "successor agency" to hold the assets of the dissolved
redevelopment agency until they are disposed of in accordance with applicable laws and regulations. m
On January 9, 2012,the City Council adopted resolution 2012-12, electing to serve as the Successor
Agency to the former redevelopment agency of the City of San Bernardino in accordance with the N
Bill. On January 23, 2012, the City Council adopted resolution 2012-19 to have the City of San N
Bernardino serve as the Successor Housing Agency to the former redevelopment agency of the City
of San Bernardino.
co
After enactment of the law,which occurred on June 28,2011,redevelopment agencies in the State of
California were prohibited from entering into new projects, obligations or commitments. Subject to o_
the control of a newly established oversight board, remaining assets can only be used to pay w
enforceable obligations in existence at the date of dissolution, including the completion of any a
unfinished projects that were subject to legally enforceable contractual commitments. Q
rn
In future fiscal years, successor agencies will only be allocated tax increment revenue (to the extent N
available in the Redevelopment Property Tax Trust Fund, or"RPTTF", as maintained by the County 7T.
Auditor/Controller) in the amount that is necessary to pay the estimated annual payments on Cn
enforceable obligations of the former redevelopment agency until all enforceable obligations of the N
prior redevelopment agency have been paid in full and all assets have been redistributed or o
liquidated.
a�
The Bill directs the State Controller of the State of California to review the propriety of any transfers
of assets between redevelopment agencies and other public bodies that occurred after January 1, d
2011. If the public body that received such transfers is not contractually committed to a third party c
for the expenditure or encumbrance of those assets, the State Controller is required to order the w
available assets to be transferred to the public body designated as the successor agency by the Bill. d
In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on o
CL
December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased
to operate as a legal entity as of February 1,2012. After the date of dissolution,the assets, liabilities,
and activities of the dissolved redevelopment agency are reported in the Low and Moderate Income
Housing Fund, a City special revenue fund (for housing assets, liabilities, and activities), and a
private-purpose trust fund, a type of fiduciary fund (for non-housing assets, liabilities, and =
activities), in the financial statements of the City. U.
3
_
The EDA and the Successor Agency to the EDA conducted some of their activities through three =
affiliated entities: San Bernardino Economic Development Corporation (SBEDC), Affordable Q
Housing Solutions (AHS), and Sustainable Communities Reinvestment Partnership (SCRIP). The
financial activities of these affiliated entities are reported in the fiduciary funds of the accompanying E
t
financial statements, as components of the Successor Agency.
r
Q
cket
112
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
San Bernardino Economic Development Corporation — SBEDC was incorporated in 1973 as a
nonprofit public benefit corporation. SBEDC's purpose is to assist the EDA in promoting
development and redevelopment of properties within the City of San Bernardino (City). SBEDC
currently holds title to approximately 300 parcels of real property in the City pursuant to a March c°
Cn
2011 Funding Agreement with the EDA, under which the EDA transferred properties to SBEDC, -
and SBEDC committed to develop the properties using funding provided by the EDA. These parcels 0
include 128 parcels for the Bice Property project, 74 parcels for the Arden Guthrie Property project,
and 5 parcels for the Carousel Mall (an approximately 650,000 square foot indoor mall), which is u
owned and operated through the Carousel Mall LLC (a single-member limited liability company 2
with SBEDC as the single member). The funding agreement and the transfer of the properties were ca
m
validated in a judgment entered on July 27, 2011 by the Superior Court of the State of California, ch
County of San Bernardino, in an action brought by the EDA as Case No. CIVDS1103893 N
(Validation Judgment). Subsequently, however, the State Controller's Office (SCO), as authorized c
by the June 2011 and June 2012 legislation providing for the dissolution of redevelopment agencies,
conducted a review of the transfers and issued a report dated March 6, 2013 (SCO's "City of San }
Bernardino Economic Development Agency — Asset Transfer Review Report.") The SCO
contended in the report that the transfers were unallowable and that the Validation Judgment was not y
effective. The Successor Agency contested these contentions but the matter remains unresolved and LL
the ultimate disposition of the properties is undetermined. These properties were reported in the
Successor Agency as of June 30,2013. 3
Q
Affordable Housing Solutions — AHS was incorporated in 2005 as a nonprofit public benefit
corporation and was acquired by the EDA in 2009 to assist it in promoting economic development N
and increasing the availability of low and moderate income housing in the City. AHS has developed
several successful affordable housing projects, including Phoenix Square and the Magnolia Square
Project. AHS is also the City's contracted Neighborhood Stabilization Program administrator as well
as its property holding entity for the Home Investment Partnership Program (HOME) and the Low M
and Moderate Income Housing Fund (LMHIF). AHS, like SBEDC, entered into an agreement with c
the EDA in March 2011 for the receipt of properties and funding from the EDA. This agreement,
and property transfers made pursuant to it, were validated in the Validation Judgment. As with
SBEDC, the SCO disputed the validity of the EDA-AHS transactions. These properties were v
reported in the Successor Agency as of June 30,2013. w
Sustainable Communities Reinvestment Partnership — SCRIP was organized as a limited liability >_
company in 2009 to pursue renewable energy and sustainability projects in the City to help improve o
energy efficiency and reduce greenhouse gas emissions in the region. SCRIP's priorities include the C
development of solar power systems and coordination with the City-owned geothermal energy
operation that serves governmental and private users in the City. In 2010, SCRIP facilitated the
construction of a 250kW photovoltaic solar power system on the roof of a city-occupied building at
201 North "E" Street, San Bernardino. SCRIP also facilitated construction of a 448kW solar power LL
system at the San Bernardino International Airport in conjunction with the Inland Valley L
Development Agency. _
C
Q
On September 22,2015 Senate Bill 107,which amends various sections of the California Health and
Safety Code related to the dissolution of redevelopment agencies, was signed into law. SB 107 0)
contains various provisions which may impact, among other things (i) the repayment of prior
City/Redevelopment loans, (ii) treatment of City loans to the Successor Agency to pay enforceable
w
obligations,including bonded debt,and administrative costs, and(iii)the treatment of special levies. Q
pt
113
Cc ft 554;
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(A) Cash and Investments
,r
d
Cash and investments as of June 30,2013, are classified in the accompanying financial statements as m
follows: R
Cn
�a
Cash and investments $ 23,384,622
_
Cash with fiscal agents 30,007,728 c
U.
$ 53,392,350 2
N
M
m
(B) Notes Receivable M
T
N
Notes receivable represent loan agreements entered into between the former EDA and unrelated non- o
governmental entities as part of the EDA's redevelopment activities. There are five notes ranging in
amount from approximately $11,000 to $609,000, and totaling $3.9 million. Collection of these }
notes receivable is subject to the terms of each individual loan agreement.
N
(C) Property Held for Resale U.
a�
Property held for resale represents vacant land, commercial, and retail real estate acquired by the 5
EDA as part of its redevelopment activities. Over 55 properties, reported at cost basis ranging from Q
under $1,000 to $16.4 million each, and totaling $48.9 million, were transferred to the Successor
Agency upon dissolution of the redevelopment agency. These properties are being held for
disposition in accordance with applicable laws and regulations.
M
r
(D) Capital Assets C14
O
M
In accordance with the provisions of the Bill and the court case, all assets of the former EDA were c
transferred to the Successor Agency upon dissolution on February 1, 2012. Capital assets transferred
to the Successor Agency and related capital asset activities for the year ended June 30, 2013 were as
follows:
W
Balance Balance c`o
June 30,2012 Additions Deletions June 30,2013 >-
Capital assets,not being depreciated: o
Land $ 11,631,572 $ $ $ 11,631,572 d
Total capital assets,not being depreciated 11,631,572 11,631,572
Capital assets,being depreciated:
Buildings&improvements 16,508,665 - 16,508,665 c
Machinery,vehicles&equipment 1,282,198 1,282,198 LL
Total capital assets,being depreciated 17,790,863 17,790,863
_
_
Less accumulated depreciation for: 4
Buildings&improvements (8,126,746) (444,197) (8,570,943)
Machinery,vehicles&equipment (1,091,275) (97,371) (1,188,646)
E
Total accumulated depreciation (9,218,021) (541,568) - (9,759,589)
m
Total capital assets,being depreciated net 8,572,842 (541,568) 8,031,274 Q
Capital assets,net $ 20,204,414 $ (541,568) $ $ 19,662,846
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(E) Long-Term Liabilities *n
d
In accordance with the provisions of the Bill and the court case, the obligations of the former EDA d
became vested with the funds established for the Successor Agency upon the date of dissolution,
February 1, 2012. Tax revenue is pledged to fund the debts of the Successor Agency Trust subject to
the reapportionment of such revenues as provided by the Bill. The debt of the Successor Agency 0
Trust as of June 30,2013 was as follows: _
ii.
Balance 2
June 30,2012, Balance Due Within
Restated Additions Reductions June 30,2013 One Year m
M
T
Compensated absences(Note 10) $ 279,814 $ - $ $ 279,814 $ 83,944 N
0
N
OPEB obligation(Note 15) 957,669 178,306 1,135,975
d
Participation agreement:
Yellow Freight 216,088 216,088 N
Notes payable: p
HUD Section 108: ++
Cinema project 3,450,000 (435,000) 3,015,000 460,000
Reynolds 506,637 (506,637) - Q
CMB 33,000,000 33,000,000 -
Total notes payable 36,956,637 (941,637) 36,015,000 460,000 N
T
Tax allocation bonds: M
Bonds 2010A 6,335,000 (180,000) 6,155,000 190,000 0
Bonds 2010B 2,905,000 (160,000) 2,745,000 155,000 N
Bonds 2002A 3,020,000 (75,000) 2,945,000 80,000 ce)
Refunding Bonds,2002 21,205,000 (1,190,000) 20,015,000 1,260,000 d
Refunding Bonds,1998A 10,025,000 (895,000) 9,130,000 940,000
_
Refunding Bonds,1998B 4,965,000 (375,000) 4,590,000 395,000 -a
Refunding Bonds,2005A 42,610,000 (2,640,000) 39,970,000 2,795,000 d
.a
Refunding Bonds,2005B 16,015,000 (1,020,000) 14,995,000 1,080,000 =
W
Taxable Bonds 2006 21,720,000 (1,390,000) 20,330,000 1,470,000
ctf
Less: N
Unamortized discount (660,050) 50,517 (609,533) - }
Unamortized premium 1,025,401 (73,243) 952,158 p
Total tax allocation bonds 129,165,351 (7,947,726) 121,217,625 8,365,000 CL
Mortgage revenue bonds: 70
Highland Senior Housing 1995A 1,275,000 (55,000) 1,220,000 55,000
Ramona Senior Housing 1995A 1,120,000 (45,000) 1,075,000 50,000
Total mortgage revenue bonds 2,395,000 (100,000) 2,295,000 105,000 LL
Certificates of Participation: _
1999 Certificates of participation 5,880,000 (325,000) 5,555,000 340,000 =
a
Total successor agency =
d
long-term liabilities $ 175,850,559 $ 178,306 $ (9,314,363) $ 166,714,502 $ 9,353,944 E
U
The City adopted the provisions of GASB Statement No. 65 and restated the beginning long-term Q
liabilities balance of the Successor Agency for$1,901,286 for the refunding loss on bonds, which GASB
Statement No. 65 requires to be presented as a deferred outflow of resources.
_ ,PI .ticket:Pa.
6 A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
-^ Year Ended June 30,2013
(1) Participation Agreement =
d
Amount m
Outstanding at
Cn
June 30,2013
Yellow Freight
On January 22, 2001, the City of San Bernardino EDA entered into a Property U.
Owner Redevelopment Agreement with Yellow Freight Systems. As part of the y
agreement,the EDA agreed to provide public assistance to offset costs associated m
with acquisition and development of a freight terminal. Only EDA funds directly M
generated by net tax increment amounts upon maturity of the note have been
pledged. Payments will be from time to time as funds are available. No interest N
shall accrue on the note. $ 216,088 L
�v
m
(2) Notes Payable
N_
LL
Amount a
Outstanding at
June 30,2013 a
HUD Section 108 Note:
w
N
Cinema Project dTv
M
The City of San Bernardino EDA and MDA-San Bernardino Associates, LLC N
(MDA) entered into a HUD Section 108 Loan Agreement in December of 1998. c
The proceeds of the EDA Loan, together with other sources of funds, were used
and applied by MDA for the payment of the costs of the development,
construction, improvement and financing of a multi-screen cinema complex and
related common area improvements. In order for the EDA to be able to make the
loan, the EDA entered into a Contract for Loan Guarantee Assistance, a Master w
Fiscal Agency Agreement, and executed promissory notes with the United States
of America through its Department of Housing and Urban Development pursuant
to Section 108 of the Housing and Community Development Act of 1974, as
amended. 0 a
m
Interest payments are due semiannually on February 1 and August 1 through
August 1, 2018. Principal payments are to be made annually on August 1, and
continue through August 1,2018. $ 3,015,000 c
LL
f0
7
_
_
Q
r
_
d
E
t
V
l4
a+
Q
r`Packet"Pg;.557
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements'ANN- Year Ended June 30,2013
N
r+
_
Amount
Outstanding at m
June 30,2013
Reynolds of San Bernardino,a California Corporation
c
On December 5, 2006, the former EDA entered into an Installment Note (Note) e
for the purchase of property with Reynolds of San Bernardino, a California "-
Corporation,for$606,637. This Note was amended on January 1,2010. The Note
matures on January 1, 2013. Interest only payments of $2,494 per month at m
4.93436% are due on the first day of the month and continue through January 1, r
2013. The Note is secured by a deed of trust. The Note was fully repaid on
May 8,2013. - N
L
Amount >_
Outstanding at M
June 30,2013 N
CMB Notes Payable -a
a�
On October 5, 2009, the former EDA entered into a Loan Agreement (Loan) for Q
borrowing funds from CMB Infrastructure Investment Group III, in the amount of
$15,000,000, in accordance with the Employment-Based Immigration Fifth N
Preference (EB-5) Immigrant Investor Visa Program. The Note matures on
September 30, 2015. Interest only payments are due on the first day of each M
quarter at the rate of 5.25%per annum. N
C
On September 1, 2010, the former EDA entered into a Loan Agreement (Loan)
for borrowing funds from CMB Infrastructure Investment Group V, in the amount
of$8,000,000, in accordance with the EB-5 Immigrant Investor Visa Program.
The Note matures on October 1, 2016. Interest only payments are due on the first
day of each quarter at the rate of 5.25%per annum. w
L
On March 1, 2011, the former EDA entered into a Loan Agreement (Loan) for
borrowing funds from CMB Infrastructure Investment Group VI-C, in the amount
of$10,000,000, in accordance with the EB-5 Immigrant Investor Visa Program. °_.
The Note matures on January 1, 2018. Interest only payments are due on the first
day of each quarter at the rate of 5.25%per annum. R
As of June 30,2013, $33,000,000 has been drawn against the Loans. 33,000,000
Total notes payable $ 36,015,000
_
_
a
c
m
E
t
w
Q
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
The following schedule summarizes the debt to maturity payments for notes payable:
d
E
Year ending
June 30, Principal Interest Total N
2014 $ 460,000 $ 1,800,108 $ 2,260,108
2015 490,000 1,792,616 2,282,616 U_
2016 15,530,000 1,388,626 16,918,626 .2
2017 8,560,000 771,597 9,331,597 m
2018 10,605,000 414,097 11,019,097 r
2019-2023 370,000 5,772 375,772 r
0
N
Totals $36,015,000 $6,172,816 $42,187,816
a�
Note: The amounts above are scheduled payments in accordance with the loan agreements. N
U_
(3)Tax Allocation Bonds
a�
=a
Tax Allocation Bonds,Series 201"
Q
In December 2010, the San Bernardino Joint Powers Financing Authority issued $7,065,000 in N
tax allocation bonds to finance certain redevelopment activities of the 41" Street Corridor project, d',
to fund a reserve fund for the bonds, fund the interest account, and pay all costs of issuance co
related to the bonds.
N
C
The outstanding Series 2010A bonds consist of term bonds of$6,155,000 maturing from April 1,
2015, to April 1, 2030 in annual installments ranging from $190,000 to $655,000. Term bonds of
$390,000 are due on April 1, 2015,term bonds of$1,515,000 are due on April 1, 2021, and term
bonds of$4,250,000 are due on April 1, 2030. Interest is payable semi-annually on April 1 and a
October 1 at rates ranging from 3.5%to 9.3%per annum. to
L
M
The term bonds maturing on April 2015, are subject to mandatory prepayment, on each April 1, _
commencing on April 1, 2012,through April 1, 2015. Term bonds maturing on April 1, 2021, are _
subject to mandatory prepayment, on each April 1, commencing on April 1, 2016, through d
April 1, 2021. Term bonds maturing on April 1, 2030, are subject to mandatory prepayment on
each April 1,commencing on April 1,2022,through April 1,2030.
c
The former EDA agreed to pay the Authority principal and interest payments solely from the Tax
Revenues from the Northwest Redevelopment Project Area. U.
A reserve account is required to be maintained in the amount of$686,974. The balance held in Q
the reserve account as of June 30, 2013, was $517,837. At June 30, 2013, $6,155,000 of the
w
bonds were outstanding.
E
c�
Q
o Packef Pg ;5;59
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Tax Allocation Bonds,Series 2010B
m
In January 2011, the San Bernardino Joint Powers Financing Authority issued $3,220,000 in tax a�Ei
allocation bonds to finance certain redevelopment activities of the Northwest project area,to fund
a reserve fund for the bonds,fund the interest account,and pay all costs of issuance of the bonds.
The outstanding Series 2010B bonds consist of term bonds of$2,745,000 maturing from April 1,
2020, to April 1, 2028 in annual installments ranging from $25,000 to $690,000. Term bonds of 'u.
$925,000 are due on April 1, 2020 and term bonds of $1,820,000 are due on April 1, 2028. v
f11
Interest is payable annually on April 1 at rates ranging from 3.0%to 7.0%per annum. m
M
The term bonds maturing in April 2020 are subject to mandatory prepayment, on each April 1, N
commencing on April 1,2013, through April 1,2020. Term bonds maturing on April 1, 2028, are o
subject to mandatory prepayment, on each April 1 commencing on April 1, 2021, through N
�-
April 1,2028.
The former EDA agreed to pay the Authority principal and interest payments solely from the N
EDA's tax revenues from the Northwest Redevelopment Project Area. ii
d
A reserve account is required to be maintained in the amount of$309,567. The balance held in
the reserve account as of June 30, 2013, was $191,653. At June 30, 2013, $2,745,000 of the
bonds were outstanding. a;
N
Tax Allocation Bonds,Series 2002A `t
M
r
In January 2002,the San Bernardino Joint Powers Financing Authority issued$3,635,000 in tax
allocation bonds to fund certain capital improvement projects in the Mount Vernon Project Area, o
to fund a reserve fund, and to pay costs of issuance of the bonds. Interest on the bonds is m
payable June 1, 2002, and semi-annually thereafter on June 1 and December 1 of each year at
0 0
rates ranging from 4.7% to 6.2/o per annum. The bonds consist of term bonds ranging in �
m
amounts from $285,000 to $2,025,000 maturing from 2006 to 2031. Principal installments are -a
payable annually on December 1 ranging in amount from $50,000 to $445,000 through w
December 1,2031. a
m
Term bonds maturing on December 1, 2012, are subject to mandatory prepayment, on each o
December 1, commencing on December 1, 2007, through December 1, 2012. Term bonds Q-
maturing on December 1, 2021, are subject to mandatory prepayment on each December 1,
commencing on December 1, 2013, through December 1, 2021. Term bonds maturing on f6
December 1, 2031, are subject to mandatory prepayment, on each December 1, commencing on =
December 1,2022. _
U_
A reserve account is required to be maintained in the amount of$263,625. The balance held in
the reserve account as of June 30, 2013, was $241,820. At June 30, 2013, $2,945,000 of the =
bonds were outstanding. Q
_
ar
E
U
R
w
Q
Q < Packet.Pg =560-'.
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Tax Allocation Refunding Bonds,Series 2002
c
a�
In April 2002,the San Bernardino Joint Powers Financing Authority issued $30,330,000 in tax
allocation refunding bonds to refund the 1995B Tax Allocation Bonds, to finance certain
redevelopment activities in the former EDA's project areas, to fund a reserve fund for the �a
bonds, fund the interest account, and pay costs of issuance of the bonds. As a result, the U
refunded bonds are considered to be defeased and the liability has been removed from the =
financial statements. U
2
The bonds consist of term bonds of $7,100,000 maturing from 2013 to 2018 in annual m
installments ranging from $1,190,000 to $1,500,000, term bonds of$3,475,000 maturing from
2019 to 2020 in annual installments ranging from $1,685,000 to $1,790,000, and term bonds of N
$9,440,000 maturing from 2021 to 2026 in annual installments ranging from $1,120,000 to c
$2,770,000. Interest is payable semi-annually on October 1 and April 1 at rates ranging from N
3.25%to 5.625%per annum.
The term bonds maturing on April 1, 2018, are subject to mandatory prepayment, on each N
April 1, commencing on April 1,2013,through April 1, 2018. Term bonds maturing on April 1, U.
2020, are subject to mandatory prepayment, on April 1, 2019, and April 1, 2020. Term bonds
maturing on April 1, 2026, are subject to mandatory prepayment on each April 1, commencing
on April 1, 2021,through April 1, 2026.
Q
The former EDA agreed to pay the Authority principal and interest payments solely from the N
EDA's surplus tax revenues from the Central City North, State College No. 4, Southeast �?
Industrial Park,Northwest, South Valle, Uptown and Tri-City Redevelopment Project Areas.
0
N
A reserve account is required to be maintained in the amount of$2,683,230. The balance held c
in the reserve account as of June 30 2013 was $1,999,511. At June 30 2013 $20,015,000 of
the bonds were outstanding.
a
Tax Allocation Bonds,Series 2002A
c
W
In January 2002,the San Bernardino Joint Powers Financing Authority issued$3,635,000 in tax
allocation bonds to fund certain capital improvement projects in the Mount Vernon Project Area, >_
to fund a reserve fund, and to pay costs of issuance of the bonds. Interest on the bonds is o
payable June 1, 2002 and semi-annually thereafter on June 1 and December 1 of each year at m
rates ranging from 4.7% to 6.2% per annum. The bonds consist of term bonds ranging in
amounts from $285,000 to $2,025,000 maturing from 2006 to 2031. Principal installments are
payable annually on December 1 ranging in amount from $50,000 to $445,000 through R
December 1,2031. c
U.
Term bonds maturing on December 1, 2012 are subject to mandatory prepayment, on each 3
December 1, commencing on December 1, 2007 through December 1, 2012. Term bonds Q
maturing on December 1, 2021, are subject to mandatory prepayment on each December 1,
r
commencing on December 1, 2013 through December 1, 2021. Term bonds maturing on
December 1, 2031, are subject to mandatory prepayment, on each December 1, commencing on t
December 1,2022.
A reserve account is required to be maintained in the amount of$263,625. The balance held in a
the reserve account as of June 30, 2013 was $241,820. At June 30, 2013, $2,945,000 of the
bonds were outstanding.
��� I'acketP�.561
h6Aa
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Refunding Bonds,Series 1998A
e
m
The $19,000,000 of tax allocation refunding bonds, issue of 1998, Series A, consist of serial m
bonds with varying interest rates from 3.600% to 5.750% per annum. Interest is payable
semiannually on January 1 and July 1. Serial bonds mature annually on July 1 through July 1,
2020.
_
The proceeds of the 1998 Series A Tax Allocation Refunding Bonds along with the proceeds of U.
the 1998 Series B Subordinated Tax Allocation Refunding Bonds were used to advance refund U
$20,990,000 of outstanding Central City Project Tax Allocation Refunding Bonds, 1991 Series w
m
A and$4,005,000 of outstanding Central City Project Subordinated Tax Allocation Bonds 1991 ch
Series B. r
N
r
O
The Series A bonds are not subject to optional redemption. The bonds are secured by a pledge
of property tax apportionments from the Central City Project Area. A reserve account is }
required to be maintained in accordance with the bond documents. A reserve account is
required to be maintained in the amount of$1,456,515. The balance held in the reserve account N
as of June 30, 2013 was $1,157,586. At June 30, 2013, $9,130,000 of the bonds were LL
outstanding.
Subordinate Refunding Bonds,Series 1998B Q
a�
The $8,590,000 of subordinated tax allocation refunding bonds, issue of 1998 Series B, consists r
of $4,815,000 of serial bonds with varying interest rates from 4.500% to 5.875% per annum �-
and $3,775,000 of term bonds, bearing interest at 6.000% per annum. Interest is payable
semiannual) on January 1 and Jul 1. Serial bonds mature annual) on Jul 1 through Jul 1 C14
Y rY Y Y Y g Y
2014. Term bonds are due July 1, 2020, and shall be called and redeemed before maturity rom c
Y M
money deposited into the Term Bond Sinking Fund on July 1, 2015, to July 1, 2020, without d
c
premium.
The proceeds of the 1998 Series B subordinated Tax Allocation Refunding Bonds along with
the 1998 Series A Tax Allocation Refunding Bonds were used to advance refund $20,990,000 w
of outstanding Central City Project Tax Allocation Refunding Bonds, 1991 Series A and
$4,005,000 of outstanding Central City Project Subordinated Tax Allocation Bonds, 1991 >-
Series B. L
0
CL
Bonds maturing on or after July 1, 2009, are subject to redemption before maturity,at the
option of the former EDA, from available funds, on any date after July 1, 2008. Such bonds
will be redeemed at the times and prices (expressed as a percentage of the principal amount so
redeemed) as set forth in the bond documents. The bonds are secured by a pledge of property =
U.
tax apportionments from the Central City Project Area. A reserve account is required to be FU
maintained in accordance with the bond documents. As of June 30, 2013, the reserve
requirement was $639,012 and the amount actually held in the reserve account was $467,712. _
At June 30,2013, $4,590,000 of the bonds were outstanding. Q
m
Tax Allocation Revenue Refunding Bonds,Series 2005A _
m
In September 2005, the San Bernardino Joint Powers Financing Authority issued $55,800,000 in Q
tax allocation refunding bonds to current refund $55,800,000 of the outstanding 1995A Tax
Packet
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Allocation Refunding Bonds. The remaining portion of the 1995A Bonds was refunded with the
proceeds of the Authority's Tax Allocation Refunding Bonds, Series 2005B (see following
section). As a result, the 1995A Tax Allocation Refunding Bonds are considered to be defeased
and the liability has been removed from the financial statements. t°
The Series 2005A bonds consist of serial bonds with varying interest rates from 5.15% to 5.75%
per annum. Interest is payable semi-annually on April 1 and October 1. Serial bonds mature
annually on October 1 through October 1,2025. UL
V
U)
The Series 2005A bonds are not subject to optional redemption. The former EDA agreed to pay
m
the Authority principal and interest payments solely from the EDA's tax revenues from the M
Central City North, State College Project No. 4, Southeast Industrial Park, Northwest, South N
Valle,Uptown and Tri-City Redevelopment Project Areas. o
N
L
A reserve account is required to be maintained in the amount of$1,141,000. The balance held in }
the reserve account as of June 30, 2013 was $1,460,751. At June 30, 2013, $39,970,000 of the
bonds were outstanding. N
U.
The reacquisition price exceeded the net carrying amount of the old debt by $1,116,000. This m
amount is recorded as a deferred outflow of resources and is being amortized over the life of the
new debt. The advance refunding resulted in an increase in debt service payments over the next Q
20 years of$18,089 and resulted in an economic gain of$1,940,000. a;
N
T
Tax Allocation Revenue Refunding Bonds,Series 2005B
M
r
In September 2005, the San Bernardino Joint Powers Financing Authority issued $21,105,000 in C4
tax allocation refunding bonds to current refund $21,105,000 of the outstanding 1995A Tax M
Allocation Refunding Bonds. The remaining portion of the 1995A Bonds was refunded with the c
proceeds of the Authority's Tax Allocation Refunding Bonds, Series 2005A (see preceding
section). As a result, the 1995A Tax Allocation Refunding Bonds are considered to be defeased
and the liability has been removed from the financial statements.
c
w
The Series 2005B bonds consist of serial bonds with varying interest rates from 5.15% to 5.75% d
per annum. Interest is payable semi-annually on April 1 and October 1. Serial bonds mature >_
annually on October 1 through October 1,2025. o
CL
0
The Series 2005B bonds are not subject to optional redemption. The former EDA agreed to pay a_
the Authority principal and interest payments solely from the EDA's tax revenues from the
Central City North, State College Project No. 4, Southeast Industrial Park, Northwest, South
Valle,Uptown and Tri-City Redevelopment Project Areas. _
iL
A reserve account is required to be maintained in the amount of$490,000. The balance held in
the reserve account as of June 30, 2013 was $437,603. At June 30, 2013, $14,995,000 of the
a
bonds were outstanding.
c
The reacquisition price exceeded the net carrying amount of the old debt by $422,100. This =
amount is being recorded as a deferred outflow of resources and is being amortized over the life
of the new debt. Q
'ac
122 ke#Pg 563 rt
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
Tax Allocation Bonds(20%Set Aside), Taxable Series 2006
c
m
In April 2006, the San Bernardino Joint Powers Financing Authority issued $28,665,000 in tax
allocation bonds to fund the acquisition, demolition and relocation of certain occupants of the
Central City North Project Area and provide for other redevelopment activities within the City of
San Bernardino, as provided in the Redevelopment Plan, fund the reserve fund, and pay costs of
issuance associated with the bonds.
U_
The 2006 bonds consist of term bonds of $7,370,000 maturing from 2012 to 2016 in annual 2
installments ranging from $1,315,000 to $1,640,000, and term bonds of $15,665,000 maturing cc cc
from 2017 to 2027 in annual installments ranging from $1,015,000 to $1,850,000. Interest is m
payable semi-annually on May 1 and November 1 at interest rates ranging from 5.20% to 6.15% N
P
per annum. o
N
L
The bonds maturing on or prior to May 1, 2016, shall not be subject to call and redemption prior
to maturity. The bonds maturing on or after May 1, 2017, shall be subject to redemption on or
after May 1, 2016, and any date thereafter as a whole or in part by lot, at the option of the former N
EDA, at par,plus accrued interest,without premium. U_
d
The former EDA agreed to pay the Authority principal and interest payments solely from the
EDA's Housing Revenues from the Central City North, Central City Merged, Central City West, Q
Mount Vernon, State College Project No. 4, Southeast Industrial Park, Northwest, South Valle, a;
Uptown,40"'Street and Tri-City Redevelopment Project Areas.
�r
A reserve account is required to be maintained in the amount of$2,698,116. The balance held in
the reserve account as of June 30, 2013 was $2,618,841. At June 30, 2013, $20,330,000 of the N
bonds were outstanding. M
m
The following schedule summarizes the debt to maturity payments for tax allocation bonds:
Year ending
June 30, Principal Interest Total W
L
2014 $ 8,365,000 $ 7,174,137 $ 15,539,137
2015 8,825,000 6,781,983 15,606,983 d
2016 9,315,000 6,267,926 15,582,926
2017 9,835,000 5,720,814 15,555,814
c
2018 10,400,000 5,134,011 15,534,011
2019-2023 47,830,000 16,064,496 63,894,496 L-
2024-2028 23,985,000 4,610,259 28,595,259
2029-2033 2,320,000 332,450 2,652,450 a
w
Totals $ 120,875,000 $ 52,086,076 $ 172,961,076
E
564
123
Packet Pg:
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(4) Mortgage Revenue Bonds
m
The mortgage revenue bonds are special obligations payable solely from payments made on and
secured by a pledge of the acquired mortgage loans and certain reserve funds and other monies in N
connection therewith, all pledged under the resolution authorizing the issuance of the bonds. The W
bonds are payable from revenues or assets of the EDA.Mortgage revenue bonds outstanding as of
June 30, 2013 include the Multifamily Housing Revenue Bonds (Highland Lutheran Senior
Housing Project) 1995 Series for $1,220,000 and the Multifamily Housing Revenue Bonds U-
(Ramona Senior Complex Project) 1995 Series for $1,075,000. The Multifamily Housing 2
U)
Revenue Bonds (Highland Lutheran Senior Housing Project) 1995 Series was issued on June 29,
m
1995. The Bonds shall mature on July 1, 2015 and shall bear interest at the rate of 7.625% per M
annum. Interest is payable annually on July 1. The Multifamily Housing Revenue Bonds N
(Ramona Senior Complex Project) 1995 Series was issued on June 29, 1995. The Bonds shall o
mature on July 1,2015 and shall bear interest at the rate of 7.875%per annum. Interest is payable
annually on July 1. W
The following schedule summarizes the debt to maturity payments for the mortgage revenue w
bonds: LL
d
Year ending
June 30, Principal Interest Total aC
a�
N
2014 $ 105,000 $ 173,616 $ 278,616
2015 115,000 165,097 280,097
2016 125,000 155,803 280,803 CC14
2017 135,000 145,734 280,734
2018 150,000 134,700 284,700 c
2019-2023 920,000 476,850 1,396,850
-c
2024-2025 745,000 90,366 835,366
c
Totals $ 2,295,000 $ 1,342,166 $ 3,637,166 w
L
M
W
(5) Certificates of Participation o
C2
1999 Certificates of Participation
�a
On September 23, 1999, the San Bernardino Joint Powers Financing Authority issued r-
$15,480,000 of Refunding Certificates of Participation (Certificates). The Certificates were =_
issued to retire $2,325,000 outstanding of Refunding Certificates of Participation (South Valle
Public Improvement Project) dated April 1, 1987, and $5,910,000 outstanding of Certificates of
Participation (1995 Police Station Financing Project) dated April 1, 1995, and to provide funds Q
for capital improvements (201 Building Projects).
E
t
c�
r
Q
124 PacketPg 36
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
The Certificates mature on September 1 of each year through September 1, 2024, in amounts
ranging from $330,000 to $1,080,000. The interest represented by the Certificates is calculated on
the basis of a 360-day year of twelve 30-day months, from September 1, 1999, at the rates per m
annum set forth in the bond documents and will represent the sum of the portions of the lease
payments designated as interest coming due during the six months preceding each interest
payment date. The interest rates will range approximately from 3.70%to 5.50%per annum.
The Certificates maturing on September 1, 2020, are subject to mandatory sinking fund U_
redemption in part on September 1 in each year on or after September 1, 2010, from the principal 2
.y
components of the lease payments required to be paid by the City pursuant to the Lease m
m
Agreements with respect to each such redemption date, at a redemption price equal to the principal r,
amount thereof to be redeemed, together with interest accrued thereon to the date fixed for N
redemption, without premium, in accordance with the terms identified in the bond documents. The o
Certificates maturing on September 1, 2024, are subject to mandatory sinking fund redemption in
part on September 1,2021,from the principal components of the lease payments required to be paid W
by the City pursuant to the Lease Agreements with respect to each such redemption date, at a
redemption price equal to the principal amount thereof to be redeemed, together with interest N
accrued thereon to the date fixed for redemption, without premium, in accordance with the terms E
identified in the bond documents. m
=a
The Certificates represent direct, undivided fractional interest in lease payments to be made by Q
the City under the lease agreements. A reserve fund is required to be maintained in an amount a;
equal to the maximum annual debt service. At June 30, 2013, the reserve requirement was
$1,147,000 and the amount actually held in the reserve account was $1,156,533. The total `t
outstanding balance of the Certificates at June 30, 2013, was $9,825,000 of which $5,555,000 is
CD
reported as a long-term liability of the Successor Agency, which is the portion of the Certificates C*4
that represent the South Valle Refunding and 201 Building Projects portions. Repayments of M
these portions of the Certificates are funded from the Redevelopment Property Tax Trust Fund, as c
a result of the dissolution of the redevelopment agency. The remaining $4,270,000 outstanding
balance of the Certificates at June 30, 2013 is reported as a long-term liability of the City, which -a
is the portion of the Certificates that represents the Police Station portion. Please see Note 8 (E). "0
W
The following schedule summarizes the debt to maturity payments for the certificates of
participation: >-
L
0
CL
Year ending
June 30, Principal Interest Total
2014 $ 340,000 $ 296,175 $ 636,175
2015 360,000 276,925 636,925 c
2016 380,000 256,575 636,575
2017 400,000 235,125 635,125
2018 420,000 212,575 632,575 Q
2019-2023 2,465,000 680,488 3,145,488
2024-2025 1,190,000 66,275 1,256,275 E
Totals $ 5,555,000 $ 2,024,138 $ 7,579,138
U
Q
125 Packet Pg 566;`
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Basic Financial Statements(Continued)
Year Ended June 30,2013
(F) Restatement of Financial Statements
m
The beginning net position at July 1, 2012, for the Successor Agencies was restated to report
corrections of errors and for the adoption of GASB Statement No. 65 for the following:
Redevelopment Obligation
c
Retirement Fund c
(Successor Agency) "-
.N
Adjustment to record section 108 payable to HUD Arden Guthrie $ 7,500,000 °a
M
Adjustment to reclassify cash with fiscal agents from the Low and Moderate 3,838,185 r
N
Income Housing Fund and the CDBG Fund c
N
Adjustment to recognize the cost of issuance expenses of the Bonds issued in the (1,237,905)
past years in accordance to GASB 65,Items Previously Reported as Assets and
Liabilities.
Adjustment to record the Highland Senior Housing 1995A Bond Payable (1,275,000) N
U.
Adjustment to record property taxes,penalties,costs,and interest related
to foreclosed property by the Successor Agency (620,135)
Adjustment to record the Ramona Senior Housing 1995A Bond Payable (1,120,000) Q
Prior Year Adjustments $ 7,085,145
N
M
r
O
N
O
M
d
C
3
N
C
W
L
d
Y
L
Q
Q
d
U-
Q
F+
E
s
U
Q
126 Packet'Pg 567
N
C
d
Y
N
r.
LL
V
�N
MM�
W
M
r
N
r
O
(V
L
t4
V
N_
LL
d
.r+
a
N
d'
SUPPLEMENTARY SCHEDULES
O
N
O
M
01
C
7
d
C
W
L
c0
d
L
NNd
I.L
LL
N
C
C
Q
C
E
V
R
a
Pxac�Cet.Pg f568
N
a-.
C
U
E
N
a+
ro
w
Cn
U
C
ro
C
LL
U
ro
Cf1
M
r
N
O
N
L
ro
d
ro
v
N_
LL
U
Q
O
N
VII
7'
This page intentionally left blank. Ce)
Ir-
O
N
O
M
U
C
7
N
.a
C
W
L
ro
0
L
O
Q
ro
U
C
ro
C
LL
ro
7
C
C
Q
Y
Q�
U
ro
Q
Packet Pg.569
CITY OF SAN BERNARDINO,CALIFORNIA
Required Supplementary Information
Schedule of Funding Progress(in thousands)
City Miscellaneous,City Safety,and Successor Agency
Defined Benefit Plans of the California Public Employees'Retirement System
For the Year Ended June 30,2013
E
m
Y
N
Unfunded @
Actuarial Actuarial Actuarial Funded UAAL as
Accrued Value of Accrued Ratio Annual a % of =
Actuarial Liability Assets Liability Based on Covered Covered U.
Valuation (AAL) (AVA) (UAAL) AVA Payroll Payroll
Date (a) (b) (a)-(b) (b)/(a) (d) [(a)-(b)]/(d) m
M
r
N
r
Cl
6/30/2011 N
L
Misc. $ 427,258 $ 366,217 $ 61,041 85.7% $ 49,853 122.4% }
Safety 587,025 487,333 99,692 83.0% 46,293 215.4%
Successor 18,125 15,503 2,622 85.5% 2,537 103.4% ai
U-
6/30/2012
Misc. $ 446,677 $ 379,291 $ 67,386 84.9% $ 47,802 141.0% a
Safety 614,962 506,240 108,722 82.3% 44,163 246.2%
Successor 18,720 16,116 2,604 86.1% 1,152 226.0% N
6/30/2013
Misc. $ 462,717 $ 346,177 $ 116,540 74.8% $ 39,974 291.5% c°.i
Safety 633,088 463,931 169,157 73.3% 38,562 438.7% M
Successor 19,073 14,909 4,164 78.2% 438 950.7%
m
w
L
y.r
L
O
Q
LL
_
_
U-
_
Q
Y
_
E
V
1.
a
See accompanying notes to required supplementary information.
127 PacketrPg S�Q.
fiAa =.
CITY OF SAN BERNARDINO,CALIFORNIA
Required Supplementary Information
Schedules of Funding Progress and Employer Contributions(in thousands)
Other Post-Employment Benefit Plans
For the Year Ended June 30,2013 w
c
a�
E
Schedule of Funding Progress(in thousands)
r
W
Unfunded
Actuarial Actuarial Actuarial Funded UAAL as
Accrued Value of Accrued Ratio Annual a% of C
Actuarial Liability Assets Liability Based on Covered Covered U-
.U
Valuation (AAL) (AVA) (UAAL) AVA Payroll Payroll
Date (a) (b) (a)-(b) (b)/(a) (c) [(a)-(b)]/(c) pp
City c)
6/30/2007 $ 60,158 $ - $ 60,158 0.0% $ 79,135 76.0% cv
6/30/2009 61,371 - 61,371 0.0% 78,951 77.7% N
6/30/2012* 48,819 - 48,819 0.0% 84,166 58.0%
Water Department
6/30/2008 $ 26,190 $ - $ 26,190 0.0% $ 12,755 205.3% N
6/30/2010 28,676 - 28,676 0.0% 12,619 227.2% u_
6/30/2012* 28,831 8,556 20,275 29.7% 14,765 137.3% _2
Successor Agency
6/30/2008* $ 749 $ - $ 749 0.0% $ 1,763 42.5% N
*Most recent actuarial valuation available
v
Cl)
T"
O
N
Schedule of Employer Contributions(in thousands) ci
M
Water Department
Year Annual
Ended Required Amount Percentage
June 30, Contribution Contributed Contributed
c
2010 $ 2,307 $ 670 29% w
2011 2,505 676 27% aDi
2012 2,729 9,040 331%
L
0
Q
NN�
U-
a
E
U
lC
r
Q
See accompanying notes to required supplementary information.
128 Pac6t'Pg 571,x,
CITY OF SAN BERNARDINO,CALIFORNIA
Required Supplementary Information
Budgetary Comparison Schedule-General Fund
For the Year Ended June 30,2013
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget O
O
Revenues:
Taxes $ 89,326,711 $ 89,326,711 $ 92,938,293 $ 3,611,582
Licenses and permits 9,541,900 9,541,900 9,610,001 68,101
Fines and forfeitures 2,331,900 2,331,900 1,844,472 (487,428) 6
Investment income 640,150 640,150 781,805 141,655
Intergovernmental 2,148,959 2,148,959 2,069,546 (79,413) _
Charges for services 7,558,064 7,558,064 7,714,126 156,062 j%
Other 4,645,700 4,645,700 5,996,558 1,350,858 V
Total revenues 116,193,384 116,193,384 120,954,801 4,761,417
M
M
Expenditures:
N
Current: r-
Mayor 594,477 594,477 535,218 59,259 N
Common Council 662,163 662,163 557,046 105,117
City Clerk 1,021,179 1,021,179 1,197,503 (176,324) >-
City Treasurer 221,184 221,184 205,747 15,437
City Attorney 3,555,328 3,555,328 2,737,707 817,621 N
City Manager 1,116,137 1,116,137 645,282 470,855 V-
Human Resources 511,313 511,313 471,215 40,098
d
.r
Finance 1,262,928 1,262,928 1,634,964 (372,036)
Civil Service 399,188 399,188 349,835 49,353
Q
Nondepartmental 4,238,350 5,831,185 5,460,746 370,439
Police 55,670,861 55,765,861 57,128,660 (1,362,799) N
Fire 31,624,504 31,624,504 28,744,567 2,879,937
Community Development 6,879,611 6,879,611 4,506,449 2,373,162
Public Works 8,259,838 8,164,838 2,514,635 5,650,203 c
Park,Recreation&Community Services 4,657,006 4,657,006 4,030,226 626,780 N
Library Services 1,757,328 1,757,328 1,623,162 134,166 M
Soccer Field 371,653 371,653 258,931 112,722 d
c
Cemetery 189,797 189,797 90,086 99,711
Animal Control 2,257,980 2,257,980 2,022,160 235,820 a
m
Debt service: -p
Principal 1,538,689 1,538,689 2,736,731 (1,198,042) Uj
Interest and fiscal charges 308,311 308,311 877,552 (569,241)
Total expenditures 127,097,825 128,690,660 118,328,422 10,362,238
Excess(deficiency)of revenues over(under)expenditures (10,904,441) (12,497,276) 2,626,379 15,123,655 `
O
CL
Other financing sources(uses): O
Proceeds from sale of property 95,000 95,000 1,243 (93,757) -
Transfers in 15,446,810 15,446,810 2,231,852 (13,214,958) v
Transfers out (2,558,500) (2,558,500) (384,374) 2,174,126
Total other financing sources(uses) 12,983,310 12,983,310 1,848,721 (11,134,589) c
U.
R
Net change in fund balance 2,078,869 486,034 4,475,100 3,989,066 O
c
c
Fund balance(deficit),beginning of year, Q
as previously reported (11,541,823) (11,541,823) (11,541,823) -
m
Prior period adjustment - (79,432) (79,432)
Fund balance(deficit),July 1,2012,as restated (11,541,823) (11,541,823) (11,621,255) (79,432)
Fund balance(deficit),end of year $ (9,462,954) $(11,055,789) $ (7,146,155) $ 3,909,634 Q
See accompanying notes to required supplementary information.
129 Packet Pg 5�2.
N
C
4i
d
r+
f0
r
N
R
U
C
tSf
C
LL
U
.N
m
M
T-
N
r
O
N
L
Q�
U
N_
LL
.a
d
Q
N
This page intentionally left blank. c,)
0
N
O
M
d
C
'C
d
C
W
L
d
L
O
Q
w
LL
R
3
C
C
Q
r
C
d
s
U
c6
Q
Packet Pg 4573
130
CITY OF SAN BERNARDINO,CALIFORNIA
Notes to Required Supplementary Information
Year Ended June 30,2013
(1) Budgetary Control and Accounting C
d
The City utilizes the following general procedures in establishing its annual budget for the General d
Fund,as reflected in the budgetary comparison schedule: t°
The annual budget adopted by the Common Council provides for the City's general operations, and
includes proposed expenditures and estimated revenues.The City Manager and Common Council are
authorized to make the necessary changes to the budget to ensure adequate and proper standards of U.
services.
.N
R
m
Following approval of the final budget by the Mayor and Common Council,budget transfers within a r
department budget in an amount not to exceed $25,000 per transfer shall be approved or disapproved c5
according to established Finance policies and procedures and on forms approved by the Finance N
Department,and with notice to the Director of Finance,and written notice to the Mayor and Common
Council,as long as the total department budget allocation is not increased and as long as no transfers
are approved into or out of budget allocation for personnel salaries or benefits. The legal level of FU
budgetary control is personnel salaries and benefits versus other expenditures in each department. w
U.
The budget is formally integrated into the accounting system and employed as a managed control m
device during the year for the General Fund. _
a
Budgets are not legally adopted for other City funds. N
The General Fund budget is adopted on a basis consistent with generally accepted accounting
M
principles. c
N
At fiscal year-end,operating budget appropriations lapse;however,incomplete capital improvements,
equipment and contractual appropriations can be carried over to the following fiscal year.
a�
a
c
w
m
.r
L
0
Q
LL
Q
i+
E
V
Y
Q
131 ®
6.A:a
c
m
a�
r
U)
u
c
U.
R
m
M
r
N
r
O
N
L
O
O
O
V
_N
d
r
O
Q
O
N
r
�t
This page intentionally left blank. M
0
N
O
M
d
C
N
_
W
O
d
O
Q
d
Q.
i0
u
_
m
_
U-
R
3
_
_
Q
_
d
E
t
V
td
rr
Q
PackidUP 575
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30,2013
Special Debt Capital d
Revenue Service Projects Total E
d
Assets: cra
Cash and investments $ 6,751,110 $ 127,257 $ 21,407,401 $ 28,285,768
Receivables,net:
Accounts 8,058 - 52,756 60,814
m
Interest 3,756 21 15,489 19,266 =
LL
Special assessments - 267,093 - 267,093 U
Due from other governments 524,502 957 10,556 536,015 W
Advances to other funds 82,000 - 82,000 164,000 m
Other assets - - 214,671 214,671 M
r
N
Total assets $ 7,369,426 $ 395,328 $ 21,782,873 $ 29,547,627 0
N
L
Liabilities,Deferred Inflows of Resources and Fund
}
Balances(Deficit): ca
Liabilities: v
N
Accounts payable $ 523,744 $ - $ 1,609,793 $ 2,133,537 LL
Accrued liabilities 331 - - 331
m
Due to other funds - - 1,777,391 1,777,391
Retentions payable 19,647 - 90,776 110,423 Q
Deposits 30,515 6,725 16,869 54,109
Due to CalPERS 131,385 - 112,225 243,610
Advances from other funds - 293,700 - 293,700
M
Total liabilities 705,622 300,425 3,607,054 4,613,101 0
N
Deferred inflows of resources: c°h
Unavailable revenues 300,063 267,093 - 567,156 °)
c
Total liabilities and deferred inflows of resources 1,005,685 567,518 3,607,054 5,180,257
a�
Fund balances(deficit):
c
Restricted 6,363,741 80,934 20,426,940 26,871,615 W
L
Unassigned - (253,124) (2,251,121) (2,504,245) M
m
}
Total fund balances(deficit) 6,363,741 (172,190) 18,175,819 24,367,370
0
Total liabilities,deferred inflows of resources and CL
a)
fund balances(deficit) $ 7,369,426 $ 395,328 $ 21,782,873 $ 29,547,627 W
.v
c
cn
C
LL
E
c
c
Q
c
m
E
t
ca
r
Q
133 Packet.Pg 576,
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Revenues,Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30,2013
N
Special Debt Capital aci
Revenue Service Projects Total m
Revenues:
Taxes $ 601,410 $ 64,942 $ 1,329,163 $ 1,995,515
Licenses and permits 279,585 - 747,270 1,026,855
Impact fees - - 1,771,424 1,771,424
Investment income (22,393) 521 (127,151) (149,023)
Intergovernmental 6,404,174 - 1,381,034 7,785,208 v
Charges for services 3,180,848 - 1,194,453 4,375,301 m
Other 8,170 - - 8,170 Cl)
Total revenues 10,451,794 65,463 6,296,193 16,813,450 N
Expenditures: 0°4
L
Current: M
m
General government 91,657 1,845 - 93,502 >-
Public safety 1,351,442 - 108,441 1,459,883 v
Streets 5,499,293 - 5,677,454 11,176,747 a
ii
Culture and recreation - - 11,435 11,435 'a
Community service 6,521 - - 6,521 4)
Debt service:
Principal 1,135,367 - 88,919 1,224,286 Q
Interest and fiscal charges 112,182 28,710 65,260 206,152 N
T
Total expenditures 8,196,462 30,555 5,951,509 14,178,526 �!
M
Excess of revenues c
over expenditures 2,255,332 34,908 344,684 2,634,924 N
0
Other financing sources(uses): C°
d
Transfers in 91,874 - 42,500 134,374 c
Transfers out - - (31,852) (31,852)
Total other financing 4)
sources(uses) 91,874 - 10,648 102,522 to
Net change in fund balances 2,347,206 34,908 355,332 2,737,446
L
Fund balances(deficit),beginning °c
of year 4,016,535 (207,098) 17,820,487 21,629,924 m
D:
�a
Fund balances(deficit),
end of year $ 6,363,741 $ (172,190) $ 18,175,819 $ 24,367,370 M
c
U.
c
c
Q
c
m
E
t
M
Q
134 Packet PgA 57T
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Nonmajor Special Revenue Funds
Year Ended June 30,2013
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are restricted
or committed to expenditure for specified purposes other than debt service or capital projects. The City
maintains the following Nonmajor Special Revenue Funds for the purposes indicated: m
co
Cable TV
For the regulatory oversight of the City's cable companies for franchise compliance,consumer protection,
and franchise renewal negotiations,as well as operating two access channels. _
u.
Asset Seizure 2
For the investigation, detection and prosecution of criminal activities. Funding is provided by criminal
m
assets seized under existing state and federal statutes. r,
N
Alternative Transportation o
For receipt and disbursement of funds received per Transportation Development Act Article 3 (SB 821) N L.
of the Bikeway&Pedestrian Program and the State and Local Fiscal Assistance Act of 1972.
Special Gas Tax N
For the receipt of gasoline tax revenue paid to the City as a subvention from the State of California. These U-
funds are transferred to the General Fund to partially support maintenance activities and to finance street
construction projects as provided by State law. =a
Q
Traffic Safety a;
For the recording of the City's share of California Vehicle Code fines collected by San Bernardino
County. `r
co
r
Sewerline Maintenance c°�
For the cost of maintaining Sewer lines as paid for from a portion of Sewer revenues. M
Q
Fire Station
For the operation and maintenance of the Verdemont Fire Station.
a�
a
W
L
d
V
L
O
CL
d
W
_
R
_
LL
l0
7
C
_
Q
_
d
E
s
ca
.r
w.
Q
135 P,acket,Pg 578
t
N
r-+
C
d
E
d
r+
R
N
�U
C
O
C
LL
U
co
w
m
M
T-
N
O
N
L
�Q
U
N_
U-
d
O
Q
N
d'
This page intentionally left blank. M
0
N
O
M
d
C
N
v
C
W
L
O
d
O
Q
c�
C
c�
C_
U-
fQ
7
C
C
Q
C
d
E
t
U
tC
Q
z� Packet Pg
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2013
c
d
Asset Alternative Special d
Cable TV Seizure Transportation Gas Tax o
Assets:
Cash and investments $ 515,101 $ 1,317,241 $ 270,295 $ 693,195
U
Receivables,net: c�
Accounts 1,898 - - - c
Interest - 1,052 80 243 LL
Due from other governments - - 66,861 399,335 N
Advances to other funds - - -
m
Total assets $ 516,999 $ 1,318,293 $ 337,236 $ 1,092,773 c)
T-
N
Liabilities and Fund Balances: o
Liabilities: L
t�
Accounts payable $ - $ 99,365 $ 1,450 $ 43,016 y
Accrued liabilities - - - -
Retentions payable - - - v
Deposits - 20,000 - - An
Due to Ca1PERS - - 8,212 6,843 LL
Total liabilities - 119,365 9,662 49,859
Deferred inflows of resources Q
Unavailable revenues - - -
Total liabilities and deferred inflows of resources 119,365 9,662 49,859 N
r
Fund balances: M
Restricted 516,999 1,198,928 327,574 1,042,914 0
N
O
Total fund balances 516,999 1,198,928 327,574 1,042,914 M
d
c
Total liabilities and fund balances $ 516,999 $ 1,318,293 $ 337,236 $ 1,092,773
d
(Continued)
W
L
d
0
Q
NN�
bL
U
c
C
LL
c
C
Q
id
C
E
U
cC
Q
80.,
137 Packet Pg X
6Aa
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Balance Sheet(Continued)
Nonmajor Special Revenue Funds
June 30,2013
Y
Traffic Sewerline Fire y
Safety Maintenance Station Total 0
Assets: N
Cash and investments $ 889,130 $ 2,739,884 $ 326,264 $ 6,751,110 O
.v
Receivables,net:
Accounts - 6,160 - 8,058 =_
Interest - 2,120 261 3,756 U-
Due from other governments 40,893 17,413 - 524,502 N
Advances to other funds - 82,000 - 82,000 @
OD
Total assets $ 930,023 $ 2,847,577 $ 326,525 $ 7,369,426 M
T
N
r
Liabilities and Fund Balances: o
N
Liabilities: L
Accounts payable $ 348,225 $ 31,688 $ - $ 523,744 }
Accrued liabilities - 331 - 331
Retentions payable - 19,647 - 19,647
Deposits - - 10,515 30,515 N
Due to Ca1PERS - 116,330 - 131,385
.a
Total liabilities 348,225 167,996 10,515 705,622 d
=a
Deferred inflows of resources: Q
Unavailable revenues - - 300,063 300,063 M
Total liabilities and deferred inflows of resources 348,225 167,996 310,578 1,005,685 N
T
Fund balances: co
TMM
Restricted 581,798 2,679,581 15,947 6,363,741 0
N
O
Total fund balances 581,798 2,679,581 15,947 6,363,741 co
d
c
Total liabilities and fund balances $ 930,023 $ 2,847,577 $ 326,525 $ 7,369,426
O
c
W
Q
O
Q
d
cts
C
R
G
LL
fC
3
C
C
Q
s.%
C
O
E
.O
V
O
a+
Q
138 Packet Pg
58'1
t6Aa
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended June 30, 2013
c
d
Asset Alternative Special y
Cable TV Seizure Transportation Gas Tax r
Revenues:
Taxes $ - $ - $ - $
Licenses and permits 279,585 - -
Investment income (3) 10,841 880 4,955 C
Intergovernmental 535,594 255,864 4,752,338 LL
Cages f o
Charges r services - - - - U
.N
Other 2,970 5,200 - czs
Total revenues 282,552 546,435 261,944 4,757,293 m
T
Expenditures: r
Current: �
N
General government - 91,657 1-
Public safety - 487,262 - - d
Streets - - 3,279,831
Community service 6,521 - W
Debt service: U-
Principal - - - 1,135,367
Interest and fiscal charges - - - 112,182
Total expenditures 6,521 487,262 91,657 4,527,380
Q
Excess of revenues over
expenditures 276,031 59,173 170,287 229,913
Other financing sources(uses): M
r
Transfers in 91,874 N
Transfers out - -
0
Total other financing sources(uses) - - 91,874
d
C
Net change in fund balances 276,031 59,173 262,161 229,913 7
Fund balances(deficit),beginning of
year 240,968 1,139,755 65,413 813,001 w
L
Fund balances,end of year $ 516,999 $ 1,198,928 $ 327,574 $ 1,042,914 d
(Continued) p
M
M
C
C
LL
R
3
C
C
Q
C
d
E
L
V
R
Q
82
139 Packet Pg X
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Revenues,Expenditures and Changes in Fund Balances(Continued)
Nonmajor Special Revenue Funds
For the Year Ended June 30,2013
c
d
Traffic Sewerline Fire d
Safety Maintenance Station Total r
Revenues: N
Taxes $ $ - $ 601,410 $ 601,410 i
Licenses and permits - 279,585
Investment income (42,359) 3,293 (22,393) _
Intergovernmental 860,378 - - 6,404,174 "u.
Charges for services - 3,180,848 - 3,180,848 2
Other - - - 8,170 M
Total revenues 860,378 3,138,489 604,703 10,451,794 m
M
7
Expenditures: N�
Current:
N
General government - - 91,657
tv
Public safety 278,580 - 585,600 1,351,442 d
Streets - 2,219,462 - 5,499,293 }
cC
Community service - - 6,521 N
Debt service: U.
Principal 1,135,367 'G
Interest and fiscal charges - - - 112,182
Total expenditures 278,580 2,219,462 585,600 8,196,462
Q
Excess of revenues over
expenditures 581,798 919,027 19,103 2,255,332
Other financing sources(uses):
r
Transfers in 91,874 N
Transfers out -
0
Total other financing sources(uses) - - - 91,874 Cl)
d
C
Net change in fund balances 581,798 919,027 19,103 2,347,206
Fund balances(deficit),beginning of
year - 1,760,554 (3,156) 4,016,535 L j
L
Fund balances,end of year $ 581,798 $ 2,679,581 $ 15,947 $ 6,363,741
}
L
O
M
NNW
LL
U-
�Q
Q
E
V
i-
a
140 Packet Pg 5�3
6Aa "
CITY OF SAN BERNARDINO,CALIFORNIA
Nonmajor Debt Service Funds
Year Ended June 30,2013
Debt Service Funds are used to account for the accumulation of resources that are restricted, committed,
c
or assigned for, and payment of, principal, interest and related costs of the long-term debt. The City
maintains the following Nonmajor Debt Service Funds for the purposes indicated:
r
U)
Assessment District#985 6
For the collection of assessments from property owners and for the remittance of such assessments to
bondholders as required by the Improvement Bond Act of 1915 and related California State statutes for
this district. 'u.
N
Assessment District#987
m
For the collection of the Verdemont infrastructure fees on developing properties used to repay a loan from M
bondholders as required by the Improvement Bond Act of 1915 and related California State statutes for N
this district. o
N
L
Assessment District#1015
For the collection of assessments from property owners and for the remittance of such assessments to the
Successor Agency of the former redevelopment agency (Economic Development Agency) and other City N
funds as required by the Improvement Bond Act of 1915 and related California State statutes for this U-
district. m
r
=a
Q
w
N
T
M
r
0
N
C
M
d
C
N
C
W
L
�Q
d
O
Q
LL
U.
M
C
C
a
r
C
E
a
141 rPacket$P,g 584
6.A.a
N
C
d
r
R
w
U)
fC
�V
C
R
C
U-
2
N
f4
m
M
T
N
T
O
N
L
V
A
U.
d
.F�
Q
N
This page intentionally left blank. ,
T
O
N
O
M
d
C
.a
N
C
W
L
07
L
O
CL
NN(D
1.1.
m
LL
C
Q
(D
G
V
Q
I d) PacketPg 585
13Aa.
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Balance Sheet
Nonmajor Debt Service Funds
June 30, 2013
N
_
d
Assessment Assessment Assessment
District District District +?
#985 #987 #1015 Total N
Assets:
Cash and investments $ 68,540 $ 19,108 $ 39,609 $ 127,257 c=o
_
Receivables,net: U-
Interest - - 21 21 v
Special assessments - - 267,093 267,093 m
Due from other governments - 11 946 957 M
T
Total assets $ 68,540 $ 19,119 $ 307,669 $ 395,328 N
0
N
Liabilities,Deferred Inflows of Resources and
Fund Balances(Deficit): >-
Liabilities:
v
Deposits $ - $ 6,725 $ - $ 6,725
ii
Unearned revenue - - - -
Advances from other funds - - 293,700 293,700 %
Total liabilities - 6,725 293,700 300,425
Q
Deferred inflows of resources:
N
Unavailable revenues - - 267,093 267,093 j
Total liabilities and deferred inflows of C"
resources - 6,725 560,793 567,518 N
Fund balances(deficit): c°n
Restricted 68,540 12,394 - 80,934 =
Unassigned - - (253,124) (253,124)
Total fund balances(deficit) 68,540 12,394 (253,124) (172,190)
_
Total liabilities and fund balances(deficit) $ 68,540 $ 19,119 $ 307,669 $ 395,328 W
m
0
CL
0
_
c�
c
U-
c
Q
w
E
Q
143 °Packet Pg Z-
fibAa
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Debt Service Funds
For the Year Ended June 30,2013
N
r.�
C
CD
Assessment Assessment Assessment
m
r
District District District m
#985 #987 #1015 Total co
Revenues: U
Taxes $ - $ 83 $ 64,859 $ 64,942
Investment income 252 (93) 362 521 LL
Total revenues 252 (10) 65,221 65,463
00
Expenditures: r
Current: N
General government - - 1,845 1,845 04
Investment expense - - - - d
Debt service: >-
Principal - - - -
Interest and fiscal charges - - 28,710 28,710 N
LL
Total expenditures - - 30,555 30,555 m
Excess(deficiency)of revenues Q
over(under)expenditures 252 (10) 34,666 34,908
Net change in fund balances 252 (10) 34,666 34,908 r
�t
Fund balances(deficit),beginning of year 68,288 12,404 (287,790) (207,098) M
Fund balances(deficit),end of year $ 68,540 $ 12,394 $ (253,124) $ (172,190) N
0
M
d
C
7
d
C
W
t0
d
O
C.
d
i0
C
lC
C
U-
E
C
C
a
r
C
d
E
M
V
w
a
144 Packet Pg X87,`.``'
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Nonmajor Capital Projects Funds
Year Ended June 30,2013
Capital Projects Funds are used to account for the financial resources that are restricted, committed, or
.r
assigned for the acquisition or construction of major capital facilities and other capital assets (other than
those financed by Proprietary Funds). The City maintains the following Nonmajor Capital Projects Funds d
for the purposes indicated:
�o
Verdemont
c
For improvements in the Verdemont area from development fees collected.
U.
Fire Equipment Acquisition
N
For the acquisition of fire equipment from lease proceeds.
m
M
T
Park Construction Fee N
For park land acquisition and development. Principal revenue sources are parks acquisition and o
development fees collected from developers and state revenues for park development.
CIA
m
Cemetery Construction
For improvements of the City-owned cemetery from a portion of fees collected for services. w
U_
Sewerline Construction d
For construction of sewer collection systems from development revenues. ii
Q
Storm Drain Construction a;
For the construction of storm drain facilities throughout the City from development revenues.
Special Assessments
For assessment districts related to improvement, construction, and maintenance including landscape N
maintenance, sewerline maintenance,and security paid by assessments on properties. c
M
N
Cultural Development Construction Fee
For collection of development fees used to pay for cultural improvements and activities.
a�
Assessment District#1015 w
For construction of improvements from loans related to assessment district#1015.
Impact Fees p
CL
For the specific revenue sources that are legally restricted to fund expenditures for specific purposes.
a!
Street Construction
For right-of-way acquisition, construction, and improvements related to the City's street system. These
projects are funded by various state and federal programs and matching City funds. _
U.
Public Improvements
For maintenance and construction of improvements around the Indian Bingo Casino located on the =
Q
reservation.
m
Prop Ib Local Street M
Established to account for monies received from the State through Prop lb. This proposition provided$19
billion in bond funds for a variety of transportation projects, including $2 billion for cities and counties a
NMI,, for maintenance and improvements of local transportation facilities.
145 P777 ;588
x� Ata
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Balance Sheet
Nonmajor Capital Project Funds
June 30,2013
N
w
Fire Park
d
Equipment Construction Cemetery
Verdemont Acquisition Fee Construction
N
Assets: _
Cash and investments $ 247,469 $ 68,457 $ 169,342 $ 52,877 1°
'v
Accounts receivable - - - - _
c�
Interest receivable 198 55 135 42
ii
Due from other governments - - - - 2
Advances to other funds - - - - w
M
Other assets - - - - in
Total assets $ 247,667 $ 68,512 $ 169,477 $ 52,919 T-
N
T-
CD
Liabilities and Fund Balances(Deficit): N
L
Liabilities: M
m
Accounts payable $ - $ - $ - $ - >-
Due to other funds - - - -
v
Retentions payable - - 47,900 - N
U-
Deposits - - - - 'a
Due to Ca1PERS - - -
Total liabilities - - 47,900 - Q
Fund balances(deficit): N
Restricted 247,667 68,512 121,577 52,919 !
Unassigned - - - - M
0
Total fund balances(deficit) 247,667 68,512 121,577 52,919 N
0
M
Total liabilities and fund balances(deficit) $ 247,667 $ 68,512 $ 169,477 $ 52,919
(Continued)
c
W
L
�Q
L
O
Q
NNd
Li.
C
U.
Q
Y
E
V
d
Q
Packet Pg a89,
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Balance Sheet(Continued)
Nonmajor Capital Project Funds
June 30,2013
UJ
a+
Cultural
d
Sewerline Storm Drain Special Development E
m
Construction Construction Assessments Construction Fee a
Cn
$ 2,543,088 $ 3,586,823 $ - $ 1,159,808
'v
m
2,052 2,860 - 667
LL
- - 10,556 - _v
82,000 - - - y
214,671 - - - m
$ 2,841,811 $ 3,589,683 $ 10,556 $ 1,160,475
N
r
O
N
L
fC
d
$ 34,602 $ 288 $ 166,547
- - 134,086 -
14,053 12,804 - - y
iL
- - 16,869 -
2,737 8,212 88,958 -
51,392 21,304 406,460 - Q
N
2,790,419 3,568,379 - 1,160,475
- - (395,904) - M
T-
O
2,790,419 3,568,379 (395,904) 1,160,475 N
0
M
$ 2,841,811 $ 3,589,683 $ 10,556 $ 1,160,475 c
(Continued)
c
W
L
R
d
}
.r
L
O
CL
U.
Q
F+
E
'_
V
b+
Q
147 Packet Pg. 590
s
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Balance Sheet(Continued)
Nonmajor Capital Project Funds
June 30,2013
Hl
Assessment c
d
District Street E
#1015 Impact Fees Construction a
Assets:
Cash and investments $ 34,009 $ 12,384,113 $ -
L
Accounts receivable - - 52,756 c
m
Interest receivable 27 8,585 - c
LL
Due from other governments - - - v
Advances to other funds
co
Other assets - - - m
Total assets $ 34,036 $ 12,392,698 $ 52,756 Cl)
N
T"
O
Liabilities and Fund Balances(Deficit): N
Liabilities:
m
Accounts payable $ - $ 1,142,690 $ 263,299 >-
Due to other funds - - 1,643,305
Retentions payable - - -
LL
Deposits - - -
Due to CalPERS - 4,106 1,369
Total liabilities - 1,146,796 1,907,973 Q
Fund balances(deficit): N
Restricted 34,036 11,245,902 - j
Unassigned - - (1,855,217) M
0
Total fund balances(deficit) 34,036 11,245,902 (1,855,217) N
0
Cl)
Total liabilities and fund balances(deficit) $ 34,036 $ 12,392,698 $ 52,756 c
(Continued)
C
W
�a
m
O
c.
m
7@
c
c
LL
�a
c
c
Q
w:
c
m
E
t
U
R
w
Q
149 Pa�ckePg 591°'_
6Aa`.
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Balance Sheet(Continued)
Nonmajor Capital Project Funds
June 30,2013
.r
m
Public Prop lb E
Improvements Local Street Total o
Cn
$ 1,086,794 $ 74,621 $ 21,407,401 ca
U
- - 52,756 =
868 - 15,489 _
U-
- - 10,556
- 82,000 N
- - 214,671 m
$ 1,087,662 $ 74,621 $ 21,782,873 T
N
r
0
N
U
$ - $ 2,367 $ 1,609,793 >-
- 1,777,391 ca
U
16,019 90,776 N
i-
- - 16,869
- 6,843 112,225
- 25,229 3,607,054 Q
CD
N
1,087,662 49,392 20,426,940
- - (2,251,121) M
0
1,087,662 49,392 18,175,819 N
C
M
$ 1,087,662 $ 74,621 $ 21,782,873 c
d
_
W
ca
W
L
O
_
_
U.
_
_
Q
Y
_
E
U
.F+
Q
1 n o Packet Pjg 592
6A�
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Revenues,Expenditures and Changes in Fund Balances
Nonmajor Capital Projects Funds
For the Year Ended June 30,2013
N
y.+
Fire Park c
d
Equipment Construction Cemetery d
Verdemont Acquisition Fee Construction
r
Revenues: to
Taxes $ - $ - $ - $ - as
Licenses and permits -
Impact fees - - 2,989
Investment income 1,874 540 4,638 585 ii
Intergovernmental - - - - v
.N
Charges for services - - - - m
M
Total revenues 1,874 540 7,627 585
N
O
Expenditures: N
L
Current: to
d
Public safety - 11,999 - - >-
Streets - - - - io
Culture and recreation - - 7,512 - v
N
Debt service: U.
Principal - - - -
N
Interest and fiscal charges - - - -
Total expenditures - 11,999 7,512 - Q
N
Excess(deficiency)of revenues j
over(under)expenditures 1,874 (11,459) 115 585
M
r
O
Other financing sources(uses): N
Transfers in
M
Transfers out - - - -
c
Total other financing sources
(uses) - - - -
d
c
Net change in fund balances 1,874 (11,459) 115 585 W
c`a
a)
Fund balances(deficit),beginning r
of year 245,793 79,971 121,462 52,334 O
sz
d
Fund balances(deficit),end of year $ 247,667 $ 68,512 $ 121,577 $ 52,919
(Continued)
to
C
LL
C
C
Q
C
d
>_
z
V
to
w
Q
150 Packet Pg 593
,6Aa
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Revenues,Expenditures and Changes in Fund Balances(Continued)
Nonmajor Capital Projects Funds
For the Year Ended June 30,2013
N
Cultural
d
Sewerline Storm Drain Special Development m
Construction Construction Assessments Construction Fee
r
N
$ - $ - $ 1,329,163 $ - 7i
- - - 747,270 v
c
R
2,018 (72,835) 10,386 5,673 LL
U
265,934 928,519
M
267,952 855,684 1,339,549 752,943
N
r
O
N
L
d
105,058 95,972 1,732,753 - v
LL
N
105,058 95,972 1,732,753 - Q
N
d'
162,894 759,712 (393,204) 752,943
M
r
O
N
M
- (31,852) d
c
- (31,852)
c
W
162,894 759,712 (393,204) 721,091
co
W
2,627,525 2,808,667 (2,700) 439,384 O
m
$ 2,790,419 $ 3,568,379 $ (395,904) $ 1,160,475
R
.v
(Continued)
cC
C
LL
C
C
Q
C
d
E
AF A
t
U
Rf
Q
94.:
151Pac�C
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Revenues,Expenditures and Changes in Fund Balances(Continued)
Nonmajor Capital Projects Funds
For the Year Ended June 30,2013
N
C
d
Assessment Impact Street E
District#1015 Fees Construction j
Revenues: N
Taxes $ - $ $ - R
Licenses and permits - - - U
Impact fees - 1,768,435 - c
Investment income 376 (37,201) - ii
Intergovernmental - - 1,381,034 v
N
Charges for services - - - m
M
Total revenues 376 1,731,234 1,381,034
N
T"
O
Expenditures: N
Current: to
d
Public safety - 96,442 - >-
Streets - 1,159,553 289,186 v
Culture and recreation - 3,923 - N
Debt service: ti
Principal - 88,919 -
d
Interest and fiscal charges - 65,260 -
Total expenditures - 1,414,097 289,186 Q
.ems'""..
N
Excess(deficiency)of revenues
over(under)expenditures 376 317,137 1,091,848
M
r
O
Other financing sources(uses): N
Transfers in - 42,500 - O
M
Transfers out - - - d
C
Total other financing sources
(uses) - 42,500 - m
c
W
Net change in fund balances 376 359,637 1,091,848
tD
Fund balances(deficit),beginning
of year 33,660 10,886,265 (2,947,065) Q
d
Fund balances(deficit),end of year $ 34,036 $ 11,245,902 $ (1,855,217)
U
(Continued) _
cv
c
LL
io
C
C
Q
C
d
E
s
Q
152 Packet Pg 595 ':
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Revenues,Expenditures and Changes in Fund Balances(Continued)
Nonmajor Capital Projects Funds
For the Year Ended June 30,2013
d
Public Prop lb d
Improvements Local Street Total
N
$ $ - $ 1,329,163 iv
- 747,270 v
_
- 1,771,424 R
_
12,301 (55,506) (127,151) u.
- - 1,381,034 v
.y
- - 1,194,453 m
M
12,301 (55,506) 6,296,193
N
T-
C)
N
L
Q
- 108,441
2,294,932 5,677,454 v
- 11,435 N
LL
88,919
65,260
- 2,294,932 5,951,509 Q
N
d'
12,301 (2,350,438) 344,684
M
r
O
N
- - 42,500 M
(31,852) d
_
- - 10,648
_
W
12,301 (2,350,438) 355,332 L
d
.r
1,075,361 2,399,830 17,820,487 O
CL
d
$ 1,087,662 $ 49,392 $ 18,175,819 w
.v
_
ca
_
LL
io
3
_
_
Q
r
_
N
E
t
V
lC
r
a
6.A.a
v
E
a�
r
U
C
C
U-
.2
N
IC
ca
M
T-
N
r
O
N
L
U
LL
N
.a
Q
O
This page intentionally left blank.
O
N
O
M
d
C
N
G
W
L
L
O
NN�
Fu
U
U-
Q
U
t+
Q
Sa Packet Pg. 597
6,A a
CITY OF SAN BERNARDINO,CALIFORNIA
Internal Service Funds
Year Ended June 30,2013
Internal Service Funds are used to account for activities and services performed for other organizational
c
units within the City. Charges to other City departments are made to support these activities. The City
maintains the following Internal Service Funds for the purposes indicated: d
m
w
Unemployment Insurance
For administration of unemployment insurance claims paid to the Employment Development Department
of the State of California.
U-
Workers' Compensation 2
'N
For administration of the City's self-insurance for worker's compensation.
M
M
Liability Insurance N
For administration of the City's liability claims, combined self-insurance and umbrella coverage for c
liability.
Motorpool
For the maintenance and operating costs for the City's fleet of vehicles. y
U-
Telephone Support
For the operation cost and acquisition of the City's telephone communications systems.
a
Information Systems
N
For the acquisition and maintenance of the City's computer and emergency communications systems. T
Utility
For the control and allocation of the City's utility costs. c°.i
0
M
Central Services m
For the provision of printing, duplication and postal services and operation of City Stores for supply
costs. -a
m
-a
_
W
L
L
O
Q.
LL
_
_
U.
_
_
a
w
_
E
a
�55 � f'�acket�Pg.598y.
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Net Position
Internal Service Funds
June 30,2013
Unemployment Workers' Liability =
a>
Insurance Compensation Insurance Motorpool E
Assets:
Current assets:
Cash and investments $ - $ - $ 2,372,336 $ 1,260,702 N
Prepaids - - 126,383 -
Due from other funds - - 967,018 -
c�
Accounts receivable - - - 5,166 =
Inventory - - - 252,086 U.
Due from other governments - - - 100,223 •2
Total current assets - - 3,465,737 1,618,177 co
M
T
Noncurrent assets: cv
Capital assets: c
Intangible assets,net - - - - N
Other capital assets being m
depreciated,net - - - 293,717 >-
Total noncurrent assets - - - 293,717 v
N_
Total assets - - 3,465,737 1,911,894 LL
m
r
Liabilities: 'a
Current liabilities:
Q
Accounts payable 91,110 14,328 13,797 37,336
Accrued liabilities - - - -
N
Due to other funds 215,832 972,360 - - j
Due to CalPERS - 31,477 16,423 175,179
Claims and judgments payable - 3,815,102 - - c
Compensated absences - - 3,986 30,784 N
Capital lease payable - - - - M
Due to New World - - - - m
c
Total current liabilities 306,942 4,833,267 34,206 243,299
d
Noncurrent liabilities: -a
Claims and judgments payable - 18,798,523 8,121,417 -
W
Compensated absences - - 21,985 71,829
Due to New World - - - - d
Capital lease payable
Total noncurrent liabilities - 18,798,523 8,143,402 71,829 0
CL
m
Total liabilities 306,942 23,631,790 8,177,608 315,128
.v
Net Position:
Net investment in capital assets - - - 293,717 _c
Unrestricted(deficit) (306,942) (23,631,790) (4,711,871) 1,303,049 W_
Total net position(deficit) $ (306,942) $ (23,631,790) $ (4,711,871) $ 1,596,766
3
c
c
(Continued) Q
c
m
>_
s
Q
9
156 ..
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Net Position(Continued)
Internal Service Funds
June 30,2013
N
Telephone Information Central
Support Systems Utility Services Total E
m
r
$ 442,747 $ 685,754 $ - $ - $ 4,761,539 N
- - - - 126,383 .v U
- 1,226,430 - - 2,193,448 =
to
932 5,600 - 1,372 13,070 _
- - - - 252,086 L'
- - - - 100,223 v
'rn
443,679 1,917,784 - 1,372 7,446,749
00
M
r
N
r
O
4,509,298 - - 4,509,298 N
L
160,086 464,506 236,303 - 1,154,612
160,086 4,973,804 236,303 - 5,663,910
_o
LL
603,765 6,891,588 236,303 1,372 13,110,659 -0
d
=a
Q
80,234 800,957 1,136,739 2,684 2,177,185
- 1,158 - - 1,158 N
97,810 75,998 892,905 117,693 2,372,598
26,003 169,705 6,843 6,843 432,473 `r
M
- - - - 3,815,102 c
5,949 - 2,023 1,178 43,920 N
- - 67,840 - 67,840 M
- 528,381 - - 528,381 d
c
209,996 1,576,199 2,106,350 128,398 9,438,657
a
m
a
- - - - 26,919,940 c
W
12,620 262,976 4,721 3,630 377,761 2
- 3,506,864 - - 3,506,864
- - 390,540 - 390,540
12,620 3,769,840 395,261 3,630 31,195,105 a
m
222,616 5,346,039 2,501,611 132,028 40,633,762
.v
c
160,086 938,559 (222,077) - 1,170,285 c
221,063 606,990 (2,043,231) (130,656) (28,693,388) LL
$ 381,149 $ 1,545,549 $ (2,265,308) $ (130,656) $ (27,523,103)
c
c
Q
c
E
t
U
w
Q
157
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Revenues,Expenses and Changes in Fund Net Position
Internal Service Funds
For the Year Ended June 30,2013
c
m
Unemployment Workers' Liability d
Insurance Compensation Insurance Motorpool
N
Operating revenues:
Charges for services $ 254,479 $ 4,333,142 $ 3,137,946 $ 6,783,353 v
Total operating revenues 254,479 4,333,142 3,137,946 6,783,353
LL
Operating expenses: v
Cost of sales and services 3,666 1,069,808 225,405 5,637,149 m
Claims expense 429,374 13,135,834 917,204 - co
Amortization expense - - - - N
Depreciation - - 77 679,889 c
Total operating expenses 433,040 14,205,642 1,142,686 6,317,038 N
c`a
m
Operating income(loss) (178,561) (9,872,500) 1,995,260 466,315
R
U
Nonoperating revenues LL
(expenses): 'a
d
Investment loss - - (25,181) -
Interest expense - - - (3,105) Q
Miscellaneous income - - - 845,167
Total nonoperating revenues N
(expenses) - - (25,181) 842,062
Cl)
Change in net position (178,561) (9,872,500) 1,970,079 1,308,377 c
N
Net position(deficit),beginning M
of year (128,381) (13,759,290) (6,681,950) 288,389 c
Prior period adjustment - - - - y
Net position(deficit)beginning (128,381) (13,759,290) (6,681,950) 288,389 w
of year,as restated R
d
Net position(deficit),end of year $ (306,942) $ (23,631,790) $ (4,711,871) $ 1,596,766 O
CL
CD
(Continued) -
2
.v
c
c
LL
R
c
c
a
r
c
d
E
s
ca
r
a
158 J?acket Rg '601
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Revenues,Expenses and Changes in Fund Net Position(Continued)
Internal Service Funds
For the Year Ended June 30,2013
U)
c
d
E
Telephone Information Central a;
Support Systems Utility Services Total ca
Cn
R
$ 1,074,570 $ 4,135,159 $ 3,882,388 $ 65,867 $ 23,666,904
1,074,570 4,135,159 3,882,388 65,867 23,666,904 =
LL
v
826,658 2,643,730 5,123,168 104,092 15,633,676 m
- - - - 14,482,412 ce)
- 594,633 - - 594,633 r
N
81,493 245,449 117,785 - 1,124,693
0
908,151 3,483,812 5,240,953 104,092 31,835,414 N
d
166,419 651,347 (1,358,565) (38,225) (8,168,510)
cu
v
N_
LL
d
(9) (11) (12) - (25,213)
- (39,177) (23,735) - (66,017) Q
2,728 3,595 - - 851,490
N
2,719 (35,593) (23,747) - 760,260
M
169,138 615,754 (1,382,312) (38,225) (7,408,250) c
N
C
M
212,011 915,386 (882,996) (92,431) (20,129,262) _
- 14,409 - - 14,409 �
d
'a
c
212,011 929,795 (882,996) (92,431) (20,114,853) w
W
}
$ 381,149 $ 1,545,549 $ (2,265,308) $ (130,656) $ (27,523,103) Q
d
.v
c
c�
c
LL
�v
c
c
Q
c
as
E
t
v
to
Q
159
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30,2013
c
Q
Unemployment Workers' Liability y
Insurance Compensation Insurance Motorpool
r
Cash flows from operating activities: to
Cash received from user departments $ 254,479 $ 4,395,630 $ 3,138,113 $ 6,677,964 Rs
Cash payments to suppliers for goods and services (3,666) (1,335,166) (219,029) (5,952,575) v
C
Cash payments for claims and insurance (338,264) (3,121,931) (1,118,037) -
Cash received from(paid for)for other activities (126,383) 845,166
LL
V
Net cash provided by(used for)operating activities (87,451) (61,467) 1,674,664 1,570,555 y
l4
m
Cash flows from noncapital financing activities: ch
Proceeds(disbursements)interfund loans 87,451 61,467 722,477 (194,704) N
r
Net cash provided by(used for)noncapital financing activities 87,451 61,467 722,477 (194,704) c
N
L
Cash flows from capital and related financing activities:
Principal payments on long-term debt - - (112,044) >_
Interest paid on long-term debt - - (3,105)
v
Net cash used for capital and related financing activities - - (115,149) N
LL
Cash flows from investing activities: y
Investment loss (24,805)
Net cash used for investing activities (24,805)
Q
Net(decrease)increase in cash and investments 2,372,336 1,260,702 CF)
CV
- -
Cash and investments,beginning of year 7!'
M
Cash and investments,end of year $ $ $ 2,372,336 $ 1,260,702 0
N
(Continued) G
M
G1
C
7
d
'C
C
W
L
(v
L
O
CL
LL
C
_C
LL
t[)
3
C
C
Q
C
E
L
V
Q
160 Packet Pg:X03
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Cash Flows(Continued)
Internal Service Funds
For the Year Ended June 30,2013
to
.v
C
d
Telephone Information Central y
Support Systems Utility Services Total
r
to
$ 1,086,009 $ 4,132,199 $ 3,882,388 $ 64,977 $ 23,631,759 c�
(786,426) (1,941,672) (5,091,353) (97,799) (15,427,686) V
C
- - - (4,578,232)
C
2,728 3,595 725,106
LL
V
302,311 2,194,122 (1,208,965) (32,822) 4,350,947 y
M
m
M
140,436 (900,830) 1,297,474 32,822 1,246,593
N
r
140,436 (900,830) 1,297,474 32,822 1,246,593 O
N
L
R
(513,540) (64,774) (690,358)
(93,998) (23,735) (120,838)
v
(607,538) (88,509) (811,196) A
LL
d
(24,805)
- - - (24,805)
Q
442,747 685,754 4,761,539
M
$ 442,747 $ 685,754 $ $ $ 4,761,539 0
N
O
M
Q
C
d
'C
C
W
L
d
.F+
L
O
M
d
LL
3
Q
Q7
E
t
V
r
Q
161cket Pg 604°
6.A.a
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Cash Flows(Continued)
Internal Service Funds
For the Year Ended June 30,2013
c
d
Unemployment Workers' Liability y
Insurance Compensation Insurance Motorpool r
Reconciliation of operating income to
(loss)to net cash provided by R1
(used for)operating activities: V
C
Operating income(loss) $ (178,561) $ (9,872,500) $ 1,995,260 $ 466,315 =
Adjustments to reconcile operating U.
income(loss)to net cash provided V
by(used for)operating activities:
Amortization - - m
Depreciation - - 77 679,889
Other nonoperating revenues - - 845,166 N
r
(Increase)decrease in assets: o
Other receivables - - N
Inventory - - (35,705) y
Prepaids - - (126,383) >-
Accounts receivable - - 167 (5,165)
V
Due from other governments - 62,488 - (100,223) N
Increase(decrease)in liabilities: LL.
Accounts payable 91,110 (187,275) (22,731) (243,025)
Accrued liabilities - - - -
Due to CalPERS 31,477 16,423 175,179
Claims and judgments 10,013,903 (200,833) a
Compensated absences (109,560) 12,684 (211,876) CY)
Net cash provided by(used N
T
zil
for)operating activities $ (87,451) $ (61,467) $ 1,674,664 $ 1,570,555 M
0
(Continued) N
0
M
d
G
7
d
C
W
L
R
d
L
0
CL
NN�
LPL
.0
U.
Q
id
E
t�
® w
Q
162 Packet P,g 605
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Cash Flows(Continued)
Internal Service Funds
For the Year Ended June 30,2013
N
C
Q
Telephone Information Central E
Support Systems utility Services Total
w
U)
lTS
.V
C
$ 166,419 $ 651,347 $ (1,358,565) $ (38,225) $ (8,168,510)
C
U-
v
.y
fCi
- 594,633 - - 594,633 m
81,493 245,449 117,785 - 1,124,693 M
T
2,727 3,595 - - 851,488 N
O
(931) (931) N
L
- (35,705)
- - (126,383) >-
1,875 (5,600) - (1,372) (10,095) V
10,496 2,640 - 481 (24,118) N
LL
15,490 676,751 51,717 (1,430) 380,607
d
- 156,022 - - 156,022
26,003 - 6,843 6,843 262,768
- - - 9,813,070 Q
(1,261) (130,715) (26,745) 881 (466,592) p�
N
r
$ 302,311 $ 2,194,122 $ (1,208,965) $ (32,822) $ 4,350,947 M
r
O
N
O
M
d
C
d
G
W
L
d
L
O
Q.
d
LL
Q
i.
E
s
c�
w
Q
163 Packet Pg 606:'.
6.A.a
N
C
E
d
R
U)
(Sf
U
C
l0
C
U-
2
N
m
C11
M
r
N
O
N
L
cu
W
m
U
N_
U-
U
Q
O
N_
This page intentionally left blank. M
0
N
O
M
N
.a
d
G
W
L
d
L
O
0.
CD
U
C
f6
C
W
C
C
Q
C
d
E
t
U
cC
Q
64 Packet Pg. 607
t:
CITY OF SAN BERNARDINO
Agency Funds
Year Ended June 30,2013
The Agency Funds are used to account for assets held by the City as an agent for individuals, private
organizations, other governments and/or other funds. The City maintains the following Agency Funds for
the purposes indicated:
ca
Cn
Assessment District#961 6
For the collection of assessments from property owners and for the remittance of such assessments to 0
bondholders as required by the Improvement Bond Act of 1915 and related California State statutes for =
this district. u.
Assessment District#977A
m
For the collection of assessments from property owners and for the remittance of such assessments to r>
bondholders as required by the Improvement Bond Act of 1915 and related California State statutes for N
this district. o
N
L
Assessment District#977B
For the collection of assessments from property owners and for the remittance of such assessments to
bondholders as required by the Improvement Bond Act of 1915 and related California State statutes for N
this district. U-
d
.r
Assessment District#1003 =a
For the collection of assessments from property owners and for the remittance of such assessments to Q
bondholders as required by the Improvement Bond Act of 1915 and related California State statutes for a;
N
this district. r
i
v
Special Deposits
For deposits made by developers, other government agencies or others for disposition under the terms for 04
which the deposits were made. M
d
Cemetery Perpetual Care
For funds collected for the perpetual maintenance of the City owned and operated Cemetery. -a
m
San Bernardino Regional Water Resource Authority w
For the collection and disposition of funds received for the San Bernardino Regional Water Resource d
Authority. >-
L
0
Sturges Center for the Arts m
For the collection and disposition of funds received for the Sturges Center for the Arts.
c
CU
c
U-
R
c
c
a
c
E
a
165 Packei Pg.�,608
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Fiduciary Assets and Liabilities
June 30,2013
N
C
d
Assessment Assessment Assessment Assessment m
District District District District
#961 #977A #97713 #1003
Assets: c
ca
Cash and investments $ 370,055 $ 63,124 $ 26,751 $ 57,758 5
it
Accounts receivable,net - - - -
Prepaids - - - - M
M
r
Total assets $ 370,055 $ 63,124 $ 26,751 $ 57,758 N
0
N
Liabilities:
Accounts payable $ - $ - $ - $
Deposits payable - - - - N
Due to bond holders 370,055 63,124 26,751 57,758 U.
m
Total liabilities $ 370,055 $ 63,124 $ 26,751 $ 57,758
Q
(Continued) N
M
r
O
N
O
M
d
C
d
.a
C
W
L
M
L
Q
d
LL
C
Q
i+
E
V
r
Q
166 Packet Pg 609.;
CITY OF SAN BERNARDINO,CALIFORNIA Uc
Combining Statement of Fiduciary Assets and Liabilities(Continued)
' June 30,2013
U)
San Bernardino
Cemetery Regional d
Special Perpetual Water Resource R
Cn
Deposits Care Authority Total
c
ca
$ 3,181,570 $ 659,526 $ 73,792 $ 4,432,576
U-
16,650 - - 16,650 U
238 - - 238
m
M
$ 3,198,458 $ 659,526 $ 73,792 $ 4,449,464 N
O
N
i
M
d
$ 227,693 $ - $ - $ 227,693 }
2,970,765 659,526 73,792 3,704,083 y
- - - 517,688 u.
d
r
$ 3,198,458 $ 659,526 $ 73,792 $ 4,449,464
a
N
d'
M
r
O
N
O
M
d
C
7
d
C
W
L
d
O
CL
NNw
Lf�
U-
Q
E
M
V
Y
Q
167
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Changes in Fiduciary Assets and Liabilities
For the Year Ended June 30,2013
y
Balance at Balance at m
July 1, 2012 Additions Deletions June 30,2013 m
Assessment District#961
in
Assets:
Cash and investments $ 368,257 $ 1,798 $ - $ 370,055
Interest receivable 47 - 47 - E
U-
U
Total assets $ 368,304 $ 1,798 $ 47 $ 370,055 m
M
r
Liabilities: C5
Due to bond holders $ 368,304 $ 1,798 $ 47 $ 370,055
L
c�
d
Total liabilities $ 368,304 $ 1,798 $ 47 $ 370,055
7a
N
Assessment District#977A "-
Assets:
Cash and investments $ 61,914 $ 1,210 $ - $ 63,124 Q
Interest receivable 8 - 8 -
Due from other governments - 315 315 - N
Total assets $ 61,922 $ 1,525 $ 323 $ 63,124
0
N
O
Liabilities:
m
Due to bond holders $ 61,922 $ 1,202 $ - $ 63,124
Total liabilities $ 61,922 $ 1,202 $ - $ 63,124
w
L
Assessment District#977B m
Assets: .�
L
Cash and investments $ 26,629 $ 122 $ - $ 26,751 C
Interest receivable 3 - 3 -
Total assets $ 26,632 $ 122 $ 3 $ 26,751
U-
Liabilities:
Due to bond holders $ 26,632 $ 122 $ 3 $ 26,751
Q
Total liabilities $ 26,632 $ 122 $ 3 $ 26,751
E
s
v
(Continued) Q
168 Packet Pg x61r
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Changes in Fiduciary Assets and Liabilities(Continued)
For the Year Ended June 30,2013
N
Balance at Balance at m
July 1,2012 Additions Deletions June 30,2013 d
Assessment District#1003
co
Assets: Ta
Cash and investments $ 58,192 $ - $ 434 $ 57,758
Interest receivable 7 7 - _
U-
U
Total assets $ 58,199 $ - $ 441 $ 57,758 m
M
Liabilities: N
Due to bond holders $ 58,199 $ - $ 441 $ 57,758
c�
a�
Total liabilities $ 58,199 $ - $ 441 $ 57,758
m
U
N
Special Deposits U-
Assets:
Cash and investments $ 2,027,617 $ 1,153,953 $ - $ 3,181,570 a
Accounts receivable,net 13,970 3,034 354 16,650
Prepaids 238 238 N
Interest receivable 13 13 `t
Due from other governments 55,103 - 55,103
0
N
Total assets $ 2,096,703 $ 1,157,225 $ 55,470 $ 3,198,458
M
C
3
Liabilities:
Accounts payable $ - $ 227,693 $ - $ 227,693
Deposits payable 2,096,703 1,012,525 138,463 2,970,765 w
Total liabilities $ 2,096,703 $ 1,240,218 $ 138,463 $ 3,198,458 }
0
a�
Cemetery Perpetual Care
Assets:
Cash and investments $ - $ 659,526 $ - $ 659,526
Due from City of San •u.
Bernardino 659,486 - 659,486 -
C
Total assets $ 659,486 $ 659,526 $ 659,486 $ 659,526 Q
c
E
Liabilities:
Deposits payable $ 659,486 $ 40 $ - $ 659,526
a
Total liabilities $ 659,486 $ 40 $ - $ 659,526
(Continued)
169 1 Packet Pg. 692
6�A a
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Changes in Fiduciary Assets and Liabilities(Continued)
For the Year Ended June 30,2013
Balance at Balance at a=i
July 1,2012 Additions Deletions June 30, 2013 d
San Bernardino Regional ca
co
Water Resource Authority m
Assets: C
M
Cash and investments $ 74,584 $ 74,584 $ 75,376 $ 73,792 5
LL
V
Total assets $ 74,584 $ 74,584 $ 75,376 $ 73,792 m
M
T
Liabilities: N
CD
Deposits payable $ 74,584 $ - $ 792 $ 73,792 N
L
Total liabilities $ 74,584 $ - $ 792 $ 73,792
Sturges Center for the Arts "-
Assets:
Cash and investments $ 12,743 $ - $ 12,743 $ - a
Total assets $ 12,743 $ - $ 12,743 $ - 04
N
v
M
Liabilities: c
Deposits payable $ 12,743 $ - $ 12,743 $ - N
C
M
d
Total liabilities $ 12,743 $ - $ 12,743 $ -
v
a�
(Continued)
C
w
L
d
d-+
L
0
Q
NN�
1.1.
�Q
C
LL
C
C
Q
C
0
G
V
W
170 Cpcket:Pg.613
CITY OF SAN BERNARDINO,CALIFORNIA
Combining Statement of Changes in Fiduciary Assets and Liabilities(Continued)
For the Year Ended June 30,2013
Balance at Balance at m
July 1,2012 Additions Deletions June 30,2013 m
Totals-All Agency Funds n
Assets: '@
Cash and investments $ 2,629,936 $ 1,891,193 $ 88,553 $ 4,432,576
Accounts receivable,net 13,970 3,034 354 16,650 _
LL
Prepaids - 238 - 238
Interest receivable 78 - 78 - m
Due from other governments 55,103 315 55,418 - M
Due from City of San c�
Bernardino 659,486 - 659,486 - N
c�
m
Total assets $ 3,358,573 $ 1,894,780 $ 803,889 $ 4,449,464 >'
U
N
Liabilities: "-
Accounts payable $ - $ 227,693 $ - $ 227,693 ?
Deposits payable 2,843,516 1,012,565 151,998 3,704,083
Due to bond holders 515,057 3,122 491 517,688 Q
M
N
T
Total liabilities $ 3,358,573 $ 1,243,380 $ 152,489 $ 4,449,464
M
r
O
N
O
M
d
_
3
d
_
W
R
d
t
a
d
_
_
U-
io
3
_
_
a
E
U
Q
171 PacketPg 614.,