HomeMy WebLinkAbout05.F- Finance 5.F
DOC ID: 4676
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Report/Information
From: Brent Mason M/CC Meeting Date: 10/17/2016
Prepared by: Veronica Martinez, (909)
384-5242
Dept: Finance Ward(s):
Subject:
Receive and File the Annual Financial Report for Fiscal Year Ending June 30, 2015
(#4676)
Current Business Registration Certificate:
Financial Impact:
The item has no fiscal impact and only reports the City's fiscal status as of June 30,
2015. Audit fees associated with the development of this report are approximately
$350,000 which has been included in the Finance Department's existing budget
authorization. No additional financial action is required.
Motion: Receive and File.
Synopsis of Previous Council Action:
7/18/2016 - FY 2013/14 Audit was Received and Filed by Mayor and Council
12/7/2015 - Resolution 2015-263 was approved
Background:
The Pun Group, LLP was contracted by the City to perform the annual audits for fiscal
years 2013/14 and 2014/15. The second year's audit of 2014/15 has been completed
and is being presented to the Council for its review and acceptance. With the
completion of this report, the City is now caught up with its formerly delinquent audit
reports. The completion of this report with the Pun Group is a very positive result and
represents further "traction" by the Finance Department in setting right a recent history
of inadequate accounting and financial reporting. The 2015/16 audit report will be next,
starting audit field work in January with completion of the report prior to the March 31
deadline for timely completion of financial statements and submission to the State
Controller's Office. This will mark the first time since the 2010 financial report, that it will
have been completed in a timely manner.
A presentation of the information contained within the financial report will be presented
to the Council during the meeting.
Supporting Documents:
2015 Final Financial Report (PDF)
2015 Audit Presentation (PPTX)
Updated: 10/13/2016 by Georgeann "Gigi" Hanna Packet Pg. 89
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City of San Bernardino
San Bernardino, California LL
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Annual Financial Report o
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Independent Auditors' Report
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For the Year Ended June 30, 2015
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Packet Pg. 91
5.F.a
City of San Bernardino
Annual Financial Report
For the Year Ended June 30, 2015
Table of Contents
Page
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FINANCIAL SECTION d
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Independent Auditors' Report on Financial Statements........................................................................................... 1
Basic Financial Statements:
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Government-Wide Financial Statements: CL
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Statementof Net Position................................................................................................................................. 10
Statement of Activities and Changes in Net Position....................................................................................... 12
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Fund Financial Statements: c
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Governmental Fund Financial Statements: Ca
BalanceSheet................................................................................................................................................... 18
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Reconciliation of the Governmental Funds Balance Sheet
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to the Government-Wide Statement of Net Position............................................................................... 20 0
Statement of Revenues, Expenditures, and Changes in Fund Balances .................................................... 21 E
Reconciliation of the Governmental Statement of Revenues, c
Expenditures, and Changes in Fund Balances to the Government-Wide
Statement of Activities and Changes in Net Position.............................................................................23
Proprietary Fund Financial Statements:
Statementof Net Position.......................................................................................................................... 26
Statement of Revenues, Expenses, and Changes in Net Position.............................................................. 28 to
Statementof Cash Flows...........................................................................................................................29
Fiduciary Fund Financial Statements:
Statementof Fiduciary Net Position.......................................................................................................... 33 0 CL
Statement of Changes in Fiduciary Net Position....................................................................................... 34 CD
Notes to the Basic Financial Statements ............................................................................................................. 35
Required Supplementary Information (Unaudited): ii
BudgetaryInformation........................................................................................................................................... 135 U_
Budgetary Comparison Schedules: 'r'
GeneralFund................................................................................................................................................... 136
Federal and State Grants Special Revenue Fund............................................................................................. 137
Low and Moderate Income Housing Special Revenue Fund.......................................................................... 138
Sales and Road Special Revenue Fund..........................
................................................................................. 139 .c
Schedules of Funding Progress—Other Post Employment Benefits..................................................................... 140 c
Schedules of Changes in Net Pension Liability and Related Ratios...................................................................... 141 Q
Schedule of the Successor Agency's
Proportionate Share of the Net Pension Liability and Related Ratios................................................... 143
Scheduleof Contributions...................................................................................................................................... 144
Packet Pg.92
City of San Bernardino
Annual Financial Report
For the Year Ended June 30, 2015
Table of Contents Continued
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FINANCIAL SECTION (Continued): d
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Supplementary Information: >-
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Non-Major Governmental Funds: o
Combining Balance Sheet t
151 0
Combining Statement of Revenues,Expenditures, and Changes in Fund Balances.................................... 156 m
Internal Service Funds: U
Combining Statement of Net Position.......................................................................................................... 162 =
Combining Statement of Revenues, Expenses, and Changes in Net Position.............................................. 164 S
Combining Statement of Cash Flows........................................................................................................... 166
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Fiduciary Funds: Q
Combining Statement of Fiduciary Assets and Liabilities—Agency Funds................................................ 172 m
Combining Statement of Changes in Assets and Liabilities—Agency Funds............................................. 174 i7=
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5.F.a
T E
N �ROUP
UNTANTS&ADVISQRS
INDEPENDENT AUDITORS' REPORT ui
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To the Honorable Mayor and Members of the City Council N
of the City of San Bernardino ;,.
San Bernardino, California �
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Report on Financial Statements c
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We have audited the accompanying financial statements of the governmental activities,the business-type activities,
each major fund, and the aggregate remaining fund information of the City of San Bernardino, California (the
"City"), as of and for the year ended June 30, 2015, and the related notes to the financial statements, which
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 _
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Management is responsible for the preparation and fair presentation of these financial statements in accordance a�
with accounting principles generally accepted in the United States of America; this includes the design, LL
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial r_
statements that are free from material misstatement,whether due to fraud or error.
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Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the to
financial statements of the Water Enterprise Fund and the Sewer Enterprise Fund(major funds), which collectively
represent 96%, 103%, and 71%, respectively, of the assets, net position, and revenues of the business-type L
activities. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, °e.
insofar as it relates to the amounts included for the Water Enterprise Fund and the Sewer Enterprise Fund, is based
solely on the report of other auditors. We conducted our audit in accordance with auditing standards generally ti
accepted in the United States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan =
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material U_
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the c
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the N
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the E
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 V
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the a
reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
200 East Sandpointe Avenue,Suite 600,Santa Ana,California 92707
Tel:949-777-8800-Toll Free:855-276-4272-Fax:949-777-8850
"-"-w.pungroup.corn Packet Pg. 94
To the Honorable Mayor and Members of the City Council
of the City of San Bernardino
San Bernardino, California
Page 2
Summary of Opinions
Opinion Unit Type of Opinion
Governmental Activities Qualified
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Business-Type Activities Unmodified N
General Fund Unmodified }'
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Federal and State Grants Special Revenue Fund Qualified LO
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Low and Moderate Income Housing-Special Revenue Fund Qualified
Sales and Road Special Revenue Fund Unmodified Q.
Integrated Waste Enterprise Fund Unmodified
Water Enterprise Fund Unmodified
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 Q
Fund, Major Low and Moderate Income Housing Special Revenue Fund, and the Aggregate Remaining Fund m
Information U_
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Management has not adopted a methodology for reviewing the collectability of notes receivable in the 0
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
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
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. The amount by which the departure 0
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would affect the assets 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 S
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 property held for resale in the ii
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 in order to determine the net U_
realizable value of the property and, accordingly, property held for resale is reported at acquisition cost plus
improvement costs. Accounting principles generally accepted in the United States of America require that the N
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,
major Federal and State Grants special revenue fund, major Low and Moderate Income Housing special revenue U
fund, and the Aggregate Remaining Fund Information. The amount by which the departure would affect the assets Y
and net position or fund balance and change the expenses or expenditures in the Governmental Activities, major <t
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.
2 Packet Pg. 95
5.F.a
To the Honorable Mayor and Members of the City Council
of the City of San Bernardino
San Bernardino, California
Page 3
Management has not adopted a methodology for reviewing the valuation of the compensated absences balance in
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
contractually required rates during the pendency plan stage of Bankruptcy without regard to considerations of �t
eventual outcomes as may be determined by the final plan of adjustments. The amount by which the departure N
would affect the liability and net position and change the expenses or expenditures in the Governmental Activities >_
has not been determined.
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Management has not adopted a methodology for reviewing the classification between depreciable and non- 0
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depreciable and the related depreciation expense of the Capital Asset in the Redevelopment Obligation Retirement �
Fund (Successor Agency) within the Aggregate Remaining Fund Information, in order to determine the total net �a
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 the compensated c
absences balance be recorded based on contractually required rates during the pendency plan stage of Bankruptcy U.
without regard to considerations of eventual outcomes as may be determined by the final plan of adjustments. The ru
amount by which the departure would affect the liability and net position and change the expenses or expenditures c
in the Governmental Activities has not been determined. Q
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Qualified Opinions
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In our opinion, except for the effects of the matters described in the Basis for Qualified Opinion on Governmental >
Activities, Major Federal and State Grants Special Revenue Fund, Major Low and Moderate Income Housing a)
Special Revenue Fund, and the Aggregate Remaining Fund Information paragraphs, the financial statements
referred to above present fairly, in all material respects, the respective financial position of the Governmental
Activities, the major Federal and State Grants special revenue fund, major Low and Moderate Income Housing P_
special revenue fund, and the aggregate remaining fund information of the City of San Bernardino, California, as of d'
June 30, 2015, and the respective changes in financial position thereof for the year then ended in accordance with t
accounting principles generally accepted in the United States of America. m
Unmodified Opinions
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In our opinion, based on our audit and the report of other auditors, the financial statements referred to previously c
present fairly, in all material respects,the respective financial position of the Business-Type Activities,the General U_
Fund, the major Sales and Road Special Revenue Fund, the major Integrated Waste Enterprise Fund, the major c
Water Enterprise Fund, and the major Sewer Enterprise Fund of the City as of June 30, 2015, and the respective U.
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changes in financial position, and where applicable, cash flows thereof for the year then ended in accordance with o
accounting principles generally accepted in the United States of America.
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Emphasis of Matter E
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Going Concern a
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
protection and adjustment of its liabilities under Chapter 9 of the United States Bankruptcy Code. These conditions
raise substantial doubt about its ability to continue as going concern. Management's plans regarding those matters
also are described in Note 2. The financial statements do not include any adjustments that might result from the
outcome of this uncertainty. Our opinion is not modified with respect to this matter.
3 Packet Pg. 96
S.F.a
To the Honorable Mayor and Members of the City Council
of the City of San Bernardino
San Bernardino,California
Page 4
Restatement of Prior Year Financial Statements
As discussed in Note 23 to the financial statements, various account balances have been restated. We audited the
adjustments described in Note 23 that were applied to restate the June 30, 2014 basic financial statements. In our LO
opinion, such adjustments are appropriate and have been properly applied. Our opinion is not modified in respect to
this matter. °
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Implementation of GASB Statement No. 68 and 71
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As discussed in Note 1 and 19 to the basic financial statements, the City implemented Governmental Accounting c
Standards Board ("GASB") Statement No. 68,Accounting and Financial Reporting for Pensions—an amendment 0
of GASB Statement No. 27 and GASB Statement No. 71,Pension Transition for Contributions Made Subsequent to
the Measurement Date — an amendment of GASB Statement No. 68. The adoption of these standards required
retrospective application of previously reported net position and reclassification of certain accounts as of July 1,
2014 as described in Note 14 to the basic financial statements. In addition, aggregate net pension liability is LL
reported in the Government-Wide Statement of Net Position and Statement of Fiduciary Net Position in the
amounts and of$379,701,774 and $5,032,781, respectively, as of June 30, 2014, the measurement date. This net c
pension liability is calculated by actuaries using estimates and actuarial techniques from an actuarial valuation as of Q
June 30, 2013 which was rolled-forward by the actuaries to June 30, 2014, the measurement date. Our opinion is °_'
not modified with respect to this matter. U_
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Other Matters ass
Required Supplementary Information
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Accounting principles generally accepted in the United States of America require that the Management's
Discussion and Analysis, Fund Budgetary Comparison Schedules, Schedule of Funding Progress for Other
Postemployment Benefits, Schedule of Changes in the Net Pension Liability and Related Ratios, Schedule of
Proportionate Share of the Net Pension Liability and Related Ratios, and Schedule of Contributions, as listed in the o
foregoing table of contents, be presented to supplement the basic financial statements. Such information, although a
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 E
America, which consisted of inquiries of management about the methods of preparing the information and LL
comparing the information for consistency with management's responses to our inquiries, the basic financial c
statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express �
an opinion or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
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Other Information E
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the City's basic financial statements. The Combining and Individual Nonmajor Fund Financial Statements are Q
presented for purposes of additional analysis and are not a required part of the basic financial statements.
4 Packet Pg. 97
To the Honorable Mayor and Members of the City Council
of the City of San Bernardino
San Bernardino,California
AF r0%
Page 5
The Combining and Individual Nonmajor Fund Financial Statements on pages 149 through 176 are the
responsibility of management and were derived from and relate directly to the underlying accounting and other
records used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures, including LO
comparing and reconciling such information directly to the underlying accounting and other records used to prepare le
the basic financial statements or to the basic financial statements themselves, and other additional procedures in N
accordance with auditing standards generally accepted in the United States of America. In our opinion, the >-
Combining and Individual Nonmajor Fund Financial Statements are fairly stated in all material respects in relation `o
to the basic financial statements as a whole. "-
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Other Reporting Required by Government Auditing Standards
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
provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to LL
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 c
is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Q
City's internal control over financial reporting and compliance.
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Santa Ana, California
September 28,2016
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BASIC FINANCIAL STATEMENTS
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GOVERNMENT-WIDE FINANCIAL STATEMENTS
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City of San Bernardino
Statement of Net Position
June 30, 2015
Primary Government
Governmental Business-Type
Activities Activities Total
ASSETS 'n
Current assets:
Cash and investments $ 70,912,465 $ 49,863,508 $ 120,775,973 N
Cash and investments with fiscal agents 1,226,630 - 1,226,630 >-
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Internal balances 2,501,747 (2,501,747) - 0
Receivables: 12
Accounts 4,392,665 8,045,640 12,438,305 0
Interest 122,683 164,270 286,953 (D Special assessments 52,331 - 52,331
Due from other governments 9,199,760 598,003 9,797,763 v
Inventory 267,167 1,991,313 2,258,480
Prepaid items 635,493 437,488 1,072,981
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Total current assets 89,310,941 58,598,475 147,909,416 R
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Noncurrent assets: Q
Notes receivable 30,435,284 - 30,435,284
Prepaid expenses - 681,663 681,663
Restricted cash - 8,161,700 8,161,700 -a
Restricted investments-Consent Decree - 21,125,203 21,125,203 cc
Restricted-other assets - 30,167,260 30,167,260
`A%O, Property held for resale 34,585,347 - 34,585,347 w
Investment in joint ventures - 25,482,376 25,482,376
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Non-depreciable capital assets 127,599,416 35,279,493 162,878,909
Depreciable capital assets,net 255,319,469 219,650,006 474,969,475
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Total noncurrent assets 447,939,516 340,547,701 788,487,217
Total assets 537,250,457 399,146,176 936,396,633 oa
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DEFERRED OUTFLOWS OF RESOURCES M
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Deferred loss on refunding - 66,698 66,698 =
Pension contributions made after measurement date 16,874,254 3,500,118 20,374,372
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Total deferred outflows of resources 16,874,254 3,566,816 20,441,070
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See accompanying Notes to Basic Financial Statements.
10 Packet Pg. 103
S.F.a
City of San Bernardino
Statement of Net Position (Continued)
June 30,2015
Primary Government
Governmental Business-Type
Activities Activities Total
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 11,083,666 $ 5,786,438 $ 16,870,104 N
Payroll and related liabilities 415,776 1,355,281 1,771,057 >'
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Interest payable 7,044,647 403,639 7,448,286 0
Retentions payable 256,243 - 256,243 %-
Due to other governments 776,212 - 776,212 Q
Unearned revenue 3,451,005 - 3,451,005 <Y
Deposits payable 86,032 583,345 669,377
CalPERS Settlement-due within one year 6,379,799 - 6,379,799
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Compensated absences-due within one year 2,986,688 1,264,508 4,251,196 0
Claims payable-due within one year 5,753,943 - 5,753,943 =
Long-term debt-due within one year 57,216,746 8,051,208 65,267,954
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Total current liabilities 95,450,757 17,444,419 112,895,176
Noncurrent liabilities: Q
Deposits payable - 3,274,097 3,274,097 LL
Unearned revenue-Consent Decree - 51,821,114 51,821,114 -0
Due to Successor Agency 2,232,925 - 2,232,925
Aggregate net pension liability 233,237,597 48,142,332 281,379,929 >
**am., Net OPEB obligation 28,320,567 2,475,255 30,795,822
Landfill closure liability - 6,929,000 6,929,000 as
PARS settlement-due in more one year 580,000 - 580,000
Compensated absences-due in more than one year 6,968,937 421,259 7,390,196 h
Claims payable-due in more than one year 38,355,232 1,453,212 39,808,444
Long-term debt-due in more than one year 23,993,638 23,773,923 47,767,561 t
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Total noncurrent liabilities 333,688,896 138,290,192 471,979,088 w
Total liabilities 429,139,653 155,734,611 584,874,264
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DEFERRED INFLOWS OF RESOURCES
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Actual earnings in excess of projected earnings 0
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on pension plan investments 50,997,489 11,351,209 62,348,698 R
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Total deferred inflows of resources 50,997,489 11,351,209 62,348,698 U_
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NET POSITION p
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Net investment in capital assets 357,760,150 223,104,368 580,864,518
Restricted:
Public safety 1,370,731 - 1,370,731 =
Streets and capital projects 30,012,273 - 30,012,273
Culture and recreation 749,547 - 749,547 Q
Community development 66,541,141 - 66,541,141
Community service 767,993 - 767,993
Debt service 1,226,630 - 1,226,630
Capital related fees - 60,084,163 60,084,163
Total restricted 100,668,315 60,084,163 160,752,478
Unrestricted(deficit) (384,440,896) (47,561,359) (432,002,255)
Total net position $ 73,987,569 $ 235,627,172 $ 309,614,741
See accompanying Notes to Basic Financial Statements.
11 Packet Pg. 104
S.F.a
City of San Bernardino
Statement of Activities and Changes in Net Position
For the Year Ended June 30,2015
Program Revenues
Operating Capital Total
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Charges for Grants and Grants and Program
Functions/Programs Expenses Services Contributions Contributions Revenues
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Primary government: >-
Governmental activities:
General government $ 23,792,572 $ 2,459,211 $ 5,804,535 $ - $ 8,263,746
Public safety 93,758,051 5,242,941 4,853,124 - 10,096,065
Streets 29,610,950 12,826,107 37,285 9,801,186 22,664,578 m
Culture and recreation 10,805,969 1,397,431 - - 1,397,431 X
Community development 3,060,294 579,930 4,499,568 - 5,079,498 %v
Community service 5,684,705 104,608 2,688,850 - 2,793,458
Interest on long-term debt 3,994,357 - - - - c
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Total governmental activities 170,706,898 22,610,228 17,883,362 9,801,186 50,294,776
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Business-type activities: Q
Integrated Waste 19,640,062 25,212,322 - - 25,212,322
Water 35,673,702 32,334,811 2,089,637 3,905,104 38,329,552
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Sewer 19,501,609 24,399,415 - 1,072,841 25,472,256 -�
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Total business-type activities 74,815,373 81,946,548 2,089,637 4,977,945 89,014,130
Total primary government $ 245,522,271 $ 104,556,776 $ 19,972,999 $ 14,779,131 $ 139,308,906
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See accompanying Notes to Basic Financial Statements.
12 Packet Pg. 105
5.F.a
City of San Bernardino
Statement of Activities and Changes in Net Position (Continued)
For the Year Ended June 30,2015
Net(Expense)Revenue
and Changes in Net Position
Primary Government
Governmental Business-type
Functions/Programs Activities Activities Total
0
N
Primary government:
Governmental activities: u-
General government $ (15,528,826) $ - $ (15,528,826) 40-
Public safety (83,661,986) - (83,661,986) G
Streets (6,946,372) - (6,946,372) aMi
Culture and recreation (9,408,538) - (9,408,538) W
Community development 2,019,204 - 2,019,204 R
Community service (2,891,247) - (2,891,247) c
Interest on long-term debt (3,994,357) - (3,994,357) c
LL
Total governmental activities (120,412,122) - (120,412,122)
c
Business-type activities: Q
Integrated Waste - 5,572,260 5,572,260
Water - 2,655,850 2,655,850
LL
Sewer - 5,970,647 5,970,647 -a
c
ea
Total business-type activities - 14,198,757 14,198,757 (D 2:
Total primary government (120,412,122) 14,198,757 (106,213,365)
W
General revenues: to
Taxes: m
Property taxes 40,571,180 - 40,571,180 :-
Sales taxes 31,187,510 - 31,187,510 0
Franchise taxes 3,900,853 - 3,900,853 C
Utilities user taxes 23,921,806 - 23,921,806 W
Transient occupancy taxes 3,463,262 - 3,463,262 R
Othertaxes 7,169,083 - 7,169,083
ea
Total taxes 110,213,694 - 110,213,694
iL
Investment earnings 856,229 635,061 1,491,290 c
Miscellaneous 4,324,380 2,348,834 6,673,214 LL
LO
CD
Transfers
N
Intragovernment 2,200,000 (2,200,000) -
From fiduciary funds 1,001 - 1,001
Total transfers 2,201,001 (2,200,000) 1,001 v
ctr
Y
Total general revenues and transfers 117,595,304 783,895 118,379,199 Q
Changes in net position (2,816,818) 14,982,652 12,165,834
Net Position-beginning of year,as restated(Note 23) 76,804,387 220,644,520 297,448,907
Net Position-end of year $ 73,987,569 $ 235,627,172 $ 309,614,741
See accompanying Notes to Basic Financial Statements.
13 Packet Pg. 106
5.F.a
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FUND FINANCIAL STATEMENTS
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16 Packet Pg. 109
S.F.a
GOVERNMENTAL FUND
FINANCIAL STATEMENTS
General Fund—This is the primary operating fund of the City. It is used to account for all revenues and expenditures
that are not required to be accounted for in another fund. W)
Federal and State Grants Fund - This fund is used to report various grants awarded to the City by Federal, State, and N
local governments not otherwise accounted for in the General Fund or Capital Projects funds. A detailed report by U.
program is available under a separate report meeting the criteria of the Office of Management and Budget (OMB) ,o
Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations, for all federal grants received by o
the Citv.
m
Low and Moderate Income Housing Fund - This fund is used for the continued maintenance and operations of low 3
and moderate income housing project activities of the former redevelopment agency. This fund was established on c
February 1, 2012,when the City elected to become the Housing Successor to the housing related activities of the former ii.
redevelopment agency.
C
Q
Sales and Road Fund - This fund is used to account for the local street improvements as provided for by the San 2
E
Bernardino County Measure I Sales Tax.
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7 Packet Pg. 110
�r
City of San Bernardino
Balance Sheet
Governmental Funds
June 30,2015
Major Funds
Low and
Moderate
Federal and Income Sales and
LO
General State Grants Housing Road
Fund Fund Fund Fund
r
0
ASSETS N
u-
Cash and investments $ 12,560,325 $ 2,172,170 $ 1,450,679 $ 7,231,097 0
Receivables: t
Accounts 3,237,272 914,008 315 - p
CL
Interest 45,574 903 2,010 11,666
Notes - 3,591,670 26,843,614 -
Special assessments - - - -
Due from other governments 5,207,058 2,308,231 - 1,340,569
Deposits - - - -
Prepaids 635,493 -
R
Due from other funds 4,966,638 - - _
Advances to other funds - - 65,200 =
Property held for resale - 16,260,782 18,324,565 - Q
a�
Restricted cash and investments held by fiscal agents 1,226,630 - - -
Total assets $ 27,878,990 $ 25,247,764 $ 46,686,383 $ 8,583,332 c
R
LIABILITIES,DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES d
U
d
Liabilities:
Accounts payable $ 4,602,826 $ 1,242,113 $ - $ 227,273
Accrued liabilities 911,200 - - - to
Payroll and related liabilities 381,711 32,053 - 153
Retentions payable - 35,658 - 136,325
O
Due to other governments 427,902 348,310 - - CL
(D
Due to other funds 1,018,716 1,512,275 -
Deposits payable 43,263 - - -
Unearned revenue - 2,991,051
c
Advances from other funds - -
Due to Successor Agency 2,232,925 - - - u-
R
Total liabilities 9,618,543 6,161,460 - 363,751 5
LO
LL
Deferred inflows of resources:
Unavailable revenues 232,250 - - - c
N
r-:
Total deferred inflows of resources 232,250 - - -
m
Fund Balances: s
Nonspendable 635,493 19,852,452 45,233,379 -
Restricted 1,226,630 - 1,453,004 8,219,581 Q
Committed 905,724 - - -
Unassigned 15,260,350 (766,148) - -
Total fiend balances 18,028,197 19,086,304 46,686,383 8,219,581
Total liabilities,deferred inflows
of resources and fund balances $ 27,878,990 $ 25,247,764 $ 46,686,383 $ 8,583,332
(Continued)
See accompanying Notes to Basic Financial Statements.
18 Packet Pg. 111
City of San Bernardino
Balance Sheet(Continued)
Governmental Funds
Ci June 30,2015
Other Total
LO
Governmental Governmental
Funds Funds 4*
0
ASSETS N
LL
Cash and investments $ 39,757,856 $ 63,172,127 0
Receivables: 12
t
Accounts 239,665 4,391,260 O
Interest 62,530 122,683 m
Notes - 30,435,284
Special assessments 52,331 52,331 t°
Due from other governments 343,902 9,199,760
Deposits - - _
Prepaids -
635 493 LL
Due from other funds 230,300 5,196,938
Advances to other funds 82,000 147,200 Q
Property held for resale - 34,585,347
Restricted cash and investments held by fiscal agents - 1,226,630
LL
Total assets $ 40,768,584 $ 149,165,053 =
C LIABILITIES,DEFERRED INFLOWS >
OF RESOURCES AND FUND BALANCES
U
d
Liabilities:
Accounts payable $ 2,290,650 $ 8,362,862 to
Accrued liabilities - 911,200 c~o
Payroll and related liabilities 1,571 415,488
Retentions payable 84,260 256,243
O
Due to other governments - 776,212 ai
Due to other funds - 2,530,991 w
Deposits payable 42,769 86,032 �g
Unearned revenue - 2,991,051 =
Advances from other funds 147,200 147,200 c
Due to Successor Agency - 2,232,925 LL
M
Total liabilities 2,566,450 18,710,204 E
LL
Deferred inflows of resources: r
Unavailable revenues 634,663 866,913 G
N
Total deferred inflows of resources 634,663 866,913 w
Fund Balances: .fie
Nonspendable 82,000 65,803,324
Restricted 37,625,540 48,524,755 Q
Committed - 905,724
Unassigned (140,069) 14,354,133
Total fund balances 37,567,471 129,587,936
Total liabilities,deferred inflows
of resources and fund balances $ 40,768,584 $ 149,165,053
(Concluded)
See accompanying Notes to Basic Financial Statements.
19 Packet Pg. 112
5.F.a
City of San Bernardino
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2015
Total Fund Balances-Total Governmental Funds $ 129,587,936
Amounts reported for governmental activities in the Statement of Net Position were different because:
Capital assets used in governmental activities were not financial resources and therefore were not reported in governmental
LO
funds.
' Government-Wide Financial Statements 382,918,885 c
Less:Internal Service Funds'capital assets (3,698,256) c�
Total capital assets adjustment 379,220,629 U-
L
Interest payable on long-term debt did not require current financial resources. Therefore,interest payable was not reported
as a liability in Governmental Funds Balance Sheet. (7,044,647) o C
m L
Long-term liabilities were not due and payable in the current period and therefore were not reported in the governmental tY
funds.
Amount reported in Government-Wide Statement of Net Position: ci
c
CalPERS Settlement-due within one year (6,379,799) _
PARS Settlement-due in more than one year (580,000) U-
Compensated absences-due within one year (2,986,688) 3
Compensated absences-due in more than one year (6,968,937) c
Claims payable-due within one year (5,753,943) Q
Claims payable-due in more than one year (38,355,232) 2
Long-term debt-due within one year (57,216,746) 'a
Long-term debt-due in more than one year (23,993,638)
cc
Net OPEB obligation (28,320,567) y
Ar
Total reported in Government-Wide Statement of Net Position (170,555,550)
a)
Less:Amount reported in Internal Service Funds
Compensated absences-due within one year 159,700
Compensated absences-due in more than one year 318,828 w
Capital leases payable-due within one year 630,417 QO
Capital leases payable-due in more than one year 2,757,641
Claims payable-due within one year 5,753,943 to
Claims payable-due within one year 38,355,232
Total reported in Internal Service Funds 47,975,767
Net long-term liabilities (122,579,783)
Pension contributions made during the year after the measurement date are reported as expenditures in governmental funds c
and as deferred outflow of resources in the government-wide financial statements.This amount did not include the pension LL
contributions made during the year after the measurement date for Internal Service Funds in the amount of$386,575. 16,487,679 C
LL
Net pension liability is not due and payable in the current period and therefore is not reported in the governmental funds. 'n
This amount did not include the aggregate net pension liability for Internal Service Funds in the amount of$5,350,095. (227,887,502) N
Difference between projected and actual earnings on pension plan investments are reported in the government-wide
statements.This amount did not include the investment earnings greater than expected earnings for Internal Service Funds E
in the amount of$1,261,468. v
Projected earnings over actual earnings (49,736,021) Q
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:
Unavailable revenues 866,913
C itemal service funds were used by management to charge the costs of certain activities to individual funds. The assets and
abilities of the internal service funds were included in governmental activities in the Government-Wide Statement of Net
Position. (44,927,635)
Net Position of Governmental Activities $ 73,987,569
See accompanying Notes to Basic Financial Statements.
20 Packet Pg. 113
5.F.a
City of San Bernardino
Statement of Revenues,Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30,2015
Major Funds
Low and
Moderate
Federal and Income Sales and
Uj
General State Grants Housing Road
Fund Fund Fund Fund
V-
0
N
REVENUES:
U-
Taxes $ 102,643,713 $ - $ - $ 3,384,653 0
Licenses and permits 10,219,955 1,100 1,800 -
Impact fees - - - - C
Fines and forfeitures 1,496,318 - - - )
Use of money and property 238,085 13,055 75,448 77,274
Lease revenue 396,250 - - -
.v
Intergovernmental 2,513,115 13,582,107 19,636 229
Charges for services 6,527,548 - 179 -
Other revenues 4,468,664 1,283,529 61,277 LL
Total revenues 128,503,648 14,879,791 158,340 3,462,156 c
EXPENDITURES: Q
m
Current: U'
General Government 17,914,214 4,762,115 - c
Public Safety 81,478,514 3,513,809 - -
m
Streets 5,248,083 185,826 - 2,442,558
Culture and recreation 7,922,486 2,067,600 - - U
a�
Community development 2,883,598 294,763 372,256 -
Community service 1,585,596 3,523,531 - - W
Debt service: co
Principal 8,733,983 934,052 - 6,508 `t
Interest and fiscal charges 1,028,086 384,751 - - o
sa
Total expenditures 126,794,560 15,666,447 372,256 2,449,066 a)
REVENUES OVER
(UNDER)EXPENDITURES 1,709,088 (786,656) (213,916) 1,013,090 c
OTHER FINANCING SOURCES(USES):
U-
Transfers from Successor Agency - - 1,001 -
Transfers in 2,969,606 - 42,726 -
Transfers out (40,000) (58,812) - - LO
Total other financing sources(uses) 2,929,606 (58,812) 43,727 - N
CHANGES IN FUND BALANCES 4,638,694 (845,468) (170,189) 1,013,090
E
FUND BALANCES(DEFICIT): v
Beginning of year,as restated(Note 23) 13,389,503 19,931,772 46,856,572 7,206,491
Q
End of year $ 18,028,197 $ 19,086,304 $ 46,686,383 $ 8,219,581
(Continued)
See accompanying Notes to Basic Financial Statements.
21 Packet Pg. 114
5.F.a
City of San Bernardino
Statement of Revenues,Expenditures, and Changes in Fund Balances (Continued)
Governmental Funds
For the Year Ended June 30,2015
Other Total
Governmental Governmental
Funds Funds
0
REVENUES: N
u_
Taxes $ 2,220,414 $ 108,248,780 G
Licenses and permits 1,003,838 11,226,693 "-
Impact fees 2,915,704 2,915,704 0 CL
Fines and forfeitures 363,341 1,859,659 d
Use of money and property 404,363 808,225
Lease revenue - 396,250 ca
Intergovernmental 7,096,502 23,211,589
Charges for services 3,905,095 10,432,822 c
Otherrevenues 37,569 5,851,039 u_
�a
Total revenues 17,946,826 164,950,761 c
c
EXPENDITURES: Q
d
Current: U.
General Government 352,013 23,028,342
Public Safety 1,121,334 86,113,657 Q
Streets 8,902,769 16,779,236
Culture and recreation 25,612 10,015,698
Community development - 3,550,617 W
Community service - 5,109,127
Debt service: to
Principal 222,898 9,897,441
Interest and fiscal charges 75,237 1,488,074
Q-
Total expenditures 10,699,863 155,982,192 �
REVENUES OVER '@
(UNDER)EXPENDITURES 7,246,963 8,968,569 =
c�
OTHER FINANCING SOURCES(USES):
ii
Transfer from Successor Agency - 1,001 is
Transfers in 74,065 3,086,397 =
LL
Transfers out (787,585) (886,397)
r
Total other financing sources(uses) (713,520) 2,201,001 N
CHANGES IN FUND BALANCES 6,533,443 11,169,570
FUND BALANCES(DEFICIT):
Beginning of year,as restated(Note 23) 31,034,028 118,418,366
Q
End of year $ 37,567,471 $ 129,587,936
(Concluded)
See accompanying Notes to Basic Financial Statements.
22 Packet Pg. 115
City of San Bernardino
Reconciliation of the Governmental Statement of Revenues,Expenditures, and Changes
in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position
For the Year Ended June 30, 2015
Net Change in Fund Balances-Total Governmental Funds $ 11,169,570
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
LO
Activities and Changes in Net Position, the cost of those assets was allocated over their estimated useful lives as
depreciation expense. This was the amount of capital assets recorded in the current period. 5,682,353 d
r
0
N
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 tL
expenditures in the Governmental Funds. This amount did not include the depreciation/amortization expense for Internal ,O
Service Funds in the amount of$854,327. (17,525,105) C
O.
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 9,897,441 U
c
sa
Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are
LL
c
not reported as expenditures in governmental funds.
Changes in accreted interest (722,245) G
Changes in compensated absences 1,378,889 =
Change in PARS settlement (580,000) y
Changes in net OPEB obligation 897,254 ji
M
Changes in net pension liability reported in the Statement of Activities does not require the use of current financial
C U
sources and,therefore,is not reported as an expenditure in governmental funds(Note 10). (66,059,073) aD
The net effect of various miscellaneous transactions involving pension plans (i.e. deferred inflow/outflow amortization,
contributions after measurement date)increased Net Position. 66,327,237
ca
Interest expense on long-term debt was reported in the Government-Wide Statement of Activities and Changes in Net
Position,but it did not require the use of current financial resources. This amount represented the change in accrued interest
from prior year. (1,682,690)
O
Q
m
Unavailable revenues were reported as deferred inflows of resources in the Governmental Funds but were reported as
revenues in the Government-Wide Statement of Statement of Activities. 62,302 is
U
C
Internal service funds were used by management to charge the costs of certain activities to individual funds. The net
c
revenue of internal service funds was reported with governmental activities. (11,662,751) u-
R
Change in Net Position of Governmental Activities $ (2,816,818)
U_
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See accompanying Notes to Basic Financial Statements.
23 Packet Pg. 116
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Packet Pg. 117
5.F.a
PROPRIETARY FUND
FINANCIAL STATEMENTS
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
this fund, including, but not limited to, administration, operations, maintenance, financing and related debt service, and
billing and collection. N
Water Fund — This fund is used to account for the provision of water services to the residential, commercial, and
industrial segments of the City. All activities necessary to provide such services are accounted for in this fund,including, c
CL
but not limited to, administration, operations,maintenance, financing and related debt service, and billing and collection.
M
Sewer Fund — This fund is used to account for the provision of wastewater collection and treatment services to the O
residential, commercial, and industrial segments of the City. All activities necessary to provide such services are =
U.
accounted for in this fund, including, but not limited to, administration, operations, maintenance, financing and related �a
debt service, and billing and collection. c
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�� Packet Pg. 118
5.F.a
City of San Bernardino
Statement of Net Position
Proprietary Funds
June 30, 2015
Governmental
Major Funds Activities
Integrated Internal
Waste Water Sewer Total Service Funds r
r
0
ASSETS nt
LL
Current assets: O
Cash and cash equivalents $ 9,147,244 $ 12,749,403 $ - $ 21,896,647 $ 7,740,338 t
Investments - 4,026,280 23,940,581 27,966,861 -
Accounts receivable 234,929 5,395,885 2,414,826 8,045,640 1,405 W
Interest receivable 16,535 11,684 136,051 164,270 -
Due from other governments - 433,335 164,668 598,003 -
Due from other funds 2,523,358 2,149,088 47,865 4,720,311 - c
Inventories - 1,991,313 - 1,991,313 267,167 LL
Current portion of prepaid items - 297,911 139,577 437,488 -
c
Total current assets 11,922,066 27,054,899 26,843,568 65,820,533 8,008,910 Q
m
Noncurrent assets: LL
Prepaid items - - 681,663 681,663 -
Investments in joint ventures - - 25,482,376 25,482,376 -
m
Restricted assets: >
Cash and cash equivalents-capital-related fees - - 7,633,049 7,633,049 -
Cash and cash equivalents-Consent Decree - 528,651 - 528,651 -
Investments-Consent Decree - 21,125,203 - 21,125,203 -
Interest receivable-Consent Decree - 65,494 - 65,494 -
Prepaid insurance-Consent Decree - 30,101,766 - 30,101,766 - '
Capital assets: p
Non-depreciable assets - 9,177,446 26,102,047 35,279,493 - m
Depreciable assets,net of accumulated depreciation 2,703,685 178,902,319 38,044,002 219,650,006 3,698,256 M
Total capital assets,net 2,703,685 188,079,765 64,146,049 254,929,499 3,698,256
Total noncurrent assets 2,703,685 239,900,879 97,943,137 340,547,701 3,698,256 W
Total assets 14,625,751 266,955,778 124,786,705 406,368,234 11,707,166 =
LL
DEFERRED OUTFLOWS OF RESOURCES
0
C14 Deferred loss on refunding - - 66,698 66,698 -
Pension contributions made after measurement date 520,958 1,698,121 1,281,039 3,500,118 386,575
F
Total deferred outflows of resources 520,958 1,698,121 1,347,737 3,566,816 386,575
U
f4
Q
See accompanying Notes to Basic Financial Statements.
26 Packet Pg. 11
5.F.a
City of San Bernardino
Statement of Net Position (Continued)
Proprietary Funds
June 30,2015
Governmental
Major Funds Activities
Integrated Internal
LO
Waste Water Sewer Total Service Funds
r
0
LIABILITIES AND NET POSITION N
U-
Liabilities:
Current liabilities:
Accounts payable and accrued liabilities 2,044,215 1,520,236 2,221,987 5,786,438 1,809,604 c
Due to other funds - 5,809,369 1,412,689 7,222,058 164,200 W
Payroll and related liabilities 23,939 860,556 470,786 1,355,281 288 �a
Interest payable 17,490 241,369 144,780 403,639 - c
Deposits payable - 583,345 - 583,345 - c
Unearned revenue - - - - 459,954 LL
Long term debt-due within one year 1,438,444 1,748,054 4,864,710 8,051,208 630,417 3
Compensated absences-due within one year 283,603 753,511 227,394 1,264,508 159,700 c
Claims payable-due within one year - - - - 5,753,943 Q
d
Total current liabilities 3,807,691 11,516,440 9,342,346 24,666,477 8,978,106 U.
c
Noncurrent liabilities: �
a�
Deposits payable - 3,274,097 - 3,274,097 -
Compensated absences-due in more than one year 176,033 188,378 56,848 421,259 318,828
Unearned revenue-Consent Decree - 51,821,114 - 51,821,114 -
Aggregrate net pension liability 7,209,934 23,331,467 17,600,931 48,142,332 5,350,095 ca
Long term debt-due in more than one year 1,214,142 19,368,473 3,191,308 23,773,923 2,757,647 CD
Net OPEB obligation-due in more than one year 1,680,034 628,895 166,326 2,475,255 - 4"
Landfill closure liability-due in more than one year 6,929,000 - - 6,929,000 - p
Claims payable-due in more than one year - 1,213,539 239,673 1,453,212 38,355,232 m
W
Total noncurrent liabilities 17,209,143 99,825,963 21,255,086 138,290,192 46,781,802 �a
.v
Total liabilities 21,016,834 111,342,403 30,597,432 162,956,669 55,759,908 M
_
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DEFERRED INFLOWS OF RESOURCES
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Actual earnings in excess of projected earnings U-;
on pension plan investments 1,699,990 5,501,195 4,150,024 11,351,209 1,261,468 N
Total deferred inflows of resources 1,699,990 5,501,195 4,150,024 11,351,209 1,261,468
d
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Net Position(Deficit): v
Net investment in capital assets 51,099 166,963,238 56,090,031 223,104,368 735,044 2
Restricted - 52,451,114 7,633,049 60,084,163 - Q
Unrestricted(deficit) (7,621,214) (67,604,051) 27,663,906 (47,561,359) (45,662,679)
Total net position(deficit) $ (7,570,115) $151,810,301 $ 91,386,986 $235,627,172 $(44,927,635)
See accompanying Notes to Basic Financial Statements.
27 Packet Pg. 120
S.F.a
City of San Bernardino
Statement of Revenues,Expenses, and Changes in Net Position
Proprietary Funds
For the Year Ended June 30,2015
Governmental
Major Funds Activities
Integrated Internal
Waste Water Sewer Total Service Funds
OPERATING REVENUES:
Charges for services $ 25,212,322 $ 32,334,811 $ 24,399,415 $ 81,946,548 $20,943,413 N
Other operating revenues - 786,318 335,010 1,121,328 - >-
LL
Total operating revenues 25,212,322 33,121,129 24,734,425 83,067,876 20,943,413 L.
OPERATING EXPENSES: o
Q.
Cost of sales and services 12,230,010 - - 12,230,010 15,443,668 4)
Administration and customer service 5,558,425 6,585,336 2,387,122 14,530,883 -
Utility administration - 653,209 638,613 1,291,822 - v
Engineering,operations,and distribution administration - 6,015,448 990,463 7,005,911 -
Plant operations - 7,813,911 8,697,724 16,511,635 - U.
Maintenance - 1,988,719 2,906,853 4,895,572 -
Environmental control - - 594,777 594,777 -
c
Distribution - 4,653,106 - 4,653,106 - _
4
Engineering - 2,439,170 534,226 2,973,396 -
Claims expense - - - - 16,882,837 ii
Amortization - - - - 594,633
Depreciation 1,719,302 5,355,684 2,870,550 9,945,536 259,694
m
Total operating expenses 19,507,737 35,504,583 19,620,328 74,632,648 33,180,832
m
OPERATING INCOME(LOSS) 5,704,585 (2,383,454) 5,114,097 8,435,228 (12,237,419) w
co
NONOPERATING REVENUES(EXPENSES):
Interest income 99,064 54,786 481,211 635,061 (15,774)
Rental income - 181,809 700 182,509 -
0
Noncapital grants - 2,089,637 - 2,089,637 - Q-
a>
Interest expense and fiscal charges (132,325) (169,119) (227,165) (528,609) (101,348)
Gain(loss)on joint venture-RIX - - 345,884 345,884 -
Miscellaneous income 910 - - 910 691,790 =
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Other - 545,840 498,247 1,044,087 - c
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Total nonoperating revenues(expenses) (32,351) 2,702,953 1,098,877 3,769,479 574,668 R
c
INCOME(LOSS)BEFORE CAPITAL LL.
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CONTRIBUTIONS AND TRANSFERS 5,672,234 319,499 6,212,974 12,204,707 (11,662,751) c
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CAPITAL CONTRIBUTIONS AND TRANSFERS: c
Capital contributions - 3,905,104 1,072,841 4,977,945 - d
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Transfers out (2,200,000) - - (2,200,000) -
Total contributions and transfers (2,200,000) 3,905,104 1,072,841 2,777,945 -
4
CHANGES IN NET POSITION 3,472,234 4,224,603 7,285,815 14,982,652 (11,662,751)
NET POSITION:
Beginning of year,as restated(Note 23) (11,042,349) 147,585,698 84,101,171 220,644,520 (33,264,884)
End of year $ (7,570,115) $ 151,810,301 $ 91,386,986 $ 235,627,172 $(44,927,635)
See accompanying Notes to Basic Financial Statements.
28 Packet Pg. 121
City of San Bernardino
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30,2015
Governmental
Major Funds Activities
Integrated Internal
Waste Water Sewer Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
V_
Cash received from customers $ 24,986,088 $ 40,145,082 $ 27,386,210 $ 92,517,380 $ - 4
Cash received from user departments - - - - 22,392,050 C
Cash received from(payments to)other funds 28,630 - - 28,630 - N
Rental income - 727,649 498,947 1,226,596 - e
Li.
Cash payments to suppliers for goods and services (12,640,168) (24,077,838) (11,946,389) (48,664,395) (16,238,584) i
Cash payments to employees for services (5,558,425) (9,233,112) (5,914,404) (20,705,941) - Je
Cash payments for claims and insurance - - - (7,646,156) r
Cash received from(paid for)other activities 910 - 910 691,790 0 CL
Net cash provided by(used in)operating activities 6,817,035 7,561,781 10,024,364 24,403,180 (800,900) tv
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CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES: C
Acquisition of capital assets (7,584,022) (11,483,816) (19,067,838) 7,219 =
Drawdown of CIEDB loan 746,201 - 746,201 - LL
Principal paid on capital-related debt (2,140,363) (1,683,818) (4,629,425) (8,453,606) (543,651) �p
Interest paid on capital-related debt (144,822) (187,153) (242,585) (574,560) (101,348)
C
Capital grant proceeds 86,336 - 86,336 - C
Charges to property owners for capital projects - 3,818,768 1,072,841 4,891,609 Q
d
Net cash(used in)capital and related LL
financing activities (2,285,185) (4,803,688) (15,282,985) (22,371,858) (637,780) „L
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CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Ql
ansent Decree insurance drawdowns - 2,089,637 2,089,637 - >
'RWAI#fransfers(out) (2,200,000) - (2,200,000) V
Net cash provided by(used in)noncapital financing activities (2,200,000) 2,089,637 (110,363)
CASH FLOWS FROM INVESTING ACTIVITIES:
ti
Sales and maturities of investments 17,599,300 11,588,638 29,187,938 W
Purchase of investments (17,210,432) (11,877,148) (29,087,580)
Investment income 96,257 53,683 480,453 630,393 C
Net cash provided by investing activities 96,257 442,551 191,943 730,751 I2
d
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Net change in cash and cash equivalents 2,428,107 5,290,281 (5,066,678) 2,651,710 (1,438,680)
w
CASH AND CASH EQUIVALENTS:
Beginning of year 6,719,137 7,987,773 12,699,727 27,406,637 9,179,018 =
End of year $ 9,147,244 $ 13,278,054 $ 7,633,049 $ 30,058,347 $ 7,740,338
iv
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RECONCILIATION TO STATEMENT OF NET POSITION:
Cash and cash equivalents $ 9,147,244 $ 12,749,403 $ - $ 21,896,647 $ 7,740,338 to
Restricted cash and cash equivalents - 528,651 7,633,049 8,161,700
Total cash and cash equivalents $ 9,147,244 $ 13,278,054 $ 7,633,049 $ 30,058,347 $ 7,740,338 N
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See accompanying Notes to Basic Financial Statements.
29 Packet Pg. 122
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S.F.a
City of San Bernardino
Statement of Cash Flows
Proprietary Funds (Continued)
For the Year Ended June 30,2015
Governmental
Major Funds Activities
Integrated Internal
Waste Water Sewer Total Service Funds
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY(USED IN)OPERATING ACTIVITIES:
Operating income(loss) $ 5,704,585 $ (2,383,454) $ 5,114,097 $ 8,435,228 $(12,237,419) p
Adjustments to reconcile operating income(loss)to net cash N
provided by(used in)operating activities: LL
Depreciation 1,719,302 5,355,684 2,870,550 9,945,536 259,694 C
Amortization - - - - 594,633 r.
Rental income - 181,809 700 182,509 - C
Other non-operating revenues(expenses) 910 545,840 498,247 1,044,997 691,790 Q
Changes in operating assets and liabilities: 4)
Accounts receivable (226,234) 2,067,276 1,626,140 3,467,182 1,173,693 _
Due from other governments 1,158,025 65,792 1,223,817 - t4
Inventory - (300,570) - (300,570) (17,251) _
Prepaids (86,465) 5,646 (80,819) _
Due from other funds 28,630 (1,984,888) (47,865) (2,004,123)
Deferred pension contributions (520,958) (178,081) (134,342) (833,381) (386,575)
Accounts payable and accrued liabilities (199,035) (989,177) (758,749) (1,946,961) (455,768) O
Accrued payroll and related liabilities 5,819 304,337 133,737 443,893 288 =
Due to other funds - 3,524,201 1,144,076 4,668,277 (14,018) Q
Deposits payable - 274,452 - 274,452 - 4)
Unearned revenue - - - 288,962 LL
Claims and judgments payable - 482,043 (28,434) 453,609 9,236,681
Compensated absences (6,439) (134,702) (82,425) (223,566) (43,336)
Aggregrate net pension liability (1,531,789) (6,128,232) (4,623,053) (12,283,074) (1,153,742) ;
OPEB obligation 142,254 352,488 90,223 584,965 -
Investment earnings greater than 0
expected earnings 1,699,990 5,501,195 4,150,024 11,351,209 1,261,468 4)
Total adjustments 1,112,450 9,945,235 4,910,267 15,967,952 11,436,519 .
try
Net cash provided by(used in)operating activities $ 6,817,035 $ 7,561,781 $ 10,024,364 $ 24,403,180 $ (800,900) t�-
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See accompanying Notes to Basic Financial Statements.
30 Packet Pg. 123
5.F.a
FIDUCIARY FUND
FINANCIAL STATEMENTS
Agency Funds —These funds are used to account for money and property held by the City as trustee or custodian. Such
funds include Special Deposits, Cemetery Perpertual Care, San Bernardino Regoinal Water Resource Authority, and i
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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 U_
enforceable obligations of the former San Bernardino Economic Development Agency. These funds are restricted for o
the sole purpose of payment of items on an approved Recognized Payment Obligation Schedule (ROPS). _
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5.F.a
City of San Bernardino
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2015
Successor Agency
To the Economic
Development
Agency
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of San Bernardino v-
Agency Private-purpose �
Funds Trust Fund N
ASSETS ILL
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Cash and investments $ 5,867,232 $ 19,062,659 O
Cash and investments with fiscal agents - 31,489,376 C
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Receivables:
Accounts 1,989 150,092
Interest - 26,453
Notes - 1,233,227
Due from other governments 16,050 -
Due from City - 2,232,925 'u-
Prepaids - 5,587 is
Property held for resale - 48,907,836 c
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Capital assets: Q
Non-depreciable - 11,620,311
Depreciable,net - 7,251,107 u_
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Total assets $ 5,885,271 121,979,573 =
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DEFERRED OUTFLOWS OF RESOURCES w
Adjustments due to positive differences in pension cost-sharing proportion 154,504
Pension contributions made after measurement date 19,656
Deferred loss on refunding of bonds 1,462,528 r-
Total deferred outflows of resources 1,636,688
LIABILITIES 0 CL
Accounts payable $ 183,103 337,418
Accrued liabilities - 4,536
Retentions payable 989151 143,170
Deposits payable 4,809,932 4,532 c
Interest payable - 1,774,275 jL
Due to other governments 276,397 703,469
Due to bondholders 517,688 -
LL
Compensated absences - 949834 W)
Aggregate net pension liability - 3,815,585 c
Long-term debt - 133,472,172
Net OPEB obligation - 1,444,840
Total liabilities $ 5,885,271 141,794,831 s
v
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DEFERRED INFLOWS OF RESOURCES Q
Actual earnings in excess of projected earnings on pension plan investments 1,186,905
Employer's proportionate share of contributions in excess of the Employer's actual contribution 299,468
Total deferred inflows of resources 1,486,373
NET POSITION(DEFICIT)
Held in trust (19,664,943)
Total net position(deficit) $ (19,6649943)
See accompanying Notes to Basic Financial Statements.
33 Packet Pg. 126
5.F.a
City of San Bernardino
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30,2015
Successor Agency
to the Economic
Development
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Agency �t
of San Bernardino N
Private-purpose >_
Trust Fund
12
ADDITIONS: Q.
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Taxes and special assessments $ 31,802,589 W
Investment income 246,135 to
0
Lease revenue 994,163
Other revenues 217,092 =
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Total additions 33,259,979 Ta
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DEDUCTIONS: Q
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Redevelopment 4,884,980 W
Debt service-interest 8,449,151 a
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r)epreciation and amortization 535,488
ransfers to City 1,001
Total deductions 13,870,620
Changes in Net Position 19,389,359
NET POSITION: t
0
Beginning of period,as restated(Note 23) (39,054,302)
End of period $ (19,664,943)
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34 Packet Pg. 127
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6 Packet Pg. 129
5.F.a
City of San Bernardino
Index of Notes to Basic Financial Statements
For the Year Ended June 30, 2015
NOTE DESCRIPTION PAGE
1 Summary of Significant Accounting Policies 39
2 Bankruptcy 54 N
3 Cash and Investments 60
0
4 Notes Receivables 65
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5 Interfund Receivables,Payables,and Transfers 66
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6 Property Held for Resale 67
7 Capital Assets 68 a_
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8 Long-Term Liabilities 71 =
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9 Operating Leases 98
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10 Compensated Absences 98
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11 Claims and Judgments Payable 99
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12 Fund Balance Classification 101
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13 Net Position and Fund Balance Deficits 102
14 Net Investment in Capital Assets 102 0 C
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15 Pension Plans 103
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16 Settlement with Ca1PERS 116
17 Settlement with PARS Employees 117
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18 Other Post-Employment Benefits 117 U.
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19 Jointly Governed Organizations and Joint Ventures 123 "'
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20 Consent Decree 125 m
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21 Landfill Closure Liability 125
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22 Commitments and Contingencies 126
23 Restatement of Prior Year Balances 127
24 Successor Agency Trust for Assets of Former Redevelopment Agency 128
25 Subsequent Events 130
37 Packet Pg. 130
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38 Packet Pg. 131
UNNINNOW
5.F.a
City of San Bernardino
Notes to Basic Financial Statements
For the Year Ended June 30,2015
Note 1—Summary of Significant Accounting Policies
The basic financial statements of the City of San Bernardino, California (City) have been prepared in conformity
with Generally Accepted Accounting Principles of the United States of America (U.S. GAAP) as applied to ,n
governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting
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.
A. Financial Reporting Entity °
0
The City was incorporated on April 13, 1854, as a Charter City. The City operates under a Mayor/Council/City m
Manager form of government and provides the following services: public safety(police and fire),highways and
streets, health and social services, culture-recreation, public improvements, community development(planning,
building and zoning),public utilities(water, sewage and solid waste), and general administrative services.
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The financial reporting entity consists of the primary government, the City, and its component units. LL
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 Q
appoints a voting majority of that organization's governing body and either the City is able to impose its will on 0
that organization or there is a potential for that organization to provide financial benefits to or impose specific
financial burdens on the City. The City is also considered to be financially accountable for an organization if c
that organization is fiscally dependent i.e. it is unable to adopt its budget, le taxes set rates or charges, or W
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issue bonded debt without approval from the City). In certain cases, other organizations are included as 0
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component units if the nature and significance of their relationship with the City are such that their exclusion
would cause the City's financial statements to be misleading or incomplete.
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Blended Component Units t°
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Blended component units, although legally separate entities, are, in substance part of the City's operation and 0
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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 W
separate from the government.
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The City Council acts as the governing body and City's management has operation responsibility of the ;i
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 S
30 year-end. LO
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Affordable Housing Solutions of San Bernardino,Inc. (AHS)
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On December 16, 2009, the Economic Development Agency (EDA) acquired the Global Mobile Home E
Park Corporation, a not-for-profit corporation (501(c)(3)), from the Redevelopment Agency of the City of
Pomona for the redevelopment purposes of the EDA as authorized by Resolution 2009-16 of the Q
Community Development Commission of the City of San Bernardino on May 4, 2009, and approved on
May 5, 2009. The mayor and common council of the City of San Bernardino serve ex officio as the
chairperson and members of the Community Development Commission of the City of San Bernardino,
respectively. On September 23, 2009,the Corporation amended its Articles of Incorporation to rename the
Corporation the "Affordable Housing Solutions of San Bernardino Inc." (AHS), which was endorsed and
filed in the office of the Secretary of State of the State of California on October 9, 2009. AHS is not
currently active and has no assets.
39 Packet Pg. 132
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Year Ended June 30,2015
Note 1 —Summary of Significant Accounting Policies(Continued)
A. Financial Reporting Entity(Continued)
Blended Component Units(Continued)
0
San Bernardino Joint Powers Financing Authority(Authority) `V
v_
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The San Bernardino Joint Powers Financing Authority (Authority) was established pursuant to a Joint o
Exercise of Powers Agreement dated August 21, 1989, by and between the City and the EDA. The EDA a
was dissolved during fiscal year 2012 leaving the City the only member of the Authority. Please see the m
next paragraph for further details. The Authority was created for the purpose of providing financing for a_
redevelopment activities for the City, the EDA, or other local agencies in the State of California, the
acquisition, construction or installation by the Authority of public capital improvements and/or the
purchase by the Authority of public obligations within the meaning of the Marks-Roos Act. The Authority E
is authorized pursuant to the Marks-Roos Act to borrow money for the purpose of financing the acquisition U.
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of bonds, notes and other obligations of, or for the purpose of making loans to, the City, the EDA, or such n
other local agencies to provide financing for redevelopment activities of the City or the EDA. The a
Authority is governed by a board composed of the City's elected officials. There are no separate financial 4)
statements issued for the Authority. u-
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Discretely Presented Component Units M
The City has no discretely presented component units.
B. Basis of Presentation,Accounting and Measurement Focus
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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 0
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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
funds is maintained in accordance with legal and managerial requirements.
U_
Government-Wide Financial Statements
U.
The City's Government-Wide Financial Statements include a Statement of Net Position and a Statement of LO
Activities and Changes in Net Position. These statements present summaries of governmental and business-
type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in
these statements. °D
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These financial statements are presented on an "economic resources"measurement focus and the accrual basis cc
of accounting. Accordingly, all of the City's assets and liabilities, including capital assets, as well as a
infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position.
The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues
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
outflows of resources, liabilities and deferred inflows of resources resulting from exchange and exchange-
like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets,
deferred outflows of resources, liabilities and deferred inflows of resources resulting from nonexchange
transactions are recognized in accordance with the requirements of GASB Statement No. 33.
40 Packet Pg. 133
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 1—Summary of Significant Accounting Policies (Continued)
B. Basis of Presentation,Accounting and Measurement Focus (Continued)
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Government-Wide Financial Statements (Continued) 4
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Program revenues include charges for services, special assessments, and payments made by parties outside of N
the reporting government's citizenry if that money is restricted to a particular program. Program revenues are �-
L
netted with program expenses in the statement of activities to present the net cost of each program. Program ,Q
revenues for the City are classified in three categories:
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➢ Charges for services W
➢ Operating grants and contributions
➢ Capital grants and contributions
_
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 a
eliminated in the total primary government column. In the Statement of Activities and Changes in Net
Position, internal service fund transactions have been eliminated; however, those transactions between U.
governmental and business-type activities have not been eliminated. The following interfund activities have c
been eliminated:
➢ Due to/from other funds
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➢ Advances to/from other funds
➢ Transfersin/out co
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Government Fund Financial Statements
0
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
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
presented all major funds that met the applicable criteria. ;l
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 L0
included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances N
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 E
period in which they become both measurable and available to finance expenditures of the current period. _
Measurable means that the amounts can be estimated, or otherwise determined. Available means that the Y
amounts were collected during the reporting period or soon enough thereafter to be available to finance the Q
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.
Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle in-lieu, transient occupancy taxes,
grants and interest associated with the current fiscal period are all considered to be susceptible to accrual and
so have been recognized as revenues of the current fiscal period to the extent normally collected within the
availability period. Other revenue items are considered to be measurable and available when cash is received
by the government.
41 Packet Pg. 134
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 1—Summary of Significant Accounting Policies(Continued)
B. Basis of Presentation,Accounting and Measurement Focus (Continued)
Government Fund Financial Statements (Continued)
0
Revenue recognition is subject to the measurable and available criteria for the governmental funds in the fund N
financial statements. Exchange transactions are recognized as revenues in the period in which they are earned U.
(i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as ,o
revenues in the period in which the underlying exchange transaction upon which they are based takes place. c
Imposed non-exchange transactions are recognized as revenues in the period for which they were imposed. If m
the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the W
revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary
non-exchange transactions have been recognized as revenues when all applicable eligibility requirements r_
have been met.
U_
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. Q
a�
The City reports the following major Governmental Funds: U.
c
General Fund — This is the primary operating fund of the City. It accounts for all activities of the
general government, except those required to be accounted for in another fund. >_
d
Federal and State Grants Fund— This fund is used to report various grants awarded to the City by the W
Federal, State and local governments not otherwise accounted for in the General Fund or Capital Projects to
Funds. A detailed report by program is available under a separate report meeting the criteria of the Office W
of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations, for all federal grants received by the City. o
w
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
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.
Sales and Road Fund— This fund is used to resources that are restricted for local street improvements =
U.
projects as provided for by San Bernardino County Measure I Sales Tax. to
0
n,
Proprietary Fund Financial Statements
m
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses E
and Changes in Fund Net Position, and a Statement of Cash Flows for each major Proprietary Fund. w
d
A separate column representing internal service funds is also presented in these statements. However, internal
service balances and activities have been combined with the governmental activities in the Government-Wide
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.
42 1 Packet Pg. 135
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 1 —Summary of Significant Accounting Policies(Continued)
B. Basis of Presentation,Accounting and Measurement Focus (Continued)
Proprietary Fund Financial Statements (Continued) 4
0
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 U_
of Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Position presents increases o
(revenues) and decreases (expenses) in total Net Position. Under the accrual basis of accounting, revenues are _
recognized in the period in which they are earned while expenses are recognized in the period in which the m
liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made a:
for uncollectible amounts.
c
Operating revenues in the proprietary funds are those revenues that are generated from the primary operations =
U.
of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses
that are essential to the primary operations of the fund. All other expenses are reported as non-operating
expenses.
d
The City reports the following major proprietary funds: U_
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 this fund, including, but not limited to, administration, operations, U
maintenance, financing and related debt service, and billing and collection.
to
Water Fund — This fund is used to account for the provision of water services to the residential,
commercial and industrial segments of the City. All activities necessary to provide such services are
accounted for in this fund, including, but not limited to, administration, operations, maintenance, c
financing and related debt service, and billing and collection. aai
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, E
maintenance, financing and related debt service, and billing and collection.
Fiduciary.Fund Financial Statements W)
0
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. E
s
Fiduciary fund types are accounted for according to the nature of the fund. The City's agency funds are purely Q
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
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
for debt service activity, as the City is prohibited from levying additional taxes for these districts. Such funds
include Assessment District's#961, #977A, #977B, and#1003.
43 Packet Pg. 136
rrrr.
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 1—Summary of Significant Accounting Policies(Continued)
B. Basis of Presentation,Accounting and Measurement Focus (Continued)
in
Fiduciary Fund Financial Statements(Continued) t
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 u-
operations are presented on the Statement of Changes of Fiduciary Net Position. ,o
Successor Agency of the Redevelopment Agency for the City of San Bernardino a
i aa
W
The Redevelopment Obligation Retirement Fund(Successor Agency)was created to serve as a custodian
for the assets and to wind down the affairs of the RDA on February 1, 2012, pursuant to Assembly Bill r-
x1 26. Its purpose is to expeditiously wind down the affairs of the dissolved RDA. The Successor Agency S
is a separate public entity from the City, subject to the direction of an oversight board. The City Council U.
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 Q
completion of any unfinished projects that were subject to legally enforceable contractual commitments).
In future fiscal years, the Successor Agency will only be allocated revenue in the amount that is ii
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
liquidated. Based upon the nature of the Successor Agency's custodial role, the Successor Agency has
been included in the accompanying basic financial statements as a private purpose trust fund.
C. Deferred Outflows and Inflows of Resources
co
In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources,
v
Deferred Inflows of Resources, and Net Position, the Statement of Net Position reports separate sections for o
CL
Deferred Outflows of Resources, and Deferred Inflows of Resources,when applicable.
Deferred Outflows of Resources represents a consumption of net position that applies to a future
period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then.
The City only has one item that qualifies for reporting in this category. It is the unamortized loss on
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
U.
reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded LO
or refunding debt.
Deferred Inflows of Resources represents an acquisition of net position that applies to a future C ows
and so will not be recognized as an inflow of resources (revenue)until that time. The City has E
only one type of item, which arises only under a modified accrual basis of accounting that qualifies for Y
reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the et
governmental funds balance sheet. The governmental funds report unavailable revenues from notes and
loans receivable. These amounts are deferred and recognized as an inflow of resources in the period
that the amounts become available.
44 Packet Pg. 137
S.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 1—Summary of Significant Accounting Policies(Continued)
D. Encumbrances
i
Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure
of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an c
extension of budgetary controls. �1
U_
E. Cash,Cash Equivalents and Investments o
r_
The City pools its available cash for investment purposes. The City considers pooled cash and investment as
amounts,with original maturities of three months or less,to be cash equivalents.
Investments are reported in the accompanying financial statements at fair value, except for certain investment r_
contracts that are reported at cost because they are not transferable and they have terms that are not affected by =
changes in market interest rates. Changes in fair value that occur during a fiscal year are recognized as U.
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 a
any gains or losses realized upon the liquidation, maturity, or sale of investments. m
U.
Investment income earned by the pooled investments is allocated to the various funds based on each fund's c
average cash and investment balance, except for investment income associated with funds not legally cc
(tw" 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.
U
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 W
known amounts of cash or so near their maturity that they present insignificant risk of changes in value
because of changes in interest rates. Q.
CD
Certain disclosure requirements,if applicable, for Deposits and Investment Risks in the following areas:
➢ Interest Rate Risk
Credit Risk
- Overall
- Custodial Credit Risk =
- Concentration of Credit Risk u'
Foreign Currency Risk c
N
In addition, other disclosures are specified including use of certain methods to present deposits and
investments,highly sensitive investments, credit quality at year-end and other disclosures. F
U
t4
F. Restricted Assets C
Amounts reported as restricted assets in the enterprise funds have been restricted by bond indentures or are to
be used for specified purposes based on contract provisions, such as bonded debt service.
45 Packet Pg. 138
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 1—Summary of Significant Accounting Policies (Continued)
G. Receivable
Customer or trade receivables are reported as "accounts receivable" and are shown net of an allowance for
uncollectible accounts based on historical and management estimates. r,
N
Noncurrent portions of long-term receivables (e.g. "notes receivable") due to governmental fund types are uU-
reported in their respective balance sheets despite their spending measurement focus. Recognition of ,o
governmental fund type revenues represented by noncurrent receivables are deferred until they become current o
receivables. Noncurrent portions of long-term notes receivable are offset by nonspendable fund balance in the m
general fund, and by restricted, committed or assigned fund balance in other funds.
H. Interfund Transactions
c
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the U.
fiscal year are referred to as either"due to/from other funds"or"advances to/from other funds"(i.e.,the current
portion of interfund loans). Any residual balances outstanding between the governmental activities and �c
business-type activities are reported in the Governmental-Wide Financial Statements as"internal balances."
U.
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
400
time inventory is used. Inventory reported in governmental funds is offset with nonspendable fund balance to W
show that inventories do not constitute available spendable resources, even though they are a component of
fund balance.
J. Prepaid Items Q.
m
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
expendable financial resources.
U_
K. Property Held for Resale ;
c
Property held for resale represents land, structures, and related improvements that were acquired for resale as U_
part of the City's redevelopment and grant activities. Property held for resale is accounted for is recorded at c
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 E
be used for restricted purposes or as nonspendable fund balance when such proceeds are not restricted.
cc
Q
46 Packet Pg. 139
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 1—Summary of Significant Accounting Policies(Continued)
L. Capital Assets
i
Capital assets, which include land, buildings and improvements, machinery, vehicles, equipment (including 7
furniture) and infrastructure assets, are reported in the applicable activity columns in the accompanying o
government-wide statement of net position and the proprietary funds statement of net position. Capital assets c"
are defined using guidelines established by the City. Such guidelines provide that assets with an initial LL
individual cost of more than $5,000 ($200,000 for infrastructure) and an estimated useful life of at least two ,o
years are considered to be capital assets. Such capital assets are recorded at cost where historical records are o
available and at an estimated original cost where no historical records exist. Contributed capital assets are a
valued at their estimated fair value at the date of the contribution. The cost of normal maintenance and repairs W
that do not add to the value of the assets or materially extend asset lives are not capitalized. Major outlays for
capital assets and improvements are capitalized as projects are constructed.
_
Capital assets include public domain (infrastructure) consisting of certain improvements other than buildings, "'
including pavement, curbs and gutters, streets and sidewalks, drainage systems, traffic control devices, c
streetlights, and right-of-way corridors within the City. _
d
Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method U_
in the government-wide financial statements and in the financial statements of the proprietary funds.
Depreciation is charged as an expense against operations and accumulated depreciation is reported on the
respective statement of net position.
a�
The ranges of lives used for depreciation purposes for each capital asset class are:
co
Years
co
Buildings and improvements 10-40 '
Infrastructure 20-50 0
0
Wells,pumping plants,reservoirs,and distribution system 8-50
Interceptor lines 50
Disposal plant 35 -50
Leasehold improvements 5-25
Shops,office,stores and yards 10-20
Tools and equipment 4-20
Office equipment 5-20
=
U_
Communication equipment 7- 10
Computer equipment 5 - 10 N
Automotive equipment 3 -8
c
d
Each major infrastructure system can be divided into subsystems. For example, the street system can be Z
subdivided into pavement, curbs and gutters, sidewalks, medians, streetlights, landscaping and land. These M
subsystems were not delineated in the basic financial statements. The appropriate operating department a
maintains information regarding the subsystems.
Interest accrued during capital assets construction, if any, is capitalized for the business-type funds as part of
the asset cost.
For all infrastructure systems,the City elected to use the Basic Approach for infrastructure reporting.
47 1 Packet Pg. 140
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 1—Summary of Significant Accounting Policies(Continued)
M. Capital Contribution
u�
Contributions in aid of construction represent cash and utility plant additions contributed to the City by 7
le
property owners or developers desiring services that require capital expenditures or capacity commitment. N
N. Long-Term Debt �-
L
+1-
2
In the Government-wide and proprietary fund financial statements, long-term debt and other long-term c
financial obligations are reported as liabilities.
a:
Prior to July 1, 2013, bond premiums and discounts, as well as issuance costs, are amortized over the life of the
bonds using the straight-line method, which approximates effective interest method. Bonds payable are r_
reported net of the applicable premium or discount except for insurance prepaid bond insurance premiums. The =_
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. _
Q
m
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as ii,
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 M
issuances are reported as other financing uses. The differences between the government-wide and fund >_
financial statements are shown in the Reconciliation of the Governmental Funds Balance Sheet to the U
Government-Wide Statement of Net Position.
ca
ti
O. Refunding of Debt
The difference between the reacquisition price of refunding bonds and the net carrying amount of refunded debt 0
CL
(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
available, a deferred inflow of resources is reported until such time as the revenue becomes available.
U_
P. Compensated Absences
In accordance with negotiated labor agreements, employees accumulate earned but unused vacation, other W)
compensated leave, and sick leave pay benefits. Depending upon bargaining unit and date of hire, employees N
were allowed to apply 100% of accrued sick leave hours for additional California Public Employees'
Retirement System(Ca1PERS) service credit upon retirement.
For employees separating from service after February 17, 2012 and before June 30, 2015 vacation payouts are
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
from service after July 1, 2013,they receive their full vacation payout.
After subtracting the sick leave balance equivalent of one full year of service credit(2080 hours),which may be
applied to CAPERS service credit, any sick leave balance remaining upon separation shall be paid at a specific
percentage of the cash value to employees who have remained in City service until the dates specified in the
labor agreements.
48 Packet Pg. 141
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 1 —Summary of Significant Accounting Policies (Continued)
P. Compensated Absences (Continued)
Government-Wide Financial Statements
For governmental and business-type activities, compensated absences are recorded as expenses when earned. c°�
U_
Fund Financial Statements �-
a
For governmental funds, compensated absences are recorded as expenditures in the year paid. The General c
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
recorded as a long-term liability of the fund.
Q. Pensions Plans _
U.
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of
resources related to pensions, and pension expense, information about the fiduciary net position of the plans r_
and additions to/deductions from the plans' fiduciary net position have been determined on the same basis as
they are reported by the plans (Note 15). For this purpose, benefit payments (including refunds of employee LL,
contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported c
at fair value. The following timeframes are used for pension reporting: co
CAPERS: �
w
o!
Valuation Date June 30,2013
Measurement Date June 30,2014
Measurement Period July 1,2013 to June 30, 2014
Gains and losses related to changes in total pension liability and fiduciary net position are recognized in n
pension expense systematically over time. The first amortized amounts are recognized in pension expense for
the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred
inflows of resources related to pensions and are to be recognized in future pension expense. The amortization
period differs depending on the source of the gain or loss. The difference between projected and actual earnings
is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected ii
remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the c
C
of the measurement period. u.
Ln
Ir-
R. Fund Balances c°•,
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 g
amounts in the funds can be spent. As of June 30, 2015, fund balances for governmental funds are made up of
the following: 1
• Nonspendable Fund Balance— includes amounts that are (a) not in a spendable form, or (b) legally or
contractually required to be maintained intact. The "not in spendable form" criterion includes items
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
external resources providers, constitutionally or through enabling legislation. Restrictions may
effectively be changed or lifted with the consent of resource providers.
49 1 Packet Pg. 142
-
u 5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note I —Summary of Significant Accounting Policies(Continued)
R. Fund Balances (Continued)
ei
• Committed Fund Balance — includes amounts that have been limited to specific purposes or through
adoption of a resolution or an ordinance by the City council, the highest level of decision making c
authority of the City, and resources that have been specifically committed for use in satisfying N
contractual obligations, as in agreements with third-parties. The City has determined that both a U_
resolution and an ordinance are equally binding. These commitments may be changed or lifted, but ,o
only by the same formal action that was used to impose the constraint originally. City Council action o
to commit fund balance must occur within the fiscal reporting period while the amount committed may m
be subsequently determined.
• Assigned Fund Balance — includes amounts that are intended to be used by the City for specific c
purposes. Intent is expressed by(a)the City Council or(b) a body or official to which the City Council c
has delegated the authority to assign amounts to be used for a specific purpose. "-
• 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 a
categories. Unassigned amounts are technically available for any purpose. Other governmental funds 2
may only report a negative unassigned balance that was created after classification of fund balance in
the nonspendable,restricted or committed categories.
a�
In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund
balance classifications, fund balance is depleted in order of restricted, committed assigned and unassigned.
S. Net Position ti
The financial statements utilize a net position presentation. Net position is classified as follows:
0
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 �a
related to such borrowings that are attributable to the acquisition, construction or improvement of those
assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt c
attributable to the unspent proceeds is not included in the calculation of net investment in capital assets. LL
Rather,that portion of the debt is offset by unspent proceeds.
c
iz
• Restricted Net Position — This category presents restricted assets reduced by liabilities and deferred c
inflows of resources related to those assets. Those assets are restricted due to external restrictions N
imposed by creditors (such as through bond covenants), grantors or laws and regulations of other r_
governments and restrictions imposed through constitutional provisions or enabling legislation. E
• Unrestricted—This category represents net position of the City that is not restricted for any project or 4
other purpose.
When both restricted and unrestricted resources are available for use, the City's policy is to use restricted
resources first,then unrestricted resources that are needed.
50 Packet Pg. 143
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 1 —Summary of Significant Accounting Policies(Continued)
T. Property Taxes
u�
Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they 7
become available. Available means due, or past due and receivable within the current period and collected c
within the current period or expected to be collected soon enough thereafter (not to exceed 60 days)to be used 04
to pay liabilities in the current period. U-
0
Under California law, property taxes are assessed and collected by the counties at up to 1% of assessed value, o
plus other increases approved by the voters. The County of San Bernardino,bills and collects the property taxes aCLi
and remits them to the City at various times throughout the year. Property taxes are attached as an enforceable W
lien on property as of January 1. Taxes are levied on July 1 and are due in two installments. The first
installment is due on November 1, and is payable through December 10 without penalty. The second r-
installment is due February 1, and is payable through April 10 without penalty. _
U-
is
U. Use of Accounting Estimates
_
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 i7L
amounts in the financial statements and the accompanying notes. Actual results could differ from the estimates.
m
V. Implementation of New GASB Pronouncements for the Year Ended June 30,2015
U
The requirements of the following accounting standards are effective for the purpose of implementation, if W
applicable to the City, for the year ended June 30, 2015. The financial statements included herein apply the to
requirements and provisions of these statements, including necessary retroactive adjustments to financial v
statement classifications and presentations.
1=
0
GASB Statement No. 68 °-
m
o_
GASB has issued Statement No. 68, Accounting and Financial Reporting for Pensions — an amendment of
GASB Statement No. 27. This Statement establishes standards for measuring and recognizing liabilities,
deferred outflow of resources, deferred inflows of resources, and expense/expenditures for pension plans. This =_
Statement identifies the methods and assumptions that should be used to project benefit payments, discount -
projected benefit payments to their actuarial present value, and attribute that present value to periods of =
employee service. This Statement became effective for periods beginning after June 15, 2014. See Note 23 for U.
prior period adjustment as a result of implementation. c
N
GASB Statement No. 69 =
m
E
GASB has issued Statement No. 69, Government Combinations and Disposals of Government Operations. This
Statement establishes accounting and financial reporting standards related to government combinations and Q
disposals of government operations. As used in this Statement, the term government combinations includes a
variety of transactions referred to as mergers, acquisitions, and transfers of operations. This Statement became
effective for periods beginning after December 15, 2013 and did not have a significant impact on the City's
financial statements for year ended June 30, 2015.
51 Packet Pg. 144
err
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 1—Summary of Significant Accounting Policies (Continued)
V. Implementation of New GASB Pronouncements for the Year Ended June 30,2015 (Continued)
GASB Statement No. 71
0
GASB has issued Statement No. 71, Pension Transition for Contributions Made Subsequent to the CN
Measurement Date—an amendment of GASB Statement No. 68. This Statement establishes standards relates to u_
amounts associated with contributions, if any, made by a state or local government employer or nonemployer o
contributing entity to a defined benefit pension plan after the measurement date of the government's beginning c
net pension liability. This Statement became effective for periods beginning after June 15, 2014. See Note 23 m
for prior period adjustment as a result of implementation.
W. Upcoming Government Accounting Standards Implementation
_
The City is currently analyzing its accounting practices to determine the potential impact on the financial °J'
statements for the following GASB statements:
GASB Statement No. 72
'u=
In February 2015, GASB issued Statement No. 12,Fair Value Measurement and Application, which provides
guidance for determining a fair value measurement for financial reporting purposes. This statement also
provides guidance for applying fair value to certain investments and disclosure related to all fair value >_
measurements. Application of this statement is effective for the City's fiscal year ending June 30,2016. m
o:
GASB Statement No. 73 co
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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 o
CL
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
provisions that address employers and governmental nonemployer contributing entities that are not within the
scope of GASB Statement 68,which are effective for financial statements for fiscal year ending June 30,2017. LL
GASB Statement No. 74 =
U-
LO
In June 2015, GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other N
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 0
replaces GASB Statement 43. Application of this statement is effective for the City's fiscal year ending June _
30,2017.
GASB Statement No. 75
In June 2015, GASB issued Statement No. 75, Accounting and Financial Reporting for Postemployment
LV 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
effective for the City's fiscal year ending June 30, 2018.
52 Packet Pg. 145
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 1—Summary of Significant Accounting Policies(Continued)
W. Upcoming Government Accounting Standards Implementation (Continued)
LO
GASB Statement No. 76
In June 2015, GASB issued Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for N
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 `o
Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. The first category of
authoritative GAAP consists of GASB Statements of Governmental Accounting Standards. The second Q.
category comprises GASB Technical Bulletins and Implementation Guides, as well as guidance from the
American Institute of Certified Public Accountants that is cleared by the GASB. Application of this statement
is effective for the City's fiscal year ending June 30,2016.
R
c
GASB Statement No. 77 U.
iv
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. a
Application of this statement is effective for the City's fiscal year ending June 30,2017. 2
U_
GASB Statement No. 78 c
R
In December 2015, GASB issued Statement No. 78, Pensions Provided Through Certain Multiple-Employer
Defined Benefit Pension Plans. This Statement amends the scope and applicability of Statement 68 to exclude 0
pensions provided to employees of state or local governmental employers through a cost-sharing multiple- W
employer defined benefit pension plan that (1) is not a state or local governmental pension plan, (2) is used to to
provide defined benefit pensions both to employees of state or local governmental employers and to employees W
of employers that are not state or local governmental employers, and (3) has no predominant state or local �-
governmental employer (either individually or collectively with other state or local governmental employers o
that provide pensions through the pension plan). This Statement establishes requirements for recognition and m
measurement of pension expense, expenditures, and liabilities; note disclosures; and required supplementary
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.
c
GASB Statement No. 79
R
C
In December 2015, GASB issued Statement No. 79, Certain External Investment Pools and Pool Participants. U-
This Statement establishes additional note disclosure requirements for qualifying external investment pools that c
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 w
participants include information about any limitations or restrictions on participant withdrawals. Application of E
this statement is effective for the City's fiscal year ending June 30,2017. 0
GASB Statement No. 80 Q
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
blending of a component unit incorporated as a not-for-profit corporation in which the primary government is
the sole corporate member. The additional criterion does not apply to component units included in the financial
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.
53 1 Packet Pg. 146
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 1—Summary of Significant Accounting Policies (Continued)
W. Upcoming Government Accounting Standards Implementation (Continued)
GASB Statement No. 81
0
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 LL
assets, liabilities, and deferred inflows of resources at the inception of the agreement. Furthermore, this o
Statement requires that a government recognize assets representing its beneficial interests in irrevocable split-
0
interest agreements that are administered by a third party, if the government controls the present service C
capacity of the beneficial interests. This Statement requires that a government recognize revenue when the W
resources become applicable to the reporting period. Application of this statement is effective for the City's
fiscal year ending June 30,2018. U
c
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GASB Statement No. 82
In December 2015, GASB issued Statement No. 82, Pension Issues—An Amendment of GASB Statements No. a
67, No. 68, and No. 73. This Statement clarifies that payments that are made by an employer to satisfy d
contribution requirements that are identified by the pension plan terms as plan member contribution U.
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 m
those amounts be recognized in the period for which the contribution is assessed and classified in the same >_
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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Note 2—Bankruptcy
0
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 U
the process of preparing a proposed budget for the City's 2012-13 fiscal year. In late June 2012, the City's M
Finance Department completed a report entitled, "San Bernardino Budgetary Analysis and Recommendations E
for Budget Stabilization" (the "Budget Report") which determined that: (i) the City faced a projected budget R
deficit of over$45.8 million in the 2012-13 fiscal year and the budget deficit was projected to grow even larger LL
for each of the following five years due to, among other things, continued stagnation in General Fund revenues, U')
the poor housing market and economy, increasing pension and other post-retirement benefit costs, and N
unfunded liabilities in the City's retiree health, worker's compensation and general liability accounts, (ii) the u
City had depleted all of its General Fund reserves to cover substantial budget deficits for four consecutive fiscal E
years beginning with the 2008-2009 fiscal year and had an estimated $18.2 million negative cash balance in its _
General Fund, (iii) immediate and substantial action had to be taken to reduce spending and preserve cash for
the City to continue to provide essential services to its residents, (iv) an analysis of the City's General Fund Q
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
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.
54 Packet Pg. 147
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City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 2—Bankruptcy(Continued)
A. Factors Precipitating the City's Chapter 9 Bankruptcy Filing On August 1,2012 (Continued)
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 c
the City's Finance Department fell behind in performing various financial tasks which was exacerbated by the N
implementation of a new financial software system. As late as April 2012, and in connection with the City's U_
mid-year budget review, the City Manager at that time believed that the City's estimated budget shortfall for ,o
fiscal year 2011-12 would be just over $3.1 million and could be remedied by cuts to department budgets, o
continuing a hiring freeze on filling vacant positions and making revenue adjustments. m
W
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 r_
in revenue to the General Fund from sales tax, property tax, franchise fees, utility users tax and licenses and =
permits all had significant detrimental impact on the City. The Budget Report also found that the City's
operational costs continued to exceed revenues despite the City's efforts to cut costs by negotiated reductions in
employee costs,job cuts, service cuts, sales of assets, implementation of revenue measures, increased transfers
from other funds, and use and then exhaustion of its General Fund reserves. As of June 2012, the City's
unemployment rate was 16.9% (more than double the national unemployment rate), and the City had one of the LL
highest home foreclosure rates in the nation.
OWN
AF A 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
number of employees were retiring and leaving the City triggering immediate cash-outs of vacation and sick to
leave accruals, (iii) the City's credit line had been terminated, (iv) vendors were demanding cash up front v
before providing essential materials, goods and services to the City, (v) the City had no ability to access short
term credit markets to solve its cash flow problems and no General Fund reserves, and (vi) cash flow o
CL
projections showed that the City had projected monthly General Fund deficits ranging between $2 million and
r $5.6 million from July through September.
R
On July 18, 2012, the Mayor and Common Council of the City enacted Resolution No. 2012-205 declaring a
fiscal emergency (the "Fiscal Emergency Resolution") based on information presented in the Budget Report,
U.
J.
Staff Report and at public meetings of the Mayor and Common Council held on July 10, July 16 and July 18, m
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, Ul)
safety or well-being of the City's residents absent the protections of Chapter 9 of the Bankruptcy Code and N
given the City's dire financial condition it was in the best interest of the City to declare a fiscal emergency. On
July 18, 2012, the Mayor and Common Council of the City also enacted Resolution No. 2012-206 which 4)
determined that the City was insolvent in its current fiscal year and unable to meet its payroll without the =
protections afforded by Chapter 9 of the Bankruptcy Code which would endanger the health, safety and welfare
of its residents, and authorized and directed certain City officials and employees to execute and file all Q
petitions, schedules, lists and other papers and to take any and all actions necessary and proper to file a petition
under Chapter 9 of the Bankruptcy Code.
55 Packet Pg. 148
S.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 2—Bankruptcy(Continued)
A. Factors Precipitating the City's Chapter 9 Bankruptcy Filing On August 1,2012(Continued)
LO
As an initial step in a multi-phase and multi-step process of developing a budget for operating in bankruptcy V,
called a Pendency Plan, on July 24, 2012 the City approved a"Fiscal Emergency Operating Plan—July 2012 to c
September 2012" (the "Fiscal Emergency Plan"). Pursuant to the Fiscal Emergency Plan, the City did not N
make payments for (i) debt payments due, including a payment for pension bond obligations due on July 20, U_
2012 in the amount of over $3.3 million, (ii) bi-monthly payments to fund retiree health obligations due in the ,o
first quarter in the amount of over $2.2 million, (iii) deferred equipment purchases and capital projects, (iv) c
payment on a note for its financial accounting software system, and(v) other trade payables due and owing in m
an amount over $6 million. In addition, the City did not make over $1.4 million in payments under certain W
settlement agreements in three lawsuits. Pursuant to the Fiscal Emergency Plan, City staff also determined that
the City would not be able to borrow money from the private credit markets to meet its obligations because it r_
could not demonstrate the ability to pay such debts back with revenues generated in the current fiscal year.
U.
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 'u=
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 m
designated as the bankruptcy judge overseeing the City's Chapter 9 Bankruptcy Case. >_
d
C. Approval and Implementation of the City's Pendency Plan and Budgets o!
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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
presented to the City's Common Council to remain effective until a Pendency Plan was finalized and approved. `o
CL
On September 17,2012 and October 1,2012,the Common Council approved certain cuts and budget offsets set
forth in the Pre-Pendency Plan and a 9 Point Adjustment Plan, which the City estimated would eliminate
approximately $29.78 million of the City's overall $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("CalPERS"),bond debt and certain trade debt. m
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'u.
On November 26, 2012, the Common Council adopted a Pendency Plan which incorporated the Pre-Pendency Ul)
Plan. The Pendency Plan served to balance the City's budget during the Bankruptcy Case using tools available N
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 0)
participating in mediation with two of its unions; (b)implementing changes to collective bargaining agreements
with the three unions for which the City was unable to reach consensual resolutions through resolutions adopted U
by the City's Common Council;and(c)rejecting the collective bargaining agreements with the three dissenting d
unions as described below.
56 Packet Pg. 149
S.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 2—Bankruptcy(Continued)
C. Approval and Implementation of the City's Pendency Plan and Budgets (Continued)
On February 19, 2013, the City Manager issued and made available the Budget Message and the Fiscal Year
2012-13 and Fiscal Year 2013-14 Proposed Budget for the General Fund. On April 22, 2013, the City adopted
its budget for the General Fund and other funds for fiscal years 2012-13 and 2013-14. On June 30, 2014, the N
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 o
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 Q
enabled the City to survive financially, manage its ongoing fiscal emergency, and provide essential Q
governmental services to its residents until a plan of adjustment is approved.
D. The Bankruptcy Court's Determination of City Eligibility for Chapter 9 Relief
In the first few weeks of the Bankruptcy Case,the City filed a motion requesting that the Court set a deadline to u_
file objections to the City's eligibility for Chapter 9 relief. On August 24, 2012, the Court entered its "Order Z
Directing And Approving Form Of Notice And Setting Deadline For Filing Objections To The City Of San Q
Bernardino, California's Petition" which established the deadline to file and serve all objections to eligibility
as October 24,2012. Prior to October 12,2012,the City provided over 15,000 pages of documents pursuant to U.
stipulations with various creditors respecting its financial condition and eligibility for Chapter 9 relief. a
Although the City has numerous creditors —U.S. and German financial institutions holding the City's bonds,
Wall Street bond insurers, hundreds of trade creditors, thousands of retirees receiving pensions and retiree
health care benefits, and seven unions representing the City's current employees—only one creditor, CalPERS, d
objected to the City's eligibility to be a chapter 9 debtor. With respect to CAPERS, the City dedicated W
substantial resources in its Finance Department to providing information, running numbers, attending meetings
and responding to CAPERS' requests. The City provided additional documents totaling over 40,000 pages of
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 C
judgment on the City's eligibility for Chapter 9 relief. CAPERS objected and asserted that it was entitled to W
additional discovery on the City's eligibility. On August 28, 2013, after extensive briefing by the City and
CAPERS, the Bankruptcy Court determined based upon uncontroverted facts that the City had satisfied the r_
requirements for eligibility in Bankruptcy Code section 109(c) and that it had filed its petition in good faith =_
pursuant to Bankruptcy Code section 921(c), and subsequently issued orders to that effect (the `Eligibility
Orders"). The Bankruptcy Court found that the City was authorized under California law to be a chapter 9 c
debtor,the City was insolvent,the City had filed its bankruptcy case in good faith and with the desire to effect a
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plan of adjustment of debts, and, under the circumstances, it was impracticable for the City to have conducted c
pre-bankruptcy negotiations with its creditors. N
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E. CalPERS' Appeal of the Bankruptcy Court's Eligibility Orders E
s
Ca1PERS appealed from the Eligibility Orders, and the U.S. District Court for the Central District of California M
certified the appeal for review by this U.S. Court of Appeals for the Ninth Circuit. The Ninth Circuit granted Q
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, CalPERS is challenging the
Bankruptcy Court's Eligibility Orders and seeks dismissal of the City's chapter 9 case. The City believes that
dismissal of its chapter 9 case would be a catastrophic blow to the City and its citizens as they struggle to
recover from the effects of the economic downturn and housing bubble burst. Such a dismissal would deny the
City the tools and breathing room afforded municipalities under bankruptcy law to reorganize and adjust its
debts, and establish a plan of adjustment for a sound financial future. The CAPERS appeal remains pending,
but Ca1PERS is not pursuing the appeal as long as the City complies with the CalPERS Interim Agreement.
57 1 Packet Pg. 150
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 2—Bankruptcy(Continued)
F. The City's Debt Obligations and Creditor Claims
W
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 N
the City's outstanding obligations including, but not limited to, the following which were in existence as of U.
August 31,2012(unless otherwise noted):
• Unsecured Pension Costs and Unfunded Pension Liabilities — The City has outstanding unfunded m
liability owed to Ca1PERS.
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• Other Post-Employment Benefits — The City's retirement plans provide for other post-employment
cc
benefits ("OPEBs"), consisting primarily of retiree medical care. The City's unfunded liability for =
OPEBs was set forth in the City's last audit.
c
• Pension Obligation Bond Indebtedness — To address growing public safety pension obligations, the Q
City issued pension obligation bonds ("POBs") in 2005 which reduced unfunded pension liabilities. as
The City has not made payments under the POB's since prior to the Petition Date. u-
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• Lease And Other Financial Obligations—The City has outstanding lease obligations for critical City 4)
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 d
system,refuse trucks and other critical equipment.
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• Capital Improvement Loans — In addition to its bonded indebtedness, loans, and capital leases, the
City has infrastructure loans for capital improvements. t
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G.
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
"special revenues," and/or obligations paid from dedicated special/restricted funds, are currently unimpaired
and remain unimpaired under the City's proposed plan of adjustment.
U_
G. Component Units and Restricted Funds =
U.
The Bankruptcy Case seeks the adjustment of the obligations of the City and does not extend to the City's
component units that are separate legal entities. In addition, the City's restricted resources and/or special use 04
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 Q
The City continues to provide essential services to its residents and is committed to continuing to provide such
services throughout the Bankruptcy Case. The goal for the Chapter 9 process is to allow the City the time it
needs to correct its structural budget imbalance and cash flow problems and set it on a sound financial course
moving forward.
58 Packet Pg. 151
S.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 2—Bankruptcy(Continued)
I. The City's Plan of Adjustment and Disclosure Statement
On May 18, 2015, the City Council approved a Recovery Plan in support of the Plan of Adjustment. The City
continues to work towards a consensual plan of adjustment with its creditors and, if a consensual plan cannot be
achieved,then confirmation of a plan of adjustment over potential objections from creditors. N
U-
The bankruptcy court established May 30, 2015 as the deadline for the City to file a plan of adjustment. The o
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. 0
On October 8, 2015, the bankruptcy court held a hearing on the adequacy of the disclosure statement. The W
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 r_
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, U.
the City filed its second amended disclosure statement and appendix of exhibits in support thereof, its second
amended plan for the adjustment of debts of the City, and a solicitation motion. Certain objections to the C
second amended disclosure statement or such motion were filed by the deadline of April 13, 2016, the City's
response to filed objections to the second amended disclosure statement or such motion was filed on April 20, U-
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, CU
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 v
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 o
objections on any matter in the third amended disclosure statement; the City's reply to response to the third 0
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.
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J. The City's Plan of Adjustment and Disclosure Statement U;
The aggregate gain expected to occur by re-measuring liabilities subject to the proposed plan of adjustment and =
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 October 24, 2016, and perhaps N
after the outcome of the appeal(s), which likely will not be resolved until 2017, if then. The plan of adjustment
does not contemplate termination of services, discontinuance of operations, or termination of the City. m
E
The City expects to file additional modifications to the Proposed Plan prior to reflect new or finalized U
settlements and fix certain clerical errors. Any plan for adjustment of the City's debts finally confirmed by the Q
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
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.
59 Packet Pg. 152
S.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 2—Bankruptcy(Continued)
J. The City's Plan of Adjustment and Disclosure Statement(Continued)
Ln
The City expects to file additional disclosure notices and reports that will update information concerning its 7
General Fund financial condition and Chapter 9 process with EMMA from time to time. The full Plan of
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 U_
0
Note 3—Cash and Investments CL
eu
Cash and investments are presented in the accompanying financial statements at June 30,2015 as follows:
c
Government-Wide Statement of Net Position Fiduciary Funds
E-
.
Governmental Business-Type Statement of ji
Activities Activities Total Net Position Total M
Z
Cash and investments $ 70,912,465 $ 49,863,508 $ 120,775,973 $ 24,929,891 $ 145,705,864 c
Cash and investments with fiscal agent 1,226,630 - 1,226,630 31,489,376 32,716,006 =
Q
Restricted cash - 8,161,700 8,161,700 - 8,161,700
Restricted investment-Consent Decree - 21,125,203 21,125,203 - 21,125,203 U.
Total cash and investments $ 72,139,095 $ 79,150,411 $ 151,289,506 $ 56,419,267 $ 207,708,773
cc
d
Cash and investments at June 30,2015,consisted of the following:
d
Cash:
Cash on hand $ 14,675
Deposits with financial institution 48,285,909 �!
Total Cash 48,300,584 O
Investments:
m
Investments 126,692,183
Investments held by bond trustee 32,716,006
L)
Total Investments 159,408,189
c
Total Cash and Investments $ 207,708,773 j%
ets
E
As part of the City's investment guidelines, the City continually seeks ways to increase investment income while U_
not risking investment principal. One way the City accomplishes this is by "sweeping", on a nightly basis, any c
excess cash held in its non-interest bearing checking account to an interest bearing money market account with N
the same bank.
E
A. Demand Deposits
The carrying amounts of the City's demand deposits were $48,285,909 at June 30, 2015. Bank balances
were $44,331,483 at that date, the total amount of which was collateralized or insured with securities held by
the pledging financial institutions in the City's name as discussed below.
The California Government Code requires California banks and savings and loan associations to secure the
City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in this
manner shall have the effect of perfecting a security interest in such collateral superior to those of a general
creditor. Thus, collateral for cash deposits is considered to be held in the City's name.
60 1 Packet Pg. 153
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 3—Cash and Investments(Continued)
A. Demand Deposits (Continued)
LO
The market value of pledged securities must equal at least 110% of the City's cash deposits. California law
also allows institutions to secure City's deposits by pledging first trust deed mortgage notes having a value of c
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, U-
however,has not waived the collateralization requirements. ,o
1:
B. Investments Authorized by the California Government Code and the City's Investment Policy
Q!
The table below identifies the investment types that are authorized for the City by the California Government
Code and the City's investment policy. The table also identifies certain provisions of the California r_
Government Code (or the City's investment policy, if more restrictive) that address interest rate risk and =_
concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees LL
that are governed by the provisions of debt agreements of the City, rather than the general provisions of the
California Government Code or the City's investment policy.
Q
d
Maximum Maximum jy
Maximum Percentage Investment in
Authorized Investment Types Maturity of Portfolio One Issuer* M
United States Treasury Obligations 5 years None None >
United States Federal Agency securities 5 years None None
Bonds,Notes or Registered Warrants Issue
by the State of California or Local
Agencies within the State of California 5 years None None
CD
Bankers'Acceptances 180 days 40% 30% :'
Commercial Paper 270 days 25% 10% 1`
Negotiable Certificates of Deposit 5 years 30% None Q.
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
_
Local Agency Investment(LAIF) N/A None $50 million U_
*Based on state law requirements or City investment policy requirements,whichever is more restrictive.
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61 Packet Pg. 154
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 3—Cash and Investments (Continued)
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
below identifies the investment types that are authorized for investments held by fiscal agents. The table also N
identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit LL
risk. L
0
Maximum Maximum
0
Maximum Percentage Investment in Q-
Authorized Investment Types Maturity Allowed One Issuer W
t United States Treasury Obligations None None N/A
United States Federal Agency Securities None None None C
Bonds,Notes or Registered Warrants
c
Issued by the State of California or Local u°
Agencies within the State of California 5 yrs None None
Bankers'Acceptances 180-360 days None None =
Commercial Paper 90-180 days None None Q
Medium-term Corporate Notes None None None
u_
Money Market Mutual Funds N/A None None
Investment Contracts None None None
a>
D. Risk Disclosures
cs
d
Disclosures Relating to Interest Rate Risk
m
Interest rate risk is the risk that changes in market interest will adversely affect the fair value of an investment. to
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 0 CL
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
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 U_
�a
of the City's investments by maturity. For purposes of the schedule shown below, any callable securities are =
U_
assumed to be held to maturity. U-)
0
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62 Packet Pg. 155
.,a
S.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 3—Cash and Investments (Continued)
D. Risk Disclosures(Continued)
Disclosures Relating to Interest Rate Risk(Continued)
4
Investment Maturities p
Investment Type Total 1 year or fewer 1 to 2 years 2-3 years N
LAIF $ 4,111,467 $ 4,111,467 $ - $
Commercial paper 984,476 984,476 -
Money market mutual funds 24,585,518 24,585,518 -
O
Certificates of deposit 4,281,563 475,329 898,774 2,907,460
Negotiable certificates of deposit 1,994,002 - 1,994,002 -
Federal agency securities 63,695,843 2,637,358 4,531,994 56,526,491
.v
U.S.Treasury obligations 12,677,858 420,630 583,536 11,673,692
Medium-term corporate notes 8,819,792 1,542,413 2,588,775 4,688,604
Asset backed securities 4,534,174 - 79,665 4,454,509 U.
Investment contracts 1,007,490 - - 1,007,490
Held by bond trustee: _
Money market mutual funds 31,660,006 31,660,006 - - Q
Investment contracts 1,056,000 - - 1,056,000
U.
Total Investments $ 159,408,189 $ 66,417,197 $ 10,676,746 $ 82,314,246
O
Disclosures Relating to Credit Risk •�
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the
investment. This is measured by the assignment of a rating by a nationally recognized statistical rating
organization. However, some issuers do not seek a credit rating. For instance, the California Local Agency
Investment Fund (LAIF) has not sought or received a credit rating. In these cases, the purchaser is solely —°
responsible for performing their own due diligence before purchasing an investment or participating in an c
external investment pool. Certificates of deposit of$250,000 or less are fully insured by the Federal Deposit
Insurance Corporation(FDIC),and therefore, do not seek a credit rating.
ec
Presented below is the minimum rating required by (where applicable) the California Government Code, the r_
City's investment policy,or debt agreements,and the actual rating as of year-end for each investment type. c
LL
Minimum Ratings Rating =
Legal at Year-End at Year-End u-
Investment Type Total Rating AA or AAA A Not Rated �
0
LAIF $ 4,111,467 N/A $ - $ - $ 4,1114 N
Commercial paper 984,476 A-1 - 984,476 _
Money market mutual funds 24,585,518 AA+ 17,486,847 7,098,671 d
Certificates of deposit 4,281,563 N/A 1,662,824 1,374,103 1,244,6: _
Negotiable certificates of deposit 1,994,002 A - - 1,994,0,
Federal agency securities 63,695,843 AA 63,695,843 -
U.S.Treasury obligations 12,677,858 N/A - - 12,67718. Q
Medium-term corporate notes 8,819,792 A 8,819,792
Asset backed securities 4,534,174 AA 4,534,174 -
Investment contracts 1,007,490 N/A - - 1,007,4'
Held by bond trustee:
Money market mutual funds 31,660,006 AA+ - 31,660,01
Investment contracts 1,056,000 N/A - - 1,056,01
$ 159,408,189 $ 96,199,480 $ 9,457,250 $ 53,751,4.
63 1 Packet Pg. 156
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 3—Cash and Investments (Continued)
D. Risk Disclosures(Continued)
LO
Disclosure Relating to Concentration of Credit Risk
0
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer N
beyond that stipulated in the Gov't Code. GASB Statement No. 40 requires disclosure by amount and issuer, of U.
investments in any one issuer that represent 5% or more of total investments. Investments in any one issuer ,o
(other than U.S. Treasury securities, mutual funds, and external investment pools) that represents 5% or more c
of the City's total investments are as follows: M
m
W
Reported Percentage
Issuer Investment Type Amount of Portfolio
Federal National Mortgage Association Federal Agency Securities $ 30,666,369 19.24% _
LL
Federal Home Loan Banks Federal Agency Securities 22,180,200 13.91% jp
Federal Home Loan Mortgage Corporation Federal Agency Securities 10,849,274 6.81% c
C
r Local Agency Investment Fund California Pooled Investment Fund 4,111,467 2.58% Q
U_
Disclosures Relating to Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution,
a government will not be able to recover its deposits or will not be able to recover collateral securities that
are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the
event of the failure of the counterparty (e.g., broker-dealer)to a transaction, a government will not be able to
recover the value of its investment or collateral securities that are in the possession of another party. The
California Government Code and the City's investment policy do not contain legal or policy requirements that V
would limit the exposure to custodial credit risk for deposits or investments, other than the following o
provision for deposits: The California Government Code requires that a financial institution secure deposits 0 CD
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
agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed E
mortgage notes having a value of 150% of the secured public deposits. At June 30, 2015, the City's deposits
R
(bank balances)were collateralized under California Law. _
U_
0
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_
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64 Packet Pg. 157
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 3—Cash and Investments (Continued)
E. Investment in State Investment Pool
The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the
oversight of the Treasurer of the State of California. The City's investments in LAIF at June 30, 2015 included c
a portion of pool funds invested in Structure Notes and Asset-Backed Securities: N
U_
Structured Notes are debt securities (other than asset-backed securities) whose cash-flow characteristics ,o
(coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have o
embedded forwards or options. Q-
m
Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle their purchasers to
receive a share of the cash flows from pool of assets such as principal and interest repayments from a pool r_
of mortgages(such as Collateralized Mortgage Obligations)or credit card receivables. _
ii
As of June 30, 2015, the City had $4,111,467 invested in LAIF, which had invested 0.97% of the pool
investment funds in Structured Notes and Asset-Back Securities. LAIF determines fair value on its investment a
portfolio based on market quotations for those securities where market quotations are readily available and
based on amortized cost or best estimate for those securities where market value is not readily available. The LL
City valued its investments in LAIF as of June 30, 2015,by multiplying its account balance with LAIF times a c
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
the same value of the pool shares. The credit quality rating of LAIF is unrated as of June 30,2015.
co
Note 4—Notes Receivables
c�
Notes receivable represent loan agreements entered into between the City or the former EDA and unrelated non- o
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, 2015, approximately $6.14 million
of notes receivable, net of$2.55 million allowance for doubtful accounts, were reported in the Federal and State
Grants Fund major special revenue fund. At June 30, 2015,the Low and Moderate Income Housing major special
revenue fund reported approximately $34.92 million of notes receivable, net of $8.12 million allowance for
LL
doubtful accounts, were reported. The Successor Agency has eight notes outstanding ranging in amount from
approximately $11,000 to $463,000 totaling $1.23 million. Collection of these notes receivable is subject to the
terms of each individual loan agreement. U')
CD
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65 Packet Pg. 158
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 5-Interfund Receivables,Payables,and Transfers
A. Due To/From Other Funds
Amounts due to and due from other funds at June 30, 2015,were as follows:
r
a
Due To Other Funds CV
Federal and Water Sewer Internal LL
General State Grants Enterprise Enterprise Service
O
Due From Other Funds Fund Fund Fund Fund Funds Total
General Fund $ $ 1,512,275 $ 3,454,363 $ $ $ 4,966,1 O
Nonmajor Governmental Funds - 230,300 230,: d
Integrated Waste Enterprise Fund 2,124,706 398,652 $ 2,523,:
Water Enterprise Fund 970,851 - 1,014,037 164,200 2,149,1
Sewer Enterprise Fund 47,865 - - - 47,: _
Total $ 1,018,716 $ 1,512,275 $ 5,809,369 $ 1,412,689 $ 164,200 $ 9,917,: tp
G
W
t0
3
Amounts due to and due from other funds reflect (a) Monies owed to the Integrated Waste Enterprise (IWE) C
fund from Water Enterprise and Sewer Enterprise funds for monies for services collected by the Water Q
Department on behalf of the IWE fund; and(b)inter-fund borrowings to cover short-term operating deficits and 2
E
cash overdrafts.
e,s
B. Advances To/From Other Funds >
Advance to and advances from other funds at June 30,2015,were as follows:
to
Advances From Other
to
�t
Nonmajor
Governmental t:
O
Advances To Other Funds Funds Total CL
Low&Moderate Income Housing Fund $ 65,200 $ 65,200
Nonmajor Governmental Funds 82,000 82,000 v
Total $ 147,200 $ 147,200
LL
The interfund advances above resulted from loans to fund infrastructure and other capital improvements in the
Arden-Guthrie and New Pine Assessment Districts and are expected to be repaid through special assessments U_
on property owners in those districts. o
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66 Packet Pg. 159
5.F.a
City of San Bernardino
19 Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 5—Interfund Receivables,Payables, and Transfers (Continued)
C. Transfers
Interfund transfers during the year ended June 30,2015,consisted of the following:
c
Transfers Out N
Federal and Integrated Non-major u'
General State Grants Waste Governmental O
Transfers In Fund Fund Enterprise Fund Funds Total t
General Fund $ $ 16,086 $ 2,200,000 $ 753,520 $ 2,969,606 d
Low&Moderate Income Housing Fund - 42,726 - - 42,726
Non-major Governmental Funds 40,000 - 34,065 74,065 ea
Total $ 40,000 $ 58,812 $ 2,200,000 $ 787,585 $ 3,086,397
to
C
Interfund transfers were principally used to (a) fund operating deficits in non-major funds, (b) reimburse costs
Ii
of the General Fund for City-provided services and(c)eliminate deficit fund balances.
Q
d
Note 6—Property Held for Resale ii
"a
c
Property held for resale represents single-family, multi-family, commercial, and retail real estate acquired by the a
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 w
approximately $78,000 to $640,000, and totaling $16.3 million. The Low and Moderate Income Housing major W
special revenue fund includes approximately 30 properties ranging in amount from approximately $5,000 to 10
$11.8 million, and totaling $18.3 million. Property held for resale is recorded at acquisition cost plus improvement W
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. c
Q.
a
Property held for resale in the Successor Agency represents vacant land and commercial and retail real estate W
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
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 —a
applicable laws and regulations. _
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67 Packet Pg. 160
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 7—Capital Assets
A. Governmental Activities
The summary of changes in governmental activities capital assets for the year ended June 30, 2015, is as
0
follows:
0
N
LL
Balance Balance O
July 1,2014 Additions Deletions Transfers June 30,2015 t
Capital assets,not being depreciated: Q.
Land $ 113,844,359 $ - $ $ - $ 113,844,359
Construction in progress 14,427,853 4,098,980 (4,771,776) 13,755,057 Q=
Total capital assets,not being depreciated 128,272,212 4,098,980 (4,771,776) 127,599,416 v
c
Capital assets,being depreciated: «t
Infrastructure 550,143,854 - - 4,069,912 554,213,766
Buildings and improvements 74,263,662 17,786 (775,346) 701,864 74,207,966 LL
Machinery,vehicles,and equipment 55,599,687 1,669,132 (55,852) - 57,212,967
c
Subtotal 680,007,203 1,686,918 (831,198) 4,771,776 685,634,699 a
Less accumulated depreciation
Infrastructure (306,049,976) (14,517,065) - - (320,567,041: Li
Buildings and improvements (59,950,540) (1,228,848) 664,583 (60,514,805:
Machinery,vehicles,and equipment (50,570,382) (2,038,886) 55,852 - (52,553,416:
Subtotal (416,570,898) (17,784,799) 720,435 (433,635,262: >
Total capital assets,being depreciated 263,436,305 (16,097,881) (110,763) 4,771,776 251,999,437 v
Intangible assets,being amortized:
Purchased software 5,946,327 - 5,946,327
Accumulated amortization (2,031,662) (594,633) - (2,626,295;
Total intangible assets,being amortized 3,914,665 (594,633) - - 3,320,032
Total governmental activities capital assets,net $ 395,623,182 $ (12,593,534) $ (110,763) $ $ 382,918,885 p
d
Depreciation and amortization expense was charged to the functions/programs of the governmental activities as
follows: c
M
General government $ 159,445 LL
Public safety 1,615,638 ca
Streets 15,061,762 u=
Culture and recreation 503,800 'n
Community development 7,676 °.1
Community services 176,784
c
Internal service funds 854,327
E
Total depreciation/amortization expense $ 18,379,432
w
Q
68 Packet Pg. 161
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 7—Capital Assets (Continued)
B. Business-Type Activities
u3
The summary of changes in business-type activities capital assets for the year ended June 30, 2015, is as
follows: c
N
Balance Balance 1
July 1,2014 Additions Deletions June 30,2015 p
Capital assets,not being depreciated: r
Land and easements $ 17,136,331 $ 686,112 $ - $ 17,822,44: d
Construction in progress 15,631,658 16,344,754 (14,519,362) 17,457,051 W
Total capital assets,not being depreciated 32,767,989 17,030,866 (14,519,362) 35,279,49:
v
Capital assets,being depreciated:
Water rights,wells,and pumping 99,804,329 1,560,536 - 101,364,86:
Distribution systems 138,672,711 8,007,924 - 146,680,63:
Building,plant,and store yards 127,489,178 6,253,132 (248,062) 133,494,24;
Other capital assets 45,308,848 983,002 (1,583) 46,290,26' Q
Subtotal 411,275,066 16,804,594 (249,645) 427,830,01: a)
Less accumulated depreciation LL
Water rights,wells,and pumping (34,697,421) (1,572,391) - (36,269,81: R
Distribution systems (34,701,375) (2,792,111) - (37,493,48 y
' 785 - 94 916,17.
Building,plant,and store yards (92,228,390) (2,687, ) ( �
Other capital assets (36,608,672) (2,893,249) 1,385 (39,500,531
Subtotal (198,235,858) (9,945,536) 1,385 (208,180,00:
Total capital assets,being depreciated 213,039,208 6,859,058 (248,260) 219,650,001 ti
co
Total capital assets,net $ 245,807,197 $ 23,889,924 $ (14,767,622) $ 254,929,491 d,
0
Depreciation expense was charged to the functions/programs of the business-type activities as follows: 0
Integrated Waste Enterprise Fund $ 1,719,302
Water Enterprise Fund 5,355,684
Sewer Enterprise Fund 2,870,550 E
LL
Total depreciation expense $ 9,945,536 is
c
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69 Packet Pg. 162
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 7—Capital Assets (Continued)
C. Fiduciary Fund Financial Statements
i
The summary of changes in fiduciary activities capital assets for the year ended June 30, 2015, is as follows:
0
Balance Balance N
July 1,2014 Additions Reclassifications June 30,2015 LL
L
Capital assets,not being depreciated: 0
Land $ 11,620,311 $ - $ - $ 11,620,311 0
Total capital assets,not being depreciated 11,620,311 - - 11,620,311 m
!Y
Capital assets,being depreciated:
Buildings and improvements 16,519,926 - - 16,519,926 'v
Machinery,vehicles,and equipment 1,282,198 - - 1,282,198
c
Subtotal 17,802,124 - - 17,802,124 ji
Less accumulated depreciation
Buildings and improvements (8,900,729) (373,430) - (9,274,159) C
C
Machinery,vehicles,and equipment (1,238,327) (38,531) - (1,276,858) Q
Subtotal (10,139,056) (411,961) - (10,551,017)
Total capital assets,being depreciated 7,663,068 (411,961) - 7,251,107
c
Total capital assets,net $ 19,283,379 $ (411,961) $ - $ 18,871,418
Z
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70 Packet Pg. 163
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities
A. Governmental Activities
u�
A summary of changes in the long-term liabilities of the governmental activities for the year ended June 30,
2015,is as follows:
N
Classification LPL
Balance Debt Debt Balance Due within Due in More
July 1,2014 Issued Retired June 30,2015 One Year Than One Year
Governmental Activities: 0
Capital leases $ 1,220,130 $ - $ (550,957) S 669,173 $ 380,817 $ 288,356
HUD CDBG liability 2,064,243 (168,761) 1,895,482 500,000 1,395,482
California Department of Finance 1,231,423 - 1,231,423 100,000 1,131,423 cj
c
Notes payable:
c
HUD Section 108-Arden Guthrie 6,822,000 - (354,000) 6,468,000 384,000 6,084,000 'U-
Fire maintenance facility note 1,200,000 (100,000) 1,100,000 - 1,100,000 is
New World Software Agreement 3,506,863 (543,651) 2,963,212 559,364 2,403,848
Total notes payable 11,528,863 - (997,651) 10,531,212 943,364 9,587,848
Lease revenue bonds:
City Hall Lease(Refunding Bonds,Series 1996) 6,925,000 (610,000) 6,315,000 645,000 5,670,000 U.
'C
Total lease revenue bonds 6,925,000 (610,000) 6,315,000 645,000 5,670,000
California Infrastructure and Economic
Development Bank(CIEDB)
Fire Station Lease 1,886,595 - (94,188) 1,792,407 96,938 1,695,469 d
Street Construction 2,407,844 - (1,189,821) 1,218,023 1,218,023 - ...
Harriman Place Street Exention Lease 1,012,559 - (114,639) 897,920 117,860 780,060 c0
r'
Total CIEDB 5,306,998 - (1,398,648) 3,908,350 1,432,821 2,475,529
Certificates of participation:
1999 Certificates of Participation 4,010,000 (275,000) 3,735,000 290,000 3,445,000 0
Total certificates of participation 4,010,000 (275,000) 3,735,000 290,000 3,445,000
Pension obligation bonds:
Taxable Pension Obligation Bonds,2005 Series A 46,140,860 - 46,140,860 46,140,860 - C
Add:interest accretion 6,061,639 722,245 - 6,783,884 6,783,884 M_
Total pension obligation bonds 52,202,499 722,245 - 52,924,744 52,924,744 LL
Total $84,489,156 $ 722,245 $ (4,001,017) $ 81,210,384 $57,216,746 $23,993,638 c
iz
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71 Packet Pg. 164
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities(Continued)
A. Governmental Activities(Continued)
Capital Leases Payable
0
The City has entered into several lease agreements for the financing of fire vehicles and equipment, air 0"
conditioners, and police vehicles. These lease agreements qualify as capital leases for accounting purposes and, U.
therefore, have been recorded at the present value of future minimum lease payments as of the date of a
inception. t
0
CL
The annual debt service requirements for the capital leases payable outstanding at June 30,2015 are as follows:
Year Ending csu
June 30, Principal Interest Total c
2016 $ 380,817 $ 39,034 $ 419,851 u_
R
2017 121,228 11,542 132,770 _
2018 81,632 6,877 88,509 Q
2019 85,496 3,013 88,509
Total $ 669,173 $ 60,466 $ 729,639 U_
c
CU
Assets acquired through the capital leases are as follows: }
'm
Amount aoi
Machinery,vehicles,and equipment $ 5,759,773
Less:accumulated depreciation (5,115,090) r-
Total $ 644,683 et
a
0-
HUD CDBG Liability 0
R
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 c
Office of the Inspector General of HUD. The City and HUD agreed on actions to resolve monetary findings U_
related to ineligible or unsupported expenditures and unreported program income. The City has accrued the
total of$1,895,482 owed to its CDBG line of credit as a liability of the governmental activities opinion unit. ii-
The City has acknowledged that if it does not honor the payment schedule below, it will result in nds being o
fu
reduced from the City's CDBG line of credit. N
The annual debt service requirements for the HUD CDBG liability outstanding at June 30, 2015 are as follows: E
Year Ending
June 30, Principal Interest Total Q
2016 $ 500,000 $ - $ 500,000
2017 500,000 - 500,000
2018 895,482 - 895,482
Total $ 1,895,482 $ - $ 1,895,482
72 Packet Pg. 165
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8—Long-Term Liabilities(Continued)
A. Governmental Activities (Continued)
California Department of Finance Liability
0
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 U.
City-contested amounts ranging from $14,041,882 to $1,231,423 were due to DOF. At June 30, 2013, the Low ,o
and Moderate Income Housing Fund reported a liability to DOF in the amount $3,415,155 for this liability. o
Subsequent to June 30, 2013, the DOF and the City agreed, via an installment payment agreement as m
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
Housing fund and added to the governmental activities long-term debt as of July 1, 2013.
The annual debt service requirements for the California Department of Finance liability outstanding at June 30,
ca
2015 are as follows:
c
c
Q
Year Ending
June 30, Principal Interest Total LL
2016 $ 100,000 $ - $ 100,000
c
2017 100,000 - 100,000
2018 100,000 100,000
-
2019 100,000 100,000
2020 100,000 - 100,000 W
2021-2025 500,000 - 500,000
2026-2028 231,423 - 231,423 r
0
Total $ 1,231,423 $ - $ 1,231,423
O
O.
d
tY
HUD Section 108—Arden Guthrie Focused Neighborhood Revitalization Proiect Note Payable
The City of San Bernardino entered into a Contract for Loan Guarantee Assistance, a Master Fiscal Agency M
Agreement, and executed a promissory note with the United States Department of Housing and Urban iz
Development pursuant to Section 108 of the Housing and Community Development Act of 1974, as amended c
(Section 108 Loan). The proceeds of the loan were then loaned to the EDA to be used for the Arden-Guthrie iz
Focused Neighborhood Revitalization Project, which affects approximately 20 acres of land located at the LO
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
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. -�
During the initial phase interest is payable from the date of each advance to the "Public Offering Date" and Q
shall accrue on the unpaid principal balance of the Note and shall be paid in quarterly installments on the first
day of February,May,August and November,"Interim Payment Date". The amount of interest payable on each
Interim Payment Date will represent interest accrued on the unpaid balance during the three month period
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
such advance at a rate per annum equal to 20 basis points (.2%) above the Applicable LIBOR Rate on such
Reset Date.
73 Packet Pg. 166
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8—Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
HUD Section 108—Arden Guthrie Focused Neighborhood Revitalization Project Note Payable
(Continued) C,
N
Interest payments are due semiannually on February 1 and August 1 and continue through August 1, 2026. U_
Principal payments are due annually on August 1, and continue through August 1, 2026. Jo
r_
The annual debt service requirements for the HUD Section 108 — Arden Guthrie note payable outstanding at m
June 30,2015 are as follows:
'U
Year Ending
June 30, Principal Interest Total c
2016 $ 384,000 $ 347,969 $ 731,969 LL
is
2017 404,000 327,874 731,874
2018 424,000 306,316 730,316
2019 454,000 282,867 736,867 m
2020 494,000 257,193 751,193 LL
2021-2025 3,040,000 812,517 3,852,517 V
2026-2027 1,268,000 73,069 1,341,069 M
Total $ 6,468,000 $ 2,407,805 $ 8,875,805 >
U
d3
Fire Maintenance Facility Note Payable
cG
ti
On August 1, 2009, the City entered into a note agreement with a property owner for the purchase of land to be
used for the City's Fire Department Maintenance Facility. The note is for the amount of $1,200,000 with a
maturity date of July 1, 2019 and bears interest at 5.0% per annum. Principal payment is due on July 1, 2019, Q.
but the City has an option to prepay the principal. The City made a principal payment of$100,000 in December
2014. Interest payments are due semiannually on January 1 and July 1, commencing on January 1, 2010
through July 1,2019.
The annual debt service requirements for the Fire Maintenance Facility note payable outstanding at June 30, ii
2015 are as follows:
U_
Year Ending 'n
June 30, Principal Interest Total N
2016 $ - $ 55,000 $ 55,000
2017 - 55,000 55,000 W
2018 - 55,000 55,000 z
2019 - 55,000 55,000 U
2020 1,100,000 27,500 1,127,500 Q
Total $ 1,100,000 $ 247,500 $ 1,347,500
74 Packet Pg. 167
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8—Long-Term Liabilities(Continued)
A. Governmental Activities (Continued)
New World Note Payable
�r
0
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 LL
annualpayments of$645,000, calculated using a discount rate of 2.89%. The final payment is due July 1, 2019. o
The annual debt service requirements for the New World note payable outstanding at June 30, 2015 are as m
follows:
U
Year Ending
June 30, Principal Interest Total
2016 $ 559,364 $ 85,637 645,001 °i
2017 575,529 69,471 645,000
2018 592,162 52,838 645,000 =
c
2019 609,275 35,725 645,000 a
2020 626,882 18,117 644,999
LL
Total $ 2,963,212 $ 261,788 $ 3,225,000
w
a
Lease Revenue Refunding Bonds(City Hall Proiect),Series 1996 'U
$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 to
certain equipment and other capital improvements by the City. These bonds consisted of: $4,235,000 of serial
bonds with interest rates varying from 4.15% to 5.00%, and $1,690,000 of term bonds bearing interest at
5.10%, $865,000 of term bonds, bearing interest of 5.30%, and $3,215,000 of term bonds, bearing interest at 0 CL
5.60% and $6,315,000 of term bonds, bearing interest at 5.70%. Interest is payable semiannually on January 1 CD
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. _
The bonds are subject to optional redemption as a whole or in part at the times and prices (expressed as a 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 30,2015,the reserve requirement u.
was $1,497,030 and the amount actually held in the reserve account was$1,045,669. "'
0
N
The bonds and the interest thereon were previously payable from, and secured by a pledge of, lease payments to
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
grant to the former EDA,which will be assigned to First Trust of California National Association, as trustee, its
interest in the lease agreement, which includes its rights to acquire the leased premises, upon payment of Q
principal of and interest on the bonds.Upon dissolution of the EDA,the bonds became a liability of the City.
75 Packet Pg. 168
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8-Long-Term Liabilities(Continued)
A. Governmental Activities(Continued)
Lease Revenue Refunding Bonds(City Hall Project),Series 1996(Continued)
�t
0
The annual debt service requirements for the Lease Revenue Refunding Bonds(City Hall Project), Series 1996,
outstanding at June 30,2015 are as follows: '_
a
Year Ending C
June 30, Principal Interest Total CL
Q
2016 $ 645,000 $ 359,955 $ 1,004,955 W
2017 685,000 323,190 1,008,190 R
2018 720,000 284,145 1,004,145
2019 760,000 243,105 1,003,105 C
2020 805,000 199,785 1,004,785 u_
2021-2023 2,700,000 313,500 3,013,500 R
Total $ 6,315,000 $ 1,723,680 $ 8,038,680
Q
as
California Infrastructure and Economic Development Bank-Fire Station Lease U_
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
Station lease payments upon a term of 25 years from the effective day at an interest rate of 2.92% per annum.
The base rental payments are due on February 1 and August 1 of each year, commencing on February 1, 2005,
co
through August 1, 2029.
The annual debt service requirements for the Fire Station Lease outstanding at June 30,2015 are as follows:
0
Year Ending D
June 30, Principal Interest Total
2016 $ 96,938 $ 50,923 $ 147,861
2017 99,769 48,051 147,820
2018 102,682 45,095 147,777 W
2019 105,680 42,053 147,733
2020 108,766 38,922 147,688
'u.
2021-2025 593,366 144,352 737,718 ,n
2026-2030 685,206 51,171 736,377 c
N
Total $ 1,792,407 $ 420,567 $ 2,212,974
c
m
E
v
Q
76 Packet Pg. 169
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities(Continued)
A. Governmental Activities (Continued)
California Infrastructure and Economic Development Bank—Street Construction Lease
0
On September 27, 2005, the California Infrastructure and Economic Development Bank(CIEDB) and the City N
entered into a financing agreement for pavement reconstruction and 25.5 miles of pavement rehabilitation UM
projects on public streets throughout the City for an amount of$10,000,000. Interest rate is 2.37% per annum. ,o
The City agrees to pay the CIEDB on August 1 and February 1, commencing on August 1, 2006, through c
August 1,2015. m
t�
The annual debt service requirements for the Street Construction Lease outstanding at June 30, 2015 are as
follows: _
M
Year Ending u'
June 30, Principal Interest Total M
_
2016 1,218,023 14,434 1,232,457 =
Q
Total $ 1,218,023 $ 14,434 $ 1,232,457 d
U.
California Infrastructure and Economic Development Bank—Harriman Place Extension Lease =
R
m
On August 28, 2001, the California Infrastructure and Economic Development Bank (CIEDB) and the City
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.
Subject to the provisions of the lease, the City agrees to pay to the CIEDB as rental for use and occupancy of m
the Harriman Street Extension lease payments on February 1 and August I of each year, commencing on :S
August 1,2004,through August 1,2021. c
Q.
The annual debt service requirements for the Harriman Place Extension Lease outstanding at June 30, 2015 are W
as follows:
c
Year Ending c
June 30, Principal Interest Total L-
r 2016 $ 117,860 $ 23,576 $ 141,436 c
2017 121,172 20,217 141,389 u-
2018 124,577 16,764 141,341 c
2019 128,077 13,215 141,292 N
2020 131,676 9,565 141,241
2021-2022 274,558 7,769 282,327
E
Total $ 897,920 $ 91,106 $ 989,026 =
Q
77 Packet Pg. 170
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8—Long-Term Liabilities(Continued)
A. Governmental Activities (Continued)
u�
1999 Certificates of Participation
T_
0
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 LL
outstanding of Refunding Certificates of Participation (South Valle Public Improvement Project) dated ,
April 1, 1987, and $5,910,000 outstanding of Certificates of Participation (1995 Police Station Financing a
Project) dated April 1, 1995, and to provide funds for capital improvements (201 Building Projects).
The Certificates mature on September 1 of each year through September 1, 2024, in amounts ranging from
$330,000 to $1,080,000. The interest represented by the Certificates is calculated on the basis of a 360-day eo=a
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 U.
during the six months preceding each interest payment date. The interest rates will range approximately from
3.70%to 5.50%per annum.
4
a,
The Certificates maturing on September 1, 2020, are subject to mandatory sinking fund redemption in part on u=
September 1 in each year on or after September 1, 2010, 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
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
documents. The Certificates maturing on September 1, 2024, are subject to mandatory sinking fund redemption
in part on September 1, 2021, from the principal components of the lease payments required to be paid by the
City pursuant to the Lease Agreements with respect to each such redemption date, at a redemption price equal v
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 documents. o
a
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 annual
debt service. At June 30, 2015, the reserve requirement was $1,147,000 and the amount actually held in the
reserve account was $1,114,061. The total outstanding balance of the Certificates at June 30, 2015 was U.
$8,590,000 of which $3,735,000 is reported as a long-term liability of the City, which is the portion of the _r;
Certificates that represent the Police Station portion. Repayment of this portion of the Certificates is funded
from the City's general revenues under the terms of the lease agreement. The remaining $3,735,000 U1>
outstanding balance of the Certificates at June 30, 2015, is reported as a long-term liability of the Successor N
Agency, which is the portion of the Certificates that represents the South Valle Refunding and 201 Building
Projects portions. _
E
cs
d
78 Packet Pg. 171
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
u�
1999 Certificates of Participation (Continued)
0
The annual debt service requirements for the 1999 Certificates of Participation outstanding at June 30, 2015 are 04
as follows: u_
0
Year Ending
June 30, Principal Interest Total CL
Q
2016 $ 290,000 $ 197,451 $ 487,451 W
2017 305,000 181,088 486,088
2018 325,000 163,763 488,763
2019 340,000 145,475 485,475 =_
2020 360,000 126,225 486,225 U-
2021-2025 2,115,000 303,188 2,418,188 R
Total $ 3,735,000 $ 1,117,190 $ 4,852,190 Q
a�
Taxable Pension Obligation Bonds,2005 Series A U.
In October 2005, the City issued City of San Bernardino Taxable Pension Obligation Bonds, 2005 Series A,
consisting of$36,050,000 principal amount of Taxable Pension Obligation Bonds, Series A-1 (standard bonds) 2
and$14,351,583 principal amount of Taxable Pension Obligation Bonds, 2005 Series A-2 (capital appreciation
bonds). The City issued the bonds in order to prepay its unfunded accrued actuarial liability related to the City's
safety retirement plan. NCO.
co
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, Q.
commencing on October 1, 2006 through October 1, 2035. The capital appreciation bonds are dated October 1, �
2005, with interest rates varying from 4.993% to 5.877% per annum, maturing annually commencing 1a
October 1, 2007,through October 1, 2024. Interest is due semiannually on April 1 and October 1, 2006 through .5
October 1, 2035. c
U.
The City is in default on these bonds since the City did not pay interest or principal on these bonds beginning in
fiscal year 2013 and has recorded the full amount of the outstanding principal as a current portion of their long- iz
term debt as of June 30, 2015. Please see Note 2 Bankruptcy. Subsequent to June 30, 2015,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
will be reduced to $50.7 million payable in installments over a 30 year term. Please see Note 25 Subsequent
Events.
c�
.r
4
79 Packet Pg. 172
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities(Continued)
A. Governmental Activities (Continued)
Taxable Pension Obligation Bonds,2005 Series A(Continued)
0
The annual debt service requirements for the Taxable Pension Obligation Bonds, 2005 Series A, outstanding at N
June 30, 2015 are as follows:
O
4-
Year Ending 'C
June 30, Principal Interest Total CL
d
2016 $ 5,524,973 $ 2,028,894 $ 7,553,867
2017 1,418,844 2,028,894 3,447,738
2018 1,384,740 2,028,894 3,413,634 c
2019 1,353,495 2,028,894 3,382,389 c
2020 1,319,606 2,028,894 3,348,500 L-
2021-2025 6,268,086 10,133,355 16,401,441 R
O
2026-2030 12,550,000 8,382,061 20,932,061
c
2031-2035 . 18,515,000 4,051,457 22,566,457 Q
2036 4,590,000 129,163 4,719,163
LL
Total $ 52,924,744 $ 32,840,506 $ 85,765,250 -a
c
�a
m
B. Business-type Activities
as
A summary of changes in the long-term liabilities of the business-type activities for the year ended June 30,
2015,is as follows: to
c�
v
Classification
Balance Debt Debt Balance Due within Due in More
O
July 1,2014 Issued Retired June 30,2015 One Year Than One Year d
Business-Type Activities: W
Integrated Waste equipment capital leases $ 4,792,949 $ $ (2,140,363) $ 2,652,586 $ 1,438,444 $ 1,214,142
c
Notes payable:
C
2002 California Infrastructure and LL
Economic Development Bank-Water Note 5,177,248 (575,228) 4,602,020 594,440 4,007,580
2007 California Infrastructure and LL
Economic Development Bank-Water Note 7,359,166 (479,775) 6,879,391 492,777 6,386,614 'n
r
2012 California Infrastructure and °
cv
Economic Development Bank-Water Note 9,586,740 (424,046) 9,162,694 435,114 8,727,580
c
2012 San Bernardino Valley Municipal
Water District Note 677,191 (204,769) 472,422 225,723 246,699 E
State Revolving Fund 3,374,135 (1,664,425) 1,709,710 1,709,710 U
Total notes payable 26,174,480 (3,348,243) 22,826,237 3,457,764 19,368,473 Q
Certificates of participation:
1998 Sewer Revenue Certificates of Participation 9,340,000 (2,965,000) 6,375,000 3,155,000 3,220,000
Less:unamortized discount (47,636) 18,944 (28,692) - (28,692)
Total certificates of participation 9,292,364 (2,946,056) 6,346,308 3,155,000 3,191,308
Total $ 40,259,793 $ $ (8,434,662) $ 31,825,131 $ 8,051,208 $ 23,773,923
80 Packet Pg. 173
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8—Long-Term Liabilities(Continued)
B. Business-type Activities(Continued)
Integrated Waste Equipment Capital Leases Payable
0
The City entered into several lease purchase agreements for the financing of the acquisition of refuse trucks and r
street sweepers. The terms of leases are 84 months each, with individual semi-annual payments ranging from u-
$165,999 to $945,575. Interest rate ranges from 2.89% to 3.78%. These lease agreements qualify as capital ,o
leases for accounting purposes and, therefore, have been recorded at the present value of future minimum lease o
payments as of the date of inception. These lease agreements qualify as capital leases for accounting purposes, m
and therefore, have been recorded at the present value of the future minimum lease payments as of the date of W
inception. t°
The annual debt service requirements for the Integrated Waste capital leases payable outstanding at June 30,
2015 are as follows: LL
Year Ending Q
June 30, Principal Interest Total �y
2016 $ 1,438,444 $ 78,821 $ 1,517,265 ii
2017 889,209 32,560 921,769
2018 324,933 7,060 331,993 M
aD
Total $ 2,652,586 $ 118,441 $ 2,771,027 >
v
as
Assets acquired through the capital leases are as follows:
ti
co
Amount a
Machinery,vehicles,and equipment $ 19,972,082 t
Less:accumulated depreciation (13,265,231) Q.
d
Total $ 6,706,851 W
is
.v
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
transmission mains, booster stations and a reservoir identified in the Water System Reliability Schedule of LL
Improvements. The note was issued with an interest rate of 3.34% per annum with interest payable u,
semiannually on February 1 and August 1.Principal payments are due annually on February 1. N
m
E
ea
Q
81 Packet Pg. 174
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8-Long-Term Liabilities (Continued)
B. Business-type Activities(Continued)
2002 California Infrastructure and Economic Development Bank(CIEDB)-Water Note(Continued)
0
The annual debt service requirements for the 2002 CIEDB Water note payable outstanding at June 30, 2015 are N
as follows: LL
U.
0
Year Ending t
June 30, Principal Interest Total Q
d
2016 $ 594,440 $ 153,708 $ 748,148
2017 614,294 133,854 748,148
2018 634,812 113,336 748,148 c
2019 656,014 92,133 748,147 c
2020 677,925 70,222 748,147 IL
2021-2022 1,424,535 71,760 1,496,295 t°
Total $ 4,602,020 $ 635,013 $ 5,237,033
Q
a>
2007 California Infrastructure and Economic Development Bank(CIEDB)-Water Note LL-
c
In July 2007, CIEDB issued a $10,000,000 note to the City Water Department to provide funding for booster y
stations and transmission mains in the Verdemont area. The note was issued with an interest rate of 2.71%per •��-,
annum with interest payable semiannually on February 1 and August 1. Principal payments are due annually on
August 1.
co
The annual debt service requirements for the 2007 CIEDB Water note payable outstanding at June 30, 2015 are
as follows:
0
CL
Year Ending 0
June 30, Principal Interest Total
ro
2016 $ 492,777 $ 179,754 $ 672,531
2017 506,131 166,219 672,350 c
2018 519,847 152,317 672,164 LL
2019 533,935 138,038 671,973 as
2020 548,405 123,373 671,778 =
LL
2021-2025 2,973,170 382,585 3,355,755 Ul)
r
2026-2027 1,305,126 35,605 1,340,731 N
Total $ 6,879,391 $ 1,177,891 $ 8,057,282 }:
c
m
E
s
U
cC
a
82 Packet Pg. 175
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities (Continued)
B. Business-type Activities (Continued)
2012 California Infrastructure and Economic Development Bank(CIEDB)—Water Note
0
In May 2012, CIEDB issued a $10,000,000 note to the City Water Department to provide funding for the N
construction of the 12 million gallon Ogden Reservoir and certain pipeline improvements. The note was issued u_
with an interest rate of 2.61% per annum with interest payable semiannually on February 1 and August 1. ,o
Principal payments are due annually on August 1. o
Q.
The annual debt service requirements for the 2012 CIEDB Water note payable outstanding at June 30, 2015 are W
as follows:
c
Year Ending c
June 30, Principal Interest Total U.
2016 $ 435,114 $ 233,468 $ 668,582
2017 446,470 221,963 668,433 Q
2018 458,123 210,158 668,281
2019 470,080 198,045 668,125
2020 482,349 185,616 667,965 a
2021-2025 2,607,286 729,988 3,337,274
2026-2030 2,965,768 366,828 3,332,596 m
2031-2032 1,297,504 34,083 1,331,587
Total $ 9,162,694 $ 2,180,149 $ 11,342,843
co
ti
2012 San Bernardino Valley Municipal Water District Note m
In July 2012, the Department closed escrow on the purchase of real property from the San Bernardino Valley 0
0.
Municipal Water District (SBVMWD), which included a down payment of$1,000,000 and a promissory note a)
of$1,117,500 to be paid in sixty(60)monthly installments due on or before the 1 st of each month.
The annual debt service requirements for the 2012 San Bernardino Valley Municipal Water District note c
payable outstanding at June 30, 2015 are as follows: LL
�a
Year Ending
LL
June 30, Principal Interest Total U)
2016 $ 225,723 $ 3,504 $ 229,227
N
2017 246,699 1,238 247,937
Total $ 472,422 $ 4,742 $ 477,164
E
v
Q
83 Packet Pg. 176
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities(Continued)
B. Business-type Activities(Continued)
�n
State Revolving Fund
0
The State Water Resources Control Board issued a note to Santa Ana Watershed Authority to provide funding 0"
the San Bernardino/Colton Rapid Infiltration Extraction (RIX) project in the amount of$25,978,599. In April U_
2001, the agreement was amended to transfer the note obligation to the successors in interest being the City of
San Bernardino Board of Water Commissioners, and the City of Colton. The City Water Department will use o
revenues from the sewer treatment utility fund towards repayment of the note. The note matures in 2016 and m
bear interest at a rate of 2.80%per annum.
1Z
The annual debt service requirements for the State Revolving Fund note payable outstanding at June 30, 2015 a
are as follows: _
LL
Year Ending
June 30, Principal Interest Total
2016 $ 1,709,710 $ 47,872 $ 1,757,582 Q
at
U_
1998 Refunding Sewer Revenue Certificates of Participation
m
,. In 1998, the sewer treatment utility issued $36,230,000 in Certificates of Participation to advance refund the Z
1992 Sewer Certificates of Participation and fund additional capital improvements. The 1992 Certificates
originally provided for the construction of certain capital improvements. The proceeds of the 1998 Certificates
were invested and used to pay interest on the 1998 issue until February 1, 2001, when the 1992 Certificates to
were called at a prepayment premium of two percent. The City Water Department now pays the installment a
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 0
annum, annual debt service payments ranging from$1,697,000 to$3,474,000, and a maturity date of 2017. tr
The annual debt service requirements for the 1999 Refunding Sewer Revenue Certificates of Participation 5
outstanding at June 30,2015 are as follows:
LL
Year Ending is
June 30, Principal Interest Total 9
LL
2015 $ 3,155,000 $ 318,750 $ 3,473,750 'n
2016 3,220,000 161,000 3,381,000 °
N
Total $ 6,375,000 $ 479,750 $ 6,854,750
CD
E
s
U
w
Q
84 Packet Pg. 177
W"
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities(Continued)
C. Fiduciary Fund Financial Statements
A summary of changes in the long-term liabilities of the fiduciary fund financial statements for the year ended
June 30, 2015,is as follows: c
N
Classification }
LL
Balance Debt Debt Balance Due within Due in More `p
July 1,2014 Issued Retired June 30,2015 One Year Than One Year
Fiduciary Activities: 0
M
Notes payable: W
HUD Section 108-Cinema Project $ 2,555,000 $ $ (490,000) $ 2,065,000 $ 530,000 $ 1,535,000
CMB Infrastructure Investment Group 33,000,000 - (12,500,000) 20,500,000 2,500,000 18,000,000 c
Total notes payable 35,555,000 - (12,990,000) 22,565,000 3,030,000 19,535,000
ii
Tax allocation bonds:
Series 1998A,Refunding 8,190,000 - (985,000) 7,205,000 1;040,000 6,165,000 c
Series 199813,Refunding 4,195,000 - (420,000) 3,775,000 445,000 3,330,000 Q
Series 2002A 2,865,000 - (85,000) 2,780,000 90,000 2,690,000 2
Series 2002,Refunding 1857555000 - (1,335,000) 17,420,000 1,415,000 16,005,000 u-
Series 2005A,Refunding 37,175,000 - (2,955,000) 34,220,000 3,125,000 31,095,000 c
Series 200513,Refunding 13,915,000 (1,140,000) 12,775,000 1,205,000 11,570,000 y
Series 2006,Taxable 18,860,000 (1,555,000) 17,305,000 1,6405000 15,665,000
Series 2010A 5,965,000 (200,000) 5,765,000 210,000 5,555,000 v
m
Series 2010B 2,590,000 (150,000) 2,440,000 145,000 2,295,000 W
Unamortized discount (559,016) 50,517 (508,499) - (508,499)
Unamortized premium 878,915 (73,244) 805,671 - 805,671
Total tax allocation bonds 112,829,899 (8,847,727) 103,982,172 9,315,000 94,667,172
Mortgage revenue bonds: 0
Highland Senior Housing 1995 1,100,000 - - 1,100,000 65,000 1,035,000
Casa Ramona Senior Housing 1995 970,000 - - 970,000 60,000 910,000
Total mortgate revenue bonds 2,070,000 - 2,070,000 125,000 1,945,000
Certificates of participation:
1999 Certificates of Participation 5,215,000 (360,000) 4,855,000 380,000 4,475,000 U'
iu
LL
Total certificates of participation 5,215,000 (360,000) 4,855,000 380,000 4,475,000 2
Total $155,669,899 $ $(22,197,727) $133,472,172 $ 12,850,000 $120,622,172 'n
C7
N
C
CD
E
.0
V
d
85 Packet Pg. 178
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8—Long-Term Liabilities(Continued)
C. Fiduciary Fund Financial Statements(Continued)
ui
HUD Section 108—Cinema Proiect Note Payable
0
The City of San Bernardino EDA and MDA-San Bernardino Associates, LLC (MDA) entered into a HUD N
Section 108 Loan Agreement in December of 1998. The proceeds of the EDA Loan, together with other U_
sources of funds, were used and applied by MDA for the payment of the costs of the development, o
construction, improvement and financing of a multi-screen cinema complex and related common area
improvements. In order for the EDA to be able to make the loan, the EDA entered into a Contract for Loan Q.
Guarantee Assistance, a Master Fiscal Agency Agreement, and executed promissory notes with the United W
States of America through its Department of Housing and Urban Development pursuant to Section 108 of the i
Housing and Community Development Act of 1974, as amended. c
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.
c
C
The annual debt service requirements for the HUD Section 108 — Cinema Project note payable outstanding at Q
m
June 30,2015 are as follows: LL
_
Year Ending to
June 30, Principal Interest Total >
2016 $ 530,000 $ 49,876 $ 579,876
2017 560,000 36,598 596,598 IY
2018 605,000 20,347 625,347 W
2019 370,000 5,772 375,772 r
cfl
Total $ 2,065,000 $ 112,593 $ 2,177,593
0
CMB Infrastructure Investment Group Notes Payable
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 c
Immigration Fifth Preference (EB-5) Immigrant Investor Visa Program. The Note matures on September 30, ii
2015. Interest only payments are due on the first day of each quarter at the rate of 5.25%per annum.
U.
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 N
Investor Visa Program. The Note matures on October 1, 2016. Interest only payments are due on the first day of
each quarter at the rate of 5.25%per annum.
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 Q
Investor Visa Program. The Note matures on January 1,2018. Interest only payments are due on the first day of
each quarter at the rate of 5.25%per annum.
As of June 30,2015, $33,000,000 has been drawn against the Loans.
86 Packet Pg. 179
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8—Long-Term Liabilities (Continued)
C. Fiduciary Fund Financial Statements (Continued)
LO
CMB Infrastructure Investment Group Notes Payable (Continued)
4
0
N
The annual debt service requirements for the CMB Infrastructure Investment Group notes payable outstanding LL
at June 30,2015 are as follows: �o
Year Ending Q,
June 30, Principal Interest Total W
2016 $ 2,500,000 $ 1,010,535 $ 3,510,535 as
2017 8,000,000 326,667 8,326,667
2018 10,000,000 408,333 10,408,333
Total $20,500,000 $ 1,745,535 $22,245,535 LL
c
Tax Allocation Refunding Bonds, Series 1998A Q
The $19,000,000 of tax allocation refunding bonds, issue of 1998, Series A, consist of serial bonds with varying U_
interest rates from 3.600% to 5.750% per annum. Interest is payable semiannually on January I and July 1. r_
Serial bonds mature annually on July 1 through July 1, 2020. >
U
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
Central City Project Tax Allocation Refunding Bonds, 1991 Series A and $4,005,000 of outstanding Central
City Project Subordinated Tax Allocation Bonds 1991 Series B.
The Series A bonds are not subject to optional redemption. The bonds are secured by a pledge of property tax Q.
apportionments from the Central City Project Area. A reserve account is required to be maintained in
accordance with the bond documents. A reserve account is required to be maintained in the amount of
$1,456,515. The balance held in the reserve account as of June 30, 2015 was $1,454,366. At June 30, 2015,
$7,205,000 of the bonds were outstanding.
ii
The annual debt service requirements for the Tax Allocation Refunding Bonds, Series 1998A outstanding at
June 30, 2015 are as follows: U=
Year Ending N
June 30, Principal Interest Total
c
2016 $ 1,040,000 $ 384,388 $ 1,424,388 °f
E
2017 1,100,000 322,863 1,422,863
U
2018 1,160,000 257,888 1,417,888 2
2019 1,230,000 189,175 1,419,175 d
2020 1,300,000 116,438 1,416,438
2021 1,375,000 39,531 1,414,531
Total $ 7,205,000 $ 1,310,283 $ 8,515,283
87 Packet Pg. 180
S.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8—Long-Term Liabilities(Continued)
C. Fiduciary Fund Financial Statements (Continued)
Tax Allocation Refunding Bonds, Series 1998B
v
The $8,590,000 of subordinated tax allocation refunding bonds, issue of 1998 Series B, consists of$4,815,000 N
of serial bonds with varying interest rates from 4.500% to 5.875% per annum and $3,775,000 of term bonds, LL
bearing interest at 6.000% per annum. Interest is payable semiannually on January 1 and July 1. Serial bonds ,`o
mature annually on July 1 through July 1, 2014. Term bonds are due July 1, 2020, and shall be called and r_
redeemed before maturity from money deposited into the Term Bond Sinking Fund on July 1, 2015, to July 1, °a
2020,without premium.
ca
The proceeds of the 1998 Series B subordinated Tax Allocation Refunding Bonds along with the 1998 Series A c
Tax Allocation Refunding Bonds were used to advance refund$20,990,000 of outstanding Central City Project c
Tax Allocation Refunding Bonds, 1991 Series A and $4,005,000 of outstanding Central City Project U_
Subordinated Tax Allocation Bonds, 1991 Series B.
c
Bonds maturing on or after July 1, 2009, are subject to redemption before maturity, at the option of the former a
a�
EDA, from available funds, on any date after July 1,2008. Such bonds will be redeemed at the times and prices E
(expressed as a percentage of the principal amount so redeemed) as set forth in the bond documents. The bonds
are secured by a pledge of property 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 30,2015,the reserve requirement >
was $639,012 and the amount actually held in the reserve account was $638,669. At June 30, 2015, $3,775,000 v
of the bonds were outstanding.
The annual debt service requirements for the Tax Allocation Refunding Bonds, Series 1998B outstanding at
June 30, 2015 are as follows:
t=
0
Year Ending Q-
d
June 30, Principal Interest Total 0=
2016 $ 445,000 $ 213,150 $ 658,150 e°
2017 470,000 185,700 655,700
2018 500,000 156,600 656,600
2019 530,000 125,700 655,700 LL
2020 560,000 93,000 653,000 c
2021 1,270,000 38,100 1,308,100 �-
Total $ 3,775,000 $ 812,250 $ 4,587,250 0
N
r+
Tax Allocation Bonds,Series 2002A
In January 2002, the San Bernardino Joint Powers Financing Authority issued $3,635,000 in tax allocation Y
bonds to fund certain capital improvement projects in the Mount Vernon Project Area, to fund a reserve fund,
and to pay costs of issuance of the bonds. Interest on the bonds is 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
installments are payable annually on December 1 ranging in amount from $50,000 to $445,000 through
December 1,2031.
88 Packet Pg. 181
i
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8-Long-Term Liabilities(Continued)
C. Fiduciary Fund Financial Statements (Continued)
Tax Allocation Bonds,Series 2002A (Continued)
�r
0
Term bonds maturing on December 1, 2012, are subject to mandatory prepayment, on each December 1, N
commencing on December 1, 2007, through December 1, 2012. Term bonds maturing on December 1, 2021, U_
are subject to mandatory prepayment on each December 1, commencing on December 1, 2013, through ,o
December 1, 2021. Term bonds maturing on December 1, 2031, are subject to mandatory prepayment, on each
December 1, commencing on December 1,2022. °�
a�
A reserve account is required to be maintained in the amount of$263,625. The balance held in the reserve M
account as of June 30, 2015,was $258,834. At June 30, 2015, $2,780,000 of the bonds were outstanding. _
M
The annual debt service requirements for the Tax Allocation Bonds, Series 2002A outstanding at June 30, 2015 u•
are as follows:
_
Year Ending 4
as
June 30, Principal Interest Total
2016 $ 90,000 $ 168,150 $ 258,150 'a
_
2017 95,000 162,600 257,600
2018 100,000 156,750 256,750
2019 105,000 150,600 255,600
v
2020 115,000 144,000 259,000 �
2021-2025 685,000 603,835 1,288,835
2026-2030 925,000 355,725 1,280,725
2031-2032 665,000 48,205 713,205
Total $ 2,780,000 $ 1,789,865 $ 4,569,865 C
CL
a�
Tax Allocation Refunding Bonds,Series 2002
U
In April 2002, the San Bernardino Joint Powers Financing Authority issued $30,330,000 in tax allocation c=a
refunding bonds to refund the 1995B Tax Allocation Bonds, to finance certain redevelopment activities in the ii
former EDA's project areas, to fund a reserve fund for the bonds, fund the interest account, and pay costs of R
issuance of the bonds. As a result, the refunded bonds are considered defeased and the liability has been =
LL
removed from the financial statements. u�
0
The bonds consist of term bonds of $7,100,000 maturing from 2013 to 2018 in annual installments ranging
from $1,190,000 to $1,500,000, term bonds of$3,475,000 maturing from 2019 to 2020 in annual installments a=i
ranging from $1,685,000 to $1,790,000, and term bonds of$9,440,000 maturing from 2021 to 2026 in annual t
installments ranging from$1,120,000 to$2,770,000. Interest is payable semi-annually on October 1 and April 1
at rates ranging from 3.25%to 5.625%per annum. Q
The term bonds maturing on April 1, 2018,are subject to mandatory prepayment, on each April 1, commencing
on April 1, 2013, through April 1, 2018. Term bonds maturing on April 1, 2020, are subject to mandatory
prepayment, on April 1, 2019, and April 1, 2020. Term bonds maturing on April 1, 2026, are subject to
mandatory prepayment on each April 1, commencing on April 1,2021,through April 1,2026.
89 Packet Pg. 182
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8—Long-Term Liabilities (Continued)
C. Fiduciary Fund Financial Statements (Continued)
Tax Allocation Refunding Bonds, Series 2002 (Continued)
0
The former EDA agreed to pay the Authority principal and interest payments solely from the EDA's surplus tax N
revenues from the Central City North, State College No. 4, Southeast Industrial Park, Northwest, South Valle, U_
Uptown and Tri-City Redevelopment Project Areas. �o
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 30,2015,was $1,974,815. At June 30,2015, $17,420,000 of the bonds were outstanding.
i The annual debt service requirements for the Tax Allocation Refunding Bonds, Series 2002 outstanding at June =
30,2015 are as follows: c
LL
Year Ending �
June 30, Principal Interest Total c
2016 $ 1,415,000 $ 1,107,676 $ 2,522,676
2017 1,500,000 1,022,776 2,522,776 U_
2018 1,590,000 932,776 2,522,776 'ts
2019 1,685,000 837,376 2,522,376 M
2020 1,790,000 734,590 2,524,590
CD
2021-2025 7,660,000 1,923,238 9,583,238
U
2026 1,780,000 117,926 1,897,926
Total $ 17,420,000 $ 6,676,358 $24,096,358
ca
ti
to
d'
Tax Allocation Refunding Bonds,Series 2005A
0
In September 2005, the San Bernardino Joint Powers Financing Authority issued$55,800,000 in tax allocation tr
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. ;y
R
The Series 2005A bonds consist of serial bonds with varying interest rates from 5.15% to 5.75% per annum. 0
ary' g p LL
Interest is payable semi-annually on April 1 and October 1. Serial bonds mature annually on October 1 through LO
October 1,2025. 0
The Series 2005A 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 s
Project No. 4, Southeast Industrial Park,Northwest, South Valle, Uptown, and Tri-City Redevelopment Project
Areas. Q
A reserve account is required to be maintained in the amount of$5,101,721. The balance held in the reserve
account as of June 30, 2015 was$2,086,442. At June 30, 2015, $34,220,000 of the bonds were outstanding.
too� The reacquisition price exceeded the net carrying amount of the old debt by $1,116,000. This amount is being
netted against the new debt and being amortized over the life of the new debt. The advance refunding resulted
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.
90 Packet Pg. 183
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities (Continued)
C. Fiduciary Fund Financial Statements (Continued)
in
Tax Allocation Refunding Bonds,Series 2005A(Continued)
P
The annual debt service requirements for the Tax Allocation Refunding Bonds, Series 2005A outstanding at N
June 30, 2015 are as follows: U_
0
Year Ending
June 30, Principal Interest Total g
aD
2016 $ 3,125,000 $ 1,877,806 $ 5,002,806 W
2017 3,305,000 1,692,944 4,997,944 iy
2018 3,495,000 1,497,444 4,992,444 U
c
2019 3,695,000 1,290,731 4,985,731
c
2020 3,905,000 1,072,231 4,977,231 LL
2021-2025 14,140,000 2,586,063 16,726,063 16
2026 2,555,000 73,456 2,628,456
c
Total $34,220,000 $ 10,090,675 $44,310,675 Q
m
'ti
Tax Allocation Revenue RefundinLF Bonds,Series 2005B
ca
In September 2005, the San Bernardino Joint Powers Financing Authority issued $21,105,000 in tax allocation
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 W
Bonds are considered to be defeased and the liability has been removed from the financial statements.
V
The Series 2005B bonds consist of serial bonds with varying interest rates from 5.15% to 5.75% per annum. a
Interest is payable semi-annually on April 1 and October 1. Serial bonds mature annually on October 1 through (D
October 1,2025.
�a
The Series 2005B bonds are not subject to optional redemption. The former EDA agreed to pay the Authority c
principal and interest payments solely from the EDA's tax revenues from the Central City North, State College ii
Project No. 4, Southeast Industrial Park, Northwest, South Valle, Uptown and Tri-City Redevelopment Project
Areas. r-
U_
U)
A reserve account is required to be maintained in the amount of$1,946,566. The balance held in the reserve N
account as of June 30, 2015 was $819,204. At June 30,2015, $13,915,000 of the bonds were outstanding.
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.
Q
91 Packet Pg. 184
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8—Long-Term Liabilities(Continued)
C. Fiduciary Fund Financial Statements (Continued)
Tax Allocation Refunding Bonds,Series 2005B (Continued)
0
The annual debt service requirements for the Tax Allocation Refunding Bonds, Series 2005B outstanding at N
June 30,2015 are as follows: U_
L
0
Year Ending
June 30, Principal Interest Total
I 2016 $ 1,205,000 $ 699,919 $ 1,904,919 W
2017 1,275,000 628,619 1,903,619 w
2018 1,350,000 553,150 1,903,150 =
2019 1,425,000 473,369 1,898,369 M
c
2020 1,510,000 388,988 1,898,988 LL
2021-2025 5,080,000 920,575 6,000,575 R
2026 930,000 26,738 956,738 =
Total $ 12,775,000 $ 3,691,358 $ 16,466,358 Q
a�
U_
Tax Allocation Bonds,Taxable Series 2006
c
In April 2006,the San Bernardino Joint Powers Financing Authority issued$28,665,000 in tax allocation bonds >
to fund the acquisition, demolition and relocation of certain occupants of the Central City North Project Area
and provide for other redevelopment activities within the City of San Bernardino, as provided in the
Redevelopment Plan, fund the reserve fund, and pay costs of issuance associated with the bonds.
co
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 o
installments ranging from $1,015,000 to $1,850,000. Interest is payable semi-annually on May 1 and CD
CL
November 1 at interest rates ranging from 5.20%to 6.15%per annum.
ca
The bonds maturing on or prior to May 1, 2016, shall not be subject to call and redemption prior to maturity. tu
The bonds maturing on or after May 1, 2017, shall be subject to redemption on or after May 1, 2016, and any iz
date thereafter as a whole or in part by lot, at the option of the former EDA, at par, plus accrued interest, R
without premium.
U.
u>
The former EDA agreed to pay the Authority principal and interest payments solely from the EDA's Housing N
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, 4& Street and Tri-City 4)
Redevelopment Project Areas.
c�
A reserve account is required to be maintained in the amount of$2,698,116. The balance held in the reserve Q
account as of June 30, 2015 was $2,445,247. At June 30, 2015, $17,305,000 of the bonds were outstanding.
92 Packet Pg. 185
S.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities(Continued)
C. Fiduciary Fund Financial Statements (Continued)
Tax Allocation Bonds,Taxable Series 2006 (Continued)
0
The annual debt service requirements for the Tax Allocation Bonds, Taxable Series 2006 outstanding at June N
30,2015 are as follows: LL
o
Year Ending
June 30, Principal Interest Total 0
2016 $ 1,640,000 $ 1,055,648 $ 2,695,648
2017 1,730,000 963,398 2,693,398
2018 1,840,000 857,003 2,697,003 v
c
2019 1,850,000 743,843 2,593,843
c
2020 1,790,000 630,068 2,420,068 LL
2021-2025 6,180,000 1,758,593 7,938,593
2026-2027 2,275,000 208,485 2,483,485 g
c
Total $ 17,305,000 $ 6,217,038 $23,522,038
m
U_
Tax Allocation Bonds, Series 2010A
c
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`h Street Corridor project, to fund a reserve fund for
the bonds, fund the interest account, and pay all costs of issuance related to the bonds.
co
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, 0 CL
2030. Interest is payable semi-annually on April 1 and October 1 at rates ranging from 3.5% to 9.3% per 0)
annum.
�a
U
The term bonds maturing on April 2015 are subject to mandatory prepayment, on each April 1, commencing on c
April 1, 2012, through April 1, 2015. Term bonds maturing on April 1, 2021, are subject to mandatory E
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
LL
April 1,2030. r
0
N
The former EDA agreed to pay the Authority principal and interest payments solely from the Tax Revenues c
from the Northwest Redevelopment Project Area.
z
A reserve account is required to be maintained in the amount of $685,294. The balance held in the reserve co
account as of June 30,2015,was$685,150. At June 30, 2015, $5,765,000 of the bonds were outstanding. q
93 Packet Pg. 186
S.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities (Continued)
C. Fiduciary Fund Financial Statements (Continued)
LO
Tax Allocation Bonds,Series 2010A(Continued)
0
The annual debt service requirements for the Tax Allocation Bonds, Series 2010A outstanding at June 30, 2015 N
are as follows: LL
L
Year Ending t
June 30, Principal Interest Total 0 CL
2016 $ 210,000 $ 506,750 $ 716,750 lY
2017 225,000 491,000 716,000
2018 240,000 474,125 714,125 _
2019 260,000 456,125 716,125
2020 280,000 436,625 716,625 LL
2021-2025 1,785,000 1,796,650 3,581,650
2026-2030 2,765,000 812,613 3,577,613 c
Total $ 5,765,000 $ 4,973,888 $ 10,738,888
LL
Tax Allocation Bonds, Series 2010B
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 v
bonds, fund the interest account, and pay all costs of issuance of the bonds.
m
The outstanding Series 2010B bonds consist of term bonds of$2,745,000 maturing from April 1, 2020,to April
1, 2028 in annual installments ranging from $25,000 to $690,000. Term bonds of$925,000 are due on April 1,
2020 and term bonds of$1,820,000 are due on April 1, 2028. Interest is payable annually on April 1 at rates o
ranging from 3.0%to 7.0%per annum.
The term bonds maturing in April 2020 are subject to mandatory prepayment, on each April 1 commencin g on ea
April 1, 2013, through April 1, 2020. Term bonds maturing on April 1, 2028, are subject to mandatory env
prepayment, on each April 1 commencing on April 1 2021 through April 1 2028. _
U.
The former EDA agreed to pay the Authority principal and interest payments solely from the EDA's tax C
revenues from the Northwest Redevelopment Project Area. u�
P
N
A reserve account is required to be maintained in the amount of $309,567. The balance held in the reserve
account as of June 30,2015,was $306,284. At June 30,2015, $2,440,000 of the bonds were outstanding.
U
r�
Q
94 Packet Pg. 187
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8-Long-Term Liabilities (Continued)
C. Fiduciary Fund Financial Statements (Continued)
LO
Tax Allocation Bonds,Series 2010B (Continued)
0
The annual debt service requirements for the Tax Allocation Bonds, Series 2010B outstanding at June 30, 2015 N
are as follows: LL
0
v-
Year Ending
June 30, Principal Interest Total Q.
CD
2016 $ 145,000 $ 164,600 $ 309,600
2017 135,000 155,900 290,900
2018 125,000 147,800 272,800 v
c
2019 115,000 140,300 255,300 =_
2020 100,000 133,400 233,400 u-
2021-2025 255,000 589,400 844,400
2026-2028 1,565,000 253,050 1,818,050 _
c
Total $ 2,440,000 $ 1,584,450 $ 4,024,450 Q
m
U_
Highland Senior Housing 1995 Mortgage Revenue Bonds
CD
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 U
p g pY Y m
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 to
Bonds shall mature on July 1, 2015 and shall bear interest at the rate of 7.625%per annum. Interest is payable
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 0.
30, 2015 are$1,100,000. )
The annual debt service requirements for the Highland Senior Housing Mortgage Revenue bonds outstanding at
June 30,2015 are as follows:
ii.
Year Ending ea
June 30, Principal Interest Total =
2016 $ 65,000 $ 81,397 $ 146,397 LO
T"
2017 70,000 76,250 146,250 0
N
2018 80,000 70,531 150,531 };
2019 85,000 64,241 149,241
2020 90,000 57,569 147,569 F
2021-2025 565,000 169,466 734,466 cs
2026 145,000 5,528 150,528 Q
Total $ 1,100,000 $ 524,982 $ 1,624,982
95 [Packet Pg. 188
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 8—Long-Term Liabilities(Continued)
C. Fiduciary Activities (Continued)
u�
Casa Ramona Senior Housing 1995 Mortgage Revenue Bonds
0
The Multifamily Housing Revenue Bonds 1995 Series (Casa Ramona Senior Housing Complex Project) were N
issued on June 29, 1995 for $1,075,000. The mortgage revenue bonds are special obligations payable solely U_
from payments made on and secured by a pledge of the acquired mortgage loans and certain reserve funds and o
other monies in connection therewith, all pledged under the resolution authorizing the issuance of the bonds. o
The Bonds shall mature on July 1, 2015 and shall bear interest at the rate of 7.875% per annum. Interest is m
payable annually on July 1. The bonds are payable from revenues or assets of the EDA. Multifamily Housing W
Revenue Bonds (Casa Ramona Senior Housing Project) 1995 Series mortgage revenue bonds outstanding as of ra
June 30, 2015 are$970,000.
c
The annual debt service requirements for the Casa Ramona Senior Housing 1995 Mortgage Revenue bonds °J-
outstanding at June 30,2015 are as follows:
c
Year Ending Q
m
June 30, Principal Interest Total
LL
2016 $ 60,000 $ 74,025 $ 134,025 V
c
2017 65,000 69,103 134,103
2018 70,000 63,788 133,788
2019 75,000 58,078 133,078
2020 80,000 51,975 131,975 as
2021-2025 495,000 152,578 647,578
to
2026 125,000 4,922 129,922 .
Total $ 970,000 $ 474,469 $ 1,444,469
O
1999 Certificates of Participation
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 iz
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). E
The Certificates mature on September 1 of each year through September 1, 2024, in amounts ranging from N
$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 a)
documents and will represent the sum of the portions of the lease payments designated as interest coming due v
during the six months preceding each interest payment date. The interest rates will range approximately from kv
3.70%to 5.50%per annum. Q
96 Packet Pg. 189
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 8—Long-Term Liabilities(Continued)
C. Fiduciary Activities (Continued)
1999 Certificates of Participation (Continued)
a
The Certificates maturing on September 1, 2020, are subject to mandatory sinking fund redemption in part on N
September 1 in each year on or after September 1, 2010, from the principal components of the lease U_
payments required to be paid by the City pursuant to the Lease Agreements with respect to each such ,o
redemption date, at a redemption price equal to the principal amount thereof to be redeemed, together with c
interest accrued thereon to the date fixed for redemption, without premium, in accordance with the terms m
identified in the bond documents. The Certificates maturing on September 1, 2024, are subject to mandatory W
sinking fund redemption in part on September 1, 2021, 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 c
a redemption price equal to the principal amount thereof to be redeemed, together with interest accrued thereon c
to the date fixed for redemption, without premium, in accordance with the terms identified in the bond u_
documents.
C
c
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 U.
annual debt service. At June 30, 2015, the reserve requirement was $1,147,000 and the amount actually held c
in the reserve account was $1,114,061. The total outstanding balance of the Certificates at June 30, 2015, ca
was $9,2258,590,000 of which $4,855,000 is reported as a long-term liability of the Successor Agency, >
which is the portion of the Certificates that represent the South Valle Refunding and 201 Building Projects d
portions. Repayments of these portions of the Certificates are funded from the Redevelopment Property Tax W
Trust Fund, as a result of the dissolution of the redevelopment agency. The remaining $3,735,000
outstanding balance of the Certificates at June 30, 2015 is reported as a long-term liability of the City, which
is the portion of the Certificates that represents the Police Station portion.
O
The annual debt service requirements for the 1999 Certificates of Participation outstanding at June 30,2015 are aQi
as follows: Q_
Year Ending
June 30, Principal Interest Total
U.
2016 $ 380,000 $ 256,574 $ 636,574
2017 400,000 235,125 635,125
LL
2018 420,000 212,575 632,575 ,n
2019 440,000 188,925 628,925 0
2020 470,000 163,900 633,900 N
Y
2021-2025 2,745,000 393,938 3,138,938
m
Total $ 4,855,000 $ 1,451,037 $ 6,306,037 E
v
c�
d
97 Packet Pg. 190
b_
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 9—Operating Leases
Effective December 15, 2008, the City's Water Department took possession of leased space from Superior Homes
LLC for administrative office and warehouse space for a term of ten years. The Water Department has options to
extend the lease for 3 additional terms of 5 years apiece for up to a total of 15 years. The following is a schedule of
minimum lease payments as of June 30,2015.
0
N
Year Ending Water Sewer LL
June 30, Utility Utility Total p
x-
2016 $ 228,408 $ 31,152 $ 259,560 0
2017 228,408 31,152 259,560 d
2018 228,408 31,152 259,560
Total $ 685,224 $ 93,456 S 778,680
.v
_
_
U_
Note 10—Compensated Absences 7i
City employees receive between 10 and 25 vacation days each year depending upon length of service. An employee Q
may accumulate earned vacation time to a maximum not to exceed 60 days. Upon termination, employees are paid 2
the full value of their unused vacation time determined at their present salary rate. City employees receive 12 LL
personal necessity/sick leave days each year. Upon separation from the City, employees having six or more years of
service can convers unused sick leave to a post-employment health care plan or a 401(a)retirement plan as follows:
288 hours or fewer accrued = 0; 289-479 hours accrued = 20% of accrued sick leave; 480-959 hours = 25%; 960
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 to
employees. The unpaid leave is included in the total compensated absences balance outstanding as of June 30,
2015.
0
0.
A. Governmental Activities
A summary of changes in the compensated absences balances for the governmental activities for the year ended
June 30,2015 is as follows:
Classification
Balance Balance Due within Due in More c
July 1,2014 Additions Deletions June 30,2015 One Year Than One Year
Compensated absences $ 11,377,850 $ (15,610) $ (1,406,615) $ 9,955,625 $ 2,986,688 $ 6,968,937 c
N
Total $ 11,377,850 $ (15,610) $ (1,406,615) $ 9,955,625 $ 2,986,688 $ 6,968,937
_
Compensated absences in the governmental activities are obligations of the following funds:
t
M
Governmental Funds $ 9,507,318 Q
Liability Insurance 23,931
Motorpool 129,487
Telephone Support 10,797
Information Systems 274,481
Utility 5,376
Central Services 4,235
Total $ 9,955,625
98 Packet Pg. 191
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
JP
Note 10—Compensated Absences (Continued)
B. Business-type Activities
i
A summary of changes in the compensated absences balances for the business-type activities for the year ended
June 30,2015 is as follows: c
N
Classification
'a Balance Balance Due within Due in More `p
July 1,2014 Additions Deletions June 30,2015 One Year Than One Year t
Compensated absences $ 1,909,333 $ 1,623,440 $ (1,847,006) $ 1,685,767 $ 1,264,508 $ 421,259 Q
CD
Total $ 1,909,333 $ 1,623,440 $ (1,847,006) $ 1,685,767 $ 1,264,508 $ 421,259 R
R
U
Compensated absences in the business-type activities are obligations of the following funds:
ii
Integrated Waste Fund $ 459,636
Water Fund 941,889 O
c
Sewer Fund 284,242 =
4
Total $ 1,685,767
U_
C. Fiduciary Fund Financial Statements
A summary of changes in the compensated absences balances for the fiduciary fund financial statements for the �
year ended June 30,2015 is as follows:
Classification ti
ca
Balance Balance Due within Due in More d'
July 1,2014 Additions Deletions June 30,2015 One Year Than One Year t
O
Compensated absences $ 85,681 $ 9,153 $ - $ 94,834 $ 94,834 $ - 0
Total $ 85,681 $ 9,153 $ - $ 94,834 $ 94,834 $ - cc
R
All compensated absences liabilities in the fiduciary fund financial statements belong to the Redevelopment c
Obligation Retirement Fund(Successor Agency). U_
C
U.
Note 11—Claims and Judgments Payable
0
N
The City of San Bernardino is self-insured for its liability, unemployment and long-term disability programs. The
accrued liability for estimated claims represents an estimate of the eventual loss on claims arising prior to year-end
including claims incurred but not yet reported and estimates of loss adjustment expense.
e�
Currently, the City is a member of the Big Independent Cities Excess Pool (BICEP), which covers general liability Q
claims. BICEP pools catastrophic general liability, automobile liability, and public officials' errors and omissions
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
catastrophic losses of all the members. In addition, the cost of a member city will also depend on that member's
own loss experience. Entities 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,
Oxnard, West Covina, San Bernardino and Santa Ana.
99 Packet Pg. 192
S.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 11—Claims and Judgments Payable(Continued)
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.
0
The City is a member of the CSAC Excess Insurance Authority (the Authority) for its workers' compensation N
claims. For these claims, the City is self-insured for the first $1 million. The first $4 million in excess of the self- LL
insured limit is insured through the Authority. In addition, for amounts in excess of the $5 million self-insurance o
and Authority coverage, the City has obtained an additional $45 million in liability coverage from ACE American t
Insurance Company. m
W
Settled claims for general liability and workers' compensation have not exceeded insurance coverage during the s
past three years.
A. Governmental Activities LL
Changes in the general liability claims liability for the governmental activities for the years ended June 30, Q
2015,2014, and 2013, are as follows:
LL
Beginning of Prior Claims and Balance at =
Fiscal Year Period Changes in Claims Fiscal Year ca
Liability Adjustment Estimates Payments End y
2012-2013 $ 8,322,250 $ - $ (200,200) $ (633) $ 8,121,417
_ 2013-2014 8,121,417 3,978,808 3,704,890 (1,852,445) 13,952,670 W
2014-2015 13,952,670 - 924,913 (425,426) 14,452,157
ti
0
Changes in the workers' compensation claims liability for the governmental activities for the years ended June
30,2015, 2014, and 2013, are as follows: o
sz
w
Beginning of Prior Claims and Balance at W
Fiscal Year Period Changes in Claims Fiscal Year
U
Liability Adjustment Estimates Payments End
2012-2013 $ 12,599,722 $ - $ 13,135,834 $ (3,121,931) $ 22,613,625 c
U.
2013-2014 22,613,625 (5,044,419) 8,142,403 (4,791,785) 20,919,824
is
2014-2015 20,919,824 - 13,956,479 (5,219,285) 29,657,018
LL
�.n
B. Business-type Activities o
Changes in the workers' compensation claims liability for the business-type activities for the years ended June
30,2015,2014, and 2013,are as follows: E
U
CU
Beginning of Claims and Balance at Q
Fiscal Year Changes in Claims Fiscal Year
Liability Estimates Payments End
2012-2013 $ 424,441 $ 623,037 $ (210,404) $ 837,074
2013-2014 837,074 545,631 (383,102) 999,603
2014-2015 999,603 1,012,935 (559,326) 1,453,212
The City maintains third party insurance coverage for general liability claims in business-type activities.
100 1 Packet Pg. 193
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 12—Fund Balance Classification
The City classifies fund balances, as shown on the Balance Sheet Governmental Funds, as follows as of June 30,
2015:
Major Funds c
Low and N
Federal Moderate U.
U.
and State Income Sales and Other
General Grants Housing Road Governmental
Fund Fund Fund Fund Funds Total 0 CL
Nonspendable W
Notes receivable $ - $ 3,591,670 $ 26,843,614 $ - $ - $ 30,435,284
Deposits - - - - - - U
c
Prepaids 635,493 - - - 635,493 =
Advances to other funds - 65,200 - 82,000 147,200 j.
Property held for resale - 16,260,782 18,324,565 - - 34,585,347 -E
Total nonspendable 635,493 19,852,452 45,233,379 - 82,000 65,803,324 r-
c
Restricted Q
a�
Housing - - 1,453,004 - - 11453,004 LL
Street improvements - - - 8,219,581 4,616,768 12,836,349 -a
Cable TV - - - - 747,396 747,396 e=a
Law enforcement - - - - 1,445,535 1,445,535 (D
Transportation - - - - 1,995,738 1,995,738 Z
Sewer - - - - 4,006,729 4,006,729 a)
Debt service 1,226,630 - - - 28,552 1,255,182
Capital projects - - - - 24,784,822 24,784,822
co
Total restricted 1,226,630 - 1,453,004 8,219,581 37,625,540 48,524,755 :'
Committed
O
Animal control 587,907 - - - - 587,907 d
Soccer field 317,817 - - - - 317,817 W
Total committed 905,724 - - - - 905,724 0
v
Unassigned(deficit) 15,260,350 (766,148) - - (140,069) 14,354,133 A
Total fund balances $ 18,028,197 $ 19,086,304 $ 46,686,383 $ 8,219,581 $ 37,567,471 $ 129,587,936 j-
R
c
U-
LO
a
N
C
U
E
U
a-
Q
101 Packet Pg. 194
5.E.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 13—Net Position and Fund Balance Deficits
At June 30, 2015, the Governmental Activities and Business-Type Activities Statement of Net Position had an
unrestricted net position deficit of$(384,440,896) and$(47,561,359),respectively.
At June 30, 2015, the following proprietary funds, governmental funds, fiduciary funds have deficits that are c
anticipated to be funded from future grants,other revenues and operating transfers: N
LL
2
Fund Type Funds Deficit _
Enterprise Integrated Waste Fund $ (7,570,115) m
Debt Service Assessment District#1015 Fund (140,069) W
Internal Service Workers'Compensation Fund (30,244,844)
Internal Service Liability Insurance Fund (10,066,894)
Intemal Service Motorpool Fund (2,301,285) C
Internal Service Information Systems Fund (2,014,511) W
Internal Service Utility Fund (397,866) 3
Internal Service Central Services Fund (106,388) _
Fiduciary Successor Agency to the Economic Development (19,664,943) Q
Agency of San Bernardino Private-purpose
LL
Trust Fund
_
d
CAs of June 30, 2015, the General Fund does not have the financial capacity to fund such accumulated deficits.
Therefore, management expects that funding for the accumulated deficits will be accomplished over a period 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 charged to the various l departments. Both these funds operate on a pay-as-you-go basis; as such the deficits in these funds are expected to :1
change as claims are made. Management has paid and expects to pay for all accepted claims as and when they become o
due. Q•
m
a:
Note 14—Net Investment in Capital Assets
The Government-wide Statement of Net Position reports net investment in capital assets as follows:
LL
R
Governmental Business-type ,LL
Activities Activities Total o
N
Total capital assets,net $ 382,918,885 $ 254,929,499 $ 637,848,384
_
Less related debt:
Capital leases payable (669,173) (2,652,586) (3,321,759)
Notes payable (10,531,212) (22,826,237) (33,357,449) U
Lease revenue bonds (6,315,000) - (6,315,000) Q
California Infrastructure (3,908,350) - (3,908,350)
Certificates of participation (3,735,000) (6,346,308) (10,081,308)
Net investment in capital assets $ 357,760,150 $ 223,104,368 $ 580,864,518
102 Packet Pg. 195
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 15—Pension Plans
A. Summary
u�
Net Pension Liability
Net Pension Liability is reported in the accompanying statements of net position as follows: t°
Net Pension
Liability O
v-
Miscellaneous Plan-53 $ 113,701,106 r-
0
Safety Plan-54 167,678,823 N
City's Pension Total 281,379,929 W
Successor Agency Plan- 1414 3,815,585
Total $ 285,195,514 C
c
ii
Deferred Outflows of Resources
c
Deferred Outflows of Resources are reported in the accompanying statements of net position as follows:
<t
m
Deferred employer
pension contributions Adjustments due to V-
made after positive diferrerences
measurement date in proportions M
N
Miscellaneous Plan-53 $ 8,237,102 $ - >
Safety Plan-54 12,137,270 - U
Successor Agency Plan- 1414 19,656 154,504 N
Total $ 20,394,028 $ 154,504
to
h
Deferred Inflows of Resources
Deferred Inflows of Resources are reported in the accompanying statements of net position as follows:
Employer's proportionate
Investment earnings share of contributions v
greater than in excess of the Employer's
expected earnings actual contributions
LL
Miscellaneous Plan-53 $ 26,808,942 $ -
Safety Plan-54 35,539,756 -
Successor Agency Plan-1414 1,186,905 299,468 iL
Total $ 63,535,603 $ 299,468 C
N
a+
Pension Expense
Pension expenses are included in the accompanying statements of revenues, expenses, and change in net position
as follows:
d
Net Pension
Expense
Miscellaneous Plan-53 $ 7,145,428
Safety Plan-54 12,435,765
Successor Agency Plan- 1414 114,673
Total $ 19,695,866
103 Packet Pg. 196
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 15—Pension Plans (Continued)
B. City Plans
LO
Plan Description
Substantially all City employees working the equivalent of 1,000 hours per fiscal year are eligible to participate in N
the Safety Plan and Miscellaneous Plan Agent multiple-employer defined benefit plans administered by California >-
Public Employees Retirement System (CalPERS), which acts as a common investment and administrative agent o
for its participating member employers. Benefit Provisions under the Plans are established by State statutes within
the Public Employee's Retirement Law. CalPERS issues publicly available reports that include a full description Q.
of the pension plans regarding benefit provisions, assumptions and membership information that can be found on 0)
the CalPERS website. Copies of the CalPERS annual financial report may be obtained from the CalPERS
Executive Office—400 P Street, Sacramento, CA 95814.
ca
Benefits Provided c LL
is
CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan _
members and beneficiaries. A classic CalPERS member or PEPRA Safety member becomes eligible for Service a
Retirement upon attainment of age 55 with at least 5 years of credited service. PEPRA miscellaneous members a)
become eligible for service retirement upon attainment of age 62 with at least 5 years of service. The service o-
retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final r-
compensation. The final compensation is the monthly average of the member's highest 36 or 12 consecutive >
months' fulltime equivalent monthly pay. Retirement benefits for classic miscellaneous employees are calculated as •>
2% to 2.7% of the average final 12 months compensation. Retirement benefits for PEPRA miscellaneous
employees are calculated as 2%of the average final 36 months compensation.Retirement benefits for classic safety
employees are calculated as 3% of the average final 12 months compensation. Retirement benefits for PEPRA
safety employees are calculated as 2.7%of the average final 36 months compensation.
Participant is eligible for nonindustrial disability retirement if becomes disabled and has at least 5 years of credited Q
service. There is no special age requirement. The standard nonindustrial disability retirement benefit is a monthly tr
allowance equal to 1.8 percent of final compensation,multiplied by service. R
U
G
Industrial disability benefits are not offered to miscellaneous employees. The City provides industrial disability
retirement benefit to safety employees. The industrial disability retirement benefit is a monthly allowance equal to U.
50 percent of final compensation.
U_
An employee's beneficiary may receive the basic death benefit if the employee dies while actively employed. The
employee must be actively employed with the City to be eligible for this benefit. An employee's survivor who is 2
eligible for any other pre-retirement death benefit may choose to receive that death benefit instead of this basic c
death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions, E
where interest is currently credited at 7.5 percent per year,plus a lump sum in the amount of one month's salary for
each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one
month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months Q
preceding death.
Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree's designated
survivor(s), or to the retiree's estate.
Benefit terms provide for annual cost-of-living adjustments to each employee's retirement allowance. Beginning
the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted
on a compound basis by 2 percent.
104 Packet Pg. 197
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 15—Pension Plans (Continued)
A City Plans(Continued)
Employees Covered
0
At June 30,2014,the measurement date,the following employees were covered by the benefit terms for each Plan: N
LL
Miscellaneous Safety `p
Active employees 765 345
Transferred and terminated employees 855 123 Q
Retired employees and benificiaries 1304 661
Total 2924 1129
c
c
Contributions LL
Section 20814(c) of the California Public Employees' Retirement Law ("PERL") requires that the employer c
contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective <[
on the July 1 following notice of a change in the rate. The total plan contributions are determined through 2-
Ca1PERS' annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to 'Ua
finance the costs of benefits earned by employees during the year, with an additional amount to finance any
CU
unfunded accrued liability. The employer is required to contribute the difference between the actuarially
determined rate and the contribution rate of employees. For the measurement period ended June 30, 2015, the
average active miscellaneous and safety employee contribution rates were 8.00% and 9.000% of annual pay,
respectively, and the employer's contribution rates were 18.186% and 31.455% of miscellaneous and safety
employee annual payroll,respectively. m
ti
co
et
For the year ended June 30,2015,the plan's contributions made for each Plan was as follows: o
Q.
Miscellaneous Safety Aggregate Total
Contributions-employer $ 8,237,102 $ 12,137,270 $ 20,374,372
c
Net Pension Liability
U-
The City's net pension liability is measured as the total pension liability, less the pension plan's fiduciary net =
position. The net pension liability of the Plan is measured as of June 30, 2014,using an annual actuarial valuation �
as of June 30, 2013 rolled forward to June 30, 2014 using standard update procedures. A summary of principal
CO
assumptions and methods used to determine the net pension liability is shown on the following page. `1J
e
a�
E
U
t�
105 Packet Pg. 198
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 15—Pension Plans (Continued)
B. City Plans (Continued)
Actuarial Assumptions v
0
The total pension liabilities in the June 30,2013 actuarial valuations were determined using the following actuarial N
assumptions:
0
4-
Actuarial Cost Method Entry Age Normal in accordance with the requirement of GASB Statement No.68 t
Actuarial Assumptions: O.
Discount Rate 7.50%
Inflation 2.75%
Salary Increases Varies by Entry Age and Service v
Investment Rate of Return 7.50%Net of Pension Plan Investment and Administrative Expenses;includes Inflation
Mortality Rate Table Derived using CalPERS'Membership Data for all Funds.
Post Retirement Benefit Increase Contract COLA up to 2.75%until Purchasing Power Protection Allowance Floor on Purchasing U_
There were no changes in assumptions, benefit terms or other inputs that affected the measurement of the net a
pension liability. There were no changes between the measurement date of the net pension liability and the
reporting date. The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2013 —U—
valuations were based on the results of a January 2014 actuarial experience study for the period 1997 to 2011. _
Further details of the Experience Study can be found on the CalPERS website.
m
Discount Rate
The discount rate used to measure the total pension liability was 7.50 percent. To determine whether the municipal
to
bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would
most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on
the testing, none of the tested plans run out of assets. Therefore, the current 7.50 percent discount rate is adequate o
CL
and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.50
percent is applied to all plans in the Public Employees Retirement Fund. The stress test results are presented in a
detailed report called "GASB Crossover Testing Report" that can be obtained at CalPERS' website under the
GASB 68 section. o
According to Paragraph 30 of Statement 68, the long-term discount rate should be determined without reduction
for pension plan administrative expense. The 7.50 percent investment return assumption used in this accounting
valuation is net of administrative expenses. Administrative expenses are assumed to be 15 basis points. An ,r,
investment return excluding administrative expenses would have been 7.65 percent. Using this lower discount rate N
has resulted in a slightly higher total pension liability and net pension liability. This difference was deemed
immaterial to the agent multiple-employer plan.
'r-
CalPERS is scheduled to review all actuarial assumptions as part of its regular Asset Liability Management review u
cycle that is scheduled to be completed in February 2018. Any changes to the discount rate will require Council 4
action and proper stakeholder outreach. For these reasons, CalPERS expects to continue using a discount rate net
of administrative expenses for GASB 67 and 68 calculations through at least fiscal year 2018. CalPERS will
continue to check the materiality of the difference in calculation until such time as we have changed our
methodology.
The long-term expected rate of return on pension plan investments was determined using a building-block method
in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense and inflation)are developed for each major asset class.
106 Packet Pg. 199
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 15—Pension Plans (Continued)
B. City Plans (Continued)
Discount Rate(Continued) LO
4
In determining the long-term expected rate of return, staff took into account both short-term and long-term market c
return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming }
that both members and employers will make their required contributions on time and as scheduled in all future u-
L
years. Using historical returns of all the funds' asset classes, expected compound (geometric) returns were ,o
calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. c
Using the expected nominal returns for both short-term and long-term,the present value of benefits was calculated m
for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived W
at the same present value of benefits for cash flows as the one calculated using both short-term and long-term 2
returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and O
rounded down to the nearest one quarter of one percent. _
U.
The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated 3
using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric =
rates of return are net of administrative expenses. <
d
LL
New Strategic Real Return Real Return
Asset Class Allocation Years 1-101 Years 11+2 M
Global Equity 47.00% 5.25% 5.71% >
Global Fixed Income 19.00 0.99 2.43 N
U
Inflation Sensitive 6.00 0.45 3.36
Private Equity 12.00 6.83 6.95
Real Estate 11.00 4.50 5.13 cry
ti
Infrastructure and Forestland 3.00 4.50 5.09
Liquidity 2.00 -0.55 -1.05
An expected inflation of 2.5%used for this period p
zAn expected inflatin of 3.0%used for this period. d
Q_
R
Changes in the Net Pension Liability U
The following table shows the changes in net pension liability recognized over the measurement period:
LL
Miscellaneous Plan s
LL,
Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability O
N
Balance at June 30,2013(Valuation Date) $ 486,361,821 $ 342,796,034 $ 143,565,787
Changes in the year: y
Service cost 7,664,862 - 7,664,862 E
Interest on the total pension liabilities 35,857,877 - 35,857,877 _
U
Differences between expected and actual experience - - -
Benefit payments,including refunds of members contributions (24,178,446) (24,178,446) 4
Contributions-employer - 10,201,167 (10,201,167)
Contributions-employee - 4,422,413 (4,422,413)
Net investment income - 58,763,840 (58,763,840)
Administrative expenses - - -
Net changes 19,344,293 49,208,974 (29,864,681)
Balance at June 30,2014(Measurement Date) $ 505,706,114 $ 392,005,008 $ 113,701,106
107 1 Packet Pg. 200
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 15—Pension Plans (Continued)
A City Plans (Continued)
Changes in the Net Pension Liability(Continued) 'n
Safety Plan N
Total Pension Plan Fiduciary Net Net Pension LL
Liability Position Liability I-
O
Balance at June 30,2013(Valuation Date) $ 664,483,681 $ 455,455,761 $ 209,027,920 t
Changes in the year: 0 CL
Service cost 11,208,178 - 11,208,178
Interest on the total pension liabilities 48,966,477 - 48,966,477
<a
Differences between expected and actual experience - - - v
Benefit payments,including refunds of members contributions (34,402,815) (34,402,815) -
Contributions-employer - 18,245,106 (18,245,106)
Contributions-employee - 5,184,692 (5,184,692) LL
Net investment income - 78,093,954 (78,093,954) c
Administrative expenses
Net changes 25,771,840 67,120,937 (41,349,097) m
LL
Balance at June 30,2014(Measurement Date) $ 690,255,521 $ 522,576,698 $ 167,678,823
c
ca
CD
AF Sensitivity of the Net Pension Liability to Changes in the Discount Rate Z
U
U
The following presents the City's net pension liability, calculated using the discount rate, as well as what the
City's net pension liability would be if it were calculated using a discount rate that is one percentage point lower„
or one percentage point higher than the current rate:
L
Plan's Aggregate Net Pension Liability/(Asset) 0
Discount Rate-1% Current Discount Discount Rate+1% (D
(6.50%) Rate(7.50%) (8.50%)
R_
Miscellaneous Plan-53 $ 178,372,789 $ 113,701,106 $ 60,053,207 U
C
t�
Safety Plan-54 $ 258,809,232 $ 167,678,823 $ 92,698,487 =
Aggregate Total $ 437,182,021 $ 281,379,929 $ 152,751,694
0
Pension Plan Fiduciary Net Position —Detailed information about each pension plan's fiduciary net position is `yV
available in the separately issued Ca1PERS financial reports.
E
0
U
r-
.N
Q
108 Packet Pg. 201
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 15—Pension Plans (Continued)
B. City Plans (Continued)
LO
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
0
For the year ended June 30, 2015, the City recognized pension expense in the amounts of $7,145,428 and N
$12,435,765,for the miscellaneous and safety plans,respectively. U_
0
w
The amortization period differs depending on the source of the gain or loss. The difference between projected and r-
actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the 0
average expected remaining service lives of all members that are provided with benefits (active, inactive and W
retired)as of the beginning of the measurement period. 2
The Expected Average Remaining Service Lifetime ("EARSL") is calculated by dividing the total future service c
years by the total number of plan participants (active, inactive, and retired) in the risk pool. The EARSL for risk u-
pool for the 2013-14 measurement period is 3.8 years, which was obtained by dividing the total service years of 05
460,700 (the sum of remaining service lifetimes of the active employees) by 122,789 (the total number of 4
participants: active,inactive, and retired).
LL
At June 30, 2015 the City reported deferred outflows of resources and deferred inflows of resources related to c
pensions from the following sources:
aD
C, Miscellaneous Plan v
v
Deferred outflows Deferred inflows
of Resources of Resources n
Difference between projected and actual d
earning on pension plan investments $ - $ (26,808,942)
0
Total $ - $ (26,808,942) g-
m
Safety Plan U
_
Deferred outflows Deferred inflows c
of Resources of Resources LL
iv
Difference between projected and actual F
earning on pension plan investments $ - $ (35,539,756) Lo
T_
Total $ - $ (35,539,756) N
c
CD
Aggregate Totals E
Deferred outflows Deferred inflows R
of Resources of Resources Q
Difference between projected and actual
earning on pension plan investments $ - $ (62,348,698)
Total $ - $ (62,348,698)
109 Packet Pg. 202
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 15—Pension Plans(Continued)
A City Plans (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions(Continued)
�r
For the Miscellaneous plan and Safety Plan and Miscellaneous Plan, $8,237,102 and $12,137,270, respectively, C4
was reported as deferred outflows of resources related to pensions resulting from City's contributions subsequent >_
1 to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, c
2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to V
-' pensions will be recognized in pension expense as follows: Q.
�f; m
Q:
Deferred Outflows/(Inflows)of Resources
Year Ended June 30, Miscellaneous Plam Safety Plan
2016 $ (6,702,236) $ (8,884,939)
2017 (6,702,236) $ (8,884,939) LL
' 2018 (6,702,236) (8,884,939)
2019 (6,702,234) (8,884,939) _
2020
Thereafter - -
u
$ (26,808,942) $ (35,539,756)
CC. >
Successor Agency Plan
as
Plan Description —The Successor Agency Plan of the City of San Bernardino is available to full time employees
employed by the Successor Agency to the San Bernardino Economic Development Agency. Part-time employees
must meet specific criteria for participation. The Classic Plans are closed to new entrants only eligible for It
employees hired prior to January 1, 2013. Employees hired after January 1, 2013 are eligible to enroll in the
PEPRA plans. Benefit Provisions under the Plans are established by State statutes within the Public Employee's
Retirement Law. CalPERS issues publicly available reports that include a full description of the pension plans
regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office — 400 P
Street, Sacramento, CA 95814. c
U_
Benefits Provided c
U_
CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan 0
members and beneficiaries. A classic safety and miscellaneous CalPERS member becomes eligible for Service N
Retirement upon attainment of age 50 and 55, respectively, with at least 5 years of credited service. Public
Employee Pension Reform Act(PEPRA) safety and miscellaneous members become eligible for service retirement 0)
upon attainment of age 57 and 62, respectively,with at least 5 years of service. The service retirement benefit is a E
monthly allowance equal to the product of the benefit factor, years of service, and final compensation. The final
compensation is the monthly average of the member's highest 12 full-time equivalent monthly pay. Retirement Q
benefits for classic safety miscellaneous employees are calculated as 3% and 2.7%, respectively, of the average
final 12 months compensation. Retirement benefits for PEPRA safety and miscellaneous employees are calculated
as 2.7%and 2%,respectively, of the average final 36 months compensation.
Participant is eligible for non-industrial disability retirement if becomes disabled and has at least 5 years of
credited service. There is no special age requirement. The standard non-industrial disability retirement benefit is a
monthly allowance equal to 1.8% of final compensation, multiplied by service. Industrial disability benefits are
not offered to miscellaneous employees.
110 Packet Pg. 203
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 15—Pension Plans(Continued)
C. Successor Agency Plan (Continued)
Benefits Provided(Continued)
An employee's beneficiary may receive the basic death benefit if the employee dies while actively employed. The N
employee must be actively employed with the City to be eligible for this benefit. An employee's survivor who is u_
eligible for any other pre-retirement death benefit may choose to receive that death benefit instead of this basic o
death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions,
where interest is currently credited at 7.5%per year,plus a lump sum in the amount of one month's salary for each Q.
completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one
month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months R
preceding death. c
C
Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree's designated u-
survivor(s),or to the retiree's estate.
c
c
Benefit terms provide for annual cost-of-living adjustments to each employee's retirement allowance. Beginning
the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted
on a compound basis by 2%. _
Employees Covered >
U
At June 30, 2015 the following employees were covered by the benefit terms the Plan:
Successor Agency
ti
Active employees 1
Transferred and terminated employees 44
Retired employees and benificiaries 68 p
CL
Total 113 °D
R
.v
Contributions c=a
C
U_
Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer @
contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective S
on the July 1 following notice of a change in the rate. The total plan contributions are determined through the ,LL
Ca1PERS' annual actuarial valuation process. For public agency cost-sharing plans covered by the Miscellaneous N
risk pools, the Plan's actuarially determined rate is based on the estimated amount necessary to pay the Plan's ;
allocated share of the risk pool's costs of benefits earned by employees during the year, and any unfunded accrued
liability. The employer is required to contribute the difference between the actuarially determined rate and the E
contribution rate of employees. For the measurement period ended June 30, 2015 (the measurement date), the
active contribution rate was 8% of annual payroll for the Miscellaneous Classic Plan which was paid for by the a
employer. The average employer's contribution rate was 22.024% of annual payroll for the Miscellaneous Classic
Plan.
For the year ended June 30, 2015, employer contributions made for the Successor Agency Miscellaneous Cost-
sharing Plan was as follows:
Contributions-employer $ 19,656
ill Packet Pg. 204
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 15 Pension Plans(Continued)
C. Successor Agency Plan (Continued)
u�
Pension Liabilities,Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
0
The City's net pension liability for each Plan is measured as the proportionate share of the net pension liability. N
The net pension liability of the Plans is measured as of June 30, 2015, and the total pension liability for each Plan U.
used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2013 rolled ,o
forward to June 30, 2015 using standard update procedures. The City's proportion of the net pension liability was 't
based on a projection of the City's long-term share of contributions to the pension plans relative to the projected d
contributions of all participating employers, actuarially determined. tY
ca
As of June 30,2015,the City reported net pension liability for its proportionate shares of the net pension liability
of the Successor Agency Miscellaneous Plan as follows: c
LL
Increase(Decrease)
Plan Total Pension Plan Fiduciary Net Plan Net Pension =
C
Liability Position Liability/(Asset) Q
m
Balance at:6/30/13(Valuation date) $ 19,910,241 $ 14,816,615 $ 5,093,626 u-
Balance at:6/30/14(Measurement date) 21,095,092 17,279,507 3,815,585
Net Changes during 2013-2014 1,184,851 2,462,892 (1,278,041) co
w
The following is the approach established by the plan actuary to allocate the net pension liability and pension
expense to the individual employers within the risk pool.
(1) In determining a cost-sharing plan's proportionate share, total amounts of liabilities and assets are first
calculated for the risk pool as a whole on the valuation date (June 30, 2013). The risk pool's fiduciary net :
position ("FNP") subtracted from its total pension liability ("TPL") determines the net pension liability :
("NPL")at the valuation date.
(2)Using standard actuarial roll forward methods,the risk pool TPL is then computed at the measurement date
(June 30, 2015). Risk pool FNP at the measurement date is then subtracted from this number to compute the _
NPL for the risk pool at the measurement date. For purposes of FNP in this step and any later reference
thereto, the risk pool's FNP at the measurement date denotes the aggregate risk pool's FNP at June 30, 2015 LL
less the sum of all additional side fund (or unfunded liability) contributions made by all employers during the
measurement period(2013-14). U-
0
(3)The individual plan's TPL,FNP and NPL are also calculated at the valuation date. c°•,
(4) Two ratios are created by dividing the plan's individual TPL and FNP as of the valuation date from (3)by w
the amounts in step(1),the risk pool's total TPL and FNP,respectively.
�a
(5)The plan's TPL as of the Measurement Date is equal to the risk pool TPL generated in(2)multiplied by the Q
TPL ratio generated in (4). The plan's FNP as of the Measurement Date is equal to the FNP generated in (2)
multiplied by the FNP ratio generated in(4)plus any additional side fund(or unfunded liability) contributions
made by the employer on behalf of the plan during the measurement period.
(6)The plan's NPL at the Measurement Date is the difference between the TPL and FNP calculated in(5).
112 Packet Pg. 205
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 15—Pension Plans(Continued)
C. Successor Agency Plan (Continued)
in
Pension Liabilities,Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
(Continued)
a
N
The City's proportionate share of the net pension liability for the Successor Agency Miscellaneous Plan as of June LL
30, 2013 and 2014 was as follows: o
t=
Proportion June 30,2013 0.15545% CL
Proportion June 30,2014 0.15438% m
Q:
Change-Increase(Decrease) -0.00107%
.v
_
_
For the year ended June 30, 2015, the City recognized pension expense in the amount of $114,673 for the u-
Successor Agency Miscellaneous Plan.
_
The amortization period differs depending on the source of the gain or loss. The difference between projected and Q
actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the -2—
average expected remaining service lives of all members that are provided with benefits (active, inactive and LL
retired)as of the beginning of the measurement period. _
ea
The Expected Average Remaining Service Lifetime (`EARSU) is calculated by dividing the total future service
years by the total number of plan participants (active, inactive, and retired) in the risk pool. The EARSL for risk
pool for the 2013-14 measurement period is 3.8 years, which was obtained by dividing the total service years of
460,700 (the sum of remaining service lifetimes of the active employees) by 122,789 (the total number of ti
participants: active,inactive, and retired).
At June 30, 2015, the City reported deferred outflows of resources and deferred inflows of resources related to 0 CL
pensions from the following sources:
Deferred outflows Deferred inflows v
x of Resources of Resources =
c
Difference between projected and actual
earning on pension plan investments $ - $ (1,186,905)
Adjustment due to positive differences
in proportions 154,504 - P
Employer's proportionate share of contributions N
share of contributions in excess of the
_
Employer's actual contributions - (299,468) E
Total $ 154,504 $ (1,486,373) _
U
M
Z
Q
Packet Pg. 206
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 15—Pension Plans(Continued)
C. Successor Agency Plan (Continued)
Pension Liabilities,Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
(Continued)
0
N
For the Successor Agency Miscellaneous Plan, $19,656 was reported as deferred outflows of resources related to U-
pensions resulting from City's contributions subsequent to the measurement date will be recognized as a reduction o
of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of t
resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: C
Deferred Outflows/ �a
Year Ended June 30, (Inflows)of Resources
c
2016 $ (348,499) _
2017 (348,499) LL.
2018 (338,144)
2019 (296,727)
2020 - a
Thereafter
U-
$ (1,331,869) _
M
0 Actuarial Methods and Assumptions Used to Determine Total Pension Liability
d
For the measurement period ended June 30, 2015 (the measurement date), the total pension liability was
determined by rolling forward the June 30, 2013 total pension liability. Both the June 3.0, 2013 and the June 30,
2015 total pension liabilities were based on the following actuarial methods and assumptions:
Actuarial Cost Method Entry Age Normal in accordance with the requirement of GASB Statement No.68 0 CL
Actuarial Assumptions:
Discount Rate 7.50%
Inflation 2.75%
c
Salary Increases Varies by Entry Age and Service
Investment Rate of Return 7.50%Net of Pension Plan Investment and Administrative Expenses;includes Inflation LL
Mortality Rate Table Derived using CalPERS'Membership Data for all Funds.
Post Retirement Benefit Increase Contract COLA up to 2.75%until Purchasing Power Protection Allowance Floor on Purchasing
U.
All other actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial N
experience study for the period from 1997 to 2011, including updates to salary increase, mortality and retirement
rates. The Experience Study report can be obtained at CAPERS' website under Forms and Publications.
Discount Rate
r
The discount rate used to measure the total pension liability was 7.50%. To determine whether the municipal bond
rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most
likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the
testing, none of the tested plans run out of assets. Therefore, the current 7.50% discount rate is adequate and the
use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.50% is
applied to all plans in the Public Employees Retirement Fund. The stress test results are presented in a detailed
report called "GASB Crossover Testing Report" that can be obtained at CalPERS' website under the GASB 68
section.
114 Packet Pg. 207
OEM-
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 15—Pension Plans (Continued)
C. Successor Agency Plan (Continued)
LO
Discount Rate (Continued)
�r
0
According to Paragraph 30 of Statement 68, the long-term discount rate should be determined without reduction N
for pension plan administrative expense. The 7.50% investment return assumption used in this accounting U_
valuation is net of administrative expenses. Administrative expenses are assumed to be 15 basis points. An �o
investment return excluding administrative expenses would have been 7.65%. Using this lower discount rate has o
resulted in a slightly higher total pension liability and net pension liability. This difference was deemed immaterial m
to the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan.
ca
Ca1PERS is scheduled to review all actuarial assumptions as part of its regular Asset Liability Management review c
cycle that is scheduled to be completed in February 2018. Any changes to the discount rate will require Board c
action and proper stakeholder outreach. For these reasons, CaIPERS expects to continue using a discount rate net U_
of administrative expenses for GASB 67 and 68 calculations through at least the 2017-18 fiscal year. Ca1PERS
will continue to check the materiality of the difference in calculation until such time as we have changed our Q
methodology.
U.
The long-term expected rate of return on pension plan investments was determined using a building-block method c
in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense and inflation)are developed for each major asset class.
In determining the long-term expected rate of return, staff took into account both short-term and long-term market W
return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming
that both members and employers will make their required contributions on time and as scheduled in all future to
years. Using historical returns of all the funds' asset classes, expected compound (geometric) returns were (-
calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building block approach. to
Using the expected nominal returns for both short-term and long-term,the present value of benefits was calculated
for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived
at the same present value of benefits for cash flows as the one calculated using both short-term and long-term
returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and
rounded down to the nearest one quarter of one percent. The table below reflects long-term expected real rate of
return by asset class. The rate of return was calculated using the capital market assumptions applied to determine
the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.
LL
LO
New Strategic Real Return Real Return o
Asset Class Allocation Years 1-10 Years 11+2 N
Global Equity 47.00% 5.25% 5.71% a)
Global Fixed Income 19.00 0.99 2.43
Inflation Sensitive 6.00 0.45 3.36
Private Equity 12.00 6.83 6.95
Real Estate 11.00 4.50 5.13
Infrastructure and Forestland 3.00 4.50 5.09
Liquidity 2.00 -0.55 -1.05
0 ]An expected inflation of 2.5%used for this period
ZAn expected inflatin of 3.0%used for this period.
115 Packet Pg. 208
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 15—Pension Plans (Continued)
C. Successor Agency Plan (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City's proportionate share of the net pension liability for the Successor Agency
Miscellaneous Plan, calculated using the discount rate for the Successor Agency Miscellaneous Plan, as well as LL
what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate o
that is one percentage point lower or one percentage point higher than the current rate:
a
Plan's Aggregate Net Pension Liability/(Asset) C
Discount Rate-1% Current Discount Discount Rate+1%
(6.50%) Rate(7.50%) (8.50%)
$ 6,614,118 $ 3,815,585 $ 1,493,069
_
U-
'Fa
Pension Plan Fiduciary Net Position
Detailed information about each pension plan's fiduciary net position is available in the separately issued CaIPERS
financial reports. U-
_
Payable to the Pension Plan
At June 30, 2015, the Successor Agency reported a payable of$0 for the outstanding amount of contributions to d
the pension plan required for the year ended June 30,2015.
co
c�
Note 16—Settlement with CaIPERS `t
t
The City deferred payment of the employer portion of retirement contributions to CaIPERS for a period of time due to
its severe liquidity crisis. The deferrals of the City's employer portion of retirement contributions to CaIPERS first
occurred on July 31, 2012, as reported by the City in a press release dated October 29, 2012. On November 27, 2012, 16
CaIPERS 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. CaIPERS sought relief from the stay in order to commence a "-
state court action against the City to attempt to recoup the deferred payments, and to compel the payment of future =
pension contributions from the City. The Bankruptcy Court denied CaIPERS' motion for relief from the automatic u-
stay. Beginning in July 2013, the City resumed payments of the City's employer portion of retirement contributions to c
CaIPERS.
_
The unpaid arrearage for the period from August 1, 2012 through June 30, 2013 amounted to $13.6 million (the
"Arrearage"). Because CaIPERS could have asserted a contract termination claim that alone exceeded all other claims
against the City combined, and an additional large claim for penalties associated with the Arrearage, and the City's
unions and retirees had a substantial stake in the resolution of the CaIPERS' claims and the City's contractual Q
relationship with CaIPERS, the City first focused its mediation efforts on reaching a settlement with CaIPERS. An
interim agreement between the City and CaIPERS entitled "Mediator's Order" was approved by the Judge Zive on
June 9, 2014, and became what is now known as the "CaIPERS Interim Agreement." The CaIPERS Interim Agreement
addressed the understanding between the City and CaIPERS and provided for, among other things: (i) payment of
certain arrearages to CaIPERS; (ii)payment of certain additional administrative costs of CaIPERS; and(iii)a covenant
not to impair CaIPERS under the Plan.
116 Packet Pg. 209
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 16—Settlement with Ca1PERS (Continued)
This agreement required that City make monthly payments of $602,580 to Ca1PERS starting on July 1, 2014
through June 1,2016. iF
The annual debt service requirements for the Ca1PERS Settlement outstanding at June 30,2015 are as follows:
0
N
Year Ending >_
June 30, Principal Interest Total
O
2016 $ 6,379,799 $ 248,581 $ 6,628,380
Total $ 6,379,799 $ 248,581 $ 6,628,380 0 C
m L
M
Note 17—Settlement with PARS Employees C
c
The City has entered into a settlement with the holders of the PARS Claims. Pursuant to the settlement: (i) the U.
PARS Plans will be rejected, and the City will waive any and all claims to the funds held within the PARS Trust M
and the 415 Trust as of the date of termination of the PARS Plans, (ii) the amounts remaining in the PARS Trust =
and the 415 Trust (approximately $1.92 million) will be distributed to the PARS Participants pursuant to agreed-
upon allocations, and the City will endeavor to make each such distributions in a manner that will minimize adverse
iz
tax consequences for each PARS Participant, (iii) the City will make a distribution of$290,000 on the later of the c
Effective Date or July 5, 2017, and a distribution $290,000 on the later of the Effective Date or July 5, 2018, in M
each case to the PARS Participants pursuant to agreed-upon allocations, and (iv) the City will be discharged from >
any and all obligations to further fund any PARS Plan or to make any other distributions on account of the PARS
a�
Claims. a
co
r,
to
Note 18—Other Post-Employment Benefits `t
A. Summary C
a
d
o:
Net OPEB Obligation is reported in the accompanying financial statements as follows:
c
City Water Department «5
Plan Plan Total
LL
Governmental Activities $ 28,320,567 $ $ 28,320,567
Integrated Waste Fund 1,680,034 - 1,680,034 LL
Water Fund - 628,895 628,895 C
Sewer Fund - 166,326 166,326 C:14 r
Total $ 30,000,601 $ 795,221 $ 30,795,822 d
E
V
to
B. City—Excluding Water Department(Water Enterprise Fund and Sewer Enterprise Fund) Q
Plan Description
The City administers a single employer defined benefit healthcare plan (the Plan). The Plan currently provides
healthcare and life insurance for eligible retirees and their surviving spouses through the City's group health
insurance plan, which is administered by Mercer. Life insurance premiums are paid 100% by retirees. The Plan
covers both active and retired members.Benefits provisions are established through negotiations between the City
and various union bargaining groups.The Plan does not issue a publicly available financial report.
117 Packet Pg. 210
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 18—Other Post-Employment Benefits(Continued)
B. City—Excluding Water Department(Water Enterprise Fund and Sewer Enterprise Fund) (Continued)
i
Funding Policy
Contribution requirements of the Plan are established through negotiations between the City and union �°
representatives. The required contribution is based on pay-as-you-go financing requirements. For fiscal year UL
2015, the City contributed$213,174 to the Plan. The City currently contributes $115 per month of the required `o
premium costs of active employees. Retired employees are permitted to participate with active employees in the r_
health-care plan, but retirees must pay all premiums as calculated by Mercer, less the City's payment of$115 0 CL
per month, assigned to them, except for sworn police employees. The City's monthly contribution for sworn
police employees is in accordance with the following schedule: R
Years of service Monthly Contribution
20 $ 200 U_
25 350
30 450
c
4
Annual OPEB Cost and Net OPEB Obligation a�
U.
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. m
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 excess) over a period not to exceed thirty years.
4 The following table shows the components of the City's annual OPEB cost for the year, the amount actually
contributed to the Plan, and changes in the City's net OPEB obligation:
co
v
2015 2014 2013
- t=
Annual required contribution $ 542,000 $ 4,803,000 $ 4,482,000 0 CL
Interest on net OPEB obligation 1,215,000 1,153,000 1,036,000 0)
Adjustment to the annual required contribution (1,795,000) (1,588,000) (1,368,000)
R
Net OPEB cost (38,000) 4,368,000 4,150,000 _
M
Contributions made: E
ii
Benefit payments(cash subsidy) (235,174) (557,952) (567,000) R
c
Benefit payments(implied subsidy) (481,826) (891,048) (815,000) jL
U)
Changes in net OPEB obligation (755,000) 2,919,000 2,768,000 c
N
Net OPEB obligation,beginning of the year 30,755,601 27,836,601 25,068,601
c
Net OPEB obligation,end of year $ 30,000,601 $ 30,755,601 $ 27,836,601 m
U
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB Q
obligation for 2015 and the two preceding years were as follows:
Percentage of Net
Annual Actual Annual OPEB OPEB
Fiscal Year OPEB Cost Contributions Cost Contributed Obligation
2013 $ 4,150,000 $ 567,000 23% $ 27,836,601
2014 4,368,000 557,952 13% 30,755,601
2015 (38,000) 235,174 -619% 30,000,601
118 Packet Pg. 211
MW
S.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 18—Other Post-Employment Benefits (Continued)
B. City—Excluding Water Department(Water Enterprise Fund and Sewer Enterprise Fund) (Continued)
ai
Funded Status and Funding Progress
0
As of June 30, 2015,the Plan was 0.0%funded. The actuarial accrued liability for benefits was $7,822,000 and N
the actuarial value of assets was $0 resulting in unfunded actuarial accrued liabilities (UAAL) of$7,822,000. U.
The covered payroll (annual payroll of active employees covered by the plan) was $62,980,000 and the o
percentage of the UAAL to covered payroll was 12.42%. c
Q.
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
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the
Plan and the annual required contributions of the employer are subject to continual revision as actual results are c
compared with past expectations and new estimates are made about the future. The schedule of funding iz
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. a
d
LL
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
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 coo
perspective of the calculations.
In the June 30, 2012 actuarial valuation, which was used to determine the ARC for fiscal year 2013, the o
actuarial cost method used for determining the benefit obligations is the entry age normal cost method. The CD
actuarial assumptions included a 4.25% discount rate, which is the assumed rate of the expected long-term 1;
investment returns on plan assets calculated based on the funded level of the plan at the valuation date, and an
annual healthcare cost trend rate of 8.5°/a initially,reduced by increments of 0.5%per year to an ultimate rate of =
5.0%. The unfunded actuarial accrued liability (UAAL) at June 30, 2012 is being amortized as a level percent ii
of payroll over a 21-year fixed (closed) period. Future assumption changes, plan changes, and gain/losses are
amortized over a 15-year fixed (closed) period. The maximum combined period amortization is 30-years. It is iz
assumed the City's payroll will increase 3.25%per year. c
N
C. Water Department c
(D
E
Plan Description
The City Water Department(Department)provides health benefits to all qualifying retirees and their spouses in C
accordance with Memorandums of Understanding under various labor agreements. The Department maintains
the financial activity of the plan as a trust fund, and no separate financial report is publically available.
Employees are eligible for retiree health benefits if they retire from the Department on or after age 50 with at
0 least 10, 12, or 15 years of service,depending on bargaining unit, and are eligible for a PERS pension.
119 Packet Pg. 212
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 18—Other Post-Employment Benefits (Continued)
C. Water Department(Continued)
u�
Funding Policy
The contribution requirements of plan members and the Department are established and may be amended by N
the Board of Water Commissioners. The required contribution is based on projected pay-as-you-go financing LL
requirements, with an additional amount to prefund benefits as determined annually by the Board of Water o
Commissioners. For fiscal year 2015, the Department has funded $2,256,321 for the current year. The
Department pays up to the entire cost of health benefits for eligible retirees and their spouses, subject to the 0 CL
City's vesting schedule.
Annual OPEB Cost and Net OPEB Obligation
�a
The Department's annual other post-employment benefit (OPEB) cost (expense) is calculated based on the LL
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 Q
excess) over a period not to exceed thirty years. The following table shows the components of the Department's 2
annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the Department's E
net OPEB obligation:
d
2015 2014 2013 d
Annual required contribution $ 2,707,000 $ 2,438,000 $ 2,361,000 ,
Interest on net OPEB obligation 22,032 111,711 - to
Adjustment to the annual required contribution (30,000) (111,711) - W
Net OPEB cost 2,699,032 2,438,000 2,361,000
Contributions made: (2,256,321) (3,872,869) (573,621) p
sz
Changes in net OPEB obligation 442,711 (1,434,869) 1,787,379 d
Net OPEB obligation,beginning of the year 352,510 1,787,379 -
Net OPEB obligation,end of year $ 795,221 $ 352,510 $ 1,787,379
c
U_
The Department's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net ;
OPEB obligation for 2015 and the two preceding years were as follows: ii
Ln
Percentage of Net o
C
Annual Actual Annual OPEB OPEB
Fiscal Year OPEB Cost Contributions Cost Contributed Obligation y
2013 $ 2,361,000 $ 573,621 360% $ 1,787,379
E
2014 2,438,000 3,872,869 24% 352,510
2015 2,699,032 2,256,321 84% 795,221 Q
120 Packet Pg. 213
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 18-Other Post-Employment Benefits(Continued)
C. Water Department(Continued)
LO
Funded Status and Funding Progress
0
As of June 30, 2014,the Plan was 38,22% funded. The actuarial accrued liability for benefits was $35,012,000 N
and the actuarial value of assets was $13,380,000 resulting in unfunded actuarial accrued liabilities (UAAL) of U.
$21,632,000. The covered payroll (annual payroll of active employees covered by the plan) was $15,531,000
and the percentage of the UAAL to covered payroll was 139.28%. o
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions W
about the probability of occurrence of events far into the future. Examples include assumptions about future i
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the c
Plan and the annual required contributions of the employer are subject to continual revision as actual results are c
compared with past expectations and new estimates are made about the future. The schedule of funding u_
progress, presented as required supplementary information following the notes to the financial statements, Z
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.
U_
Actuarial Methods and Assumptions
M
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 v
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
short-term volatility in actuarial accrued liabilities and the actuarial assets, consistent with long-term to
perspective of the calculations.
0
In the June 30, 2014 actuarial valuation, the entry age actuarial cost method was used. The actuarial w
assumptions included a rate of return of 6.25% and annual healthcare costs trend rates of 7.5%initially,reduced it
by increments to an ultimate rate of 5% in 2012. Both rates included a 3% inflation assumption. The actuarial
value of assets was determined using techniques that spread the effects of short-term volatility in the market
value of investments over a five-year period. The UAAL is being amortized as a level percentage of projected
U.
payroll on an open basis. The remaining amortization period at June 30, 2015 was 19 years.
LL
D. Successor Agency UM
r
0
N
Plan Description
The Successor Agency (Agency) administers a single employer defined benefit healthcare plan (the Plan). The E
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 Q
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.
121 Packet Pg. 214
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 18—Other Post-Employment Benefits(Continued)
D. Successor Agency(Continued)
Funding Policy
0
The contribution requirements of the Agency are established and may be amended by the Agency's Board. The N
required contribution is based on pay-as-you-go financing requirements. For fiscal year 2015, the Agency U_
contributed$24,499 to the plan,which was 100%of the total current premiums. o
t=
Annual OPEB Cost and Net OPEB Obligation
The Agency's annual other OPEB cost(expense)is calculated based on the annual required contribution(ARC) is
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 c
amortize any unfunded actuarial liabilities (or funding excess) not to exceed thirty years. The following table LL
shows the components of the Agency's annual OPEB cost for the year, the amount actually contributed to the 3
plan, and changes in the Agency's net OPEB obligation: Q
d
2015 2014 2013 W
Annual required contribution $ 211,490 $ 211,490 $ 211,490
Interest on net OPEB obligation 58,224 50,905 43,095 y
Adjustment to the annual required contribution (94,241) (76,905) (61,038)
Net OPEB cost 175,473 185,490 193,547 w
Contributions made: (24,499) (22,848) (19,992)
Increase in net OPEB obligation 150,974 162,642 173,555 to
Net OPEB obligation,beginning of the year 1,293,866 1,131,224 957,669 m
Net OPEB obligation,end of year $ 1,444,840 $ 1,293,866 $ 1,131,224
O
Q
d
The Agency's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net
OPEB obligation for 2015 and the two preceding years were as follows:
c
Percentage of Net
LL
Annual Actual Annual OPEB OPEB
is
Fiscal Year OPEB Cost Contributions Cost Contributed Obligation
iz
2013 $ 193,547 $ 19,992 24% $ 1,131,224 LO
2014 185,490 22,848 24% 1,293,866 a
2014 175,473 24,499 14% 1,444,840
c
m
Funded Status and Funding Progress s
U
t�
As of June 30, 2008, the Plan was 0.0% funded. The actuarial accrued liability for benefits was $749,208 and
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 42.47%.
122 Packet Pg. 215
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 18—Other Post-Employment Benefits (Continued)
D. Successor Agency(Continued)
Funded Status and Funding Progress(Continued)
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 cm
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the _
Plan and the annual required contributions of the employer are subject to continual revision as actual results are
compared with past expectations and new estimates are made about the future. The schedule of funding o
CL
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.
c
Actuarial Methods and Assumptions =_
LL
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the time of
each valuation and the historical pattern of sharing of benefit costs between employer and plan members to that Q
point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of
LL
short-term volatility in actuarial accrued liabilities and the actuarial assets, consistent with long-term
perspective of the calculations.
The actuarial cost method used for determining the benefit obligations is the entry age normal cost method. The '0)
actuarial assumptions included a 4.5% discount rate, which is the assumed rate of the expected long-term
investment returns on plan assets calculated based on the funded level of the Plan at the valuation date, and an
annual healthcare cost trend rate of 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.
t:
0
Q.
Note 19—Jointly Governed Organizations and Joint Ventures
U
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 LL
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 U.
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 cm
information can be obtained by contacting the IVDA at 1601 E. Third Street, San Bernardino,CA 92408.
m
San Bernardino International Airport Authority
ea
In May 1992, the City entered into a joint powers agreement with the Cities of Colton, Loma Linda, Highland and Q
Redlands and the County of San Bernardino to form the San Bernardino International Airport Authority (SBIAA).
SBIAA was created primarily for the purpose of acquiring, operating, repairing, maintaining and administering the
aviation related portions of the former Norton Air Force Base property located in San Bernardino. Effective
April 19, 1996, the City of Redlands withdrew 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
grants and lease income. Additional financial information can be obtained by contacting SBIAA at 1601 E. Third
Street, San Bernardino, CA 92408.
123 Packet Pg. 216
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 19—Jointly Governed Organizations and Joint Ventures(Continued)
San Bernardino Regional Water Resource Authority
0
In August 1998, the City entered into a joint powers agreement with the Inland Valley Development Agency
(IVDA) and the San Bernardino Valley Municipal Water District (the District) to form the San Bernardino c
Regional Water Resources Authority (the Authority). The Authority was created primarily for the purpose of N
conducting a water resource and storage project. The Authority board is comprised of three members from the U-
City, one member from IVDA and two from the District. The primary sources of funding are loans and grants. o
Additional financial information can be obtained by contacting the Authority at 201 North "E" Street, Third
Floor, San Bernardino, CA 92401.
Colton/San Bernardino Regional Tertiary Treatment and Water Reclamation Authority
On August 2, 1994, the City of San Bernardino, through the Water Department formed a joint powers authority c
with the City of Colton to construct, operate, use and maintain tertiary wastewater treatment, disposal and water u_
reclamations systems, including the Regional Rapid Infiltration and Extraction Facility (RIX). This authority is
governed by a separate board consisting of four members; two appointed by the City through the Water a
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 LL
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
no liabilities. Annual revenues (in the form of contributions from the two member cities) are equal to annual U
expenses. The Water Department's equity interest in this joint venture has been reported as an investment in W
joint venture in the accompanying statement of net position. ca
0
San Bernardino Public Safety Authority
!T-
r-
0
CL
On April 1, 1968,the City of San Bernardino and the County of San Bernardino formed the San Bernardino Public
Safety Authority (PSA), a joint powers authority, as a financing vehicle to construct public safety buildings and
improvements to the wastewater treatment plant. In accordance with the terms of an installment purchase
agreement, title to the capital assets financed through the PSA were recognized as capital assets of the City at the
inception of the installment purchase agreement between the City and the PSA. The City's remaining interest in the
joint venture is in the form of cash and investments held by the PSA for debt service related activity. The Water R
Department's equity interest in these assets has been recognized in the accompanying statement of net position as =
LL
an investment in joint venture. in
0
N
West End Water Development, Treatment and Conservation Joint Powers Authority
_
m
On August 15, 1990, the City of San Bernardino joined the West End Water Development, Treatment and E
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 Q
venture was formed to provide a financing vehicle for the three member agencies. This joint venture is currently
inactive.
124 Packet Pg. 217
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 20—Consent Decree
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
Court, Central Division entered judgment, in the form of a Consent Decree, in the matter of City of San Bernardino c
v. United States of America. The Consent Decree settles the City's and the State's claims arising from the N
groundwater contamination allegedly caused by the Army. The Consent Decree contains a number of provisions U_
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 le
-
0 Unit. The Newmark Operable Unit was declared operational and functional in 1998. The Muscoy m
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 E
operate and maintain the groundwater extraction and treatment system for a period of 50 years. The $69 million
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 Q
Consent Decree, as to how the money may be spent.
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
construction of the Muscoy Operable Unit extraction system. These capital facility funds may not be used for costs tY
incurred to operate, maintain, repair or retrofit components of the site extraction of treatment systems constructed
by EPA.
v
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 a
Fund investment with an interest rate of 4.95%per annum. These funds were invested to pay costs associated with a)
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.
LL
c
The terms of the Guaranteed Investment Contract only provided the Department with the position of a secured
�a
creditor with respect to an AIG bankruptcy. As concerns rose regarding AIG's financial credibility, in October =
2009, the Department negotiated and accepted a "payout" in the amount of $18,661,876, which represented the ,LL
principal and accrued interest as of that date. These funds are currently invested in a diversified portfolio managed N
by PFM Asset Management. The balance of restricted investments held at June 30, 2015 is $21,125,203.
c
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E
Z
Note 21—Landfill Closure Liability U
Q
The City operated a municipal non-hazardous solid waste facility, identified as the "Waterman Landfill", from
1950 to 1960. The City is the primary responsible party for pollution remediation obligations related to the
Waterman Landfill. During the 1990s, groundwater monitoring wells were installed and placed into service as
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.
The City is currently in the design phase of the remediation project, and anticipates the construction phase to
begin in 2016. Pollution remediation costs for the closure of the Waterman Landfill are estimated at $6,929,000
at June 30, 2015, measured using the expected cash flow technique.
125 Packet Pg. 218
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
AV
Note 21—Landfill Closure Liability(Continued)
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
or regulatory requirements. The liability is reported in the Integrated Waste Fund in the accompanying financial c
statements. N
u.
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Note 22—Commitments and Contingencies o
CL
Q
A. Litigation
The City is a defendant in numerous lawsuits and is also subject to other claims, including claims for workers' C
z compensation payments. The City uses in-house and, where necessary, outside counsel to adjudicate lawsuits. c
Each case is initially rated by the City Supervising or Senior attorney handling or overseeing the case with U.
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 c
based upon the facts of the case, industry standards relative to the type of injury or damage involved, and the
experience of the Supervising or Senior attorney. The legal reserve as of June 30, 2015, is a product of this LL
analysis. The City used a third-party actuary to perform a workers' compensation reserve analysis (estimated
loss reserve) as of June 30, 2015. The actuary used a general approach that relied upon actual loss development
patterns for the City of San Bernardino to the extent they are available, and is augmented with industry >
benchmark loss development patterns based on insurance industry sources and patterns to project ultimate 0
p p �' p p J
losses. While it is not possible to project the final outcome of these lawsuits and claims, the City and its legal W
department have estimated that the liability for all such litigation and claims totaled approximately $44.11 to
million for the primary government as of June 30, 2015. These lawsuits and claims may be compromised W
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. o
CL
B. Federal and State Grants
U
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
LL
the grants, including amounts already collected,which may constitute a liability of the City.
LL
C. Gas Tax Revenues Un
0
The City is subject to periodic audits of its use of gas tax revenues by the State Controller's Office. The City
used a portion of gas tax revenues to make certain debt service payments on a note payable related to pavement
rehabilitation (street-related) projects. State guidelines relating to gas tax expenditures limit the amount of =
revenue available for debt service expenditures, as well as the type of debt that may be paid. State regulatory
authorities have not issued an opinion on the matter and the potential exposure to the City's General Fund is Q
uncertain, and therefore, no contingent liability related to this matter has been accrued in the accompanying
financial statements.
126 Packet Pg. 219
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 23—Restatement of Prior Year Balances
A. Government-Wide Financial Statements
The beginning net position at July 1, 2014 of the Government-wide Financial Statements was restated as
follows:
0
N
Governmental Business-Type U.
Activities Activities p
Net position at July 1,2014,as originally reported $ 409,663,060 $ 278,394,025 0
Prior period adjustments: Q-
Net pension liability due to the implementation of GASB 68 (321,952,269) (57,749,505)
Notes receivable adjustment (10,906,404) - is
Net position at July 1,2014,as restated $ 76,804,387 $ 220,644,520
_
U_
B. Governmental Fund Financial Statements
_
The beginning fund balances at July 1, 2014 for the governmental funds were restated as follows: Q
m
UL
Major Funds 'O
_
°j Low and
Moderate
Federal and Income v
State Grants Housing
Fund Fund
to
Fund balance(deficit)at July 1,2014,as originally stated $ 19,642,193 $ 58,052,555
Adjust notes receivable 289,579 (11,195,983)
Net position at July 1,2014,as restated $ 19,931,772 $ 46,856,572 0
Q.
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C. Proprietary Fund Financial Statements
The beginning fund balances at July 1, 2014 for the proprietary funds were restated as follows:
LL
Enterprise Funds
LL
Integrated LO
Waste Water Sewer
N
Fund Fund Fund ++
_
d
Net position(deficit)at July 1,2014,
as originally reported $ (2,309,785) $ 175,525,354 $ 105,178,460
Net pension liability due to the Q
implementation of GASB 68 (8,732,564) (27,939,656) (21,077,289)
Net position at July 1,2014,as restated $ (11,042,349) $ 147,585,698 $ 84,101,171
127 Packet Pg. 220
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30,2015
Note 23—Restatement of Prior Year Balances(Continued)
C. Proprietary Fund Financial Statements (Continued)
Internal Service Funds r
d•
Workers' Liability Telephone Information Central
O
Compensation Insurance Motorool Support Systems Utility Services N
Fund Fund Fund Fund Fund Fund Fund >..
LL
L
Net position(deficit)at July 1,2014,
as originally reported $ (20,009,355) $ (9,536,141) $ 555,078 $ 696,092 $ 1,801,099 $ (277,431) $ 2,265 Y�-
Net pension liability due to the
implementation of GASB 68 (213,293) (189,295) (2,784,119) (420,879) (2,775,796) (3,499) (109,610) 0
Q.
Net position at July 1,2014,as restated $ (20,222,648) $ (9,725,436) $ (2,229,041) $ 275,213 $ (974,697) $ (280,930) $ (107,345) tv
M
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D. Fiduciary Fund Financial Statements
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The beginning fund balances at July 1,2014 for the fiduciary activities were restated as follows: ii
Successor Agency =
To the Economic Q
Development m
Agency LL
of San Bernardino _
tv
Private-purpose y
Trust Fund
Net position at July 1,2014,as originally reported $ (34,021,521)
Prior period adjustments:
Net pension liability due to the implementation of GASB 68 (5,032,781) t°
1`
Net position at July 1,2014,as restated $ (39,054,302)
a✓
0
m
Note 24—Successor Agency Trust for Assets of Former Redevelopment Agency
_
On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26 (the "Bill") that provides for M
the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of ii
the City since the City had previously reported its redevelopment agency (commonly referred to as the "Economic s
Development Agency"or"EDA")as a blended component unit on the City's financial statements. iS
The Bill provides that upon dissolution of the redevelopment agency, either the city or another unit of local N
government may serve as the "successor agency" to hold the assets of the dissolved redevelopment agency until
they are disposed of in accordance with applicable laws and regulations. On January 9, 2012, the City Council
adopted resolution 2012-12, electing to serve as the Successor Agency to the former redevelopment agency of the s
City of San Bernardino in accordance with the Bill. On January 23, 2012, the City Council adopted resolution
2012 49 to have the City of San Bernardino serve as the Successor Housing Agency to the former redevelopment Q
agency of the City of San Bernardino.
128 Packet Pg. 221
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 24—Successor Agency Trust for Assets of Former Redevelopment Agency(Continued)
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
LO
established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the
date of dissolution, including the completion of any unfinished projects that were subject to legally enforceable
contractual commitments. c°�
In future fiscal years, successor agencies will only be allocated tax increment revenue (to the extent available in the o
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 0 CL
redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full tx
and all assets have been redistributed or liquidated.
The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets
between redevelopment agencies and other public bodies that occurred after January 1,2011. If the public body that S
received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those
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.
a
In accordance with the timeline set forth in the Bill(as modified by the California Supreme Court on December 29, LL
2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as c
of February 1, 2012. After the date of dissolution, the assets, liabilities, and activities of the dissolved M
kw� redevelopment agency are reported in the Low and Moderate Income Housing Fund, a City special revenue fund
(for housing assets, liabilities, and activities), and a private-purpose trust fund, a type of fiduciary fund (for non-
housing assets, liabilities, and activities), in the financial statements of the City.
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 _
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 r_
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 U_
transferred properties to SBEDC, and SBEDC committed to develop the properties using funding provided by the c
EDA. These parcels include 128 parcels for the Bice Property project, 74 parcels for the Arden-Guthrie Property U.
project, and 5 parcels for the Carousel Mall (an approximately 650,000 square foot indoor mall), which is owned N
and operated through the Carousel Mall LLC(a single-member limited liability company with SBEDC as the single
member). The funding agreement and the transfer of the properties were validated in a judgment entered on July 27,
2011 by the Superior Court of the State of California, County of San Bernardino, in an action brought by the EDA E
as Case No. CIVDS1103893 (Validation Judgment). Subsequently, however, the State Controller's Office (SCO), U
as authorized by the June 2011 and June 2012 legislation providing for the dissolution of redevelopment agencies, Q
conducted a review of the transfers and issued a report dated March 6, 2013 (SCO's "City of San Bernardino
Economic Development Agency — Asset Transfer Review Report."). The SCO contended in the report that the
transfers were unallowable and that the Validation Judgment was not effective. The Successor Agency contested
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, 2015.
129 Packet Pg. 222
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 24—Successor Agency Trust for Assets of Former Redevelopment Agency(Continued)
Affordable Housing Solutions (AHS) was incorporated in 2005 as a nonprofit public benefit corporation and was
acquired by the EDA in 2009 to assist it in promoting economic development and increasing the availability of low
and moderate income housing in the City. AHS has developed several successful affordable housing projects, v
including Phoenix Square and the Magnolia Square Project. AHS is also the City's contracted Neighborhood c
Stabilization Program administrator as well as its property holding entity for the Home Investment Partnership N
Program(HOME) and the Low and Moderate Income Housing Fund(LMHIF). AHS, like SBEDC, entered into an LL
agreement with the EDA in March 2011 for the receipt of properties and funding from the EDA. This agreement, ,`o
and property transfers made pursuant to it, was validated in the Validation Judgment. As with SBEDC, the SCO :
disputed the validity of the EDA-AHS transactions. These properties were reported in the Successor Agency as of m
June 30,2015.
�a
Sustainable Communities Reinvestment Partnership (SCRIP) was organized as a limited liability company in 2009 c
to pursue renewable energy and sustainability projects in the City to help improve energy efficiency and reduce c
greenhouse gas emissions in the region. SCRIP's priorities include the development of solar power systems and n_
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- at
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
U.
Agency.
M
C, On September 22, 2015, Senate Bill 107, which amends various sections of the California Health and Safety Code >
related to the dissolution of redevelopment agencies, was signed into law. SB 107 contains various provisions
which may impact, among other things, (i)the repayment of prior City/Redevelopment loans, (ii)treatment of City Q�
loans to the Successor Agency to pay enforceable obligations, including bonded debt, and administrative costs, and
(iii)the treatment of special levies.
0
CL
Note 25—Subsequent Events
A. Annexation of San Bernardino City Fire Department to San Bernardino County Fire Protection
District M
On May 18, 2015, the Mayor and Common Council approved the City Recovery Plan which included
numerous measures to increase revenues and reduce expenditures, including regionalization or contracting of =
fire services. On August 24, 2015, the Mayor and Common Council authorized a filing of application for the ,un
City's fire department operations to be annexed to the San Bernardino County Fire Protection District N
(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 E
SBCFPD is effective July 1, 2016.
Q
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
balances to the extent owing, of each of the hired employees. In addition the City will make several transfers to
Trust Accounts on behalf of firefighters in full settlement of cost-sharing and other pension related claims, all
claims arising in or related to the Post-Petition Litigation (other than arising in connection with cost-sharing),
and all claims relating to "salary comparability" arising from implementation of Annexation. The total of these
transfers will be approximately$5.7 million.
130 Packet Pg. 223
5.F.a
City of San Bernardino
Notes to Basic Financial Statements (Continued)
For the Fiscal Year Ended June 30, 2015
Note 25—Subsequent Events (Continued)
B. Outsourcing of Integrated Waste Fund Operations to Franchisee
On January 25, 2016, the Mayor and Common Council unanimously approved a ten year exclusive franchise
agreement with Burrtec Waste Industries, Inc. to provide solid waste, street sweeping and right-of-way c
cleanup services to the residents of the City. Effective April 1, 2016, the City will no longer be providing N
services through its Integrated Waste enterprise fund and the fund's operations will be shut down, with any tai_
residual balances being transferred to the General Fund. o
C. 2005 Pension Obligation Bonds Settlement m
W
On March 21, 2016, the Mayor and Common Council approved a settlement in the City's Chapter 9 7a
bankruptcy case between the City and the holders of the City-issued 2005 Pension Obligation Bonds that
have been in default since 2012. In the settlement agreement dated March 29, 2016, the settlement reduces =
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 3
courts. Under the settlement, the bondholders will receive payment equal to approximately 40 percent of Q
their debt on a present value basis, discounted using the existing coupon rate.
U.
D. Settlement with PARS Participants
�a
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 U
will be rejected, and the City will waive any and all claims to the funds held within the PARS Trust and the W
415 Trust. The amounts remaining in the PARS Trust and the 415 Trust will be distributed to the PARS to
Participants and the City will make two additional distributions of $290,000 to the PARS Participants in
subsequent years.
0
E. Loans with the San Bernardino Valley Municipal Water District °'
m
On December 1st, 2015, the Board of Water Commissioners approved a loan with the San Bernardino Valley
Municipal Water District up to $1.2 million for the UV System Rehabilitation Project.
ii
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REQUIRED SUPPLEMENTARY INFORMATION
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Packet Pg. 227
5.F.a
City of San Bernardino
Required Supplementary Information (Unaudited)
Budgetary Information
For the Year Ended June 30, 2015
Budgetary Information
The annual budget adopted by the Common Council provides for the City's general operations, and includes ,,r,
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. c
N
Following approval of the final budget by the Mayor and Common Council, budget transfers within a department U--
budget, in an amount not to exceed$25,000 per transfer, shall be approved or disapproved according to established ,o
Finance Department policies and procedures and on forms approved by the Finance Department, with notice to the o
Director of Finance, and written notice to the Mayor and Common Council, as long as the total department budget aai
allocation is not increased, and as long as no transfers into or out of the budget allocation for personnel salaries and
benefits are approved. The legal level of budgetary control is personnel salaries and benefits versus other
expenditures in each department.
The budget is formally integrated into the accounting system and employed as a managed control device during the "'
year for the General Fund.
3
_
_
Budgets are not legally adopted for the other City funds.
_ LL
The General Fund budget is adopted on a basis consistent with generally accepted accounting principles.
M
' The City does not adopt a budget for the Low and Moderate Income Housing Special Revenue Fund.
W
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At fiscal year end, operating budget appropriations lapse; however, appropriations for incomplete capital W
improvements, equipment purchases, and contractual obligations can be carried over to the following fiscal year. co
ca
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted
as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed o
appropriations,the excess must either be refunded to the State Controller, returned to the taxpayers through revised
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
to be used in future years without limitation.
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;s Packet Pg. 228
S.F.a
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30, 2015
Budgetary Comparison Schedules—General Fund
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
REVENUES:
Taxes $ 96,397,200 $ 97,447,200 $ 102,643,713 $ 5,196,513 c
Licenses and permits 9,734,449 9,734,449 10,219,955 485,506 cV
Fines and forfeitures 2,457,172 2,774,172 1,496,318 (1,277,854) >-
Use of money and property 33,000 33,000 238,085 205,085 L-
O
Lease revenue 870,100 870,100 396,250 (473,850)
Intergovernmental 1,751,982 2,891,570 2,513,115 (378,455) oa
Charges for services 7,454,914 7,454,914 6,527,548 (927,366) LY
Other revenues 4,126,433 4,126,433 4,468,664 342,231
_R
Total revenues 122,825,250 125,331,838 128,503,648 3,171,810 v
c
c
EXPENDITURES: ii
Current:
General government 15,561,262 20,609,472 17,914,214 2,695,258 =
Public safety 85,520,518 87,541,277 81,478,514 6,062,763 Q
Streets 4,936,364 5,080,140 5,248,083 (167,943)
U.
Culture and recreation 6,957,331 7,410,753 7,922,486 (511,733)
Community development 3,806,157 3,533,215 2,883,598 649,617
Community service 1,383,275 1,566,575 1,585,596 (19,021)
Debt service: U
Principal 2,171,615 2,171,615 8,733,983 (6,562,368)
Interest and fiscal charges 704,942 704,942 1,028,086 (323,144)
Total expenditures 121,041,464 128,617,989 126,794,560 1,823,429
d'
REVENUES OVER
(UNDER)EXPENDITURES 1,783,786 (3,286,151) 1,709,088 4,995,239 0
Q.
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OTHER FINANCING SOURCES(USES) W
Transfers in 5,161,214 5,161,214 2,969,606 (2,191,608)
Transfers out (2,341,214) (2,341,214) (40,000) 2,301,214 =
Total other financing sources(uses) 2,820,000 2,820,000 2,929,606 109,606 E
ii
Net change in fund balance $ 4,603,786 $ (466,151) 4,638,694 $ 5,104,845 =
LL
47
Fund Balance:
0
Beginning of year 13,389,503 N
End of year $ 18,028,197 y
E
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136 Packet Pg. 229
5.F.a
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30, 2015
Budgetary Comparison Schedules—Federal and State Grants Special Revenue Fund
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
LO
REVENUES:
0
Licenses and permits $ - $ - $ 1,100 $ 1,100 N
Use of money and property - - 13,055 13,055 LL
Intergovernmental 19,582,628 22,038,197 13,582,107 (8,456,090) p
Other revenues - - 1,283,529 1,283,529
Total revenues 19,582,628 22,038,197 14,879,791 (7,158,406) 0
,
m
EXPENDITURES: is
Current: v
c
General government 6,839,869 11,009,468 4,762,115 (6,247,353)
Public safety 3,198,049 4,185,622 3,513,809 (671,813) U.
Streets 637,145 637,145 185,826 (451,319)
Culture and recreation 1,371,535 1,874,535 2,067,600 193,065
c
Community development 232,500 1,002,963 294,763 (708,200) d
Community service 3,683,526 3,943,526 3,523,531 (419,995) _T
Debt Service:
Principal 488,900 934,052 934,052 - c
Interest and fiscal charges - 337,524 384,751 47,227 y
' Total expenditures 16,451,524 23,924,835 15,666,447 (8,258,388) y
v
at
REVENUES OVER
(UNDER)EXPENDITURES 3,131,104 (1,886,638) (786,656) (15,416,794) to
co
OTHER FINANCING SOURCES(USES):
Transfers out - - (58,812) (58,812) o
Q
Total other financing sources(uses) - - (58,812) (58,812) tr
CHANGE IN FUND BALANCE $ 3,131,104 $ (1,886,638) (845,468) $ 1,041,170
.v
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FUND BALANCE: U-
Beginning of year,as restated(Note 23) 19,931,772
End of year $ 19,086,304 ii
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137 Packet Pg. 230
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30,2015
Budgetary Comparison Schedules—Low and Moderate Income Housing Special Revenue Fund
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
W)
r
REVENUES: V-
CD
Licenses and permits $ - $ - $ 1,800 $ 1,800 N
Use of money and property - - 75,448 75,448 U-
Intergovernmental - - 19,636 19,636 L.
Charges for services - - 179 179
Other revenues - - 61,277 61,277 0
Total revenues - - 158,340 158,340 a'
EXPENDITURES: v
c
Current:
c
Community development - - 372,256 372,256 ii
Total expenditures - - 372,256 372,256 3
c
c
REVENUES OVER Q
(UNDER)EXPENDITURES - - (213,916) 530,596
OTHER FINANCING SOURCES(USES):
' Transfers from Successor Agency - - 1,001 1,001 W
Transfers in 42,726 42,726
Total other financing sources(uses) - - 43,727 43,727
CHANGE IN FUND BALANCE $ - $ - (170,189) $ (170,189) to
co
FUND BALANCE: t
Beginning of year,as restated(Note 23) 46,856,572 d
End of year $ 46,686,383 W
is
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38 Packet Pg. 231
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30,2015
k
Budgetary Comparison Schedules—Sales and Road Special Revenue Fund
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
LO
r
REVENUES:
0
Taxes $ 3,055,630 3,055,630 $ 3,384,653 $ 329,023 N
Use of money and property - - 77,274 77,274 LL
Intergovernmental - - 229 229 0
Total revenues 3,055,630 3,055,630 3,462,156 406,526
O
O.
�i
EXPENDITURES:
Current: is
Streets 9,938,174 9,938,174 2,442,558 (7,495,616)
Debt Service:
c
Principal - - 6,508 6,508 LL
Total expenditures 9,938,174 9,938,174 2,449,066 (7,489,108)
c
c
REVENUES OVER Q
(UNDER)EXPENDITURES (6,882,544) (6,882,544) 1,013,090 (7,082,582)
CHANGE IN FUND BALANCE $ (6,882,544) $ (6,882,544) 1,013,090 $ 7,895,634
m
FUND BALANCE:
Beginning of year 7,206,491
End of year $ 8,219,581
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;�� Packet Pg.232
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30,2015
i
Schedules of Funding Progress—Other Postemployment Benefit Plans
Unfunded
Actuarial
Entry Age Unfunded Liability as
Actuarial Actuarial Actuarial Actuarial Percentage of
Valuation Assets Accrued Accrued Funded Covered Covered C%j
Date Value Liability Liability Ratio Payroll Payroll LL
City `O
6/30/2009 $ - $ 61,371,000 $ 61,371,000 0.00% $ 78,951,000 77.73% `~
6/30/2012 - 48,819,000 48,819,000 0.00% 84,166,000 58.00% 0
6/30/2014* - 7,822,000 7,822,000 0.00% 62,980,000 12.42% 4)
R
Water Department 0
6/30/2010 $ - $ 28,676,000 $ 28,676,000 0.00% $ 12,619,000 227.24% M
6/30/2012 8,556,000 28,831,000 20,275,000 29.68% 14,765,000 137.32% -
U-
6/30/2014* 13,380,000 35,012,000 21,632,000 38.22% 15,531,000 139.28%
3
C
Successor Agency _
4
6/30/2008* $ - $ 749,208 $ 749,208 0.00% $ 1,764,100 42.47% d
ii
*Most recent actuarial valuation available c
CD
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140 Packet Pg. 233
5.F.a
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30, 2015
Schedules of Changes in the Net Position Liability and Related Ratios—Last Ten Years*
City Miscellaneous Plan-53
As of June 30,2015 ;n
o
Total Pension Liability 2013-14 N
U_
Service cost $ 7,664,862 0
Interest on total pension liability 35,857,877 1�
Differences between expected and actual experience - 0 CL
CD
Changes in assumptions - lY
Changes in benefit terms -
U
Benefit payments,including refunds of employee contributions (24,178,446) _
sv
c
Net change in total pension liability 19,344,293 W
Total pension liability-beginning 486,361,821
c
c
Total pension liability-ending(a) $ 505,706,114 Q
O
U_
Plan fiduciary net position
ceContributions-employer $ 10,201,167
Contributions-employee 4,422,413
Investment income(net of administrative expenses) 58,763,840
tY
Benefit payments (24,178,446)
Other
d'
Net change in plan fiduciary net position 49,208,974
O
Plan fiduciary net position-beginning 342,796,034 N
W
Plan fiduciary net position-ending(b) $ 392,005,008
I
L)
c
Net pension liability-ending(a)-(b) $ 113,701,106 or_
LL
is
Plan fiduciary net position as a percentage of the O
U.
total pension liability 77.52% in
V_
0
Covered-employee payroll $ 41,173,517 N
c
Net pension liability as a percentage of covered- W
E
employee payroll 276.15%
Y
d.+
Q
Notes to Schedule:
Benefit changes:the figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30,
2013.This applies for voluntary benefit changes as well as any offers of Two Years of Additional Service Credit(a.k.a.Golden Handshakes).
Chances in assumptions:there were no changes in assumptions.
141 Packet Pg. 234
5.F.a
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30, 2015
Schedules of Changes in the Net Position Liability and Related Ratios—Last Ten Years* (Continued)
, City Safety Plan- 54
As of June 30,2015
r
v
0
Total Pension Liability 2013-14 N
LL
Service cost $ 11,208,178
Interest on total pension liability 48,966,477
Differences between expected and actual experience - Q,
m
Changes in assumptions - W
Changes in benefit terms - ;
Benefit payments,including refunds of employee contributions (34,402,815)
c
Net change in total pension liability 25,771,840 'U
-
Ii
Total pension liability-beginning 664,483,681
c
c
Total pension liability-ending(a) $ 690,255,521 Q
Plan fiduciary net position
sv
Contributions-employer $ 18,245,106
Contributions-employee 5,184,692
Investment income(net of administrative expenses) 78,093,954
Benefit payments (34,402,815)
Other -
�t
Net change in plan fiduciary net position 67,120,937 L
O
Plan fiduciary net position-beginning 455,455,761
Plan fiduciary net position-ending(b) $ 522,576,698
U
C
Net pension liability-ending(a)-(b) $ 167,678,823
LL
is
Plan fiduciary net position as a percentage of the =
ii
total pension liability 75.71% u-)
T
Covered-employee payroll $ 39,718,552 N
c
Net pension liability as a percentage of covered-
E
employee payroll 422.17%
a..
Q
Notes to Schedule:
Benefit changes:the figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30,
2013.This applies for voluntary benefit changes as well as any offers of Two Years of Additional Service Credit(a.k.a.Golden Handshakes).
Changes in assumptions:there were no changes in assumptions.
142 Packet Pg. 235
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30,2015
Schedule of the Successor Agency's Proportionate Share of the Net Pension Liability and Related Ratios—
Last Ten Years*
Successor Agency Plan-1414
ua
For the Year Ended June 30,2015
0
Measurement Period June 30,2014 C14
U.
Successor Agency's Proportion of the Net Pension Liability 0.06132°/ C
Successor Agency's Proportionate Share of the net Pension Liability $ 3,815,585 't
0
Successor Agency's Covered-Employee Payroll $ 451,000 0
Successor Agency's Proportionate Share of the Net Pension Liability W,
as a Percentage of Its Covered-Employee Payroll 69.16°
v
c
Plan's Proportionate Share of the Fiduciary Net Position
as a Percentage of the Total Pension Liability 83.77 0/ U_
R
Historical information is required only for measurement periods for which GASB 68 is applicale.
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143 Packet Pg. 236
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30, 2015
Schedule of Contributions—Last Ten Years*
City Miscellaneous Plan-53
As of June 30,2015
2014-151 2013-141
r
Actuarially determined contribution $ 8,237,102 $ 10,201,167 N
Contributions in relation to the actuarially determined contributions z (8,237,102) (10,201,167) U_
Contribution deficiency(excess) $
Covered-employee payroll 3'4 $ 42,408,723 $ 41,173,517 0
m
Contributions as a percentage of covered- tY
employee payroll 3 19.42% 24.78% .0
c
'Historical information is required only for measurement periods for which GASB 68 is applicable. _
U_
2 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may ;
choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the =
actuarially determined contributions. Q
3 Covered-Employee Payroll represented above is based on pensionable earnings provided by the employer. However GASB 68
LL
defines covered-employee payroll as the total payroll of employees that are provided pensions through the pension plan. -a
Accordingly, if pensionable earnings are different than total earnings for covered-employees, the employer should display in the
disclosure footnotes the payroll based on total earnings for the covered group and recalculate the required payroll-related ratios.
'm
U
4 Payroll from prior year($39,374,288)was assumed to increase by the 3.00%payroll growth assumption.
Notes to Schedule
cc
ti
Valuation date: 6/30/2013
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2013-14 were from the June 30,2011 p
public agency valuations. m
!Y
Methods and assumptions used to determine contribution rates: m
.V
Actuarial cost method Entry Age Normal
c
Amortization method/period For details,see June 30,2011 Funding Valuation Report
U.
Asset valuation method Actuarial Value of Assets.For details,see June 30,2011
Funding Valuation Report. U.
Inflation 2.75% u7
r
0
Salary increases Varies by entry age and service N
Payroll growth 3.00%
Investment rate of return 7.50%,net of pension plan investment and administrative E
expenses,including inflation
Retirement age The probabilities of retirement are based on the 2010 Q
CalPERS Experience study for the period from 1997 to 2007.
Mortality The probabilities of mortality are based on the 2010 Ca1PERS
Experience Study for the period from 1997 to 2007.Pre-
retirement and Post-retirement mortality rates include 5 years
of projected mortality improvement using Scale AA published
by the Society of Actuaries.
144 Packet Pg. 237
5.F.a
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30, 2015
Schedule of Contributions—Last Ten Years* (Continued)
City Safety Plan-54
As of June 30,2015
2014-15 1 2013-141 4
Actuarially determined contribution $ 12,137,270 $ 18,245,106 N
Contributions in relation to the actuarially determined contributions z (12,137,270) (18,245,106) LL
L
Contribution deficiency(excess) $ - $ - ,0
Covered-employee payroll 3'4 $ 40,910,109 $ 39,718,552 Q
CD
Contributions as a percentage of covered- W
employee payrolls 29.67% 45.94% 5
.v
c
1 Historical information is required only for measurement periods for which GASB 68 is applicable. _
LL
2 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may
choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the =
actuarially determined contributions. d
3 Covered-Employee Payroll represented above is based on pensionab le earnings provided by the employer. However GASB 68
iL
defines covered-employee payroll as the total payroll of employees that are provided pensions through the pension plan.
Accordingly, if pensionable earnings are different than total earnings for covered-employees, the employer should display in the
disclosure footnotes the payroll based on total earnings for the covered group and recalculate the required payroll-related ratios. aw
U
4 Payroll from prior year($38,561,701)was assumed to increase by the 3.00%payroll growth assumption. d
Notes to Schedule
cfl
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Valuation date: 6/30/2013
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2013-14 were from the June 30,2011 O
public agency valuations. N
tY
Methods and assumptions used to determine contribution rates: as
Actuarial cost method Entry Age Normal
c
Amortization method/period For details,see June 30,2011 Funding Valuation Report ji
Asset valuation method Actuarial Value of Assets.For details,see June 30,2011
Funding Valuation Report. ji
Inflation 2.75% u"
r
0
Salary increases Varies by entry age and service N
Payroll growth 3.00%
Investment rate of return 7.50%,net of pension plan investment and administrative E
expenses,including inflation U
Retirement age The probabilities of retirement are based on the 2010 Q
CalPERS Experience study for the period from 1997 to 2007.
Mortality The probabilities of mortality are based on the 2010 Ca1PERS
Experience Study for the period from 1997 to 2007.Pre-
retirement and Post-retirement mortality rates include 5 years
of projected mortality improvement using Scale AA published
by the Society of Actuaries.
145 Packet Pg. 238
S.F.a
City of San Bernardino
Required Supplementary Information (Unaudited) (Continued)
For the Year Ended June 30,2015
Schedule of Contributions—Last Ten Years* (Continued)
Successor Agency Plan-1414
As of June 30,2015
2014-151 2013-141
Actuarially determined contribution $ 19,656 $ 60,842 N
Contributions in relation to the actuarially determined contributions z (19,656) (60,842) >_
Contribution deficiency(excess) $ $ - 12
Covered-employee payroll 3,4 $ 464,530 $ 451,000 Q.
N
Contributions as a percentage of covered-
employee payroll 4.23% 13.49% 5
U
r- C
1 Historical information is required only for measurement periods for which GASB 68 is applicable.
U.
2 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may
choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the
actuarially determined contributions. Q
m
3 Covered-Employee Payroll represented above is based on pensionable earnings provided by the employer. However, GASB 68 U.
defines covered-employee payroll as the total payroll of employees that are provided pensions through the pension plan.
Accordingly, if pensionable earnings are different than total earnings for covered-employees, the employer should display in the
disclosure footnotes the payroll based on total earnings for the covered group and recalculate the required payroll-related ratios.
U
4 Payroll from prior year($437,864)was assumed to increase by the 3.00%payroll growth assumption.
Notes to Schedule cp
t`
Valuation date: 6/30/2013 IT
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2013-14 were from the June 30,2011 0
public agency valuations. y
W
Methods and assumptions used to determine contribution rates: rV
U
Actuarial cost method Entry Age Normal
c
Amortization method/period For details,see June 30,2011 Funding Valuation Report LL
Asset valuation method Actuarial Value of Assets.For details,see June 30,2011 =
Funding Valuation Report. U.
Inflation 2.75% T_
0
Salary increases Varies by entry age and service N
Payroll growth 3.00%
Investment rate of return 7.50%,net of pension plan investment and administrative L
expenses,including inflation �?
Retirement age The probabilities of retirement are based on the 2010 Q
Ca1PERS Experience study for the period from 1997 to 2007.
Mortality The probabilities of mortality are based on the 2010 CalPERS
Experience Study for the period from 1997 to 2007.Pre-
retirement and Post-retirement mortality rates include 5 years
of projected mortality improvement using Scale AA published
by the Society of Actuaries.
146 Packet Pg. 239
S.F.a
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SUPPLEMENTARY INFORMATION 'U
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147 Packet Pg. 240
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148 Packet Pg. 241
5.F.a
NON-MAJOR
GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS:
Cable TV Fund - This fund is used to account for the regulatory oversight of the City's cable companies for franchise
compliance, consumer protection, and franchise renewal negotiations, as well as operating two access channels. c
N
LL
Asset Seizure Fund - This fund is used for the investigation, detection, and prosecution of criminal activities. Funding o
is provided by criminal assets seized under existing state and federal statutes. le-
0
a
d
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 T
Fiscal Assistance Act of 1972.
U.
Special Gas Tax Fund - This fund is used to account for the receipt of gasoline tax revenue paid to the City as a m
subvention from the State of California. These funds are transferred to the General Fund to partially support a
maintenance activities and to finance street construction projects as provided by State law. a,
W
M
Traffic Safety Fund -This fund is used for the recording of the City's share of California Vehicle Code fines collected
y San Bernardino County. >
a�
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.
Fire Station Fund -This fund is used to account for the operation and maintenance of the Verdemont Fire Station. _
CL
W
DEBT SERVICE FUNDS:
c
m
Assessment District#987 Fund -This fund is used to account for the collection of the Verdemont infrastructure fees on E
LL
developing properties used to repay a loan from bondholders as required by the Improvement Bond Act of 1915 and R
related California State statutes for this district. _
U_
0
Assessment District#1015 Fund - This fund is used to account for the collection of assessments from property owners
and for the remittance of such assessments to the Successor Agency of the former redevelopment agency (Economic
Development Agency) and other City funds as required by the Improvement Bond Act of 1915 and related California E
State statutes for this district. w
Q
149 Packet Pg. 242
5.F.a
NON-MAJOR
GOVERNMENTAL FUNDS
CAPITAL PROJECTS FUNDS:
Verdemont Fund - This fund is used to account for development fees collected for improvements in the Verdemont
area.
0
N
Fire Equipment Fund -This fund is used for the acquisition of fire equipment from lease proceeds. L
0
t
Park Construction Fee Fund - This fund is used for park land acquisition and development. Principal revenue sources a
are parks acquisition and development fees collected from developers and state revenues for park development.
Cemetery Construction Fund - This fund is used for improvements to the City-owned cemetery from a portion of fees
collected for services. U-
Sewerline Construction Fund - This fund is used for construction of sewer collection systems from development Q
revenues. m
U.
Storm Drain Construction Fund - This fund is used for construction of storm drain facilities through the City from a
'evelopment revenues.
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. ~
c�
v
Cultural Development Construction Fee Fund - This fund is used for collection of development fees used to pay for Q.
cultural improvements and activities.
�a
Assessment Distric #1015 Fund - This fund is used for constructionn of improvements from loans related to r_
Assessment District#1015. _
ii
Impact Fees Fund - This fund is used to account for the specific revenue sources that are legally restricted to fund LL expenditures of developer impact fees. c
N
4i
Street Construction Fund - This fund is used to account for right-of-way acquisition, construction, and improvments m
related to the City's street system. These projects are funded by various state and federal programs and matching City
funds.
Public Improvements Fund -This fund is used to for maintenance and construction of improvements around the Indian
Bingo Casino located on the reservation.
140P IB Local Street Fund This fund was established to account for monies received from the State through Prop 1B.
This proposition provided$19 billion in bond funds for a variety of transportation projects, including $2 billion for cities
and counties for maintenance and improvements of local transportation facilities.
150 Packet Pg. 243
City of San Bernardino
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2015
Special Revenue
LO
7
Asset Alternative Special Traffic c
Cable TV Seizure Transportation Gas Tax Safety N
ASSETS U_
L
Cash and investments $ 747,591 $ 1,416,272 $ 696,590 $ 5,059,175 $ 1,671,569
Receivables:
O
Accounts 67,762 32,775 24 - - C
Interest 1,206 2,324 1,124 8,092 - W
Special assessments - - - - - �?
Due from other governments - - 69,254 - 55 c
Due from other funds - -
Advances to other funds - - - - -
Total assets $ 816,559 $ 1,451,371 $ 766,992 $ 5,067,267 $ 1,671,624
c
c
LIABILITIES,DEFERRED INFLOWS OF Q
m
RESOURCES AND FUND BALANCES jL
Liabilities:
c
Accounts payable $ 67,745 $ 64,260 $ 50 $ 450,499 $ 442,828
Accrued payroll and related liabilities 1,418 - - - - >
Deposits - 20,000 - - - m
U
d
Retentions payable - - - - -
Advances from other funds - - - - -
cc
Total liabilities 69,163 84,260 50 450,499 442,828
Deferred inflows of resources: 0
O
Unavailable revenues - - - - - Q-
m
Total deferred inflows of resources - - - - -
.v
Fund Balances:
ca
Nonspendable - - - - -
Restricted 747,396 1,367,111 766,942 4,616,768 1,228,796
Unassigned(deficit) - - - - - c
Total fund balances 747,396 1,367,1 11 766,942 4,616,768 1,228,796 LL
LO
Total liabilities,deferred inflows of N
resources and fund balances $ 816,559 $ 1,451,371 $ 766,992 $ 5,067,267 $ 1,671,624
c
m
(Continued) _
U
ca
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Q
151 Packet Pg. 244
5.F.a
City of San Bernardino
Combining Balance Sheet(Continued)
Non-Major Governmental Funds
June 30,2015
Special Revenue Debt Service Capital Projects
an
Assessment Assessment
Sewerline Fire District District
Maintenance Station #987 #1015 Verdemont c14
ASSETS U.
Cash and investments $ 3,889,359 $ 354,862 $ - $ 6,574 $ 267,044 ,0
Receivables: t
O
Accounts - - - - - Q'
m
Interest 6,800 1,743 - 98 430 W
Special assessments - - - 52,331 - �a
Due from other governments - 640 - 459 -
Due from other funds 230,300 - - - - c
Advances to other funds 41,000 - - - - �-
Total assets $ 4,167,459 $ 357,245 $ - $ 59,462 $ 267,474
c
c
LIABILITIES,DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES U.
Liabilities: _
C'f Accounts payable $ 119,730 $ - $ - $ - $ 3,465 a(i
Accrued payroll and related liabilities - - - - -
Deposits - -
Retentions payable -
Advances from other funds - - - 147,200 -
cc
Total liabilities 119,730 - - 147,200 3,465 CD
et
Deferred inflows of resources: 0
O
Unavailable revenues 278,821 - 52,331 - C
Total deferred inflows of resources - 278,821 - 52,331
Is, -
M
.v
Fund Balances:
e�
Nonspendable 41,000 - - - -
Restricted 4,006,729 78,424 - - 264,009
Unassigned(deficit) - - - (140,069) -
Total fund balances 4,047,729 78,424 - (140,069) 264,009 LL
U)
Total liabilities,deferred inflows of c
resources and fund balances $ 4,167,459 $ 357,245 $ - $ 59,462 $ 267,474 N
r_
d
(Continued) E
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152 Packet Pg. 245
City of San Bernardino
Combining Balance Sheet(Continued)
Non-Major Governmental Funds
June 30, 2015
Capital Projects
LO
Fire Park Storm
Equipment Construction Cemetery Sewerline Drain c
Acquisition Fee Construction Construction Construction N
}
ASSETS u_
Cash and investments $ 48,828 $ 396,295 $ - $ 3,211,886 $ 3,557,261 0
Receivables: 0
0
Accounts - - - Q-
m
Interest 79 639 - 5,143 5,739 W
Special assessments - - - -
Due from other governments - - - -
Due from other funds - - - - c
Advances to other funds - - - 41,000 - E
Total assets $ 48,907 $ 396,934 $ - $ 3,258,029 $ 3,563,000 3
c
c
LIABILITIES,DEFERRED INFLOWS OF Q
m
RESOURCES AND FUND BALANCES LL
Liabilities:
Accounts payable $ - $ - $ - $ 14,704 $ 23,732
Accrued payroll and related liabilities - - - - 153 >
.O
14swo+' Deposits - - - -
Retentions payable 47,900 - - 12,804
Advances from other funds - - - -
Total liabilities - 47,900 - 14,704 36,689
Deferred inflows of resources: 0
O
Unavailable revenues - - - - - CL
CD
Total deferred inflows of resources - - -
.v
Fund Balances:
Nonspendable - - - 41,000 -
LL
Restricted 48,907 349,034 - 3,202,325 3,526,311
is
Unassigned(deficit) - - - - - _
Total fund balances 48,907 349,034 - 3,243,325 3,526,311 U.
u7
Total liabilities,deferred inflows of
resources and fund balances $ 48,907 $ 396,934 $ - $ 3,258,029 $ 3,563,000 N
:j
c
d
(Continued) E
ti
cC
.r
Q
153 Packet Pg. 246
.......
i
5.F.a
City of San Bernardino
Combining Balance Sheet(Continued)
Non-Major Governmental Funds
June 30, 2015
Capital Projects
Cultural
Development Assessment r'
Special Construction District Impact Street c
Assessments Fee #1015 Fees Construction N
ASSETS U-
L
Cash and investments $ 216,189 $ 2,797,142 $ - $ 14,055,097 $ 196,671 0
Receivables: 1�
Accounts - - - - 139,104 d
Interest 20 4,513 - 22,693 -
Special assessments - - - - -
Due from other governments 12,334 - - 261,160
Due from other funds - - - - - c
Advances to other funds - - - - - U_
Total assets $ 228,543 $ 2,801,655 $ - $ 14,338,950 $ 335,775
c
LIABILITIES,DEFERRED INFLOWS OF Q
m
RESOURCES AND FUND BALANCES
ii
Liabilities:
c
Accounts payable $ 114,782 $ 8,880 $ - $ 720,273 $ 257,335
Accrued payroll and related liabilities >
w Deposits 22,769 - - - - d
Retentions payable - - - - 7,537 W.
Advances from other funds - - - - -
cc
Total liabilities 137,551 8,880 - 720,273 264,872
Deferred inflows of resources:
O
Unavailable revenues - - - 261,160 42,351 m
Total deferred inflows of resources - - - 261,160 42,351
Fund Balances:
tv
Nonspendable - - - - -
Restricted 90,992 2,792,775 - 13,357,517 28,552 U-
R
Unassigned(deficit)
Total fund balances 90,992 2,792,775 - 13,357,517 28,552 U.
Total liabilities,deferred inflows of N
resources and fund balances $ 228,543 $ 2,801,655 $ - $ 14,338,950 $ 335,775
c
m
(Continued) s
v
R
ar
r.+
Q
154 Packet Pg. 247
5.F.a
City of San Bernardino
Combining Balance Sheet(Continued)
Non-Major Governmental Funds
June 30,2015
Capital Projects
Total i
Prop 1B Other 7
Public Local Governmental T_
Improvements Street Funds N
ASSETS �-
L
Cash and investments $ 1,103,290 $ 66,161 $ 39,757,856 0
Receivables:
Accounts - - 239,665 m
Interest 1,780 107 62,530 W
Special assessments - - 52,331 is
Due from other governments - - 343,902
Due from other funds - - 230,300
Advances to other funds - - 82,000 u.
Total assets $ 1,105,070 $ 66,268 $ 40,768,584
c
c
LIABILITIES,DEFERRED INFLOWS OF Q
a�
RESOURCES AND FUND BALANCES U_
Liabilities:
c
Accounts payable $ - $ 2,367 $ 2,290,650
Accrued payroll and related liabilities - - 1,571
Deposits - - 42,769
Retentions payable - 16,019 84,260
Advances from other funds - - 147,200
co
Total liabilities - 18,386 2,566,450
Deferred inflows of resources: t
Unavailable revenues - - 634,663 d
Total deferred inflows of resources - - 634,663
.v
Fund Balances:
ea
Nonspendable - - 82,000
Restricted 1,105,070 47,882 37,625,540 u_
Unassigned(deficit) - - (140,069)
Total fund balances 1,105,070 47,882 37,567,471 u_
LO
Total liabilities,deferred inflows of c
resources and fund balances $ 1,105,070 $ 66,268 $ 40,768,584 N
c
a�
(Concluded) E
U
a-+
Q
155 Packet Pg. 248
City of San Bernardino
Combining Statement of Revenues,Expenditures, and Changes in Fund Balances
Non-Major Governmental Funds
For the Year Ended June 30,2015
Special Revenue
r
Asset Alternative Special Traffic
V_
Cable TV Seizure Transportation Gas Tax Safety o
N
REVENUES:
LL
Taxes $ 265,329 $ - $ - $ - $ - p
w
Licenses and Permits - - - - -
Impact fees - - - - - 0 CL
Fines and forfeitures - - - - 363,341
Use of money and property 7,624 13,339 7,987 50,509 -
Intergovernmental - 476,895 265,618 5,322,606 27,962 -v
Charges for Services 120 - - - -
Other revenues 37,569 - - - - jL
Total revenues 310,642 490,234 273,605 5,373,115 391,303
4r
EXPENDITURES: Q
Current:
General government 270,404 - 65,997 - - U_
Public safety - 228,718 - -
166,816 �
C Streets - - 4,367,244 - y
Culture and recreation
Debt service: tY
Principal - - 4,339 3,615 -
Interest and fiscal charges - - - - - m
ti
Total expenditures 270,404 228,718 70,336 4,370,859 166,816
t
REVENUES OVER o
(UNDER)EXPENDITURES 40,238 261,516 203,269 1,002,256 224,487 W
OTHER FINANCING SOURCES(USES): ea
c
Transfers in
Transfers out - - - - - E
LL
Total other financing sources(uses) - - - -
LL
CHANGE IN FUND BALANCE 40,238 261,516 203,269 1,002,256 224,487 tr>
V_
0
N
FUND BALANCE:
Beginning of year 707,158 1,105,595 563,673 3,614,512 1,004,309 =
d
End of year $ 747,396 $ 1,367,111 $ 766,942 $ 4,616,768 $ 1,228,796
v
ec
(Continued) Q
156 Packet Pg. 249
5.F.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 30,2015
Special Revenue Debt Service Capital Projects
Assessment Assessment u7
T_
Sewerline Fire District District 4
V_
Maintenance Station #987 #1015 Verdemont o
N
REVENUES: LL LL
Taxes $ - $ 732,044 $ - $ 62,917 $ - p
4-
Licenses and Permits - - - - - r_
Impact fees - - - - 0 CL
Fines and forfeitures - - - a)
Use of money and property 47,332 9,497 - 557 2,715
Intergovernmental - - - - -
Charges for Services 3,080,742 - - 33,011
C
Otherrevenues - - - - -
U.
Total revenues 3,128,074 741,541 63,474 35,726 7v
c
c
EXPENDITURES: Q
Current:
General government
Public safety - 725,800 - - -
ca
Streets 2,045,537 - 6,725 10,882 20,965 m
Culture and recreation - - - -
v
Debt service: d
Principal 61,463 - - - -
Interest and fiscal charges - - - 15,864 - to
ti
Total expenditures 2,107,000 725,800 6,725 26,746 20,965
REVENUES OVER o
CL
(UNDER)EXPENDITURES 1,021,074 15,741 (6,725) 36,728 14,761
OTHER FINANCING SOURCES(USES):
Transfers in - - - 34,065 -
Transfers out (700,000) - - - -
U.
Total other financing sources(uses) (700,000) - - 34,065 - _C;
C
LL
CHANGES IN FUND BALANCES 321,074 15,741 (6,725) 70,793 14,761 ,n
0
N
FUND BALANCES:
Beginning of year 3,726,655 62,683 6,725 (210,862) 249,248 d
End of year $ 4,047,729 $ 78,424 $ - $ (140,069) $ 264,009 s
v
(Continued) Q
157 Packet Pg. 250
5.F.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 30,2015
n.
Capital Projects
Fire Park Storm `n
Equipment Construction Cemetery Sewerline Drain
Acquisition Fee Construction Construction Construction N
REVENUES: >_
LL
Taxes $ - $ - $ - $ - $ - O
`0
Licenses and Permits - - - - - t
Impact fees - - - - - 0 CL
Fines and forfeitures - - - - - d
Use of money and property 473 3,068 - 36,488 35,572
is
Intergovernmental - 223,841 - - -
Charges for Services - - - 422,848 368,374
c
Other revenues - - - - -
LL
Total revenues 473 226,909 - 459,336 403,946 E
c
c
EXPENDITURES: Q
Current:
General government - - - - -
Public safety - - - - -
'C Streets - 253 - 19,479 162,137 >
' Culture and recreation - - - - -
Debt service: aa)
Principal - - - 1,446 4,339 W
Interest and fiscal charges - - - - - ca
ti
Total expenditures - 253 - 20,925 166,476
REVENUES OVER O
(UNDER)EXPENDITURES 473 226,656 - 438,411 237,470
OTHER FINANCING SOURCES(USES):
cs
c
Transfers in
Transfers out - - (53,520) - - U_
Total other financing sources(uses) - - (53,520) - - is
7
C
CHANGES IN FUND BALANCES 473 226,656 (53,520) 438,411 237,470
0
N
FUND BALANCES:
Beginning of year 48,434 122,378 53,520 2,804,914 3,288,841
d
End of year $ 48,907 $ 349,034 $ - $ 3,243,325 $ 3,526,311
O
(Continued) Q
158 Packet Pg. 251
5.F.a
City of San Bernardino
Combining Statement of Revenues,Expenditures, and Changes in Fund Balances (Continued)
-Major Governmental Funds C.....�Non
or the Year Ended June 30,2015
Capital Projects
Cultural
r..
Development Assessment
Special Construction District Impact Street 4
V-
Assessments Fee #1015 Fees Construction c
N
REVENUES: r
U-
Taxes $ 1,160,124 $ - $ - $ - $ - `p
v-
Licenses and Permits - 1,003,838 - - -
Impact fees - - - 2,915,704 - 0 CL
Fines and forfeitures - - - W
tY
Use of money and property - 28,426 - 148,812
Intergovernmental - - - - 779,580
Charges for Services - - - - - _
Other revenues - - - - U.
Total revenues 1,160,124 1,032,264 3,064,516 779,580 m
c
EXPENDITURES: Q
Current:
It General government - 15,612 - - - LL
Public safety - - - - - M
Streets 1,112,074 853,531 303,512 0
Culture and recreation 25,612 - - - -
U
Debt service:
Principal 47,001 - - 96,357 723
Interest and fiscal charges - - - 59,373 - n
Total expenditures 1,184,687 15,612 - 1,009,261 304,235
REVENUES OVER o
CL
(UNDER)EXPENDITURES (24,563) 1,016,652 - 2,055,255 475,345
OTHER FINANCING SOURCES(USES):
U
Transfers in 40,000 - - - -
Transfers out - - (34,065) u„
Total other financing sources(uses) 40,000 - (34,065) - -
LL
CHANGES IN FUND BALANCES 15,437 1,016,652 (34,065) 2,055,255 475,345
r
O
N
FUND BALANCES:
Beginning of year 75,555 1,776,123 34,065 11,302,262 (446,793)
End of year $ 90,992 $ 2,792,775 $ - $ 13,357,517 $ 28,552
U
�S
(Continued) Q
159 Packet Pg. 252
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, 2015
Capital Projects
Total
r
Prop 113 Other U0
Public Local Governmental
Improvements Street Funds c
N
REVENUES: >_
U_
Taxes $ - $ - $ 2,220,414 0
Licenses and Permits - - 1,003,838
Impact fees - - 2,915,704 CL
Fines and forfeitures - - 363,341 a)
Use of money and property 11,249 715 404,363
Intergovernmental - -
7,096,502 'Zj
Charges for Services - - 3,905,095
Other revenues - - 37 569 jy
Total revenues 11,249 715 17,946,826 3
c
`t EXPENDITURES: Q
Current:
General government - - 352,013 U_
Public safety 1,121,334
Streets - 430 8,902,769 d
Culture and recreation - - 25,612
U
Debt service: a)
Principal - 3,615 222,898
Interest and fiscal charges - - 75,237 to
r-
Total expenditures - 4,045 10,699,863 �6
REVENUES OVER o
0.
(UNDER)EXPENDITURES 11,249 (3,330) 7,246,963
OTHER FINANCING SOURCES(USES): R
.v
Transfers in - - 74,065 om
Transfers out - - (787,585) E
U_
Total other financing sources(uses) - - (713,520)
U.
CHANGE IN FUND BALANCE 11,249 (3,330) 6,533,443
r
0
N
FUND BALANCE:
Beginning of year 1,093,821 51,212 31,034,028 0
End of year $ 1,105,070 $ 47,882 $ 37,567,471
v
R
w
(Concluded) Q
60 Packet Pg. 253
5.F.a
INTERNAL SERVICE FUNDS
Internal Service Funds are used to finance and account for special activities and services performed by a designated
City department for other departments on a cost reimbursement basis. The City maintains the following Internal Service
Funds for the purposes indicated:
0
N
Unemployment Insurance Fund -This fund is used for administration of unemployment insurance claims paid to
U.
the Employment Development Department of the State of California. L.
0
Workers'Compensation Fund -This fund is for administration of the City's self-insurance for workers' m
compensation.
c
Liability Insurance Fund -This fund is for the administration of the City's liability claims, combined self- c
insurance and umbrella coverage for liability.
�a
c
Motorpool Fund -This fund is used to account for the maintenance and operating costs for the City's fleet of Q
vehicles. m
U-
c
Telephone Support Fund -This fund is used to account for the operating cost and acquisition of the City's
10 telephone communications systems. •��—,
U
d
D:
Information Systems Fund -This fund is used to account for the acquisition and maintenance of the City's
cc
computer and emergency communications systems.
Utility Fund -This fund is used to account for the control and allocation of the City's utility costs. o
a
m
Central Services Fund -This fund is used to account for the provision of printing, duplication, and postal services �n
and operations of City Stores for supply costs.
U-
S
LL
to
r
O
N
C
d
E
V
R
V
Q
1 6 1 Packet Pg. 254
5.F.a
City of San Bernardino
Combining Statement of Net Position
All Internal Service Funds
0___________Lune30,2015
Unemployment Workers' Liability Telephone
Insurance Compensation Insurance Motorpool Support
ASSETS
Current assets:
Cash and investments $ 46,805 $ 107,962 $ 4,626,886 $ 545,145 $ 801,617 4
Accounts receivable - - - - 1,025 N
Inventories - - - 267,167 - �
Total current assets 46,805 107,962 4,626,886 812,312 802,642 LL
O
Noncurrent assets:
Capital assets,net - - - 45,764 - 0
Total noncurrent assets - - - 45,764 - O
Total assets 46,805 107,962 4,626,886 858,076 802,642
.v
c
DEFERRED OUTFLOWS OF RESOURCES M
c
Pension contributions made after measurement date - 12,148 11,144 165,989 25,108 LL
Ta
Total deferred outflows of resources - 12,148 11,144 165,989 25,108 c
c
LIABILITIES Q
d
Current liabilities: U.
Accounts payable 38,912 9,998 37,958 356,956 103,273 c
Payroll and related liabilities - - 288 - - M
Due to other funds - - - = 88,000 >
Unearned revenue 459,954 U
Long-term debt-due within one year -
Compensated absences-due within one year - 18,000 14,000 42,000 4,000
to
Claims payable-due within one year - 5,571,121 182,822 - - 1-
Total current liabilities 38,912 6,059,073 235,068 398,956 195,273
Noncurrent liabilities: 0 CL
Long-term debt-due in more than one year - - - - -
Aggregate net pension liablity - 168,122 154,226 2,297,252 347,488
Compensated absences-due in more than one year - 12,221 9,931 87,487 6,797 1
Claims payable-due in more than one year - 24,085,897 14,269,335 - -
Total noncurrent liabilities - 24,266,240 14,433,492 2,384,739 354,285
ii
Total liabilities 38,912 30,325,313 14,668,560 2,783,695 549,558
LL
DEFERRED INFLOWS OF RESOURCES U')
Actual earnings in excess of projected earnings c
N
on pension plan investments - 39,641 36,364 541,655 81,932
c
Total deferred inflows of resources - 39,641 36,364 541,655 81,932 d
E
NET POSITION
Net investment in capital assets - - - 45,764 - Q
Unrestricted(deficit) 7,893 (30,244,844) (10,066,894) (2,347,049) 196,260
Total net position $ 7,893 $ (30,244,844) $(10,066,894) $ (2,301,285) $ 196,260
(Continued)
162 Packet Pg. 255
5.F.a
City of San Bernardino
Combining Statement of Net Position (Continued)
All Internal Service Funds
June 30,2015
Information Central
Systems Utility Services Total
ASSETS
Current assets:
Cash and investments $ 540,523 $ 1,065,485 $ 5,915 $ 7,740,338 e`t
Accounts receivable - - 380 1,405 N
Inventories - - - 267,167 },
LL
Total current assets 540,523 1,065,485 6,295 8,008,910
0
Noncurrent assets: t
Capital assets,net 3,650,571 1,921 - 3,698,256 0 CL
Total noncurrent assets 3,650,571 1,921 - 3,698,256 m
Total assets 4,191,094 1,067,406 6,295 11,707,166 R
.v
c
DEFERRED OUTFLOWS OF RESOURCES
c
Pension contributions made after measurement date 165,649 - 6,537 386,575 U-
R
Total deferred outflows of resources 165,649 - 6,537 386,575 c
c
LIABILITIES Q
d
Current liabilities: U.
Accounts payable 224,275 1,035,044 3,188 1,809,604 c
Payroll and related liabilities - - - 288 M
Due to other funds 76,200 - - 164,200 >
Unearned revenue - - - 459,954 d
Long-term debt-due within one year 559,364 71,053 - 630,417
Compensated absences-due within one year 78,000 2,200 1,500 159,700
cfl
Claims payable-due within one year - - - 5,753,943
Total current liabilities 937,839 1,108,297 4,688 8,978,106
Noncurrent liabilities: 0
Long-term debt-due in more than one year 2,403,848 353,799 - 2,757,647 m
Aggregate net pension liability 2,292,541 - 90,466 5,350,095
Compensated absences-due in more than one year 196,481 3,176 2,735 318,828
Claims payable-due in more than one year - - - 38,355,232
Total noncurrent liabilities 4,892,870 356,975 93,201 46,781,802
ii
Total liabilities 5,830,709 1,465,272 97,889 55,759,908
U_
DEFERRED INFLOWS OF RESOURCES to
Actual earnings in excess of projected earnings
540,545 - 21331 1261,468 N
on pension plan investments ;.�
c
Total deferred inflows of resources 540,545 - 21,331 1,261,468
E
t
NET POSITION v
to
Net investment in capital assets 687,359 1,921 - 735,044 Q
Unrestricted(deficit) (2,701,870) (399,787) (106,388) (45,662,679)
Total net position $ (2,014,511) $ (397,866) $ (106,388) $ (44,927,635)
(Concluded)
163 Packet Pg. 256
City of San Bernardino
Combining Statement of Revenues,Expenses, and Changes in Net Position
All Internal Service Funds
For the Year Ended June 30, 2015
Unemployment Workers' Liability Telephone
Insurance Compensation Insurance Motorpool Support u�
OPERATING REVENUES:
P
Q
Charges for services 229,226 4,983,194 2,570,635 4,573,267 987,762 N
Total operating revenues 229,226 4,983,194 2,570,635 4,573,267 987,762
O
v-
OPERATING EXPENSES: Q
Cost of sales and services 3,825 1,048,911 193,541 5,275,499 987,339 m
w
Claims expense 217,508 13,956,479 2,708,850 - -
Amortization - - - - - U_
Depreciation - - - 61,909 80,043
Total operating expenses 221,333 15,005,390 2,902,391 5,337,408 1,067,382
c
Operating income(loss) 7,893 (10,022,196) (331,756) (764,141) (79,620) _
Q
a>
NONOPERATING REVENUES(EXPENSES): LL
Interest income - - (9,702) (1,189) (1,644)
r -iterest expense - - - - -
✓Iiscellaneous income - - - 693,086 2,311 v
Total nonoperating revenues(expenses) - - (9,702) 691,897 667 w
cry
Income(loss)before transfers 7,893 (10,022,196) (341,458) (72,244) (78,953)
Changes in net position 7,893 (10,022,196) (341,458) (72,244) (78,953) o
CL
m
NET POSITION:
�a
Beginning of year,as restated(Note 23) - (20,222,648) (9,725,436) (2,229,041) 275,213
End of year $ 7,893 $ (30,244,844) $ (10,066,894) $ (2,301,285) $ 196,260 c
LL
(Continued)
U-
LO
0
N
Y
Q�
E
U
f4
Q
164 Packet Pg. 257
City of San Bernardino
Combining Statement of Revenues,Expenses, and Changes in Net Position (Continued)
All Internal Service Funds
For the Year Ended June 30,2015
Information Central
Systems Utility Services Total u>
OPERATING REVENUES:
0
Charges for services 2,441,758 5,040,073 117,498 20,943,413 N
Total operating revenues 2,441,758 5,040,073 117,498 20,943,413 Z
O
OPERATING EXPENSES: o
M
Cost of sales and services 2,667,431 5,150,581 116,541 15,443,668 m
w
Claims expense - - - 16,882,837
Amortization 594,633 - - 594,633 v
c
Depreciation 111,314 6,428 - 259,694 =
Total operating expenses 3,373,378 5,157,009 116,541 33,180,832 LL
c
Operating income(loss) (931,620) (116,936) 957 (12,237,419)
Q
d
NONOPERATING REVENUES(EXPENSES): u-
Interest income (3,239) - - (15,774)
iterest expense (101,348) - - (101,348)
Jain(loss)on disposal of capital assets (3,607) - - 691,790 v
Total nonoperating revenues(expenses) (108,194) - - 574,668 w
co
Income(loss)before transfers (1,039,814) (116,936) 957 (11,662,751)
Changes in net position (1,039,814) (116,936) 957 (11,662,751)
CL
CD
NET POSITION:
is
Beginning of year,as restated(Note 23) (974,697) (280,930) (107,345) (33,264,884)
End of year $ (2,014,511) $ (397,866) $ (106,388) $ (44,927,635) _
LL
(Concluded) _
LL
u7
r
O
N
G
d
E
t
V
R
Q
165 Packet Pg. 258
City of San Bernardino
Combining Statement of Cash Flows
All Internal Service Funds
For the Year Ended June 30,2015
Unemployment Workers' Liability Telephone
Insurance Compensation Insurance Motorpool Support i
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from user departments $ 229,226 $ 6,428,733 $ 2,570,635 $ 4,573,267 $ 987,483 N
Cash payments to suppliers and employees U.U.
for goods and services (41,874) (1,101,486) (203,909) (5,369,670) (964,722) w
Cash payments for claims and insurance (217,508) (5,219,285) (2,209,363) - -
Cash received from(paid for)other activities - - - 693,086 2,311 Q
a�
Net cash provided by(used in)
operating activities (30,156) 107,962 157,363 (103,317) 25,072 �a
U
Rf
CASH FLOWS FROM CAPITAL AND
U-
RELATED FINANCING ACTIVITIES:
Principal payments on long term debt - - - - -
Acquisition of capital assets
Interest paid
Net cash provided by(used in)capital and
related financing activities - - - - -
am
Net change in cash and cash equivalents (30,156) 107,962 157,363 (103,317) 25,072 U
CASH AND CASH EQUIVALENTS:
cct
Beginning of year 76,961 - 4,469,523 648,462 776,545
End of year $ 46,805 $ 107,962 $ 4,626,886 $ 545,145 $ 801,617
O
(Continued) Q-
c
LL
U.
LO
0
N
i-+
U
E
S
U
cC
Q
166 Packet Pg. 259
5.F.a
City of San Bernardino
Combining Statement of Cash Flows (Continued)
All Internal Service Funds
For the Year Ended June 30, 2015
Information Central
Systems Utility Services Total in
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from user departments $ 2,445,498 $ 5,040,073 $ 117,135 $ 22,392,050 N
Cash payments to suppliers and employees U-
for goods and services (2,722,678) (5,714,323) (119,922) (16,238,584)
Cash payments for claims and insurance - - - (7,646,156)
Cash received from(paid for)other activities (3,607) - - 691,790 0 C
m L
Net cash provided by(used in)
operating activities (280,787) (674,250) (2,787) (800,900) R
.v
c
CASH FLOWS FROM CAPITAL AND
U.
RELATED FINANCING ACTIVITIES:
ea
Principal payments on long term debt (543,651) - - (543,651)
c
Acquisition of capital assets (103,545) 110,764 - 7,219
Q
Interest paid (101,348) - - (101,348) as
Net cash provided by(used in)capital and U"
related financing activities (748,544) 110,764 - (637,780) r-
m
Net change in cash and cash equivalents (1,029,331) (563,486) (2,787) (1,438,680)
U
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CASH AND CASH EQUIVALENTS:
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Beginning of year 1,569,854 1,628,971 8,702 9,179,018
End of year $ 540,523 $ 1,065,485 $ 5,915 $ 7,740,338
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67 Packet Pg. 260
City of San Bernardino
Combining Statement of Cash Flows (Continued)
All Internal Service Funds
For the Year Ended June 30,2015
Unemployment Workers' Liability Telephone
Insurance Compensation Insurance Motorpool Support �n
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RECONCILIATION OF OPERATING INCOME
TO NET CASH PROVIDED BY(USED IN) N
OPERATING ACTIVITIES: }
LL
Operating income(loss) $ 7,893 $ (10,022,196) $ (331,756) $ (764,141) $ (79,620) O
v-
Adjustments to reconcile operating income(loss)to
net cash provided by(used in)operating activities: Q.
Depreciation - - - 61,909 80,043
Amortization - - - - - iC
Other non-operating revenues - - - 693,086 2,311
Changes in operating assets and liabilities:
Accounts receivable - 1,146,929 - - 54 U.
Inventories - - - (17,251) -
Deferred pension contributions - (12,148) (11,144) (165,989) (25,108) c
Accounts payable (38,049) (6,645) 20,909 44,523 40,188 Q
as
Payroll and related liabilities - - 288 - - W
Due to other funds - (14,018) - - - V
Unearned revenue - 312,628 - - (333)
Aggregate net pension liability - (45,706) (35,348) (489,843) (73,833)
Compensated absences - (27,717) (21,437) (7,266) (562)
v
Claims and judgments payable - 8,737,194 499,487 - -
Investment earnings greater than
expected earnings - 39,641 36,364 541,655 81,932
Total adjustments (38,049) 10,130,158 489,119 660,824 104,692
L
Net cash provided by(used in) a
0.
operating activities $ (30,156) $ 107,962 $ 157,363 $ (103,317) $ 25,072
(Continued) v
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168 Packet Pg. 261
5.F.a
City of San Bernardino
Combining Statement of Cash Flows (Continued)
All Internal Service Funds
For the Year Ended June 30,2015
Information Central
Systems Utility Services Total
RECONCILIATION OF OPERATING INCOME
r
TO NET CASH PROVIDED BY(USED IN) N
OPERATING ACTIVITIES: >_
LL
Operating income(loss) $ (931,620) $ (116,936) $ 957 $(12,237,419) C
Adjustments to reconcile operating income(loss)to
net cash provided by(used in)operating activities: Q,
Depreciation 111,314 6,428 - 259,694
Amortization 594,633 - - 594,633
Other non-operating revenues (3,607) - - 691,790 c
Changes in operating assets and liabilities:
Accounts receivable 27,073 - (363) 1,173,693 U.
Inventories - - - (17,251)
Deferred pension contributions (165,649) - (6,537) (386,575)
c
Accounts payable 40,384 (558,269) 1,191 (455,768) Q
Payroll and related liabilities - - - 288 LL
Due to other funds - - - (14,018)
Unearned revenue (23,333) - - 288,962 M
Aggregate net pension liability (486,137) (3,615) (19,260) (1,153,742)
Compensated absences 15,610 (1,858) (106) (43,336) v
Claims and judgments payable - - - 9,236,681 W
Investment earnings greater than to
expected earnings 540,545 - 21,331 1,261,468 �
Total adjustments 650,833 (557,314) (3,744) 11,436,519
L.
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Net cash provided by(used in) 0
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operating activities $ (280,787) $ (674,250) $ (2,787) $ (800,900)
(Concluded) v
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169 Packet Pg. 262
5.�.a
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170 Packet Pg. 263
5.F.a
FIDUCIARY FUNDS
AGENCY FUNDS
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 Ln
indicated:
0
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Assessment District #961 - This fund is used to account for the collection of assessments from property owners o
and for the remittance of such assessments to bondholders as required by the Improvement Bond Act of 1915 and It
related California State statutes for this district. °CL
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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 u-
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 n-
and for the remittance of such assessments to bondholders as required by the Improvement Bond Act of 1915 and
related California State statutes for this district.
U
Assessment District #1003 - 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.
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Special Deposits -This fund accounts for all deposits made by developers, other government agencies or others for
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 =_
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owned and operated Cemetery.
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San Bernardino Water Resource Authority - This fund accounts for the collection and disposition of funds
received for the San Bernardino Regional Water Resource Authority. N
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171 Packet Pg. 264
S.F.a
City of San Bernardino
Combining Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2015
Assessment Assessment Assessment Assessment
District District District District Special eF
r
4961 #977A #97713 41003 Deposits o
N
ASSETS LL
L
Cash and investments $ 370,055 $ 63,124 $ 26,751 $ 57,758 $ 4,616,727 0
Accounts receivable - - - - 1,989 V
O
Due from other governments - - - - 16,050 CD
Total assets $ 370,055 $ 63,124 $ 26,751 $ 57,758 $ 4,634,766
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LIABILITIES =
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Accounts payable $ - $ - $ - $ - $ 183,103
Retention payable - - 98,151
Due to other governments - - - - 276,397
4
Deposits payable - - - - 4,077,115 a>
Due to bondholders 370,055 63,124 26,751 57,758 -
Total liabilities $ 370,055 $ 63,124 $ 26,751 $ 57,758 $ 4,634,766
m
(Continued)
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172 Packet Pg.265
City of San Bernardino
Combining Statement of Fiduciary Assets and Liabilities (Continued)
Agency Funds
June 30, 2015
San Bernardino
Regional
Cemetery Water
Perpetual Resource
Care Authority Total o
N
ASSETS LL
Cash and investments $ 659,796 $ 73,021 $ 5,867,232 ,Q
Accounts receivable - - 1,989
O
Due from other governments - - 16,050
Total assets $ 659,796 $ 73,021 $ 5,885,271
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LIABILITIES c
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Accounts payable $ - $ - $ 183,103
Retention payable - - 98,151
Due to other governments - 276,397
Q
Deposits payable 659,796 73,021 4,809,932 m
Due to bondholders - - 517,688
Total liabilities $ 659,796 $ 73,021 $ 5,885,271
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173 Packet Pg.266'
5.F.a
City of San Bernardino
Combining Statement of Changes in Fiduciary Assets and Liabilities
Agency Funds
For Year Ended June 30, 2015
Balance Balance
July 1,2014 Additions Deletions June 30,2015
u�
Assessment District#961 r
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Assets: o
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Cash and investments $ 370,055 $ - $ $ 370,055 }.
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Total assets $ 370,055 $ - $ $ 370,055 �-
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Liabilities: '-
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Due to bondholders $ 370,055 $ - $ - $ 370,055 CL
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Total liabilities $ 370,055 $ - $ $ 370,055
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Assessment District#977A
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Assets:
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Cash and investments $ 63,124 $ - $ - $ 63,124 c
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Total assets $ 63,124 $ - $ - $ 63,124 Q
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Liabilities: LL
Due to bondholders $ 63,124 $ - $ $ 63,124 r-
Total liabilities $ 63,124 $ - $ $ 63,124 w
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Assessment District#9771
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Assets: r-
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Cash and investments $ 26,751 $ - $ - $ 26,751 y
Total assets $ 26,751 $ - $ - $ 26,751 0
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Liabilities:
Due to bondholders $ 26,751 $ - $ - $ 26,751 is
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Total liabilities $ 26,751 $ - $ - $ 26,751 =
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Assessment District#1003 C
Assets: LL
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Cash and investments $ 57,758 $ - $ - $ 57,758 p
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Total assets $ 57,758 $ - $ - $ 57,758 c
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Liabilities: E
Due to bondholders $ 57,758 $ - $ - $ 57,758 0
Total liabilities $ 57,758 $ - $ $ 57,758 Q
174 Packet Pg. 267
S.F.a
City of San Bernardino
Combining Statement of Changes in Fiduciary Assets and Liabilities (Continued)
Agency Funds
For Year Ended June 30,2015
Balance Balance
July 1,2014 Additions Deletions June 30,2015
to
Special Deposits
Assets: o
N
Cash and investments $ 3,845,930 $ 770,797 $ - $ 4,616,727 >.
Accounts receivable 98 1,891 - 1,989 LL
0
Due from other governments 44,796 - (28,746) 16,050
Total assets $ 3,890,824 $ 772,688 $ (28,746) $ 4,634,766 M
CD
Liabilities:
is
Accounts payable $ 152,150 $ 30,953 $ - $ 183,103 v
C
Retention payable - 98,151 - 98,151 M
Due to other governments 276,397 - - 276,397 u.
Deposits payable 3,462,277 614,838 - 4,077,115
c
Total liabilities $ 3,890,824 $ 743,942 $ - $ 4,634,766
LL
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Cemetery Perpetual Care
Assets: SII
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Cash and investments $ 659,756 $ 40 $ 659,796
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Total assets $ 659,756 $ 40 $ $ 659,796 tY
Liabilities:
Deposits payable $ 659,756 $ 40 $ - $ 659,796
Total liabilities $ 659,756 $ 40 $ - $ 659,796
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San Bernardino Regional Water Resource Authority w
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Assets: U
Cash and investments $ 73,416 $ - $ (395) $ 73,021
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Total assets $ 73,416 $ - $ (395) $ 73,021 U-
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Liabilities: S
LL
Deposits payable $ 73,416 $ - $ (395) $ 73,021 un
Total liabilities $ 73,416 $ - $ (395) $ 73,021 N
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175 Packet Pg. 268
5.F.a
City of San Bernardino
Combining Statement of Changes in Fiduciary Assets and Liabilities (Continued)
Agency Funds
For Year Ended June 30,2015
Balance Balance
July 1,2014 Additions Deletions June 30,2015
Total All A$ency Funds r'
Assets: o
N
Cash and investments $ 5,096,790 $ 770,837 $ (395) $ 5,867,232 �.
Accounts receivable 98 1,891 - 1,989 L
O
Due from other governments 44,796 - (28,746) 16,050
Total assets $ 5,141,684 $ 772,728 $ (29,141) $ 5,885,271 Q,
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Liabilities:
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Accounts payable $ 152,150 $ 30,953 $ - $ 183,103 U
c
Retention payable - 98,151 - 98,151 M
c
Due to other governments 276,397 - - 276,397 LL
Deposits payable 4,195,449 614,878 (395) 4,809,932
Due to bondholders 5179688 - - 517,688 Q
Total liabilities $ 5,141,684 $ 743,982 $ (395) $ 5,885,271 2
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