HomeMy WebLinkAbout07.D- Finance 7.D
DOC ID: 4532
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Report/Information
From: Brent Mason M/CC Meeting Date: 07/18/2016
Prepared by: Veronica Martinez, (909)
384-5242
Dept: Finance Ward(s): N/A
Subject:
Receive and File the Financial Audit Report for Fiscal Year Ending June 30, 2014
(#4532)
Current Business Registration Certificate: Not Applicable
Financial Impact:
N/A
Motion: Receive and file.
Synopsis of Previous Council Action:
N/A
Background:
f The Pun Group, LLP was contracted by the City to perform the annual audits for the
2013/14 and 2014/15 fiscal years. The first year's audit for 2013/14 has been completed
and is being presented to the City Council for its review and acceptance. The City is in
the process of catching up on its very delinquent audit reports. The completion of this
report with the Pun Group is a very positive result in that it represents "traction" in the
long process of getting the financial audits current. They are well into the work for the
fiscal year 2014/15 report now and expect to have it completed summer 2016 for
presentation in September to the Council.
Important to note from this report is that the auditor's opinion is what is referred to as a
"Modified Opinion. " The preferred result is an "Unmodified Opinion. " The auditor lists
four areas in the report for which they have presented a qualification (or limitation) on
the scope of their opinion, primarily because they are not able to adequately test certain
portions of the City's financial statements due to inadequate documentation.
Alternative testing procedures can be developed and utilized to overcome these
shortcomings, and in subsequent years, staff will be working on these issues to remove
the modifications to the audit report with the objective of receiving a "clean opinion" in
the future.
The modifications to the report are related to the Federal and State Grants Fund, the
Low and Moderate Income Housing Fund and the portion of the report collectively
referred to as the "Aggregate Remaining Funds" (small funds not reported individually in
the report). The nature of the modifications are related to:
Updated: 7/12/2016 by Georgeann 'Gigi" Hanna
Packet`Pg 706
7:D
4532
1. The collectability of notes receivable associated with the activities of the
Successor Agency;
2. The ability to properly value the Property Held for Resale associated with the
Successor Agency;
3. The ability to properly value the Compensated Absences due to uncertainty of
how it will be used due to the bankruptcy proceedings; and lastly,
4. The classification of the depreciable and non-depreciable portions of various
capital assets within the Successor Agency.
As noted above, all of these modifications can be corrected, but will take a great deal of
time/effort and coordination with the auditors so they can then opine on the outcome of
the alternative methodologies used to develop appropriate values for these items.
As important to note is what is NOT part of the modified opinion, which includes the
General Fund and the other large City funds. The point here is that the other funds have
been audited and the numbers can be relied upon. Of particular note is the improvement
in the General Fund's net position - which had been $5 million (as restated) at the end
of 2013 and is more than $13 million at the end of 2014. Financial progress is being
made, and while the bankruptcy process is absorbing a great deal of the immediately
available resources, the outcome is a more financially viable entity better able to
address the many, many challenges that face this City.
Supporting Documents:
Annual Financial Report and Independent Auditor's Report for Year Ended June 30
2014 (PDF)
Updated: 7/12/2016 by Georgeann "Gigi" Hanna Packet Pg. 707
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City of San Bernardino
Annual Financial Report
For the Year Ended June 30,2014 N
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Table of Contents o
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FINANCIAL SECTION a
Independent Auditors' Report on Financial Statements...........................................................................................1
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Basic Financial Statements: ``
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Government-Wide Financial Statements: e
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Statementof Net Position...................................................................................................................................8
Statement of Activities and Changes in Net Position....................................................................................... 10 c
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Fund Financial Statements: M
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Governmental Fund Financial Statements: _
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BalanceSheet................................................................................................................................................... 16
Reconciliation of the Governmental Funds Balance Sheet �
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to the Government-Wide Statement of Net Position............................................................................... 18 w
Statement of Revenues,Expenditures and Changes in Fund Balances..................................................... 19 R
Reconciliation of the Governmental Statement of Revenues,
Expenditures, and Changes in Fund Balances to the Government-Wide c
Statement of Activities and Changes in Net Position.............................................................................21
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Proprietary Fund Financial Statements: 0
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Statementof Net Position..........................................................................................................................24
Statement of Revenues, Expenses and Changes in Net Position...............................................................26 0
Statementof Cash Flows...........................................................................................................................27 0
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position.......................................................................................................... 31 Q
Statement of Changes in Fiduciary Net Position.......................................................................................32
Notes to the Basic Financial Statements ............................................................................................................. 33 a
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Required Supplementary Information (Unaudited):
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BudgetaryInformation........................................................................................................................................... 129 cc
Budgetary Comparison Schedules: 0
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General Fund................................................................................................................................................... 130 d
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Federal and State Grants Special Revenue Fund............................................................................................. 131 R
Low and Moderate Income Housing Special Revenue Fund.......................................................................... 132 .5
Sales and Road Special Revenue Fund........................................................................................................... 133
Schedules of Funding Progress—Defined Benefit Pension Plans......................................................................... 134 iz
Schedule of Funding Progress—Other Post Employment Benefit Plans............................................................... 135
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City of San Bernardino
Annual Financial Report
For the Year Ended June 30, 2014
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Table of Contents (Continued) o
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FINANCIAL SECTION (Continued): Q
Supplementary Information:
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Non-Major Governmental Funds: U
CombiningBalance Sheet............................................................................................................................ 141 M
Combining Statement of Revenues,Expenditures and Changes in Fund Balances.....................................146
Internal Service Funds: o
Combining Statement of Net Position..................... c
152
Combining Statement of Activities and Changes in Net Position................................................................ 154
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Combining Statement of Cash Flows...........................................................................................................156 C
Fiduciary Funds:
Combining Statement of Fiduciary Assets and Liabilities—Agency Funds................................................162 w
Combining Statement of Changes in Assets and Liabilities—Agency Funds............................................. 164 R
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INDEPENDENT AUDITORS' REPORT
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To the Honorable Mayor and Members of the City Council a
of the City of San Bernardino
San Bernardino,California
Report on Financial Statements U_
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We have audited the accompanying financial statements of the governmental activities,the business-type activities, M
each major fund, and the aggregate remaining fund information of the City of San Bernardino, California (the d'
"City"), as of and for the year ended June 30, 2014, and the related notes to the financial statements, which T
collectively comprise the City's basic financial statements as listed in the table of contents.
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Management's Responsibility for the Financial Statements
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 the design, c
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial w
statements that are free from material misstatement,whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the C
financial statements of the Water Enterprise Fund and the Sewer Enterprise Fund(major funds),which collectively
represent 97%, 101%, and 72%, respectively, of the assets, net position, and revenues of the business-type o
activities. Those statements were audited by other auditors whose report has been 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 Q
solely on the report of other auditors. We conducted our audit in accordance with auditing standards generally
accepted in the United States of America and the standards applicable to financial audits contained in Government 0
Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material d
misstatement. c
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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the cc
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the c
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk d
assessments, the auditor considers internal control relevant to the City's preparation and fair 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 City's internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the E
reasonableness of significant accounting estimates made by management, as well as evaluating the overall U.
presentation of the financial statements.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions. m
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200 East Sandpointe Avenue,Suite 600,Santa Ana,California 92707 a
Tel:949-777-8800-Toll Free:855-276-4272•Fax:949-777-8850
www.pungroup.com Packet Pg. 712
7.D.a
To the Honorable Mayor and Members of the City Council
of the City of San Bernardino
San Bernardino,California
Page 2 _
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Summary of Opinions
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Opinion Unit Type of Opinion N
Governmental Activities Qualified
Business-Type Activities Unmodified
General Fund Unmodified Q
Federal and State Grants Special Revenue Fund Qualified f0
Low and Moderate Income Housing-Special Revenue Fund Qualified
Sales and Road Special Revenue Fund Unmodified
Integrated Waste Enterprise Fund Unmodified U.
Water Enterprise Fund Unmodified N
Sewer Enterprise Fund Unmodified
Aggregate Remaining Fund Information Qualified
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Basis for Qualified Opinion on Governmental Activities, Major Federal and State Grants Special Revenue N
Fund, Major Low and Moderate Income Housing Special Revenue Fund, and the Aggregate Remaining Fund M
Information
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Management has not adopted a methodology for reviewing the collectability of notes receivable in the
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 and, accordingly, has not w
considered the need to provide an allowance for uncollectible amounts.Accounting principles 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 the expenses or expenditures in the o
Governmental Activities, major Federal and State Grants special revenue fund, major Low and Moderate Income i
Housing special revenue fund, and the Aggregate Remaining Fund Information. The amount by which the departure °c
would affect the assets and net position or fund balance and change the expenses or expenditures in the Cf-
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 has not been determined. °
Management has not adopted a methodology for reviewing the valuation of property held for resale in the Q
Governmental Activities, major Federal and State Grants special revenue fund, major Low and Moderate Income a
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 cost plus
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improvement costs. Accounting principles generally accepted in the United States of America require that the -a
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 in the Governmental Activities, w
major Federal and State Grants special revenue fund, major Low and Moderate Income Housing special revenue
fund, and the Aggregate Remaining Fund Information. The amount by which the departure would affect the assets °Q
and net position or fund balance and change the expenses or expenditures in the 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 has not been determined.
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Management has not adopted a methodology for reviewing the valuation of the compensated absences balance in U.
the Governmental Activities, in order to determine the total liability of the compensated absences. Accordingly,
compensated absences balance is reported at post-petition liquidation value. Accounting principles generally
accepted in the United States of America require that the compensated absences balance be recorded based on a
contractually required rates during the pendency plan stage of Bankruptcy without regard to considerations of
eventual outcomes as may be determined by the final plan of adjustments. The amount by which the departure E
would affect the liability and net position and change the expenses or expenditures in the Governmental Activities
has not been determined. 'a
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2 Packet Pg. 713
To the Honorable Mayor and Members of the City Council
of the City of San Bernardino
San Bernardino,California
Page 3 2
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Management has not adopted a methodology for reviewing the classification between depreciable and non- °
depreciable and the related depreciation expense of the Capital Asset in the Redevelopment Obligation Retirement c
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Fund (Successor Agency) within the Aggregate Remaining Fund Information, in order to determine the total net
realizable value of the capital assets. Accordingly, capital asset is reported at acquisition cost plus improvement
costs. Accounting principles generally accepted in the United States of America require that capital assets be
recorded based on historical cost,net of accumulated depreciation.The amount by which the departure would affect Q
the assets and net position and change in the deductions in the Redevelopment Obligation Retirement Fund
(Successor Agency)within the Aggregate Remaining Fund Information has not been determined.
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Qualified Opinions L`
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In our opinion, except for the effects of the matters described in the Basis for Qualified Opinion on Governmental a
Activities, Major Federal and State Grants Special Revenue Fund, Major Low and Moderate Income Housing
Special Revenue Fund, and the Aggregate Remaining Fund Information paragraphs, the financial statements c
referred to above present fairly, in all material respects, the respective financial position of the Governmental N
Activities, the major Federal and State Grants special revenue fund, major Low and Moderate Income Housing M
special revenue fund,and the aggregate remaining fund information of the City of San Bernardino, California,as of
June 30, 2014, 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. °
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Unmodified Opinions w
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In our opinion, based on our audit and the report of other auditors, the financial statements referred to previously }
present fairly, in all material respects,the respective financial position of the Business-Type Activities,the 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 as of June 30, 2014, and the respective
changes in financial position, and where applicable, cash flows thereof for the year then ended in accordance with
accounting principles generally accepted in the United States of America. U'
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Emphasis of Matter
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Going Concern m
The accompanying financial statements have been prepared assuming the City will continue as a going concern. As
discussed in Note 2 to the basic financial statements, the City filed a case on August 1, 2012, seeking bankruptcy d
protection and adjustment of its liabilities under Chapter 9 of the United States Bankruptcy Code. These conditions c
raise substantial doubt about its ability to continue as going concern. Management's plans regarding those matters V
also are described in Note 2. The financial statements do not include any adjustments that might result from the M
outcome of this uncertainty. Our opinion is not modified with respect to this matter. _
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Restatement of Prior Year Financial Statements
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As discussed in Note 22 to the financial statements, various account balances have been restated. We audited the
adjustments described in Note 22 that were applied to restate the June 30, 2013 basic financial statements. In our
opinion, such adjustments are appropriate and have been properly applied. Our opinion is not modified in respect to U.
this matter.
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GASB Statement No. 68 a
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As further discussed in Note 1 to the basic financial statements, GASB issued GASB Statement No. 68,Accounting 0
® and Financial Reporting for Pension Plans. This statement requires state and local governments to display the
actuarially determined Net Pension Liability in its financial statements effective with fiscal year 2014-2015. This y
Net Pension Liability is expected to be substantial. Our opinion is not modified with respect to this matter. Q
3 1 Packet Pg. 714
7.D.a
To the Honorable Mayor and Members of the City Council
of the City of San Bernardino
San Bernardino,California
Page 4
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Other Matters o
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Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's
Discussion and Analysis, Fund Budgetary Comparison Schedules and Schedules of Funding Progress for Pension Q
and OPEB Plans, as listed in the foregoing table of contents, be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the Required Supplementary Information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management about v
the methods of preparing the information and comparing the information for consistency with management's d
responses to our inquiries,the basic financial statements, and other knowledge we obtained during our audit of the o
basic financial statements. We do not express an opinion or provide any assurance on the information because the o
limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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Other Information -'
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Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise w
the City's basic financial statements. The Combining and Individual Nonmajor Fund Financial Statements are
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presented for purposes of additional analysis and are not a required part of the basic financial statements.
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The Combining and Individual Nonmajor Fund Financial Statements on pages 137 through 162 are the
responsibility of management and were derived from and relate directly to the underlying accounting and other 0 CL
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 in
comparing and reconciling such information directly to the underlying accounting and other records used to prepare 0
the basic financial statements or to the basic financial statements themselves, and other additional procedures in V
accordance with auditing standards generally accepted in the United States of America. In our opinion, the Q
Combining and Individual Nonmajor Fund Financial Statements are fairly stated in all material respects in relation m
to the basic financial statements as a whole.
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Other Reporting Required by Government Auditing Standards -4a
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In accordance with Government Auditing Standards, we have also issued our report dated June 9, 2016, on our
consideration of the City's internal control over financial reporting and on our tests of its compliance with certain
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provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to 0 CL
describe the scope of our testing of internal control over financial reporting and compliance and the results of that
testing,and not to provide an opinion on the internal control over financial reporting or on compliance. That report a
is an integral part of an audit performed in accordance with Government Auditing Standards in considering the
City's internal control over financial reporting and compliance.
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Santa Ana,California
June 9,2016 a
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BASIC FINANCIAL STATEMENTS
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GOVERNMENT-WIDE FINANCIAL STATEMENTS 0
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Packet Pg. 718
7.D.a
City of San Bernardino
Statement of Net Position
June 30,2014 H
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Primary Government d
Governmental Business-Type
Activities Activities Total
ASSETS Q
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Current assets:
Cash and.investments $ 60,440,863 $ 47,476,705 $ 107,917,568 C
Cash and investments with fiscal agents 1,208,016 - 1,208,016 S U.
Internal balances (162,407) 162,407 -
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Receivables: M
Accounts 6,068,141 11,512,822 17,580,963
Interest 149,444 161,011 310,455 r
Special assessments 163,804 - 163,804 N
Due from other governments 8,362,208 1,821,820 10,184,028 M
Deposits 200,000 - 200,000
Inventory 249,916 1,690,743 1,940,659
Prepaid items 456,252 351,023 807,275 d
Total current assets 77,136,237 63,176,531 140,312,768 3
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Noncurrent assets:
Notes receivable 42,057,414 - 42,057,414
Prepaid items - 687,309 687,309 w
Restricted cash - 7,585,801 7,585,801
Restricted investments-Consent Decree - 21,259,686 21,259,686 a
Restricted-other assets - 32,691,517 32,691,517 4)Property held for resale 34,721,732 - 34,721,732 )
Investment in joint ventures - 25,116,989 25,116,989 p
Net pension asset 55,231,576 - 55,231,576
Non-depreciable capital assets 128,272,212 32,767,989 161,040,201 Q
Depreciable capital assets,net 267,350,970 213,039,208 480,390,178
Total noncurrent assets 527,633,904 333,148,499 860,782,403 c
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Total assets 604,770,141 396,325,030 1,001,095,171
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DEFERRED OUTFLOWS OF RESOURCES -0
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Deferred loss on refunding - 108,823 108,823 M
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Total deferred outflows of resources - 108,823 108,823 0 CL
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See accompanying Notes to the Basic Financial Statements.
8 Packet Pg. 719
7.D.a
City of San Bernardino
Statement of Net Position (Continued)
June 30,2014 N
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Primary Government
Governmental Business-Type
Activities Activities Total
LIABILITIES Q
Current liabilities:
Accounts payable and accrued liabilities $ 10,632,613 $ 7,733,399 $ 18,366,012
Payroll and related liabilities 188,746 911,388 1,100,134 LL
Interest payable 5,361,957 510,659 5,872,616
Retentions payable 176,955 - 176,955
Due to other governments 1,187,158 - 1,187,158 v
Unearned revenue 1,800,011 - 1,800,011 r
Deposits payable 61,017 502,298 563,315 N
Ca1PERS Settlement-due within one year 5,882,688 - 5,882,688 M
Compensated absences-due within one year 3,413,355 882,108 4,295,463 c
Claims payable-due within one year 5,219,285 999,603 6,218,888
Long-term debt-due within one year 56,274,570 8,472,313 64,746,883 d
Total current liabilities 90,198,355 20,011,768 110,210,123 c
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Noncurrent liabilities: L
Developer deposits - 3,080,692 3,080,692 }
Unearned revenue-Consent Decree - 53,304,210 53,304,210 0
Due to Successor Agency 2,232,925 - 2,232,925 t
Net pension obligation 711,031 9,159 720,190 Q.
Net OPEB obligation 29,217,821 1,890,290 31,108,111 fY
Landfill closure liability - 6,929,000 6,929,000 H
Ca1PERS settlement-due in more one year 6,937,186 - 6,937,186 0
Compensated absences-due in more than one year 7,964,495 1,027,225 8,991,720 V
Claims payable-due in more than one year 29,653,209 - 29,653,209 Q
Long-term debt-due in more than one year 28,214,586 31,787,484 60,002,070 y
Total noncurrent liabilities 104,931,253 98,028,060 202,959,313
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Total liabilities 195,129,608 118,039,828 313,169,436
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NET POSITION a
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Net investment in capital assets 366,632,191 206,293,601 572,925,792 `°
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Restricted: C
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Public safety 1,105,595 - 1,105,595 �
Streets and capital projects 36,367,423 - 36,367,423
Culture and recreation 699,158 - 699,158
Community development 77,719,415 - 77,719,415 c
Community service 563,673 - 563,673
Debt service 1,214,741 - 1,214,741
Capital related fees - 61,537,004 61,537,004
Total restricted 117,670,005 61,537,004 179,207,009 Q
Unrestricted(deficit) (74,661,663) 10,563,420 (64,098,243)
Total net position $ 409,640,533 $ 278,394,025 $ 688,034,558
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See accompanying Notes to the Basic Financial Statements.
9 Packet Pg.720
7.D.a
City of San Bernardino
Statement of Activities and Changes in Net Position
For the Year Ended June 30,2014 U
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Program Revenues m
Operating Capital Total
Charges for Grants and Grants and Program Q
Functions/Programs Expenses Services Contributions Contributions Revenues
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Primary government:
Governmental activities:
General government $ 18,045,239 $ 2,496,930 $ 1,346,203 $ - $ 3,843,133 L`
Public safety 90,844,424 5,921,344 6,042,481 - 11,963,825 M
Streets 28,371,459 7,907,263 1,200 11,141,515 19,049,978 W)
Culture and recreation 8,053,521 766,853 - - 766,853
Community development 2,944,616 4,025,505 3,753,421 - 7,778,926 N
Community service 6,062,512 56,056 3,709,872 - 3,765,928 0
Interest on long-term debt 6,324,491 - - - - d
Total governmental activities 160,646,262 21,173,951 14,853,177 11,141,515 47,168,643
Business-type activities:
Integrated Waste 20,306,358 24,911,930 - - 24,911,930 =
Water 36,303,452 35,968,790 2,030,066 6,521,601 44,520,457 w
L
Sewer 23,753,540 25,350,989 - 989,176 26,340,165 y
Total business-type activities 80,363,350 86,231,709 2,030,066 7,510,777 95,772,552 c
Total primary government $241,009,612 $ 107,405,660 $ 16,883,243 $ 18,652,292 $ 142,941,195
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See accompanying Notes to the Basic Financial Statements.
10 Packet Pg. 721
City of San Bernardino
Statement of Activities and Changes in Net Position (Continued)
For the Year Ended June 30,2014 H
LL
L.
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Net(Expense)Revenue o
and Changes in Net Position C
Primary Government
.r
Governmental Business-type Q
Functions/Programs Activities Activities Total
.v
Primary government: C
to
Governmental activities: E
U.
General government $ (14,202,106) $ - $ (14,202,106)
Public safety (78,880,599) - (78,880,599) M
Streets (9,321,481) - (9,321,481)
Culture and recreation (7,286,668) - (7,286,668) .�
Community development 4,834,310 - 4,834,310 N
Community service (2,296,584) - (2,296,584) c
Interest on long-term debt (6,324,491) - (6,324,491)
Total governmental activities (113,477,619) - (113,477,619)
Business-type activities: y
Integrated Waste - 4,605,572 4,605,572
Water - 8,217,005 8,217,005 w
L
Sewer - 2,586,625 2,586,625 m
Total business-type activities - 15,409,202 15,409,202 c
Total primary government (113,477,619) 15,409,202 (98,068,417)
0
a
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General revenues:
Taxes: H
t
Property taxes 38,885,226 - 3-8,885,226
Sales taxes 30,420,582 - 30,420,582 3
Franchise taxes 3,749,762 - 3,749,762 Q
.r
Utilities user taxes 22,498,934 - 22,498,934 C
Transient occupancy taxes 2,935,962 - 2,935,962
Othertaxes 7,138,133 - 7,138,133 d
Total taxes 105,628,599 - 105,628,599
Investment earnings 892,498 581,185 1,473,683 c
Loss on sale of assets - (11,798) (11,798)
Miscellaneous 4,731,890 1,884,946 6,616,836 a
Transfers
Intragovetnment 2,200,000 (2,200,000) - 5
From fiduciary funds 2,105 - 2,105 0
Total transfers 2,202,105 (2,200,000) 2,105 c
U.
Total general revenues and transfers 113,455,092 254,333 113,709,425
Changes in net position (22,527) 15,663,535 15,641,008 c
c
Net Position-beginning of year,as restated(Note 22) 409,663,060 262,730,490 672,393,550 a
Net Position-end of year $ 409,640,533 $ 278,394,025 $ 688,034,558
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See accompanying Notes to the Basic Financial Statements.
11 Packet Pg. 722
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FUND FINANCIAL STATEMENTS
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14 Packet Pg.725
7.D.a
GOVERNMENTAL FUND
FINANCIAL STATEMENTS
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General Fund—This is the primary operating fund of the City. It is used to account for all revenues and expenditures W
that are not required to be accounted for in another fund.
Q
Federal and State Grants Fund -This fund is used to report various grants awarded to the City by Federal, State, and
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local governments not otherwise accounted for in the General Fund or Capital Projects funds. A detailed report by
program is available under a separate report meeting the criteria of the Office of Management and Budget(OMB) U-
Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations, for all federal grants received by M
the City. v
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a
Low and Moderate Income Housing Fund -This fund is used for the continued maintenance and operations of low N
and moderate income housing project activities of the former redevelopment agency. This fund was established on r°>
February 1,2012,when the City elected to become the Housing Successor to the housing related activities of the former c
redevelopment agency.
v
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Sales and Road Fund-This fund is used to account for the local street improvments as provided for by the San w
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Bernardino County Measure I Sales Tax. co
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5 Packet Pg. 726
7.D.a
City of San Bernardino
Balance Sheet
Governmental Funds v
June 30,2014 U.
L
Major Funds 12
Low and p
Moderate y
Federal and Income Sales and
General State Grants Housing Road
Fund Fund Fund Fund Q
ASSETS
v
Cash and investments $ 9,089,846 $ 797,663 $ 588,546 $ 7,150,698
Receivables: _
U-
Accounts 3,464,349 1,564,612 - -
Interest 49,358 1,001 1,957 14,372 M
Notes - 3,337,628 38,719,786 - U')_
Special assessments - - - -
Due from other governments 5,502,294 843,854 - 1,005,388 c
Deposits - - 200,000 - N
0
Prepaids 415,286 32,966 - - M
Due from other funds 393,578 - - - c
Advances to other funds - - 116,800
Property held for resale - 16,296,266 18,425,466 y
Restricted cash and investments held by fiscal agents 1,208,016 - - -
Total assets $ 20,122,727 $ 22,873,990 $ 58,052,555 $ 8,170,458 W
L
M
LIABILITIES,DEFERRED INFLOWS �
OF RESOURCES AND FUND BALANCES o
Liabilities:
O
Accounts payable $ 3,057,721 $ 761,985 $ - $ 914,350
Accrued liabilities 477,426 45,879 -
Payroll and related liabilities 187,037 - - - i
Retentions payable - 35,658 - 49,617 r
Due to other governments 427,902 759,256 - - 3
Due to other funds
Deposits payable 24,148 -
d
Unearned revenue - 1,629,019 - -
c
Advances from other funds - -
CL
Due to Successor Agency 2,232,925 - - - d
a
Total liabilities 6,407,159 3,231,797 - 963,967
v
c
Deferred inflows of resources:
Unavailable revenues 326,065 - - -
O
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Total deferred inflows of resources 326,065 - - -
Fund Balances:
Nonspendable 415,286 19,666,860 57,462,052 - c
Restricted 1,208,016 - 590,503 7,206,491 =_
Committed 1,439,131 - - - LL.
Unassigned(deficit) 10,327,070 (24,667) - -
Total fund balances 13,389,503 19,642,193 58,052,555 7,206,491 Q
Total liabilities,deferred inflows
of resources and fund balances $ 20,122,727 $ 22,873,990 $ 58,052,555 $ 8,170,458 y
E
(Continued) v
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w
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See accompanying Notes to Basic Financial Statements.
16 Packet Pg. 727
7.D.a
City of San Bernardino
Balance Sheet(Continued)
Governmental Funds v
June 30,2014 u
L
0
W
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O
Q
0)
Other Total
Governmental Governmental
Funds Funds Q
ASSETS f6
U
Cash and investments $ 33,635,092 $ 51,261,845
Receivables: _
LL
Accounts (135,918) 4,893,043
Interest 66,982 133,670 co
Notes - 42,057,414 LO_
Special assessments 163,804 163,804 d
Due from other governments 1,010,672 8,362,208 0
Deposits - 200,000 N
0
Prepaids 8,000 456,252 M
Due from other funds - 393,578 c
Advances to other funds 147,600 264,400
Property held for resale - 34,721,732 V
Restricted cash and investments held by fiscal agents - 1,208,016 =
Total assets $ 34,896,232 $ 144,115,962 W
L
LIABILITIES,DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES ,o
Liabilities:
O
Accounts payable $ 3,109,880 $ 7,843,936 d
Accrued liabilities - 523,305 W
Payroll and related liabilities 1,709 188,746 L
Retentions payable 91,680 176,955 $
Due to other governments - 1,187,158
Due to other funds 377,767 377,767 a
Deposits payable 36,869 61,017
Unearned revenue - 1,629,019 c
Advances from other funds 264,400 264,400 0.
Due to Successor Agency - 2,232,925 '00
Total liabilities 3,882,305 14,485,228 c
C
Deferred inflows of resources: `c
Unavailable revenues 594,056 920,121 0
O
Total deferred inflows of resources 594,056 920,121
Fund Balances:
Nonspendable 155,600 77,699,798
Restricted 30,921,926 39,926,936 c_
Committed - 1,439,131 U.
Unassigned(deficit) (657,655) 9,644,748
Total fund balances 30,419,871 128,710,613 Q
Total liabilities,deferred inflows
w
of resources and fund balances $ 34,896,232 $ 144,115,962 y
(Concluded)
a
See accompanying Notes to Basic Financial Statements.
17 Packet Pg. 728
City of San Bernardino
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position c10,
June 30,2014 ii
O
Total Fund Balances-Total Governmental Funds $ 128,710,613 t
O
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Amounts reported for governmental activities in the Statement of Net Position were different because: d
Capital assets used in governmental activities were not financial resources and therefore were not reported in governmental
funds. a
Government-Wide Financial Statements 395,623,182
Less:Internal Service Funds'capital assets (4,559,801)
t0
Total capital assets adjustment 391,063,381 c
U.
Net pension asset did not provide current financial resources.Therefore,net pension asset was not reported as an asset in the N
governmental funds. 55,231,576 tn
Interest payable on long-term debt did not require current financial resources. Therefore,interest payable was not reported It
V_
as a liability in Governmental Funds Balance Sheet. (5,361,957) N
0
Long-term liabilities were not due and payable in the current period and therefore were not reported in the governmental
4�
funds. _
Amount reported in Government-Wide Statement of Net Position:
CaIPERS Settlement-due within one year (5,882,688)
CAPERS Settlement-due in more one year (6,937,186)
Compensated absences-due within one year (3,413,355) W
Compensated absences-due in more than one year (7,964,495)
Claims payable-due within one year (5,219,285) }
Claims payable-due in more than one year (29,653,209) JO
Long-term debt-due within one year (56,274,570) C
Long-term debt-due in more than one year (28,214,586) C,
O
Net pension obligation (711,031) �
Net OPEB obligation (29,217,821) N
L
Prepaid items (173,4885226) O
Less:Amount reported in Internal Service Funds -a
3
Compensated absences-due within one year 156,558 Q
Compensated absences-due in more than one year 365,306 c
Capital leases payable-due within one year 614,705
Capital leases payable-due in more than one year 3,317,010 0.
Claims payable-due within one year 5,219,285 o
'o
Claims payable-due within one year 29,653,209 c
Net pension obligation 71345
39,333,418 ea
Net long-term liabilities (134,154,808) Q
d
Deferred inflows and outflows of resources are not available for current period and, therefore, are deferred in the
governmental funds or not recorded in the govermental funds: t0
.v
Unavailable revenues 920,121 r_
c
Internal service funds were used by management to charge the costs of certain activities to individual funds. The assets and LL
liabilities of the internal service funds were included in governmental activities in the Government-Wide Statement of Net to
O
Position. (26,768,393) _
c
a
Net Position of Governmental Activities $ 409,640,533
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See accompanying Notes to Basic Financial Statements.
18 Packet Pg. 729
7.D.a
City of San Bernardino
Statement of Revenues,Expenditures and Changes in Fund Balance
Governmental Funds U
For the Year Ended June 30,2014 u
0
w
Major Funds m
Low and
Moderate
Federal and Income Sales and
General State Grants Housing Road Q
Fund Fund Fund Fund v
c
REVENUES: is
c
Taxes $ 98,422,231 $ - $ - $ 3,433,884 U.
Licenses and permits 9,367,281 150 825 - M
Impact fees - - - -
Fines and forfeitures 2,108,990 - - -
Use of money and property 204,295 49,107 40,802 44,572 r
CD
Lease revenue 704,726 - - - N
Intergovernmental 1,817,393 13,465,663 - 502,129 C°)
Charges for services 7,576,976 - - -
Otherrevenues 4,111,481 392,331 49,445 - z
Total revenues 124,313,373 13,907,251 91,072 3,980,585 m
c
EXPENDITURES: w
Current: f9
m
General Government 14,729,092 2,311,508 -
Public Safety 80,793,365 5,298,157 - - o
Streets 3,688,475 249,996 - 3,012,569 0
Culture and recreation 6,545,614 842,408 - - as
Community development 2,796,048 32,573 - -
Community service 1,565,203 3,757,132 -
i
Debt service: a
Principal 2,850,564 856,834 - 1,916
Interest and fiscal charges 2,060,373 419,307 - - Q
Total expenditures 115,028,734 13,767,915 3,014,485 y
c
REVENUES OVER u
(UNDER)EXPENDITURES 9,284,639 139,336 91,072 966,100 -aa
OTHER FINANCING SOURCES(USES):
c�
Transfer from Successor Agency - 2,105 -
Transfers in 3,020,719 - - - 0
Q.
Transfers out (3,937,273) - - - a)
W
Total other financing sources(uses) (916,554) - 2,105 -
U
_
CHANGES IN FUND BALANCES 8,368,085 139,336 93,177 966,100
c
U-
FUND BALANCES:
Beginning of year(as restated,Note 22) 5,021,418 19,502,857 57,959,378 6,240,391 =
End of year $ 13,389,503 $ 19,642,193 $ 58,052,555 $ 7,206,491 Q
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(Continued) E
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See accompanying Notes to Basic Financial Statements.
19 Packet Pg. 730
7.D.a
City of San Bernardino
Statement of Revenues,Expenditures and Changes in Fund Balance (Continued)
C Governmental Funds v
For the Year Ended June 30,2014 U-
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12
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Other Total
Governmental Governmental Q
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Funds Funds v
c
REVENUES:
c
Taxes $ 2,270,666 $ 104,126,781 U.
Licenses and permits 338,544 9,706,800 N
Impact fees 1,761,012 1,761,012 W
Fines and forfeitures 381,659 2,490,649
Use of money and property 211,193 549,969 r
Lease revenue - 704,726 N
Intergovernmental 7,905,847 23,691,032 M
Charges for services 3,831,267 11,408,243 c
Otherrevenues 60,084 4,613,341
Total revenues 16,760,272 159,052,553
c
EXPENDITURES: W
L
Current: c4
m
General Government 244,860 172285,460 }
Public Safety 1,223,453 87,314,975
Streets 11,554,985 18,506,025 C
Culture and recreation 10,000 7,398,022 M
a�
Community development - 2,828,621 w
Community service 360,561 5,682,896 O
L
Debt service:
Principal 129,424 3,838,738
Interest and fiscal charges 79,981 2,559,661 Q
.r
Total expenditures 13,603,264 145,414,398 aci
V
c
REVENUES OVER a,
(UNDER)EXPENDITURES 3,157,008 13,638,155
c
OTHER FINANCING SOURCES(USES): _
Transfer from Successor Agency - 22105 t
Transfers in 3,937,273 6,957,992 C
CL
Transfers out (820,719) (4,757,992)
Total other financing sources(uses) 3,116,554 2,202,105
.v
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CHANGES IN FUND BALANCES 6,273,562 15,840,260
c
U.
FUND BALANCES:
Beginning of year(as restated,Note 22) 24,146,309 112,870,353 c
End of year $ 30,419,871 $ 128,710,613 Q
c
d
(Concluded) E
s
Q
See accompanying Notes to Basic Financial Statements.
20 Packet Pg. 731
7.D.a
City of San Bernardino
Reconciliation of the Governmental Statement of Revenues,Expenditures, and Changes
10 in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position
For the Year Ended June 30, 2014 LL
L
0
Net Change in Fund Balances-Total Governmental Funds $ 15,840,260 0
Amounts reported for governmental activities in the Statement of Activities were different because:
Governmental funds reported capital asset acquisitions as expenditures. However, in the Government-Wide Statement of
Activities and Changes in Net Position, the cost of those assets was allocated over their estimated useful lives as Q
depreciation expense. This was the amount of capital assets recorded in the current period. 5,932,143
�o
U
Depreciation expense on capital assets was reported in the Government-Wide Statement of Activities and Changes in Net
Position,but they did not require the use of current financial resources.Therefore,depreciation expense was not reported as
expenditures in the Governmental Funds. This amount did not include the depreciation expense for Internal Service Funds u
in the amount of$583,390. (17,909,960) N
M
U)
Repayment of long-term liabilities was an expenditures in governmental funds, but the repayment reduced long-term '
liabilities in the Government-Wide Statement of Net Position.
Principal payment of long-term debt 3,838,738 N
0
M
Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are d
not reported as expenditures in governmental funds.
Changes in accreted interest (703,021)
.O
Changes in compensated absences 770,525
Change in net pension asset 370,293 c LU
Change in net pension obligation (1,226,161) _
Changes in net OPEB obligation (2,551,964)
UInterest expense on long-term debt was reported in the Government-Wide Statement of Activities and Changes in Net ,0
Position,but it did not require the use of current financial resources. This amount represented the change in accrued interest C
from prior year. (2,934,464) r.
Prepaid items (1,138,015) N
L
O
Internal service funds were used by management to charge the costs of certain activities to individual funds. The net
revenue of internal service funds was reported with governmental activities. (310,901)
Q
.r
Change in Net Position of Governmental Activities $ (22,527)
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See accompanying Notes to Basic Financial Statements.
21 Packet Pg. 732
7.D.a
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Packet Pg. 733
7.D.a
PROPRIETARY FUND
FINANCIAL STATEMENTS
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Integrated Waste Fund—This fund is used to account for the provision of refuse collection to the residential,
commercial,and industrial segments of the City.All activities necessary to provide such services are accounted for in a
this fund,including,but not limited to,administration,operations,maintenance,financing and related debt service,and a
billing and collection.
c
Water Fund—This fund is used to account for the provision of water services to the residential,commercial, and u
industrial segments of the City.All activities necessary to provide such services are accounted for in this fund, including,
Lo
but not limited to,administration,operations,maintenance,financing and related debt service, and billing and collection. �t
T
Sewer Fund—This fund is used to account for the provision of wastewater collection and treatment services to the
N
residential,commercial,and industrial segments of the City.All activities necessary to provide such services are
M
accounted for in this fund, including,but not limited to,administration,operations,maintenance,financing and related
debt service,and billing and collection.
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23 Packet Pg. 734
City of San Bernardino
Statement of Net Position
Proprietary Funds
June 30,2014 U.
0
w
Governmental p.
Major Funds Activities M
Integrated Internal
'O
Waste Water Sewer Total Service Funds
Q
eo
ASSETS
c
to
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Current assets: LL
Cash and cash equivalents $ 6,719,137 $ 7,888,566 $ 5,213,133 $ 19,820,836 $ 9,179,018 N
Investments - 3,984,295 23,671,574 27,655,869 - Ln
Accounts receivable 8,695 7,463,161 4,040,966 11,512,822 1,175,098
Interest receivable 13,728 11,988 135,295 161,011 15,774 r
Due from other governments - 1,591,360 230,460 1,821,820 - N
Due from other funds 2,551,988 164,200 - 2,716,188 -
M
Inventories - 1,690,743 - 1,690,743 249,916 =
Current portion of prepaid items - 211,446 139,577 351,023 -
a
Total current assets 9,293,548 23,005,759 33,431,005 65,730,312 10,619,806
c
W
Noncurrent assets: L
Prepaid items - 687,309 687,309 - to
}
Investments in joint ventures - - 25,116,989 25,116,989 - L
Restricted assets:
Cash and cash equivalents-capital-related fees - - 7,486,594 7,486,594 - C
Cash and cash equivalents-Consent Decree - 99,207 - 99,207 - d
Prepaid items - 21,259,686 - 21,259,686 -
N
Interest receivable-Consent Decree - 64,084 - 64,084 -
Prepaid insurance-Consent Decree - 31,881,232 - 31,881,232 -
'o
Note proceeds held by State - 746,201 - 746,201 - Q
Capital assets:
c
Non-depreciable assets - 11,878,419 20,889,570 32,767,989 -
Depreciable assets,net of accumulated depreciation 4,422,987 173,973,008 34,643,213 213,039,208 4,559,801
C.
Total capital assets,net 4,422,987 185,851,427 55,532,783 245,807,197 4,559,801 4)
.a
c
Total noncurrent assets 4,422,987 239,901,837 88,823,675 333,148,499 4,559,801 -p
C
Total assets 13,716,535 262,907,596 122,254,680 398,878,811 15,179,607
O
C.
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding - - 108,823 108,823 - O
.v
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Total deferred outflows of resources - - 108,823 108,823 -
c
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See accompanying Notes to Basic Financial Statements. 24 Packet Pg. 735
City of San Bernardino
Statement of Net Position (Continued)
Proprietary Funds
June 30,2014
U.
0
Governmental 0 CL
Major Funds Activities Ix
Integrated Internal -'
Waste Water Sewer Total Service Funds
a
LIABILITIES
to
c
Current liabilities: ii
Accounts payable and accrued liabilities 2,243,250 2,509,413 2,980,736 7,733,399 2,265,372 N
Due to other funds - 2,285,168 268,613 2,553,781 178,218
W)
Payroll and related liabilities 18,120 556,219 337,049 911,388 - `t
Interest payable 29,987 259,403 221,269 510,659 -
Deposits payable - 502,298 - 502,298 - iCD
Unearned revenue - - - 170,992 0
M
Long term debt-due within one year 2,140,362 1,702,526 4,629,425 8,472,313 614,705 c
Compensated absences-due within one year - 661,888 220,220 882,108 156,558
Claims payable-due within one year - 731,496 268,107 999,603 5,219,285
a�
Total current liabilities 4,431,719 9,208,411 8,925,419 22,565,549 8,605,130 c
w
Noncurrent liabilities: aa)
Deposits payable - 3,080,692 - 3,080,692 - �-
Compensated absences-due in more than one year 466,075 414,703 146,447 1,027,225 365,306 0
Unearned revenue-Consent Decree - 53,304,210 - 53,304,210 -
O
Net Pension Obligation 9,159 - - 9,159 7,345 d
Long term debt-due in more than one year 2,652,587 21,097,819 8,037,078 31,787,484 3,317,010 0!
Net OPEB obligation-due in more than one year 1,537,780 276,407 76,103 1,890,290 - G
Landfill closure liability-due in more than one year 6,929,000 - - 6,929,000 -
Claims payable-due in more than one year - - - - 29,653,209 Q
Total noncurrent liabilities 11,594,601 78,173,831 8,259,628 98,028,060 33,342,870 d
V
Total liabilities 16,026,320 87,382,242 17,185,047 120,593,609 41,948,000 d
CL
NET POSITION(DEFICIT) a
Net investment in capital assets (369,962) 163,797,283 42,866,280 206,293,601 1,052,938
Restricted - 54,050,410 7,486,594 61,537,004 - °
c
to
Unrestricted(deficit) (1,939,823) (42,322,339) 54,825,582 10,563,420 (27,821,331)
O
Total net position(deficit) $ (2,309,785) $ 175,525,354 $ 105,178,456 $ 278,394,025 $ (26,768,393) y
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See accompanying Notes to Basic Financial Statements. 25 Packet Pg. 736
City of San Bernardino
Statement of Revenues,Expenses and Changes in Net Position
Proprietary Funds N
For the Year Ended June 30,2014 LL
0
Governmental 12
t
Major Funds Activities Q.
Integrated Internal
Waste Water Sewer Total Service Funds
OPERATING REVENUES: _
Q
Charges for services $24,911,930 $ 35,968,790 $ 25,350,989 $ 86,231,709 $27,472,988 To
Other operating revenues - 703,113 319,785 1,022,898 - _
Total operating revenues 24,911,930 36,671,903 25,670,774 87,254,607 27,472,988 c
ii
OPERATING EXPENSES: M
Cost of sales and services 12,102,433 - - 12,102,433 15,760,216
Administration and customer service 5,433,849 6,485,280 2,754,625 14,673,754 -
Utility administration - 622,403 449,769 1,072,172 - c
Engineering,operations,and distribution administration - 7,302,717 2,141,332 9,444,049 - N
Plant operations - 6,960,724 8,907,163 15,867,887 - c°o
Maintenance - 1,837,556 3,146,275 4,983,831 - d
c
Environmental control - - 621,055 621,055 -
Distribution - 4,434,581 - 4,434,581 -
Engineering - 2,426,717 527,294 2,954,011 - 'ts
Claims expense - - - - 11,225,397 W
Amortization - - - - 594,633 t`p
Depreciation 2,564,350 5,971,638 3,426,515 11,962,503 583,390 >-
Total operating expenses 20,100,632 36,041,616 21,974,028 78,116,276 28,163,636 O
t
OPERATING INCOME(LOSS) 4,811,298 630,287 3,696,746 9,138,331 (690,648) 0 CL
d
12
NONOPERATING REVENUES(EXPENSES): JA
Interest income 43,921 93,428 443,836 581,185 15,774 O
Rental income - 160,089 20,669 180,758 -
Noncapital grants - 2,030,066 - 2,030,066 - Q
Interest expense and fiscal charges (205,726) (261,836) (557,053) (1,024,615) (127,345)
Gain(loss)on disposal of capital assets - 4,446 (16,244) (11,798) - p
Gain(loss)on joint venture-RIX - - (1,222,459) (1,222,459) - d
Amortization of issuance costs - - - - - m
Miscellaneous income 700 - - 700 491,318 V
c
Other - 478,512 202,078 680,590 -
Total nonoperating revenues(expenses) (161,105) 2,504,705 (1,129,173) 1,214,427 379,747 ca
t
O
INCOME(LOSS)BEFORE CAPITAL Q'
CONTRIBUTIONS AND TRANSFERS 4,650,193 3,134,992 2,567,573 10,352,758 (310,901)
CAPITAL CONTRIBUTIONS AND TRANSFERS: c
Capital contributions - 6,521,601 989,176 7,510,777 - M
c
Transfers out (2,200,000) - - (2,200,000) -
Total contributions and transfers (2,200,000) 6,521,601 989,176 5,310,777 -
c
C
CHANGES IN NET POSITION 2,450,193 9,656,593 3,556,749 15,663,535 (310,901) Q
0 NET POSITION: al
Beginning of year(as restated,Note 22) (4,759,978) 165,868,761 101,621,707 262,730,490 (26,457,492) v
End of year $ (2,309,785) $ 175,525,354 $ 105,178,456 $ 278,394,025 $(26,768,393) Q
See accompanying Notes to Basic Financial Statements.
26 1 Packet Pg. 737
City of San Bernardino
Statement of Cash Flows
Proprietary Funds 0
For the Year Ended June 30,2014 U.
0
Governmental r_
Major Funds Activities Q.
Integrated Internal 4)
Waste Water Sewer Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $24,848,910 $37,714,256 $26,033,778 $88,596,944 $ - Q
Cash received from user departments - - - 26,581,243 '_
Rental income - 160,089 20,669 180,758 - to
Cash payments to suppliers for goods and services (11,615,000) (21,990,302) (12,782,203) (46,387,505) (15,868,401) c
U_
Cash payments to employees for services (5,433,849) (8,865,507) (5,505,795) (19,805,151) -
Cash payments for claims and insurance - - - - (6,023,512) m
Cash received from(paid for)other activities 700 478,513 202,078 681,291 491,318 1
Net cash provided by(used in)operating activities 7,800,761 7,497,049 7,968,527 23,266,337 5,180,648 v
T
O
CASH FLOWS FROM CAPITAL AND RELATED N
0
FINANCING ACTIVITIES: M
4)
Acquisition of capital assets - (16,606,674) (4,191,053) (20,797,727) (73,914) _
Drawdown of CIEDB loan - 2,453,244 - 2,453,244 -
Principal paid on capital-related debt (2,550,418) (1,658,265) (4,443,762) (8,652,445) (561,910)
Interest paid on capital-related debt (225,000) (660,854) (542,429) (1,428,283) (127,346) W
Prepaid items - 260,839 - 260,839 - 6.
Charges to property owners for capital projects - 6,260,762 989,176 7,249,938 - )
Proceeds received from disposal of capital assets - 163,579 17,197 180,776 - C
Net cash provided by(used in)capital and related w
financing activities (2,775,418) (9,787,369) (8,170,871) (20,733,658) (763,170) 0
Q.
d
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
N
Cash paid to RIX joint venture - - (1,487,467) (1,487,467) - p
Consent Decree insurance drawdowns - 2,030,066 - 2,030,066 - :a
Transfers(out) (2,200,000) - - (2,200,000) - 3
Q
Net cash provided by(used in)noncapital financing activities (2,200,000) 2,030,066 (1,487,467) (1,657,401) -
V
CASH FLOWS FROM INVESTING ACTIVITIES: c
d
Sales and maturities of investments - 8,153,132 9,761,721 17,914,853 - d
Purchase of investments - (5,392,176) (12,013,169) (17,405,345) - c
Investment income(loss) 30,193 113,681 390,520 534,394 - p
c
Net cash provided by(used in)investing activities 30,193 2,874,637 (1,860,928) 1,043,902 -
Net change in cash and cash equivalents 2,855,536 2,614,383 (3,550,739) 1,919,180 4,417,478 Q.
d
CASH AND CASH EQUIVALENTS:
Beginning of year 3,863,601 5,373,390 16,250,466 25,487,457 4,761,540 c
End of year $ 6,719,137 $ 7,987,773 $12,699,727 $27,406,637 $ 9,179,018 c
U_
RECONCILIATION TO STATEMENT OF NET POSITION:
Cash and cash equivalents $ 6,719,137 $ 7,888,566 $ 5,213,133 $19,820,836 $ 9,179,018 c
Restricted cash and cash equivalents - 99,207 7,486,594 7,585,801 - Q
Total cash and cash equivalents $ 6,719,137 $ 7,987,773 $12,699,727 $27,406,637 $ 9,179,018
d
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ca
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See accompanying Notes to Basic Financial Statements.
27 Packet Pg. 738
City of San Bernardino
Statement of Cash Flows
Proprietary Funds (Continued) v
For the Year Ended June 30,2014 U.
L
0
w
Governmental
Major Funds Activities p•
Integrated Internal W
Waste Water Sewer Total Service Funds
.a
RECONCILIATION OF OPERATING INCOME TO NET CASH a
PROVIDED BY(USED IN)OPERATING ACTIVITIES: co
.v
Operating income(loss) $ 4,811,298 $ 630,287 $ 3,696,746 $ 9,138,331 $ (690,648)
Adjustments to reconcile operating income(loss)to net cash =
U.
provided by(used in)operating activities:
Depreciation 2,564,350 5,971,638 3,426,515 11,962,503 583,390 M
Amortization - - - - 594,633 q..�
Rental income - 160,089 20,669 180,758 - d
Other non-operating revenues(expenses) 700 478,513 202,078 681,291 491,318 0
Changes in operating assets and liabilities: c
Accounts receivable 11,563 (585,945) (721,135) (1,295,517) (1,162,028) M
Due from other governments - 1,492,583 340,260 1,832,843 100,223 c
Inventory - (118,281) - (118,281) 2,170
Prepaids - (100,416) 160,083 59,667 126,383 d
Due from other funds (74,583) - - (74,583) 2,193,448 =
Accounts payable and accrued liabilities 1,336,498 424,821 1,403,350 3,164,669 87,029 W
L
Accrued payroll and related liabilities 18,120 (160,877) 55,772 (86,985) - M
d
Due to other governments (748,257) - - (748,257) - >-
Due to other funds - 74,828 (245) 74,583 (2,194,380) JO
Deposits payable - 135,715 - 135,715 - C
Unearned revenue - - - - 170,992 p,
Landfill closure liability (9,614) - - (9,614) - 4)
Claims and judgments payable - 162,647 (118) 162,529 5,201,885 N
Compensated absences 53,714 (186,844) (62,288) (195,418) 101,361 O
Net pension obligation (530,064) - - (530,064) (425,128)
OPEB obligation 367,036 (881,709) (553,160) (1,067,833) - a
.r
Total adjustments 2,989,463 6,866,762 4,271,781 14,128,006 5,871,296
Net cash provided by(used in)operating activities $ 7,800,761 $ 7,497,049 $ 7,968,527 $23,266,337 $ 5,180,648 =
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See accompanying Notes to Basic Financial Statements.
28 Packet Pg. 739
7.D.a
FIDUCIARY FUND
FINANCIAL STATEMENTS ii
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CL
Agency Funds—These funds are used to account for money and property held by the City as trustee or custodian. Such w
funds include Special Deposits,Cemetery Perpertual Care, San Bernardino Regoinal Water Resource Authority, and
3
Q
Successor Agency to the San Bernardino Economic Development Agency Private Purpose Trust Fund —This fund
is used to account for monies received from the San Bernardino County Auditor-Controller for the repayment of the
enforceable obligations of the former San Bernardino Economic Development Agency. These funds are restricted for U.
the sole purpose of payment of items on an approved Recognized Payment Obligation Schedule(ROPS). M
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30 Packet Pg.741
.......:..
7.D.a
City of San Bernardino
Statement of Fiduciary Net Position
Fiduciary Funds N
For the Year Ended June 30,2014 u.
0
Successor Agency
To the Economic Q
Development W
Agency y
of San Bernardino 3
Agency Private-purpose Q
Funds Trust Fund
U
C
ASSETS M
c
Cash and investments $ 5,096,790 $ 23,064,516 LL
Cash and investments with fiscal agents - 31,648,223 M
Receivables: LO
Accouns 98 246,863
Interest - 41,811 r
Notes - 1,839,918 N
Due from other governments 44,796 - M
Due from City - 2,232,926
Pre p aids -
3,735 3
Property held for resale - 48,907,836 "o
Capital assets:
Non-depreciable - 11,620,311 w
Depreciable,net - 7,663,068
Total assets $ 5,141,684 127,269,207 0
O
DEFERRED OUTFLOWS OF RESOURCES L
Loss on refunding of bonds 1,608,780 Q.
d
Total deferred outflows of resources 1,608,780
N
O
LIABILITIES
:o
Accounts payable $ 152,150 3,339,061
Q
Accrued liabilities - 4,536
Retentions payable - 143,170 d
Deposits payable 4,195,449 4,532
Interest payable 276,397 1,655,294 d
Due to other governments - 703,469 c
Due to bondholders 517,688 - —
a
Compensated absences - 85,681
Long-term debt - 155,669,899 r_
OPEB obligation - 1,293,866 Q
Total liabilities $ 5,141,684 162,899,508
NET POSITION(DEFICIT)
Held in trust (34,021,521) E
Total net position(deficit) $ (34,021,521)
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See accompanying Notes to Basic Financial Statements.
31 Packet Pg. 742
7.D.a
City of San Bernardino
Statement of Changes in Fiduciary Net Position
Fiduciary Funds y
For the Year Ended June 30, 2014 LL
0
0
Successor Agency C
to the Economic w
Development
Agency Q
of San Bernardino O
.v
Private-purpose
Trust Fund =
W
N
ADDITIONS: LO
I!
Taxes and special assessments $ 21,735,962
ct
Investment income 177,588
0
Lease revenue 1,995,165 N
0
Otherrevenues 724,755 co
d
Total additions 24,633,470
d
DEDUCTIONS:
_
Redevelopment 7,372,293 W
L.
Debt service-interest 8,509,185 y
Prepaid items 502,994 L
O
Transfers to City 2,105
Total deductions 16,386,577 0 CL
d
Changes in Net Position 8,246,893
O
NET POSITION:
Q
Beginning of period,as restated(Note 22) (42,268,414)
m
End of period $ (34,021,521)
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See accompanying Notes to Basic Financial Statements.
32 Packet Pg.743
7.D.a
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14 Packet Pg.745
x
City of San Bernardino
Index of Notes to Basic Financial Statements
For the Year Ended June 30, 2014
.. LL
L
0
NOTE DESCRIPTION PAGE 0
CL
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1 Summary of Significant Accounting Policies 37
2 Bankruptcy 53 Q
3 Cash and Investments 58
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4 Notes Receivables 63 U.
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5 Interfund Receivables,Payables,and Transfers 64 LO
6 Property Held for Resale 65
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7 Capital Assets 66 M
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8 Long-Term Liabilities 69
9 Operating Leases 97 a
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10 Compensated Absences 97
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11 Claims and Judgments Payable 98
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12 Fund Balance Classification 100 0
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13 Fund Deficit and Expenditures in Excess of Appropriations 101
14 Net Investment in Capital Assets 101 0
15 Defined Benefit Pension Plan 102 a
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16 Settlement with CaIPERS 108 c
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17 Other Post-Employment Benefits 109 "0
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18 Jointly Governed Organizations and Joint Venture 116 r_
19 Consent Decree 117 0
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20 Landfill Closure Liability 118
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21 Commitments and Contingencies 119 ca
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22 Restatement of Prior Year Balances 120
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23 Successor Agency Trust for Assets of Former Redevelopment Agency 122 =
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24 Subsequent Events 124
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35 Packet Pg.746
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36 Packet Pg. 747
7.D.a
City of San Bernardino
Notes to Basic Financial Statements
For the Year Ended June 30,2014 N
ii.
0
w
Note 1—Summary of Significant Accounting Policies o
Q.
The basic financial statements of the City of San Bernardino, California (City) have been prepared in conformity W
with Generally Accepted Accounting Principles of the United States of America (U.S. GAAP) as applied to
governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting Q
body for establishing governmental accounting and financial reporting standards in the United States. The more
significant of the City's accounting policies are described below. _
c
A. Financial Reporting Entity U.
co
The 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, o
building and zoning),public utilities(water, sewage and solid waste),and general administrative services. N
0
co
The financial reporting entity consists of the primary government, the City, and its component units. c
Component units are legally separate entities for which the elected officials of the primary government are
financially accountable. The City is considered to be financially accountable for an organization if the City
appoints a voting majority of that organization's governing body and either the City is able to impose its will on
that organization or there is a potential for that organization to provide financial benefits to or impose specific w
financial burdens on the City. The City is also considered to be financially accountable for an organization if }
that organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges;or c
issue bonded debt without approval from the City). In certain cases, other organizations are included as
component units if the nature and significance of their relationship with the City are such that their exclusion c
would cause the City's financial statements to be misleading or incomplete. Q
U)
Blended Component Units c
V
Blended component units, although legally separate entities, are, in substance part of the City's operation and a
so data from these units are combined with data of the City. Discretely presents component units, on the other
hand, are reported in a separate column in the combined financial statements to emphasize that they are legally a
separate from the government. a
d
The City Council acts as the governing body and City's management has operation responsibility of the c
following organizations. As a result, these organizations are considered component units of the City and are c
included within the financial statements of the City using the blended method.All component units have a June
30 year-end. a
m
Affordable Housing Solutions of San Bernardino,Inc. (AHS)
On December 16, 2009, the Economic Development Agency (EDA) acquired the Global Mobile Home c
Park Corporation, a not-for-profit corporation (501(c)(3)), from the Redevelopment Agency of the City of E
U.
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, 2009, and approved on c
May 5, 2009. The mayor and common council of the City of San Bernardino serve ex officio as the Q
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 r
filed in the office of the Secretary of State of the State of California on October 9, 2009. AHS is not
currently active and has no assets. a
37 Packet Pg. 748
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014
U_
0
Note 1-Summary of Significant Accounting Policies (Continued) o
CL
a�
A. Financial Reporting Entity(Continued)
w
Blended Component Units(Continued)
Q
San Bernardino Joint Powers Financing Authority (Authority)
c
The San Bernardino Joint Powers Financing Authority (Authority) was established pursuant to a Joint U-.
Exercise of Powers Agreement dated August 21, 1989, by and between the City and the EDA. The EDA M
was dissolved during fiscal year 2012 leaving the City the only member of the Authority. Please see the v
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 agencies in the State of California, the o
acquisition, construction or installation by the Authority of public capital improvements and/or the N
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 c
of bonds, notes and other obligations of, or for the purpose of making loans to, the City,the EDA, or such i
other local agencies to provide financing for redevelopment activities of the City or the EDA. The
Authority is governed by a board composed of the City's elected officials. There are no separate financial c
statements issued for the Authority.
m
Discretely Presented Component Units c
w
The City has no discretely presented component units. c.
d
B. Basis of Presentation,Accounting and Measurement Focus N
0
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting
entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts a
that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Fund
accounting segregates funds according to their intended purpose and is used to aid management in
demonstrating compliance with finance-related legal and contractual provisions. The minimum number of o.
funds is maintained in accordance with legal and managerial requirements.
c
Government-wide Financial Statements V
c
ca
The City's Government-Wide Financial Statements include a Statement of Net Position and a Statement of a
Activities and Changes in Net Position. These statements present summaries of governmental and business- 0
type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in
25
these statements. 0
c
ca
These financial statements are presented on an "economic resources"measurement focus and the accrual basis
U.
of accounting. Accordingly, all of the City's assets and liabilities, including capital assets, as well as -4
infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. c'
The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues Q
are recognized in the period in which they are earned while expenses are recognized in the period in which the
liability is incurred. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, deferred E
outflows of resources, liabilities and deferred inflows of resources resulting from exchange and exchange-
0
like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets, w
deferred outflows of resources, liabilities and deferred inflows of resources resulting from nonexchange a
transactions are recognized in accordance with the requirements of GASB Statement No. 33.
38
Nom-law
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
U_
L
0
Note 1—Summary of Significant Accounting Policies (Continued) o
a
m
B. Basis of Presentation,Accounting and Measurement Focus (Continued)
w
Government-wide Financial Statements (Continued) Q
�a
Program revenues include charges for services, special assessments, and payments made by 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. Program
revenues for the City are classified in three categories:
M
LO
Charges for services
➢ Operating grants and contributions ;!
CD
➢ Capital grants and contributions N
0
M
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal =
balances in the Statement of Net Position have been eliminated except those representing balances between the
governmental activities and the business-type activities, which are presented as internal balances and d
eliminated in the total primary government column. In the Statement of Activities and Changes in Net c
Position, internal service fund transactions have been eliminated; however, those transactions between W
L.
governmental and business-type activities have not been eliminated. The following interfund activities have
been eliminated:
0
➢ Due to/from other funds
O
Advances to/from other funds Q-
d
➢ Transfers in/out
N
i
O
Government Fund Financial Statements
a
Z
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures
and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An -tea
accompanying schedule is presented to reconcile and explain the differences in Net Position as presented in
these statements to the Net Position presented in the Government-Wide Financial Statements. The City has d
presented all major funds that met the applicable criteria. a
c
a
All governmental funds are accounted for on a spending or "current financial resources"measurement focus
and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are o
included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances m
presents increases(revenues and other financing sources)and decreases(expenditures and other financing uses)
in net current assets. Under the modified accrual basis of accounting,revenues are recognized in the accounting
period in which they become both measurable and available to finance expenditures of the current period. R
Measurable means that the amounts can be estimated, or otherwise determined. Available means that the E
amounts were collected during the reporting period or soon enough thereafter to be available to finance the U.
�o
expenditures accrued for the reporting period. The City uses an availability period of 60 days for all revenues
except reimbursable grants,which use a six month availability period.
Q
Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle in-lieu, transient occupancy taxes, 0
grants and interest associated with the current fiscal period are all considered to be susceptible to accrual and z
so have been recognized as revenues of the current fiscal period to the extent normally collected within the
availability period. Other revenue items are considered to be measurable and available when cash is received a
by the government.
39 Packet Pg. 750
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 v
LL
L
Q
W
Note 1 —Summary of Significant Accounting Policies(Continued) o
Q.
(D
B. Basis of Presentation,Accounting and Measurement Focus (Continued)
Government Fund Financial Statements (Continued) Q
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 the period in which they are earned =
(i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as U-
revenues in the period in which the underlying exchange transaction upon which they are based takes place. co
Imposed non-exchange transactions are recognized as revenues in the period for which they were imposed. If v
the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the
revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary c
non-exchange transactions have been recognized as revenues when all applicable eligibility requirements N
0
have been met.
m
c
The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided
to explain the differences created by the integrated approach of GASB Statement No. 34. m
c
The City reports the following major Governmental Funds:
m
General Fund — This is the primary operating fund of the City. It accounts for all activities of the c
general government, except those required to be accounted for in another fund.
1=
0
Federal and State Grants Fund— This fund is used to report various grants awarded to the City by the
Federal, State and local governments not otherwise accounted for in the General Fund or Capital Projects H
Funds. A detailed report by program is available under a separate report meeting the criteria of the Office c
of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations, for all federal grants received by the City. Q
c
Low and Moderate Income Housing Fund — This fund is used for resources that are restricted for the
continued maintenance and operations of low and moderate income housing project activities of the o.
former redevelopment agency. This fund was established on February 1, 2012, when the City elected to �
become the Housing Successor to the housing related activities of the former redevelopment agency. c
V
c
Sales and Road Fund— This fund is used to resources that are restricted for local street improvements
projects as provided for by San Bernardino County Measure I Sales Tax. 0
d
Proprietary Fund Financial Statements
M
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses c
and Changes in Fund Net Position,and a Statement of Cash Flows for each major Proprietary Fund. E U.
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A separate column representing internal service funds is also presented in these statements. However, internal c'
service balances and activities have been combined with the governmental activities in the Government-Wide a
Financial Statements. The City's internal service funds include funds which provide services directly to other
City funds. These areas of service include unemployment insurance, workers' compensation, liability
insurance,motorpool,telephone support, information systems,utility, and central services.
ea
a
40 Packet Pg. 751
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
L
Note 1 —Summary of Significant Accounting Policies(Continued) o
CL
Q
B. Basis of Presentation,Accounting and Measurement Focus (Continued)
`a
Proprietary Fund Financial Statements(Continued) Q
Proprietary funds are accounted for using the "economic resources"measurement focus and the accrual basis of
accounting.Accordingly, all assets and liabilities(whether current or noncurrent)are included on the Statement
of Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Position presents increases U.
(revenues) and decreases (expenses) in total Net Position. Under the accrual basis of accounting, revenues are M
recognized in the period in which they are earned while expenses are recognized in the period in which the to
liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made
for uncollectible amounts.
0
N
CD
Operating revenues in the proprietary funds are those revenues that are generated from the primary operations M
of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses c
that are essential to the primary operations of the fund. All other expenses are reported as non-operating n
expenses.
a
c
The City reports the following major proprietary funds: w
L
d
Integrated Waste Fund — This fund is used to account for the provision of refuse collection to the L
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, operations, c
maintenance, financing and related debt service, and billing and collection. m
Water Fund — This fund is used to account for the provision of water services to the residential, o
commercial and industrial segments of the City. All activities necessary to provide such services are a
accounted for in this fund, including, but not limited to, administration, operations, maintenance, a
financing and related debt service, and billing and collection.
m
M
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 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 collection. c
Fiduciary Fund Financial Statements c
CL
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in
Fiduciary Net Position. The City's fiduciary funds represent agency funds and private purpose trust funds.
Both agency funds and the private purpose trust funds are accounted for on the full accrual basis of accounting. C
U.c_
Fiduciary fund types are accounted for according to the nature of the fund. The City's agency funds are purely —
custodial in nature(assets equal liabilities)and thus do not involve measurement of results of operations. These
funds are used to account for money and property held by the City as trustee or custodian. The City established a
Agency Funds and used to account for money and property held by the City as trustee or custodian. Such
funds include Special Deposits, Cemetery Perpetual Care, and San Bernardino Regional Water Resource
Authority. They are also used to account for various assessment districts for which the City acts as an agent s
for debt service activity,as the City is prohibited from levying additional taxes for these districts. Such funds
cc
include Assessment District's#961,#977A,#977B, and#1003.
a
41 1 Packet Pg. 752
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014 N
LL
q
w
Note 1—Summary of Significant Accounting Policies (Continued) -
CL
m
B. Basis of Presentation,Accounting and Measurement Focus (Continued)
w
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Fiduciary Fund Financial Statements(Continued) Q
The City's private purpose trust fund is a fiduciary fund type used by the City to report assets, liabilities and
activities of the Successor Agency to the Redevelopment Agency for the City of San Bernardino. Its results of =
operations are presented on the Statement of Changes of Fiduciary Net Position. U-
N
Successor Agency of the Redevelopment Agency for the City of San Bernardino
V
The Redevelopment Obligation Retirement Fund(Successor Agency)was created to serve as a custodian c
for the assets and to wind down the affairs of the RDA on February 1, 2012, pursuant to Assembly Bill N
xl 26. Its purpose is to expeditiously wind down the affairs of the dissolved RDA. The Successor Agency M
is a separate public entity from the City, subject to the direction of an oversight board. The City Council c
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 m
completion of any unfinished projects that were subject to legally enforceable contractual commitments). c
In future fiscal years, the Successor Agency will only be allocated revenue in the amount that is w
necessary to pay the estimated annual installment payments on enforceable obligations of the former
RDA until all enforceable obligations of the former RDA have been paid in full and all assets have been
Jq
liquidated. Based upon the nature of the Successor Agency's custodial role, the Successor Agency has t
been included in the accompanying basic financial statements as a private purpose trust fund.
m
C. Deferred Outflows and Inflows of Resources �
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0
In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources,
Deferred Inflows of Resources, and Net Position, the Statement of Net Position reports separate sections for a
Deferred Outflows of Resources, and Deferred Inflows of Resources,when applicable.
m
Deferred Outflows of Resources represents a consumption of net position that applies to a future a
period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. -0a
The City only has one item that qualifies for reporting in this category. It is the unamortized loss on c
refunding of debt reported in the government-wide statement of net position. A unamortized loss on
refunding of debt results from the difference in the carrying value of refunded debt and its
reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded c
or refunding debt.
Deferred Inflows of Resources represents an acquisition of net position that applies to a future
period(s)and so will not be recognized as an inflow of resources (revenue)until that time. The City has
only one type of item, which arises only under a modified accrual basis of accounting that qualifies for U.
reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the
governmental funds balance sheet. The governmental funds report unavailable revenues from notes and c
loans receivable. These amounts are deferred and recognized as an inflow of resources in the period a
that the amounts become available. r
c
m
0
E
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42 V
7.D.a
City of San Bernardino
Notes to Basic Financial Statements(Continued)
For the Year Ended June 30,2014 N
U_
L
0
Note 1—Summary of Significant Accounting Policies (Continued) o
Q
m
D. Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure Q
of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an
extension of budgetary controls.
c
c
E. Cash,Cash Equivalents and Investments "-
N
The City pools its available cash for investment purposes. The City considers pooled cash and investment v
amounts,with original maturities of three months or less,to be cash equivalents.
0
Investments are reported in the accompanying financial statements at fair value, except for certain investment N
contracts that are reported at cost because they are not transferable and they have terms that are not affected by co
changes in market interest rates. Changes in fair value that occur during a fiscal year are recognized as c
investment income reported for that fiscal year, 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. w
L
Investment income earned by the pooled investments is allocated to the various funds based on each fund's }
average cash and investment balance, except for investment income associated with funds not legally o
required to receive pooled investment income which has been assigned to and recorded as revenue of the «-
general fund,as provided by California Government Code Section 53647. a
a�
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 are both readily convertible to 0
known amounts of cash or so near their maturity that they present insignificant risk of changes in value
because of changes in interest rates. C
c
Certain disclosure requirements,if applicable,for Deposits and Investment Risks in the following areas:
c
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➢ Interest Rate Risk °-
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➢ Credit Risk
c
- Overall a
- Custodial Credit Risk R
Concentration of Credit Risk
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Foreign Currency Risk
In addition, other disclosures are specified including use of certain methods to present deposits and Ft
investments,highly sensitive investments,credit quality at year-end and other disclosures. C
c
F. Restricted Assets
Co
Amounts reported as restricted assets in the enterprise funds have been restricted by bond indentures or are to Q
be used for specified purposes based on contract provisions, such as bonded debt service.
Y
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Y
Q
43 Packet Pg. 754
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
L
W
Note 1 —Summary of Significant Accounting Policies(Continued) o
a
G. Receivable
�a
Customer or trade receivables are reported as "accounts receivable" and are shown net of an allowance for Q
uncollectible accounts based on historical and management estimates.
U
_
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 u-
governmental fund type revenues represented by noncurrent receivables are deferred until they become current M
receivables. Noncurrent portions of long-term notes receivable are offset by nonspendable fund balance in the
general fund,and by restricted,committed or assigned fund balance in other funds.
v
0
H. Interfund Transactions N
0
M
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the c
fiscal year are referred to as either"due to/from other funds"or"advances to/from other funds"(i.e.,the current n
portion of interfund loans). Any residual balances outstanding between the governmental activities and m
business-type activities are reported in the Governmental-Wide Financial Statements as"internal balances."
W
L
I. Inventory
Inventories are valued on the average cost method. Inventory balances represent expendable supplies held for
consumption. Inventory is reported under the consumption method whereby expenditures are reported at the c
time inventory is used. Inventory reported in governmental funds is offset with nonspendable fund balance to
show that inventories do not constitute available spendable resources, even though they are a component of N
fund balance. c
=a
J. Prepaid Items Q
w
Prepaid items are reported in the governmental funds under the consumption method and are reported as a
nonspendable component of fund balance to indicate that they are not spendable for appropriation and are not a
expendable financial resources.
K. Property Held for Resale c
Property held for resale represents land, structures, and related improvements that were acquired for resale as c
part of the City's redevelopment and grant activities. Property held for resale is accounted for is recorded at d
acquisition cost plus improvement costs, in non-accordance with accounting principles generally accepted in
the United States of America. Property held for resale, which is not available for current expenditure, is
reported in the governmental funds balance sheet as restricted fund balance when proceeds from the sale must C
be used for restricted purposes or as nonspendable fund balance when such proceeds are not restricted. _
U.
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44 Packet Pg. 755
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
iL.
0
Note 1—Summary of Significant Accounting Policies (Continued) o
a
CD
L. Capital Assets
=a
Capital assets, which include land, buildings and improvements, machinery, vehicles, equipment (including a
furniture) and infrastructure assets, are reported in the applicable activity columns in the accompanying T
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 infrastructure) and an estimated useful life of at least two U_
years are considered to be capital assets. Such capital assets are recorded at cost where historical records are M
available and at an estimated original cost where no historical records exist. Contributed capital assets are v
valued at their estimated fair value at the date of the contribution. The cost of normal maintenance and repairs
that do not add to the value of the assets or materially extend asset lives are not capitalized. Major outlays for c
capital assets and improvements are capitalized as projects are constructed. N
0
M
Capital assets include public domain (infrastructure) consisting of certain improvements other than buildings, C
including pavement, curbs and gutters, streets and sidewalks, drainage systems, traffic control devices, n
streetlights,and right-of-way corridors within the City.
c
Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method w
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 o
respective statement of net position. "-
0
The ranges of lives used for depreciation purposes for each capital asset class are:
Years L
0
Buildings and improvements 10-40
Infrastructure 20-50
Q
Wells,pumping plants,reservoirs,and distribution system 8-50 c
Interceptor lines 50 'a
Disposal plant 35-50 fl
Leasehold improvements 5-25
Shops,office,stores and yards 10-20 =
Tools and equipment 4-20
_
Office equipment 5-20
Communication equipment 7- 10 0 CL
Computer equipment 5- 10
Automotive equipment 3-8
U
Each major infrastructure system can be divided into subsystems. For example, the street system can be co
subdivided into pavement, curbs and gutters, sidewalks, medians, streetlights, landscaping and land. These ii
subsystems were not delineated in the basic financial statements. The appropriate operating department a
maintains information regarding the subsystems.
c
Q
Interest accrued during capital assets construction, if any, is capitalized for the business-type funds as part of
the asset cost. E
U
For all infrastructure systems,the City elected to use the Basic Approach for infrastructure reporting. :°-
Q
45 Packet Pg. 756
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014 N
U.
L
0
Note 1 —Summary of Significant Accounting Policies (Continued) o
CL
m
M. Capital Contribution
�a
Contributions in aid of construction represent cash and utility plant additions contributed to the City by Q
property owners or developers desiring services that require capital expenditures or capacity commitment.
U
N. Long-Term Debt c
U_
In the Government-wide and proprietary fund financial statements, long-term debt and other long-term M
financial obligations are reported as liabilities.
v
Prior to July 1,2013,bond premiums and discounts,as well as issuance costs, are amortized over the life of the c
bonds using the straight-line method, which approximates effective interest method. Bonds payable are N
reported net of the applicable premium or discount except for insurance prepaid bond insurance premiums. The r°>
City implemented GASB Statement No. 65 effective July 1, 2013, which changed how governments account =
for bond issuance costs. Issuance costs, except for prepaid bond insurance premium, are now expensed when
incurred. d
V
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as w
bond issuance costs, in the year of issuance. The face amount of the debt issued is reported as other financing
sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt c
issuances are reported as other financing uses. The differences between the government-wide and fund w
financial statements are shown in the Reconciliation of the Governmental Funds Balance Sheet to the 0
Government-Wide Statement of Net Position.
O. Refunding of Debt 0
�a
The difference between the reacquisition price of refunding bonds and the net carrying amount of refunded debt a
(deferred amount on refunding) is amortized over the shorter of the lives of the refunding debt or remaining life
of the refunded debt. Unamortized portions of the loss on refunding debt are reported as deferred outflows of �
resources. When an asset is recorded in the governmental fund financial statements but the revenue is not a
available,a deferred inflow of resources is reported until such time as the revenue becomes available. -4)
_
P. Compensated Absences V
w
In accordance with negotiated labor agreements, employees accumulate earned but unused vacation, other 0 CL
compensated leave, and sick leave pay benefits. Depending upon bargaining unit and date of hire, employees a$
were allowed to apply 100% of accrued sick leave hours for additional California Public Employees'
Retirement System(CaIPERS)service credit upon retirement.
MV
ea
For employees separating from service after February 17, 2012 and before June 30, 2014 vacation payouts are U_
now paid in annual installments on the separation date equal to the greater of$10,000 or 1/3 of the employees
accrued balance until paid in full and sick leave accruals are no longer paid out.For those employees separating c
from service after July 1,2013,they receive their full vacation payout. Q
c
After subtracting the sick leave balance equivalent of one full year of service credit(2080 hours),which may be
' applied to CaIPERS service credit,any sick leave balance remaining upon separation shall be paid at a specific M
percentage of the cash value to employees who have remained in City service until the dates specified in the ;g
labor agreements. a
46 Packet Pg. 757
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
U.
0
w
Note 1—Summary of Significant Accounting Policies (Continued) o
CL
d
P. Compensated Absences (Continued)
Government-Wide Financial Statements '
�a
For governmental and business-type activities,compensated absences are recorded as expenses when earned.
�a
c
Fund Financial Statements "-
N
For governmental funds, compensated absences are recorded as expenditures in the year paid. The General v
Fund is typically used to liquidate compensated absences. In proprietary funds, compensated absences are
expensed to the various funds in the period they are earned, and such fund's share of the unpaid liability is o
recorded as a long-term liability of the fund.
0
M
Q. Fund Balances
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based
primarily on the extent to which the City is bound to honor constraints on the specific purposes for which c
amounts in the funds can be spent. As of June 30, 2014, fund balances for governmental funds are made up of w
the following:
• Nonspendable Fund Balance—includes amounts that are (a) not in a spendable form, or (b) legally or t
contractually required to be maintained intact. The not in spendable form criterion includes items a
that are not expected to be converted to cash,for example: deposits and prepaid items.
• Restricted Fund Balance — includes amounts that are restricted for specific purposes stipulated by c
external resources providers, constitutionally or through enabling legislation. Restrictions may
effectively be changed or lifted with the consent of resource providers.
a
w
• Committed Fund Balance — includes amounts that have been limited to specific purposes or through W
adoption of a resolution or an ordinance by the City council, the highest level of decision making r_
authority of the City, and resources that have been specifically committed for use in satisfying m
contractual obligations, as in agreements with third-parties. The City has determined that both a
resolution and an ordinance are equally binding. These commitments may be changed or lifted, but n
only by the same formal action that was used to impose the constraint originally. City Council action
to commit fund balance must occur within the fiscal reporting period while the amount committed may :
be subsequently determined. m
• Assigned Fund Balance — includes amounts that are intended to be used by the City for specific �a
purposes. Intent is expressed by(a)the City Council or(b)a body or official to which the City Council r_
has delegated the authority to assign amounts to be used for a specific purpose. c
E
• 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 the other four fund balance
categories. Unassigned amounts are technically available for any purpose. Other governmental funds a
may only report a negative unassigned balance that was created after classification of fund balance in
the nonspendable,restricted or committed categories. E
t
In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund M
balance classifications,fund balance is depleted in order of restricted,committed assigned and unassigned. a
47 Packet Pg. 758
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
LL
L
0
4-
Note 1—Summary of Significant Accounting Policies (Continued) o
0_
a�
R. Net Position
v
The financial statements utilize a net position presentation. Net position is classified as follows: Q
• 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 outflows of resources
related to such borrowings that are attributable to the acquisition, construction or improvement of those u-
assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt M
attributable to the unspent proceeds is not included in the calculation of net investment in capital assets. v LO
Rather,that portion of the debt is offset by unspent proceeds. :"
T
0
• Restricted Net Position — This category presents restricted assets reduced by liabilities and deferred
0
inflows of resources related to those assets. Those assets are restricted due to external restrictions
imposed by creditors (such as through bond covenants), grantors or laws and regulations of other
governments and restrictions imposed through constitutional provisions or enabling legislation.
a�
• Unrestricted—This category represents net position of the City that is not restricted for any project or w
other purpose.
w
■ When both restricted and unrestricted resources are available for use, the City's policy is to use restricted o
resources first,then unrestricted resources that are needed.
0
CL
S. Property Taxes
H
Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they o
become available. Available means due, or past due and receivable within the current period and collected a
within the current period or expected to be collected soon enough thereafter(not to exceed 60 days)to be used Q
to pay liabilities in the current period.
Under California law, property taxes are assessed and collected by the counties at up to 1% of assessed value, a
plus other increases approved by the voters. The County of San Bernardino,bills and collects the property taxes
and remits them to the City at various times throughout the year. Property taxes are attached as an enforceable E
lien on property as of January 1. Taxes are levied on July 1 and are due in two installments. The first c
installment is due on November 1, and is payable through December 10 without penalty. The second C
installment is due February 1, and is payable through April 10 without penalty. 0
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T. Use of Accounting Estimates 5
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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 U.
amounts in the financial statements and the accompanying notes. Actual results could differ from the estimates.
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48 Packet Pg. 759
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note I —Summary of Significant Accounting Policies (Continued) o
U. Implementation of New GASB Pronouncements for the Year Ended June 30,2014
The requirements of the following accounting standards are effective for the purpose of implementation, if Q
applicable to the City, for the year ended June 30, 2014. The financial statements included herein apply the to
requirements and provisions of these statements, including necessary retroactive adjustments to financial
statement classifications and presentations. _
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GASB Statement No. 70
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In April 2013, the GASB issued Statement No. 70, Accounting and Financial Reporting for Nonexchange
Financial Guarantees, which provides accounting and financial reporting guidance to state and local T
governments that offer nonexchange financial guarantees and for governments that receive guarantees on their �°,
obligations.This statement had no impact on the City's financial statements.
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V. Upcoming Government Accounting Standards Implementation
The City is currently analyzing its accounting practices to determine the potential impact on the financial
statements for the following GASB statements: W
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GASB Statement No. 68
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In June 2012, 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.
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Key changes include: w
• Separating how the accounting and financial reporting is determined from how pensions are
funded. m
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• Employers with defined benefit pension plans will recognize a net pension liability, as defined by
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the standard,in their government-wide,proprietary and fiduciary fund financial statements.
• Incorporating ad hoc cost-of-living adjustments and other ad hoc post-employment benefit changes c
into projections of benefit payments, if an employer's past practice and future expectations of c
granting them indicate they are essentially automatic.
• Using a discount rate that applies (a) the expected long-term rate of return on pension plan c
investments for which plan assets are expected to be available to make projected benefit payments, 0
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 payments to the extent that the conditions in
(a)are not met. M
• Adopting a single actuarial cost allocation method — entry age normal — rather than the current U_
choice among six actuarial cost methods. �a
• Requiring more extensive note disclosures and required supplementary information
Q
The statement relates to accounting and financial reporting and does not apply to how governments approach
the funding of their pension plans. At present, there generally is a close connection between the way many
governments fund pensions and how they account for and report information about them in financial
statements. The statement would separate how the accounting and financial reporting is determined from how Y
pensions are funded.Application of Statement 68 is effective for the City's fiscal year ending June 30,2015. a
49 ,EN=
�rirrrrrw.
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 1 —Summary of Significant Accounting Policies(Continued) c
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V. Upcoming Government Accounting Standards Implementation (Continued)
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GASB Statement No. 69 '
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In January 2013, GASB issued Statement No. 69, Government Combinations and Disposals 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 U.
effective for the City's fiscal year ending June 30,2015. M
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GASB Statement No. 71 '"
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In November 2013, GASB issued Statement No. 71,Pension Transition for Contributions Made Subsequent to N
the Measurement Date-an amendment of GASB Statement No. 68, which provides guidance to state and local M
governments clarifying the transition provisions for GASB No. 68 regarding pension contributions made after c
the measurement date. Application of this statement is effective for the City's fiscal year ending June 30,2015. n
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GASB Statement No. 72 c
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In February 2015, 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 `o
provides guidance for applying fair value to certain investments and disclosure related to all fair value
measurements. Application of this statement is effective for the City's fiscal year ending June 30,2016. a
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GASB Statement No. 73
0
In June 2015, 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 a
Statements 67 and 68. This statement establishes requirements for those pensions and pension plans that are not =
administered through a trust 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 a
provisions that address employers and governmental nonemployer contributing entities that are not within the 0
scope of GASB Statement 68,which are effective for financial statements for fiscal year ending June 30,2017. c
c
GASB Statement No. 74 16
0
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In June 2015, GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other
Than Pension Plans,which addresses reporting by postemployment benefits other than pensions (OPEB)plans
that administer benefits on behalf of governments. This statement basically parallels GASB Statement 67 and
replaces GASB Statement 43. Application of this statement is effective for the City's fiscal year ending June c
30,2017. LL
70
GASB Statement No. 75 c
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a
In June 2015, 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 other governments. This statement
basically parallels GASB Statement 68 and replaces GASB Statement 45. Application of this statement is ;o
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effective for the City's fiscal year ending June 30,2018. a
50 Packet Pg. 761
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 1 —Summary of Significant Accounting Policies (Continued)
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V. Upcoming Government Accounting Standards Implementation (Continued)
GASB Statement No. 76 '
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In June 2015, 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 Accounting Principles for State and Local Governments. The first category of M
authoritative GAAP consists of GASB Statements of Governmental Accounting Standards. The second L
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 c
is effective for the City's fiscal year ending June 30,2016. c'
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GASB Statement No. 77
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 local governments. c
Application of this statement is effective for the City's fiscal year ending June 30,2017. w
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GASB Statement No. 78
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In December 2015, GASB issued Statement No. 78, Pensions Provided Through Certain Multiple-Employer c
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Defined Benefit Pension Plans. This Statement amends the scope and applicability of Statement 68 to exclude
pensions provided to employees of state or local governmental employers through a cost-sharing multiple- 0
employer defined benefit pension plan that (1) is not a state or local governmental pension plan, (2) is used to 0
provide defined benefit pensions both to employees of state or local governmental employers and to employees V
of employers that are not state or local governmental employers, and (3) has no predominant state or local a
governmental employer (either individually or collectively with other state or local governmental employers
that provide pensions through the pension plan). This Statement establishes requirements for recognition and
measurement of pension expense, expenditures, and liabilities; note disclosures; and required supplementary a
information for pensions that have the characteristics described above.Application of this statement is effective )
for the City's fiscal year ending June 30,2017.
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GASB Statement No. 79
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In December 2015, GASB issued Statement No. 79, Certain External Investment Pools and Pool Participants.
This Statement establishes additional note disclosure requirements for qualifying external investment pools that
measure all of their investments at amortized cost for financial reporting purposes and for governments that
participate in those pools. Those disclosures for both the qualifying external investment pools and their
participants include information about any limitations or restrictions on participant withdrawals. Application of E
U.
this statement is effective for the City's fiscal year ending June 30,2017. 3
OWN, E
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51 Packet Pg. 762
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014 N
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Note 1—Summary of Significant Accounting Policies (Continued) o
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V. Upcoming Government Accounting Standards Implementation (Continued)
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GASB Statement No. 80 '
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Ta
In December 2015,GASB issued Statement No. 80,Blending Requirements for Certain Component Units—An
Amendment of GASB Statement No. 14. This Statement amends the blending requirements for the financial =
statement presentation of component units of all state and local governments. The additional criterion requires U_
blending of a component unit incorporated as a not-for-profit corporation in which the primary government is M
the sole corporate member. The additional criterion does not apply to component units included in the financial LO
reporting entity pursuant to the provisions of Statement No. 39, Determining Whether Certain Organizations
Are Component Units.Application of this statement is effective for the City's fiscal year ending June 30,2017. o
N
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GASB Statement No. 81 M
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In December 2015, GASB issued Statement No. 81, Irrevocable Split-Interest Agreements. This Statement
requires that a government that receives resources pursuant to an irrevocable split-interest agreement recognize
assets, liabilities, and deferred inflows of resources at the inception of the agreement. Furthermore, this c
Statement requires that a government recognize assets representing its beneficial interests in irrevocable split- w
CO
interest agreements that are administered by a third party, if the government controls the present service
capacity of the beneficial interests. This Statement requires that a government recognize revenue when the L
resources become applicable to the reporting period. Application of this statement is effective for the City's
fiscal year ending June 30,2018. 0
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GASB Statement No. 82 M
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In December 2015, GASB issued Statement No. 82,Pension Issues—An Amendment of GASB Statements No.
67, No. 68, and No. 73. This Statement clarifies that payments that are made by an employer to satisfy Q
contribution requirements that are identified by the pension plan terms as plan member contribution
requirements should be classified as plan member contributions for purposes of Statement 67 and as employee
contributions for purposes of Statement 68. It also requires that an employer's expense and expenditures for
those amounts be recognized in the period for which the contribution is assessed and classified in the same -Qate
manner as the employer classifies similar compensation other than pensions(for example,as salaries and wages =
or as fringe benefits).Application of this statement is effective for the City's fiscal year ending June 30,2018.
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52 Packet Pg. 763
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 2—Bankruptcy o
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A. Factors Precipitating the City's Chapter 9 Bankruptcy Filing On August 1,2012
Beginning or around May 2012, the City's Finance Department (led by a newly hired Finance Director)began Q
the process of preparing a proposed budget for the City's 2012-13 fiscal year. In late June 2012, the City's 2
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 M
deficit of over$45.8 million in the 2012-13 fiscal year and the budget deficit was projected to grow even larger U_
for each of the following five years due to,among other things,continued stagnation in General Fund revenues, M
the poor housing market and economy, increasing pension and other post-retirement benefit costs, and in
unfunded liabilities in the City's retiree health, worker's compensation and general liability accounts, (ii) the
City had depleted all of its General Fund reserves to cover substantial budget deficits for four consecutive fiscal c
years beginning with the 2008-2009 fiscal year and had an estimated$18.2 million negative cash balance in its N
General Fund, (iii) immediate and substantial action had to be taken to reduce spending and preserve cash for e°
the City to continue to provide essential services to its residents, (iv) an analysis of the City's General Fund c
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 least $4.5 million (estimated) less than d
reported, and (v) the City did not have sufficient unrestricted cash available to pay its financial obligations as
and when they were due or to become due and owing. w
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Several factors led to the late discovery of the scope and extent of the City's financial problems. Beginning in
late 2011 and continuing through early May of 2012, key City management personnel retired or resigned, and
the City's Finance Department fell behind in performing various financial tasks which was exacerbated by the c
implementation of a new financial software system. As late as April 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 N
fiscal year 2011-12 would be just over $3.1 million and could be remedied by cuts to department budgets, c
continuing a hiring freeze on filling vacant positions and making revenue adjustments. a
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The Budget Report found that the City had been hit hard by the major recession that began in late 2007. In =
addition,the housing market collapse in the Inland Empire region,the loss of redevelopment funds and declines
in revenue to the General Fund from sales tax, property tax, franchise fees, utility users tax and licenses and d
permits all had significant detrimental impact on the City. The Budget Report also found that the City's 0)CL
operational costs continued to exceed revenues despite the City's efforts to cut costs by negotiated reductions in c
employee costs,job cuts, service cuts, sales of assets, implementation of revenue measures, increased transfers a
from other funds, and use and then exhaustion of its General Fund reserves. As of June 2012, the City's R
unemployment rate was 16.9%(more than double the national unemployment rate), and the City had one of the a
highest home foreclosure rates in the nation. d
The City also prepared a Staff Report(the"Staff Report")dated July 18,2012,which determined that(i) it was
unlikely that, at that time, the City could meet its payroll and other financial obligations in the next thirty (30)
to sixty(60)days(including debt obligations and lease payments for critical City assets), (ii) an unusually large ii
number of employees were retiring and leaving the City triggering 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 c'
before providing essential materials, goods and services to the City, (v) the City had no ability to access short Q
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 July through September.
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53 Packet Pg. 764
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 v
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Note 2—Bankruptcy (Continued) o
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A. Factors Precipitating the City's Chapter 9 Bankruptcy Filing On August 1,2012 (Continued)
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On July 18, 2012, the Mayor and Common Council of the City enacted Resolution No. 2012-205 declaring a Q
fiscal emergency (the "Fiscal Emergency Resolution") based on information presented in the Budget Report, �v
Staff Report and at public meetings of the Mayor and Common Council held on 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 the financial state of the City jeopardized the health, U_
safety or well-being of the City's residents absent the protections of Chapter 9 of the Bankruptcy Code and M
given the City's dire financial condition it was in the best interest of the City to declare a fiscal emergency. On LO
July 18, 2012, the Mayor and Common Council of the City also enacted Resolution No. 2012-206 which
determined that the City was insolvent in its current fiscal year and unable to meet its payroll without the o
protections afforded by Chapter 9 of the Bankruptcy Code which would endanger the health, safety and welfare N
of its residents, and authorized and directed certain City officials and employees to execute and file all co
petitions, schedules, lists and other papers and to take any and all actions necessary and proper to file a petition c
under Chapter 9 of the Bankruptcy Code.
m
As an initial step in a multi-phase and multi-step process of developing a budget for operating in bankruptcy
called a Pendency Plan,on July 24,2012 the City approved a"Fiscal Emergency Operating Plan—July 2012 to w
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, L
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 million, (iii) deferred equipment purchases and capital projects, (iv) o
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payment on a note for its financial accounting software system, and(v) other trade payables due and owing in
Er-
an amount over $6 million. In addition, the City did not make over $1.4 million in payments under certain
settlement agreements in three lawsuits. Pursuant to the Fiscal Emergency Plan, City staff also determined that o
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 current fiscal year. a
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B. The City's Chapter 9 Bankruptcy Filing
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Given the City's financial crisis described above, on August 1, 2012 ("Petition Date") the City commenced a
bankruptcy case under Chapter 9 of the Bankruptcy Code (the "Bankruptcy Case") by filing a voluntary c
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, Judge Meredith A. Jury was
designated as the bankruptcy judge overseeing the City's Chapter 9 Bankruptcy Case. a
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C. Approval and Implementation of the City's Pendency Plan and Budgets
U
The City promptly took the next step in the multi-step and multi-phase process of formulating its Pendency
Plan by preparing its Pre-Pendency Plan. On August 30, 2012, a budget for fiscal year 2012-2013 was U_
presented to the City's Common Council to remain effective until a Pendency Plan was finalized and approved. 6
On September 17,2012 and October 1,2012,the Common Council approved certain cuts and budget offsets set c
forth in the Pre-Pendency Plan and a 9 Point Adjustment Plan, which the City estimated would eliminate Q
approximately $29.78 million of the City's overall $45.8 million budget deficit. During this time, the City
deferred payment of certain obligations in order to curtail the increasing deficit in the General Fund and the
City's dire liquidity crisis. These deferred payments include employer pension contribution payments to the
California Public Employees' Retirement System("Ca1PERS"),bond debt and certain trade debt. E
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54 Packet Pg. 765
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 2—Bankruptcy(Continued) o
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C. Approval and Implementation of the City's Pendency Plan and Budgets (Continued)
On November 26, 2012, the Common Council adopted a Pendency Plan which incorporated the Pre-Pendency Q
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 of: (a) meeting, conferring and negotiating with all seven of its unions, including
participating in mediation with two of its unions; (b)implementing changes to collective bargaining agreements LL
with the three unions for which the City was unable to reach consensual resolutions through resolutions adopted M
by the City's Common Council; and(c)rejecting the collective bargaining agreements with the three dissenting to
unions as described below.
v
On February 19, 2013, the City Manager issued and made available the Budget Message and the Fiscal Year N
2012-13 and Fiscal Year 2013-14 Proposed Budget for the General Fund. On April 22, 2013,the City adopted M
its budget for the General Fund and other funds for fiscal years 2012-13 and 2013-14. On June 30, 2014, the c
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 expenditures with revenues. On June 30, 2015, the m
City adopted its budget for fiscal year 2015-16 which again continued certain of the expenditure reductions in
the Pendency Plan and implemented other measures to align expenditures with revenues. These efforts have w
L
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. L
D. The Bankruptcy Court's Determination of City Eligibility for Chapter 9 Relief c
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In the first few weeks of the Bankruptcy Case,the City filed a motion requesting that the Court set a deadline to w
file objections to the City's eligibility for Chapter 9 relief. On August 24, 2012, the Court entered its "Order c
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 a
as October 24,2012. Prior to October 12,2012,the City provided over 15,000 pages of documents pursuant to
stipulations with various creditors respecting its financial condition and eligibility for Chapter 9 relief. V
Although the City has numerous creditors —U.S. and German financial institutions holding the City's bonds, m
Wall Street bond insurers, hundreds of trade creditors, thousands of retirees receiving pensions and retiree -°'ate
health care benefits, and seven unions representing the City's current employees—only one creditor, CalPERS, c
objected to the City's eligibility to be a chapter 9 debtor. With respect to CalPERS, the City dedicated c
substantial resources in its Finance Department to providing information, running numbers, attending meetings
and responding to Ca1PERS' requests. The City provided additional documents totaling over 40,000 pages of c
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documents in the hope that CAPERS would withdraw its objection to the City's eligibility.
At a status conference in June 2013, the Bankruptcy Court set a briefing schedule for a motion for summary 0
judgment on the City's eligibility for Chapter 9 relief. CalPERS objected and asserted that it was entitled to M
additional discovery on the City's eligibility. On August 28, 2013, after extensive briefing by the City and S U.
CalPERS, the Bankruptcy Court determined based upon uncontroverted facts 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 Q
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 bankruptcy case in good faith and with the desire to effect a
plan of adjustment of debts, and, under the circumstances, it was impracticable for the City to have conducted
pre-bankruptcy negotiations with its creditors.
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55 Packet Pg. 766
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 2—Bankruptcy(Continued) o
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E. CalPERS'Appeal of the Bankruptcy Court's Eligibility Orders
CaIPERS appealed from the Eligibility Orders, and the U.S. District Court for the Central District of California
Q
certified the appeal for review by this U.S. Court of Appeals for the Ninth Circuit. The Ninth Circuit granted R
CaIPERS' petition for leave to appeal the Eligibility Orders, established a briefing schedule and set oral
argument on CalPERS' appeal on its August 2014 calendar. By its appeal, CaIPERS is challenging the
Bankruptcy Court's Eligibility Orders and seeks dismissal of the City's chapter 9 case. The City believes that U_
dismissal of its chapter 9 case would be a catastrophic blow to the City and its citizens as they struggle to M
recover from the effects of the economic downturn and housing bubble burst. Such a dismissal would deny the v
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 CalPERS appeal remains pending, o
but CaIPERS is not pursuing the appeal as long as the City complies with the CalPERS Interim Agreement. N
0
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F. The City's Debt Obligations and Creditor Claims
The Bankruptcy Court established February 7, 2014 as the deadline for all creditors, other than governmental
units of the City, to file proofs of claims, and March 21, 2014 as the deadline for governmental units to file c
proofs of claims. The City's proposed plan of adjustment will address claims timely filed against the City and w
co
the City's outstanding obligations including, but not limited to, the following which were in existence as of
August 31,2012 (unless otherwise noted): L
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• Unsecured Pension Costs and Unfunded Pension Liabilities — The City has outstanding unfunded o
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liability owed to CaIPERS.
• Other Post-Employment Benefits — The City's retirement plans provide for other post-employment o
benefits ("OPEBs"), consisting primarily of retiree medical care. The City's unfunded liability for
OPEBs was set forth in the City's last audit. a
• Pension Obligation Bond Indebtedness —To address growing public safety pension obligations, the 0
City issued pension obligation bonds ("POBs") in 2005 which reduced unfunded pension liabilities. 0 CL
The City has not made payments under the POB's since prior to the Petition Date.
• Lease And Other Financial Obligations—The City has outstanding lease obligations for critical 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 0
system,refuse trucks and other critical equipment.
m
• Capital Improvement Loans — In addition to its bonded indebtedness, loans, and capital leases, the
City has infrastructure loans for capital improvements. c
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Debt service obligations paid from dedicated special use restricted resources and/or funds that are not within
the General Fund, such as sewer improvement bonds and infrastructure bank loans secured by restricted c
"special revenues," and/or obligations paid from dedicated special/restricted funds, are currently unimpaired Q
and remain unimpaired under the City's proposed plan of adjustment. a�=i
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56 Packet Pg. 767
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
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Note 2—Bankruptcy(Continued) o
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G. Component Units and Restricted Funds
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The Bankruptcy Case seeks the adjustment of the obligations of the City and does not extend to the City's Q
component units that are separate legal entities. In addition, the City's restricted resources and/or special use
funds are funds of the City 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
proposed plan of adjustment. u-
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H. Impact of the Bankruptcy Case on the City's Ability to Provide Services Cl)
The City continues to provide essential services to its residents and is committed to continuing to provide such c
services throughout the Bankruptcy Case. The goal for the Chapter 9 process is to allow the City the time it N
needs to correct its structural budget imbalance and cash flow problems and set it on a sound financial course M
moving forward. c
I. The City's Plan of Adjustment and Disclosure Statement
c
On May 18, 2015, the City Council approved a Recovery Plan in support of the Plan of Adjustment. The City w
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 objections from creditors. L
0
The bankruptcy court established May 30, 2015 as the deadline for the City to file a plan of adjustment. The o
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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. N
On October 8, 2015, the bankruptcy court held a hearing on the adequacy of the disclosure statement. The o
bankruptcy court held a hearing on the disclosure statement and status conference on December 23, 2015, at
which it set deadlines for a second amended plan and disclosure statement and further briefing, and at a status
conference held on February 4,2016,the Court revised those dates and provided that the City is to file a second
amended disclosure statement and motion on solicitation procedures on March 30, 2016. On March 30, 2015,
the City filed its second amended disclosure statement and appendix of exhibits in support thereof, its second CD
amended plan for the adjustment of debts of the City, and a solicitation motion. Certain objections to the a
second amended disclosure statement or such motion were filed by the deadline of April 13, 2016, the City's c
response to filed objections to the second amended disclosure statement or such motion was filed on April 20,
2016, and the hearings on the amended disclosure statement and such motion were held on April 27, 2016. On
May 27,2016,the City filed its third amended disclosure statement and appendix of exhibits in support thereof, c
its third amended plan for the adjustment of debts of the City, reflecting the changes agreed to by the City and
various parties to settlements that were not fully reflected in the second amended disclosure statement and
changes to clarify the treatment of holders of personal injury claims that may be able to obtain payment from
the City's participation in the Big Independent Cities Excess Pool Joint Powers Authority (`BICEP"). cc
Responses to the third amended disclosure statement were due by June 3, 2016, provided however that E
responses are limited to matters that changed between the second and third amended disclosure statements,
except that BICEP, San Bernardino Associated Governments,and the Retiree Committee will be allowed to file c
objections on any matter in the third amended disclosure statement; the City's reply to response to the third a
amended disclosure statement is due on June 10,2016, and the hearings on the disclosure statement and motion
on solicitation procedures(to which no objection was filed)were continued to June 16,2016. d
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57 Packet Pg. 768
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 2—Bankruptcy(Continued) L
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I. The City's Plan of Adjustment and Disclosure Statement(Continued)
w
The aggregate gain expected to occur by re-measuring liabilities subject to the proposed plan of adjustment and a
contingent claims are not able to be reasonably measured or estimated, given that the ultimate outcome of the
confirmation hearing will not be made by U.S. Bankruptcy Court until at least fiscal year 2016/2017, and
perhaps after the outcome of the appeal(s),which likely will not be resolved until late fiscal year 2016/2017, if M
then. The plan of adjustment does not contemplate termination of services, discontinuance of operations, or
termination of the City.
N
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The City expects to file additional modifications to the Proposed Plan prior to reflect new or finalized v
settlements and fix certain clerical errors. Any plan for adjustment of the City's debts finally confirmed by the
Court is likely to provide for material modifications of the City's obligations with respect to its debts and could
include a schedule of payments substantially different than the originally scheduled debt service. The City o
expects to file additional disclosure notices and reports on the Electronic Municipal Market Access ("EMMA")
website from time to time updating information concerning its General Fund financial condition and Chapter 9
filing.
a�
The City expects to file additional disclosure notices and reports that will update information concerning its =
General Fund financial condition and Chapter 9 process with EMMA from time to time. The full Plan of w
Adjustment and related bankruptcy filings can be found on the City's website at: http://www.ci.san-
bernardino.ca.us/home nav/chapter 9 bankruptcy/default.asp }
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Note 3—Cash and Investments °a
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Cash and investments are presented in the accompanying financial statements at June 30,2014 as follows: N
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Government-Wide Statement of Net Position Fiduciary Funds
Governmental Business-Type Statement of
Q
Activities Activities Total Net Position Total
Cash and investments $ 60,440,863 $ 47,476,705 $ 107,917,568 $ 28,161,306 $ 136,078,874
Cash and investments with fiscal agent 1,208,016 - 1,208,016 31,648,223 32,856,239
Restricted cash - 7,585,801 7,585,801 - 7,585,801 a
d
Restricted investment-Consent Decree - 21,259,686 21,259,686 - 21,259,686
c
Total cash and investments $ 61,648,879 $ 76,322,192 $ 137,971,071 $ 59,809,529 $ 197,780,600 a
C
Cash and investments at June 30,2014,consisted of the following: o
CL
m
Cash:
Cash on hand $ 14,575 5
Deposits with financial institution 37,531,907 V
C
Total Cash 37,546,482
c
Investments: U_
Investments 127,377,879 5-
O
Investments held by bond trustee 32,856,239 C
c
Total Investments 160,234,118 Q
Total Cash and Investments $ 197,780,600 =
As part of the City's investment guidelines,the City continually seeks ways to increase investment income while
not risking investment principal. One way the City accomplishes this is by "sweeping", on a nightly basis, any w
excess cash held in its non-interest bearing checking account to an interest bearing money market account with Q
the same bank.
58 Packet Pg. 769
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 3—Cash and Investments (Continued) o
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A. Demand Deposits
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The carrying amounts of the City's demand deposits were $37,531,907 at June 30, 2014. Bank balances Q
were $37,329,024 at that date,the total amount of which was collateralized or insured with securities held by C5
the pledging financial institutions in the City's name as discussed below.
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The California Government Code requires California banks and savings and loan associations to secure the LL
City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in this M
manner shall have the effect of perfecting a security interest in such collateral superior to those of a general LO
creditor. Thus, collateral for cash deposits is considered to be held in the City's name.
0
The market value of pledged securities must equal at least 110% of the City's cash deposits. California law N
also allows institutions to secure City's deposits by pledging first trust deed mortgage notes having a value of
150% of the City's total cash deposits. The City may waive collateral requirements for cash deposits, which =
are fully insured up to $250,000 by the Federal Deposit Insurance Corporation ("FDIC"). The City,
however,has not waived the collateralization requirements.
c
B. Investments Authorized by the California Government Code and the City's Investment Policy w
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The table below identifies the investment types that are authorized for the City by the California Government L
Code and the City's investment policy. The table also identifies certain provisions of the California °
Government Code (or the City's investment policy, if more restrictive) that address interest rate risk and o
concentration of credit risk. This table 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 y
California Government Code or the City's investment policy. o
0
Maximum Maximum
Q
Maximum Percentage Investment in
Authorized Investment Types Maturity of Portfolio One Issuer*
United States Treasury Obligations 5 years None None
d
United States Federal Agency securities 5 years None None y
Bonds,Notes or Registered Warrants Issue
by the State of California or Local a
Agencies within the State of California 5 years None None
Bankers'Acceptances 180 days 40% 30% o
Commercial Paper 270 days 25% 10% m
Negotiable Certificates of Deposit 5 years 30% None
Time Cerificates of Deposit N/A 25% None
Medium-term Corporates Notes 5 years 30% 15%
Money Market Mutual Funds N/A 20% 10%
Mortgage Pass-through Securities 5 years 20% None U_
Local Agency Investment(LAIF) N/A None $50 million
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*Based on state law requirements or City investment policy requirements,whichever is more restrictive. Qc
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59 Packet Pg. 770
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
Ar
For the Year Ended June 30,2014 N
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Note 3—Cash and Investments(Continued) -
Q.
C. 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. The table Q
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.
U.
Maximum Maximum M
Maximum Percentage Investment in 'n
v
Authorized Investment Types Maturity Allowed One Issuer
United States Treasury Obligations None None N/A o
United States Federal Agency Securities None None None N
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Bonds,Notes or Registered Warrants co
Issued by the State of California or Local _
Agencies within the State of California 5 yrs None None
Bankers'Acceptances 180-360 days None None
Commercial Paper 90-180 days None None
Medium-term Corporate Notes None None None W
Money Market Mutual Funds N/A None None d
Investment Contracts None None None >-
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D. Risk Disclosures o
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Disclosures Relating to Interest Rate Risk
a
Interest rate risk is the risk that changes in market interest will adversely affect the fair value of an investment. o
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 Q
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 maturity evenly over time as necessary to provide the
cash flow and liquidity needed for operations. a
4)
Information about the sensitivity of the fair values of the City's investments (including investments held by
bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution a
of the City's investments by maturity. For purposes of the schedule shown below, any callable securities are M
assumed to be held to maturity. o
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60 Packet Pg. 771
7.D.a
City of San Bernardino.
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 3—Cash and Investments (Continued) o
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D. Risk Disclosures (Continued) 0 re
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Disclosures Relating to Interest Rate Risk a
a
Investment Maturities
Investment Type Total i year or fewer 1 to 2 years 2-3 years =
LAIF $ 12,591,145 $ 12,591,145 $ - $
Commercial paper 479,647 479,647 - U_
Money market mutual funds 24,358,864 24,358,864 - - N
M
Certificates of deposit 3,218,771 1,000,680 973,455 1,244,636
Negotiable certificates of deposit 2,242,118 248,368 248,000 1,745,750
Federal agency securities 58,368,345 3,481,157 8,328,604 46,558,584 0
U.S.Treasury obligations 13,804,276 761,338 5,164,800 7,878,138 c
Medium-term corporate notes 9,308,983 264,581 2,604,043 6,440,359 Cl)
a)
Asset backed securities 3,005,730 432,034 580,931 1,992,765
Held by bond trustee:
Money market mutual funds 29,792,711 29,792,711 - - m
Federal agency securities 2,007,528 1,817,280 190,248 - _
Investment contracts 1,056,000 - - 1,056,000 w
L
Total Investments $ 160,234,118 $ 75,227,805 $ 18,090,081 $ 66,916,232 W
L
0
Disclosures Relating to Credit Risk
O
Q.
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 u,
organization. However, some issuers do not seek a credit rating. For instance, the California Local Agency o
Investment Fund (LAIF) has not sought or received a credit rating. In these cases, the purchaser is solely 0
responsible for performing their own due diligence before purchasing an investment or participating in an Q
external investment pool. Certificates of deposit of$250,000 or less are fully insured by the Federal Deposit C
Insurance Corporation(FDIC),and therefore,do not seek a credit rating. _
d
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. '0
c
Minimum Ratings Rating co
Legal at Year-End at Year-End
O
Investment Type Total Rating AA or AAA A Not Rated Q-
a)
LAIF $ 12,591,145 N/A $ - $ - $ 12,591,145
Commercial paper 479,647 A-1 479,647 - i0
Money market mutual funds 24,358,864 AA+ 307,570 - 24,051,294 U
c
Certificates of deposit 3,218,771 N/A 500,143 1,473,992 1,244,636
C
Negotiable certificates of deposit 2,242,118 A - - 2,242,118 S LL
Federal agency securities 58,368,345 AA 58,368,345 -
U.S.Treasury obligations 13,804,276 N/A - - 13,804,276
Medium-term corporate notes 9,308,983 A 6,990,184 1,304,424 1,014,375 =
Asset backed securities 3,005,730 AA 3,005,730 - - Q
Held by bond trustee:
I Money market mutual funds 29,792,711 AA+ - = 29,792,711
Federal agency securities 2,007,528 N/A 2,007,528
Investment contracts 1,056,000 N/A - - 1,056,000 v
to
$ 160,234,118 $ 71,179,500 $ 3,258,063 $ 85,796,555 Q
�k�t
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 3—Cash and Investments (Continued) o
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D. Risk Disclosures (Continued)
Disclosure Relating to Concentration of Credit Risk Q
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The investment policy of the City contains no limitations on the amount that can be invested in any one issuer
beyond that stipulated in the Gov't Code. GASB Statement No. 40 requires disclosure by amount and issuer, of CO
investments in any one issuer that represent 5% or more of total investments. Investments in any one issuer
(other than U.S. Treasury securities, mutual funds, and external investment pools) that represents 5% or more M
of the City's total investments are as follows: v
Reported Percentage r
0
Issuer Investment Type Amount of Portfolio N
0
Federal National Mortgage Association Federal Agency Securities $ 16,450,609 10.27%
Federal Home Loan Banks Federal Agency Securities 8,590,973 5.36%
Federal Home Loan Mortgage Corporation Federal Agency Securities 26,657,394 16.64% 70
Local Agency Investment Fund California Pooled Investment Fund 12,591,145 7.86%
c
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Disclosures Relating to Custodial Credit Risk
m
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Custodial credit risk for deposits is the risk that,in the event of the failure of a depository financial institution, o
a government will not be able to recover its deposits or will not be able to recover collateral securities that L
are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the Q.
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 A
California Government Code and the City's investment policy do not contain legal or policy requirements that o
would limit the exposure to custodial credit risk for deposits or investments, other than the following
provision for deposits: The California Government Code requires that a financial institution secure deposits Q
made by state or local governmental units by pledging securities in an undivided collateral pool held by a
depository regulated under state law (unless so waived by the governmental unit). The market value of the
pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public Q.
agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed -0
mortgage notes having a value of 150% of the secured public deposits. At June 30, 2014, the City's deposits -
-a
(bank balances)were collateralized under California Law.
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62 Packet Pg. 773
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014
U.
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Note 3—Cash and Investments (Continued) o
a
E. Investment in State Investment Pool
'a
The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the a
oversight of the Treasurer of the State of California. The City's investments in LAIF at June 30, 2014 included
a portion of pool funds invested in Structure Notes and Asset-Backed Securities:
co
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Structured Notes are debt securities (other than asset-backed securities) whose cash-flow characteristics U_
(coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have M
embedded forwards or options. v
Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle their purchasers to It
receive a share of the cash flows from pool of assets such as principal and interest repayments from a pool N
of mortgages(such as Collateralized Mortgage Obligations)or credit card receivables.
_
As of June 30, 2013, the City had $12,591,145 invested in LAIF, which had invested 1.86% of the pool
investment funds in Structured Notes and Asset-Back Securities. LAIF determines fair value on its investment
CD
portfolio based on market quotations for those securities where market quotations are readily available and c
based on amortized cost or best estimate for those securities where market value is not readily available. The w
cu
City valued its investments in LAIF as of June 30, 2014,by multiplying its account balance with LAIF times a
fair value factor determined by LAIF. This fair value factor was determined by dividing all LAIF participants'
total aggregate amortized cost by total aggregate fair value. The fair value of the City's position in the pool is r°
the same value of the pool shares.The credit quality rating of LA is unrated as of June 30,2014. o
IF
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Note 4—Notes Receivable o
..
Notes receivable represent loan agreements entered into between the City or the former EDA and unrelated non- a
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, 2014, approximately $6.64 million V
of notes receivable, net of$3.26 million allowance for doubtful accounts, were reported in the Federal and State a
Grants Fund major special revenue fund.At June 30,2014,the Low and Moderate Income Housing major special 0
revenue fund reported approximately $38.72 million of notes receivable but the City has not done an analysis of c
the collectability of these notes receivable. The Successor Agency has five notes outstanding ranging in amount =
from approximately $11,000 to $609,000 totaling $1.84 million. Collection of these notes receivable is subject to
the terms of each individual loan agreement. a
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63 Packet Pg. 774
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
0 For the Year Ended June 30,2014 N
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Note 5 -Interfund Receivables,Payables,and Transfers o
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A. Due To/From Other Funds
Amounts due to and due from other funds at June 30,2014,were as follows: '
Q
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Due To Other Funds
R
Water. Sewer Internal Nonmajor =
Enterprise Enterprise Service Governmental U'
Due From Other Funds Fund Fund Funds Funds Total N
Cl)
LO
General Fund $ 1,793 $ - $ 14,018 $ 377,767 $ 393,578
Integrated Waste Enterprise Fund 2,283,375 268,613 - - 2,551,988
Water Enterprise Fund - - 164,200 - 164,200 N
Total $ 2,285,168 $ 268,613 $ 178,218 $ 377,767 $ 3,109,766 M
a�
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Amounts due to and due from other funds reflect (a) Monies owed to the Integrated Waste Enterprise (IWE)
CD
fund from Water Enterprise and Sewer Enterprise funds for monies for services collected by the Water 0
Department on behalf of the IWE fund;and(b)inter-fund borrowings to cover short-term operating deficits and w
L
cash overdrafts.
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B. Advances To/From Other Funds 0
0
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Advance to and advances from other funds at June 30, 2014,were as follows:
0
Advances From Other Funds
Nonmajor Q
Governmental =
Advances To Other Funds Funds Total
c
Low&Moderate Income Housing Fund $ 116,800 $ 116,800 a
Nonmajor Governmental Funds 147,600 147,600 a
Total $ 264,400 $ 264,400 =
c
The interfund advances above resulted from loans to fund infrastructure and other capital improvements in the o
Arden-Guthrie and New Pine Assessment Districts and are expected to be repaid through special assessments C
on property owners in those districts.
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64 Packet Pg. 775
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 5—Interfund Receivables,Payables,and Transfers(Continued)
0
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C. Transfers
Interfund transfers during the year ended June 30,2014,consisted of the following: Q
Transfers Out v
_
Integrated Non-major =_
General Waste Governmental LL
Transfers In Fund Enterprise Fund Funds Total N
M
General Fund $ - $ 2,200,000 $ 820,719 $ 3,020,719 `O
d'
Non-major Governmental Funds 3,937,273 - - 3,937,273
Total $ 3,937,273 $ 2,200,000 $ 820,719 $ 6,957,992 c
N
O
Interfund transfers were principally used to(a)fund operating deficits in non-major funds, (b)fund debt service o
payments, (c) reimburse costs of the General Fund for City-provided services, (d) eliminate deficit fund
balances,and(e)subsidize capital expenditures.
LU
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Note 6—Property Held for Resale
d
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, the Federal and State Grant Fund. Approximately 60 -
properties are reported in the Federal and State Grants Fund major special revenue fund ranging in amount from o
0.
approximately $78,000 to $640,000, and totaling $16.3 million. The Low and Moderate Income Housing major
special revenue fund includes approximately 30 properties ranging in amount from approximately $5,000 to
V)
$11.8 million, and totaling $18.4 million. Property held for resale is recorded at acquisition cost plus improvement o
costs in non-accordance with accounting principles generally accepted in the United States of America. These costs
will be charged to current year project expenditures when the related properties are sold or disposed. Q
Property held for resale in the Successor Agency represents vacant land and commercial and retail real estate a)
acquired by the EDA as part of its redevelopment activities. Over 55 properties, reported at acquisition cost plus
improvement costs in non-accordance with accounting principles generally accepted in the United States, ranging m
from 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. co
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65 Packet Pg. 776
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
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Note 7—Capital Assets o
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A. Governmental Activities
r
The summary of changes in governmental activities capital assets for the year ended June 30, 2014, is as Q
follows:
U
Balance to
July 1,2013 Balance C
U-
as restated Additions Deletions Transfers June 30,2014
N
Capital assets,not being depreciated:
Land $ 113,844,359 $ - $ - $ $ 113,844,359 �?
Construction in progress 10,907,743 5,405,412 - (1,885,302) 14,427,853
T
Total capital assets,not being depreciated 124,752,102 5,405,412 - (1,885,302) 128,272,212 N
Capital assets,being depreciated:
M
Infrastructure 548,258,552 - 1,885,302 550,143,854
Buildings and improvements 74,263,662 - - 74,263,662
Machinery,vehicles,and equipment 55,043,696 600,643 (44,652) - 55,599,687
Subtotal 677,565,910 600,643 (44,652) 1,885,302 680,007,203 -0
Less accumulated depreciation tL
Infrastructure (291,451,160) (14,598,816) - - (306,049,976)
Buildings and improvements (58,539,116) (1,411,424) - (59,950,540)
Machinery,vehicles,and equipment (48,131,924) (2,483,110) 44,652 - (50,570,382) L
0
Subtotal (398,122,200) (18,493,350) 44,652 - (416,570,898) L
Total capital assets,being depreciated 279,443,710 (17,892,707) - 1,885,302 263,436,305 Q.
m
Intangible assets,being amortized:
Purchased software 5,946,327 - - 5,946,327- n
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Accumulated amortization (1,437,029) (594,633) - - (2,031,662) o
Total intangible assets,being amortized 4,509,298 (594,633) - 3,914,665
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Total governmental activities capital assets,net $ 408,705,110 $ (13,081,928) $ - $ - $ 395,623,182
c
Depreciation and amortization expense was charged to the functions/programs of the governmental activities as a
fu
follows: o
General government $ 245,152
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Public safety 1,739,918 t�
Streets 15,229,180 0
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Culture and recreation 469,877 d
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Community development 25,841
Community services 199,992 v
Internal service funds 1,178,023
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Total depreciation/amortization expense $ 19,087,983 U.
0 0
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66 Packet Pg. 777
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 7—Capital Assets(Continued) c
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B. Business-Type Activities
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The summary of changes in business-type activities capital assets for the year ended June 30, 2014, is as '
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follows:
C
Balance Balance
c
July 1,2013 Additions Deletions June 30,2014 Ii
Capital assets,not being depreciated: N
Land and easements $ 17,207,654 $ 4,046 $ (75,369) $ 17,136,331 Ln
Construction in progress 24,724,783 15,483,211 (24,576,336) 15,631,658
Total capital assets,not being depreciated 41,932,437 15,487,257 (24,651,705) 32,767,989 0
Capital assets,being depreciated: N
0
Water rights,wells,and pumping 83,414,194 14,557,423 - 97,971,617
Distribution systems 124,990,205 13,032,904 (1,040,877) 136,982,232 =
Building,plant,and store yards 122,980,384 759,707 (127,247) 123,612,844
Other capital assets 42,493,652 1,993,646 (386,510) 44,100,788 'a
d
Subtotal 373,878,435 30,343,680 (1,554,634) 402,667,481
W
Less accumulated depreciation 6.
Water rights,wells,and pumping (32,190,724) (2,432,714) - (34,623,438)
Distribution systems (31,368,626) (2,575,218) 932,949 (33,010,895) L
Building,plant,and store yards (83,832,426) (3,388,844) 118,013 (87,103,257)
Other capital assets (31,636,052) (3,565,727) 311,096 (34,890,683) to
0.
Subtotal (179,027,828) (11,962,503) 1,362,058 (189,628,273)
Total capital assets,being depreciated 194,850,607 18,381,177 (192,576) 213,039,208 H
Total capital assets,net $ 236,783,044 $ 33,868,434 $ (24,844,281) $ 245,807,197 0�
3
Depreciation expense was charged to the functions/programs of the business-type activities as follows: Q
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Integrated Waste Enterprise Fund $ 2,564,350 c
Water Enterprise Fund 5,971,638
Sewer Enterprise Fund 3,426,515 a
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Total depreciation expense $ 11,962,503
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67 Packet Pg. 778
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014 y
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0
Note 7—Capital Assets(Continued) o
CL
C. Fiduciary Fund Financial Statements tr
=a
The summary of changes in fiduciary activities capital assets for the year ended June 30,2014, is as follows: Q
Balance Balance v
July 1,2013 Additions Reclassifications June 30,2014
_
Capital assets,not being depreciated: W
Land $ 11,631,572 $ $ (11,261) $ 11,620,311 N
M
Total capital assets,not being depreciated 11,631,572 - (11,261) 11,620,311 'n
v
Capital assets,being depreciated:
Buildings and improvements 16,508,665 11,261 16,519,926 o
Machinery,vehicles,and equipment 1,282,198 - 1,282,198 N
0
Subtotal 17,790,863 11,261 17,802,124 M
d
Less accumulated depreciation
Buildings and improvements (8,570,943) (329,786) (8,900,729)
Machinery,vehicles,and equipment (1,188,646) (49,681) - (1,238,327) d
Subtotal (9,759,589) (379,467) (10,139,056) I j
Total capital assets,being depreciated 8,031,274 (379,467) 11,261 7,663,068
Total capital assets,net $ 19,662,846 $ (379,467) $ - $ 19,283,379 >'
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68 Packet Pg.779
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
U.
0
Note 8—Long-Term Liabilities c
CL
A. Governmental Activities
.r
'v
A summary of changes in the long-term liabilities of the governmental activities for the year ended June 30,
Q
2014,is as follows:
C
Balance Classification
C
July 1,2013 Debt Debt Balance Due within Due in More
as restated Issued Retired June 30,2014 One Year Than One Year
N
Governmental Activities:
Capital leases $ 1,845,254 $ $ (625,124) $ 1,220,130 $ 622,010 $ 598,120
HUD CDBG liability 2,064,243 - 2,064,243 168,761 1,895,482
California Department of Finance 1,231,423 - 1,231,423 - 1,231,423 N
Notes payable: M
HUD Section 108-Arden Guthrie 7,166,000 (344,000) 6,822,000 354,000 6,468,000 d
C
Fire maintenance facility note 1,200,000 - - 1,200,000 100,000 1,100,000
New World Software Agreement 4,035,245 (528,382) 3,506,863 543,652 2,963,211
700
Total notes payable 12,401,245 (872,382) 11,528,863 997,652 10,531,211 C
Lease revenue bonds: W
L
City Hall Lease(Refunding Bonds,Series 1996) 7,505,000 (580,000) 6,925,000 610,000 6,315,000 y
Total lease revenue bonds 7,505,000 (580,000) 6,925,000 610,000 6,315,000
California Infrastructure and Economic 'q
Development Bank(CIEDB) C
CL
Fire Station Lease 1,978,110 - (91,515) 1,886,595 94,188 1,792,407
Street Construction 3,570,116 - (1,162,272) 2,407,844 1,189,821 1,218,023 H
Harriman Place Street Exention Lease 1,124,064 - (111,505) 1,012,559 114,639 897,920 C
Total CIEDB 6,672,290 (1,365,292) 5,306,998 1,398,648 3,908,350
.0
Certificates of participation:
Q
1999 Certificates of Participation 4,270,000 (260,000) 4,010,000 275,000 3,735,000 C
Total certificates of participation 4,270,000 (260,000) 4,010,000 275,000 3,735,000 C
Pension obligation bonds: d
C.
Taxable Pension Obligation Bonds,2005 Series A 46,140,860 - 46,140,860 46,140,860 'a
Add:interest accretion 5,358,618 703,021 6,061,639 6,061,639 E
Total pension obligation bonds 51,499,478 703,021 52,202,499 52,202,499 C cc
Total $ 87,488,933 $ 703,021 $ (3,702,798) $ 84,489,156 $ 56,274,570 $ 28,214,586 t
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69 Packet Pg. 780
•rll�rr..n.r�
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
U_
L
0
Note 8—Long-Term Liabilities(Continued) o
a
A. Governmental Activities(Continued)
�a
Capital Leases Payable '
Q
io
The City has entered into several lease agreements for the financing of fire vehicles and equipment, air
conditioners,and police vehicles. These lease agreements qualify as capital leases for accounting purposes and,
therefore, have been recorded at the present value of future minimum lease payments as of the date of it
inception. N
M
The annual debt service requirements for the capital leases payable outstanding at June 30, 2014 are as follows:
0
Year Ending N
June 30, Principal Interest Total M
a�
2015 $ 622,010 $ 43,920 $ 665,930
2016 309,764 21,578 331,342
2017 121,228 11,542 132,770
2018 81,632 6,877 88,509 w
2019 85,496 3,013 88,509 L
Total $ 1,220,130 $ 86,930 $ 1,307,060
L
Assets acquired through the capital leases are as follows: o
CL
d
Amount
y
Machinery,vehicles,and equipment $ 5,759,773 0
Less:accumulated depreciation (4,455,848)
Total $ 1,303,925 Q
w
W
c
HUD CDBG Liability CD
CL
d
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 City and HUD agreed on actions to resolve monetary findings �
related to ineligible or unsupported expenditures and unreported program income. The City has accrued the °a
total of$2,064,243 owed to its CDBG line of credit as a liability of the governmental activities opinion unit.
The City has acknowledged that if it does not honor the payment schedule below, it will result in funds being
reduced from the City's CDBG line of credit.
c
The annual debt service requirements for the HUD CDBG liability outstanding at June 30,2014 are as follows: LL
Year Ending
C
June 30, Principal Interest Total Q
2015 $ 168,761 $ - $ 168,761
2016 500,000 - 500,000 E
2017 500,000 - 500,000
2018 895,482 - 895,482
Q
Total $ 2,064,243 $ - $ 2,064,243
70 Packet Pg. 781
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
U_
L
0
W
Note 8—Long-Term Liabilities (Continued)
0
a�
A. Governmental Activities(Continued)
California Department of Finance Liability '
Q
E
As a result of the California Department of Finance's (DOF) original Due Diligence Review of the Low and
Moderate Income Housing Fund's uncommitted tax increment to be returned to DOF, the DOF determined
City-contested amounts ranging from $14,041,882 to $1,231,423 were due to DOF. At June 30, 2013,the Low n-
and Moderate Income Housing Fund reported a liability to DOF in the amount $3,415,155 for this liability. CN
Subsequent to June 30, 2013, the DOF and the City agreed, via an installment payment agreement as v
determined according to Health and Safety Code Section 34179.5, that the City will pay DOF $1,231,423
through December 15, 2027. The adjusted liability has been removed from the Low and Moderate Income o
Housing fund and added to the governmental activities long-term debt as of July 1,2013. N
0
M
The annual debt service requirements for the California Department of Finance liability outstanding at June 30, c
2014 are as follows:
a�
Year Ending c
June 30, Principal Interest Total W
2015 $ - $ - $
r
2016 100,000 - 100,000 a
2017 100,000 100,000
L
2018 100,000 - 100,000 0
2019 100,000 - 100,000 m
2020-2024 500,000 - 500,000
2025-2028 331,423 - 331,423 p
Total $ 1,231,423 $ - $ 1,231,423 -a
w
c
(D
HUD Section 108—Arden Guthrie Focused Neighborhood Revitalization Project Note Payable
Q-
m
The City of San Bernardino entered into a Contract for Loan Guarantee Assistance, a Master Fiscal Agency -a
Agreement, and executed a promissory note with the United States Department of Housing and Urban
Development pursuant to Section 108 of the Housing and Community Development Act of 1974, as amended
(Section 108 Loan). The proceeds of the loan were then loaned to the EDA to be used for the Arden-Guthrie o
Focused Neighborhood Revitalization Project, which affects approximately 20 acres of land located at the 0
northwest corner of Arden Avenue and 20th Street(Arden-Guthrie Site). Once the Arden-Guthrie Site is sold to
a third-party,the proceeds of the sale are required to be paid to the City.All of the debt service payments on the f°
U
Section 108 Loan are the responsibility of the City. The source of funds available for the repayment of the Loan
is the CDBG Program Revenue of the City. _
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71 Packet Pg. 782
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
iL
0
Note 8—Long-Term Liabilities (Continued) o
CL
m
A. Governmental Activities (Continued)
HUD Section 108—Arden Guthrie Focused Neighborhood Revitalization Project Note Payable '
(Continued) i6
U
c
During the initial phase interest is payable from the date of each advance to the "Public Offering Date" and =
shall accrue on the unpaid principal balance of the Note and shall be paid in quarterly installments on the first U-
day of February,May,August and November,"Interim Payment Date". The amount of interest payable on each M
Interim Payment Date will represent interest accrued on the unpaid balance during the three month period LO
ending before the Interim Payment Date, in 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 on the date of c
such advance at a rate per annum equal to 20 basis points (.2%) above the Applicable LIBOR Rate on such N
0
Reset Date.
m
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. 0
'a
c
The annual debt service requirements for the HUD Section 108—Arden Guthrie note payable outstanding at w
June 30,2014 are as follows:
ML_it Year Ending 12
June 30, Principal Interest Total p
Q
2015 $ 354,000 $ 366,716 $ 720,716
2016 384,000 347,969 731,969
2017 404,000 327,874 731,874 O
2018 424,000 306,316 730,316
2019 454,000 282,867 736,867 Q
2020-2024 2,880,000 978,098 3,858,098
2025-2027 1,922,000 164,681 2,086,681 =
Total $ 6,822,000 $ 2,774,521 $ 9,596,521 d
Q
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a
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Fire Maintenance Facility Note Payable
c
On August 1,2009,the City entered into a note agreement with a property owner for the purchase of land to be c
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, 2019 and bears interest at 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 2
2014. Interest payments are due semiannually on January 1 and July 1, commencing on January 1, 2010
through July 1,2019. _
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72 Packet Pg. 783
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014 N
U.
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0
Note 8-Long-Term Liabilities (Continued) o
CL
A. Governmental Activities (Continued)
r
Fire Maintenance Facility Note Payable(Continued) 3
Q
�o
The annual debt service requirements for the Fire Maintenance Facility note payable outstanding at June 30,
2014 are as follows:
c
LL
Year Ending 04
June 30, Principal Interest Total LO
2015 $ 100,000 $ 57,500 $ 157,500
2016 - 55,000 55,000 c
2017 - 55,000 55,000 N
0
2018 - 55,000 55,000 Cl)
m
2019 - 55,000 55,000
2020 1,100,000 55,000 1,155,000
Total $ 1,200,000 $ 332,500 $ 1,532,500 d
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L
New World Note Payable ca
0
L
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 accounting purposes and has been recorded at the present value of the o
annual °-
0
payments of$645,000, calculated using a discount rate of 2.89%. The final payment is due July 1,2019.
0
L
The annual debt service requirements for the New World note payable outstanding at June 30,2014 are as 0
follows: 0
Q
c
Year Ending (D
June 30, Principal Interest Total
2015 $ 543,652 $ 101,348 645,000 d
2016 559,363 85,637 645,000
2017 575,529 69,471 645,000 -
2018 592,162 52,838 645,000
2019 609,275 35,725 645,000 t
2020 626,882 18,117 644,999 0
Q
Total $ 3,506,863 $ 363,137 $ 3,870,000 m
m
Lease Revenue Refunding Bonds(City Hall Proiect), Series 1996
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$16,320,000 of Lease Revenue Refunding Bonds (City Hall Project), Series 1996, were issued to refund the
Central City Project, $12,000,000 Certificates of 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 a
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, bearing interest of 5.30%, and $3,215,000 of term bonds, bearing interest at
5.60% and $6,315,000 of term bonds, bearing interest at 5.70%. Interest is payable semiannually on January 1 E
and July 1. Remaining term bonds are due January 1, 2015, and January 1, 2023, and shall be called and
redeemed before maturity from money deposited into the term bond sinking fund. Q
73 Packet Pg..784
7.DM
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
U.
L
0
Note 8-Long-Term Liabilities (Continued) 0
0.
A. Governmental Activities (Continued)
y
Lease Revenue Refunding Bonds(City Hall Project),Series 1996(Continued) Q
The bonds are subject to optional redemption as a whole or in part at the times and prices (expressed as a co
U
percentage of the principal amount so redeemed) as set forth in the bond documents. A reserve account is
required to be maintained in accordance with the bond documents.As of June 30,2014,the reserve requirement E
was$1,008,190 and the amount actually held in the reserve account was$1,008,331. ``
N
M
The bonds and the interest thereon were previously payable from,and secured by a pledge of,lease payments to LO
be paid by the City of San Bernardino pursuant to a lease purchase agreement between the EDA as lessor and
the City as lessee. In order for the City to secure its obligations pursuant to the lease agreement, the City will o
grant to the former EDA,which will be assigned to First Trust of California National Association,as trustee,its `"
0
interest in the lease agreement, which includes its rights to acquire the leased premises, upon payment of
a�
principal of and interest on the bonds.Upon dissolution of the EDA,the bonds became a liability of the City.
The annual debt service requirements for the Lease Revenue Refunding Bonds(City Hall Project), Series 1996,
outstanding at June 30,2014 are as follows:
W
L
Year Ending
June 30, Principal Interest Total
2015 $ 610,000 $ 394,115 $ 1,004,115
2016 645,000 359,955 1,004,955 0
2017 685,000 323,190 1,008,190 °
m
2018 720,000 284,145 1,004,145
Jn
2019 760,000 243,105 1,003,105 0
2020-2023 3,505,000 513,285 4,018,285 2
Total $ 6,925,000 $ 2,117,795 $ 9,042,795 0
CD
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California Infrastructure and Economic Development Bank-Fire Station Lease
c
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On August 2, 2004, the California Infrastructure and Economic Development 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 of the lease, the City agrees to pay to the CIEDB as rental for use and occupancy of the Fire c
Station lease payments upon a term of 25 years from the effective day at an interest rate of 2.92% per annum. M
The base rental payments are due on February 1 and August 1 of each year, commencing on February 1, 2005, o
through August 1,2029.
The annual debt service requirements for the Fire Station Lease outstanding at June 30,2014 are as follows:
U
C
Year Ending =
June 30, Principal Interest Total ii
2015 $ 94,188 $ 53,713 $ 147,901
2016 96,938 50,923 147,861 =
c
2017 99,769 48,051 147,820 Q
2018 102,682 45,095 147,777
2019 105,680 42,053 147,733
2020-2024 576,531 161,433 737,964
2025-2030 810,807 73,013 883,820 ;2
Total $ 1,886,595 $ 474,281 $ 2,360,876 Q
74 Packet Pg. 785
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
0 U_
For the Year Ended June 30,2014
L
0
Note 8—Long-Term Liabilities(Continued) o
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A. Governmental Activities(Continued)
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California Infrastructure and Economic Development Bank—Street Construction Lease Q
On September 27, 2005, the California Infrastructure and Economic Development Bank(CIEDB) and the City
entered into a financing agreement for pavement reconstruction and 25.5 miles of pavement rehabilitation c
projects on public streets throughout the City for an amount of$10,000,000. Interest rate is 2.37%per annum. LL
The City agrees to pay the CIEDB on August 1 and February 1, commencing on August 1, 2006, through M
August 1,2015. to
v
The annual debt service requirements for the Street Construction Lease outstanding at June 30,2014 are as o
follows: "'
0
co
Year Ending c
June 30, Principal Interest Total
.c
2015 $ 1,189,821 $ 42,967 $ 1,232,788 Wa
2016 1,218,023 14,434 1,232,457 c
w
Total $ 2,407,844 $ 57,401 $ 2,465,245 R
d
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California Infrastructure and Economic Development Bank—Harriman Place Extension Lease
L
0
On August 28, 2001, the California Infrastructure and Economic Development Bank (CIEDB) and the City m
entered into a lease agreement in regard to the Harriman Place Street Extension Project(Project) for an amount.
of$2,000,000. Interest rate is 2.81% per annum. The Project is located on real property owned by the City. c
Subject to the provisions of the lease, the City agrees to pay to the CIEDB as rental for use and occupancy of
the Harriman Street Extension lease payments on February 1 and August 1 of each year, commencing on a
August 1,2004,through August 1,2021.
c
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The annual debt service requirements for the Harriman Place Extension Lease outstanding at June 30,2014 are
as follows: d
c
Year Ending
June 30, Principal Interest Total
2015 $ 114,639 $ 26,842 $ 141,481 oQ
2016 117,860 23,576 141,436
2017 121,172 20,217 141,389 FZ
2018 124,577 16,764 141,341 U
2019 128,077 13,215 141,292 c
2020-2022 406,234 17,334 423,568 ii
Total $ 1,012,559 $ 117,948 $ 1,130,507 f9
c
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75 Packet Pg. 786
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
iL
L
Note 8—Long-Term Liabilities(Continued) L
0
CL
A. Governmental Activities(Continued)
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1999 Certificates of Participation '
Q
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On September 23, 1999, the San Bernardino Joint Powers Financing Authority issued $15,480,000 of
Refunding Certificates of Participation (Certificates). The Certificates were issued to retire $2,325,000 c
outstanding of Refunding Certificates of Participation (South Valle Public Improvement Project) dated U_
April 1, 1987, and $5,910,000 outstanding of Certificates of Participation (1995 Police Station Financing M
Project)dated April 1, 1995, and to provide funds for capital improvements(201 Building Projects). v
The Certificates mature on September 1 of each year through September 1, 2024, in amounts ranging from c
$330,000 to $1,080,000. The interest represented by the Certificates is calculated on the basis of a 360-day N
year of twelve 30-day months, from September 1, 1999, at the rates per annum set forth in the bond M
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. d
c
The Certificates maturing on September 1, 2020, are subject to mandatory sinking fund redemption in part on w
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 Agreements with respect to each such redemption date, at L
a redemption price equal to the principal 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 c
documents. The Certificates maturing on September 1,2024, are subject to mandatory sinking fund redemption 0
in part on September 1, 2021, from the principal components of the lease payments required to be paid by the N
City pursuant to the Lease Agreements with respect to each such redemption date, at a redemption price equal c
to the principal amount thereof to be redeemed, together with interest accrued thereon to the date fixed for a
redemption,without premium,in accordance with the terms identified in the bond documents. a
The Certificates represent direct, undivided fractional interest in lease payments to be made by the City under V
the lease agreements. A reserve fund is required to be maintained in an amount equal to the maximum annual a
debt service. At June 30, 2014, the reserve requirement was $1,147,000 and the amount actually held in the v
reserve account was $1,079,222. The total outstanding balance of the Certificates at June 30, 2014 was c
$9,225,000 of which $4,010,000 is reported as a long-term liability of the City, which is the portion of the c
Certificates that represent the Police Station portion. Repayment of this portion of the Certificates is funded M
from the City's general revenues under the terms of the lease agreement. The remaining $5,215,000 c.
outstanding balance of the Certificates at June 30, 2014, is reported as a long-term liability of the Successor (D
Agency, which is the portion of the Certificates that represents the South Valle Refunding and 201 Building
Projects portions.
M
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76 Packet Pg. 787
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
U.
0
w
Note 8—Long-Term Liabilities(Continued) c
CL
A. Governmental Activities(Continued)
'a
1999 Certificates of Participation(Continued) '
a
25
The annual debt service requirements for the 1999 Certificates of Participation outstanding at June 30,2014 are
as follows:
U.
Year Ending M
June 30, Principal Interest Total
2015 $ 275,000 $ 212,988 $ 487,988 d
2016 290,000 197,451 487,451 c
2017 305,000 181,088 486,088 N
0
2018 325,000 163,763 488,763 M
m
2019 340,000 145,475 485,475 c
2020-2024 2,005,000 416,485 2,421,485
2025 470,000 12,925 482,925
Total $ 4,010,000 $ 1,330,175 $ 5,340,175 c
W
L
Taxable Pension Obligation Bonds,2005 Series A >
q
In October 2005, the City issued City of San Bernardino Taxable Pension Obligation Bonds, 2005 Series A, c
consisting of$36,050,000 principal amount of Taxable Pension Obligation Bonds, Series A-1 (standard bonds) m
and$14,351,583 principal amount of Taxable Pension Obligation Bonds, 2005 Series A-2 (capital appreciation W
bonds). The City issued the bonds in order to prepay its unfunded accrued actuarial liability related to the City's c
safety retirement plan.
The standard bonds are dated October 1, 2005, with an interest rate of 5.628% per annum, maturing annually
commencing October 1,2024,through October 1, 2035. Interest is due semiannually on April 1 and October 1, -0
commencing on October 1, 2006 through October 1, 2035. The capital appreciation bonds are dated October 1, m
2005, with interest rates varying from 4.993% to 5.877% per annum, maturing annually commencing m
October 1, 2007,through October 1,2024. Interest is due semiannually on April 1 and October 1,2006 through c
October 1,2035. -a
c
ca
The City is in default on these bonds since the City did not pay interest or principal on these bonds beginning in o
fiscal year 2013 and has recorded the full amount of the outstanding principal as a current portion of their long- m
term debt as of June 30, 2014. Please see Note 2 Bankruptcy. Subsequent to June 30, 2014,the City reached a
settlement agreement with the bond creditors which is contingent upon the Bankruptcy Court's confirmation of
the City's Plan of Adjustment. Pursuant to the settlement agreement, bond creditors' claims against the City cca
will be reduced to $50.7 million payable in installments over a 30 year term. Please see Note 25 Subsequent c
U.
Events.
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77 Packet Pg. 788
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
iL
0
Note 8—Long-Term Liabilities (Continued)
0
sz
a�
A. Governmental Activities (Continued)
w
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Taxable Pension Obligation Bonds,2005 Series A(Continued) Q
The annual debt service requirements for the Taxable Pension Obligation Bonds, 2005 Series A, outstanding at
June 30,2014 are as follows: 16
c
U_
Year Ending N
Cl)
June 30, Principal Interest Total v
2015 $ 4,060,866 $ 2,028,894 $ 6,089,760
2016 1,369,028 2,028,894 3,397,922 c
2017 1,342,966 2,028,894 3,371,860 N
0
2018 1,309,663 2,028,894 3,338,557 M
a�
2019 1,279,525 2,028,894 3,308,419
2020-2024 6,790,451 10,144,470 16,934,921
2025-2029 10,015,000 9,504,567 19,519,567 m
2030-2034 17,175,000 6,386,787 23,561,787 w
2035-2036 8,860,000 1,118,005 9,978,005
ct!s
Total $ 52,202,499 $ 37,298,299 $ 89,500,798 m
L
0
B. Business-type Activities o
CL
A summary of changes in the long-term liabilities of the business-type activities for the year ended June 30, tY
2014, is as follows: L
0
Balance Classification
0
July 1,2013 Debt Debt Balance Due within Due in More Q
as restated Issued Retired June 30,2014 One Year Than One Yeai C
0
Business-Type Activities:
C
Integrated Waste equipment capital leases $ 7,343,367 $ $ (2,550,418) $ 4,792,949 $ 2,140,362 $ 2,652,587 Q
Notes payable: a)
2002 California Infrastructure and
Economic Development Bank-Water Note 5,733,883 - (556,635) 5,177,248 575,227 4,602,021
2007 California Infrastructure and CU
Economic Development Bank-Water Note 7,826,282 (467,116) 7,359,166 479,775 6,879,391 0
0
2012 California Infrastructure and CL
a)
Economic Development Bank-Water Note 10,000,000 (413,260) 9,586,740 424,046 9,162,694 lY
2012 San Bernardino Valley Municipal
Water District Note 898,445 - (221,254) 677,191 223,478 453,713
State Revolving Fund 4,993,225 - (1,619,090) 3,374,135 1,664,425 1,709,710 co
c
Total notes payable 29,451,835 - (3,277,355) 26,174,480 3,366,951 22,807,529 ii
Certificates of participation: ca
1998 Sewer Revenue Certificates of Participation 12,145,000 (2,805,000) 9,340,000 2,965,000 6,375,000
c
Less:unamortized discount (67,308) 19,676 (47,632) - (47,632) Q
Total certificates of participation 12,077,692 (2,785,324) 9,292,368 2,965,000 6,327,368 =
Total $48,872,894 $ - $ (8,613,097) $40,259,797 $ 8,472,313 $31,787,484 E
Q
78 Packet Pg. 789
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
' For the Year Ended June 30,2014 U
U_
0
Note 8—Long-Term Liabilities(Continued) C
0
CL
B. Business-type Activities(Continued)
w
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Integrated Waste Equipment Capital Leases Payable '
Q
�o
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 months each, with individual semi-annual payments ranging from
$165,999 to $945,575. Interest rate ranges from 2.89% to 3.78%. These lease agreements qualify as capital iz
leases for accounting purposes and,therefore,have been recorded at the present value of future minimum lease
payments as of the date of inception. These lease agreements qualify as capital leases for accounting purposes, to
and therefore, have been recorded at the present value of the future minimum lease payments as of the date of
inception. c
N
The annual debt service requirements for the Integrated Waste capital leases payable outstanding at June 30, c°h
2014 are as follows: c
3
Year Ending y
June 30, Principal Interest Total c
W
2015 $ 2,140,362 $ 145,780 $ 2,286,142
2016 1,438,444 78,821 1,517,265 4)
2017 889,209 32,560 921,769 0
2018 324,934 7,060 331,994
Total $ 4,792,949 $ 264,221 $ 5,057,170 0
CL
d
Assets acquired through the capital leases are as follows: c
0
Amount 3
Q
.r
Machinery,vehicles,and equipment $ 19,972,082
Less:accumulated depreciation (11,610,493) c
m
CL
$ 8,361,589
c
2002 California Infrastructure and Economic Development Bank(CIEDB)—Water Note
In April 2002, CIEDB issued a $10,000,000 note to the City Water Department to provide funding for 00
transmission mains, booster stations and a reservoir identified in the Water System Reliability Schedule of w
Improvements. The note was issued with an interest rate of 3.34% per annum with interest payable a
semiannually on February 1 and August 1.Principal payments are due annually on February 1. c
c
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79 Packet Pg.790
w�
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014 y
U_
0
Note 8-Long-Term Liabilities (Continued) o
CL
B. Business-type Activities(Continued)
2002 California Infrastructure and Economic Development Bank(CIEDB)-Water Note(Continued)
Q
0
The annual debt service requirements for the 2002 CIEDB Water note payable outstanding at June 30, 2014 are U
as follows: t0
c
U.
Year Ending N
June 30, Principal Interest Total Cl)
2015 $ 575,227 $ 172,921 $ 748,148
2016 594,440 153,708 748,148 c
2017 614,294 133,854 748,148 N
0
2018 634,812 113,336 748,148 M
a�
2019 656,014 70,222 726,236
3
2020-2022 2,102,461 71,760 2,174,221
Total $ 5,177,248 $ 715,801 $ 5,893,049
v
c
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2007 California Infrastructure and Economic Development Bank(CIEDB)-Water Note
In July 2007, CIEDB issued a $10,000,000 note to the City Water Department to provide funding for booster ,Q
stations and transmission mains in the Verdemont area. The note was issued with an interest rate of 2.71% per o
annum with interest payable semiannually on February 1 and August 1. Principal payments are due annually on C
August 1. lY
N
i
The annual debt service requirements for the 2007 CIEDB Water note payable outstanding at June 30, 2014 are o
as follows:
Q
w
c
Year Ending CD
June 30, Principal Interest Total
d
CL
2015 $ 479,775 $ 192,932 $ 672,707
2016 492,777 179,754 672,531 c
2017 506,131 166,219 672,350
2018 519,847 152,317 672,164 M
2019 533,935 145,274 679,209 p
2020-2024 2,894,723 501,320 3,396,043 m
2025-2027 1,931,978 105,644 2,037,622
Total $ 7,359,166 $ 1,443,460 $ 8,802,626
C
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80 Packet Pg.791
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014
U_
0
Note 8—Long-Term Liabilities (Continued)
0
Q
B. Business-type Activities (Continued)
2012 California Infrastructure and Economic Development Bank(CIEDB)—Water Note 0
Q
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 August 1. E
Principal payments are due annually on August 1. c•�
M
CI'
The annual debt service requirements for the 2012 CIEDB Water note payable outstanding at June 30, 2014 are
as follows:
0
N
Year Ending c°>
June 30, Principal Interest Total
2015 $ 424,046 $ 244,680 $ 668,726
2016 435,114 233,468 668,582 a0
2017 446,470 221,963 668,433 to
2018 458,123 210,158 668,281
2019 470,080 204,180 674,260 a)
2020-2024 2,540,966 830,332 3,371,298 0
2025-2029 2,890,330 480,970 3,371,300
2030-2032 1,921,611 405,950 2,327,561 00 CL
Total $ 9,586,740 $ 2,831,701 $ 12,418,441 d
L
2012 San Bernardino Valley Municipal Water District Note °
�a
0
In July 2012, the Department closed escrow on the purchase of real property from the San Bernardino Valley Q
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.
0.
Q
The annual debt service requirements for the 2012 San Bernardino Valley Municipal Water District note
payable outstanding at June 30,2014 are as follows: a
c
0
Year Ending
0
June 30, Principal Interest Total
m
2015 $ 223,478 $ 5,749 $ 229,227
2016 225,723 3,504 229,227
.v
2017 227,990 1,238 229,228 cCa
c
Total $ 677,191 $ 10,491 $ 687,682 ii
0
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81 Packet Pg.792
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 v
iL
0
w
Note 8—Long-Term Liabilities(Continued)
0
Q
B. Business-type Activities (Continued)
State Revolving Fund Q
The State Water Resources Control Board issued a note to Santa Ana Watershed Authority to provide funding
the San Bernardino/Colton Rapid Infiltration Extraction (RIX) project in the amount of$25,978,599. In April =
2001, the agreement was amended to transfer the note obligation to the successors in interest being the City of ii
San Bernardino Board of Water Commissioners, and the City of Colton. The City Water Department will use M
revenues from the sewer treatment utility fund towards repayment of the note. The note matures in 2016 and LO
bear interest at a rate of 2.80%per annum.
T
The annual debt service requirements for the State Revolving Fund note payable outstanding at June 30, 2014 N
are as follows: M
m
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Year Ending
June 30, Principal Interest Total m
V
2015 $ 1,664,425 $ 94,475 $ 1,758,900 r-
W
2016 1,709,710 47,872 1,757,582
Total $ 3,374,135 $ 142,347 $ 3,516,482
0
1998 Refunding Sewer Revenue Certificates of Participation o
Q.
a>
In 1998, the sewer treatment utility issued $36,230,000 in Certificates of Participation to advance refund the
N
1992 Sewer Certificates of Participation and fund additional capital improvements. The 1992 Certificates o
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 until February 1, 2001, when the 1992 Certificates Q
were called at a prepayment premium of two percent. The City Water Department now pays the installment =
payments on the 1998 Certificates from the net revenues of the sewer treatment system. Interest is payable
semiannually on February 1, and August 1. The issue has interest rates ranging between 3.95% and 5.25% per
CL
annum,annual debt service payments ranging from$1,697,000 to$3,474,000,and a maturity date of 2017.
The annual debt service requirements for the 1999 Refunding Sewer Revenue Certificates of Participation -0
outstanding at June 30,2014 are as follows: M
t
0
Year Ending y
June 30, Principal Interest Total W
2015 $ 2,965,000 $ 474,412 $ 3,439,412
2016 3,155,000 318,750 3,473,750 c
2017 3,220,000 161,000 3,381,000 ii
Total $ 9,340,000 $ 954,162 $ 10,294,162 f0
0
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82 Packet Pg. 793
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
U_
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0
W
Note 8—Long-Term Liabilities(Continued) tf
0
a
C. Fiduciary Fund Financial Statements
Y
A summary of changes in the long-term liabilities of the fiduciary fund financial statements for the year ended Q
June 30,2014,is as follows:
U
C
Balance Classification =
July 1,2013 Debt Debt Balance Due within Due in More
as restated Issued Retired June 30,2014 One Year Than One Year N
Fiduciary Activities:
LO
Notes payable:
HUD Section 108-Cinema Project $ 3,015,000 $ - $ (460,000) $ 2,555,000 $ 490,000 $ 2,065,000 c
CMB Infrastructure Investment Group 33,000,000 - - 33,000,000 - 33,000,000 ct
0
Total notes payable 36,015,000 - (460,000) 35,555,000 490,000 35,065,000 M
d
Tax allocation bonds:
Series 1998A,Refunding 9,130,000 - (940,000) 8,190,000 985,000 7,205,000
a
Series 1998B,Refunding 4,590,000 - (395,000) 4,195,000 420,000 3,775,000 at
Series 2002A 2,945,000 - (80,000) 2,865,000 85,000 2,780,000 c
W
Series 2002,Refunding 20,015,000 - (1,260,000) 18,755,000 1,335,000 17,420,000
Series 2005A,Refunding 39,970,000 - (2,795,000) 37,175,000 2,955,000 34,220,000 }
C, Series 200513,Refunding 14,995,000 - (1,080,000) 13,915,000 1,140,000 12,775,000
Series 2006,Taxable 20,330,000 - (1,470,000) 18,860,000 1,555,000 17,305,000 t
Series 2010A 6,155,000 - (190,000) 5,965,000 200,000 5,765,000 C
Series 2010B 2,745,000 - (155,000) 2,590,000 150,000 2,440,000 y
Unamortized discount (609,533) - 50,517 (559,016) - (559,016)
Unamortized premium 952,158 - (73,243) 878,915 - 878,915 C
Total tax allocation bonds 121,217,625 - (8,387,726) 112,829,899 8,825,000 104,004,899
V
Mortgage revenue bonds: Q
Highland Senior Housing 1995 1,220,000 - (120,000) 1,100,000 - 1,100,000
Casa Ramona Senior Housing 1995 1,075,000 - (105,000) 970,000 - 970,000 V
c
Total mortgate revenue bonds 2,295,000 - (225,000) 2,070,000 - 2,070,000 d
CL
Certificates of participation: a
1999 Certificates of Participation 5,555,000 - (340,000) 5,215,000 360,000 4,855,000 c
Total certificates of participation 5,555,000 - (340,000) 5,215,000 360,000 4,855,000 c
cv
Total $165,082,625 $ - $ (9,412,726) $155,669,899 $ 9,675,000 $145,994,899
0
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83 Packet Pg. 794
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
U.
,0
Note 8—Long-Term Liabilities(Continued) V_
0
CL
C. Fiduciary Fund Financial Statements(Continued)
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HUD Section 108—Cinema Proiect Note Payable 0
Q
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The City of San Bernardino EDA and MDA-San Bernardino Associates, LLC (MDA) entered into a HUD
Section 108 Loan Agreement in December of 1998. The proceeds of the EDA Loan, together with other c
sources of funds, were used and applied by MDA for the payment of the costs of the development, E
construction, improvement and financing of a multi-screen cinema complex and related common area N
improvements. In order for the EDA to be able to make the loan, the EDA entered into a Contract for Loan LO
Guarantee Assistance, a Master 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 r
Housing and Community Development Act of 1974,as amended. N
0
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.
a�
The annual debt service requirements for the HUD Section 108 — Cinema Project note payable outstanding at
June 30,2014 are as follows: w
M
m
Year Ending `
June 30, Principal Interest Total
2015 $ 490,000 $ 60,116 $ 550,116 O.
2016 530,000 49,876 579,876 0
2017 560,000 36,598 596,598
2018 605,000 20,347 625,347 p N
2019 370,000 5,772 375,772
0
Total $ 2,555,000 $ 172,709 $ 2,727,709 Q
c
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CMB Infrastructure Investment Group Notes Payable
a
d
On October 5, 2009, the former EDA entered into a Loan Agreement (Loan) for borrowing funds from CMB
Infrastructure Investment Group III, in the amount of$15,000,000, in accordance with the Employment-Based n
Immigration Fifth Preference (EB-5) Immigrant Investor Visa Program. The Note matures on September 30, M
2015.Interest only payments are due on the first day of each quarter at the rate of 5.25%per annum. c
CL
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0
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84 Packet Pg. 795
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 v
N
U_
L
O
Note 8—Long-Term Liabilities(Continued) L
O
Q
C. Fiduciary Fund Financial Statements (Continued)
=a
CMB Infrastructure Investment Group Notes Payable(Continued) :3
Q
�o
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 U=
each quarter at the rate of 5.25%per annum. N
M
LO
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 r
Investor Visa Program. The Note matures on January 1,2018. Interest only payments are due on the first day of N
each quarter at the rate of 5.25%per annum. CD
m
c
As of June 30,2014, $33,000,000 has been drawn against the Loans.
-a
a�
The annual debt service requirements for the CMB Infrastructure Investment Group notes payable outstanding
at June 30,2014 are as follows: w
L
Year Ending
June 30, Principal Interest Total 0
2015 $ - $ 1,732,500 $ 1,732,500 a
2016 15,000,000 1,338,750 16,338,750 tr
2017 18,000,000 735,000 18,735,000
i
Total $ 33,000,000 $ 3,806,250 $ 36,806,250 0
Tax Allocation Refunding Bonds,Series 1998A Q
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The$19,000,000 of tax allocation refunding bonds,issue of 1998, Series A,consist of serial bonds with varying m
interest rates from 3.600% to 5.750% per annum. Interest is payable semiannually on January 1 and July 1. aai
Serial bonds mature annually on July 1 through July 1,2020.
a
The proceeds of the 1998 Series A Tax Allocation Refunding Bonds along with the proceeds of the 1998 Series
B Subordinated Tax Allocation Refunding Bonds were used to advance refund $20,990,000 of outstanding c
Central City Project Tax Allocation Refunding Bonds, 1991 Series A and $4,005,000 of outstanding Central m
City Project Subordinated Tax Allocation Bonds 1991 Series B.
The Series A bonds are not subject to optional redemption. The bonds are secured by a pledge of property tax
cc
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 U.
$1,456,515. The balance held in the reserve account as of June 30, 2014 was $1,452,208.. At June 30, 2014,
c
$8,190,000 of the bonds were outstanding. _
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85 Packet Pg. 796
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
U_
0
Note 8—Long-Term Liabilities (Continued) t
0
Q.
C. Fiduciary Fund Financial Statements (Continued)
Tax Allocation Refunding Bonds, Series 1998A(Continued) Q
The annual debt service requirements for the Tax Allocation Refunding Bonds, Series 1998A outstanding at
June 30,2014 are as follows: _
U_
Year Ending N
June 30, Principal Interest Total v
2015 $ 985,000 $ 442,606 $ 1,427,606
2016 1,040,000 384,388 1,424,388 c
2017 1,100,000 322,863 1,422,863 a
0
2018 1,160,000 257,888 1,417,888 M
m
2019 1,230,000 189,175 1,419,175
2020-2021 2,675,000 155,969 2,830,969
Total $ 8,190,000 $ 1,752,889 $ 9,942,889 m
c
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Tax Allocation Refunding Bonds, Series 1998B
as
The $8,590,000 of subordinated tax allocation refunding bonds, issue of 1998 Series B, consists of$4,815,000 ,o
of serial bonds with varying interest rates from 4.500% to 5.875% per annum and $3,775,000 of term bonds, c
bearing interest at 6.000% per annum. Interest is payable semiannually on January 1 and July 1. Serial bonds C
mature annually on July 1 through July 1, 2014. Term bonds are due July 1, 2020, and shall be called and
redeemed before maturity from money deposited into the Term Bond Sinking Fund on July 1, 2015, to July 1, c
2020,without premium.
a
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 of outstanding Central City Project �
Tax Allocation Refunding Bonds, 1991 Series A and $4,005,000 of outstanding Central City Project m
Subordinated Tax Allocation Bonds, 1991 Series B. a
m
c
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 c
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.As of June 30,2014,the reserve requirement
was $639,012 and the amount actually held in the reserve account was $634,630.At June 30,2014, $4,195,000
of the bonds were outstanding.
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86 Packet Pg. 797
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
0
Note 8—Long-Term Liabilities (Continued)
0
Q
C. Fiduciary Fund Financial Statements (Continued)
=a
Tax Allocation Refunding Bonds,Series 1998B (Continued) '
Q
The annual debt service requirements for the Tax Allocation Refunding Bonds, Series 1998B outstanding at
June 30,2014 are as follows: f0
c
U_
Year Ending N
June 30, Principal Interest Total LO
2015 $ 420,000 $ 238,838 $ 658,838
2016 445,000 213,150 658,150 c
2017 470,000 185,700 655,700 N
0
2018 500,000 156,600 656,600 M
4)
2019 530,000 125,700 655,700
2020-2021 1,830,000 131,100 1,961,100
Total $ 4,195,000 $ 1,051,088 $ 5,246,088 d
c
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Tax Allocation Bonds, Series 2002A
In January 2002, the San Bernardino Joint Powers Financing Authority issued $3,635,000 in tax allocation 0
bonds to fund certain capital improvement projects in the Mount Vernon Project Area, to fund a reserve fund, o
and to pay costs of issuance of the bonds. Interest on the bonds is payable June 1, 2002, and semi-annually
thereafter on June 1 and December 1 of each year at 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 o
installments are payable annually on December 1 ranging in amount from $50,000 to $445,000 through
December 1,2031.
Q
Term bonds maturing on December 1, 2012, are subject to mandatory prepayment, on each December 1,
commencing on December 1, 2007, through December 1, 2012. Term bonds maturing on December 1, 2021, a
are subject to mandatory prepayment on each December 1, commencing on December 1, 2013, through C
December 1, 2021. Term bonds maturing on December 1,2031, are subject to mandatory prepayment, on each 0
December 1,commencing on December 1,2022. -0
c
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A reserve account is required to be maintained in the amount of$263,625. The balance held in the reserve o
account as of June 30,2014,was$259,258.At June 30,2014,$2,865,000 of the bonds were outstanding. C
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87 Packet Pg. 798
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
L
0
Note 8—Long-Term Liabilities(Continued) t
0
a
C. Fiduciary Fund Financial Statements(Continued)
w
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Tax Allocation Bonds, Series 2002A(Continued) Q
70
The annual debt service requirements for the Tax Allocation Bonds, Series 2002A outstanding at June 30, 2014
are as follows:
c
U_
Year Ending N
June 30, Principal Interest Total LO
v
2015 $ 85,000 $ 173,400 $ 258,400
2016 90,000 168,150 258,150 c
2017 95,000 162,600 257,600 N
0
2018 100,000 156,750 256,750 M
m
2019 105,000 150,600 255,600 3
2020-2024 645,000 644,450 1,289,450
2025-2029 875,000 411,525 1,286,525
2030-2032 870,000 95,790 965,790 W
Total $ 2,865,000 $ 1,963,265 $ 4,828,265
C Tax Allocation Refunding Bonds,Series 2002 ,o
t=
In April 2002, the San Bernardino Joint Powers Financing Authority issued $30,330,000 in tax allocation C
refunding bonds to refund the 1995B Tax Allocation Bonds, to finance certain redevelopment activities in the W
former EDA's project areas, to fund a reserve fund for the bonds, fund the interest account, and pay costs of c
issuance of the bonds. As a result, the refunded bonds are considered defeased and the liability has been
removed from the financial statements.
a
The bonds consist of term bonds of$7,100,000 maturing from 2013 to 2018 in annual installments ranging -0
from $1,190,000 to $1,500,000, term bonds of$3,475,000 maturing from 2019 to 2020 in annual installments d
ranging from $1,685,000 to $1,790,000, and term bonds of$9,440,000 maturing from 2021 to 2026 in annual d
installments ranging from$1,120,000 to$2,770,000.Interest is payable semi-annually on October 1 and April I
at rates ranging from 3.25%to 5.625%per annum. a
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The term bonds maturing on April 1,2018,are subject to mandatory prepayment,on each April 1, commencing c
on April 1, 2013, through April 1, 2018. Term bonds maturing on April 1, 2020, are subject to mandatory m
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.
c
The former EDA agreed to pay the Authority principal and interest payments solely from the EDA's surplus tax E
revenues from the Central City North, State College No. 4, Southeast Industrial Park,Northwest, South Valle, U_
Uptown and Tri-City Redevelopment Project Areas.
C
A reserve account is required to be maintained in the amount of$2,683,230. The balance held in the reserve a
account as of June 30,2014,was$1,977,290.At June 30,2014, $18,755,000 of the bonds were outstanding. d
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88 Packet Pg. 799
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014 N
U.
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Note 8—Long-Term Liabilities (Continued) t
0
0-
C. Fiduciary Fund Financial Statements(Continued)
Tax Allocation Refunding Bonds, Series 2002 (Continued) '
Q
�a
The annual debt service requirements for the Tax Allocation Refunding Bonds, Series 2002 outstanding at June
30,2014 are as follows: o
c
LL
Year Ending N
June 30, Principal Interest Total LO
2015 $ 1,335,000 $ 1,187,776 $ 2,522,776
2016 1,415,000 1,107,676 2,522,676 0
2017 1,500,000 1,022,776 2,522,776 N
0
2018 1,590,000 932,776 2,522,776 Cl)
d
2019 1,685,000 837,376 2,522,376
2020-2024 8,215,000 2,458,084 10,673,084
2025-2026 3,015,000 317,670 3,332,670
Total $ 18,755,000 $ 7,864,134 $ 26,619,134 0
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Tax Allocation Refunding Bonds, Series 2005A
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In September 2005, the San Bernardino Joint Powers Financing Authority issued $55,800,000 in tax allocation o
refunding bonds to current refund$55,800,000 of the outstanding 1995A Tax 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 c
Bonds are considered to be defeased and the liability has been removed from the financial statements.
0
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.
Q.
d
The Series 2005A bonds are not subject to optional redemption. The former EDA agreed to pay 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 M
Areas. 0
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0
Q.
d
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 30,2014 was $2,087,639.At June 30, 2014, $37,175,000 of the bonds were outstanding. Ca
c
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The reacquisition price exceeded the net carrying amount of the old debt by $1,116,000. This amount is being E
netted against the new debt and being amortized over the life of the new debt. The advance refunding resulted U_'
in an increase in debt service payments over the next 20 years of$18,089 and resulted in an economic gain of =
$1,940,000. Q
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89 Packet Pg. 800
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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0
Note 8—Long-Term Liabilities(Continued)
0
Q.
C. Fiduciary Fund Financial Statements(Continued)
�a
Tax Allocation Refunding Bonds,Series 2005A(Continued) Q
The annual debt service requirements for the Tax Allocation Refunding Bonds, Series 2005A outstanding at U
June 30,2014 are as follows:
c
U_
Year Ending N
June 30, Principal Interest Total v
2015 $ 2,955,000 $ 2,137,563 $ 5,092,563
2016 3,125,000 1,967,650 5,092,650 0
2017 3,305,000 1,787,963 5,092,963 N
0
2018 3,495,000 1,597,925 5,092,925 Cl)
a�
2019 3,695,000 1,396,963 5,091,963
2020-2024 15,625,000 3,891,025 19,516,025
2025-2026 4,975,000 432,975 5,407,975
Total $ 37,175,000 $ 13,212,064 $ 50,387,064
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0
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Tax Allocation Revenue Refunding Bonds,Series 2005B >-
o
In September 2005,the San Bernardino Joint Powers Financing Authority issued $21,105,000 in tax allocation o
refunding bonds to current refund$21,105,000 of the outstanding 1995A Tax Allocation Refunding Bonds.The
remaining portion of the 1995A Bonds was refunded with the proceeds of the Authority's Tax Allocation
Refunding Bonds, Series 2005A (see preceding section). As a result, the 1995A Tax Allocation Refunding o
Bonds are considered to be defeased and the liability has been removed from the financial statements. 2
0
The Series 2005B 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 0a
October 1,2025.
0
CL
a>
The Series 2005B bonds are not subject to optional redemption. The former EDA agreed to pay the Authority 0
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.
0
a�
A reserve account is required to be maintained in the amount of$490,000. The balance held in the reserve
account as of June 30,2014 was$820,734.At June 30,2014,$13,915,000 of the bonds were outstanding.
U
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fC
The reacquisition price exceeded the net carrying amount of the old debt by $422,100. This amount is being =
netted against the new debt and being amortized over the life of the new debt. "-
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0
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90 Packet Pg. 801
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
U_
0
Note 8—Long-Term Liabilities (Continued) 0
0
CL
C. Fiduciary Fund Financial Statements(Continued)
w
Tax Allocation Refunding Bonds,Series 2005B (Continued) '
Q
The annual debt service requirements for the Tax Allocation Refunding Bonds, Series 2005B outstanding at
June 30,2014 are as follows:
c
U_
Year Ending N
June 30, Principal Interest Total LO
2015 $ 1,140,000 $ 800,113 $ 1,940,113
2016 1,205,000 734,563 1,939,563 0
2017 1,275,000 665,275 1,940,275 N
0
2018 1,350,000 591,963 1,941,963 M
m
2019 1,425,000 514,338 1,939,338
2020-2024 5,715,000 1,395,238 7,110,238
2025-2026 1,805,000 157,263 1,962,263 Q
Total $ 13,915,000 $ 4,858,753 $ 18,773,753
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Tax Allocation Bonds,Taxable Series 2006 0
In April 2006,the San Bernardino Joint Powers Financing Authority issued$28,665,000 in tax allocation bonds d
to fund the acquisition, demolition and relocation of certain occupants of the Central City North Project Area W
and provide for other redevelopment activities within the City of San Bernardino, as provided in the c
Redevelopment Plan, fund the reserve fund,and pay costs of issuance associated with the bonds.
The 2006 bonds consist of term bonds of $4,665,000 maturing from 2012 to 2016 in annual installments
ranging from $1,315,000 to $1,640,000, and term bonds of$15,665,000 maturing from 2017 to 2027 in annual D
installments ranging from $1,015,000 to $1,850,000. Interest is payable semi-annually on May 1 and m
November 1 at interest rates ranging from 5.20%to 6.15%per annum.
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 EDA, at par, plus accrued interest, c
without premium. m
o:
The former EDA agreed to pay the Authority principal and interest payments solely from the EDA's Housing T
Revenues from the Central City North, Central City Merged, Central City West, Mount Vernon, State College
Project No. 4, Southeast Industrial Park, Northwest, South Valle, Uptown, 40`" Street and Tri-City E
Redevelopment Project Areas. U.
�a
c
A reserve account is required to be maintained in the amount of$2,698,116. The balance held in the reserve a
account as of June 30,2014 was $2,444,972.At June 30,2014,$18,860,000 of the bonds were outstanding.
LO, c
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91 Packet Pg. 802
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
U.
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0
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Note 8-Long-Term Liabilities (Continued)
0
Q.
C. Fiduciary Fund Financial Statements (Continued)
Tax Allocation Bonds,Taxable Series 2006 (Continued) 0
Q
Ta
The annual debt service requirements for the Tax Allocation Bonds, Taxable Series 2006 outstanding at June
30,2014 are as follows: 16
LL
Year Ending N
June 30, Principal Interest Total �
2015 $ 1,555,000 $ 1,143,116 $ 2,698,116
2016 1,640,000 1,055,648 2,695,648 T
2017 1,730,000 963,398 2,693,398 N
2018 1,840,000 857,003 2,697,003 °
M
2019 1,850,000 743,843 2,593,843 =
2020-2024 6,860,000 2,180,483 9,040,483
2025-2027 3,385,000 416,663 3,801,663 -p
Total $ 18,860,000 $ 7,360,154 $ 26,220,154
W
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Tax Allocation Bonds,Series 2010A
In December 2010, the San Bernardino Joint Powers Financing Authority issued $7,065,000 in tax allocation
bonds to finance certain redevelopment activities of the 4 Street Corridor project, to fund a reserve fund for 0
the bonds, fund the interest account,and pay all costs of issuance related to the bonds. 0
0
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, a
2030. Interest is payable semi-annually on April I and October 1 at rates ranging from 3.5% to 9.3% per =
annum.
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d
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 c
prepayment, on each April 1, commencing on April 1, 2016, through 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 11 2030. c.
d
The former EDA agreed to pay the Authority principal and interest payments solely from the Tax Revenues -
from the Northwest Redevelopment Project Area.
c
A reserve account is required to be maintained in the amount of$686,974. The balance held in the reserve U_
account as of June 30,2014,was$685,488.At June 30,2014, $5,965,000 of the bonds were outstanding.
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92 Packet Pg. 803
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
U.
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0
Note 8—Long-Term Liabilities(Continued)
0
Q.
C. Fiduciary Fund Financial Statements (Continued)
w
Tax Allocation Bonds, Series 2010A(Continued)
Q
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The annual debt service requirements for the Tax Allocation Bonds, Series 2010A outstanding at June 30, 2014
are as follows: ca
LL
Year Ending N
June 30, Principal Interest Total ce)
2015 $ 200,000 $ 517,750 $ 717,750
2016 210,000 506,750 716,750 r
2017 225,000 491,000 716,000 N
2018 240,000 474,125 714,125
M
2019 260,000 456,125 716,125
2020-2024 1,645,000 1,938,663 3,583,663
2025-2030 3,185,000 1,107,225 4,292,225 p
Total $ 5,965,000 $ 5,491,638 $ 11,456,638
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Tax Allocation Bonds,Series 2010B
L
In January 2011, the San Bernardino Joint Powers Financing Authority issued $3,220,000 in tax allocation °
bonds to finance certain redevelopment activities of the Northwest project area, to fund a reserve fund for the o
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 o
1, 2028 in annual installments ranging from $25,000 to $690,000. Term bonds of$925,000 are due on April 1, T3
2020 and term bonds of$1,820,000 are due on April 1, 2028. Interest is payable annually on April 1 at rates Q
ranging from 3.0%to 7.0%per annum. _
a�
The term bonds maturing in April 2020 are subject to mandatory prepayment, on each April 1, commencing on a
April 1, 2013, through April 1, 2020. Term bonds maturing on April 1, 2028, are subject to mandatory
prepayment, on each April 1, commencing on April 1, 2021,through April 1,2028. c
The former EDA agreed to pay the Authority principal and interest payments solely from the EDA's tax
revenues from the Northwest Redevelopment Project Area. o
Q.
A reserve account is required to be maintained in the amount of $309,567. The balance held in the reserve
account as of June 30,2014,was $306,699.At June 30,2014, $2,590,000 of the bonds were outstanding.
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93 Packet Pg.804
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014 N
LL
I-
O
Note 8-Long-Term Liabilities (Continued)
O
a
C. Fiduciary Fund Financial Statements(Continued)
=a
Tax Allocation Bonds,Series 2010B (Continued) '
Q
The annual debt service requirements for the Tax Allocation Bonds, Series 2010B outstanding at June 30, 2014
are as follows: R
LL
Year Ending N
June 30, Principal Interest Total Cl)
d'
2015 $ 150,000 $ 173,600 $ 323,600
2016 145,000 164,600 309,600
2017 135,000 155,900 290,900 N
2018 125,000 147,800 272,800 c
M
2019 115,000 140,300 255,300 c
2020-2024 330,000 611,500 941,500
2025-2028 1,590,000 364,350 1,954,350
Total $ 2,590,000 $ 1,758,050 $ 4,348,050
W
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Highland Senior Housing 1995 Mortgage Revenue Bonds
L
The Multifamily Housing Revenue Bonds 1995 Series (Highland Lutheran Senior Housing Project)were issued °
on June 29, 1995 for $1,220,000. The mortgage revenue bonds are special obligations payable solely from o
CL
payments made on and secured by a pledge of the acquired mortgage loans and certain reserve funds and other
monies in connection therewith, all pledged under the resolution authorizing the issuance of the bonds. The N
Bonds shall mature on July 1, 2015 and shall bear interest at the rate of 7.625% per annum. Interest is payable o
annually on July 1. The bonds are payable from revenues or assets of the EDA. Multifamily Housing Revenue
Bonds(Highland Lutheran Senior Housing Project) 1995 Series mortgage revenue bonds outstanding as of June Q
30,2014 are $1,100,000.
c
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The annual debt service requirements for the Highland Senior Housing Mortgage Revenue bonds outstanding at m
CL
June 30,2014 are as follows:
c
Year Ending C
June 30, Principal Interest Total
2015 $ - $ 41,938 $ 41,938 O
2016 65,000 81,397 146,397 y
2017 70,000 76,250 146,250
2018 80,000 70,531 150,531
U
2019 85,000 64,241 149,241 =
R
2020-2024 525,000 211,022 736,022
2025-2026 275,000 21,541 296,541 L
Total $ 1,100,000 $ 566,920 $ 1,666,920 O
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94 Packet Pg. 805
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 U
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0
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Note 8—Long-Term Liabilities(Continued)
0
a
C. Fiduciary Activities(Continued)
Casa Ramona Senior Housing 1995 Mortgage Revenue Bonds Q
The Multifamily Housing Revenue Bonds 1995 Series (Casa Ramona Senior Housing Complex Project) were
issued on June 29, 1995 for $1,075,000. The mortgage revenue bonds are special obligations payable solely c
from payments made on and secured by a pledge of the acquired mortgage loans and certain reserve funds and iL
other monies in connection therewith, all pledged under the resolution authorizing the issuance of the bonds. N
The Bonds shall mature on July 1, 2015 and shall bear interest at the rate of 7.875% per annum. Interest is In
payable annually on July 1. The bonds are payable from revenues or assets of the EDA. Multifamily Housing !-
Revenue Bonds (Casa Ramona Senior Housing Project) 1995 Series mortgage revenue bonds outstanding as of c
June 30,2014 are$970,000. N
0
M
The annual debt service requirements for the Casa Ramona Senior Housing 1995 Mortgage Revenue bonds =
outstanding at June 30,2014 are as follows:
m
Year Ending
June 30, Principal Interest Total W
L
2015 $ - $ 38,194 $ . 38,194 O
d
2016 60,000 74,025 134,025 }
® ` 2017 65,000 69,103 134,103 w
2018 70,000 63,788 133,788
O
2019 75,000 58,078 133,078 d
2020-2024 460,000 190,181 650,181
2025-2026 240,000 19,294 259,294 h
Total $ 970,000 $ 512,663 $ 1,482,663 r
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1999 Certificates of Participation
CD
On September 23, 1999, the San Bernardino Joint Powers Financing Authority issued $15,480,000 of a
Refunding Certificates of Participation (Certificates). The Certificates were issued to retire $2,325,000 -0a
outstanding of Refunding Certificates of Participation (South Valle Public Improvement Project) dated c
April 1, 1987, and $5,910,000 outstanding of Certificates of Participation (1995 Police Station Financing c
Project)dated April 1, 1995, and to provide funds for capital improvements(201 Building Projects).
0
The Certificates mature on September 1 of each year through September 1, 2024, in amounts ranging from 0
$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 annum set forth in the bond
documents and will represent the sum of the portions of the lease payments designated as interest coming due c
during the six months preceding each interest payment date. The interest rates will range approximately from S U.
3.70%to 5.50%per annum.
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95 Packet Pg. 806
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
U_
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0
4-
Note 8-Long-Term Liabilities(Continued) L
0
Q
C. Fiduciary Activities(Continued)
1999 Certificates of Participation(Continued) '
Q
cc
The Certificates maturing on September 1, 2020, are subject to mandatory sinking fund 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 Agreements with respect to each such U_
redemption date, at a redemption price equal to the principal amount thereof to be redeemed, together with N
interest accrued thereon to the date fixed for redemption, without premium, in accordance with the terms to
identified in the bond documents. The Certificates maturing on September 1, 2024, are subject to mandatory 1-
sinking fund redemption in part on September 1, 2021, from the principal components of the lease payments c
required to be paid by the City pursuant to the Lease Agreements with respect to each such redemption date, at N
a redemption price equal to the principal amount thereof to be redeemed,together with interest accrued thereon M
to the date fixed for redemption, without premium, in accordance with the terms identified in the bond c
documents.
m
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 the maximum W
L
annual debt service. At June 30, 2014, the reserve requirement was $1,147,000 and the amount actually held m
in the reserve account was $1,079,222. The total outstanding balance of the Certificates at June 30, 2014, L
was $9,225,000 of which $5,215,000 is reported as a long-term liability of the Successor Agency, which is w
the portion of the Certificates that represent the South Valle Refunding and 201 Building Projects portions. 0
Repayments of these portions of the Certificates are funded from the Redevelopment Property Tax Trust d
Fund, as a result of the dissolution of the redevelopment agency. The remaining $4,010,000 outstanding H
balance of the Certificates at June 30, 2014 is reported as a long-term liability of the City, which is the c
portion of the Certificates that represents the Police Station portion.
Q
The annual debt service requirements for the 1999 Certificates of Participation outstanding at June 30,2014 are =
as follows:
zs
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m
Year Ending d
June 30, Principal Interest Total
2015 $ 360,000 $ 276,925 $ 636,925 c
2016 380,000 256,574 636,574
2017 400,000 235,125 635,125 0
O
2018 420,000 212,575 632,575 CL
d
2019 440,000 188,925 628,925
2020-2025 3,215,000 557,840 3,772,840
.v
Total $ 5,215,000 $ 1,727,964 $ 6,942,964 M
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96 Packet Pg. 807
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
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Note 9—Operating Leases o
Q.
Effective December 15, 2008, the City's Water Department took possession of leased space from Superior Homes W
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 terms of 5 years apiece for up to a total of 15 years. The following is a schedule of Q
minimum lease payments as of June 30,2014.
c
Year Ending Water Sewer
c
June 30, Utility Utility Total LL
2015 $ 228,408 $ 31,152 $ 259,560 N
2016 228,408 31,152 259,560
2017 228,408 31,152 259,560
2018 228,408 31,152 259,560
r
Total $ 913,632 $ 124,608 $ 1,038,240 N
0
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7
Note 10—Compensated Absences
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City employees receive between 10 and 25 vacation days each year depending upon length of service.An employee w
may accumulate earned vacation time to a maximum not to exceed 60 days. Upon termination, employees are paid L_
the full value of their unused vacation time determined at their 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 L Jq
S can convers unused sick leave to a post-employment health care plan or a 401(a)retirement plan as follows: Jq
288 hours or fewer accrued = 0; 289-479 hours accrued= 20% of accrued sick leave; 480-959 hours = 25%; 960 °a
hour or more=35%.Prior to the Mayor and Common Council adoption of the Side Letter Agreements to the City's
bargaining groups' Memoranda of Understanding, all bargaining groups were paid 50% of their accrued sick leave
balances at the time of separation.During fiscal year 2013,the City suspended leave accrual payments for separated 0
employees. The unpaid leave is included in the total compensated absences balance outstanding as of June 30, 5
2014. a
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A. Governmental Activities a
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A summary of changes in the compensated absences balances for the governmental activities for the year ended a
June 30,2014 is as follows:
Classification C
R
Balance Balance Due within Due in More t
July 1,2013 Additions Deletions June 30,2014 One Year Than One Year d
Compensated absences $ 12,048,192 $ 2,133,013 $ (2,803,355) $ 11,377,850 $ 3,413,355 $ 7,964,495 Ix
Total $ 12,048,192 $ 2,133,013 $ (2,803,355) $ 11,377,850 $ 3,413,355 $ 7,964,495 to
c
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Compensated absences in the governmental activities are obligations of the following funds:
LL
Governmental Funds $ 10,913,924
Liability Insurance 45,368 Q
Motorpool 136,753
Telephone Support 11,359
Information Systems 258,871 E
Utility 7,234 v
Central Services 4,341
Total $ 11,377,850 Q
97 Packet Pg. 808
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 10—Compensated Absences(Continued)
0
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B. Business-type Activities
A summary of changes in the compensated absences balances for the business-type activities for the year ended Q
June 30,2014 is as follows: 6
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Classification
c
Balance Balance Due within Due in More W
July 1,2013 Additions Deletions June 30,2014 One Year Than One Year N
M
Compensated absences $ 2,104,751 $ 882,889 $ (1,078,307) $ 1,909,333 $ 882,108 $ 1,027,225
Total $ 2,104,751 $ 882,889 $ (1,078,307) $ 1,909,333 $ 882,108 $ 1,027,225
T
0
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Compensated absences in the business-type activities are obligations of the following funds: 0
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Integrated Waste Fund $ 466,075
Water Fund 1,076,591
Sewer Fund 366,667
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Total $ 1,909,333 w
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C. Fiduciary Fund Financial Statements o
A summary of changes in the compensated absences balances for the fiduciary fund financial statements for the 0 CL
year ended June 30,2014 is as follows:
Classification _o
Balance Balance Due within Due in More a
July 1,2013 Additions Deletions June 30,2014 One Year Than One Year Q
.r
Compensated absences $ 279,814 $ - $ (194,133) $ 85,681 $ 85,681 $ - 5
Total $ 279,814 $ - $ (194,133) $ 85,681 $ 85,681 $ -
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All compensated absences liabilities in the fiduciary fund financial statements belong to the Redevelopment
Obligation Retirement Fund(Successor Agency). c
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Note 11—Claims and Judgments Payable
The City of San Bernardino is self-insured for its liability, unemployment and long-term disability programs. The r
accrued liability for estimated claims represents an estimate of the eventual loss on claims arising prior to year-end C
including claims incurred but not yet reported and estimates of loss adjustment expense.
U_
Currently,the City is a member of the Big Independent Cities Excess Pool(BICEP), which covers general liability c
claims. BICEP pools catastrophic general liability, automobile liability, and public officials' errors and omissions a
losses. BICEP intends to pool covered catastrophic losses incurred by 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 r
catastrophic losses of all the members. In addition, the cost of a member city will also depend on that member's r
own loss experience. Entities with a consistent record of costly claims will pay more than entities with a consistent
record of limited serious claims activity. The following public entities are members of BICEP: Huntington Beach, a
Oxnard,West Covina, San Bernardino and Santa Ana.
98 Packet Pg. 809
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 0
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Note 11—Claims and Judgments Payable(Continued)
0
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For liability claims, the City is self-insured for the first $1 million. The first million in excess of the self-insured
limit is divided up proportionately among the BICEP members. In addition, the City has obtained excess liability
coverage using a tiered system with three carriers totaling$25 million per occurrence.
76
The City is a member of the CSAC Excess Insurance Authority (the Authority) for its workers' compensation
claims. For these claims, the City is self-insured for the first $1 million. The 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 ii.
and Authority coverage, the City has obtained an additional $45 million in liability coverage from ACE American N
Insurance Company. LO
Settled claims for general liability and workers' compensation have not exceeded insurance coverage during the r
past three years. N
0
M
A. Governmental Activities =
Changes in the general liability claims liability for the governmental activities for the years ended June 30, m
2014,2013,and 2012,are as follows:
W
L
Beginning of Prior Claims and Balance at y
Fiscal Year Period Changes in Claims Fiscal Year >'
Liability Adjustment Estimates Payments End w
2011-2012 $ 9,733,570 $ - $ 741,863 $ (2,153,183) $ 8,322,250 0
2012-2013 8,322,250 - (200,200) (633) 8,121,417 Q.
d
2013-2014 8,121,417 3,978,808 3,704,890 (1,852,445) 13,952,670
N
a.
Changes in the workers' compensation claims liability for the governmental activities for the years ended
'a
June 30,2014,2013,and 2012,are as follows: 0
a
c
Beginning of Prior Claims and Balance at �
Fiscal Year Period Changes in Claims Fiscal Year d
Liability Adjustment Estimates Payments End d
2011-2012 $ 10,408,449 $ - $ 4,889,070 $ (2,697,797) $ 12,599,722
c
2012-2013 12,599,722 - 13,135,834 (3,121,931) 22,613,625 -p
2013-2014 22,613,625 (5,044,419) 8,142,403 (4,791,785) 20,919,824
O
B. Business-type Activities m
Changes in the workers' compensation claims liability for the business-type activities for the years ended �a
June 30,2014,2013,and 2012,are as follows:
c
Beginning of Claims and Balance at LL
R
Fiscal Year Changes in Claims Fiscal Year =
Liability Estimates Payments End c
a
2011-2012 $ 288,683 $ 233,438 $ (97,680) $ 424,441
2012-2013 424,441 623,037 (210,404) 837,074 E
2013-2014 837,074 545,631 (383,102) 999,603
ca
The City maintains third party insurance coverage for general liability claims in business-type activities. a
99 Packet Pg. 810
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014
U-
L
O
W
Note 12—Fund Balance Classification
0
c.
The City classifies fund balances,as shown on the Balance Sheet—Governmental Funds,as follows as of June 30,
2014:
Q
Major Funds
Low and
Federal Moderate cco
and State Income Sales and Other =
U-
General Grants Housing Road Governmental
Fund Fund Fund Fund Funds Total M
W)
Nonspendable
Notes receivable $ - $ 3,337,628 $ 38,719,786 $ - $ - $ 42,057,414 v
7-
Deposits - 200,000 - - 200,000 N
Prepaids 415,286 32,966 - - 8,000 456,252 0
Advances to other funds - - 116,800 - 147,600 264,400 M
d
Property held for resale - 16,296,266 18,425,466 - - 34,721,732 c
3
Total nonspendable 415,286 19,666,860 57,462,052 - 155,600 77,699,798
d
Restricted
Housing - - 590,503 - - 590,503 1 j
Special revenues - - - 7,206,491 10,088,628 17,295,119 -
Debt service 1,208,016 - - - 6,725 1,214,741
Capital projects - - - - 20,826,573 20,826,573 L
w
Total restricted 1,208,016 - 590,503 7,206,491 30,921,926 39,926,936
Committed C
Q
d
Animal control 822,861 - - - - 822,861 W
Baseball field - - - - - - N
t
Soccer field 616,270 - - - - 616,270 0
Total committed 1,439,131 - - - - 1,439,131
Unassigned(deficit) 10,327,070 (24,667) - - (657,655) 9,644,748 c
Total fund balances $ 13,389,503 $ 19,642,193 $ 58,052,555 $ 7,206,491 $ 30,419,871 $ 128,710,613 d
.c
Q
d
CL
at
c
a
c
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100 Packet Pg. 811
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
U_
L
W
Note 13—Fund Deficits and Expenditures in Excess of Appropriations
0
CL
A. Deficit Net Position/Fund Balances
At June 30,2014,the Governmental Activities on the Statement of Net Position had an unrestricted net position Q
deficit of($74,661,663).
U
C
At June 30, 2014, the following funds had a fund balance (deficit) or unrestricted net position (deficit), which
will be eliminated through the through the reduction in future expenditures and/or the use of new funding U.
sources: c�
M
LO
Fund Type Funds Deficit
Enterprise Integrated Waste Fund $ (2,309,785) c
Debt Service Assessment District#1015 Fund (210,862) N
0
Capital Projects Street Construction Fund (446,793) Cl)
Internal Service Workers'Compensation Fund (20,009,355) c
Internal Service Liability Insurance Fund (9,536,141)
Internal Service Utility Fund (277,431) y
Fiduciary Successor Agency to the Economic Development $ (42,268,414) _
Agency of San Bernardino Private-purpose W
L
Trust Fund
d
As of June 30, 2014,the General Fund does not have the financial capacity to fund such accumulated deficits. 4.-
�
Therefore, management expects that funding for the accumulated deficits will be accomplished over a period 0 CL
of years. The accumulated deficits of the Workers' Compensation Internal Service Fund and the Liability
Insurance Internal Service Fund are due to higher claims experienced over a period of years,-versus amounts (a
charged to the various departments. Both these funds operate on a pay-as-you-go basis; as such the deficits in o
these funds are expected to change as claims are made. Management has paid and expects to pay for all
accepted claims as and when they become due. Q
c
d
a
Note 14—Net Investment in Capital Assets a
d
The Government-wide Statement of Net Position reports net investment in capital assets as follows: c
v
Governmental Business-type
Activities Activities Total
0
Total capital assets,net $ 395,623,182 $ 245,807,197 $ 641,430,379 y
Plus note proceeds held by State - 746,201 746,201
Less related debt: 0
Capital leases payable (1,220,130) (4,792,949) (6,013,079)
Notes payable (11,528,863) (26,174,480) (37,703,343) E
U.
Lease revenue bonds (6,925,000) - (6,925,000)
California Infrastructure (5,306,998) - (5,306,998) _
Certificates of participation (4,010,000) (9,292,368) (13,302,368)
Q
Net investment in capital assets $ 366,632,191 $ 206,293,601 $ 572,925,792
d
s
eo
Q
101
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
LL
0
w
Note 15—Defined Benefit Pension Plan
0
CL
The City of San Bernardino (excluding water) contributes to; the Safety Plan of the City of San Bernardino, the Ix
Miscellaneous Plan of the City of San Bernardino, and the Miscellaneous Plan of the San Bernardino Economic
Development Agency, which are all part of the Public Agency portion of the California Public Employees' a
Retirement System (CalPERS), and the City of San Bernardino Retirement Enhancement Plan, a customized
supplemental retirement plan administered by Public Agency Retirement Services(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, supplemental retirement benefits in addition to the benefits employees will receive from the ii
California Public Employees' Retirement System(CalPERS).
M
LO
CalPERS is an agent multiple-employer agency trust, that acts as a common investment and administrative agent v
for participating public entities in the State of California,providing retirement and disability benefits,annual cost of r
living adjustments, and death benefits to plan members and beneficiaries. CalPERS benefits are payable monthly N
for life in an amount equal to a certain percent of the employees highest annual salary. Benefit provisions and all c°r,
other requirements are established by State statute and City ordinance. Copies of the CalPERS comprehensive
annual financial report may be obtained from the CalPERS Executive Office, 400 Q Street, Sacramento, CA, -;
95811.
a�
c
PARS is an agent multiple-employer agency trust that acts as a common investment and administrative agent for W
participating public entities in the State of California. Annual financial reports for the aggregate Plan may be
obtained from the PARS Office,4350 Von Karman Ave, Suite 100,Newport Beach, CA, 92660. >-
w
A. Summary 0
CL
Net Pension Asset is reported in the accompanying Statement of Net Position as follows: W
JA
L
O
Safety
Plan Q
Governmental Activities $ 55,231,576
c
m
Net Pension Obligation is reported in the accompanying financial statements as follows: d
'a
C
Miscellaneous Enhancement -a
G
Plan Plan Total
0
Governmental Activities $ 56,908 $ 654,123 $ 711,031 a
a�
Integrated Waste Fund 9,159 - 9,159
2
Total $ 66,067 $ 654,123 $ 720,190
E
c
c
Q
Y
d
L
V
w
Q
102 Packet Pg. 813
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
iL
L
0
Note 15—Defined Benefit Pension Plan (Continued)
0
a
B. Safety Plan
Plan Description—The Safety Plan of the City of San Bernardino is for sworn Police and Fire employees. The Q
contribution requirements of the members and the City are established and may be amended by CalPERS. The
Plans' provisions and benefits in effect at June 30,2014,are summarized as follows: U
c
Safety ii
Hire date Prior to January 1,2013 After January 1,2013 N
Benefit vesting schedule 5 years service 5 years service ,
Benefit Payments monthly for life monthly for life
Retirement Age 50 57 T
Required employee contribution rates 9.000% 12.250% N
Required employer contribution rates 31.455% 31.455%
m
c
Annual Pension Cost— For the year ended June 30, 2014, the City's Safety Plan annual pension costs were
$10,798,570. The annual pension costs were more than the City's required and actual contributions of aV
$11,159,863 due to positive interest earnings on the net pension asset offset by a negative adjustment to the
annual required contribution. This was due to a declining active payroll percentage contribution. The required w
L
contribution rates were determined as part of the June 30, 2011 actuarial valuation using the entry age normal
actuarial cost method with the contributions determined as a percentage of pay. The actuarial assumptions L
{ included(a) 7.50%investment rate of return(net of administrative expenses); (b)projected salary increases that
�r�✓ vary depending on age, service, and type of employment from 3.30%to 14.20%; (c)inflation of 2.75%;and(d) o
payroll growth of 3.00%. The actuarial value of the Safety Plan's assets were determined using techniques that
smooth the effects of short-term volatility in the market value of investments over a 15-year period. The City's
Ca1PERS unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a c
closed basis. Based on the actuarial valuation dated June 30, 2011, the remaining average amortization period
a
was 32 years for the Safety Plan.
Q
Funded Status and Funding Progress—As of June 30,2014 the Safety Plan was 76.2% funded. The actuarial 0
accrued liability for benefits was $684,279,693. The actuarial value of assets was $521,708,134 resulting in an
unfunded actuarial accrued liability (UAAL) of$162,571,559. The covered payroll (annual payroll of active m
employees covered by the plan)was$35,478,820,and the ratio of the UAAL to covered payroll was 458.22%.
V
The schedule of funding progress, presented as required supplementary information following the notes to the M
financial statements, presents multi-year trend information about whether the actuarial value of plan assets is _
increasing or decreasing over time relative to the actuarial accrued liability for benefits. m
o:
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C
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103 Packet Pg. 814
7.D.a
p
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
ii=
0
Note 15—Defined Benefit Pension Plan (Continued)
0
Q
B. Safety Plan (Continued)
Pension Asset— The City prepaid its Annual Required Contributions (ARC) with proceeds from the Taxable Q
Pension Obligation Bonds,2005 Series A(Note 8). The City's net pension asset was determined in accordance
with the provisions of GASB Statement No. 27 and represents contributions in excess of the ARC.The pension
asset is being amortized over a 30 year period. The pension asset balance at June 30, 2014 is $55,231,576 for
the Safety Plan. U-
N
The City's annual pension cost and change in the net pension asset related to the Safety Plan for the years
LO
ended June 30,2014,2013 and 2012,were as follows: 7t
June 30, June 30, June 30, c
N
2014 2013 2012 0
M
Annual required contribution $ -11,159,863 $ 11,612,856 $ 12,487,995 c
Interest on beginning net pension asset (3,389,708) (4,074,562) (4,153,002)
Adjustment to the annual required contribution 3,019,415 3,540,773 3,412,627
Annual pension cost 10,789,570 11,079,067 11,747,620
Contributions made 20,825,036 1,947,683 12,487,995 tL
Less:annual pension cost (10,789,570) (11,079,067) (11,747,620) y
Change in net pension asset 10,035,466 (9,131,384) 740,375 C
Net pension asset,beginning of the year 45,196,110 54,327,494 53,587,119 0
Net pension asset,end of the year $ 55,231,576 $ 45,196,110 $ 54,327,494 aQi
N
Three Year Trend Information p
r
Percentage of
Fiscal Year Annual Pension Actual APC Net Pension Q
Ended Cost(APC) Contributions Contributed Asset
6/30/2012 $ 11,747,620 $ 12,487,995 106.30% $ 54,327,494
6/30/2013 $ 11,079,067 $ 1,947,683 17.58% $ 45,196,110 Q,
6/30/2014 $ 10,789,570 $ 20,825,036 193.01% $ 55,231,576 0
c
C. Miscellaneous Plan c
Plan Description —The Miscellaneous Plan is available to full time employees not enrolled in the Safety Plan. 0 CL
Part-time employees must meet specific criteria for participation. City employees are eligible for service or 0
normal retirement at age 55 or older with a minimum of five years CAPERS service. The contribution
requirements of the plan members and the City are established by CAPERS and may be amended. The Plans'
provisions and benefits in effect at June 30,2014,are summarized below: c
LL
Miscellaneous-City
Hire date Prior to January 1,2013 After January 1,2013
Benefit vesting schedule 5 years service 5 years service =
a
Benefit Payments monthly for life monthly for life
Retirement Age 55 62 =
kwv� Required employee contribution rates 8.00% 6.25%
Required employer contribution rates 18.186% 18.186% ;g
a
104 Packet Pg. 815
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
iL
L
0
4-
Note 15—Defined Benefit Pension Plan (Continued)
0
CL
C. Miscellaneous Plan(Continued)
=a
Annual Pension Cost—For the year ended June 30, 2014, the City's Miscellaneous Plan annual pension costs Q
were $7,553,368. The annual pension costs were more than the City's required and actual contributions of
$7,487,301 due to negative interest earnings on the net pension obligation offset by a positive adjustment to the
annual required contribution. This was due to a declining active payroll percentage contribution. The required
contribution rates were determined as part of the June 30, 2010 actuarial valuations using the entry age normal iz
actuarial cost method with the contributions determined as a percent of pay. The actuarial assumptions N
included(a) 7.50%investment rate of return(net of administrative expenses);(b)projected salary increases that LO
vary depending on age, service, and type of employment from 3.30%to 14.20%; (c)inflation of 2.75%; and(d)
payroll growth of 3.00%. The actuarial value of the Miscellaneous Plan's assets were determined using o
techniques that smooth the effects of short-term volatility in the market value of investments over a 15-year c4
period. The City's CalPERS unfunded actuarial accrued liability is being amortized as a level percentage of M
projected payroll on a closed basis. Based on the actuarial valuation dated June 30, 2011, the remaining c
average amortization was 27 years for the Miscellaneous Plan.
V
d
Funded Status and Funding Progress—As of June 30, 2014,the Miscellaneous Plan was 78.1% funded. The
actuarial accrued liability for benefits was $501,077,609 and the actuarial value of assets was $391,353,584 W
resulting in unfunded actuarial accrued liabilities (UAAL) of $109,724,025. The covered payroll (annual m
payroll of active employees covered by the plan) was $41,170,684 and the percentage of the UAAL to covered }
Jq
payroll was 266.51%.
t:
0
0.
The schedule of funding progress, presented as required supplementary information following the notes to the
financial statements, presents multi-year trend information about whether the actuarial value of plan assets is y
increasing or decreasing over time relative to the actuarial accrued liability for benefits. c
=a
The City's annual pension costs and changes in net pension obligation related to the Miscellaneous Plan for the a
years ended June 30,2014,2013,and 2012,were as follows:
d
V
June 30, June 30, June 30, c
d
2014 2013 2012 CL
d
a
Annual required contribution $ 7,487,301 $ 6,937,538 $ 8,244,842 E
Interest on net pension obligation 288,941 - - v
C
Adjustment to the annual required contribution (222,874)
Annual pension cost 7,553,368 6,937,538 8,244,842 0
d
Contributions made 11,339,852 3,084,987 8,244,842
Less:annual pension cost (7,553,368) (6,937,538) (8,244,842)
.v
C
Change in net pension asset 3,786,484 (3,852,551) -
c
Net pension obligation,beginning of the year (3,852,551) - - LL
eo
Net pension obligation,end of the year $ (66,067) $ (3,852,551) $ -
c
Q
Y
V
it
Q
105 Packet Pg. 816
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
U_
0
w
Note 15—Defined Benefit Pension Plan (Continued)
0
❑.
C. Miscellaneous Plan(Continued)
�a
Three Year Trend Information
Q
Percentage of
Fiscal Year Annual Pension Actual APC Net Pension =
Ended Cost(APC) Contributions Contributed Obligation c
u-
6/30/2012 $ 8,244,842 $ 8,244,842 100.00% $ -
6/30/2013 $ 6,937,538 $ 3,084,987 44.47% $ (3,852,551)
LO
6/30/2014 $ 7,553,368 $ 11,339,852 150.13% $ (66,067) 71
D. Successor Agency Plan N
0
Plan Description — The Successor Agency Plan of the City of San Bernardino is available to full time m
employees employed by the Successor Agency to the San Bernardino Economic Development Agency. Part-
time employees must meet specific criteria for participation. City employees are eligible for service or normal .a
retirement at age 55 or older with a minimum of five years Ca1PERS service. The contribution requirements of
the plan members and the City are established by CalPERS and may be amended. The Plans' provisions and W
benefits in effect at June 30,2014, are summarized below:
Miscellaneous-Successor Agency O
t=
Hire date Prior to January 1,2013 After January 1,2013 p,
d
Benefit vesting schedule 5 years service 5 years service W
N
Benefit Payments monthly for life monthly for life
+.
Retirement Age 55 62
Required employee contribution rates 9.00% 11.25% Q
Required employer contribution rates 18.625% 18.625% d
.a
c
d
Annual Pension Cost—For the year ended June 30, 2014, the City's Successor Agency Plan annual pension m
costs were $15,951 and the City's contributions were $15,951. The required contribution rates were c
determined as part of the June 30, 2011 actuarial valuations using the entry age normal actuarial cost method
with the contributions determined.as a percent of pay. The actuarial assumptions included (a) 7.50%
investment rate of return(net of administrative expenses); (b)projected salary increases that vary depending on c
age, service, and type of employment from 3.30%to 14.20%; (c) inflation of 2.75%; and(d)payroll growth of d
3.00%. The actuarial value of the Miscellaneous Plan's assets were determined using techniques that smooth
the effects of short-term volatility in the market value of investments over a 15-year period. The City's 2
Ca1PERS unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a
closed basis. Based on the actuarial valuation dated June 30,2011,the remaining average amortization was 27 5
years for the Miscellaneous Plan.
Funded Status and Funding Progress—As of June 30, 2014, the Successor Agency Plan was 80.0% funded. Q
The actuarial accrued liability for benefits was $19,629,085 and the actuarial value of assets was $15,711,159
resulting in unfunded actuarial accrued liabilities (UAAL) of$3,917,926. The covered payroll (annual payroll
' of active employees covered by the plan)was $85,716 and the percentage of the UAAL to covered payroll was s
4570.82%.
a
106 Packet Pg. 817
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
L U_
For the Year Ended June 30,2014 N
L
0
W
Note 15—Defined Benefit Pension Plan (Continued)
0
CL
D. Successor Agency Plan(Continued) �
w
The schedule of funding progress, presented as required supplementary information following the notes to the 3
financial statements, presents multi-year trend information about whether the actuarial value of plan assets is Q
increasing or decreasing over time relative to the actuarial accrued liability for benefits. 0
c
The City's annual pension cost related to the Successor Agency Plan for the years ended June 30, 2014, 2013,
and 2012,were as follows: U.
N
M
Three Year Trend Information `r'v
Percentage of c
N
Fiscal Year Annual Pension Actual APC Net Pension o
M
Ended Cost(APC) Contributions Contributed Obligation
3
6/30/2012 $ 205,024 $ 205,024 100.00% $ -
6/30/2013 $ 79,893 $ 79,893 100.00% $
6/30/2014 $ 15,965 $ 15,965 100.00% $ -
d
E. Enhancement Plan L
0
Plan Description —Effective January 1, 2004, pursuant to sections 401(a) and 501(a) of the Internal Revenue o.
Code, the City adopted a tax-qualified governmental defined benefit plan, the City of San Bernardino Public 0
Agency Retirement System (PARS) — Retirement Enhancement Plan (the Plan). The Plan is administered by
the City and was established to provide certain police safety or police management employees employed as of c
January 1, 2004, meeting specific requirements as outlined in the Plan document, supplemental retirement a
benefits in addition to the benefits employees will receive from the California Public Employees' Retirement a
System(Ca1PERS).
d
Funding Policy—The City is required to make contributions at an actuarially determined rate. The rate was m
1.7% of annual covered payroll. As part of the agreement, the City pays for the entire benefit obligation. A d
level dollar contribution amortized over 20 years is used to determine the City contribution. The contribution c
requirements of the plan may be amended depending on future actuarial valuations and earnings levels. .a
C
Annual Pension Cost—For the year ended June 30, 2014, the City's Miscellaneous Plan annual pension costs
were $413,597. The annual pehsion costs were more than the City's required and actual contributions of 0
$208,695 due to negative interest earnings on the net pension obligation offset by a positive adjustment to the
annual required contribution. This was due to a declining active payroll percentage contribution. The required "a
contribution rate was determined as part of the actuarial valuation, using the entry age normal actuarial cost _
method with contributions determined as a percentage of pay. The actuarial assumptions included (a) 5.75% _
investment rate of return(net of administrative expenses); (b)projected salary increases of 3.25%; (c) inflation U_
of 3.0%; (d)payroll growth of 3.0%. The actuarial value of the REPs assets were determined using techniques
that smooth the effects of short-term volatility in the market value of investments over time. The City's REPS =
unfunded actuarial accrued liability is being amortized as a level dollar amount over a 15 year amortization a
period. d
' Funded Status and Funding Progress—The REP began on January 1, 2004. As of June 30, 2008, the most r
recent actuarial valuation date,the REP was 17.0% funded. The actuarial accrued liability (AAL) for benefits 2
was $5,549, 000and the actuarial value of plan assets was $942,000,resulting in an unfunded actuarial accrued a
liability(UAAL)of$4,607,000.
107 Packet Pg. 818
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
14 ii.
L
O
Note 15—Defined Benefit Pension Plan (Continued) o
Q
E. Enhancement Plan(Continued)
w
The schedule of funding progress, presented as required supplementary information following the notes to the Q
financial statements, presents multi-year trend information about whether the actuarial value of plan assets is �o
increasing or decreasing over time relative to the actuarial accrued liability for benefits.
The City's annual pension costs and changes in net pension obligation related to the Retirement Enhancement
Plan for the years ended June 30,2014,2013,and 2012,were as follows: N
M
LO
June 30, June 30, June 30, 7
2014 2013 2012 et
r
Annual required contribution $ 417,715 $ 470,363 $ 518,084 N
Interest on net pension obligation 25,830 - - M
Adjustment to the annual required contribution (29,948)
Annual pension cost 413,597 470,363 518,084
'O
Contributions made 208,695 21,142 518,084
Less:annual pension cost (413,597) (470,363) (518,084) C
Change in net pension asset (204,902) (449,221)
d
Net pension obligation,beginning of the year (449,221)
Net pension obligation,end of the year $ (654,123) $ (449,221) $
r-
O
C.
d
Three Year Trend Information
N
Percentage of 0
Fiscal Year Annual Pension Actual APC Net Pension
Ended Cost(APC) Contributions Contributed Obligation Q
6/30/2012 $ 518,084 $ 518,084 100.00% $ - d
6/30/2013 $ 470,363 $ 21,142 4.49% $ (449,221)
6/30/2014 $ 413,597 $ 208,695 50.46% $ (654,123) p,
d
a
a
Note 16—Settlement with CalPERS
ca
The City deferred payment of the employer portion of retirement contributions to Ca1PERS for a period of time due a
to its severe liquidity crisis. The deferrals of the City's employer portion of retirement contributions to Ca1PERS
first occurred on July 31,2012, as reported by the City in a press release dated October 29,2012. On November 27,
2012, Ca1PERS filed a motion for relief from the 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 Labor Code and the California Constitution. Ca1PERS sought relief from the stay in U.
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 Ca1PERS' motion for C
relief from the automatic stay. Beginning in July 2013, the City resumed payments of the City's employer portion Q
of retirement contributions to Ca1PERS.
E
coo
a
108 Packet Pg. 819
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014
N
LL
O
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Note 16—Settlement with Ca1PERS(Continued)
O
Q
The unpaid arrearage for the period from August 1, 2012 through June 30, 2013 amounted to $13.6 million (the
"Arrearage"). Because Ca1PERS could have asserted a contract termination claim that alone exceeded all other
claims against the City combined, and an additional large claim for penalties associated with the Arrearage,and the Q
City's unions and retirees had a substantial stake in the resolution of the Ca1PERS' claims and the City's
contractual relationship with Ca1PERS, the City first focused its mediation efforts on reaching a settlement with
CalPERS. An interim agreement between the City and Ca1PERS entitled "Mediator's Order" was approved by the =
Judge Zive on June 9, 2014, and became what is now known as the "Ca1PERS Interim Agreement." The Ca1PERS E
Interim Agreement addressed the understanding between the City and Ca1PERS and provided for, among other
things: (i) payment of certain arrearages to Ca1PERS; (ii) payment of certain additional administrative costs of LO
Ca1PERS;and(iii)a covenant not to impair Ca1PERS under the Plan.
T
This agreement required that City make monthly payments of $602,580 to Ca1PERS starting on July 1, 2014
through June 1,2016.
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The annual debt service requirements for the Ca1PERS Settlement outstanding at June 30,2014 are as follows:
v
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Year Ending
June 30, Principal Interest Total W
L
2015 $ 5,882,688 $ 745,692 $ 6,628,380
000,41, 2016 6,937,186 293,774 7,230,960 L
Total $ 12,819,874 $ 1,039,466 $ 13,859,340
O
Q.
m
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Note 17—Other Post-Employment Benefits
L
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V
A. Summary
Q
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Net OPEB Obligation is reported in the accompanying financial statements as follows: m
c
City Water Department Q.
Plan Plan Total d
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c
Governmental Activities $ 29,217,821 $ - $ 29,217,821
Integrated Waste Fund 1,537,780 - 1,537,780 _
tv
Water Fund - 276,407 276,407 0
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Q.
Sewer Fund - 76,103 76,103 �
Total $ 30,755,601 $ 352,510 $ 31,108,111 E
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B. City—Excluding Water Department(Water Enterprise Fund and Sewer Enterprise Fund)
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Plan Description Q
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The City administers a single employer defined benefit healthcare plan (the Plan). The Plan currently provides d
healthcare and life insurance for eligible retirees and their surviving spouses through the City's group health =
insurance plan, which is administered by Mercer. Life insurance premiums are paid 100% by retirees. The Plan r
covers both active and retired members.Benefits provisions are established through negotiations between the City a
and various union bargaining groups.The Plan does not issue a publicly available financial report.
109 Packet Pg. 820
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
LL
L
0
Note 17—Other Post-Employment Benefits (Continued) L
0
CL
B. City—Excluding Water Department(Water Enterprise Fund and Sewer Enterprise Fund)(Continued)
w
Funding Policy Q
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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. For fiscal year =
2014,the City contributed$567,000 to the Plan. The City currently contributes $115 per month of the required E
premium costs of active employees.Retired employees are permitted to participate with active employees in the N
health-care plan, but retirees must pay all premiums as calculated by Mercer, less the City's payment of$115 v
per month, assigned to them, except for sworn police employees. The City's monthly contribution for sworn 7—
police employees is in accordance with the following schedule: c
N
Years of service Monthly Contribution r°>
20 $ 200
25 350
30 450
Annual OPEB Cost and Net OPEB Obligation w
L
R
The City's annual other 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. o
The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each o
year and amortize any unfunded actuarial liabilities (or funding excess)over a period not to exceed thirty years. m
The following table shows the components of the City's annual OPEB cost for the year, the amount actually W
contributed to the Plan,and changes in the City's net OPEB obligation: L
0
2014 2013 2012
Q
Annual required contribution $ 4,803,000 $ 4,482,000 $ 7,293,000 c
Interest on net OPEB obligation 1,153,000 1,036,000 998,000 m
Adjustment to the annual required contribution (1,588,000) (1,368,000) (1,666,000) C:
CD
Q.
Net OPEB cost 4,368,000 4,150,000 6,625,000 a)
c
Contributions made:
Benefit payments(cash subsidy) (557,952) (567,000) (627,000) CU
Benefit payments(implied subsidy) (891,048) (815,000) (886,000) o
Increase in net OPEB obligation 2,919,000 2,768,000 5,112,000 0Y
Net OPEB obligation,beginning of the year 27,836,601 25,068,601 19,956,601
U
C
Net OPEB obligation,end of year $ 30,755,601 $ 27,836,601 $ 25,068,601
U.
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB 3
obligation for 2014 and the two preceding years were as follows:
Percentage of Net
Annual Actual Annual OPEB OPEB m
E
Fiscal Year OPEB Cost Contributions Cost Contributed Obligation
2012 $ 6,625,000 $ 627,000 23% $ 25,068,601 Q
2013 5,547,000 567,000 10% 27,836,601
2014 4,368,000 557,952 13% 30,755,601
110 1 Packet Pg. 821
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 0
U.
0
w
Note 17—Other Post-Employment Benefits (Continued) V_
0
CL
B. City—Excluding Water Department(Water Enterprise Fund and Sewer Enterprise Fund)(Continued)
Funded Status and Funding Progress '
a
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As of June 30,2014,the Plan was 0.0%funded. The actuarial accrued liability for benefits was$7,822,000 and 0
the actuarial value of assets was $0 resulting in unfunded actuarial accrued liabilities (UAAL) of$7,822,000. c
The covered payroll (annual payroll of active employees covered by the plan) was $62,980,000 and the U.
percentage of the UAAL to covered payroll was 12.42%. N
M
U)
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions v
about the probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the N
Plan and the annual required contributions of the employer are subject to continual revision as actual results are M
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 about whether the actuarial value of plan assets is increasing or a
decreasing over time relative to the actuarial accrued liabilities for the benefits.
w
Actuarial Methods and Assumptions m
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as �o
understood by the employer and the plan members) and include the types of benefits provided at the time of t:
each valuation and the historical pattern of sharing of benefit costs between employer and plan members to that d
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.
-a
In the June 30, 2012 actuarial valuation, which was used to determine the ARC for fiscal year 2013, the Q
actuarial cost method used for determining the benefit obligations is the entry age normal cost 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 o,
annual healthcare cost trend rate of 8.5%initially,reduced by increments of 0.5%per year to an ultimate rate of a
5.0%. The unfunded actuarial accrued liability (UAAL) at June 30, 2012 is being amortized as a level percent `
of payroll over a 21-year fixed (closed) period. Future assumption changes, plan changes, and gain/losses are r_
amortized over a 15-year fixed (closed) period. The maximum combined period amortization is 30-years. It is V
assumed the City's payroll will increase 3.25%per year. 0
d
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C. Water Department R
c
Plan Description
U.
The City Water Department(Department)provides health benefits to all qualifying retirees and their spouses in R
accordance with Memorandums of Understanding under various labor agreements. The Department maintains r_
the financial activity of the plan as a trust fund, and no separate financial report is publically available. Q
Employees are eligible for retiree health benefits if they retire from the Department on or after age 50 with at c
least 10, 12,or 15 years of service,depending on bargaining unit, and are eligible for a PERS pension. 0
E
R
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a
111 Packet Pg. 822
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014 N
U.
0
Note 17—Other Post-Employment Benefits (Continued) t
0
c.
C. Water Department(Continued)
Funding Policy
a
The contribution requirements of plan members and the Department are established and may be amended by 2
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 E
Commissioners. For fiscal year 2014,the Department has funded$573,621 for the current year. Plan members
receiving benefits contributed $138,538 (approximately 19.4% of total premiums) through their required M
contribution. The Department pays up to the entire cost of health benefits for eligible retirees and their spouses,
subject to the City's vesting schedule. r
0
N
Annual OPEB Cost and Net OPEB Obligation
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 unfunded actuarial liabilities (or funding
LU
excess)over a period not to exceed thirty years. The 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: o
Annual OPEB Cost and Net OPEB Obligation (Continued) °Q
m
o!
2014 2013 2012 N
i
Annual required contribution $ 2,438,000 $ 2,361,000 $ 2,729,000 0
Interest on net OPEB obligation 111,711 - 327,000
Adjustment to the annual required contribution (111,711) - (546,000) Q
Net OPEB cost 2,438,000 2,361,000 2,510,000 C
(D
Contributions made: (3,872,869) (573,621) (9,040,000)
Increase in net OPEB obligation (1,434,869) 1,787,379 (6,530,000) m
Net OPEB obligation,beginning of the year 1,787,379 - 6,530,000 M
Net OPEB obligation,end of year $ 352,510 $ 1,787,379 $ -
C
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The Department's annual OPEB cost,the percentage of annual OPEB cost contributed to the plan, and the net 0 CL
OPEB obligation for 2014 and the two preceding years were as follows:
Percentage of Net
U
Annual Actual Annual OPEB OPEB C
Fiscal Year OPEB Cost Contributions Cost Contributed Obligation
ii
2012 $ 2,510,000 $ 9,040,000 360% $ -
2013 2,361,000 573,621 24% 1,787,379
2014 2,438,000 3,872,869 159% 352,510 Q
c
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Y
Q
112 Packet Pg. 823
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
iL
L
0
Note 17—Other Post-Employment Benefits (Continued)
0
Q
C. Water Department(Continued)
Funded Status and Funding Progress
a
7a
As of June 30,2012,the Plan was 29.68%funded. The actuarial accrued liability for benefits was $28,831,000
and the actuarial value of assets was $8,556,000 resulting in unfunded actuarial accrued liabilities (UAAL) of =
$20,275,000. The covered payroll (annual payroll of active employees covered by the plan) was $14,765,000 ii
and the percentage of the UAAL to covered payroll was 137.32%. N
M
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 assumptions about future c
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the c4
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 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 about whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accrued liabilities for the benefits.
W
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 time of 0
each valuation and the historical pattern of sharing of benefit costs between employer and plan members to that m
point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of y
short-term volatility in actuarial accrued liabilities and the actuarial assets, consistent with long-term c
perspective of the calculations.
In the June 30, 2012 actuarial valuation, the entry age actuarial cost method was used. The actuarial
assumptions included a rate of return of 6.25%and annual healthcare costs trend rates of 8.5%initially,reduced -(D
by increments to an ultimate rate of 5% after ten years. Both rates included a 3% inflation assumption. The m
actuarial value of assets was determined using techniques that spread the effects of short-term volatility in the d
market value of investments over a five-year period. The UAAL is being amortized as a level percentage of c
projected payroll on an open basis. The remaining amortization period at June 30,2014 was 20 years. c
D. Successor Agency 0
CL
a)
Plan Description 0:
The Successor Agency (Agency) administers a single employer defined benefit healthcare plan (the Plan). The
Agency provides medical and dental plan coverage for retirees and their eligible surviving dependents. This
U.
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 Agency service.
The Plan does not issue a publicly available financial report. Q
Funding Policy m
E
s
The contribution requirements of the Agency are established and may be amended by the Agency's Board. The cc
required contribution is based on pay-as-you-go financing requirements. For fiscal year 2014, the Agency a
contributed$19,992 to the plan,which was 100%of the total current premiums.
113 1 Packet Pg. 824
7.D.a 4
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
LL
L
0
W
Note 17—Other Post-Employment Benefits (Continued)
0
CL
D. Successor Agency(Continued)
�a
Annual OPEB Cost and Net OPEB Obligation 0
a
The Agency's annual other OPEB cost(expense)is calculated based on the annual required contribution(ARC) '_
of the employer, an amount actuarially determined in accordance with 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 E
amortize any unfunded actuarial liabilities (or funding excess) not to exceed thirty years. The following table N
shows the components of the Agency's annual OPEB cost for the year, the amount actually contributed to the v
plan,and changes in the Agency's net OPEB obligation:
r
O
2014 2013 2012 er
0
Annual required contribution $ 211,490 $ 211,490 $ 211,490 M
Interest on net OPEB obligation 50,905 43,095 34,926
Adjustment to the annual required contribution (76,905) (61,038) (46,559)
Net OPEB cost 185,490 193,547 199,857
Contributions made: (22,848) (19,992) (18,326) W
Increase in net OPEB obligation 162,642 173,555 181,531
Net OPEB obligation,beginning of the year 1,131,224 957,669 776,138
Net OPEB obligation,end of year $ 1,293,866 $ 1,131,224 $ 957,669 p
O
Annual OPEB Cost and Net OPEB Obligation (Continued) m
The Agency's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net o
OPEB obligation for 2014 and the two preceding years were as follows:
a
Percentage of Net Q
Annual Actual Annual OPEB OPEB d
Fiscal Year OPEB Cost Contributions Cost Contributed Obligation c
d
2012 $ 199,857 $ 18,326 24% $ 957,669 a
d
2013 193,547 19,992 24% 1,131,224 c
2014 185,490 22,848 12% 1,293,866 .a
_
Funded Status and Funding Progress C
O
a
d
As of June 30, 2018,the Plan was 0.0% funded. The actuarial accrued liability for benefits was $749,208 and W
the actuarial value of assets was $0 resulting in unfunded actuarial accrued liabilities (UAAL) of$749,208.
The covered payroll (annual payroll of active employees covered by the plan) was $1,764,100 and the
percentage of the UAAL to covered payroll was 42.49%. _
U.
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114 p,lln
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
U_
0
Note 17—Other Post-Employment Benefits (Continued)
0
CL
D. Successor Agency(Continued)
�a
Funded Status and Funding Progress(Continued) '
�a
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 assumptions about future c
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the U.
Plan and the annual required contributions of the employer are subject to continual revision as actual results are N
compared with past expectations and new estimates are made about the future. The schedule of funding LO
progress, presented as required supplementary information following the notes to the financial statements, :-
presents multi-year trend information about whether the actuarial value of plan assets is increasing or r
decreasing over time relative to the actuarial accrued liabilities for the benefits. coo
0
M
Actuarial Methods and Assumptions
3
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 c
each valuation and the historical pattern of sharing of benefit costs between employer and plan members to that W
point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of d
short-term volatility in actuarial accrued liabilities and the actuarial assets, consistent with long-term L
perspective of the calculations.
t=
0
The actuarial cost method used for determining the benefit obligations is the entry age normal cost method.The 00)
actuarial assumptions included a 4.5% discount rate, which is the assumed rate of the expected long-term N
investment returns on plan assets calculated based on the funded level of the Plan at the valuation date, and an c
annual healthcare cost trend rate of zero percent initially, which increases to 5.0% in the fourteenth year. The
UAAL is being amortized as level percentage of projected payroll over 20 years.
a
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5 Packet Pg. 826
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
LL
0
Note 18—Jointly Governed Organizations and Joint Venture
0
CL
Inland Valley Development Agency
In January 1990, the City entered into a joint powers agreement with the Cities of Colton and Loma Linda and the 0
County of San Bernardino to form the Inland Valley Development Agency (IVDA). The IVDA adopted a
redevelopment plan, and its primary purpose is to promote the redevelopment of the former Norton Air Force Base 2
and other areas within its project area. The IVDA board is comprised of three members from the City and two each
from the other members. The primary sources of funding are tax increment and lease income. Additional financial
information can be obtained by contacting the IVDA at 1601 E. Third Street, San Bernardino,CA 92408.
N
M
San Bernardino International Airport Authority
In May 1992, the City entered into a joint powers agreement with the Cities of Colton, Loma Linda, Highland and N
Redlands and the County of San Bernardino to form the San Bernardino International Airport Authority (SBIAA). c
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 3
April 19, 1996, the City of Redlands withdrew from its membership in SBIAA. The board is comprised of two
members from the City and one each from the other members. The primary sources of funding are loans, federal 4)
grants and lease income. Additional financial information can be obtained by contacting SBIAA at 1601 E. Third w
Street, San Bernardino,CA 92408.
San Bernardino Regional Water Resource Authority `o
1 w
In August 1998, the City entered into a joint powers agreement with the Inland Valley Development Agency 00 CL
(IVDA) and the San Bernardino Valley Municipal Water District (the District) to form the San Bernardino
Regional Water Resources Authority (the Authority). The Authority was created primarily for the purpose of 0
conducting a water resource and storage project. The Authority board is comprised of three members from the o
City, one member from IVDA and 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 `B" Street, Third Q
w
Floor, San Bernardino, CA 92401. _
m
Colton/San Bernardino Regional Tertiary Treatment and Water Reclamation Authority o,
m
a
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 treatment, disposal and water r-
reclamations systems, including the Regional Rapid Infiltration and Extraction Facility (RIX). This authority is r-
governed by a separate board consisting of four members; two appointed by the City through the Water 0
CL
Department's Board of Water Commissioners and two appointed by the City Council of the City of Colton.
Construction of RIX was administered by the Santa Ana Watershed Project Authority and was substantially
completed during 1996. Administration and operation was turned over at that time. The cities of San 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 are in the form of capital assets. RIX has it
no liabilities. Annual revenues (in the form of contributions from the two member cities) are equal to annual n
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. Q
_
d
0
a
116 Packet Pg. 827
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014
N_
LL
L
O
Note 18—Jointly Governed Organizations and Joint Venture(Continued)
0
CL
San Bernardino Public Safety Authority
w
v
On April 1, 1968,the City of San Bernardino and the County of San Bernardino formed the San Bernardino Public a
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 PSA were recognized as capital assets of the City at the c
inception of the installment purchase agreement between the City and the PSA. The City's remaining interest in the U-
joint venture is in the 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 v
an investment in joint venture.
T
West End Water Development, Treatment and Conservation Joint Powers Authority N
0
co
On August 15, 1990, the City of San Bernardino joined the West End Water Development, 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 w
venture was formed to provide a financing vehicle for the three member agencies. This joint venture is currently
inactive. W
L
L
Note 19—Consent Decree 4°
�y L
O
CL
In 1996, the City of San Bernardino filed a complaint against the United States of America, Department of the
Army to recover damages, response costs and other available remedies relating to contamination alleged to have
originated at a World War II army installation known as Camp Ono. In March 2005, the United States District c
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 Q
groundwater contamination allegedly caused by the Army. The Consent Decree contains a number of provisions
obligating the City (through the City's Water Department) to operate and maintain the Newmark Groundwater
Superfund site (Site). The Site consists of two operable units, the Newmark Operable Unit and the Muscoy m
Operable Unit. The Newmark Operable Unit was declared operational and functional in 1998. The Muscoy d
Operable unit was declared operational and functional in 2007.
The Consent Decree provided for a payment of$69 million from the Army to the City for 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 d
operate and maintain the groundwater extraction and treatment system for a period of 50 years. The $69 million W
payment consisted of$59 million for operations and maintenance and $10 million for the construction of certain
capital facilities that would be required in the future; the funds are subject to strict limitations, contained in the c00a
Consent Decree,as to how the money may be spent. E
U.
Pursuant to the Consent Decree, $10 million, including interest earned, has been set aside to be used only for (i)
funding construction of treatment and directly related transmission systems that expand the Water Department's
capacity to deliver potable water and (ii) funding work performed by the Water Department to complete a
construction of the Muscoy Operable Unit extraction system. These capital facility funds may not be used for costs c
incurred to operate, maintain, repair or retrofit components of the site extraction of treatment systems constructed E
by EPA.
a
117 Packet Pg. 828
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014
ii
L
Note 19—Consent Decree(Continued)
0
0_
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 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 Q
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 provide a financial vehicle that provides cost cap coverage for the first 30
years of expenses.
c
U.
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 M
2009, the Department negotiated and accepted a "payout" in the amount of$18,661,876, which represented the :'
principal and accrued interest as of that date. These funds are currently invested in a diversified portfolio managed T
by PFM Asset Management. The balance of restricted investments held at June 30,2014 is$21,259,686. N
0
M
d
Note 20—Landfill Closure Liability
The City operated a municipal non-hazardous solid waste facility, identified as the "Waterman Landfill", from c
1950 to 1960. The City is the primary responsible party for pollution remediation obligations related to the w
Waterman Landfill. During the 1990s, groundwater monitoring wells were installed and placed into service as m
part of the overall remediation plan. In 2004, it was 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. o
The City is currently in the design phase of the remediation project, and anticipates the construction phase to c
begin in 2016. Pollution remediation costs for the closure of the Waterman Landfill are estimated at $6,929,000 0
at June 30,2014,measured using the expected cash flow technique. a
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This estimate is subject to change in future periods due to various factors including changes in the remediation
plan or operating conditions, the type of equipment and services that will be used, price increases or reductions
for specific outlay elements such as ongoing monitoring requirements, changes in technology, or changes in legal Q
or regulatory requirements. The liability is reported in the Integrated Waste Fund in the accompanying financial a=i
statements. c
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Packet Pg. 829
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
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Note 21—Commitments and Contingencies V_
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A. Litigation
The City is a defendant in numerous lawsuits and is also subject to other claims, including claims for workers' Q
compensation payments. The City uses in-house and, where necessary, outside counsel to adjudicate lawsuits.
Each case is initially rated by the City Supervising or Senior attorney handling 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 reserved for any eventual payout on any said case is U.
based upon the facts of the case, industry standards relative to the type of injury or damage involved, and the CN
experience of the Supervising or Senior attorney. The legal reserve as of June 30, 2014, is a product of this co
analysis. The City used a third-party actuary to perform a workers' compensation reserve analysis (estimated
loss reserve)as of June 30,2014. The actuary used a general approach that relied upon actual loss development c
patterns for the City of San Bernardino to the extent they are available, and is augmented with industry N
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 claims, the City and its legal =
department have estimated that the liability for all such litigation and claims totaled approximately $35.87
million for the primary government as of June 30, 2014. These lawsuits and claims may be compromised
and/or discharged pursuant to a plan of adjustment confirmed in the Bankruptcy Case and are therefore
considered an estimated contingency amount and are not reflected in the financial statements. w
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B. Contractual Obligations L
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Commitments in the form of signed contracts for costs to complete construction projects or other 0 0
improvements, including street repairs and infrastructure improvements, at June 30, 2014, amounted to aai
$6,610,353 in the Water Enterprise Fund and$29,286,549 in the Sewer Enterprise Fund. ce
0
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C. Federal and State Grants
0
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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 of the City.
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D. Gas Tax Revenues c
The City is subject to periodic audits of its use of gas tax revenues by the State Controller's Office. The City M
used a portion of gas tax revenues to make certain debt service payments on a note payable related to pavement o
rehabilitation (street-related) projects. State guidelines relating to gas tax expenditures limit the amount of m
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 2
uncertain, and therefore, no contingent liability related to this matter has been accrued in the accompanying
financial statements. E
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119 Packet Pg. 830
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 v
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Note 22—Restatement of Prior Year Balances
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A. Government-Wide Financial Statements
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The beginning net position at July 1, 2013 of the Government-wide Financial Statements was restated as Q
follows:
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Governmental Business-Type M
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Activities Activities LL
Net position at July 1,2013 $ 353,607,679 $ 262,588,742 M
Record net pension asset 45,196,110 - UI)
Remove Due to Ca1PERS 12,687,157 -
Record Net Pension Obligation for Miscellaneous and PARS Plans (3,330,076) -
0
Adjust Pension Obligation Bonds accretion 363,004 - N
Adjust Net OPEB Obligation 1,432,000 - c°>
Adjust accrued liabilities (199,833) - _
Adjust general liability claims payable (3,978,808) -
Adjust workers'compensation claims payable 5,044,419 -
Record unpaid interest on pension obligation bonds (2,028,894) - _
Record PARS liability 449,222 - w
Remove State DOF liability from govt.funds 3,415,155 - CU
Record State DOF liability (1,231,423) -
Adjust due from other goverments (322,681) - p
Adjust notes receivable (159,160) L
Remove other assets (214,671) - Q
Adjust cash receipts recorded in incorrect period (1,066,140) -
Adjust landfill closure liability - 141,748 rn
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Net position at July 1,2013,as restated $ 409,663,060 $ 262,730,490 0
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120 Packet Pg. 831
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30, 2014 v
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Note 22—Restatement of Prior Year Balances (Continued) V_
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B. Governmental Fund Financial Statements
The beginning fund balances at July 1,2013 for the governmental funds were restated as follows:
Q
Major Funds
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Low and
«s
Moderate
Federal and Income Sales and LL
General State Grants Housing Road M
Fund Fund Fund Fund `')
Fund balance(deficit)at July 1,2013 $ (7,146,155) $ 10,924,168 $ 63,891,555 $ 6,244,366
Adjust Due to CAPERS 12,224,573 206,657 12,317 p
Remove other assets - - - - N
0
Adjust revenue recorded in incorrect period (816,140)
Adjust accrued liabilities (199,833) - -
Record PARS liability on government-wide 449,222 -
Adjust due from other governments (306,389) - (16,292) d
Eliminate advances from/to other funds 9,347,332 (9,347,332) -
W
Record State DOF liability on government-wide - 3,415,155 -
Adjustnotesreceivable - (159,160) -
Net position at July 1,2013,as restated $ 5,021,418 $ 19,502,857 $ 57,959,378 $ 6,240,391 0
0
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Other Governmental Funds O.
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Alternative Alternative Sewerline Sewerline Storm Drain 0
Transportation Transportation Maintenance Construction Construction
Fund Fund Fund Fund Fund Q
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Fund balance(deficit)at July 1,2013 $ 327,574 $ 1,042,914 $ 2,679,581 $ 2,790,419 $ 3,568,379
Adjust Due to CalPERS 8,212 6,843 116,330 2,737 8,212
c
Remove other assets - - - (214,671) - d
O_
Adjust revenue recorded in incorrect period - - - - - d
Net position at July 1,2013,as restated $ 335,786 $ 1,049,757 $ 2,795,911 $ 2,578,485 $ 3,576,591
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Other Governmental Funds O
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Special Impact Street Local V
Assessments Fees Construction Street =
Fund Fund Fund Fund Total
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Fund balance(deficit)at July 1,2013 $ (395,904) $ 11,245,902 $ (1,855,217) $ 49,392 $ 19,453,040
Adjust Due to CalPERS 88,958 4,106 1,369 6,843 243,610
Remove other assets - - - - (214,671) Q
Adjust revenue recorded in incorrect period - (250,000) - (250,000) :r
Net position at July 1,2013,as restated $ (306,946) $ 11,250,008 $ (2,103,848) $ 56,235 $ 19,231,979 y
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121 Packet Pg. 832
A
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 22—Restatement of Prior Year Balances (Continued)
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C. Proprietary Fund Financial Statements lY
The beginning fund balances at July 1,2013 for the proprietary funds were restated as follows: 3
Enterprise Funds Internal Service Funds v
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Integrated Workers' Liability Information
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Waste Water Sewer Compensation Insurance Systems LL
Fund Fund Fund Fund Fund Fund N
Net position(deficit)at July 1,2013 $ (4,901,726) $ 168,892,031 $ 108,295,855 $ (23,631,790) $ (4,711,871) $ 1,545,549 LO
Adjust landfill closure liability 141,748 - - -
Adjustment to adjust the value of ther r
investment in joint venture-RIX - (1,090,102) CD
N
Adjustment to remove salvage values CD
included in capital assets (3,023,270) (5,584,046)
Adjust workers'compensation claims
payable 5,044,419
Adjust general liability claims payable - - - (3,978,808) (D
Net position at July 1,2013,as restated $ (4,759,978) $ 165,868,761 $ 101,621,707 $ (18,587,371) $ (8,690,679) $ 1,545,549 W
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D. Fiduciary Fund Financial Statements
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The beginning fund balances at July 1,2013 for the fiduciary activities were restated as follows: o
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Successor Agency W
To the Economic N
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Development O
Agency
of San Bernardino
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Private-purpose
Trust Fund d
Net position at July 1,2013 $ (42,484,502)
d
Remove Yellow Freight participation agreement 216,088 r
Net position at July 1,2013,as restated $ (42,268,414)
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Note 23—Successor Agency Trust for Assets of Former Redevelopment Agency 0
d
On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26 (the "Bill") that provides for
the dissolution of all redevelopment agencies in the State of California. This action 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.
U_
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 a
they are disposed of in accordance with applicable laws and regulations. On January 9, 2012, the City Council
Y
adopted resolution 2012-12, electing to serve as the Successor Agency to the former redevelopment agency of the
C, City of San Bernardino in accordance with the Bill. On January 23, 2012, the City Council adopted resolution E
2012-19 to have the City of San Bernardino serve as the Successor Housing Agency to the former redevelopment U
agency of the City of San Bernardino. Q
122 Packet Pg. 833
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 H
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Note 23—Successor Agency Trust for Assets of Former Redevelopment Agency(Continued)
0
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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 the control of a newly
established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the a
date of dissolution, including the completion of any unfinished projects that were subject to legally enforceable
contractual commitments. 2
ev
In future fiscal years, successor agencies will only be allocated tax increment revenue(to the extent available in the
Redevelopment Property Tax Trust Fund, or "RPTTF", as maintained by the County Auditor/Controller) in the
amount that is necessary to pay the estimated annual payments on enforceable obligations of the former M
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redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full
and all assets have been redistributed or liquidated.
T
The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets c
between redevelopment agencies and other public bodies that occurred after January 1,2011.If the public body that
received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those 3
assets,the State Controller is required to order the available assets to be transferred to the public body designated as -�
the successor agency by the Bill. m
c
In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, w
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 L
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-
0
housing assets,liabilities,and activities),in the financial statements of the City.
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 Housing Solutions (AHS), and
Sustainable Communities Reinvestment Partnership (SCRIP). The financial activities of these affiliated entities are a
reported in the fiduciary funds of the accompanying financial statements,as components of the Successor Agency. +,
m
San Bernardino Economic Development Corporation — SBEDC was incorporated in 1973 as a nonprofit public r_
benefit corporation. SBEDC's purpose is to assist the EDA in promoting development and redevelopment of d
properties within the City of San Bernardino (City). SBEDC currently holds title to approximately 300 parcels of c
real property in the City pursuant to a March 2011 Funding Agreement with the EDA, under which the EDA a
transferred properties to SBEDC, and SBEDC committed to develop the properties using funding provided by the
EDA. These parcels include 128 parcels for the Bice Property project, 74 parcels for the Arden-Guthrie Property c
project, and 5 parcels for the Carousel Mall (an approximately 650,000 square foot indoor mall), which is owned m
and operated through the Carousel Mall LLC(a single-member limited liability company with SBEDC as the single W
member).The funding agreement and the transfer of the properties were validated in a judgment entered on July 27, R
2011 by the Superior Court of the State of California, County of San Bernardino, in an action brought by the EDA r_
as Case No. CIVDS1103893 (Validation Judgment). Subsequently, however, the State Controller's Office (SCO), _
as authorized by the June 2011 and June 2012 legislation providing for the dissolution of redevelopment agencies, U.
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 a
transfers were unallowable and that the Validation Judgment was not effective. The Successor Agency contested
Y
these contentions but the matter remains unresolved and the ultimate disposition of the properties is undetermined.
These properties were reported in the Successor Agency as of June 30,2014. E
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123 Packet Pg. 834
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 y
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Note 23—Successor Agency Trust for Assets of Former Redevelopment Agency(Continued)
0
a.
Affordable Housing Solutions (AHS) was incorporated in 2005 as a nonprofit public benefit corporation and was W
acquired by the EDA in 2009 to assist it in promoting economic development and increasing the availability of low
and moderate income housing in the City. AHS has developed several successful affordable housing projects, a
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 and Moderate Income Housing Fund(LMHIF). AHS, like SBEDC, entered into an =
agreement with the EDA in March 2011 for the receipt of properties and funding from the EDA. This agreement, E
and property transfers made pursuant to it, was validated in the Validation Judgment. As with SBEDC, the SCO N
disputed the validity of the EDA-AHS transactions. These properties were reported in the Successor Agency as of to
June 30,2014.
Sustainable Communities Reinvestment Partnership (SCRIP)was organized as a limited liability company in 2009 r
to pursue renewable energy and sustainability projects in the City to help improve energy efficiency and reduce
greenhouse gas emissions in the region. SCRIP's priorities include the 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 system at the San Bernardino International Airport in conjunction with the Inland Valley Development w
Agency. }
AF
On September 22, 2105, 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 contains various provisions c
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 obligations, including bonded debt, and administrative costs, and
(iii)the treatment of special levies. N
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Note 24—Subsequent Events
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A. Annexation of San Bernardino City Fire Department to San Bernardino County Fire Protection
District °'
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On May 18, 2015, the Mayor and Common Council approved the City Recovery Plan which included c
numerous measures to increase revenues and reduce expenditures, including regionalization or contracting of M
fire services. On August 24, 2015, the Mayor and Common Council authorized a filing of application for the c
City's fire department operations to be annexed to the San Bernardino County Fire Protection District m
(SBCFPD). The City reached agreement with the San Bernardino City Professional Firefighters Union, Local
891 on the annexation in January of 2016. The employment transition for all 140 impacted City fire
employees began in March 2016 and is expected to be completed in May 2016. The full transition to
SBCFPD is effective July 1,2016. c
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On or before July 1,2016,the City will transfer to the County Fire District the cash value of up to 96 hours of
sick leave and up to 96 hours of vacation leave for each SBCPF member's accrued vacation and sick leave Q
balances to the extent owing,of each of the hired employees.In addition the City will make several transfers to i
Trust Accounts on behalf of firefighters in full settlement of cost-sharing and other pension related claims,all E
claims arising in or related to the Post-Petition Litigation(other than arising in connection with cost-sharing), E
and all claims relating to"salary comparability"arising from implementation of Annexation.The total of these cc
transfers will be approximately$5.7 million. a
124 Packet Pg. 835
7.D.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2014 N
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Note 24—Subsequent Events (Continued) C
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B. Outsourcing of Integrated Waste Fund Operations to Franchisee
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On January 25, 2016,the Mayor and Common Council unanimously approved a ten year exclusive franchise Q
agreement with Burrtec Waste Industries, Inc. to provide solid waste, street sweeping and right-of-way
cleanup services to the residents of the City. Effective April 1, 2016, the City will no longer be providing
services through its Integrated Waste enterprise fund and the fund's operations will be shut down, with any =
residual balances being transferred to the General Fund. U_
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C. 2005 Pension Obligation Bonds Settlement v
On March 21, 2016, the Mayor and Common Council approved a settlement in the City's Chapter 9 r
CD
bankruptcy case between the City and the holders of the City-issued 2005 Pension Obligation Bonds that C14
CD
have been in default since 2012. In the settlement agreement dated March 29, 2016, the settlement reduces M
the City's payments to the bondholders by approximately $45 million. The payments are scheduled to be
made over a 30 year period starting one year after the City's Chapter 9 plan is confirmed by the bankruptcy
courts. Under the settlement, the bondholders will receive payment equal to approximately 40 percent of
their debt on a present value basis,discounted using the existing coupon rate. _
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D. Settlement with PARS Participants
On May 5, 2016, the Mayor and Common Council approved a settlement in the City's Chapter 9 bankruptcy °
case between the City and the PARS Participants. In accordance with the PARS Settlement,the PARS Plans o
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will by rejected, and the City will waive any and all claims to the funds held within the PARS Trust and the
415 Trust. The amounts remaining in the PARS Trust and the 415 Trust will be distributed to the PARS N
Participants and the City will make two additional distributions of $290,000 to the PARS Participants in o
subsequent years.
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125 Packet Pg. 836
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REQUIRED SUPPLEMENTARY INFORMATION o
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128 Packet Pg. 839
7.D.a
City of San Bernardino
Required Supplementary Information (Unaudited)
For the Year Ended June 30,2014 N
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Budgetary Information o
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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 services. '
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Following approval of the final budget by the Mayor and Common Council, budget transfers within a department
budget, in an amount not to exceed$25,000 per transfer, shall be approved or disapproved according to established
Finance Department policies and procedures and on forms approved by the Finance Department,with notice to the U-
Director of Finance, and written notice to the Mayor and Common Council, as long as the total department budget N
allocation is not increased, and as long as no transfers into or out of the budget allocation for personnel salaries and LO
benefits are approved. The legal level of budgetary control is personnel salaries and benefits versus other �-
expenditures in each department.
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The budget is formally integrated into the accounting system and employed as a managed control device during the CO
year for the General Fund. c
Budgets are not legally adopted for the other City funds.
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The General Fund budget is adopted on a basis consistent with generally accepted accounting principles. W
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At fiscal year end, operating budget appropriations lapse; however, appropriations for incomplete capital
improvements,equipment purchases,and contractual obligations can be carried over to the following fiscal year. °
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Under Article X11113 of the California Constitution(the Gann Spending Limitation Initiative),the City is restricted m
as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed y
appropriations,the excess must either be refunded to the State Controller,returned to the taxpayers through revised c
tax rates or revised fee schedules, or an excess in one year may be offset against a deficit in the following year.
Further, Section 5 of Article XIIIB allows the City to designate a portion of fund balance for general contingencies a
to be used in future years without limitation. _
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119 Packet Pg. 840
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30,2014 y
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Budgetary Comparison Schedules—General Fund o
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Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
REVENUES:
Q
Taxes $ 90,603,247 $ 95,227,159 $ 98,422,231 $ 3,195,072
Licenses and permits 8,953,400 9,422,651 9,367,281 (55,370)
Fines and forfeitures 2,548,200 2,316,246 2,108,990 (207,256) c
Use of money and property 33,150 33,150 204,295 171,145 LL
Lease revenue 732,000 732,000 704,726 (27,274) N
Intergovernmental 1,586,925 1,736,170 1,817,393 81,223 co
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Charges for services 7,389,200 7,040,993 7,576,976 535,983
Otherrevenues 4,792,400 5,004,544 4,111,481 (893,063) et
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Total revenues 116,638,522 121,512,913 124,313,373 2,800,460 cow
0
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EXPENDITURES:
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Current:
General government 13,951,652 17,310,026 14,729,092 2,580,934 m
Public safety 87,455,721 89,356,150 80,793,365 8,562,785 0
Streets 8,142,077 9,452,450 3,688,475 5,763,975 w
L
Culture and recreation 5,175,863 6,860,653 6,545,614 315,039 M
Community development 3,447,055 3,112,600 2,796,048 316,552 >-
AF A
Community service 1,716,128 1,797,203 1,565,203 232,000 0
Debt service:
0
Principal 1,097,405 3,942,071 2,850,564 1,091,507 m
Interest and fiscal charges 749,595 1,355,018 2,060,373 (705,355) W
N
Total expenditures 121,735,496 133,186,171 115,028,734 18,157,437 0
0
REVENUES OVER o
(UNDER)EXPENDITURES (5,096,974) (11,673,258) 9,284,639 20,957,897 Q
C
OTHER FINANCING SOURCES(USES)
Transfers in 11,452,986 13,558,334 3,020,719 (10,537,615) aCi
Transfers out (42,500) - (3,937,273) (3,937,273) y
Total other financing sources(uses) 11,410,486 13,558,334 (916,554) (14,474,888)
C
Net change in fund balance $ 6,313,512 $ 1,885,076 8,368,085 $ 6,483,009
0
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Fund Balance:
Beginning of year,as restated(Note 22) 5,021,418
End of year $ 13,389,503
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130 Packet Pg. 841
7.D.a
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30,2014 N
U-
L
0
Budgetary Comparison Schedules—Federal and State Grants Special Revenue Fund
0
a
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget ++
REVENUES: Q
Licenses and permits $ - $ - $ 150 $ 150
Use of money and property - - 49,107 49,107
Intergovernmental 12,990,249 15,421,283 13,465,663 (1,955,620)
Otherrevenues - - 392,331 392,331
Total revenues $ 12,990,249 $ 15,421,283 $ 13,907,251 $ (1,514,032) N
M
EXPENDITURES:
Current:
General government - 6,012,156 2,311,508 (3,700,648)
0
Public safety - 928,748 5,298,157 4,369,409 N
Streets 100,000 100,000 249,996 149,996 c
Cl)
Culture and recreation 315,000 315,000 842,408 527,408 d
Community development 20,000 20,000 32,573 12,573 =
Community service 2,778,965 3,285,464 3,757,132 471,668
'73
Debt Service: d
Principal 852,269 852,269 856,834 4,565
Interest and fiscal charges 419,307 419,307 419,307 - W
L
Total expenditures 4,485,541 11,932,944 13,767,915 1,834,971 ea
d
REVENUES OVER 0
(UNDER)EXPENDITURES 8,504,708 3,488,339 139,336 320,939 V-
0
OTHER FINANCING SOURCES(USES): 4)
Transfers out 2,720,386 3,792,934 - (3,792,934)
N
Total other financing sources(uses) 2,720,386 3,792,934 - (3,792,934) f
O
CHANGE IN FUND BALANCE $ 11,225,094 $ 7,281,273 139,336 $ (7,141,937)
Q
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FUND BALANCE: C
d
Beginning of year,as restated(Note 22) 19,502,857
C
End of year $ 19,642,193 4)CL
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131 Packet Pg. 842
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30,2014 y
U-
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O
W
Budgetary Comparison Schedules—Low and Moderate Income Housing Special Revenue Fund r-
0
CL
Budgeted Amounts Actual Variance with W
Original Final Amounts Final Budget
.O
O
a
REVENUES:
eo
Licenses and permits $ - $ - $ 825 $ 825
Use of money and property - - 40,802 40,802 c
Other revenues - - 49,445 49,445 LL
Total revenues - - 91,072 91,072 N
M
L0
EXPENDITURES: :
Current:
T
Community development - - - - N
Total expenditures - - - c
a>
c
REVENUESOVER
(UNDER)EXPENDITURES - - 91,072 91,072 d
c
OTHER FINANCING SOURCES(USES): W
Transfers from Successor Agency - - 2,105 2,105
d
Total other financing sources(uses) - - 21105 2,105 >-
- - O
CHANGE IN FUND BALANCE $$ 93,177 $ 93,177 t
O
O.
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FUND BALANCE:
Beginning of year,as restated(Note 22) 57,959,378 L
0
End of year $ 58,052,555
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132 Packet Pg. 843
7.D.a
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30,2014 N
U-
L
0
Budgetary Comparison Schedules—Sales and Road Special Revenue Fund
0
0.
Budgeted Amounts Actual Variance with W
Original Final Amounts Final Budget
:a
REVENUES: Q
Taxes $ 2,995,716 2,995,716 $ 3,433,884 $ 438,168 •�
v
Use of money and.property 2,000 2,000 44,572 42,572
Intergovernmental - - 502,129 502,129 c
Total revenues $ 2,997,716 $ 2,997,716 $ 3,980,585 $ 982,869 LL
N
M
EXPENDITURES: `n
Current:
Streets 2,956,754 3,603,921 3,012,569 (591,352) r
Debt Service: N
Principal - - 1,916 1,916 o
Total expenditures 2,956,754 3,603,921 3,014,485 (589,436) C
3
REVENUES OVER
.a
(UNDER)EXPENDITURES 40,962 (606,205) 966,100 393,433 4)
C
CHANGE IN FUND BALANCE $ 40,962 $ (606,205) 966,100 $ 1,572,305 W
L
FUND BALANCE:
Beginning of year,as restated(Note 22) 6,240,391 0
End of year $ 7,206,491 0
CL
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1„ Packet Pg. 844
7.D.a
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30, 2014 U
U-
0
L
O
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Schedules of Funding Progress—Defined Benefit Pension Plans
O
Q
Unfunded m
w
Actuarial +-
Entry Age Unfunded Liability as
Actuarial Actuarial Actuarial Actuarial Percentage of Q
Valuation Assets Accrued Accrued Funded Covered Covered is
Date Value Liability Liability Ratio Payroll Payroll
c
Miscellaneous Plan
c
6/30/2012 $316,290,288 $ 446,677,440 $130,387,152 70.81% $ 47,801,727 272.77% U-
6/30/2013 346,176,839 462,716,487 116,539,648 74.81% 39,974,288 291.54% N
6/30/2014* 391,353,584 501,077,609 109,724,025 78.10% 41,170,684 266.51% Cl)
7t
Safety Plan o
6/30/2012 $422,274,719 $ 614,962,254 $192,687,535 68.67% $ 44,163,084 436.31% N
6/30/2013 463,930,661 633,088,050 169,157,389 73.28% 38,561,701 438.67% Cl)
6/30/2014* 521,708,134 684,279,693 162,571,559 76.24% 35,478,820 458.22% _
Successor Agency
6/30/2012 $ 13,723,710 $ 18,719,717 $ 4,996,007 73.31% $ 1,151,690 433.80% W
6/30/2013 14,909,317 19,072,933 4,163,616 78.17% 437,864 950.89%
6/30/2014* 15,711,159 19,629,085 3,917,926 80.04% 85,716 4570.82%
Enhancement Plan 0
6/30/2008* $ 942,000 $ 5,549,000 $ 4,607,000 17.0% N/A N/A t
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*Most recent actuarial valuation available
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134 Packet Pg. 845
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30, 2014 N
U.
0
Schedules of Funding Progress—Other Postemployment Benefit Plans t
0
CL
Unfunded
Actuarial
Entry Age Unfunded Liability as
Actuarial Actuarial Actuarial Actuarial Percentage of Q
Valuation Assets Accrued Accrued Funded Covered Covered �o
Date Value Liability Liability Ratio Payroll Payroll =
City c
6/30/2009 $ $ 61,371,000 $ 61,371,000 0.00% $ 78,951,000 77.73% u_
6/30/2012 48,819,000 48,819,000 0.00% 84,166,000 58.00% N
6/30/2014* - 7,822,000 7,822,000 0.00% 62,980,000 12.42%
Water Department
6/30/2008 $ - $ 26,190,000 $ 26,190,000 0.00% $ 12,755,000 205.33% r
0
6/30/2010 28,676,000 28,676,000 0.00% 12,619,000 227.24% N
0
6/30/2012* 8,556,000 28,831,000 20,275,000 29.68% 14,765,000 137.32% Cl)
m
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Successor Agency
6/30/2008* $ - $ 749,208 $ 749,208 0.00% $ 1,764,100 42.47%
d
* Most recent actuarial valuation available w
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135 Packet Pg. 846
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SUPPLEMENTARY INFORMATION L
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137 Packet Pg. 848
7.D.a
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138 Packet Pg. 849
7.D.a
NON-MAJOR
GOVERNMENTAL FUNDS ;
L
0
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0
CL
SPECIAL REVENUE FUNDS:
Cable TV Fund - This fund is used to account for the regulatory oversight of the City's cable companies for franchise a
compliance,consumer protection,and franchise renewal negotiations,as well as operating two access channels.
.2
c
Asset Seizure Fund - This fund is used for the investigation, detection, and prosecution of criminal activities. Funding is =
provided by criminal assets seized under existing state and federal statutes.
N
M
LO
Alternative Transportation Fund - This fund is used to account for the receipt and disbursement of funds received per
Transportation Development Act Article 3 (SB 821) of the Bikeway & Pedestrian Program and the State and Local Fiscal o
Assistance Act of 1972. N
0
M
d
Special Gas Tax Fund - This fund is used to account for the receipt of gasoline tax revenue paid to the City as a subvention
from the State of California.These funds are transferred to the General Fund to partially support maintenance activities and to
finance street construction projects as provided by State law.
w
L
Traffic Safety Fund -This fund is used for the recording of the City's share of California Vehicle Code fines collected by San 0
Bernardino County. L
0
Sewerline Maintenance Fund -This fund is used to account for the cost of maintaining sewer lines as paid for from a portion
of sewer revenues.
0
Fire Station Fund -This fund is used to account for the operation and maintenance of the Verdemont Fire Station.
a
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DEBT SERVICE FUNDS:
c
m
CL
Assessment District#985 Fund -This fund is used to account for the collection of assessments from property owners and for a
the remittance of such assessments to bondholders as required by the Improvement Bond Act of 1915 and related California c
State statutes for this district.
0
Assessment District #987 Fund - This fund is used to account for the collection of the Verdemont infrastructure fees on y
developing properties used to repay a loan from bondholders as required by the Improvement Bond Act of 1915 and related
California State statutes for this district.
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Assessment District#101 fu
S Fund -This nd is used to account for the collection of assessments from property owners and for w
the remittance of such assessments to the Successor Agency of the former redevelopment agency (Economic Development
Agency)and other City funds as required by the Improvement Bond Act of 1915 and related California State statutes for this a
district.
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139 Packet Pg. 850
7.D.a
NON-MAJOR
GOVERNMENTAL FUNDS ;T
0
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0
CAPITAL PROJECTS FUNDS:
a:
Verdemont Fund -This fund is used to account for development fees collected for improvements in the Verdemont area. a
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Fire Equipment Fund -This fund is used for the acquisition of fire equipment from lease proceeds.
U.
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Park Construction Fee Fund - This fund is used for park land acquisition and development. Principal revenue sources are v
parks acquisition and development fees collected from developers and state revenues for park development.
0
N
Cemetery Construction Fund This fund is used for improvements to the City-owned cemetery from a portion of fees Co
collected for services. a�
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Sewerline Construction Fund -This fund is used for construction of sewer collection systems from development revenues. -(D a
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Storm Drain Construction Fund - This fund is used for construction of storm drain facilities through the City from
0 development revenues. c
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Special Assessments Fund - This fund is used to account for assessment districts related to improvement, construction, and
maintenance,including landscape maintenance,sewerline maintenance,and security paid by assessments on properties. ,a
L
0
Cultural Development Construction Fee Fund -This fund is used for collection of development fees used to pay for cultural Q
improvements and activities. _
m
c
Assessment Distric #105 Fund - This fund is used for constructionn of improvements from loans related to Assessment a
District#1015.
c
Impact Fees Fund - This fund is used to account for the specific revenue sources that are legally restricted to fund W
expenditures of developer impact fees. c
CL
d
Street Construction Fund -This fund is used to account for right-of-way acquisition,construction,and improvments related to
the City's street system.These projects are funded by various state and federal programs and matching City funds.
U.
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Public Improvements Fund -This fund is used to for maintenance and construction of improvements around the Indian Bingo
Casino located on the reservation. a
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d
Prop IB Local Street Fund -This fund was established to account for monies received from the State through Prop 1B. This r
Oproposition provided $19 billion in bond funds for a variety of transportation projects, including $2 billion for cities and
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counties for maintenance and improvements of local transportation facilities. a
140 Packet Pg. 851
City of San Bernardino
Combining Balance Sheet
Non-Major Governmental Funds
June 30,2014 ii
L
0
W
L
Special Revenue CL
m
Asset Alternative Special Traffic a
Cable TV Seizure Transportation Gas Tax Safety v
c
ASSETS
c
Cash and investments $ 648,048 $ 1,344,535 $ 495,474 $ 3,220,449 $ 1,314,788 U_
Receivables: cv
Accounts 69,118 - 48 (614,157) - v
Interest 1,417 2,650 380 6,360 2,862
Special assessments - - - - - r
Due from other governments - - 68,504 614,157 34,884 N
Advances to other funds - - - - - C
M
Prepaid items 8,000
Total assets $ 726,583 $ 1,347,185 $ 564,406 $ 3,226,809 $ 1,352,534
V
d
LIABILITIES,DEFERRED INFLOWS OF
c
RESOURCES AND FUND BALANCES W
L
Liabilities: d
Accounts payable $ 17,716 $ 221,590 $ 733 $ 226,454 S 348,225
Accrued payroll and related liabilities 1,709 - - - - w
Deposits - 20,000 - -
O
Retentions payable - - - - - a.
d
Due to other funds - - - - -
Advances from other funds -
Total liabilities 19,425 241,590 733 226,454 348,225
a
Deferred inflows of resources: Q
Unavailable revenues - - - - - y
'a
Total deferred inflows of resources - - - - -
m
Q
d
Fund Balances:
c
Nonspendable 8,000 - - - -
Restricted 699,158 1,105,595 563,673 3,000,355 1,004,309
Unassigned(deficit) - - - - -
O
Total fund balances 707,158 1,105,595 563,673 3,000,355 1,004,309 d
Total liabilities,deferred inflows of 1i
resources and fund balances $ 726,583 $ 1,347,185 $ 564,406 $ 3,226,809 $ 1,352,534 O
.v
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(Continued)
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141 Packet Pg. 852
City of San Bernardino
Combining Balance Sheet(Continued)
Non-Major Governmental Funds
June 30,2014 LL
0
Special Revenue Debt Service Q
m
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Assessment Assessment Assessment Q
Sewerline Fire District District District
Maintenance Station #985 #987 #1015 U
c
ASSETS
c
Cash and investments $ 3,465,250 $ 351,522 $ - $ 6,681 $ 52,908 LL
Receivables: N
Accounts 6,210 - - - - LO
Interest 7,337 760 - 44 186
Special assessments - - - - 163,804 r
Due from other governments 281,337 - 444 N
Advances to other funds 73,800 - - °
Cl)
Prepaid items - - - - -
Total assets $ 3,833,934 $ 352,282 $ - $ 6,725 $ 217,342
v
m
LIABILITIES,DEFERRED INFLOWS OF
c
RESOURCES AND FUND BALANCES W
L
Liabilities:
Accounts payable $ 107,279 $ - $ - $ - $
Accrued payroll and related liabilities - - - - o
Deposits -
0
Retentions payable - - - - Q-
Due to other funds - - - -
Advances from other funds - - 264,400 N
L
Total liabilities 107,279 - 264,400 t
=a
Deferred inflows of resources: Q
Unavailable revenues - 289,599 - - 163,804 c
m
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Total deferred inflows of resources - 289,599 - - 163,804
CL
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Fund Balances:
C
Nonspendable 73,800
Restricted 3,652,855 62,683 - 6,725 -
Unassigned(deficit) - - - - (210,862)
Total fund balances 3,726,655 62,683 - 6,725 (210,862) d
Total liabilities,deferred inflows of
resources and fund balances $ 3,833,934 $ 352,282 $ - $ 6,725 $ 217,342 R
w
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(Continued) 5
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142 Packet Pg. 853
7.D.a
City of San Bernardino
Combining Balance Sheet (Continued)
Non-Major Governmental Funds y
June 30, 2014 ii
L
0
W
L
Capital Projects C
'a
Fire Park
Equipment Construction Cemetery Sewerline Q
Verdemont Acquisition Fee Construction Construction v
c
ASSETS f°
c
Cash and investments $ 248,710 $ 55,246 $ 169,910 $ 53,404 $ 2,739,858 LL
Receivables: cN
M
Accounts - - - - - LO
Interest 538 120 368 116 5,960
Special assessments - - - - - r
Due from other governments - - - N
Advances to other funds - - 73,800 0
M
Prepaid items - - - - - m
c
Total assets $ 249,248 $ 55,366 $ 170,278 $ 53,520 $ 2,819,618
Q
LIABILITIES,DEFERRED INFLOWS OF
c
RESOURCES AND FUND BALANCES W
L
Liabilities: aa)
Accounts payable $ - $ 6,932 $ $ $ 14,704
Accrued payroll and related liabilities - - - - o
Deposits - - - - - "0
Retentions payable - 47,900 - CL
a)
Due to other funds - -
Advances from other funds - - - - -
Total liabilities - 6,932 47,900 - 14,704 O
O
Deferred inflows of resources: Q
Unavailable revenues - aa)
Total deferred inflows of resources
a�
Q.
d
Fund Balances:
c
Nonspendable - - - - 73,800
Restricted 249,248 48,434 122,378 53,520 2,731,114
Unassigned(deficit) - - - - - C
O
Total fund balances 249,248 48,434 122,378 53,520 2,804,914 m
Total liabilities,deferred inflows of
resources and fund balances $ 249,248 $ 55,366 $ 170,278 $ 53,520 $ 2,819,618
c
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(Continued) c
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143 Packet Pg. 854
7.D.a
City of San Bernardino
Combining Balance Sheet(Continued)
Non-Major Governmental Funds y
June 30,2014 LL
0
w
t
Capital Projects Q
a)
Cultural
Storm Development Assessment 3
Drain Special Construction District Impact
ca
Q
Construction Assessments Fee #1015 Fees
c
ASSETS fQ
c
Cash and investments $ 3,525,149 $ 190,178 $ 1,772,324 $ 33,991 $ 12,785,749 u_
Receivables: N
M
Accounts - - - - - LO
Interest 7,616 - 3,799 74 23,894
Special assessments
Due from other governments - 11,346 - - N
Advances to other funds - -
M
Prepaid items - - - d
c
Total assets $ 3,532,765 $ 201,524 $ 1,776,123 $ 34,065 $ 12,809,643
d
LIABILITIES,DEFERRED INFLOWS OF °
c
RESOURCES AND FUND BALANCES w
Liabilities:
Accounts payable $ 231,120 $ 109,100 $ $ $ 1,500,424 L
Accrued payroll and related liabilities - - - - - J
Deposits - 16,869 - - - t
O
Retentions payable 12,804 - - - 6,957
Due to other funds - - - - -
Advances from other funds - - - - -
O
Total liabilities 243,924 125,969 - 1,507,381
Deferred inflows of resources: Q
Unavailable revenues - - - - -
Total deferred inflows of resources
d
C.
d
Fund Balances:
c
Nonspendable - - - -
Restricted 3,288,841 75,555 1,776,123 34,065 11,302,262
Unassigned(deficit) - - - - -
Total fund balances 3,288,841 75,555 1,776,123 34,065 11,302,262 m
Total liabilities,deferred inflows of
resources and fund balances $ 3,532,765 $ 201,524 $ 1,776,123 $ 34,065 $ 12,809,643 ca
c
cv
(Continued) 5
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144 Packet Pg. 855
City of San Bernardino
Combining Balance Sheet(Continued)
Non-Major Governmental Funds
June 30,2014 U.
0
Capital Projects o-
W
Total
Prop 1 B Other
Street Public Local Governmental Q
�v
Construction Improvements Street Funds v
ASSETS CU
c
Cash and investments $ - $ 1,091,458 $ 69,460 $ 33,635,092 u-
Receivables: 04
Accounts 402,863 - - (135,918)
Interest - 2,363 138 66,982
Special assessments - - - 163,804
Due from other governments - - - 1,010,672 °
Advances to other funds - - - 147,600 cD
M
Prepaid items - - - 8,000 c
Total assets $ 402,863 $ 1,093,821 $ 69,598 $ 34,896,232
m
LIABILITIES,DEFERRED INFLOWS OF
c
RESOURCES AND FUND BALANCES W
L
Liabilities: y
Accounts payable $ 323,236 $ - $ 2,367 $ 3,109,880
Accrued payroll and related liabilities - - - 1,709 0
Deposits - - - 36,869 C
Retentions payable 8,000 - 16,019 91,680 d
Due to other funds 377,767 - - 377,767 W
Advances from other funds - - 264,400 L
Total liabilities 709,003 - 18,386 3,882,305 w
'o
3
Deferred inflows of resources: Q
Unavailable revenues 140,653 - - 594,056
d
Total deferred inflows of resources 140,653 - - 594,056 d
CL
d
Fund Balances:
c
Nonspendable - - - 155,600 ,a
Restricted - 1,093,821 51,212 30,921,926 0
Unassigned(deficit) (446,793) - - (657,655)
Total fund balances (446,793) 1,093,821 51,212 30,419,871
Total liabilities,deferred inflows of
resources and fund balances $ 402,863 $ 1,093,821 $ 69,598 $ 34,896,232 ca
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(Concluded) _
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145 Packet Pg. 856
7.D.a
City of San Bernardino
Combining Statement of Revenues,Expenditures and Changes in Fund Balances
G Non-Major Governmental Funds
For the Year Ended June 30,2014 U_
L
0
w
Special Revenue rL
m
3
Asset Alternative Special Traffic Q
Cable TV Seizure Transportation Gas Tax Safety
c
REVENUES:
c
Taxes $ 309,792 $ - $ - $ - $ ii
Licenses and Permits - - - - - w
Impact fees - - - - - Cl)
Fines and forfeitures - - - - 381,659
Use of money and property 4,860 8,109 1,601 22,963 2,862
Intergovernmental - 515,979 222,860 5,980,203 37,990 N
Charges for Services 30 - - - - M
Other revenues 30,701 - 5,200 - - y
c
Total revenues 345,383 524,088 229,661 6,003,166 422,511
EXPENDITURES:
c
Current: W
L
General government 155,224 - 89,636 - -
Public safety - 617,421 -
Streets � - = 4, 041,503 - O
Culture and recreation
Community development - - - 10,000 - p,
Debt service: w
Principal - - 1,278 1,065 - to
L
Interest and fiscal charges - - - - - O
Total expenditures 155,224 617,421 90,914 4,052,568 -
Q
.r
REVENUES OVER c
d
(UNDER)EXPENDITURES 190,159 (93,333) 138,747 1,950,598 422,511 c
d
CL
OTHER FINANCING SOURCES(USES): d
'a
Transfers in - - 89,140 - - c
Transfers out - - - - - c
R
Total other financing sources(uses) - - 89,140 - -
O
Q
CHANGE IN FUND BALANCE 190,159 (93,333) 227,887 1,950,598 422,511
m
FUND BALANCE:
c
Beginning of year,as restated(Note 22) 516,999 1,198,928 335,786 1,049,757 581,798 c
End of year $ 707,158 $ 1,105,595 $ 563,673 $ 3,000,355 $ 1,004,309 U.
To
O
c
(Continued) O
Q
c
d
E
Q
146 Packet Pg. 857
7.D.a
City of San Bernardino
Combining Statement of Revenues,Expenditures and Changes in Fund Balances (Continued)
CU
Non-Major Governmental Funds
For the Year Ended June 30,2014 u
L
0
w
L
Special Revenue Debt Service Q
a�
Assessment Assessment Assessment :3
Sewerline Fire District District District Q
Maintenance Station #985 #987 #1015 f°
U
C
REVENUES: co
c
Taxes $ - $ 613,488 $ - $ 1,018 $ 61,286 U_
Licenses and Permits - - - - - N
Impact fees - - - - co
Fines and forfeitures - - - v
Use of money and property 28,082 2,636 149 43 484 d
Intergovernmental - - - - - N
Charges for Services 3,455,685 - - - M
Other revenues 50 17,408 - 6,725 a)
c
Total revenues 3,483,817 633,532 149 7,786 61,770
EXPENDITURES:
c
Current: W
L
General government - - - -
Public safety - 585,600 - - - ?-
Streets 1,834,971 1,196 - 1,886 0
Culture and recreation
Community development - - - - - Q.
Debt service: °)
Principal 18,102 - - -
Interest and fiscal charges - - 17,622 O
Total expenditures 1,853,073 586,796 - - 19,508 =
Q
REVENUES OVER
(UNDER)EXPENDITURES 1,630,744 46,736 149 7,786 42,262 c
d
C.
OTHER FINANCING SOURCES(USES):
Transfers in - - - - -
Transfers out (700,000) - (68,689) (13,455) - c
Total other financing sources(uses) (700,000) - (68,689) (13,455) -
O
C.
CHANGES IN FUND BALANCES 930,744 46,736 (68,540) (5,669) 42,262 m
R
FUND BALANCES:
Beginning of year,as restated(Note 22) 2,795,911 15,947 68,540 12,394 (253,124)
End of year $ 3,726,655 $ 62,683 $ - $ 6,725 $ (210,862) U-
(Continued) a
d
Y
a
147 Packet Pg. 858
City of San Bernardino
Combining Statement of Revenues,Expenditures and Changes in Fund Balances (Continued)
Non-Major Governmental Funds N
For the Year Ended June 30, 2014 i,iL
O
4-
tf
Capital Projects Q
d
Fire Park
Equipment Construction Cemetery Sewerline a
Verdemont Acquisition Fee Construction Construction v
c
REVENUES: as
c
Taxes $ - $ - $ $ - $ ii
Licenses and Permits - - - N
Impact fees - - - to
Fines and forfeitures - - -
Use of money and property 1,581 354 1,081 341 22,423 r
Intergovernmental - - - - - N
Charges for Services - 260 212,473 ccD
Otherrevenues - - - - -
c
Total revenues 1,581 354 1,081 601 234,896
EXPENDITURES:
c
Current: W
L
General government - - - -
Public safety 20,432 - - !-
Streets - 280 8,041 0
Culture and recreation - - t
Community development - - - a
Debt service:
Principal - - - - 426
Interest and fiscal charges - - - - O
Total expenditures - 20,432 280 8,467
a
REVENUES OVER
(UNDER)EXPENDITURES 1,581 (20,078) 801 601 226,429 c
W
CL
OTHER FINANCING SOURCES(USES): m
Transfers in - - - - - C
Transfers out - - - - -
Total other financing sources(uses) - - - - t
O
Q
CHANGES IN FUND BALANCES 1,581 (20,078) 801 601 226,429 O
FUND BALANCES:
Beginning of year,as restated(Note 22) 247,667 68,512 121,577 52,919 2,578,485 c
End of year $ 249,248 $ 48,434 $ 122,378 $ 53,520 $ 2,804,914 u_
To
c
(Continued)
a
E
cv
Y
a
148 Packet Pg.859
7.D.a ,„
City of San Bernardino
Combining Statement of Revenues,Expenditures and Changes in Fund Balances (Continued)
Non-Major Governmental Funds v
�,.►' For the Year Ended June 30,2014 ii
L
O
L
Capital Projects Q.
Cultural }'
Storm Development Assessment Q
Drain Special Construction District Impact _
Construction Assessments Fee #1015 Fees f°
U
REVENUES:
c
Taxes $ - $ 1,285,082 $ - $ - $ U_
Licenses and Permits - - 338,544 - N
Impact fees - - - - 1,76 1,012 c"
Fines and forfeitures - - - -
Use of money and property 22,176 439 11,454 29 72,080 d
Intergovernmental - - - - - N
Charges for Services 162,819 - - M
Other revenues - - - - m
c
Total revenues 184,995 1,285,521 349,998 29 1,833,092
EXPENDITURES:
c
Current: W
L
General government - -
Public safety - - >-
Streets 471,467 2,003,683 - 1,587,749 p
Culture and recreation - 360,561 - - - t
Community development - - - - - p,
Debt service: 12
Principal 1,278 13,842 - - 92,155
Interest and fiscal charges - - - - 62,359 0
Total expenditures 472,745 21378,086 - - 1,742,263
Q
.r
REVENUES OVER
(UNDER)EXPENDITURES (287,750) (1,092,565) 349,998 29 90,829 C
CL
OTHER FINANCING SOURCES(USES): a
Transfers in - 1,475,066 265,650 - -
Transfers out - - - - (38,575)
ea
Total other financing sources(uses) - 1,475,066 265,650 - (38,575) t
O
G.
CHANGES IN FUND BALANCES (287,750) 382,501 615,648 29 52,254 0
R
FUND BALANCES: v
_
Beginning of year,as restated(Note 22) 3,576,591 (306,946) 1,160,475 34,036 11,250,008 =
End of year $ 3,288,841 $ 75,555 $ 1,776,123 $ 34,065 $ 11,302,262 U-
R
_
(Continued) _
a
10 E
Y
W
Q
149 Packet Pg. 860
7.D.a
City of San Bernardino
Combining Statement of Revenues,Expenditures and Changes in Fund Balances (Continued)
Non-Major Governmental Funds
For the Year Ended June 30,2014 ii
L
O
w
1r
Capital Projects Q,
d
Total
Prop 1B Other Q
Street Public Local Governmental
Construction Improvements Street Funds v
c
REVENUES: n3
C
Taxes $ - $ - $ - $ 2,270,666 M
Licenses and Permits - - - 338,544 N
Impact fees - - - 1,761,012 vtn"
Fines and forfeitures - - - 381,659
Use of money and property - 6,945 501 211,193 d
T
Intergovernmental 1,148,815 - - 7,905,847 N
Charges for Services - - - 3,831,267
Other revenues - - - 60,084 O
c
Total revenues 1,148,815 6,945 501 16,760,272 3
•O
EXPENDITURES: V
C
Current: W
L
General government - - - 244,860
0 Public safety - - - 1,223,453 >-
Streets 1,598,964 786 4,459 11,554,985 O
Culture and recreation - - - 360,561 r
Community development - - - 10,000 p,
Debt service: w
Principal 213 - 1,065 129,424 h
Interest and fiscal charges - - - 79,981 +LOS
Total expenditures 1,599,177 786 5,524 13,603,264
Q
REVENUESOVER c
d
(UNDER)EXPENDITURES (450,362) 6,159 (5,023) 3,157,008
d
CL
OTHER FINANCING SOURCES(USES): d
.O
Transfers in 2,107,417 - - 3,937,273
Transfers out - - - (820,719)
R
Total other financing sources(uses) 2,107,417 - - 3,116,554
O
a
CHANGE IN FUND BALANCE 1,657,055 6,159 (5,023) 6,273,562
FUND BALANCE: v
c
Beginning of year,as restated(Note 22) (2,103,848) 1,087,662 56,235 24,146,309 c
End of year $ (446,793) $ 1,093,821 $ 51,212 $ 30,419,871 U.
io
C
(Concluded) QO
c
d
U
R
Q
150 Packet Pg. 861
7.D.a
INTERNAL SERVICE FUNDS
v
0
0
CL
Internal Service Funds are used to finance and account for special activities and services performed by a designated w
City department for other departments on a cost reimbursement basis. The City maintains the following Internal Service
Funds for the purposes indicated: Q
�o
Unemployment Insurance Fund -This fund is used for administration of unemployment insurance claims paid to
the Employment Development Department of the State of California. U-
N
M
Workers'Compensation Fund -This fund is for administration of the City's self-insurance for workers' v
compensation. 14
T
0
N
Liability Insurance Fund -This fund is for the administration of the City's liability claims, combined self-
insurance and umbrella coverage for liability.
Motorpool Fund -This fund is used to account for the maintenance and operating costs for the City's fleet of "0
r-
vehicles. w
L
d
Telephone Support Fund -This fund is used to account for the operating cost and acquisition of the City's o
telephone communications systems.
L
0
Q.
Information Systems Fund -This fund is used to account for the acquisition and maintenance of the City's
computer and emergency communications systems.
0
Y
Utility Fund -This fund is used to account for the control and allocation of the City's utility costs.
Q
Y
Central Services Fund -This fund is used to account for the provision of printing,duplication, and postal services c
and operations of City Stores for supply costs. C
c
0
Q.
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o:
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c
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a
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151 Packet Pg.862
7.D.a
City of San Bernardino
Combining Statement of Net Position
All Internal Service Funds v
June 30,2014 LL
L
W
t
0
Q
0
Unemployment Workers' Liability Telephone
Insurance Compensation Insurance Motorpool Support
ASSETS Q
Current assets: v
Cash and investments $ 76,961 $ - $ 4,469,523 $ 648,462 $ 776,545
c
Accounts receivable - 1,146,929 - - 1,079 W
Interest receivable - - 9,702 1,189 1,644 N
Inventories - - - 249,916 -
Total current assets 76,961 1,146,929 4,479,225 899,567 779,268 d
T
Noncurrent assets: °
N
Capital assets,net - - - 107,672 80,043 M
Total noncurrent assets - - - 107,672 80,043 c
Total assets 76,961 1,146,929 4,479,225 1,007,239 859,311
CD
v
LIABILITIES W
w
L
Current liabilities: 1°
0 d
Accounts payable 76,961 16,643 17,049 312,433 63,085 >-
Due to other funds - 14,018 - - 88,000 ,o
Unearned revenue - 147,326 - - 333
0
Long-tern debt-due within one year - - - - - d
Compensated absences-due within one year - 17,381 13,610 41,026 3,408 M
Claims payable-due within one year - 3,131,021 2,088,264 - - 0
Total current liabilities 76,961 3,326,389 2,118,923 353,459 154,826 =p
Noncurrent liabilities: Q
Long-term debt-due in more than one year - - - - -
Net pension obligation - 535 279 2,975 442
Compensated absences-due in more than one year - 40,557 31,758 95,727 7,951 Q,
Claims payable-due in more than one year - 17,788,803 11,864,406 - -
Total noncurrent liabilities - 17,829,895 11,896,443 98,702 8,393
C
Total liabilities 76,961 21,156,284 14,015,366 452,161 163,219 R
t
0
Q.
NET POSITION(DEFICIT) �
Net investment in capital assets - - - 107,672 80,043
Unrestricted(deficit) - (20,009,355) (9,536,141) 447,406 616,049
Total net position(deficit) $ - $(20,009,355) $ (9,536,141) $ 555,078 $ 696,092 E
U.
(Continued)
0 a
U
f4
Q
152 Packet Pg. 863
City of San Bernardino
Combining Statement of Net Position
All Internal Service Funds (Continued)
0
June 30,2014 U_
L
0
w
,r
L
0
Q
W
Information Central
w
Systems Utility Services Total =a
ASSETS `t
Current assets:
c
Cash and investments $ 1,569,854 $ 1,628,971 $ 8,702 $ 9,179,018
c
Accounts receivable 27,073 - 17 1,175,098
Interest receivable 3,239 - - 15,774 N
Inventories - - - 249,916 LO
Total current assets 1,600,166 1,628,971 8,719 10,619,806
Noncurrent assets: 0
N
Capital assets,net 4,252,973 119,113 - 4,559,801 0
M
Total noncurrent assets 4,252,973 119,113 - 4,559,801 =
Total assets 5,853,139 1,748,084 8,719 15,179,607
m
V
LIABILITIES =
W
Current liabilities:
0 m
Accounts payable 183,891 1,593,313 1,997 2,265,372
Due to other funds 76,200 - - 178,218 ,O
Unearned revenue 23,333 - - 170,992 C
Long-term debt-due within one year 543,652 71,053 - 614,705 CL
d
Compensated absences-due within one year 77,661 2,170 1,302 156,558 O
0
Claims payable-due within one year - - - 5,219,285
Total current liabilities 904,737 1,666,536 3,299 8,605,130 'a
Noncurrent liabilities: a
.r
Long-term debt-due in more than one year 2,963,211 353,799 - 3,317,010
Net pension obligation 2,882 116 116 7,345 c
Compensated absences-due in more than one year 181,210 5,064 3,039 365,306 p,
Claims payable-due in more than one year - - - 29,653,209
Total noncurrent liabilities 3,147,303 358,979 3,155 33,342,870 a
c
Total liabilities 4,052,040 2,025,515 6,454 41,948,000
0
Q.
NET POSITION(DEFICIT) m
Net investment in capital assets 746,110 119,113 - 1,052,938
Unrestricted(deficit) 1,054,989 (396,544) 2,265 (27,821,331)
Total net position(deficit) $ 1,801,099 $ (277,431) $ 2,265 $(26,768,393) E
LL
R
(Concluded)
c
a
w
E
M
w
a
153 Packet Pg. 864
7.D.a
City of San Bernardino
Combining Statement of Revenues,Expenses,and Changes in Net Position
All Internal Service Funds
For the Year Ended June 30,2014 U-
2 w
t
0
CL
d
Unemployment Workers' Liability Telephone w
.r
Insurance Compensation Insurance Motorpool Support 'p
3
OPERATING REVENUES: a
�o
Charges for services $ 633,102 $ 6,841,372 $ 3,137,947 $ 4,493,284 $ 1,065,491
Other - - - - - M
LL
c
Total operating revenues 633,102 6,841,372 3,137,947 4,493,284 1,065,491 ..
N
M
OPERATING EXPENSES: IV
Cost of sales and services 3,712 1,097,636 255,882 5,837,597 675,740 r
Claims expense 322,448 7,165,720 3,737,229 - - N
Amortization - - - - -
M
Depreciation - - - 186,045 80,044 =
Total operating expenses 326,160 8,263,356 3,993,111 6,023,642 755,784
d
Operating income(loss) 306,942 (1,421,984) (855,164) (1,530,358) 309,707 c
W
L
NONOPERATING REVENUES(EXPENSES):
nterest income - - 9,702 1,189 1,644
Interest expense - - - - -
Miscellaneous income - - - 487,481 3,592 0 CL
d
Total nonoperating revenues(expenses) - - 9,702 488,670 5,236
y
O
Income(loss)before transfers 306,942 (1,421,984) (845,462) (1,041,688) 314,943
Changes in net position 306,942 (1,421,984) (845,462) (1,041,688) 314,943
d
a
NET POSITION: _
d
C.
Beginning of year,as restated(Note 22) (306,942) (18,587,371) (8,690,679) 1,596,766 381,149 d
End of year $ - $ (20,009,355) $ (9,536,141) $ 555,078 $ 696,092
v
c
M
(Continued) t
O
d
R
Z
C
cc
C
U.
t0
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C
a
Y
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U
f0
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154 Packet Pg. 865
City of San Bernardino
Combining Statement of Revenues,Expenses,and Changes in Net Position
All Internal Service Funds (Continued)
For the Year Ended June 30,2014 U.
L
W
O
Q.
Information Central
Y
Systems Utility Services Total
O
OPERATING REVENUES: Q
Charges for services $ 3,774,154 $ 7,285,003 $ 242,635 $ 27,472,988
Other - - - -
c
Total operating revenues 3,774,154 7,285,003 242,635 27,472,988 LL;
N
M
OPERATING EXPENSES:
Cost of sales and services 2,610,726 5,169,209 109,714 15,760,216 14
Claims expense - - - 11,225,397 N
Amortization 594,633 - - 594,633 c
M
Depreciation 200,110 117,191 - 583,390
Total operating expenses 3,405,469 5,286,400 109,714 28,163,636
a�
Operating income(loss) 368,685 1,998,603 132,921 (690,648)
w
co
L
NONOPERATING REVENUES(EXPENSES):
�Interest income 3,239 - - 15,774 p
Interest expense (116,619) (10,726) - (127,345) w
Gain(loss)on disposal of capital assets 245 - - 491,318 0
d
Total nonoperating revenues(expenses) (113,135) (10,726) - 379,747 w
N
L
Income(loss)before transfers 255,550 1,987,877 132,921 (310,901) r
a
Changes in net position 255,550 1,987,877 132,921 (310,901) c
d
NET POSITION: c
d
Q.
Beginning of year,as restated(Note 22) 1,545,549 (2,265,308) (130,656) (26,457,492)
a
End of year $ 1,801,099 $ (277,431) $ 2,265 $ (26,768,393) E
a
c
c�
(Concluded)
O
n.
m
U
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fC
C
LL
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155 Packet Pg. 866
7.D.a
City of San Bernardino
Combining Statement of Cash Flows
All Internal Service Funds U
For the Year Ended June 30,2014 U.
L
0
L
0
Q
0
Unemployment Workers' Liability Telephone
Insurance Compensation Insurance Motorpool Support a
CASH FLOWS FROM OPERATING ACTIVITIES: Q
Cash received from user departments $ 417,270 $ 4,883,427 $ 4,104,965 $ 4,598,673 $ 1,055,867 v
Cash payments to suppliers and employees c=a
for goods and services (17,861) (1,068,325) (122,994) (5,698,394) (725,660)
Cash payments for claims and insurance (322,448) (3,815,102) (1,884,784) - - ..
Cash received from(paid for)other activities - - - 487,481 3,592 �
Net cash provided by(used in)
operating activities 76,961 - 2,097,187 (612,240) 333,799
0
N
CASH FLOWS FROM CAPITAL AND e°>
RELATED FINANCING ACTIVITIES: _
Principal payments on long term debt
Acquisition of capital assets - - - (1) (1) W
Interest paid - - - - lL
Net cash provided by(used in)capital and L
m
related financing activities
Net change in cash and cash equivalents 76,961 2,097,187 (612,241) 333,798 t
O
CL
CASH AND CASH EQUIVALENTS:
Beginning of year - - 2,372,336 1,260,703 442,747
End of year $ 76,961 $ - $ 4,469,523 $ 648,462 $ 776,545
v
a
RECONCILIATION TO STATEMENT OF c
NET POSITION: a)
.a
Cash and investments $ 76,961 $ - $ 4,469,523 $ 648,462 $ 776,545 =
d
Total cash and cash equivalents $ 76,961 $ - $ 4,469,523 $ 648,462 $ 776,545
c
(Continued) C
O
O
Q.
d
_
M
LL
c{S
_
_
a
E
a
156 Packet Pg. 867
7.D.a
City of San Bernardino
Combining Statement of Cash Flows
All Internal Service Funds (Continued)
For the Year Ended June 30,2014 U-
0
w
0
a�
Information Central
r
Systems Utility Services Total
CASH FLOWS FROM OPERATING ACTIVITIES: Q
Cash received from user departments $ 5,002,646 $ 6,392,098 $ 126,297 $ 26,581,243 v
Cash payments to suppliers and employees M
for goods and services (3,399,878) (4,718,872) (116,417) (15,868,401) iy
Cash payments for claims and insurance - - (1,178) (6,023,512) N
Cash received from(paid for)other activities 245 - - 491,318
Net cash provided by(used in)
operating activities 1,603,013 1,673,226 8,702 5,180,648
0
N
CASH FLOWS FROM CAPITAL AND M
RELATED FINANCING ACTIVITIES: d
c
3
Principal payments on long term debt (528,382) (33,528) - (561,910)
Acquisition of capital assets (73,912) - - (73,914) d
Interest paid (116,619) (10,727) - (127,346) W
Net cash provided by(used in)capital and L
related financing activities (718,913) (44,255) - (763,170) }
Net change in cash and cash equivalents 884,100 1,628,971 8,702 4,417,478
w
O
Q
CASH AND CASH EQUIVALENTS: �
Beginning of year 685,754 - - 4,761,540
End of year $ 1,569,854 $ 1,628,971 $ 8,702 $ 9,179,018 w
.O
Q
RECONCILIATION TO STATEMENT OF
NET POSITION: m
Cash and investments $ 1,569,854 $ 1,628,971 $ 8,702 $ 9,179,018
d
Total cash and cash equivalents $ 1,569,854 $ 1,628,971 $ 8,702 $ 9,179,018 a
c
(Concluded)
t0
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G
f6
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U-
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L
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157 Packet Pg.868
ONMOMMONNNINENt-
7.D.a
City of San Bernardino
Combining Statement of Cash Flows
All Internal Service Funds (Continued) N
For the Year Ended June 30,2014 U.
w
t
0
CL
0
Unemployment Workers' Liability Telephone
Insurance Compensation Insurance Motorpool Support
RECONCILIATION OF OPERATING INCOME Q
TO NET CASH PROVIDED BY(USED IN)
.v
OPERATING ACTIVITIES: _
R
Operating income(loss) $ 306,942 $ (1,421,984) $ (855,164) $ (1,530,358) $ 309,707 =
U.
Adjustments to reconcile operating income(loss)to
N
net cash provided by(used in)operating activities:
Depreciation - - - 186,045 80,044
Amortization - - - - - d
T
Other non-operating revenues - - - 487,481 3,592 N
Changes in operating assets and liabilities: M
Accounts receivable - (1,146,929) - 5,166 (147) c
Due from other governments - - - 100,223 -
Due from other funds - - 967,018 - - .a
Inventories - - - 2,170 - V
V
Prepaids - - 126,383 - - _
W
Accounts payable (14,149) 2,315 3,252 275,097 (17,149) t`s
Accrued liabilities - - - -
0 Due to other funds (215,832) (958,342) - - (9,810)
w`p
Unearned revenue - 147,326 - - 333 t
Net pension obligation - (30,942) (16,144) (172,204) (25,561) 0 CL
Compensated absences - 57,938 19,397 34,140 (7,210) W
Claims and judgments payable - 3,350,618 1,852,445 - - JA
Total adjustments (229,981) 1,421,984 2,952,351 918,118 24,092 r
.a
Net cash provided by(used in)
operating activities $ 76,961 $ - $ 2,097,187 $ (612,240) $ 333,799
d
(Continued) C
a
d
C
_
0
CL
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c
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0
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a
a.:
m
U
f6
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Y
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158 Packet Pg. 869
City of San Bernardino
Combining Statement of Cash Flows
All Internal Service Funds (Continued)
For the Year Ended June 30,2014 LL
,o
t
0
CL
0
Information Central W
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Systems Utility Services Total V
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RECONCILIATION OF OPERATING INCOME Q
TO NET CASH PROVIDED BY(USED IN) W
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OPERATING ACTIVITIES:
Operating income(loss) $ 368,685 $ 1,998,603 $ 132,921 $ (690,648) c
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Adjustments to reconcile operating income(loss)to
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net cash provided by(used in)operating activities: M
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Depreciation 200,110 117,191 - 583,390
Amortization 594,633 - - 594,633 IV
Other non-operating revenues 245 - - 491,318 N
Changes in operating assets and liabilities: o
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Accounts receivable (21,473) - 1,355 (1,162,028)
Due from other governments - - - 100,223 0
Due from other funds 1,226,430 - - 2,193,448
Inventories - - - 2,170 d
Prepaids - - - 126,383 W
Accounts payable (617,066) 456,574 (687) 88,187
Accrued liabilities (1,158) - - (1,158)
Due to other funds 202 (892,905) (117,693) (2,194,380) p
Unearned revenue 23,333 - - 170,992 t
Net pension obligation (166,823) (6,727) (6,727) (425,128) 0 CL
Compensated absences (4,105) 490 711 101,361 W
Claims and judgments payable - - (1,178) 5,201,885 y
Total adjustments 1,234,328 (325,377) (124,219) 5,871,296 w
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Net cash provided by(used in) 3
operating activities $ 1,603,013 $ 1,673,226 $ 8,702 $ 5,180,648
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FIDUCIARY FUNDS N
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AGENCY FUNDS
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The Agency Funds are used to account for assets held by the City in a trustee capacity for individuals, private
organizations, other governments, and/or other funds. The City maintains the following Agency Funds for the purposes 3
indicated: a
Assessment District #961 - This fund is used to account for the collection of assessments from property owners =
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and for the remittance of such assessments to bondholders as required by the Improvement Bond Act of 1915 and
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related California State statutes for this district. �,
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Assessment District #977A - This fund is used to account 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 CO
related California State statutes for this district.
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Assessment District #977B - This fund is used to account 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. o
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Assessment District #1003 - This fund is used to account for the collection of assessments from property owners W
and for the remittance of such assessments to bondholders as required by the Improvement Bond Act of 1915 and L
related California State statutes for this district. °
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Special Deposits -This fund accounts for all deposits made by developers, other government agencies or others for m
disposition under the terms for which the deposits were made.
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Cemetery Perpetual Care - This fund accounts for all money collected for the perpetual maintenance of the City
owned and operated Cemetery. -a
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San Bernardino Water Resource Authority - This fund accounts for the collection and disposition of funds 0 CL
received for the San Bernardino Regional Water Resource Authority.
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161 Packet Pg. 872
7.D.a
City of San Bernardino
Combining Statement of Fiduciary Assets and Liabilities
June 30, 2014
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Assessment Assessment Assessment Assessment 'a
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District District District District Special a
#961 #977A 4977B #1003 Deposits
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ASSETS CC
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Cash and investments $ 370,055 $ 63,124 $ 26,751 $ 57,758 $ 3,845,930 LL
Accounts receivable - - - - 98 cv
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Due from other governments - - - - 44,796 LO
Total assets $ 370,055 $ 63,124 $ 26,751 $ 57,758 $ 3,890,824 q
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LIABILITIES c�
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Accounts payable $ - $ - $ - $ - $ 152,150 3
Interest payable - - - 276,397
Deposits payable - - 3,462,277
Due to bondholders 370,055 63,124 26,751 57,758 - tL
Total liabilities $ 370,055 $ 63,124 $ 26,751 $ 57,758 $ 3,890,824
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162 Packet Pg.873
7.D.a
City of San Bernardino
Combining Statement of Fiduciary Assets and Liabilities (Continued)
June 30, 2014
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San Bernardino Q-
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Cemetery Water -a
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Perpetual Resource Q
Care Authority Total O
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ASSETS c=o
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Cash and investments $ 659,756 $ 73,416 $ 5,096,790 U.
Accounts receivable - - 98 N
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Due from other governments - - 44,796 tO
Total assets $ 659,756 $ 73,416 $ 5,141,684
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LIABILITIES
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Accounts payable $ $ - $ 152,150 r-
Interest payable - 276,397
Deposits payable 659,756 73,416 4,195,449
Due to bondholders - - 517,688 W
Total liabilities $ 659,756 $ 73,416 $ 5,141,684
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163 Packet Pg.874
7.D.a
City of San Bernardino
Statement of Changes in Fiduciary Assets and Liabilities
"' "'` Agency Funds U
For the Year Ended June 30,2014 LL
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Balance Balance t
July 1,2013 Additions Deletions June 30,2014 d
Assessment District#961
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Assets:
Cash and investments $ 370,055 $ - $ - $ 370,055 Q
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Total assets $ 370,055 $ - $ - $ 370,055
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Liabilities:
Due to bondholders $ 370,055 $ - $ - $ 370,055
Total liabilities $ 370,055 $ - $ - $ 370,055 M
Assessment District#977A
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Assets:
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Cash and investments $ 63,124 $ - $ - $ 63,124 M
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Total assets $ 63,124 $ - $ - $ 63,124 d
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Liabilities:
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Due to bondholders $ 63,124 $ - $ - $ 63,124 d
Total liabilities $ 63,124 $ - $ - $ 63,124 w
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Assessment District#977B
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'' ssets: w
Cash and investments $ 26,751 $ - $ - $ 26,751 V-
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Total assets $ 26,751 $ - $ - $ 26,751
Liabilities: A
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Due to bondholders $ 26,751 $ - $ - $ 26,751 r
Total liabilities $ 26,751 $ - $ - $ 26,751 Q
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Assessment District#1003 =
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Assets:
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Cash and investments $ 57,758 $ - $ - $ 57,758 C'
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Total assets $ 57,758 $ - $ - $ 57,758 c
Liabilities: C
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Due to bondholders $ 57,758 $ - $ - $ 57,758 t
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Total liabilities $ 57,758 $ - $ - $ 57,758 CL
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164 Packet Pg. 875
City of San Bernardino
Statement of Changes in Fiduciary Assets and Liabilities
Agency Funds
For the Year Ended June 30,2014 LL
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Balance Balance
July 1,2013 Additions Deletions June 30,2014 CL
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Special Deposits
Assets: a
Cash and investments $ 3,181,570 $ 1,968,960 $ (1,304,600) $ 3,845,930 Q
Accounts receivable 16,650 - (16,552) 98 R
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Due from other governments - 44,796 - 44,796
Prepaids 238 85 (323) - _
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Total assets $ 3,198,458 $ 2,013,841 $ (1,321,475) $ 3,890,824
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Liabilities: U*)
Accounts payable $ 227,693 $ 554,449 $ (629,992) $ 152,150
Interest payable - 276,397 - 276,397 c
Deposits payable 2,970,765 491,512 - 3,462,277 N
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Total liabilities $ 3,198,458 $ 1,322,358 $ (629,992) $ 3,890,824
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Cemetery Perpetual Care
Assets:
Cash and investments $ 659,526 $ 230 $ - $ 659,756 W j
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Total assets $ 659,526 $ 230 $ - $ 659,756
Liabilities: L
Deposits payable $ 659,526 $ 230 $ - $ 659,756
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Total liabilities $ 659,526 $ 230 $ - $ 659,756 CL
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San Bernardino Regional Water Resource Authori ty
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Assets: o
Cash and investments $ 73,792 $ - $ (376) $ 73,416
Total assets $ 73,792 $ - $ (376) $ 73,416
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Liabilities: a
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Deposits payable $ 73,792 $ - $ (376) $ 73,416 a
Total liabilities $ 73,792 $ - $ (376) $ 73,416
Total All Agency Funds c
Assets: C
Cash and investments $ 4,432,576 $ 1,969,190 $ (1,304,976) $ 5,096,790 d
Accounts receivable 16,650 - (16,552) 98 w
Due from other governments - 44,796 - 44,796 3
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Prepaids 238 85 (323) - C
Total assets $ 4,449,464 $ 2,014,071 $ (1,321,851) $ 5,141,684 =
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Liabilities: f6
Accounts payable $ 227,693 $ 554,449 $ (629,992) $ 152,150 =
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Interest payable - 276,397 - 276,397 'Q
Deposits payable 3,704,083 491,742 (376) 4,195,449
Due to bondholders 517,688 - - 517,688 E
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Total liabilities $ 4,449,464 $ 1,322,588 $ (630,368) $ 5,141,684
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165 Packet Pg. 876
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166 Packet Pg. 877