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HomeMy WebLinkAbout2017-03-15 e-packet@11:00Wednesday, March 15, 2017 11:00 AM City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA City Hall, City Manager's Conference Room 400 Grand Avenue, South San Francisco, CA Measure W Subcommittee Special Meeting Agenda March 15, 2017Measure W Subcommittee Special Meeting Agenda NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, the Measure W Subcommittee of the City of South San Francisco will hold a Special Meeting on Wednesday, March 15, 2017, at 11:00 a.m., at the City Hall, City Manager's Conference Room, 400 Grand Avenue, South San Francisco, California. Purpose of the meeting: Call To Order. Roll Call. Public Comments. MATTERS FOR CONSIDERATION Report regarding Measure W Citizens’ Oversight Committee memorandum independently confirming Fiscal Year 2015-16 Measure W Revenues and Expenditures (Richard Lee, Director of Finance) 1. Report regarding Measure W Community Civic Campus delivery option recommendation. (Marian Lee, Assistant City Manager and Dolores Montenegro, Kitchell Program Manager) 2. Adjournment. Page 2 City of South San Francisco Printed on 3/16/2017 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:17-275 Agenda Date:3/15/2017 Version:1 Item #:1. Report regarding Measure W Citizens’Oversight Committee memorandum independently confirming Fiscal Year 2015-16 Measure W Revenues and Expenditures (Richard Lee, Director of Finance) RECOMMENDATION No formal action is needed.Staff requests that the Measure W Subcommittee provide direction regarding presentation of the Measure W Citizens’Oversight Committee memorandum independently confirming Fiscal Year 2015-16 Measure W Revenues and Expenditures to the City Council. BACKGROUND/DISCUSSION The Fiscal Year (FY)2015-16 Comprehensive Annual Financial Report (CAFR)was presented to and accepted by the Measure W Citizens’Oversight Committee (COC)on December 7,2016.The COC’s action was memorialized by Chair Brosnan via Attachment 2 dated January 10, 2017, in accordance with the COC bylaws. The COC memorandum was transmitted to the City Council through the City Manager’s Office on February 8, 2017.A summary of all FY 2015-16 Measure W documents that were presented to the COC is enclosed as Attachment 1, and all COC FY 2015-16 financial reports are enclosed via Attachments 3 through 10. The FY 2015-16 CAFR was presented to and accepted by the City Council on January 11, 2017. As the COC meetings have progressed,the committee expressed interest in receiving more detailed information,including copies of invoices and remittance notices from the State Board of Equalization,to support the financial reports that were being presented.The COC is a standing committee,thus all of its agenda items are available for review on the City’s website. Below are staff’s recommendations to ensure the Measure W review process is as transparent and streamlined as possible: ·On a bi-monthly basis,make available hard copies of COC meeting materials and leave in the City Council office for review by City Council members; ·On a quarterly basis,provide project quarterly updates (by project teams)to both City Council and the COC which would include quarterly financial and contract information; ·On an annual basis,request that the COC Chair present the annual audit memorandum to the City Council with summary information of what was reviewed by the COC as well as attachments of materials reviewed. CONCLUSION The procedural changes above will serve to enhance the Measure W review process and further assure the South San Francisco community that Measure W funds are received and spent appropriately. Attachments: City of South San Francisco Printed on 3/9/2017Page 1 of 2 powered by Legistar™ File #:17-275 Agenda Date:3/15/2017 Version:1 Item #:1. 1.Measure W Citizens’ Oversight Committee FY 2015-16 memorandum; 2.Summary of FY 2015-16 Financial Reports; 3.Staff report from October 19, 2016; 4.Measure W FY 2015-16 Income Statement from October 19, 2016; 5.Measure W FY 2015-16 Revenue Detail Report from October 19, 2016; 6.Measure W FY 2015-16 Expenditure Detail Report from October 19, 2016; 7.PowerPoint Presentation from October 19, 2016 8.Audit Overview from Maze & Associates from October 19, 2016; 9.Staff Report from December 7, 2016; 10.FY 2015-16 Comprehensive Annual Financial Report City of South San Francisco Printed on 3/9/2017Page 2 of 2 powered by Legistar™ Attachment 1 Summary of Fiscal Year (FY) 2015-16 Measure W Documents Measure W Citizens' Oversight Committee Attachment Number Description 3 Staff Report from 10/19/2016 4 Measure W FY 2015-16 Income Statement from 10/19/2016 5 Measure W FY 2015-16 Revenue Detail Report from 10/19/2016 6 Measure W FY 2015-16 Expenditure Detail Report from 10/19/2016 7 PowerPoint Presentation from 10/19/2016 8 Audit Overview from Maze & Associates from 10/19/2016 9 Staff Report from 12/07/2016 10 FY 2015-16 Comprehensive Annual Financial Report (CAFR) City of South San Francisco California Comprehensive Annual Financial Report Year Ended June 30, 2016 CITY OF SOUTH SAN FRANCISCO, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2016 This Page Left Intentionally Blank CITY OF SOUTH SAN FRANCISCO, CALIFORNIA Comprehensive Annual Financial Report For the Year Ended June 30, 2016 Table of Contents Page INTRODUCTORY SECTION Table of Contents ............................................................................................................................................... i Letter of Transmittal ......................................................................................................................................... v Certificate of Achievement for Excellence in Financial Reporting ................................................................ ix Organization Chart ............................................................................................................................................ x City Council and Directory of City Officials .................................................................................................. xi FINANCIAL SECTION Independent Auditor's Report ...................................................................................................................... 1 Management’s Discussion and Analysis ....................................................................................................... 5 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position .................................................................................................................. 29 Statement of Activities ...................................................................................................................... 30 Fund Financial Statements: Major Governmental Funds: Balance Sheet ................................................................................................................................ 34 Reconciliation of Governmental Fund Balances to Net Position of Governmental Activities .... 36 Statement of Revenues, Expenditures, and Changes in Fund Balances ....................................... 38 Reconciliation of the Net Change in Fund Balances Total Governmental Funds with the Statement of Activities ........................................................................................................ 40 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Budgetary Basis: General Fund ....................................................................................................................... 41 Low and Moderate Income Housing Assets ....................................................................... 42 i CITY OF SOUTH SAN FRANCISCO, CALIFORNIA Comprehensive Annual Financial Report For the Year Ended June 30, 2016 Table of Contents Page FINANCIAL SECTION (Continued) Major Proprietary Funds: Statement of Net Position .............................................................................................................. 44 Statement of Revenues, Expenses, and Changes in Fund Net Position ........................................ 45 Statement of Cash Flows ............................................................................................................... 46 Fiduciary Funds: Statement of Fiduciary Net Position ............................................................................................. 48 Statement of Changes in Fiduciary Net Position .......................................................................... 49 Notes to Basic Financial Statements ...................................................................................................... 51 Required Supplementary Information: Schedule of Changes in Net Position Liability and Related Ratios- Miscellaneous and Safety Plan .......................................................................................... 100 Schedule of Contributions – Miscellaneous and Safety Plan ...................................................... 101 Schedule of Changes in Net Pension Liability and Related Ratios ............................................. 102 Schedule of Contributions – Safety Agent .................................................................................. 103 Other Post-Employment Benefits Schedule of Funding Progress .............................................. 104 Supplementary Information: General Fund: Combining Balance Sheet ............................................................................................................... 108 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances ..................................................................................................................... 109 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual - (Non GAPP Legal Basis) .......................................... 110 Major Governmental Funds Other Than the General Fund and Special Revenue Funds: Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual: Capital Improvement Capital Projects Fund (Non GAAP Legal Basis) .................................... 114 East of 101 Sewer Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ................ 115 East of 101 Traffic Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ............... 116 Child Care Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ............................ 117 Developer Deposits Capital Projects Fund (Non GAAP Legal Basis) .................................. 118 Capital Infrastructure Reserve Fund (Non GAAP Legal Basis) ............................................ 119 ii CITY OF SOUTH SAN FRANCISCO, CALIFORNIA Comprehensive Annual Financial Report For the Year Ended June 30, 2016 Table of Contents Page FINANCIAL SECTION (Continued) Non-major Governmental Funds: Combining Balance Sheet ............................................................................................................... 124 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ..................................................................................................................... 128 Budgeted Non-major Government Funds: Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual ................................................................................... 132 Internal Service Funds: Combining Statement of Net Position ............................................................................................ 140 Combining Statement of Revenues, Expenses and Changes in Fund Net Position ....................... 141 Combining Statement of Cash Flows ............................................................................................. 142 Fiduciary Funds: Statement of Changes in Assets and Liabilities – Agency Fund .................................................. 144 STATISTICAL SECTION Net Position by Component – Last Ten Fiscal Years .................................................................... 147 Changes in Net Position - Last Ten Fiscal Years ........................................................................... 148 Fund Balances of Governmental Funds - Last Ten Fiscal Years ................................................... 150 Changes in Fund Balance of Governmental Funds – Last Ten Fiscal Years ................................ 152 Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years ................... 154 Property Tax Rates – Direct and Overlapping Governments - Last Ten Fiscal Years ................................................................................................................ 155 Principal Property Taxpayers – Current Year and Nine Years Ago .............................................. 156 Twenty Largest Taxable Property Owners for Merged RDA Project Area .................................. 157 Property Tax Levies and Collections – Last Ten Fiscal Years ...................................................... 158 Ratio of Outstanding Debt by Type – Last Ten Fiscal Years ........................................................ 159 Computation of Direct and Overlapping Debt ............................................................................... 160 iii CITY OF SOUTH SAN FRANCISCO, CALIFORNIA Comprehensive Annual Financial Report For the Year Ended June 30, 2016 Table of Contents Page STATISTICAL SECTION (Continued) Computation of Legal Bonded Debt Margin ................................................................................. 161 Revenue Bond Coverage Sewer Rental Enterprise Fund – Last Ten Fiscal Years ....................... 162 Sewer Debt Service Coverage Sewer Rental Enterprise Fund – Last Five Fiscal Years .............. 163 Redevelopment Pledged Revenue Coverage – Last Seven Fiscal Years....................................... 164 Demographic and Economic Statistics – Last Ten Fiscal Years ................................................... 165 Principal Employers – Current Year and Nine Fiscal Years Ago ................................................. 166 Full-Time Equivalent City Governmental Employees by Function – Last Ten Fiscal Years ....... 167 Operating Indicators by Function/Program – Last Six Fiscal Years ............................................. 168 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ......................................... 169 Miscellaneous Information – Last Three Fiscal Years .................................................................. 170 iv FINANCE DEPARTMENT 650-877-8507 December 9, 2016 Honorable Mayor and Members Of the City Council City of South San Francisco South San Francisco, California CITY COUNCIL 2016 MARK ADDIEGO, MAYOR PRADEEP GUPTA, PH.D , VICE MAYOR LilA NORMANDY, COUNCILMEMBER KARYL MATSUMOTO, COUNCILMEMBER RICHARD A. GARBARINO, COUNCILMEMBER MIKE FUTRELL, CITY MANAGER The Comprehensive Annual Financial Report (CAFR) of the City of South San Francisco (the City) for the fiscal year ended June 30, 2016, is hereby submitted. Responsibility for the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. This report includes all financial activities of the City of South San Francisco, including financial information for the City, as the primary government, and for its component units, for which the City is considered financially accountable. The component units are included because of the significance of their governing, operational, and/or financial relationships with the City. The Successor Agency that was created due to the Redevelopment Agency dissolution is also included in this report. Management's Discussion & Analysis (MD&A) provides a narrative introduction overview and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A is found immediately following the report of the independent auditor in the financial section. BACKGROUND OF THE CITY The City encompasses approximately 9.5 square miles and has a population of 64,585. It employs approximately 479 full-time and part-time regular employees. 400 GRAND AVENUE • P.O. BOX 711 • SOUTH SAN FRANCISCO, CA 94083 v South San Francisco is a full service city which includes public safety (police, fire and paramedics), libraries, parks, cultural and recreational activities, senior citizen services, public works, public improvements, engineering, planning, building regulation, economic development, drainage, street lighting, and general administrative services. Sewer service, downtown parking operations, and storm water management are accounted for in the City's enterprise funds. The Conference Center Authority is included in the financial statements by discrete presentation -that is, the Authority's financial data is reported in a column separate from the financial data of the City. Water and solid waste services are provided by private entities. South San Francisco was incorporated and became a general law city of the State of California on September 19, 1908. The form of government is the Council-Manager plan. The Council is composed of a Mayor and four Council Members who are elected at large. Each Council Member serves a term of four years, with a rotating Mayor chosen by majority vote of the Council, for a term of one year. The City Manager is the administrative head of the government of the City, under the direction of the City Council. The offices of City Clerk and City Treasurer are elected. The City Attorney is appointed by the City Council. All department heads are appointed and serve under the administrative direction of the City Manager. All other officers and employees of the City are appointed by the City Manager and serve under the administrative direction of their department heads. FINANCIAL INFORMATION In developing and appraising the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable but not absolute assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets; and (3) transactions being properly executed in accordance with management's authorization. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits requires estimates and judgments by management. Basic characteristics of sound internal accounting control include segregation of accounting duties, approvals of accounting transactions, and regular reconciliation of detail and control records. All internal control evaluations occur within this framework. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurances of proper recording of financial transactions. vi The City adopts fiscal year budgets for its general, special revenue, debt service, enterprise, and capital project funds. The government also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered amounts lapse at year-end. However, encumbrances generally are reappropriated as a part of the following year's budget. The City's Reserves Policy is aligned with the Government Finance Officers Association (GFOA) best practices recommendation for reserves, setting aside 15-20 percent of operating revenues. Given the ongoing growth trend in General Fund operating revenues, the City's Reserves have grown commensurately, which has a significant impact on the Fiscal Year 2015-16 financial statement. The Fiscal Year 2015-16 Adopted Budget reflected the priorities of the City's Strategic Initiatives. One of the primary strategic initiates was to maintain, train and support a high performing team of City employees, which manifested itself in the current financial statement through higher salary and benefit costs due to the labor negotiation process, which served to attract and retain highly qualified employees by offering competitive employee compensation packages. To accomplish a multi-year perspective on financial planning, the City has used a five year model in prior years. Debt Administration The Successor Agency has outstanding tax allocation bonds and lease revenue bonds. These are not considered to be general tax-supported obligations. There are also various capital leases and notes payable in City's governmental and proprietary funds. Capital Assets The City comprised land, buildings, infrastructure, machinery, equipment, furniture, fixtures, and vehicles owned and used by general government and proprietary functions. Assets are reported within the basic financial statements. Risk Management The City maintained a risk management program for workers' compensation, general liability, and property damage. As part of this comprehensive plan, monies have accumulated in the self-insurance internal service fund to meet potential losses. In addition, a safety committee of City employees reviews all accidents and recommends preventive measures to minimize future accident­ related losses. The City self-insures the deductible or retention levels of its workers compensation, general liability and property damage insurance policies. A third party administrator handles worker compensation claims. The Association of Bay Area Governments Pooled Liability Assurance Network (ABAG PLAN) provides the City's general liability and property damage coverage vii along with claims and risk management services. An employers' casualty insurance company provides workers compensation coverage in excess of the deductible. OTHER INFORMATION Independent Audit The City engaged an independent accounting firm to audit the books of accounts, financial records, transactions, and financial statements. Their report covering 2015-16 is in the Financial Section of this report. Award The City's Comprehensive Annual Financial Repor t for the fiscal year ended June 30, 2015, received a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association. The award signified the report's attainment of easily readable and efficiently organized content and satisfaction of generally accepted accounting principles and legal requirements. The award is valid for a period of one year only. However, the City believes that this current report continues to conform to program eligibility requirements. Acknowledgments The preparation of the Comprehensive Annual Financial Report was made possible by the dedicated services of the entire staff of the Finance Department and our auditors. Each member of the department has our sincere appreciation for the contributions made in the preparation of this report. Respectfully submitted, Richard Lee Director of Finance �Ike Futrell City Manage viii ix   Citizens of South San Francisco   City Council City Clerk City Treasurer City Manager City Attorney Assistant City Manager / Chief Sustainability Officer   Administrative Departments     Operating Departments   Fire Chief Public Works Director Library Director Parks and Recreation Director Econ. & Comm. Dev. Dir. Chief of Police Human Resources Director Finance Director Communications Director Information Technology Department x City Council & Directory of Officials City Council Mark Addiego Mayor Pradeep Gupta, Ph.D. Vice Mayor Richard A. Garbarino Councilmember Karyl Matsumoto Councilmember Liza Normandy Councilmember Elected Officials Krista Martinelli City Clerk Frank Risso City Treasurer Appointed Officials Mike Futrell City Manager Marian Lee Assistant City Manager / Chief Sustainability Officer Leslie Arroyo Communications Director Richard Lee Finance Director LaTanya Bellow Human Resources Director Alex Greenwood Economic & Community Development Director Gerald Kohlmann Fire Chief Jeff Azzopardi Chief of Police Valerie Sommer Library Director Brian McMinn Public Works Director Sharon Ranals Parks & Recreation Director xi This Page Left Intentionally Blank INDEPENDENT AUDITOR’S REPORT Honorable Members of the City Council City of South San Francisco, California Report on Financial Statements 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 South San Francisco (City), California, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the component unit financial statements of the South San Francisco Conference Center Authority (Authority), which represents 1%, 2%, and 3%, respective, of the assets, net position, and revenue of the entity-wide reporting entity. These component unit financial statements were audited by other auditors, whose report thereon has been furnished to us and our opinion, insofar as it relates to the amounts included for the Authority, is based solely on the report of these auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the 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 financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the 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. 1 Opinions In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining information of the City as of June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparisons listed as part of the basic financial statements for the year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management’s Discussion and Analysis and other Required Supplementary Information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements as a whole. The Introductory Section, Supplemental Information, and Statistical Section as listed in the Table of Contents are presented for purposes of additional analysis and are not required parts of the basic financial statements. The Supplemental Information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplemental Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 4, 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 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Pleasant Hill, California December 4, 2016 3 This Page Left Intentionally Blank CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Government Accounting Standards Board Statement 34 (GASB 34) requires the City of South San Francisco to provide an overview of its financial activities for the fiscal year. Please read this in conjunction with the accompanying Transmittal Letter and Basic Financial Statements. FISCAL 2015-16 FINANCIAL HIGHLIGHTS Summary: The General Fund ended FY 2015-16 with a surplus of $1.7 million, which included a transfer of $4.0 million to the PERS Stabilization Reserve, which was created to mitigate the negative financial impact of volatility with the California Public Employees’ Retirement System (CalPERS). General Fund reserves were fully funded in accordance with the City’s Reserves Policy, which follows the Government Finance Officers’ Association (GFOA) best practice of 15-20% of operating revenues. General Fund revenues (excluding operating transfers in) increased $7.3 million compared to the prior year. The primary drivers of the year-over-year increase were property tax, sales tax and permit revenues. The principal sources of additional property taxes were secured property taxes and the City’s share of property taxes from the former redevelopment agency, demonstrating the strength of the City’s property tax roll. The increase in sales tax reflected the final Triple Flip payment from the State and the passage and implementation of Measure W, a 0.5% transactions and use tax. Increases in permit revenues were indicative of major developments in the City’s East of 101 area. City-wide financial highlights of the year include the following: Total Net Position for Governmental Activities in FY 2015-16 increased $18.0 million, from $145.4 million to $163.4 million. The increase was primarily attributed to increases in cash and investments, evident in the City’s impact fees driven by the accelerated development climate. Primary Government deferred inflow of resources decreased $10.9 million, from $23.4 million to $12.5 million. The change in net difference between projected and actual earnings on plan investments related to pension was the paramount factor in the decrease. In the prior fiscal year, which was the first year of GASB 68 implementation, the entire $23.4 million in primary government deferred inflow of resources was attributed to the net difference between projected and actual earnings on plan investments. In FY 2015-16, as illustrated in the Statement of Net Position and Note 7 – Pension Plan, the primary government deferred inflow of resources of $12.5 million is attributed to changes in assumptions ($5.4 million), differences between actual and expected experience ($4.0 million), and the net differences between projected and actual earnings on plan investments ($3.1 million). 5 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information  While Expenses for Governmental Activities were relatively flat compared to the prior year, revenues from Charges for Services increased from $24.1 million to $30.1 million, which reflected the magnitude and velocity of developments that were issued permits in FY 2015- 16.  Business-type program expenses decreased by $5.3 million in FY 2015-16, most notably in the Sewer Fund. The year-over-year decrease was due to a significant amount of capital expense that was offset into construction in progress in FY 2015-16.  Property tax revenues, excluding those from the former Redevelopment Agency (RDA), increased $948 thousand, or 5.2 percent compared to the prior year. The increase was indicative of the City’s robust secured property tax base.  Property taxes from the former RDA increased $750 thousand, or 15.5 percent. As the Successor Agency pays down the obligations of the former RDA, the proportional share of property taxes to the taxing entities increases.  Sales tax revenues increased by $2.4 million, or 15.9 percent over the prior fiscal year. which In November 2015, South San Francisco residents approved Measure W, a 0.5% transactions and use tax. The transactions and use tax was implemented on April 1, 2016, and the City received $1.5 million in revenues, comprised of advances from the State Board of Equalization for the fourth quarter of FY 2015-16.  Permit revenues for all Governmental Funds increased $2.1 million, or 43.8 percent over the prior fiscal year, indicative of the current development climate in South San Francisco and the greater San Francisco Bay Area. The East of 101 area, in particular, had a number of high value developments enter the plan submission and review phase at an accelerated pace.  In FY 2015-16, the City received $13.4 million in Transient Occupancy Tax (TOT) revenues. This was the third consecutive year of record-breaking TOT revenues, which was $495 thousand more than the prior year. Sustained robust TOT revenues were driven by high room rates and occupancy rates. OVERVIEW OF THE COMPREHENSIVE ANNUAL FINANCIAL REPORT This Comprehensive Annual Financial Report is in six parts: 1) The Introductory Section, which includes the Transmittal Letter and general information; 2) Management’s Discussion and Analysis (this part); 3) The Basic Financial Statements, which include the Government-wide and the Fund Financial Statements, along with the notes accompanying these statements; 4) Required Supplementary Information and the accompanying notes; 6 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information 5)Other Supplementary Information including combining statements for non-major governmental funds, internal service funds, other budgetary information, and a fiduciary statement of changes in assets and liabilities; and 6)The Statistical Section. Basic Financial Statements The Basic Financial Statements are comprised of the City-wide Financial Statements and the Fund Financial Statements. These two sets of financial statements provide two different views of the City’s financial activities and financial position. The City-wide Financial Statements provide a longer-term view of the City’s activities as a whole, and consist of the Statement of Net Position and the Statement of Activities. The Statement of Net Position provides information about the financial position of the City as a whole, including all its capital assets and long-term liabilities on the full accrual basis, similar to the basis used by corporations. The Statement of Activities provides information about all the City’s revenues and all its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or expenses of each the City’s programs. The Statement of Activities provides a detailed explanation of the change in Net Assets for the year. All the amounts in the Statement of Net Position and the Statement of Activities are separated into Governmental Activities and Business-type Activities in order to provide a summary of these two activities of the City as a whole. The Fund Financial Statements report the City’s operations in more detail than the government- wide statements and focus primarily on the short-term activities of the City’s General Fund and other Major Funds. The Fund Financial Statements measure only current revenues, expenditures and fund balances; they exclude capital assets, long-term debt and other long-term amounts. Major Funds account for the major financial activities of the City and are presented individually, while the activities of Non-major funds are presented in summary, with subordinate schedules presenting the detail for each of these other funds. Major Funds are explained below. The fiduciary statements provide financial information about the activities of Non-Obligated Assessment Districts, for which the City acts solely as agent. Note 1 to the Basic Financial Statements provides a summary of the City’s significant accounting policies, fund categories, and fund types. City-wide Financial Statements The Statement of Net Position and the Statement of Activities present information about the following: 7 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information  Governmental activities - All of the City’s basic services are considered to be governmental activities, including general government, fire, police, public works, parks and recreation, library, and economic and community development. These services are supported by general City revenues such as taxes, and by specific program revenues from grants, contributions, and fees. The City’s governmental activities also include the City of South San Francisco Capital Improvements Financing Authority, as the City Council also governs this entity.  Business-type activities - All the City’s enterprise activities are reported here, including wastewater treatment, parking, and storm water management. Unlike governmental services, user fees fully support most of these services.  Component Unit - The City of South San Francisco Conference Center Authority comprises the component unit. The Authority serves the City and other interests and it has a governing body separate from the City Council. Citywide financial statements are prepared on the accrual basis, which means they measure the flow of all economic resources of the City as a whole. Fund Financial Statements The Fund Financial Statements provide detailed information about each of the City’s most significant funds, called Major Funds. The concept of major funds, and the determination of which are major funds, was established by GASB Statement 34 and replaces the concept of combining like funds and presenting them in total. Instead, each Major Fund is presented individually, with all Non-major Funds summarized and presented only in a single column. Subordinate schedules present the detail of these Non-major funds. Major Funds present the major activities of the City for the year, and may change from year to year as a result of changes in the pattern of City’s activities. Fund Financial Statements include governmental, enterprise and internal service funds as discussed below. Governmental Fund Financial Statements are prepared on the modified accrual basis, which mean they measure only current financial resources and uses. Capital assets and other long-lived assets, along with long-term liabilities, are not presented in the Governmental Fund Financial Statements. Enterprise and Internal Service Fund financial statements are prepared on the full accrual basis, as in the past, and include all their assets and liabilities, current and long-term. 8 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Since the City’s Internal Service Funds provide goods and services only to the City’s governmental and business-type activities, their activities are reported only in total at the Fund level. Internal Service Funds may not be Major Funds because their revenues are derived from other City Funds. These revenues are eliminated in the citywide financial statements and any related profits or losses are returned to the activities, which created them, along with any residual net assets of the Internal Service Funds. Comparisons of Budget and Actual financial information are required in the Basic Financial Statements only for the General Fund and other Major Funds that are Special Revenue Funds. Fiduciary Statements The City is the agent for certain assessment districts, holding amounts collected from property owners which await transfer to these Districts’ bond trustees. The City’s fiduciary activities are reported in the separate Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position. These activities are excluded from the City’s other financial statements because the City cannot use these assets to finance its own operations. FINANCIAL ACTIVITIES OF THE CITY AS A WHOLE This analysis focuses on net position and changes in net position of the City’s Governmental Activities (Table and Charts 1 through 3) and Business-type Activities (Tables 4 and 5) presented in the City-wide Statement of Net Position and Statement of Activities. A comparative analysis is presented for fiscal years 2014-15 and 2013-14. 9 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Governmental Activities Governmental Net Position Table 1 Governmental Net Position at June 30 (In Millions) The total net position for Governmental Activities increased by $18.0 million in FY 2015-16 compared to the prior year. Cash and investments was a primary categorical driver for the increase, representing an increase of $9.1 million in assets, which was attributable to the breadth and magnitude of major developments via permit revenues and developer impact fees. Total deferred inflow of resources related to pension was reduced by $9.8 million. FY 2014-15 marked the first year of GASB 68 implementation, where the net differences between projected and actual earnings on plan investments represented the entire deferred inflows related to pension. In FY 2015-16, the deferred inflows related to pension was allocated to changes in assumptions ($2.0 million), Differences between actual and expected experience ($940 thousand) and net differences between projected and actual earnings on plan investments ($1.4 million). 20162015 Cash and investments 99.3$      90.2$       Other assets 12.9        9.5            Capital assets 233.4      233.3            Total assets 345.6      333.0       Total outflows related to pension 12.6        10.3              Total outflow of resources 12.6        10.3         Long‐term debt outstanding 12.4        13.6         Other liabilities 171.1      163.2            Total liabilities 183.5      176.8       Deferred inflows related to  pension11.2        21.0              Total deferred  inflow of resources 11.2        21.0         Net position:   Invested in capital assets, net of debt231.1      230.5         Restricted 52.4        49.3           Unrestricted (120.1)     (134.4)           Total net position  163.4$    145.4$     10 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Table 2 Expense and Program Revenue Comparison in Governmental Activities (In Millions) 11 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Governmental program revenues (Table 2) increased by $6.3 million compared to the prior year, largely due an increase in charges for services, representative of development velocity and magnitude via the increase trend in permit fees and developer impact fees. Chart 1 Revenues by Source - Governmental Activities 2015-16 Within Governmental Activity revenue sources, as shown in Chart 1, Charges for Services increased from 24% to 27%, indicative of the development climate in South San Francisco, where a number of high value projects entered the permit issuance phase in FY 2015-16. Tables 2 (above) and 3 (below) illustrate the difference between program revenues and expenses. Program revenues consist of capital and operating grants and contributions and fees for services. General City revenues, such as property taxes, sales and transient occupancy taxes, motor vehicle in-lieu taxes, and investment earnings, cover the shortfall between program revenues and program expenses. In FY 2015-16, the net expense for governmental activities decreased from $61.1 million to $54.7 million. The reduction was principally noted in the Public Works Department, reflecting the impact of major developments in the East of 101 area entering the permit issuance phase, bringing an influx of permit fees and developer impact fees. Property taxes 24% Sales taxes 14% Transient occupancy taxes 12% Other taxes 5% Property Taxes in lieu 5% Interest and Rentals 1% Franchise Fee 4% Miscellaneous 2%Charges for Services 27% Operating Grants and Contributions 5% Capital Grants and Contributions 1% 12 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Table 3 Net (Expense) Revenue from Services Governmental Activities (In Millions) 2015‐162014‐15 General  government(4.8)$       (4.1)$        Fire department(19.0)       (18.5)        Police department(20.2)       (20.2)        Public works department1.9           (6.4)          Recreation and community services(8.3)         (7.8)          Library(3.1)         (3.6)          Economic and community development(1.1)         (0.4)          Interest on long‐term debt Total (54.6)$     (61.0)$      13 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Business-type Activities Table 4 Business-type Net Position at June 30 (in Millions) The total net position for business-type activities increased by $7.3 million, or 8.8 percent, primarily due to a reduction in outstanding long-term liabilities, notably the City’s debt service payments on three State Water Resources loans and one sewer revenue bond.    20162015 Cash and Investments20.1$      18.9$       Other assets0.7           0.6            Capital assets127.2      126.3            Total assets 148.0      145.8       Deferred outflows related to  pension1.4           1.1                 Total Deferred outflow of resources1.4           1.1            Long‐term liabilities outstanding 38.7        43.2         Other liabilities 19.2        18.6              Total liabilities 57.9        61.8         Deferred inflows related to  pension1.2           2.3                 Total deferred inflow of resources1.2           2.3            Net position: Investment in capital assets 83.9        78.6         Restricted ‐             ‐              Unrestricted 6.2           4.2                 Total net position 90.1$      82.8$       14 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Table 5 Change in Business-type Net Position (In Millions) Business activity expenses decreased $5.3 million compared to the prior year, particularly in Sewer Enterprise activities, due to $4.8 million in capital expense in FY 2015-16 that was offset into construction in progress. Business activity revenues slightly decreased by $0.7 million, primarily due to the impact of a rate increase offset by a reduction in contributions from participating agencies. FINANCIAL ANALYSIS OF THE CITY’S FUNDS Governmental Funds Governmental funds highlight the City’s near-term inflows, outflows, and balances of spendable resources. Such information can be helpful in determining the City’s financial status. Unrestricted fund balance is a major indicator of designated and uncommitted resources available for spending in future fiscal years. 2015‐162014‐15 Expenses Sewer Enterprise18.3$    24.0$     Parking District0.8        0.5         Storm Water1.3        1.2         Total expenses20.4      25.7       Revenues Program Revenues Charges for Services20.8      21.0       Operating grants  and contributions5.8        6.2         Total program revenues 26.6      27.3       General revenues Investment earnings 0.3        0.1         Total general  revenues 0.3        0.1         Excess (deficiency) before transfers6.5        1.7         Transfers 0.9        1.4         Change in net position 7.4        3.1         Net position ‐ beginning (as adju sted)82.8      79.7       Net position ‐ ending 90.2$    82.8$     15 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information At June 30, 2016, the City’s governmental funds reported combined fund balances of $76.3 million, an increase of $5.5 million, or 7.7 percent compared to the prior year. The General Fund ending fund balance was $23.0 million, reflecting an increase of $1.7 million, or 8.2 percent. The City’s Reserves Policy follows the GFOA-recommended threshold (20% of operating revenues). As such, additional revenues from the passage and implementation of Measure W, a 0.5 percent transactions and use tax, increased the reserves requirement. Total governmental fund revenues increased by $9.4 million, from $101.0 million to $110.3 million, primarily attributable to a vibrant local economy, evident through permit revenues and transient occupancy tax. Total governmental fund expenditures increased by $9.0 million, from $90.8 million to $99.8 million, or 10.0 percent. Within FY 2015-16, the City completed its labor negotiations process, which included a number of classification and compensation studies, cost of living adjustments and other incentives for labor units. In addition, as a result of increases in the employer pension contribution rate increases from CalPERS, the City paid $2.5 million more than the prior year for employee pension benefits. The City Council authorized transfer of $4.0 million from the General Fund to the City’s Benefits Fund to mitigate the impact of CalPERS’ volatility with respect to its return on investment. Comparison of Final Budgets to Original Adopted Budget The budget is initially adopted by the City Council in June, based on revenue projections that are up to date through May. Between May and the end of the fiscal year, there can be major fluctuations in revenues depending on the economy and/or actions by the State of California. There can also be significant changes to departmental expenditure budgets to the extent unforeseen expenses occur. In the Fund Financial Statements, the page titled “Statement of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual” later in this document shows the initial adopted and final budgets for the General Fund. Significant changes between the adopted and final budgets are described below: 16 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Table 6 Comparison of Final Budgets to Original Adopted Budget (in Thousands) OriginalFinal Pct Discussion: RevenuesBudgetBudgetChangeChange(Items of more than 5% and $100,000 variance) Property taxes 24,314$ 24,314$ -$ Sales taxes 16,530 17,832 1,302 7.9%The budget was adjusted to account for 1. Final Triple Flip payment from the State. Transient occupancy taxes 12,000 13,430 1,430 11.9% The budget increase reflects the City's third consecutive record for Transient Occupancy Tax revenues, driven by sustained higher occupancy and room rates. Other taxes 4,385 4,385 - Franchise Fee3,344 3,344 - Intergovernmental6,370 7,702 1,332 20.9% The majority of the budget adjustments reflected reimbursements from the California Office of Emergency Servies (Cal OES) for the Fire Department's response to mutual aid. In addition, the City received grant funds from the California Office of Traffic Safety (OTS) for various traffic enforcement efforts. Interest and rentals2,932 2,932 - Licenses and permits3,877 5,962 2,085 53.8% A number of high value building permits were issued in the fiscal year that were not contemplated during the budget development process, primarily in the East of 101 biotechnology business area. Charges for services8,786 8,717 (69) -0.8% Fines and forfeitures839 839 - Other 234 248 14 6.0% Total 83,611$ 89,705$ 6,094$ 7.3% 17 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Table 6 (continued) Comparison of Final Budgets to Original Adopted Budget (in Thousands) OriginalFinal Pct Discussion: ExpendituresBudgetBudgetChangeChange(Items of more than 5% and $100,000 variance) City Council 238$ 268$ 30$ 12.7% City Clerk 691 751 60 8.6% City Treasurer 131 131 (0) -0.1% City Attorney 783 783 0 0.1% City Manager 1,588 1,671 83 5.2%Budget amendments reflect more robust communications and community outreach efforts. Finance 2,028 2,213 185 9.1% Budget amendments include TOT/Parking Tax audit services and temporary acting pay for staff serving in a hi gher classification for a limited duration. Non-Departmental 1,014 1,305 291 28.8% The primary budget adjustment reflects approval of a new employee safety program. Human Resources1,476 1,527 51 3.5% Fire21,755 24,104 2,349 10.8% The budget increase was required to address overtime incurred due to minimum staffing needs and responding to calls for mutual aid. Police 24,959 25,357 398 1.6%The budget increase was required to address overtime incurred due to minimum staffing needs. Public Works3,912 5,071 1,159 29.6% The additional budget reflects continuation of operation of the South City Shuttle, and site preparation services for the Civic Campus. Parks and Recreation 13,904 13,464 (440) -3.2% Librar y 4,607 4,769 162 3.5% Economic and Community Development 5,732 6,830 1,098 19.2% The additional budgeted reflects professional plan check services needed to support the pace and magnitude of the developments that were the primary drivers of the budget adjustment for license and permit revenues. Total82,818$ 88,244$ 5,426$ 6.6% 18 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Analysis of Major Governmental Funds General Fund Total General Fund revenues in FY 2015-16 were $92.6 million, $1.4 million, or 1.5 percent over the final amended budget. Total General Fund expenditures ended FY 2015-16 at 86.8 million; $1.8 million, or 2.0 percent under budget. Overall, the General Fund ended FY 2015-16 with a surplus of $1.7 million, notably for the items discussed below. Property Tax, Sales Tax and Transient Occupancy Tax (TOT), the City’s primary revenue sources, serve as a bellwether of local economic vitality, and also represented the largest year over year gains. Property Tax revenues were $1.7 million more than the prior year, principally evident in property tax from the secured roll and from the former Redevelopment Agency (RDA). Sales tax revenues increased $2.4 million in additional Sales Tax revenues were comprised of the final Triple Flip payment from the State, as well as passage and implementation of Measure W, a 0.5% transactions and use tax. For the third year in a row, Transient Occupancy Tax (TOT) revenues reached record levels at $13.4 million, $495 thousand more than the prior year. A robust and fast paced development climate led to $2.1 million more in license and permit revenues. Revenue from fines and forfeitures decreased by $430 thousand, and was the only General Fund revenue category that noted a significant year over year decline. Parking citation revenue continued to decline, with revenues nearly reduced by half compared to two years prior, reflecting the elimination of the City’s red light camera program in the prior year. General Fund expenditures increased $10.0 million, or 13.0% over the prior fiscal year. FY 2015-16 marked the completion of labor negotiations for all of the City’s labor units. The labor packages included classification and compensation studies, cost of living adjustments and other incentives that provided employees with competitive compensation. As of June 30, 2016, the General Fund total fund balance was $23.0 million, which included $3.8 million in committed reserves, $1.4 million in assigned reserves, and $17.8 million in unassigned reserves. The unassigned reserves are designated by the City Council based on the City’s Reserves Policy, which follows best practices from the Government Finance Officers’ Association (GFOA) of between 15-20 percent of General Fund operating revenue. Within the City’s unassigned reserves, the City Council designated funds for economic contingencies, potential catastrophe and budget contingencies. 19 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Other Post Employment Benefit (OPEB) Liability Impact on Fund Balance The City has a particularly rich retiree health benefit for employees hired prior to April 25, 2010 (legacy employees). Those legacy employees who retire from CalPERS and from the City concurrently with at least 5 years of service are entitled to 100% coverage of retiree medical insurance premiums paid by the City. This benefit resulted in an OPEB Unfunded Actuarial Accrued Liability of $57 million as of June 30, 2015, based the most recent external actuarial analysis which reflects investment of $13.5 million with the California Employers’ Retiree Benefit Trust (CERBT) in February 2014. In addition, the City Council approved an appropriation of over $800 thousand ($250 thousand from the General Fund, and the remainder from enterprise funds) to be contributed to CERBT on an annual basis. City Housing Fund Up until Redevelopment Agencies were abolished in FY 2011-12 by the State of California under ABX1 26, the City set aside 20% of Redevelopment property taxes to fund the provision of new affordable housing units, as well as the operation and maintenance of housing stock that the Redevelopment Agency had already funded. That fund was formerly called the Low/Moderate Income Housing Fund. With its source of funding (20% of Redevelopment property tax dollars) abolished, the City Council voted to take on the operations of the former housing units by becoming the Successor Housing Agency, with activities funded primarily from the rental revenues received by the City for those City-owned occupied housing units. Any shortfall between the rents received and the operations and maintenance costs of those housing units are funded by either one time grants or by the General Fund. Any fund balances will be held for future housing property maintenance needs. In FY 2015-16, the City Housing Fund received for $416 thousand in revenues, which included $188 thousand in rent, and $76 thousand in interest income. The fund also had $492 thousand in expenses, the majority of which was for professional services related to an affordable housing development. Capital Improvement Fund The City consolidates and reports its governmental fund-type capital project expenditures in this fund. Resources consist of transfers from the General Fund, major and non-major funds, developer impact fees, and gasoline taxes and transportation sales taxes from non-major governmental funds. Resources also come from federal, state, and local grants, contributions from other cities, utilities and private developers. Entire capital projects are appropriated in one- year, but expended over multiple years, with unspent appropriations carried forward year-to-year until completion. 20 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information East of 101 Sewer Impact Fee Fund In FY 2015-16, this fund received $551 thousand in revenues, indicative of the pace and magnitude of development in the East of 101 area, which drove fund balance to a positive $504 thousand. The fund had a negative fund balance for many years due to prepayment of impact fees by a large biotech firm to front-fund a now completed project. In 2007, the City entered into an agreement with this firm to pre-fund the sewer impact fees for the East Grand Avenue Sewer Trunk project in order for the project to be completed prior to the issuance of building permits. As a result, the pre-funding is reported as unearned revenue, a liability on the fund’s balance sheet, until sufficient development generates impact fees to cover the prepayment of those fees, or until the City has a new agreement with the firm. As of June 30, 2016, the remaining balance of the pre-funding is nearly $2.0 million. East of 101 Traffic Impact Fee Fund In FY 2015-16, the City received $1.6 million in traffic impact fees, and transferred out $475 thousand for capital improvements. As of June 30, 2016, the fund has a balance of $7.2 million. Child Care Impact Fee Fund The City received $341 thousand in child care impact fees in FY 2015-16. Factoring in limited expenditures, this fund has a balance of $2.9 million as of June 30, 2016. Larger scale projects can be funded once a sufficient balance has been accumulated. Developer Deposit Since 2007, the City has entered into agreements with a large biotech firm to front-fund sewer and streetscape projects. The remaining balances of the pre-funding are reported as liability which will be reduced as related project expenditures are incurred. 21 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Other Governmental Funds Presented as a group in the Basic Financial Statements, these funds are individually presented as Supplementary Information. Enterprise Funds Sewer Enterprise Fund The Sewer Enterprise fund reported operating income (before non-operating revenues and expenses transfers) of $8.0 million in FY 2015-16. Operating revenues decreased by $0.6 million, or 2.4 percent. The Water Quality Control Plant is a shared facility, with the cities of San Bruno, Millbrae and Burlingame sharing in the cost of operations and capital improvements. At $4.8 million, FY 2015-16 was closer to the historical average for cash flows out for acquisition of capital assets compared to the prior year. The City’s accounting practice dictates that capital outlay for enterprise funds are offset by a contra account and the resulting debit balance recorded to capital assets. Therefore, in comparison to the prior year, operating expenses decreased by $5.1 million or 22.8 percent. Net position increased $7.1 million to end the year at $75.0 million. Parking District Fund In FY 2015-16, revenues increased by 2.9 percent to $843 thousand, while expenses increased by $153 thousand, or 20.5 percent. The additional expenses reflected implementation of pilot program to install new parking meters that employed current technology, including payment by credit card. Net position decreased slightly by $20 thousand to $13.9 million. Storm Water Fund The Storm Water Fund is used to account for resources needed to fund storm drain and storm infrastructure operations, maintenance, capital replacement, and compliance with various federal and state regulations regarding storm water runoff. Revenues totaled $405 thousand, primarily from a levy on property owners. Transfers totaled $930 thousand, the majority of which came from the Gas Tax Fund in the amount of $670,000 and $250,000 from the General Fund. Expenses totaled $1.3 million, $1.6 million less than the amended budget, due to the trash capture devices capital project, which did not enter the construction phase in FY 2015-16 as projected. Rather, the construction contract is projected to be sent out for bid by the end of FY 2016-17. Reserves as of the fiscal year ended June 30, 2016, totaled $1.2 million. Service fee revenues remain static in this fund without a ballot measure to increase assessed fees. 22 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information CAPITAL ASSETS GASB Statement 34 requires the City to add infrastructure to its reportable capital assets. Infrastructure includes streets, drainage systems, and traffic control and safety devices. Previously, governments excluded the value of such property from their reports of capital assets. The City has successfully reported on the depreciated value of all such assets acquired or built since 1980. The City reports the depreciated book value of other types of capital assets such as buildings, land, equipment and furniture, on the City-wide Statement of Net Assets. Such information is summarized below and is more completely detailed in Note 3 to the Basic Financial Statements. The City depreciates all its capital assets, except land and construction in progress. At June 30, 2016, the City had $360.6 million in capital assets, net of depreciation, representing an increase of $1.0 million from the prior year. The increase reflects the return to a more typical capital asset addition trend within Business-type activities compared to more typical fiscal years. 23 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information The City’s various capital asset types used in governmental and business-type activities, are illustrated in Table 7 below: Table 7 Capital Assets (in Millions) at June 30 2016 2015 Governmental  Activities: Land47.6$     47.6$       Buildings and improvements 85.0         85.0          Equipment and vehicles 19.8         19.6          Furniture and fixtures 1.8           1.8            Infrastructure  ‐ streets*183.1      183.1       Infrastructure  ‐ traffic control  devices*5.1           5.1            Infrastructure  ‐ storm drains*8.9           8.9            Construction in progress 26.8         18.4            Less  accumulated depreciation (144.7)     (136.2)           Totals 233.4$    233.3$     *Additions during the fiscal year only Business‐type Activities Land 1.4$         1.4$          Buildings and improvements 66.7         66.7          Clean water facilities and  transmission line 75.5         75.5          Infrastructure  ‐ storm drains4.8           4.8            Infrastructure  ‐ streets 7.4           7.4            Equipment and vehicles 11.2         11.2          Construction in progress 12.1         7.1              Less accumulated depreciation (51.9)       (47.8)             Totals 127.2$    126.3$     Total  City 360.6$    359.6$     24 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information DEBT ADMINISTRATION Each of the City’s debt issuances is discussed in detail in Note 5 to the Basic Financial Statements. A summary of the City’s outstanding debt for the past two fiscal years is as follows: Table 8 Outstanding Debt (In Millions) at June 30 The decline in Business-type Activities outstanding debt of $4.4 million is the result of scheduled repayments. The largest remaining debt obligations are the following: Three loans to the City’s Sewer Enterprise Fund from the State Water Resources Control Board to finance the expansion of the City’s water quality control plant and pay for Wet Weather improvements which will improve environmental impacts on the Bay. Principal and interest repayments commence on the loans upon completion of the project related to each loan package. The three current loans outstanding have fixed interest of 2.6%, 2.5% and 2.4% are due in 2022, 2026 and 2028. Because of the regional benefits and equity interest in these projects, the City of San Bruno shares in the loan repayments for the first two of the three current loans. ECONOMIC OUTLOOK AND MAJOR ACCOMPLISHMENTS The economic outlook and major accomplishments of the City are discussed in the accompanying Transmittal Letter. Governmental Activities 20162015 Loan  payable to Successor Agency10.7$     11.4$       Capital  leases 2.2         2.8            Total  Governmental  Activities Outstanding Debt12.9$     14.2$       Business‐type Activities State  Water Resources Board loans 39.4$     43.5$       2005 Sewer Bonds3.8         4.1            Total  Business‐type  Activities Outstanding Debt43.2$     47.6$       25 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information CONTACTING THE CITY’S FINANCIAL MANAGEMENT This Comprehensive Annual Financial Report is intended to provide readers with a general overview of the City’s finances. Questions about this report or requests for additional financial information should be directed to the City of South San Francisco Finance Department, P.O. Box 711, South San Francisco, CA 94083, and phone (650) 877-8512. The City’s website is at www.ssf.net. 26 CITY OF SOUTH SAN FRANCISCO STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES The Statement of Net Position and the Statement of Activities summarize the entire City’s financial activities and financial position. The Statement of Net Position reports the excess of the City’s total assets and deferred outflows of resources over the City’s total liabilities and deferred inflows of resources, including all the City’s capital assets and all its long-term debt. The Statement of Net Position focuses the reader on the composition of the City’s net position, by subtracting total liabilities from total assets. The Statement of Net Position summarizes the financial position of all the City’s Governmental Activities in a single column, and the financial position of all the City’s Business-Type Activities in a single column; these columns are followed by a total column which presents the financial position of the entire City. The City’s Governmental Activities include the activities of its General Fund, along with all its Special Revenue, Capital Projects and Debt Service Funds. Since the City’s Internal Service Funds service these Funds, their activities are consolidated with Governmental Activities, after eliminating inter-fund transactions and balances. The City’s Business Type Activities include all its Enterprise Fund activities. The Statement of Activities reports increases and decreases in the City’s net position. It is also prepared on the full accrual basis, which means it includes all the City’s revenues and all its expenses, regardless of when cash changes hands. This differs from the “modified accrual” basis used in the Fund financial statements, which reflect only current assets, current liabilities, available revenues and measurable expenditures. The Statement of Activities presents the City’s expenses first, listed by program, and follow these with the expenses of its business-type activities. Program revenues—that is, revenues which are generated directly by these programs—are then deducted from program expenses to arrive at the net expense of each governmental and business-type program. The City’s general revenues are then listed in the Governmental Activities or Business-type Activities column, as appropriate, and the Change in Net Position is computed and reconciled with the Statement of Net Position. Both these Statements include the financial activities of the City and the City of South San Francisco Capital Improvements Financing Authority that is legally separate but a component unit of the City because it is controlled by the City, which is financially accountable for its activities. Data for the South San Francisco Conference Center Authority is reflected as a discretely presented component unit of the City. This data is presented separately from other funds of the City to reflect operations under control of a governing body with a voting majority which is different from the City Council. 27 This Page Left Intentionally Blank Component Unit Primary GovernmentSouth San Francisco Governmental Business-Type Conference Activities ActivitiesTotal Center ASSETS Cash and investments (Note 2)$98,914,915$20,121,456$119,036,371 $2,830,795 Receivables: Accounts 8,819,684586,4819,406,165 293,558 Accrued interest 231,651 42,833274,484 Loans 1,776,716 1,776,716 Deposit 203,510 203,510 117,905 Inventory 824 824 Other 3,183 Prepaid items 32,756 32,756 Restricted cash and investments (Note 2)415,952 6415,958 488,124 Internal balances (Note 4A)(47,926)47,926 Land held for development (Note 1M)1,900,000 1,900,000 Capital assets: (Note 3) Nondepreciable 74,351,29313,508,34187,859,634 Depreciable, net accumulated depreciation 159,029,784113,664,564272,694,348 3,703,675 Total Assets 345,629,159 147,971,607493,600,766 7,437,240 DEFERRED OUTFLOW OF RESOURCES Related to pension (Note 7)12,582,7801,398,08713,980,867 Deferred amounts from refunding of debt (Note 5)50,819 Total Deferred Outflow of Resources 12,582,7801,398,08713,980,867 50,819 LIABILITIES Accounts payable 2,466,101243,4832,709,584 299,982 Accrued salaries and benefits 3,621,781 3,621,781 47,094 Accrued interest payable 741,143741,143 17,194 Other payable 485,235158,896644,131 Deposits 1,815,202 7,5001,822,702 381,312 Unearned revenue 2,821,222 2,821,222 Accrued insurance losses: (Note 11) Due within one year 712,000 712,000 Due in more than one year 10,688,947 10,688,947 Compensated absences obligation: (Note 1K) Due within one year 3,537,997307,1643,845,161 Due in more than one year 2,489,751241,2902,731,041 Debt and capital lease obligations: (Note 5) Due within one year 565,4764,536,8005,102,276 425,000 Due in more than one year 12,387,67438,706,03251,093,706 905,000 OPEB obligations - due in more than one year (Note 9)24,904,700 24,904,700 Net pension liability - due in more than one year (Note 7)117,037,90313,004,212130,042,115 Total Liabilities 183,533,989 57,946,520241,480,509 2,075,582 DEFERRED INFLOW OF RESOURCES Related to pension (Note 7)11,248,8861,249,87612,498,762 Total Deferred Inflow of Resources 11,248,8861,249,87612,498,762 NET POSITION (Note 6) Net investment in capital assets 231,142,07983,930,073315,072,152 2,373,675 Restricted for: Debt service 488,124 Special revenue projects 21,324,695 21,324,695 Capital projects 31,081,907 31,081,907 Total Restricted Net Position 52,406,602 52,406,602 488,124 Unrestricted (120,119,617)6,243,225(113,876,392)2,550,678 Total Net Position $163,429,064$90,173,298$253,602,362 $5,412,477 See accompanying notes to financial statements CITY OF SOUTH SAN FRANCISCO STATEMENT OF NET POSITION JUNE 30, 2016 29 Operating Capital Charges forGrants andGrants and Functions/Programs Expenses ServicesContributionsContributions Primary Government Governmental Activities: General Government $9,044,518$4,194,563 $8,311 Fire 22,488,964 3,450,524 Police 23,158,1682,076,837 877,165 Public Works 11,916,57210,361,5252,293,226$1,147,337 Parks and Recreation 12,901,6573,744,137 839,772 Library 4,442,577 164,2711,224,606 Economic and Community Development 7,603,2756,131,463 338,412 Total Governmental Activities 91,555,73130,123,3205,581,492 1,147,337 Business-type Activities Sewer 18,273,58019,569,3415,802,788 Parking District 894,769 843,199 Storm Water 1,289,465 412,105 Total Business-type Activities 20,457,81420,824,6455,802,788 Total Primary Government $112,013,545$50,947,965$11,384,280$1,147,337 Component Unit Conference Center $3,380,041$1,619,819 General revenues: Taxes: Property taxes Sales taxes Transient occupancy taxes Franchise Fees Other taxes Motor vehicle in lieu, unrestricted Property taxes in lieu of vehicle license fees Investment earnings Miscellaneous Transfers (Note 4) Total general revenues and transfers Change in Net Position Net Position - Beginning Net Position - Ending See accompanying notes to financial statements CITY OF SOUTH SAN FRANCISCO STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2016 Program Revenues 30 Component Unit South San Francisco GovernmentalBusiness-Type Conference Activities Activities Total Center ($4,841,644)($4,841,644) (19,038,440)(19,038,440) (20,204,166)(20,204,166) 1,885,516 1,885,516 (8,317,748)(8,317,748) (3,053,700)(3,053,700) (1,133,400)(1,133,400) (54,703,582)(54,703,582) $7,098,549 7,098,549 (51,570)(51,570) (877,360)(877,360) 6,169,6196,169,619 (54,703,582)6,169,619(48,533,963) ($1,760,222) 26,438,620 26,438,620 15,188,686 15,188,686 13,393,437 13,393,437 2,172,207 3,982,092 3,982,092 5,124,574 5,124,574 26,708 26,708 5,770,060 5,770,060 1,354,266 289,2011,643,467 9,204 2,334,407 2,334,407 97,828 (919,547)919,547 72,693,3031,208,74873,902,051 2,279,239 17,989,7217,378,36725,368,088 519,017 145,439,34382,794,931228,234,274 4,893,460 $163,429,064$90,173,298$253,602,362$5,412,477 Primary Government Net (Expenses) Revenues and Changes in Net Position 31 This Page Left Intentionally Blank FUND FINANCIAL STATEMENTS Major funds are defined generally as having significant activities or balances in the current year. The funds described below were determined to be Major Funds by the City in fiscal 2016. Individual non-major funds may be found in the Supplemental section. GENERAL FUND This fund accounts for resources traditionally associated with government, such as administration, public safety, library, parks maintenance, and recreation, outside of those accounted for in other funds. LOW AND MODERATE INCOME HOUSING ASSETS SPECIAL REVENUE FUND To account for the activities related to the assets assumed by the City as Housing Successor to the housing activities of the former Redevelopment Agency of the City of South San Francisco. CAPITAL IMPROVEMENT CAPITAL PROJECTS FUND To account for expenditures associated with the acquisition, construction, or improvement of City owned facilities and infrastructure. Funding comes from the general fund, special revenue funds, grants and fees. EAST OF 101 SEWER IMPACT FEES CAPITAL PROJECTS FUND These fees provide new development’s share of new and rehabilitated sewer collection and treatment facilities to serve the East of Highway 101 area. EAST OF 101 TRAFFIC IMPACT FEES CAPITAL PROJECTS FUND These fees are to provide new development’s share of new and expanded roadway and intersection improvements to serve the East of Highway 101 area. CHILD CARE IMPACT FEES CAPITAL PROJECTS FUND These citywide fees provide new development’s share of new and expanded childcare facilities to serve the childcare needs of working parents. DEVELOPER DEPOSIT FUND To account for a deposit by a large corporation for various capital projects the developer agreed to fund. CAPITAL INFRASTRUCTURE RESERVE FUND Replacement, upgrade, and maintenance of the City’s infrastructure are backlogged, constituting a significant liability. Funds are set aside in this fund as part of the budget process and as part of the City’s reserve policy to address the replacement and/or upgrade of the city infrastructure (such as parks, buildings, facilities, streets, sidewalks, and storm water facilities). 33 GOVERNMENTAL FUNDS BALANCE SHEET JUNE 30, 2016 Low and Moderate East of 101 General Income Capital Sewer Fund Housing AssetsImprovementImpact Fees ASSETS Cash and investments (Note 2)$19,931,377 $2,190,747 $1,028,163 $2,467,653 Receivables: Accounts 7,945,482 8,128 678,625 Accrued interest 57,493 5,137 4,992 Loans 1,197,700 Due from other funds (Note 4B)100 Inventory 824 Restricted cash and investments (Note 2)66,895 Land held for redevelopment (Note 1M) Prepaids 32,756 $27,968,032 $3,468,607 $1,706,788 $2,472,645 Total Assets LIABILITIES Liabilities: Accounts payable $1,006,737 $6,800 $1,173,871 Accrued salaries and benefits 3,621,781 Other payable 206,402 165,894 Deposits Unearned revenue 115,927 $1,968,879 Due to other funds (Note 4B) Total Liabilities 4,950,847 6,800 1,339,765 1,968,879 Fund Balances (Note 6): Nonspendable 33,580 Restricted 3,461,807 503,766 Committed 3,654,283 Assigned 1,578,153 367,023 Unassigned 17,751,169 Total Fund Balances (Deficits)23,017,185 3,461,807 367,023 503,766 Total Liabilities and Fund Balances (Deficits)$27,968,032 $3,468,607 $1,706,788 $2,472,645 CITY OF SOUTH SAN FRANCISCO Capital Projects Funds 34 East of 101 Capital Other Total Traffic Child Care Developer InfrastructureGovernmentalGovernmental Impact Fees Impact Fees Deposit Reserve Fund Funds Funds $7,197,036 $2,867,905 $812,017 $17,592,545 $20,112,708 $74,200,151 180,588 8,812,823 16,217 6,936 2,961 45,840 43,578 183,154 579,016 1,776,716 100 824 349,057 415,952 1,900,000 1,900,000 32,756 $7,213,253 $2,874,841 $814,978 $17,638,385 $23,164,947 $87,322,476 $146,297 $2,333,705 3,621,781 35,065 407,361 $742,094 1,073,108 1,815,202 736,416 2,821,222 100 100 742,094 1,990,986 10,999,371 33,580 $7,213,253 $2,874,841 72,884 $17,638,385 21,173,961 52,938,897 3,654,283 1,945,176 17,751,169 7,213,253 2,874,841 72,884 17,638,385 21,173,961 76,323,105 $7,213,253 $2,874,841 $814,978 $17,638,385 $23,164,947 $87,322,476 Capital Projects Funds 35 CITY OF SOUTH SAN FRANCISCO GOVERNMENTAL FUNDS BALANCE SHEET - RECONCILIATION OF GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES JUNE 30, 2016 Total fund balances reported on the governmental funds balance sheet $76,323,105 Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds because of the following: Capital assets used in Governmental Activities are not financial resources and, therefore, are not reported in the Governmental Funds.228,457,320 Internal service funds are used by management to charge the cost of management of communication, telephone, building, fleet maintenance, equipment replacement, workers' compensation, employee benefits, insurance, and post-retirement healthcare benefits to individual funds. The assets and liabilities are included in Governmental Activities in the Statement of Net Position.(10,303,720) The assets and liabilities below are not due and payable in the current period and therefore are not reported in the funds: Long-term debt (10,714,152) Deferred outflows related pension 12,582,780 Net pension liability (117,037,903) Deferred inflows related to pension (11,248,886) Non-current portion of compensated absences (4,629,480) Net position of governmental activities $163,429,064 See accompanying notes to financial statements 36 This Page Left Intentionally Blank Low and Moderate East of 101 General Income Capital Sewer Fund Housing AssetsImprovementImpact Fees REVENUES Property taxes $24,777,659 Sales taxes 17,710,425 Transient occupancy taxes 13,442,952 Franchise Fees 3,982,092 Other taxes 5,124,574 Intergovernmental 7,833,659 $2,351,355 Interest and rentals 3,080,567 $280,436 $33,489 Licenses and permits 6,896,897 Charges for services 8,659,873 517,952 Fines and forfeitures 791,756 Other 336,267 135,680 104,644 Total Revenues 92,636,721 416,1162,455,999 551,441 EXPENDITURES Current: City Council 268,133 City Clerk 646,518 City Treasurer 118,788 City Attorney 782,389 City Manager 1,735,423 Finance 2,186,648 Non-departmental 1,124,348 2,500 Human Resources 1,468,785 Fire 24,058,478 Police 25,319,536 Public Works 5,025,897 8,538,733 Parks and Recreation 13,234,028 Library 4,681,188 Economic and Community Development 6,144,861 491,672 Other Debt service: Principal repayments Total Expenditures 86,795,020 491,6728,538,733 2,500 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 5,841,701 (75,556)(6,082,734)548,941 OTHER FINANCING SOURCES (USES) Transfers in (Note 4C)1,976,872 6,161,203 Transfers out (Note 4C)(6,082,763)(4,716) Total Other Financing Sources (Uses)(4,105,891)6,161,203 (4,716) Net Change in Fund Balances 1,735,810 (75,556)78,469 544,225 Fund balances (deficits) - July 1 21,281,375 3,537,363 288,554 (40,459) Fund balances (deficits) - June 30 $23,017,185 $3,461,807$367,023$503,766 See accompanying notes to financial statements Capital Projects Funds CITY OF SOUTH SAN FRANCISCO GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2016 38 East of 101 Capital Other Total Traffic Child Care Developer InfrastructureGovernmentalGovernmental Impact FeesImpact Fees Deposit Reserve Fund Funds Funds $1,660,961$26,438,620 17,710,425 13,442,952 3,982,092 1,551,054 6,675,628 2,175,340 12,360,354 $108,530 $46,362 $305,480 352,589 4,207,453 6,896,897 1,637,445 341,284 $269,155 3,960,649 15,386,358 791,756 201,996 1,660,992 2,439,579 1,745,975 387,646 269,155 507,476 11,361,585110,332,114 268,133 646,518 118,788 782,389 1,735,423 2,186,648 2,500 133,892 1,263,240 1,468,785 116,862 24,175,340 139,450 25,458,986 2,500 1,279,216 14,846,346 13,234,028 4,681,188 1,271,122 7,907,655 395,749 395,749 656,000 656,000 2,500 2,500 3,992,291 99,825,216 1,743,475 385,146 269,155 507,476 7,369,294 10,506,898 5,000 8,143,075 (475,073)(269,155)(527,812)(5,834,180)(13,193,699) (475,073)(269,155)(527,812)(5,829,180)(5,050,624) 1,268,402 385,146 (20,336)1,540,114 5,456,274 5,944,851 2,489,695 72,884 17,658,721 19,633,847 70,866,831 $7,213,253 $2,874,841 $72,884$17,638,385$21,173,961$76,323,105 Capital Projects Funds 39 CITY OF SOUTH SAN FRANCISCO Reconciliation of the NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS with the STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2016 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS$5,456,274 Amounts reported for Governmental Activities in the Statement of Activities are different because of the following: Capital Assets Transactions Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense. Capital assets additions 8,587,722 Retirement and adjustment of capital assets (173,153) Current year depreciation (8,128,337) Long-Term Debt Payments Repayment of principal is an expenditure in the governmental funds, but in the Statement of Net Position the repayment reduces long-term liabilities. Repayment of principal is added back to fund balance656,000 Accrual of Non-Current Items of current financial resources and therefore is not reported as revenue or expenditures in governmental funds (net change): Compensated absences (352,387) Unavailable revenue (219,545) Net pension liability, and deferred outflows and inflows of resources6,739,769 Allocation of Internal Service Fund Activity Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of the internal service fund is reported with governmental activities.5,423,378 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES$17,989,721 See accompanying notes to financial statements The amount below included in the Statement of Activities does not require the use 40 CITY OF SOUTH SAN FRANCISCO GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2016 Variance with Final Budget ActualPositive Original Final Amount(Negative) Resources (inflows): Property taxes $24,313,857$24,313,857$24,777,659 $463,802 Sales taxes 16,530,43619,332,43617,710,425(1,622,011) Transient occupancy taxes 12,000,00013,430,10013,442,952 12,852 Franchise fees 3,344,0003,344,0003,982,092 638,092 Other taxes 4,385,3634,385,3635,124,574 739,211 Intergovernmental 6,369,8877,702,3677,833,659 131,292 Interest and rentals 2,931,5002,931,5003,080,567 149,067 Licenses and permits 3,876,8545,961,8546,896,897 935,043 Charges for services 8,786,1088,717,1088,659,873 (57,235) Fines and forfeitures 838,500 838,500 791,756 (46,744) Other 234,248 248,148 336,267 88,119 Amounts available for appropriation 83,610,75391,205,23392,636,721 1,431,488 Charges to appropriations (outflows) City Council 237,768 268,135 268,133 2 City Clerk 691,304 751,302 646,518 104,784 City Treasurer 131,193 131,192 118,788 12,404 City Attorney 782,578 782,578 782,389 189 City Manager 1,588,3621,764,0991,764,093 6 Finance 2,027,7132,231,3122,231,311 1 Non-departmental 1,013,5351,305,4771,305,476 1 Human Resources 1,475,8481,527,3831,518,820 8,563 Fire 21,754,72224,103,92624,103,932 (6) Police 24,959,42425,356,50925,319,536 36,973 Public Works 3,912,3315,328,8345,328,828 6 Parks and Recreation 13,903,62613,464,41413,462,221 2,193 Library 4,607,2184,769,3544,731,555 37,799 Economic and Community Development 5,731,9796,849,4856,791,573 57,912 Total charges to appropriations 82,817,60188,634,00088,373,173 260,827 OTHER FINANCING SOURCES (USES) Transfers in (Note 4C)1,022,3012,175,3481,976,872 (198,476) Transfers out (Note 4C)(1,700,000)(8,632,720)(6,082,763)2,549,957 Total Other Financing Sources (Uses)(677,699)(6,457,372)(4,105,891)2,351,481 NET CHANGE IN FUND BALANCES $115,453($3,886,139)157,657$4,043,796 Fund Balance - July 1 21,281,375 Adjustment to budgetary basis: Encumbrance adjustments 1,578,153 Fund Balance - June 30 $23,017,185 See accompanying notes to financial statements Budgeted Amounts 41 CITY OF SOUTH SAN FRANCISCO LOW AND MODERATE INCOME HOUSING ASSETS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 Variance with Final Budget Positive BudgetActual Amounts(Negative) REVENUES: Interest and rental $167,000 $280,436 $113,436 Other 619,000 135,680 (483,320) Total Revenues 786,000 416,116 (369,884) EXPENDITURES: Current: Economic and Community Development 2,088,456 491,6721,596,784 Total Expenditures 2,088,456 491,6721,596,784 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (1,302,456)(75,556)1,226,900 OTHER FINANCING SOURCES (USES) Transfers out (230)230 Total other financing sources (uses)(230)230 NET CHANGE IN FUND BALANCE ($1,302,686)(75,556)$1,227,130 Fund balance - July 1 3,537,363 Fund balance - June 30 $3,461,807 SPECIAL REVENUE FUND See accompanying notes to financial statements 42 MAJOR PROPRIETARY FUNDS Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges. The concept of major funds established by GASB Statement 34 extends to Proprietary Funds. The City reported all enterprise funds as major proprietary funds. GASB 34 does not provide for the disclosure of budget versus actual comparisons regarding proprietary funds that are major funds. SEWER ENTERPRISE FUND This fund accounts for user charges and debt proceeds supporting the operation, maintenance, and capital expansion of the wastewater collection and treatment system. PARKING DISTRICT FUND This fund accounts for meter and parking permit fees used to acquire and maintain parking facilities. STORM WATER FUND This fund accounts for user charges sustaining the Storm Water Management Program mandated by state and federal authorities. 43 CITY OF SOUTH SAN FRANCISCO PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2016 Governmental Business-type Activities - Enterprise FundsActivities SewerParkingStorm Internal Enterprise DistrictWater TotalService Funds ASSETS Current assets: Cash and investments (Note 2)$17,206,677$1,892,163$1,022,616$20,121,456$24,714,764 Receivables: Accounts 579,944 6,537586,481 6,861 Accrued interest 35,210 4,794 2,829 42,833 48,497 Deposit 203,510 Restricted cash and investments (Note 2)6 6 Total current assets 17,821,8371,896,9571,031,98220,750,77624,973,632 Noncurrent assets: Capital assets: (Note 3) Nondepreciable 12,312,0241,023,320172,99713,508,341 103,736 Depreciable, net accumulated depreciation 102,562,14911,034,339 68,076113,664,5644,820,021 Total non-current assets 114,874,17312,057,659241,073127,172,9054,923,757 Total Assets 132,696,01013,954,6161,273,055147,923,68129,897,389 Deferred Outflow Related to pension (Note 7)1,398,087 1,398,087 LIABILITIES Current liabilities: Accounts payable 230,252 478 12,753243,483 132,396 Other payable 148,930 9,966 158,896 77,874 Accrued interest payable 741,143 741,143 Deposits payable 7,500 7,500 Accrued insurance loss (Note 11)712,000 Compensated absences obligation (Note 1K)300,217 4,062 2,885307,164 789,142 Current portion of long-term debt (Note 5)4,536,800 4,536,800 565,476 Total current liabilities 5,964,842 14,506 15,6385,994,9862,276,888 Noncurrent liabilities: Accrued insurance losses (Note 11)10,688,947 Compensated absences obligation (Note 1K)192,615 12,397 36,278241,290 609,126 Net OPEB obligation (Note 9)24,904,700 Noncurrent portion of long-term debt (Note 5)38,706,032 38,706,0321,673,522 Net pension liability (Note 7)13,004,212 13,004,212 Total noncurrent liabilities 51,902,859 12,397 36,27851,951,53437,876,295 Total Liabilities 57,867,701 26,903 51,91657,946,52040,153,183 Deferred Inflow Related to pension (Note 7)1,249,876 1,249,876 NET POSITION: Net investment in capital assets 71,631,34112,057,659241,07383,930,0732,684,759 Unrestricted (deficit)3,345,1791,870,054980,0666,195,299(12,940,553) Total Net Position $74,976,520$13,927,713$1,221,13990,125,372($10,255,794) Some amounts reported for business-type activities in the statement of net position are different because certain internal service fund assets and liabilities are included in business-type activities47,926 $90,173,298 See accompanying notes to financial statements 44 CITY OF SOUTH SAN FRANCISCO PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION FOR THE YEAR ENDED JUNE 30, 2016 Governmental Business-type Activities - Enterprise FundsActivities SewerParkingStorm Internal Enterprise District Water TotalService Funds OPERATING REVENUES Charges for services $19,515,965 $405,105$19,921,070$23,721,250 Other cities' participation 5,752,765 5,752,765 Permit fees 53,376 53,376 Parking fees $843,199 843,199 Total Operating Revenues 25,322,106 843,199 405,10526,570,41023,721,250 OPERATING EXPENSES Personnel expenses 7,165,353 268,3711,140,7668,574,49014,230,674 Professional services 167,746 90,650 258,396 566,256 OPEB expenses 535,039 535,0391,895,762 Program supplies 303,830 50,415 99,330 453,5751,994,409 Insurance 144,602 2,536 147,1381,056,255 Self-insurance and claims 1,924,421 Repair and maintenance 1,111,670 (126,681)984,989 557,714 Rents and leases 1,592,100 1,592,100 Utilities 1,348,299 50,780 10,9711,410,050 35,210 Administration 1,290,005 100,900 64,2271,455,132 Depreciation 3,790,710 257,063 14,5274,062,300 722,185 Other 23,808 2,935 26,743 282,088 Total Operating Expenses 17,305,416 895,2751,299,26119,499,95223,264,974 Operating Income (Loss)8,016,690 (52,076)(894,156)7,070,458 456,276 NONOPERATING REVENUES (EXPENSES) Interest income 238,389 32,012 18,800 289,201 324,158 Gain on dispositions of capital assets 28,272 Interest expense (1,206,947)(1,206,947)(83,845) Other 50,023 7,000 57,023 816,525 Total Nonoperating Revenues (Expenses)(918,535)32,012 25,800 (860,723)1,085,110 Income (loss) before transfers 7,098,155 (20,064)(868,356)6,209,7351,541,386 TRANSFERS Transfers in (Note 4C)4,716 930,841 935,5574,240,000 Transfers out (Note 4C)(16,010)(16,010)(108,923) Change in Net Position 7,086,861 (20,064)62,4857,129,2825,672,463 Net Position (Deficits) - July 1 67,889,65913,947,7771,158,65482,996,090(15,928,257) Net Position (Deficits) - June 30 $74,976,520$13,927,713$1,221,139$90,125,372($10,255,794) Change in Net Position$7,129,282 Some amounts reported for business-type activities in the statement of activities are different because the net revenue (expense) of certain internal service funds is reported with business-type activities 249,085 Change in Net Position of Business-Type Activities$7,378,367 See accompanying notes to financial statements 45 CITY OF SOUTH SAN FRANCISCO PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2016 Governmental Business-type Activities - Enterprise FundsActivities SewerParkingStorm Internal EnterpriseDistrictWaterTotalService Funds CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers$25,634,123$843,199$405,568$26,882,890 Cash payment to suppliers for goods and services(6,342,845)(365,612)(159,833)(6,868,290)($5,215,820) Cash payment to employees for services(7,887,380)(263,338)(1,140,332)(9,291,050)(14,408,388) Cash received from interfund service provided 24,611,366 Cash payment for judgments and claims (1,867,474) Other payments (4,794) Net Cash Provided by (Used in) Operating Activities11,403,898214,249(894,597)10,723,5503,114,890 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Receipts from other funds 100 Transfers in4,716930,841935,5574,240,000 Transfers out(16,010)(16,010)(108,923) Net Cash Provided by Noncapital Financing Activities(11,294)930,841919,5474,131,177 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid on long-term debt(4,420,781)(4,420,781)(547,574) Interest paid on long-term debt(1,285,695)(1,285,695)(83,845) Acquisition of capital assets, net(4,808,900)(164,415)(4,973,315)(513,421) Proceeds from the sale of capital assets 28,272 Net Cash Used in Capital and Related Financing Activities(10,515,376)(164,415)(10,679,791)(1,116,568) CASH FLOWS FROM INVESTING ACTIVITIES Interest received237,73931,44018,355287,534331,265 Net Cash Provided by Investing Activities237,73931,44018,355287,534331,265 Net Increase (Decrease) in cash and cash equivalents1,114,967245,689(109,816)1,250,8406,460,764 Cash and cash equivalents, beginning16,091,7161,646,4741,132,43218,870,62218,254,000 Cash and cash equivalents, ending$17,206,683$1,892,163$1,022,616$20,121,462$24,714,764 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss)$8,016,690($52,076)($894,156)$7,070,458$456,276 Adjustments to reconcile operating income (loss) to cash flows from operating activities: Depreciation3,790,710257,06314,5274,062,300722,185 Other non-operating revenue (expenses)50,0237,00057,023816,525 Net change in assets and liabilities: Accounts and lease receivables261,994(6,537)255,45773,591 Accounts payable3,699(5,737)(15,865)(17,903)(202,319) Other payable2,8099,96612,77559,105 Accrued insurance losses 56,947 OPEB obligations 1,094,000 Compensated absence obligations26,8365,03343432,30338,580 (Decrease) increase due to retirement system(748,863)(748,863) Net Cash Provided by (Used in) Operating Activities$11,403,898$214,249($894,597)$10,723,550$3,114,890 See accompanying notes to basic financial statements 46 FIDUCIARY FUND An agency fund is used to account for assets held by the City acting as an agent for another government entity. The financial activity of this fund, excluded from the Entity-wide financial statements, is presented in a separate Fiduciary Fund financial statement. SUCCESSOR AGENCY PRIVATE PURPOSE TRUST FUND The Fund is used to account for the activities of the Successor Agency to the former Redevelopment Agency of the City of South San Francisco. SSF EMPLOYEE DEFERRED COMP TRUST OVERSIGHT FUND This fund is used to pay for the administrative costs of monitoring the Deferred Compensation Funds on behalf of City employees. 47 Agency Fund SuccessorSSF Employee AgencyDef Comp Private PurposeTrust Trust FundOversight ASSETS Cash and investments (Note 2)$302,408$62,944 Accounts receivable2,932 Interest receivable10,184158 Advances to the City (Note 5)10,714,152 Loans receivable (Note 13B)245,103 Restricted cash and investments (Note 2)89,868,512 Capital assets (Note 13C): Nondepreciable52,769,724 Depreciable, net accumulated depreciation2,985,964 Total Assets$156,898,979$63,102 LIABILITIES Accounts payable$9,533$12,500 Accrued interest payable942,140 Deposits 37,519 Other accrued liabilities 50,602 Noncurrent portion of pollution remediation (Note 13E)537,000 Long-term debt (Note 13D): Due within one year2,000,000 Due in more than one year55,590,000 Total Liabilities59,116,192$63,102 NET POSITION Held in trust for other purposes$97,782,787 See accompanying notes to financial statements CITY OF SOUTH SAN FRANCISCO STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2016 48 Successor Agency Private Purpose Trust Fund ADDITIONS Intergovernmental$3,466,496 Interest and rentals971,567 Total Additions 4,438,063 DEDUCTIONS Economic and Community Development 1,067,949 Interest expense 2,856,438 Depreciation 86,452 Total Deductions 4,010,839 Change in net position 427,224 NET POSITION HELD IN TRUST FOR OTHER PURPOSES Beginning of the year 97,355,563 End of the year $97,782,787 See accompanying notes to financial statements CITY OF SOUTH SAN FRANCISCO FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED JUNE 30, 2016 49 This Page Left Intentionally Blank CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of the Financial Reporting Entity As required by generally accepted accounting principles, the financial statements present the City of South San Francisco (the City) as the Primary Government, with its component units for which the City is considered financially accountable. The component units discussed below are included in the City's reporting entity because of the significance of their operational and financial relationships with the City. B. Description of Blended Component Units The accompanying basic financial statements include all funds and boards and commissions that are controlled by the City Council. The basic financial statements include the City’s blended component units, entities for which the City is considered to be financially accountable. A blended component unit, although a legally separate entity, is in substance, part of the City’s operations and so data from this unit is combined with the City. The City’s following blended component units are described below. The City of South San Francisco Capital Improvements Financing Authority is a joint exercise of powers authority created in 1991 between the City and the City of South San Francisco former Redevelopment Agency. The Financing Authority is authorized to borrow money through the purchase or issuance of bonds, notes, or other obligations for the purpose of making loans to the City and other public entities to finance capital improvements. The City Council members serve as the Board of Directors. C. Description of Discrete Component Unit The City of South San Francisco Conference Center Authority was established in 1992 to manage and operate the South San Francisco Conference Center. The Authority is governed by a Board of nine commissioners consisting of two Council members and seven representatives from various businesses appointed by City Council. The Authority does not meet the criteria of a blended component unit, since the City Council is not the component unit’s governing body and the Authority does not provide services entirely to the City. However the City is financially accountable and is able to impose its will on the Authority. The Authority is therefore considered a discrete component unit with its financial data reported separately from the financial data of the City. The City of South San Francisco Conference Center Authority financial statements may be obtained from the Authority at 255 South Airport Boulevard, South San Francisco, CA 94080. 51 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Basis of Presentation Government-wide Statements - The Statement of Net Position and the Statement of Activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Interfund transfers and amounts owed between funds within the primary government have been eliminated from the statements. Amounts representing interfund services and uses remain in the statements. These statements distinguish between the governmental and business- type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the City’s funds, including fiduciary funds and blended component units. Separate statements for each fund category – governmental, proprietary, and fiduciary – are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. E. Major Funds Major funds are defined as funds that have either assets, liabilities, revenues or expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand total. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds. The City reported the following major governmental funds in the accompanying financial statements: General Fund – Accounts for resources traditionally associated with government, such as administration, public safety, library, parks, maintenance, and recreation, outside of those accounted for in other funds. 52 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Low and Moderate Income Housing Asset Special Revenue Fund – This fund was established to account for the activities related to the assets assumed by the City as Housing Successor to the housing activities of the former Redevelopment Agency of the City. Capital Improvement Capital Projects Fund - Accounts for expenditures associated with the acquisition, construction, or improvement of City-owned facilities and infrastructure. Funding comes from the General Fund, Special Revenue funds, grants and fees. East of 101 Sewer Impact Fees Capital Projects Fund – These fees provide new development’s share of new and rehabilitated sewer collection and treatment facilities to serve the East of Highway 101 area. East of 101 Traffic Impact Fees Capital Projects Fund – These fees are to provide new developments share of new and expanded roadway and intersection improvements to serve the East of Highway 101 area. Child Care Impact Fees Capital Projects Fund – These citywide fees provide new development’s share of new and expanded childcare facilities to serve the City. Developer Deposits Capital Projects Fund – Accounts for a deposit by a large corporation for various capital projects the developer agreed to fund. Capital Infrastructure Reserve Fund – Replacement, upgrade, and maintenance of the City’s infrastructure are backlogged, constituting a significant liability. Funds are set aside in this fund as part of the budget process and as part of the City’s reserve policy to address the replacement and/or upgrade of the city infrastructure (such as parks, buildings, facilities, streets, sidewalks, and storm water facilities). The City reported all enterprise funds as major funds in the accompanying financial statements. The enterprise funds are: Sewer Enterprise Fund - Accounts for user charges and debt proceeds supporting the operation, maintenance, and capital expansion of the wastewater collection and treatment system. Parking District Fund - Accounts for meter and parking permit fees used to acquire and maintain parking facilities. Storm Water Fund - Accounts for user charges sustaining the Storm Water Management Program mandated by state and federal authorities. The City also reports the following fund types: Internal Service Funds - These funds account for City services, self insurance, health and retirement benefits, and equipment replacement; all of which are provided to other departments on a cost-reimbursement basis. 53 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fiduciary Funds - An agency fund is used to account for assets held by the City as an agent for SSF Employee Deferred Comp Trust Oversight Fund. The Successor Agency Private-Purpose Trust Fund accounts for the accumulation of resources to be used for payments at appropriate amounts and times in the future. The financial activities of the funds are excluded from the Government-wide financial statements, but are presented in the separate Fiduciary Fund financial statements. F. Basis of Accounting The government-wide, proprietary, private-purpose trust fund, and discretely presented component unit financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. The agency funds which only report assets and liabilities and do not have a measurement focus. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds from long-term debt and acquisitions under capital leases are reported as other financing sources. Those revenues susceptible to accrual are property and sales taxes, certain intergovernmental revenues, interest revenue, licenses and permits, charges for services, fines and forfeitures. Sales taxes collected and held by the state at year end on behalf of the City are also recognized as revenue. Other receipts and taxes are recognized as revenue when the cash is received. Non-exchange transactions, in which the City gives or receives value without directly, receiving or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenue. Thus, both restricted and unrestricted net position may be made available to finance program expenditures. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary. The City considers restricted shared state revenues such as gasoline taxes and public safety sales taxes, restricted locally imposed transportation sales taxes, fines, forfeitures, licenses, permits, charges for services, and program grants as program revenues. 54 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) G. Budgets, Budgetary Accounting, and Encumbrances The City is not legally required to budget any of its funds, but does so to enhance City management's effectiveness in their financial planning efforts and to enhance control over the City's operations. Budgets are adopted on a modified accrual basis, except for encumbrances and for the Capital Improvement Fund. Encumbrances are considered expenditures in the year of the purchase order issuance. The Capital Improvement Fund is adopted on a multi-year project basis with unexpended and unencumbered budgets reappropriated in the following year. The City operates under the general laws of the State of California (the State) and annually adopts a budget effective July 1 for the ensuing fiscal year for the General fund; Special Revenue funds; Capital Projects funds except for the Developer Deposits Capital Projects Fund; and Enterprise funds. The budget is adopted by the City Council and controlled at the department level for the General fund and at the fund level or lower for all other funds with adopted budgets. From the effective date of the budget, the amounts stated therein as proposed expenditures become appropriations to the various City departments. The City Council may amend the budget by resolution during the fiscal year. The department heads may authorize transfers within one object category within the same department within a fund. The City Manager may authorize transfers between object categories and departments within a fund. All appropriations lapse at year-end, except for capital projects and encumbrances. Original adopted budgets and final amended budgets are presented in the basic financial statements. Supplementary budget appropriations were necessary during the year ended June 30, 2015. Encumbrance accounting, under which, purchase orders, contracts and other commitments for the expenditure of funds are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of the budgetary process. Encumbrances outstanding at year-end are reported as reservations of fund balances since they do not constitute expenditures or liabilities. Encumbrances are reappropriated in the following year. The budgetary comparison statements present comparisons of the legally adopted budget with actual charges to appropriations on a budgetary basis. In order to provide a meaningful comparison, the actual charges on a budgetary basis include encumbrances, which is a basis that differs significantly from those used to present financial statements in conformity with generally accepted accounting principles. Certain indirect costs are included in program expenses reported for individual functions and activities. H. Cash Equivalents - For purposes of the statement of cash flows, the City considers all highly liquid investments (including all restricted assets) with maturity of three months or less when purchased to be cash equivalents. The City maintains a cash and investment pool that is available for use by all funds. As the proprietary funds' share of this pool is readily available when needed, such share is also considered to be cash equivalent. Deposit assets in the proprietary funds are related to insurance and benefits and are not considered cash equivalents for purposes of the statement of cash flows. 55 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I. Inventory and Prepaid Items - consist of consumable supplies. Inventory is stated at cost (first- in, first-out method). The costs are recorded as expenditures at the time the individual inventory or prepaid item is consumed. Reported inventory and prepaid items are equally offset by a fund balance reservation, which indicates that they do not constitute "available spendable resources" even though they are a component of net current assets. J. Capital Assets - All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair market value on the date contributed. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each year represents that year’s pro rata share of the cost of capital assets. Depreciation is provided using the straight line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. The City has assigned the useful lives listed below to capital assets: Buildings 50 years Clean water facilities and transmission lines 40 years Improvements 30 years Machinery and equipment 5-20 years Furniture and fixtures 12 years Infrastructure 20-40 years Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. The capitalization level is $20,000 for vehicles, and $100,000 for all else, including all other equipment that is not a vehicle. K. Vacation and Sick Pay - are accrued as earned. Upon termination, employees are paid for all unused vacation at their current hourly rates. After five to twenty years of employment, one half of accumulated sick leave becomes vested, up to a maximum amount as specified under labor contract provisions. The vested portion is available for current use or, if unused, is payable at termination or retirement. The long-term portion of the liability for compensated absences for governmental fund type operations is recorded as compensated absences in the government-wide financial statements. The portion expected to be permanently liquidated is recorded in the Health and Retirement Benefits Internal Service Fund. Proprietary fund liabilities are recorded within their respective funds. 56 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The changes of the compensated absences were as follows: GovernmentalBusiness-Type Activities Activities Total Beginning Balance $5,636,781 $516,151$6,152,932 Additions 4,215,100 434,1534,649,253 Payments (3,824,133)(401,850)(4,225,983) Ending Balance $6,027,748 $548,454$6,576,202 Current Portion $3,537,997 $307,164$3,845,161 Compensated absences are liquidated by the fund that has recorded the liability. The long-term portion of governmental activities compensated absences is liquidated primarily by the Health and Retirement Benefits Internal Service Fund. L. Property Tax Levy, Collection and Maximum Rates - State of California Constitution Article XIII A provides that the combined maximum property tax rate on any given property may not exceed 1% of its assessed value unless an additional amount for general obligation debt has been approved by voters. Assessed value is calculated at 100% of market value as defined by Article XIII A and may be adjusted by no more than 2% per year unless the property is sold, transferred, or substantially improved. The State Legislature has determined the method of distribution of receipts from a 1% tax levy among the counties, cities, school districts and other districts. The County of San Mateo assesses properties, bills for and collects property taxes on the schedule that follows: Secured Unsecured Valuation/lien dates January 1 January 1 Levy dates July 1 July 1 Due dates (delinquent as of) 50% on November 1 (December 10) July 1 (August 31) 50% on February 1 (April 10) The term "unsecured" refers to taxes on personal property other than land and buildings. These taxes are secured by liens on the property being taxed. Property taxes levied are recorded as revenue and receivables when they are collected during the fiscal year of levy or within 60 days of year-end. 57 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) M. Land held for development - is stated at the lower of historical cost or net realizable value (equal to agreed upon sales price if a disposition and development agreement has been reached with a developer). N. Unbilled Services - for the Sewer Rental Enterprise Fund are accrued at year-end. O. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the dates of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting periods. Actual results could differ from those estimates. P. Deferred Outflows/Inflows of Resources - In addition to assets, the statement of financial position or balance sheet reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. In addition to liabilities, the statement of financial position or balance sheet reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Q. New Accounting Pronouncements Governmental Accounting Standards Board (GASB) Statement No. 72 – In February 2015, GASB issued Statement No. 72, Fair Value Measurement and Application. The intention of this Statement is to provide guidance for determining a fair value measurement for financial reporting by requiring measurement of certain assets and liabilities at fair value using a consistent and more detailed definition of fair value and accepted valuation techniques. Governmental Accounting Standards Board (GASB) Statement No. 76 – The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. The objective of this statement is to reduce the GAAP hierarchy to two categories of authoritative GAAP from the four categories under GASB Statement No. 55. The statement is effective for the periods beginning after June 15, 2015, or the 2015-2016 fiscal year. Governmental Accounting Standards Board (GASB) Statement No. 79 – Certain External Investment Pools and Pool Participants. The objective of this Statement is to address for certain external investment pool and their participants the accounting and financial reporting implications that result from changes in the regulatory provisions referenced by previous accounting and financial reporting standards. This statement is effective for the periods beginning after December 15, 2015, or the 2015-2016 fiscal year. 58 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) R. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are inputs – other than quoted prices included within level 1 – that are observable for an asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for an asset or liability. If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement. NOTE 2 - CASH AND INVESTMENTS The City’s goal is to invest at the maximum yield, consistent with safety and liquidity, while individual funds can process payments for expenditures at any time. A. Policies The City invests in individual investments and in investment pools. Individual investments are evidenced by specific identifiable securities instruments, or by an electronic entry registering the owner in the records of the institution issuing the security, called the book entry system. In order to increase security, the City employs the Trust Department of a bank as the custodian of certain City managed investments, regardless of their form. California Law requires banks and savings and loan institutions to pledge government securities with a market value of 110% of the City’s cash on deposit, or first trust deed mortgage notes with a market value of 150% of the deposit, as collateral for these deposits. Under California Law this collateral is held in a separate investment pool by another institution in the City’s name and places the City ahead of general creditors of the institution. 59 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) The City’s investments are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year. B. Classification Cash and investments as of June 30, 2016 are classified in the financial statements as shown below, based on whether or not their use is restricted under the terms of City debt instruments or agency agreements. Financial Statement Presentation: Statement of Net Position: City of South San Francisco: Cash and investments available for operations$119,036,371 Restricted cash and investments415,958 Total Primary Government cash and investments119,452,329 Statement of Fiduciary Assets: Cash and investments available for operations365,352 Restricted cash and investments89,868,512 Total Fiduciary cash and investments90,233,864 Conference Center: Cash and investments available for operations2,830,795 Restricted cash and investments488,124 Total South San Francisco Conference Center cash and investments3,318,919 Total cash and investments$213,005,112 The City does not allocate investments by fund. Each proprietary fund’s portion of Cash and Investments Available for Operations is in substance a demand deposit available to finance operations, and is considered a cash equivalent in preparing the statement of cash flows. 60 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) C. Investments Authorized by the California Government Code and the City’s Investment Policy The City’s investment policy and the California Government Code allow the City to invest in the following provided the credit ratings of the issuers are acceptable to the City and approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code, or the City’s Investment Policy where it is more restrictive: Minimum MaximumMaximum MaximumCredit PercentageInvestment Authorized Investment TypeMaturityQualityof Portfolioin One Issuer U.S. Treasury Obligations5 yearsN/ANo LimitNo Limit U.S. Agency Securities 5 yearsN/A25%No Limit Asset Backed Securities 5 yearsAA20%No Limit Commercial Paper 270 daysA1,P125%5% Repurchase Agreements 90 daysAANo LimitNo Limit Local Agency Investment Fund (LAIF) Upon DemandN/A$65 millionNo Limit Money Market Mutual Funds N/AHighest Rating Category 20%10% Corporate Medium Term Notes 5 years A 30%5% Supranational Obligations 5 yearsAA30%10% The City of South San Francisco Conference Center Authority (Authority) maintains its cash and investments separately from the City. The investment policy of the Authority contains no limitations on the amount that can be invested in any one issue beyond that stipulated by the California Government Code. 61 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) D. Investments Authorized by Debt Agreements The Successor Agency to the former Redevelopment Agency must maintain required amounts o/f cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged as reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with City ordinance bond indentures or State statute. The table below identifies the investment types that are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements: MaximumCredit Percentage Authorized Investment TypeMaturityQualityof Portfolio U.S. Treasury ObligationsN/AN/ANo Limit U.S. Agency Securities N/A N/ANo Limit Commercial Paper 270 daysHighest Rating Category No Limit State and Local Investment Pool N/AHighest Rating Category No Limit Guaranteed Investment Contracts (fully collateralized) (A) N/A AAANo Limit Municipal Obligations N/AHighest Rating Category No Limit State Obligations N/ATwo Highest Rating Categories No Limit (A) Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury Obligations or U.S. Agency Obligations. 62 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) The City of South San Francisco Conference Center Authority must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged as reserves to be used if the Authority fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with the Authority’s ordinance, bond indentures or State statute. The table below identifies the investment types that are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements: Minimum Maximum MaximumCredit Percentage Authorized Investment TypeMaturityQualityof Portfolio U.S. Treasury Obligations N/AN/ANo Limit U.S. Agency Securities N/AN/A 10% Negotiable Certificates of Deposit N/A A No Limit Commercial Paper N/AAaaNo Limit Corporate Notes N/A A No Limit Money Market N/AN/ANo Limit Guaranteed Investment Contracts (fully collateralized) (A)N/AAAANo Limit (A) Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury Obligations or U.S. Agency Obligations. E. Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City also manages its interest rate risk is by holding most investments to maturity, thus reversing unrealized market gains and losses. 63 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) 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 of the City’s investments by maturity or earliest call date: Remaining maturity Less thanOne to Five 1 yearYearsTotal City and Fiduciary: U.S. Agency Securities Non-callable $7,673,908$31,044,405$38,718,313 U.S. Treasury Notes 6,116,65367,613,38273,730,035 Local Agency Investment Fund 24,101,852 24,101,852 Money Market Funds 25,652,522 25,652,522 Guaranteed Investment Agreements 3,099,7503,099,750 Corporate Notes 13,745,41513,745,415 Asset Backed Securities 7,306,6497,306,649 Supranational Obligations 3,593,0643,593,064 South San Francisco Conference Center: Local Agency Investment Fund 2,263,411 2,263,411 Money Market Funds 488,124 488,124 Total Investments $66,296,470$126,402,665192,699,135 Cash in Banks and on Hand - City of South San Francisco 19,738,593 Cash in Banks and on Hand - South San Francisco Conference Center 567,384 Total Cash and Investments $213,005,112 The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance is available for withdrawal on demand, and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and Bills, and corporations. At June 30, 2016, these investments have an average maturity of 167 days. Money market funds are available for withdrawal on demand and as of June 30, 2016 have an average maturity of 34 days. 64 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) F. Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of June 30, 2016, for each of the Primary Government’s investment types as provided by Moody’s investment rating system, except as noted: Investment Type Aaa Aaa-mfAa1-Aa3A1-A3 Total City and Fiduciary: U.S. Agency Securities Non-callable $38,718,313 $38,718,313 Money Market Funds $25,652,522 25,652,522 Corporate Notes 1,472,245 $2,036,170$10,237,00013,745,415 Asset Backed Securities 7,306,649 7,306,649 Supranational Obligations 3,593,064 3,593,064 South San Francisco Conference Center: Money Market Funds 488124 488,124 Totals $51,090,271$26,140,646$2,036,170$10,237,00089,504,087 City and Fiduciary: Not rated: Guaranteed Investment Agreements 3,099,750 Local Agency Investment Fund 24,101,852 Exempt from credit rate disclosure: U.S. Treasury Notes 73,730,035 South San Francisco Conference Center: Not rated: Local Agency Investment Fund 2,263,411 Total Investments $192,699,135 G. Concentration of Credit Risk The City’s investment policy contains limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer, other than U. S. Treasury securities, mutual funds, and external investment pools that represent 5% or more of total Entity-wide investments are as follows at June 30, 2016: Investment Issuer Type Amount Federal National Mortgage Association U.S. agency securities $13,600,475 Federal Home Loan Bank U.S. agency securities 12,927,077 65 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) H. Fair Value Hierarchy The City categorized its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The following is a summary of the fair value hierarchy of the fair value of investments of the City as of June 30, 2016: Level 2 Total Investments by Fair Value Level: City and Fiduciary: U.S. Agency Securities Non-callable $38,718,313$38,718,313 U.S. Treasury Notes 73,730,03573,730,035 Local Agency Investment Fund 24,101,85224,101,852 Corporate Notes 13,745,41513,745,415 Asset Backed Securities 7,306,6497,306,649 Supranational Obligations 3,593,0643,593,064 South San Francisco Conference Center: Local Agency Investment Fund 2,263,4112,263,411 Totals $163,458,739163,458,739 Investments Measured at Amortized Cost: City and Fiduciary: Money Market Mutual Funds 25,652,522 Guaranteed Investment Agreements 3,099,750 South San Francisco Conference Center: Money Market Mutual Funds 488,124 Total Investments $192,699,135 All Investments classified in Level 2 of the fair value hierarchy, with the exception of the Local Agency Investment Fund, are valued using various pricing techniques maintained by Interactive Data Pricing, including benchmark curves, sector groupings and matrix pricing. These prices are obtained from various pricing sources by our investment manager. The Local Agency Investment Fund, classified in Level 2 of the fair value hierarchy, are valued using the fair value factor provided by the Treasurer of the State of California, which is calculated as the fair value divided by the amortized cost of the investment pool. Money market funds and guaranteed investment agreements were reported at amortized cost. 66 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 3 - CAPITAL ASSETS A. Capital Asset Changes – Changes in capital assets during the fiscal year consist of: Balance Balance June 30, 2015AdditionsRetirements AdjustmentsTransfersJune 30, 2016 Governmental activities Capital assets not being depreciated: Land$47,563,435 $47,563,435 Construction in Progress 18,356,005$8,587,722 ($259,605)26,684,122 Total capital assets not being depreciated65,919,4408,587,722(259,605)74,247,557 Capital assets being depreciated: Buildings and Improvements84,955,957 84,955,957 Infrastructure - Streets 183,079,365 183,079,365 Infrastructure - Storm Drains8,927,492 8,927,492 Infrastructure - Traffic Control Devices5,138,138 5,138,138 Equipment and Vehicle6,454,247 ($66,248)6,387,999 Furniture and Fixtures 1,837,554 1,837,554 Total capital assets being depreciated 290,392,753 (66,248)290,326,505 Less accumulated depreciation for: Buildings and Improvements (30,480,269)(2,253,800)83,745 (32,650,324) Infrastructure - Streets (85,152,103)(5,331,486)(90,483,589) Infrastructure - Storm Drains (2,753,061)(204,500)(2,957,561) Infrastructure - Traffic Control Devices (2,403,122)(183,199)(2,586,321) Equipment and Vehicle (5,937,788)(124,200)66,248 2,707 (5,993,033) Furniture and Fixtures (1,414,762)(31,152)(1,445,914) Total accumulated depreciation (128,141,105)(8,128,337)66,24886,452 (136,116,742) Net Governmental Fund Capital Assets Being Depreciated 162,251,648(8,128,337)86,452 154,209,763 Internal Service Fund Capital Assets Capital assets not being depreciated: Construction in Progress 34,854103,736 ($34,854)103,736 Total capital assets not being depreciated 34,854103,736 (34,854)103,736 Capital assets being depreciated: Equipment and Vehicle 13,146,500409,685(191,062)34,85413,399,977 Accumulated depreciation (8,048,833)(722,185)191,062 (8,579,956) Net Internal Service Fund Capital Assets Being Depreciated 5,097,667(312,500)34,8544,820,021 Governmental activity capital assets, net $233,303,609$250,621 ($173,153)$233,381,077 67 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 3 - CAPITAL ASSETS (Continued) Balance Balance June 30, 2015AdditionsJune 30, 2016 Business-type activities Capital assets, not being depreciated: Land $1,396,758 $1,396,758 Construction in Progress 7,138,268$4,973,315 12,111,583 Total capital assets not being depreciated8,535,0264,973,315 13,508,341 Capital assets being depreciated: Buildings and Improvements 66,715,639 66,715,639 Clean Water Facilities and Lines 75,522,774 75,522,774 Infrastructure - Storm Drains 4,773,977 4,773,977 Infrastructure - Streets 7,377,546 7,377,546 Equipment and Vehicle 11,179,118 11,179,118 Furniture and Fixtures 31,154 31,154 Total capital assets being depreciated165,600,208 165,600,208 Less accumulated depreciation for: Buildings and Improvements (12,924,189)(1,619,770)(14,543,959) Clean Water Facilities and Lines (23,501,744)(1,888,069)(25,389,813) Infrastructure - Storm Drains (556,962)(159,132)(716,094) Infrastructure - Streets (1,211,981)(209,570)(1,421,551) Equipment and Vehicle (9,647,314)(185,759)(9,833,073) Furniture and Fixtures (31,154)(31,154) Total accumulated depreciation (47,873,344)(4,062,300)(51,935,644) Net capital assets being depreciated117,726,864(4,062,300)113,664,564 Business-type activity capital assets, net$126,261,890$911,015 $127,172,905 Balance Balance June 30, 2015AdditionsRetirementsJune 30, 2016 Component Unit: South San Francisco Conference Center Buildings and Improvements $10,531,390$329,141($206,433)$10,654,098 Furniture and Fixtures 701,40220,616(7,860)714,158 Machinery and equipment 237,80213,465(44,371)206,896 Total:11,470,594363,222(258,664)11,575,152 Less accumulated depreciation (7,674,870)(455,271)258,664(7,871,477) Component unit, net $3,795,724($92,049)$3,703,675 B. Capital Asset Contributions - Some capital assets may have been acquired using federal and State grant funds, or were contributed by developers or other governments. Contributed capital assets are valued at their estimated acquisition value on the date contributed. GASB Statement 34 requires that these contributions be accounted for as revenues at the time the capital assets are contributed. 68 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 3 - CAPITAL ASSETS (Continued) C. Depreciation Allocation - Depreciation expense is charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program are as follows: Governmental Activities Governmental functions General government$636,742 Fire379,703 Police22,721 Public works6,553,821 Parks and recreation373,031 Library60,452 Economic and community development101,867 Total Governmental Functions 8,128,337 Internal Service Funds722,185 Total Governmental Activities $8,850,522 Business-Type Activities Sewer Enterprise$3,790,710 Parking District257,063 Storm Water14,527 Total Business-Type Activities $4,062,300 NOTE 4 - INTER-FUND TRANSACTIONS A. Internal Balances Internal balances are presented in the Entity-wide financial statements only. They represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business-type activities. B. Inter-fund Receivables and Payables Amounts due to or due from other funds reflect inter-fund balances for services rendered or short- term loans expected to be repaid in the next fiscal year. Due From Other Fund Due to Other Fund Amount General Fund Supplemental Law Enforcement Services Special Revenue Fund $100 $100 69 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 4 - INTER-FUND TRANSACTIONS (Continued) C. Transfers Resources may be transferred from one City fund to another. Transfers routinely fund capital projects or capital outlays, lease or debt service payments, and operating expenses. The purpose of majority of these transfers is to reimburse a fund that has made an expenditure on behalf of another fund. Some expenditures reimbursed were for capital projects, debt service, maintenance and operating expenses, and contributions for post-employment benefits. Transfers between funds during the fiscal year ended June 30, 2016 were as follows: FROM FUND (OUT) TO FUND (IN)AMOUNT General Fund Capital Improvement Capital Projects Fund $1,587,763 Storm Water Enterprise Fund 250,000 4,240,000 Non-major Governmental Funds 5,000 East of 101 Sewer Impact Fees Capital Project Fund Sewer Enterprise Fund 4,716 East of 101 Traffic Impact Fees Capital Project Fund Capital Improvement Capital Projects Fund 475,073 Developer Deposit Capital Projects Funds Capital Improvement Capital Projects Fund 269,155 Capital Infrastructure Reserve Capital Projects Fund Capital Improvement Capital Projects Fund 527,812 Non-major Governmental Funds General Fund 1,976,848 Capital Improvement Capital Projects Fund 3,176,491 Storm Water Enterprise Fund 680,841 Sewer Enterprise Fund General Fund 24 Capital Improvement Capital Projects Fund 15,986 Internal Service Fund Equipment Replacement Fund Capital Improvement Capital Projects Fund 108,923 Total $13,318,632 Health and Retirement Benefits Internal Service Fund 70 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 5 - LONG-TERM DEBT A. Current Year Transactions and Balances A summary of governmental and business-type activities transactions for the fiscal year ended June 30, 2016 follows: Authorized and Balance at Balance atCurrent IssuedJune 30, 2015RetirementJune 30, 2016Portion Governmental Activities: 2007 Loans Payable to the Successor Agency (1)$11,370,152$656,000$10,714,152 Total Governmental Activities Debt 11,370,152656,00010,714,152 Capital Leases (2): 2008 Two Fire Trucks 357,21397,059260,154$100,983 2010 Two Ambulances 216,11584,156 131,95987,190 2010 Two Fire Trucks 669,691111,296558,395115,736 2013 Fire Truck 1,057,513120,378937,135123,576 2014 Sweeper 486,040134,685351,355137,991 Total Capital Leases 2,786,572547,5742,238,998565,476 Net Governmental Long-Term Debt $14,156,724$1,203,574$12,953,150$565,476 Business-Type Activities: 1999 State Water Resources Loan, 2.6%, due 8/1/22 (3)$47,721,252$23,371,118$2,665,772$20,705,346$2,735,082 2004 State Water Resources Loan, 2.5%, due 1/1/27 (3)21,258,52913,339,4121,068,56612,270,8461,095,280 2008 State Water Resources Loan, 2.4%, (4) 9,164,5056,833,083416,4436,416,640426,438 2005 Sewer Revenue Bonds, 2.75 to 5.0%, due 04/30/26 (5)6,000,0004,120,000270,0003,850,000280,000 Total Enterprise Fund Long-Term Debt $84,144,286$47,663,613$4,420,781$43,242,832$4,536,800 Component Unit - Conference Center: 2003 Revenue Bonds, 2.25% to 4.0%, due 9/1/18 (6)$5,865,000$1,740,000$410,000$1,330,000$425,000 Unamortized refunding loss on 2003 bonds (77,334)(26,515)(50,819) Total Conference Center $5,865,000$1,662,666$383,485$1,279,181$425,000 71 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 5 - LONG-TERM DEBT (Continued) (1) As of June 30, 2016, the Oyster Point Improvements Impact Fund owed Successor Agency (formerly the Merged Redevelopment Project Area Capital Project Fund) for developer fees in the amount of $10,714,152 for the Flyover and Hookramps Projects that were completed in prior years. The outstanding balance will be paid off from the future developer fees. With the dissolution of the Agency effective January 31, 2012, the Successor Agency assumed the asset which the City is to repay. This payable is recorded as a long-term obligation (see also Note 13). Prior to the dissolution of all Redevelopment Agencies in California by the State, the former Redevelopment Agency (Agency) advanced $12,176,207 to the Oyster Point Improvement Impact Fee Capital Projects Fund (the Oyster Point Fund). The impact fees are collected according to a fee methodology adopted under the terms of AB 1600. The fees are assessed against commercial development in a specific geographic area that is primarily east of Highway 101 to repay the former Agency for the funds it advanced to the Oyster Point Fund to pay for freeway interchange improvements at Highway 101 and Oyster Point Blvd, and are assessed per an adopted Engineering report's formula that measures each new development's impact on the area's trip traffic. While the former Agency advanced the funds, the impact fee was put in place specifically to charge future developers for their share of traffic trips generated prior to the construction of the improvements. When the Agency was dissolved, the Successor Agency, and therefore, all local taxing entities, are entitled to receive future Oyster Point Impact fees collected by the City from developers. Future developers, not the City of South San Francisco, are legally obligated to pay the future fees until the liability owed to the Successor Agency is paid off as long as the fee continues to be levied and is in place. The repayment has significantly slowed since 2007, as development has subsided and fees assessed have therefore dropped. Management believes it may take 10-30 years or more before the Successor Agency is fully paid back. (2) The City has entered into long-term capital leases with various financing agencies. Under these capital leases, all leased assets shall be distributed to the City at the end of the lease terms and shall thereafter remain the sole property of the City. Therefore, these capital leases have been recorded at the present value of the future minimum lease payments at the date of inception of the lease, and the corresponding assets have been included in the Statement of Net Position as appropriate. Capital lease payments are made from revenues of the Equipment Replacement Internal Service Fund and the General Fund. (3) The two loans were authorized by the State Water Resources Control Board to improve and expand the City’s wastewater treatment plant. Loan proceeds were issued as the projects progressed and debt service payments commenced one year after project completion. Sewage treatment user fees support the debt service payments. (4) State Water Resources Control Board Loan – In November 2007, the City approved the $11.8 million loan agreement with State Water Resources Control Board (SWRCB) to finance the City’s Wet Weather Program project. Under the terms of the contract, the City has agreed to repay $11.8 million to the State in exchange for receiving $9.2 million in proceeds to be used to fund the Project. The difference between the repayment obligation and proceeds amounted to $2.6 million and represents in-substance interest on the outstanding balance. Debt service payments commenced on August 15, 2009. 72 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 5 - LONG-TERM DEBT (Continued) (5) On October 25, 2005, the California Statewide Communities Development Authority issued 2005D Water and Wastewater Revenue Bonds. The City participated in the pooled bond sale and the City’s portion of debt is $6,000,000. Proceeds were used to finance sewer system capital improvement. The principal payment on the debt commenced in October 2006 and is due each October 1. Final principal payment is due on October 1, 2026. Interest payment at the rate of 4.457% is payable semi-annually each April 1 and October 1. The 2005 Water and Wastewater Revenue Bonds are secured by a pledge of net revenues of the City’s Enterprise system. Net Revenues available for debt service amounted to $12.1 million which represented coverage of 26.9 over the $450,566 in debt service. (6) On June 1, 2003, the City of South San Francisco Capital Improvement Financing Authority (CIFA) issued $5,865,000 of 2003 Revenue Bonds. The CIFA was created through a joint exercise of powers agreement between the City and the City of South San Francisco Financing Authority for the purpose of obtaining financing for capital improvements. The 2003 Revenue Bonds are obligations of the CIFA although the Authority is required to make the bond principal and interest payments in return for the use and ownership of the improvements to the leased buildings that comprise the Conference Center’s facilities. The Authority has pledged the $2.50 tax imposed on the City’s hotel occupants on a per day per room basis as the sole source of repayment of these obligations. The 2003 revenue bonds are, in substance, obligations of the Authority and have therefore been recorded as such in these discretely presented component unit financial statements. The 2003 revenue bonds were issued for the purpose of refunding the 1993 revenue bonds. The refunding reduced required interest payments and did not extend the maturities on the bonds. The advance refunding reduced the Authority's total debt service payments by $846,859 and resulted in an accounting loss of $401,345, which has been deferred in accordance with GASB Statement No. 23, Accounting and Financial Reporting for Refunding of Debt Reported by Proprietary Activities. This loss is being amortized over the remaining life of the old debt and the remaining balance is reported as a deferred outflow of resources. The 2003 revenue bonds bear interest rates ranging from 2.25% to 4.00% and mature on September 1, 2018. 73 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 5 - LONG-TERM DEBT (Continued) B. Debt Service Requirements Future debt service requirements, including interest and capital leases, but excludes the 2007 and 2008 Loans payable to the Redevelopment Successor Agency at June 30, 2016, were as follows: Component Unit For the Year Governmental Activities Business-Type ActivitiesConference Center Authority Ended June 30Principal InterestPrincipalInterestPrincipalInterest 2017 $565,476$65,943$4,536,800$566,580$425,000$51,581 2018 538,42147,4314,660,5301,060,207445,00035,644 2019 381,48330,7434,782,037942,915460,00018,400 2020 263,83920,3304,906,394822,328 2021 204,25111,5825,038,676698,146 2022-2026 285,528 9,48417,222,4421,562,106 2026-2029 2,095,95357,753 Totals $2,238,998$185,513$43,242,832$5,710,035$1,330,000$105,625 Certificates of Participation and Capital Leases are issued for the purpose of financing the construction or acquisition of projects defined in each leasing arrangement. Projects are leased to the City for lease payments which, together with unspent proceeds of the leasing arrangement, will be sufficient to meet the debt service obligations of the leasing arrangement. At the termination of the leasing arrangement, title to the project will pass to the City. Leasing arrangements are similar to debt; they allow investors to participate in a share of guaranteed payments which are made by the City. Because they are similar to debt, the present value of the total of the payments to be made by the City is recorded as long-term debt. The City’s leasing arrangements are included in long term obligations discussed above. A summary of capital assets leased through the issuance of leasing arrangements follows: Original Leasing Arrangement Fund/Activity Cost Capital Leases Governmental Activity$5,842,799 74 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 6 - NET POSITION AND FUND BALANCES A. Net Position Net Position is the excess of all the City’s assets and deferred outflows of resources over all its liabilities and deferred inflows of resources, regardless of fund. Net Position are divided into three captions. These captions apply only to Net Position, which is determined only at the Government-wide level, and are described below: Net Investment in Capital Assets describes the portion of Net Position which is represented by the current net book value of the City’s capital assets, less the outstanding balance of any debt issued to finance these assets. Restricted describes the portion of Net Position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. Unrestricted describes the portion of Net Position which is not restricted to use. B. Fund Balance The City’s fund balances are classified in accordance with Governmental Accounting Standards Board Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions, which requires the City to classify its fund balances based on spending constraints imposed on the use of resources. For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint. Nonspendables represents balances set aside to indicate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for redevelopment are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed or assigned, then Nonspendable amounts are required to be presented as a component of the applicable category. Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose. Nonspendable amounts subject to restrictions are included along with spendable resources. Committed fund balances have constraints imposed by Council Resolution of the City Council which may be altered only by Council Resolution of the City Council. Nonspendable amounts subject to council commitments are included along with spendable resources. 75 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 6 – NET POSITION AND FUND BALANCE (Continued) Assigned fund balances are amounts constrained by the City’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Council or its designee and may be changed at the discretion of the City Council or its designee. The City Council had delegated authority to the Finance Director to assign fund balances which are not otherwise restricted or committed. This category includes nonspendables, when it is the City’s intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or committed. Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual general fund balance and residual fund deficits, if any, of other governmental funds. Minimum Fund Balance Policies - The City’s Reserve Policy is to have the General Fund Reserves equal to at least two months of operating revenues of 15% and up to 20%, which is in alignment with GFOA best practices. Included is an emergency reserve that reflects 2% of the general fund operating expenditures budget as well as an economic contingency which is 7% of general fund revenues. Funds in excess of these requirements will continue to be earmarked for paying down long-term liabilities, such as the Retiree Health/Other Post-Employment Benefits (OPEB) or for Infrastructure and Facilities Replacement needs. Detailed classifications of the City’s Fund Balances, as of June 30, 2016, are below: Low and Moderate East of 101 GeneralIncome HousingCapitalSewer Fund Balance Classifications Fund AssetsImprovementImpact Fees Nonspendables: Items not in spendable form: Inventory and prepaid items $33,580 Total Nonspendable Fund Balances 33,580 Restricted for: Sewer Impact Fees $503,766 Low and moderate housing projects $3,461,807 Total Restricted Fund Balances 3,461,807 503,766 Committed for: Capital projects 2,549,027 Local services 1,105,256 Total Committed Fund Balances 3,654,283 Assigned to: Capital projects 1,578,153 $367,023 Total Assigned Fund Balances 1,578,153 367,023 Unassigned: General fund 17,751,169 Total Unassigned Fund Balances 17,751,169 Total Fund Balances $23,017,185$3,461,807$367,023$503,766 (Continued) Capital Project Funds 76 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 6 – NET POSITION AND FUND BALANCE (Continued) East of 101 Capital Other TrafficChild CareDeveloper InfrastructureGovernmental Fund Balance Classifications (continued)Impact FeesImpact FeesDepositReserve FundFunds Restricted for: Traffic impact fees projects $7,213,253 Child Care impact fees projects $2,874,841 Developer deposit fees projects $72,884 Capital infrastructure projects $17,638,385 Gas Tax projects $1,277,733 Developer contributions projects 2,881,055 Community Development Block Grant projects 897,682 Maintenance districts projects 2,153,081 Transportation sales tax projects 1,276,606 City programs projects 4,194,556 Other Special Revenues projects 5,182,175 Capital projects activities 3,311,073 Total Restricted Fund Balances 7,213,2532,874,84172,88417,638,38521,173,961 Total Fund Balances $7,213,253$2,874,841$72,884$17,638,385$21,173,961 C. Net Deficit The Health and Retirement Benefits Internal Service Fund had net deficit in the amount of $18,159,358 at June 30, 2016. This deficit is attributable to the Net OPEB Obligation described in Footnote 9. D. Encumbrances The City uses an encumbrance system as an extension of normal budgetary accounting for governmental funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations. Encumbrances outstanding at year-end are recorded as restricted, committed or assigned fund balance, depending on the classification of the resources to be used to liquidate the encumbrance, since they do not constitute expenditures or liabilities. Unexpended appropriations lapse at year-end and must be reappropriated in the following year. Encumbrances outstanding in governmental funds as of June 30, 2016, were as listed below: Governmental funds:Amount General Fund $1,401,976 Capital Improvement Capital Projects Fund 2,885,611 Other Governmental Funds 325,915 Total $4,613,502 77 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 7 – PENSION PLANS For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. A. General Information about the Pension Plans Plan Descriptions – All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. 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. Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. The Plans’ provisions and benefits in effect at June 30, 2016, are summarized as follows: Miscellaneous Classic Plan Classic Plan PEPRA Plan Hire date Prior to April 25, 2010 After April 25, 2010 On or after January 1, 2013 Benefit formula 2.7% @ 55 2% @ 60 2% @ 62 Benefit vesting schedule 5 years service5 years service5 years service Benefit payments monthly for lifemonthly for lifemonthly for life Retirement age 50-55 50-60 52-62 Monthly benefits, as a % of eligible compensation 2.0% to 2.7%1.092% to 2.418%1.0% to 2.5% Required employee contribution rates 8%7%6.5% Required employer contribution rates 25.053%25.053%25.053% 78 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 7 – PENSION PLAN (Continued) Safety Classic Plan Classic Plan PEPRA Plan Hire date Prior to April 25, 2010 After April 25, 2010 On or after January 1, 2013 Benefit formula 3% @ 50 3% @ 55 2.7% @ 57 Benefit vesting schedule 5 years service5 years service5 years service Benefit payments monthly for lifemonthly for lifemonthly for life Retirement age 50 50-55 50-57 Monthly benefits, as a % of eligible compensation 3%2.4% to 3.0%2.0% to 2.7% Required employee contribution rates 9%9%12% Required employer contribution rates 40.741%40.741%40.741% Employees Covered – As of the June 30, 2014 actuarial valuation date and the June 30, 2015 measurement date, the following employees were covered by the benefit terms for the Plans: MiscellaneousSafety Inactive employees or beneficiaries currently receiving benefits401265 Inactive employees entitled to but not yet receiving benefits 297 107 Active employees 247 151 Total 945 523 Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer 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. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. B. Net Pension Liability The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2015, using an annual actuarial valuation as of June 30, 2014 rolled forward to June 30, 2015 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. Actuarial Assumptions – For the measurement period ended June 30, 2015, the total pension liabilities were determined by rolling forward the June 30, 2014 total pension liability. The June 30, 2014 total pension liabilities were based on the following actuarial methods and assumptions: 79 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 7 – PENSION PLAN (Continued) Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions: Discount Rate Inflation Salary Increase Investment Rate of Return Post Retirement Benefit Increase Mortality (1) The mortality table used was developed based on CalPERS' specific data. The table includes Miscellaneous and Safety June 30, 2014 June 30, 2015 Entry-Age Normal Cost Method 7.65% 2.75% Varies by Entry Age and Service 7.65% Net of Pension Plan Investment Expenses, includes Inflation Contract COLA up to 2.75% until Purchasing Power applies, 2.75% thereafter Derived using CalPers Membership Data for all Funds (1) 20 years of mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the 2014 experience study report. All other actuarial assumptions used in the June 30, 2014 valuation were based on the results of a January 2014 actuarial experience study for the period 1997 to 2011, including updates to salary increase, mortality and retirement rates. Further details of the Experience Study can be found on the CalPERS website. Changes of Assumptions – GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense, but without reduction for pensions plan administrative expense. The discount rate of 7.50 percent used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65 percent used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense. All other assumptions for the June 30, 2014 measurement date were the same as those used for the June 30, 2015 measurement date. Discount Rate – The discount rate used to measure the total pension liability was 7.65% for each Plan. 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 7.65% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.65% will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website. 80 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 7 – PENSION PLAN (Continued) 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. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market 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 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. 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 the 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. Asset Class New Strategic Allocation Real Return Years 1 - 10(a) Real Return Years 11+(b) Global Equity51.0%5.25%5.71% Global Fixed Income19.0%0.99%2.43% Inflation Sensitive6.0%0.45%3.36% Private Equity10.0%6.83%6.95% Real Estate10.0%4.50%5.13% Infrastructure and Forestland2.0%4.50%5.09% Liquidity2.0%-0.55%-1.05% Total100% (a) An expected inflation of 2.5% used for this period. (b) An expected inflation of 3.0% used for this period. 81 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 7 – PENSION PLAN (Continued) C. Changes in the Net Pension Liability The changes in the Net Pension Liability for each Plan are as follows: Miscellaneous Plan: Increase (Decrease) Total Pension Liability Plan Fiduciary Net Position Net Pension Liability/(Asset) Balance at June 30, 2014 $196,752,130$143,740,988$53,011,142 Changes in the year: Service cost3,075,8133,075,813 Interest on the total pension liability 14,393,013 14,393,013 Changes of benefit terms 0 Chases of assumptions (3,374,655)(3,374,655) Differences between actual and expected experience(1,567,798)(1,567,798) Plan to plan resrouce movement (50,555)50,555 Contribution - employer 4,546,984(4,546,984) Contribution - employees 1,411,273(1,411,273) Net investment income 3,221,551(3,221,551) Benefit payments, including refunds of employee contributions (10,407,243)(10,407,243)0 Administrative expenses (160,268)160,268 Net changes 2,119,130(1,438,258)3,557,388 Balance at June 30, 2015 $198,871,260$142,302,730$56,568,530 82 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 7 – PENSION PLAN (Continued) Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: MiscellaneousSafety 1% Decrease 6.65%6.65% Net Pension Liability $81,898,678$109,770,401 Current Discount Rate 7.65%7.65% Net Pension Liability $56,568,530$73,473,585 1% Increase 8.65%8.65% Net Pension Liability $35,564,019$43,669,692 Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2016, the City recognized negative pension expense of $3,196,065 and $4,292,567 for the Miscellaneous and Safety Plans, respectively. At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Miscellaneous Plan: Deferred OutflowsDeferred Inflows of Resourcesof Resources Pension contributions subsequent to measurement date $5,399,856 Changes of assumptions ($2,024,793) Differences between actual and expected experience (940,679) Net differences between projected and actual earnings on plan investments (1,454,500) Total $5,399,856($4,419,972) 83 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 7 – PENSION PLAN (Continued) Safety Plan: Deferred OutflowsDeferred Inflows of Resourcesof Resources Pension contributions subsequent to measurement date$8,581,011 Changes of assumptions ($3,420,806) Differences between actual and expected experience (3,018,849) Net differences between projected and actual earnings on plan investments (1,639,135) Total $8,581,011($8,078,790) $13,937,994 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Miscellaneous Plan: Year EndedAnnual June 30Amortization 2017($2,964,640) 2018(1,976,150) 2019(987,658) 20201,508,476 2021- Thereafter- Safety Plan: Year EndedAnnual June 30Amortization 2017($3,822,025) 2018(3,822,025) 2019(2,534,094) 20202,099,354 2021- Thereafter - 84 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 8 - DEFERRED COMPENSATION PLAN A. Deferred Compensation Plan City employees may defer a portion of their compensation under a City sponsored Deferred Compensation Plan created in accordance with Internal Revenue Code Section 457. Under this Plan, participants are not taxed on the deferred portion of their compensation until it is distributed to them; distributions may be made only at termination, retirement, death or in an emergency as defined by the Plan. The laws governing deferred compensation plan assets require plan assets to be held by a Trust for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under these plans are not the City’s property and are not subject to City control, they have been excluded from these financial statements. NOTE 9 – POST-EMPLOYMENT BENEFITS The City provides certain health care benefits for all employees who retire after attaining age 50 with at least five years of service or disability at any age. The City provides certain health care benefits for those employees hired prior to April 25, 2010. In order to reduce the City’s OPEB obligations over time, the City changed to a defined contribution post retirement health plan for employees hired as of April 25, 2010 or after. For those new hires, the City is now providing a medical after retirement health plan (MARA), and contributes 1.5% of salary for those plans. Benefits are provided as authorized by various memorandums of understanding entered into by the City and its employees. As of June 30, 2016, approximately 365 retirees were eligible to receive benefits. The City provides fully paid medical coverage under various health care plans. A summary of eligibility and retiree contribution requirements are shown below by bargaining unit: 85 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 9 – POST-EMPLOYMENT BENEFITS (Continued) Eligibility * Hired < 4/25/2010 * Age 50 and 5 years City service or disability at any age after 5 years service Medical Benefit* City pays single premium up to largest HMO single premium. Cap for 2015/2016: - $1,046.62/month pre-65 (Blue Shield) - $548.81/month post-65 Medical eligible (Blue Shield) - $1,669.83/ month post-65 not Medicare eligible (Kaiser) * Medicare ineligible retirees allowed to stay in their pre-Medicare premium plans after age 65 * City pays premium and reimburses Medicare Part B hired before 4/25/2010 only Surviving Spouse Benefit * Participation with premium payment * AFSCME, Local 1569, Mid-Management, IAFF - surviving spouses covered 2 months following death of retiree Dental, Vision, & LifeNone During fiscal year 2009, the City implemented the provisions of Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This Statement establishes uniform financial reporting standards for employers providing postemployment benefits other than pensions (OPEB). The provisions of this statement are applied prospectively and do affect prior years financial statements. Required disclosures are presented below. The City offers retirees a single- employer postemployment benefits plan that is administered by the City. The City’s Health and Retirement Benefits Fund hold assets designated for the payment of City’s OPEB obligations. The City joined the California Employers’ Retiree Benefit Trust (CERBT), an agent multiple- employer plan administered by CALPERS, consisting of an aggregation of single-employer plans. A. Funding Policy and Actuarial Assumptions The annual required contribution (ARC) was determined as part of a June 30, 2015 actuarial valuation using the entry age normal actuarial cost method. This is a projected benefit cost method, which takes into account those benefits that are expected to be earned in the future as well as those already accrued. The actuarial assumptions included (a) 4.0% investment rate of return if not pre-funded and assets remain in City’s own investment portfolio; 5.22% if pre- funded with CERBT, (b) 3.25% projected annual salary increase, (c) 3.0% inflation rate. 86 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 9 – POST-EMPLOYMENT BENEFITS (Continued) The actuarial assumptions also included the following health care cost trend: YearNon-MedicareMedicare 2016 2017 20186.5%6.7% 20196.0%6.1% 20205.5%5.6% 2021+5.0%5.0% Actual Premiums Actual Premiums The actuarial methods and assumptions used include techniques that smooth the effects of short- term volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial calculations reflect a long-term perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to revision at least biannually as results are compared to past expectations and new estimates are made about the future. The City’s OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a closed basis using a 22-year amortization period. B. Funding Progress and Funded Status Generally accepted accounting principles permits contributions to be treated as OPEB assets and deducted from the Actuarial Accrued Liability (AAL) when such contributions are placed in an irrevocable trust or equivalent arrangement. In fiscal year 2016, the City made contribution less than the ARC as presented below: Annual required contribution (ARC)$6,449,000 Interest on net OPEB Obligation 1,145,000 Adjustment to annual required contribution (2,417,000) Annual OPEB cost 5,177,000 Contributions made: Benefits paid 2,878,000 Implied subsidy payments 8,000 Prefunding contribution to trust 1,197,000 Total contributions 4,083,000 Change in net OPEB Asset / (Obligation)(1,094,000) Net OPEB Asset / (Obligation) at June 30, 2015 (23,810,700) Net OPEB Asset / (Obligation) at June 30, 2016 ($24,904,700) 87 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 9 – POST-EMPLOYMENT BENEFITS (Continued) The Plan’s annual required contributions and actual contributions for the year ended June 30, 2016 is set forth below (in thousands): Fiscal Year Annual OPEB Cost Actual Contribution Percentage of Annual OPEB Contributed Net OPEB Obligation 6/30/2014 $7,086,000$6,526,00092%$31,821,700 6/30/2015 5,884,00013,895,000236%23,810,700 6/30/2016 5,177,0004,083,00079%24,904,700 Funded Status and Funding Progress – As of June 30, 2015, the most recent actuarial valuation date, the plan was 21.9% funded. The Actuarial Accrued Liability (AAL) for benefits was $73,752,000 and the Actuarial Value of Plan Assets was $16,175,000 resulting in an Unfunded Actuarial Accrued Liability (UAAL) of $57,577,000. The covered payroll (annual payroll of active employees covered by the plan) was $24,471,000 and the ratio of UAAL to the covered payroll was 235.3% percent. The schedule of funding progress presented immediately following the financial statements as required supplementary information, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. A separate audited GAAP basis for this post-employment benefit plan report is not available. NOTE 10 – JOINTLY GOVERNED ORGANIZATIONS The City participates in the jointly governed organizations discussed below through formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each joint organization is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective joint organization, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on that board. Obligations and liabilities of this joint organization are not the City’s responsibility and the City does not have an equity interest in the assets of each joint organization except upon dissolution of the joint organization. 88 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 10 – JOINTLY GOVERNED ORGANIZATIONS (Continued) A. Oyster Point Marina (OPM) was established in 1977 by the City and the San Mateo County Harbor District (Harbor District) for the purpose of expanding, improving and operating the Oyster Point Marina and Park. The governing board consists of two of the City's council members and two Harbor District commissioners. The Harbor District operates OPM. Operation of the Marina provides revenues for the marina's operations. The City retains title to the land; however, the City is not liable for any obligations of the San Mateo County Harbor District. Condensed unaudited financial information may be obtained from San Mateo County Harbor District, #1 Johnson Pier, Half Moon Bay, CA 94019. B. Peninsula Traffic Congestion Relief Alliance (PTCRA) was formed from the merger of The Inter City Transportation Systems Management Agency and Multi-City Transportation Systems Management Agency (MCTSMA) in 2000. The members are Cities of South San Francisco, Brisbane, Colma, Daly City, Half Moon Bay, Millbrae, Pacifica and San Bruno and seven other members for the purpose of mitigating traffic congestion. The governing board consists of one council member from each member city. The finance director of Daly City acts as the treasurer and controller of PTCRA. The individual cities are not liable for the debts, liabilities or obligations of PTCRA. Each member city has an equal interest in PTCRA. Condensed accrual basis unaudited financial information may be obtained from the City of Daly City Finance Department, 333 90th Street, Daly City, CA 94015. C. City/County Association of Governments (C/CAG) was established in 1990 by the County of San Mateo and the Cities of San Mateo County for preparation, adoption, monitoring and enforcing of Countywide state mandated plans. A Board of Directors consisting of one council member from each member city and one member from the County Board of Supervisors governs C/CAG. The city treasurer of San Carlos acts as the treasurer of C/CAG. The individual cities and the County are not liable for the debts, liabilities, or obligations of C/CAG. Condensed unaudited cash basis financial information may be obtained from the City of San Carlos Finance Department, 666 Elm Street, San Carlos, CA 94070. 89 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 11 - RISK MANAGEMENT A. Insurance Coverage The City participates in Association of Bay Area Governments (ABAG) Plan Corporation, a non profit benefit corporation established to provide liability insurance coverage, claims and risk management, and legal defense to its participating members. ABAG Plan provides $5,000,000 of general liability and automobile coverage per occurrence and is responsible for paying claims in excess of the City’s $100,000 self-insured retention. The City's liability coverage through ABAG is a total of $30 million, with the first $5 million covered out of ABAG's financial reserves, and with the next $25 million covered from two excess insurance policies acquired by ABAG. The Plan includes a per occurrence or wrongful act or employee benefit wrongful act up to $10,000,000 with two retained limits of $5,000,000. A boiler and machinery policy insures up to a combined limit of $100,000,000 with various deductibles. For the year ended June 30, 2015, the City paid ABAG Plan $820,014 in premiums and did not receive a refund of premiums paid in prior years. ABAG Plan has not determined the value of the City’s interest in its net position. Financial statements may be obtained from ABAG Services, P.O. Box 2050, Oakland, CA 94694- 2050. The City has also purchased excess coverage insurance for worker’s compensation claims from CSAC Excess Insurance Authority $500,000 self-insured retention. For the past five fiscal years, general liability and worker compensation settlements did not exceed insurance coverage. B. Liability for Uninsured Claims The City provides for the uninsured portion of claims and judgments in the Self Insurance Internal Service Fund. Claims and judgments, including a provision for claims incurred but not reported, are recorded when a loss is deemed probable of assertion and the amount of the loss is reasonably determinable. As discussed above, the City has coverage for such claims, but it has retained the risk for the deductible or uninsured portion of these claims. The City’s liability for uninsured claims is limited to workers’ compensation and general liability claims, as discussed above, and was estimated by management based on prior year’s claims experience as follows: June 30, 2016 Fiscal Year Workers'General 2014-2015 Compensation LiabilityTotal Total Balance, beginning of year $11,081,000$263,000$11,344,000$10,072,000 Current year claims and changes in estimates of prior years claims2,014,474855,2732,869,7473,089,440 Claims Paid (1,867,474)(945,326)(2,812,800)(1,817,440) Balance, end of year $11,228,000$172,947$11,400,947$11,344,000 Current portion $562,000$150,000$712,000$712,000 90 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 12 - COMMITMENTS AND CONTINGENCIES The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney there is no pending litigation which is likely to have a material adverse effect on the financial position of the City. The City participates in Federal and State grant programs. These programs have been audited by the City’s independent auditors in accordance with the provisions of the Federal Single Audit Act as amended and applicable State requirements. No cost disallowances were proposed as a result of these audits; however, these programs are still subject to further examination by the grantors and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial. A. Rental Revenues From Use of City Property The Conference Center Authority, a discrete component unit, leases land from the City under an operating lease commencing on January 1, 1999, with a 30-year term from February 1, 1999, to January 31, 2029. The rent amount is subject to re-negotiation at the option of either party between January 1 and February 28, 2009 and 2019. These leases are considered for accounting purposes to be operating leases. Property lease revenue from the Conference Center Authority during the year fiscal year ended June 30, 2016, was $420,000. The cost and carrying amount of leased land under this lease receivable is $5,460,000. Future minimum lease payments from the Conference Center Authority land leases are as follows: Component Unit Year ending June 30Conference Center 2017$420,000 2018420,000 2019420,000 2020420,000 2021420,000 2022-20262,100,000 2027-2029 1,260,000 T otal $5,460,000 91 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 12 - COMMITMENTS AND CONTINGENCIES (Continued) Price Club Associates leases the land for the Costco store on South Airport Boulevard from the City. Lease payments are based on a percentage of Costco’s gross annual sales, with minimum annual rent set at $400,000, payable in monthly installments of $33,333. In fiscal 2014, Costco exercised the option to extend the lease through fiscal year 2029, with an option for a 6 year extension through fiscal year 2035. In fiscal 2016 lease payments were $400,000. Magnolia Housing leases the land for Magnolia Plaza Senior Apartments from the City. Minimum lease payments are set at $51,800, and are payable through the fiscal year 2062. In fiscal year 2016 lease payments were $51,800. Future minimum lease revenues for the Costco and Magnolia Plaza leases are as follows: Year ending June 30:CostcoMagnolia PlazaTotal 2017$400,000$51,800$451,800 2018400,00051,800451,800 2019400,00051,800451,800 2020400,00051,800451,800 2021400,00051,800451,800 2022-20262,000,000259,0002,259,000 2027-20312,000,000259,0002,259,000 2032-20361,200,000259,0001,459,000 2037-2041259,000259,000 2042-2046259,000259,000 2047-2051259,000259,000 2052-2056259,000259,000 2056-2061259,000259,000 206251,80051,800 $7,200,000$2,382,800$9,582,800 NOTE 13 – FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES The activities of the Successor Agency are reported in the Successor Agency to the former Redevelopment Agency Private-Purpose Trust Fund as the activities are under the control of the Oversight Board. The City provides administrative services to the Successor Agency to wind down the affairs of the former Redevelopment Agency. Information presented in the following footnotes represents assets and liabilities of the Successor Agency. A. Cash and Investments Cash and investments of the Successor Agency as of June 30, 2016 are discussed in Note 2 to the financial statements. Information presented in the following footnotes represents other assets and liabilities of the Successor Agency as of June 30, 2016. 92 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 13 – FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) B. Loans Receivable The Successor Agency assumed the non-housing loans receivable of the former Redevelopment Agency as of February 1, 2012. The former Redevelopment Agency engaged in programs designed to encourage construction of or improvement to low-to-moderate income housing. Under these programs, grants or loans were provided to homeowners or developers who agreed to expend these funds in accordance with the Agency’s terms. C. Capital Assets The Successor Agency assumed the capital assets of the former Redevelopment Agency as of February 1, 2012. All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair market value on the date contributed. The Successor Agency’s policy is to capitalize all assets with costs exceeding certain minimum thresholds and with useful lives exceeding two years. All capital assets with limited useful lives are depreciated over their estimated useful lives. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each year represents that year’s pro rata share of the cost of capital assets. Depreciation of all capital assets is charged as an expense against operations each year and the total amount of depreciation taken over the years, called accumulated depreciation, is reported on the balance sheet as a reduction in the book value of capital assets. Depreciation is provided using the straight line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. The Successor Agency has assigned the useful lives listed below to capital assets: Buildings 50 years Improvements 30 years Machinery and equipment 5-20 years Furniture and fixtures 12 years Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. The capitalization level is $20,000 for vehicles, and $100,000 for all else, including all other equipment that is not a vehicle. 93 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 13 – FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) Capital assets recorded at June 30 are comprised of: Balance Balance June 30, 2015AdditionsJune 30, 2016 Fiduciary activities Capital assets not being depreciated: Land $52,769,724 $52,769,724 Total capital assets not being depreciated 52,769,724 52,769,724 Capital assets being depreciated: Buildings and Improvements 3,788,506 3,788,506 Equipment and Vehicle 242,190 242,190 Furniture and Fixtures 21,506 21,506 Total capital assets being depreciated 4,052,202 4,052,202 Less accumulated depreciation for: Buildings and Improvements (721,905)($83,745)(805,650) Equipment and Vehicle (236,376)(2,707)(239,083) Furniture and Fixtures (21,505)(21,505) Total accumulated depreciation (979,786)(86,452)(1,066,238) Net capital assets being depreciated 3,072,416 (86,452)2,985,964 Fiduciary activity capital assets, net $55,842,140($86,452)$55,755,688 D. Long-Term Debt All of the long-term debt of the Successor Agency were issued by the former Redevelopment Agency. Current year transactions were as follows: Balance Balance Current Type of Obligation June 30, 2015RetirementsJune 30, 2016Portion 2006 Revenue Bonds, 3.75 to 5.13%, due 9/1/35 (1)$58,455,000($1,680,000)$56,775,000$1,745,000 1999 Revenue Bonds, 3.3 to 5.0%, due 9/1/18 (2)1,060,000(245,000)815,000255,000 Total Successor Agency $59,515,000($1,925,000)$57,590,000$2,000,000 94 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 13 – FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) Debt Service Requirements Debt service requirements are shown below for all long-term debt. For the YearSuccessor Agency Activities Ended June 30PrincipalInterest 2017$2,000,000$2,702,556 20182,100,0002,606,906 20192,195,0002,509,444 20201,990,0002,407,444 20212,090,0002,300,319 2022-202612,105,00010,339,895 2027-203115,420,0006,933,234 2032-203619,690,0002,557,000 Totals$57,590,000$32,356,798 (1) On April 19, 2006, the former Agency issued $70,675,000 of Tax Allocation Revenue Bonds, Series 2006A to advance refund and defease $9,920,000 of the 1997 Downtown Tax Allocation Bonds and $23,860,000 of the 1999 Revenue Bonds, and to finance various redevelopment projects. Net proceeds of $9,364,974 and $3,753,130 plus an additional $801,925 and $20,039,830 from the 1997 and 1999 bonds were used to purchase U.S. government securities for the 1997 Downtown Tax Allocation Bonds and 1999 Revenue Bonds, respectively. Those securities were deposited in irrevocable trust with an escrow agent to provide for all future debt service payments. The 1997 and 1999 bonds are considered to be defeased and the liabilities for those bonds have been removed. As of June 30, 2016, $6,755,000 and $11,615,000 of principal remained outstanding on the defeased 1997 and 1999 bonds, respectively. The 2006 Bonds are special obligation of the former Redevelopment Agency payable solely from and secured by a pledge of tax revenues generated within the project area. Interest on the 2006A Bonds is payable on each March 1 and September 1. Principal payments are due each September 1.The pledge of future tax revenue ends upon repayment of the $94,079,604 in remaining debt service on the bonds which is scheduled to occur in 2036. On September 1, 2016, the remaining principal balance of $56,775,000 was repaid. In September 2012, a bank escrow account in the amount of $50.2 million was established by action of the Successor Agency Oversight Board and approved by the State Department of Finance. The purpose of the escrow account is to set aside funds to call and fully repay the 2006 Tax Allocation Revenue Bonds in 2016. 95 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 13 – FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) (2) On February 1, 1999, the City of South San Francisco Capital Improvements Financing Authority (CIFA) issued $31,720,000 of 1999 Revenue Bonds to provide funds to pay loans (Homart Development), to finance redevelopment and housing activities and to refund the 1993 Gateway tax allocation bonds, which were due in 2018. The 1999 revenue bonds are obligations of the CIFA although the Redevelopment Agency is required to make bond principal and interest payments from the Gateway increment tax and housing set-aside revenues. The 1999 Revenue Bonds are, in substance, obligations of the Redevelopment Agency, and have therefore been recorded as such in these financial statements. On April 16, 2006, the Gateway principal portion of the $23,860,000 was refunded as discussed in (1) above. The housing bonds are now obligations of the Redevelopment Successor Agency. The 1999 Revenue Bonds were issued and net proceeds of $9,614,978 plus an additional $956,470 of 1993 bond reserve funds were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1993 bonds. As a result, the 1993 bonds are considered to be defeased and the liability for those bonds has been removed. Pledged Revenues With the dissolution of the former Redevelopment Agency discussed above, Tax Increment is no longer distributed, and instead the Successor Agency receives payments from the County’s Redevelopment Property Tax Trust Fund (RPTTF) that are to be used to fund debt service on the Bonds, with no distinction between housing and non-housing revenues. E. POLLUTION REMEDIATION In fiscal 2010, the former Redevelopment Agency purchased an unimproved parcel adjacent to the Caltrain Commuter Rail station from the State of California. The current rail station is among the oldest on the peninsula, is under the freeway, is small, has limited parking, and is not adjacent to the Downtown due to the freeway. The Successor Agency will contribute that site to the County Transportation Agency for the future reconfiguration of that rail station after the County secures necessary funding from other sources. The Successor Agency’s contribution will include use of the purchased parcel in order to make the station safer, more visually pleasing, more usable to commuters and business shuttles, and to make the Downtown accessible to pedestrians to and from the train station. As part of that land purchase, the price paid by the former Agency to the State was discounted to give the former Agency credit in the amount of $537,000 against known pollution remediation costs on the site. If the funding from the County for the station reconfiguration does not materialize, and if construction does not occur on that site, the pollution mitigation costs will be much less. 96 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2016 NOTE 13 – FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) F. COMMITMENTS AND CONTINGENCIES State Approval of Enforceable Obligations The Successor Agency prepares a Recognized Obligation Payment Schedule (ROPS) semi- annually that contains all proposed expenditures for the subsequent six-month period. The ROPS is subject to the review and approval of the Oversight Board as well as the State Department of Finance. Although the State Department of Finance may not question items included on the ROPS in one period, they may question the same items in a future period and disallow associated activities. The amount, if any, of current obligations that may be denied by the State Department of Finance cannot be determined at this time. The City expects such amounts, if any, to be immaterial. State Asset Transfer Review The activities of the former Redevelopment Agency and the Successor Agency are subject to further examination by the State of California and the amount, if any, of expenditures which may be disallowed by the State cannot be determined at this time. In addition, the State Controller’s Office will be conducting a review of the propriety of asset transfers between the former Redevelopment Agency or the Successor Agency and any public agency that occurred on or after January 1, 2011 and the amount, if any, of assets that may be required to be returned to the Successor Agency cannot be determined at this time. The City expects such amounts, if any, to be immaterial. G. SUBSEQUENT EVENT In August 2016, the Successor Agency transferred ten properties to the City in accordance with the Amended Long Range Property Management Plan (LRPMP) dated May 21, 2015. The ten properties were valued at $16,973,787. Seven of the ten properties were based on net book value, while the remaining three properties were based on an appraisal that was performed prior to the purchase of the properties by the Redevelopment Agency in 2008. The LRPMP stated that the ten properties were for governmental use, therefore the City received these properties at no cost. 97 This Page Left Intentionally Blank REQUIRED SUPPLEMENTARY INFORMATION CITY OF SOUTH SAN FRANCISCO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2016 Measurement Date 6/30/20146/30/2015 Total Pension Liability Service cost $3,449,973$3,075,813 Interest on total pension liability 13,930,54414,393,013 Changes of benefit terms Changes of assumptions (3,374,655) Difference between expected and actual experience (1,567,798) Benefit payments, including refunds of employee contributions (9,287,975) (10,407,243) Net change in total pension liability 8,092,542 2,119,130 Total pension liability - beginning 188,659,588 196,752,130 Total pension liability - ending (a)$196,752,130$198,871,260 Plan fiduciary net position Contributions - employer $4,235,454$4,546,984 Contributions - employee 1,466,176 1,411,273 Net investment income 21,712,340 3,221,551 Other miscellaneous income Benefit payments, including refunds of employee contributions (9,287,975) (10,407,243) Plan to plan resource movement (50,555) Administrative expense (160,268) Net change in plan fiduciary net position 18,125,995 (1,438,258) Plan fiduciary net position - beginning 125,614,993 143,740,988 Plan fiduciary net position - ending (b)$143,740,988$142,302,730 Net pension liability - ending (a)-(b)$53,011,142$56,568,530 Plan fiduciary net position as a percentage of the total pension liability 73.06%71.56% Covered payroll $17,725,581$17,798,104 Net pension liability as percentage of covered- employee payroll 299.07%317.83% Notes to Schedule: * - Fiscal year 2015 was the 1st year of implementation. Benefit changes. The figures above do not include any liability impact that may have resulted from plan changes which occurred after the actuarial valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Serivce Credit (a.k.a. Golden Handshakes). Changes in assumptions. GASB 68, paragraph 68 states that the long long-term expected rate of return should be determined net of pension plan investment expense, but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense. All other assumptions for the June 30, 2014 measurement date were the same as those used for the June 30, 2015 measurement date. Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plans SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Last 10 Years* 100 CITY OF SOUTH SAN FRANCISCO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2016 Fiscal Year Ended June 30 2015 2016 Actuarially determined contribution $4,210,973$5,399,856 Contributions in relation to the actuarially determined contributions 4,210,9735,399,856 Contribution deficiency (excess)$0 $0 Covered payroll $17,798,104$21,409,193 Contributions as a percentage of covered- employee payroll 23.66%25.22% Notes to Schedule Valuation date:6/30/2012 6/302013 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age Amortization method Level percentage of payroll Remaining amortization period 24 years as of the Valuation Date Asset valuation method 15-year smoothed market Inflation 2.75% Salary increases Investment rate of return Retirement age Mortality *- Fiscal year 2015 was the 1st year of implementation. The probabilities of Retirement are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007 The probabilities of mortality are based on the 2010 CalPERS Experience St udy 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 Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plans Last 10 Years* SCHEDULE OF CONTRIBUTIONS 3.30% to 14.20% depending on Age, Service, and type of employment 7.50% net of administrative expenses 101 CITY OF SOUTH SAN FRANCISCO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2016 Measurement Date 6/30/20146/30/2015 Total Pension Liability Service cost $5,143,842$4,968,087 Interest on total pensio n liability 18,899,54419,398,484 Changes of benefit terms Changes of assumptions (4,789,129) Difference between expected and actual experience (4,226,388) Benefit payments, including refunds of employee contributions (13,161,296) (13,556,606) Net change in total pension liability 10,882,090 1,794,448 Total pension liability - beginning 256,002,648 266,884,738 Total pension liability - ending (a)$266,884,738$268,679,186 Plan fiduciary net position Contributions - employer $6,535,399$7,191,715 Contributions - employee 2,151,163 1,714,039 Net investment income 29,348,051 4,264,997 Other miscellaneous income Benefit payments, including refunds of employee contributions (13,161,296) (13,556,606) Plan to plan resource movement Administrative expense (219,696) Net change in plan fiduciary net position 24,873,317 (605,551) Plan fiduciary net position - beginning 170,937,835 195,811,152 Plan fiduciary net position - ending (b)$195,811,152$195,205,601 Net pension liability - ending (a)-(b)$71,073,586$73,473,585 Plan fiduciary net position as a percentage of the total pension liability 73.37%72.65% Covered payroll $15,994,412$16,679,857 Net pension liability as percentage of covered- employee payroll 444.37%440.49% Notes to Schedule: * - Fiscal year 2015 was the 1st year of implementation. Safety Agent Multiple-Employer Defined Benefit Pension Plans Last 10 Years* SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Benefit changes. The figures above do not include any liability impact that may have resulted from plan changes which occurred after the actuarial valuation date. This applies or voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes in assumptions. GASB 68, paragraph 68 states that the long long-term expected rate of return should be determined net of pension plan investment expense, but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense. All other assumptions for the June 30, 2014 measurement date were the same as those used for the June 30, 2015 measurement date. 102 CITY OF SOUTH SAN FRANCISCO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2016 Fiscal Year Ended June 30 2015 2016 Actuarially determined contribution $7,191,715$8,538,138 Contributions in relation to the actuarially determined contributions 7,191,7158,538,138 Contribution deficiency (excess)$0 $0 Covered payroll $16,679,857$18,986,895 Contributions as a percentage of covered- employee payroll 43.12%44.97% Notes to Schedule Valuation date:6/30/2012 6/302013 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age Amortization method Level percentage of payroll Remaining amortization period 24 years as of the Valuation Date Asset valuation method 15-year smoothed market Inflation 2.75% Salary increases Investment rate of return Retirement age Mortality *- Fiscal year 2015 was the 1st year of implementation. 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 Safety Agent Multiple-Employer Defined Benefit Pension Plans Last 10 Years* SCHEDULE OF CONTRIBUTIONS The probabilities of Retirement are based on the 2010 CalPERS Experience Study 3.30% to 14.20% depending on Age, Service, and type of employment 7.50% net of administrative expenses 103 CITY OF SOUTH SAN FRANCISCO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2016 Overfunded (In Thousands)Overfunded(Underfunded) Entry Age(Underfunded)Actuarial ActuarialActuarialActuarialActuarial Liability as ValuationValue ofAccruedAccruedFundedCoveredPercentage of DateAssetsLiabilityLiabilityRatioPayrollCovered Payroll 6/30/2012 $0$71,306($71,306)0%$31,431(226.9%) 6/30/2013 066,444(66,444)0%29,914(222.1%) 6/30/201516,17573,752(57,577)21.9%24,471(235.3%) Other Post-Employment Benefits Schedule of Funding Progress 104 SUPPLEMENTARY INFORMATION This Page Left Intentionally Blank GENERAL FUND The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The General Fund is comprised of the following: GENERAL PURPOSE FUND This fund accounts for resources traditionally associated with government, such as administration, public safety, library, parks maintenance, and recreation, outside of those accounted for in other funds. MEASURE W FUND This fund accounts for revenue as the result of the voter-approved one-half percent sales and use tax. Revenues are committed for maintenance and enhancement of local services. 107 General PurposeMeasure W Total ASSETS Cash and investments $19,653,889 $277,488$19,931,377 Receivables: Accounts 6,900,682 1,044,800 7,945,482 Accrued interest 57,493 57,493 Due from other funds 100 100 Inventory 824 824 Prepaids 32,756 32,756 Total Assets $26,645,744 $1,322,288 $27,968,032 LIABILITIES Accounts payable $965,882 $40,855 $1,006,737 Accrued salaries and benefits 3,621,781 3,621,781 Other payable 206,402 206,402 Unearned revenue 115,927 115,927 Total Liabilities 4,909,992 40,855 4,950,847 FUND BALANCES Nonspendable 33,580 33,580 Committed 2,549,027 1,105,256 3,654,283 Assigned 1,401,976 176,177 1,578,153 Unassigned 17,751,169 17,751,169 Total Fund Balances 21,735,752 1,281,433 23,017,185 Total Liabilities and Fund Balances $26,645,744 $1,322,288 $27,968,032 CITY OF SOUTH SAN FRANCISCO GENERAL FUND COMBINING BALANCE SHEETS JUNE 30, 2016 108 General PurposeMeasure W Total REVENUES Property taxes $24,777,659 $24,777,659 Sales taxes 16,217,000 1,493,425 17,710,425 Transient occupancy taxes 13,442,952 13,442,952 Franchise Fees 3,982,092 3,982,092 Other taxes 5,124,574 5,124,574 Intergovernmental 7,833,659 7,833,659 Interest and rentals 3,080,567 3,080,567 Licenses and permits 6,896,897 6,896,897 Charges for services 8,659,873 8,659,873 Fines and forfeitures 791,756 791,756 Other 336,267 336,267 Total Revenues 91,143,296 1,493,425 92,636,721 EXPENDITURES Current: City Council 268,133 268,133 City Clerk 646,518 646,518 City Treasurer 118,788 118,788 City Attorney 782,389 782,389 City Manager 1,642,688 92,735 1,735,423 Finance 2,168,369 18,279 2,186,648 Non-departmental 1,124,348 1,124,348 Human Resources 1,468,785 1,468,785 Fire 24,058,478 24,058,478 Police 25,319,536 25,319,536 Public Works 4,943,919 81,978 5,025,897 Parks and Recreation 13,234,028 13,234,028 Library 4,681,188 4,681,188 Economic and Community Development 6,125,861 19,000 6,144,861 Total Expenditures 86,583,028 211,992 86,795,020 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 4,560,268 1,281,433 5,841,701 OTHER FINANCING SOURCES (USES) Transfers in 1,976,872 1,976,872 Transfers out (6,082,763)(6,082,763) Total Other Financing Sources (Uses)(4,105,891)(4,105,891) Net Change in Fund Balances 454,377 1,281,433 1,735,810 Fund balances (deficits) - July 1 21,281,375 21,281,375 Fund balances (deficits) - June 30 $21,735,752 $1,281,433$23,017,185 CITY OF SOUTH SAN FRANCISCO GENERAL FUND COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2016 109 CITY OF SOUTH SAN FRANCISCO GENERAL FUND COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2016 Variance with Final Budget ActualPositive OriginalFinalAmount(Negative) Resources (inflows): Property taxes$24,313,857$24,313,857$24,777,659$463,802 Sales taxes16,530,43617,832,43616,217,000(1,615,436) Transient occupancy taxes12,000,00013,430,10013,442,95212,852 Franchise fees3,344,0003,344,0003,982,092638,092 Other taxes4,385,3634,385,3635,124,574739,211 Intergovernmental6,369,8877,702,3677,833,659131,292 Interest and rentals2,931,5002,931,5003,080,567149,067 Licenses and permits3,876,8545,961,8546,896,897935,043 Charges for services8,786,1088,717,1088,659,873(57,235) Fines and forfeitures838,500838,500791,756(46,744) Other234,248248,148336,26788,119 Amounts available for appropriation83,610,75389,705,23391,143,2961,438,063 Charges to appropriations (outflows) City Council237,768268,135268,1332 City Clerk691,304751,302646,518104,784 City Treasurer131,193131,192118,78812,404 City Attorney782,578782,578782,389189 City Manager1,588,3621,671,3621,671,3584 Finance2,027,7132,213,0332,213,0321 Non-departmental1,013,5351,305,4771,305,4761 Human Resources1,475,8481,527,3831,518,8208,563 Fire21,754,72224,103,92624,103,932(6) Police24,959,42425,356,50925,319,53636,973 Public Works3,912,3315,070,6795,070,6736 Parks and Recreation13,903,62613,464,41413,462,2212,193 Library4,607,2184,769,3544,731,55537,799 Economic and Community Development5,731,9796,830,4856,772,57357,912 Total charges to appropriations82,817,60188,245,82987,985,004260,825 OTHER FINANCING SOURCES (USES) Transfers in1,022,3012,175,3481,976,872(198,476) Transfers out(1,700,000)(8,632,720)(6,082,763)2,549,957 Total Other Financing Sources (Uses)(677,699)(6,457,372)(4,105,891)2,351,481 NET CHANGE IN FUND BALANCES$115,453($4,997,968)(947,599)$4,050,369 Fund Balance - July 1 21,281,375 Adjustment to budgetary basis: Encumbrance adjustments 1,401,976 Fund Balance - June 30 $21,735,752 Budgeted Amounts General Purpose 110 Variance with Variance with Final Budget Final Budget Actual Positive Actual Positive Original Final Amount (Negative)Original Final Amount (Negative) $24,313,857$24,313,857$24,777,659 $463,802 $1,500,000$1,493,425 ($6,575)16,530,43619,332,43617,710,425(1,622,011) 12,000,00013,430,10013,442,952 12,852 3,344,000 3,344,000 3,982,092 638,092 4,385,363 4,385,363 5,124,574 739,211 6,369,887 7,702,367 7,833,659 131,292 2,931,500 2,931,500 3,080,567 149,067 3,876,854 5,961,854 6,896,897 935,043 8,786,108 8,717,108 8,659,873 (57,235) 838,500 838,500 791,756 (46,744) 234,248 248,148 336,267 88,119 1,500,000 1,493,425 (6,575)83,610,75391,205,23392,636,721 1,431,488 237,768 268,135 268,133 2 691,304 751,302 646,518 104,784 131,193 131,192 118,788 12,404 782,578 782,578 782,389 189 92,737 92,735 2 1,588,362 1,764,099 1,764,093 6 18,279 18,279 2,027,713 2,231,312 2,231,311 1 1,013,535 1,305,477 1,305,476 1 1,475,848 1,527,383 1,518,820 8,563 21,754,72224,103,92624,103,932 (6) 24,959,42425,356,50925,319,536 36,973 258,155 258,155 3,912,331 5,328,834 5,328,828 6 13,903,62613,464,41413,462,221 2,193 4,607,218 4,769,354 4,731,555 37,799 19,000 19,000 5,731,979 6,849,485 6,791,573 57,912 388,171 388,169 282,817,60188,634,00088,373,173 260,827 1,022,301 2,175,348 1,976,872 (198,476) (1,700,000)(8,632,720)(6,082,763)2,549,957 (677,699)(6,457,372)(4,105,891)2,351,481 $1,111,829 1,105,256 ($6,573)$115,453($3,886,139)157,657$4,043,796 21,281,375 176,177 1,578,153 $1,281,433 $23,017,185 Budgeted Amounts Budgeted Amounts Measure W Total 111 This Page Left Intentionally Blank MAJOR GOVERNMENTAL FUNDS OTHER THAN GENERAL FUND AND SPECIAL REVENUE FUNDS CAPITAL IMPROVEMENT FUND To account for expenditures associated with the acquisition, construction, or improvement of City owned facilities and infrastructure. Funding comes from the general fund, special revenue funds, grants and fees. EAST OF 101 SEWER IMPACT FEES CAPITAL PROJECTS FUND These fees provide new development’s share of new and rehabilitated sewer collection and treatment facilities to serve the East of Highway 101 area. EAST OF 101 TRAFFIC IMPACT FEES CAPITAL PROJECTS FUND These fees are to provide new development’s share of new and expanded roadway and intersection improvements to serve the East of Highway 101 area. CHILD CARE IMPACT FEES CAPITAL PROJECTS FUND These citywide fees provide new development’s share of new and expanded childcare facilities to serve the City. DEVELOPER DEPOSIT CAPITAL PROJECTS FUND These fees provide new development’s share of funding for the Oyster Point at Highway 101 interchange improvements. CAPITAL INFRASTRUCTURE RESERVE FUND Replacement, upgrade, and maintenance of the City’s infrastructure are backlogged, constituting a significant liability. Funds are set aside in this fund as part of the budget process and as part of the City’s reserve policy to address the replacement and/or upgrade of the city infrastructure (such as parks, buildings, facilities, streets, sidewalks, and storm water facilities). 113 CITY OF SOUTH SAN FRANCISCO CAPITAL IMPROVEMENT CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2016 Variance with Final Budget Positive BudgetActual Amounts(Negative) REVENUES: Intergovernmental $5,395,139$2,351,355($3,043,784) Other 79,000 104,644 25,644 Total Revenues 5,474,1392,455,999(3,018,140) EXPENDITURES: Current: Public works 25,957,33811,440,08414,517,254 Total Expenditures 25,957,33811,440,08414,517,254 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (20,483,199)(8,984,085)11,499,114 OTHER FINANCING SOURCES (USES) Proceeds from debt 500,000 (500,000) Transfers in 19,460,1286,161,203(13,298,925) Total other financing sources (uses)19,960,1286,161,203(13,798,925) NET CHANGE IN FUND BALANCE ($523,071)(2,822,882)($2,299,811) Fund balance - July 1 288,554 Adjustment to budgetary basis: Encumbrance adjustments 2,901,351 Fund balance - June 30 $367,023 114 CITY OF SOUTH SAN FRANCISCO EAST OF 101 SEWER IMPACT FEES CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2016 Variance with Final Budget Positive BudgetActual Amounts(Negative) REVENUES: Interest and rental $33,489 $33,489 Charges for services $520,000 517,952 (2,048) Total Revenues 520,000 551,441 31,441 EXPENDITURES: Current: Non-departmental $2,500 2,500 Total Expenditures 2,500 2,500 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 517,500 548,941 31,441 OTHER FINANCING SOURCES (USES) Transfers out (46,817)(4,716)42,101 Total other financing sources (uses)(46,817)(4,716)42,101 NET CHANGE IN FUND BALANCE $470,683 544,225 $73,542 Fund balance (deficit) - July 1 (40,459) Fund balance (deficit) - June 30 $503,766 115 CITY OF SOUTH SAN FRANCISCO EAST OF 101 TRAFFIC IMPACT FEES CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2016 Variance with Final Budget Positive BudgetActual Amounts(Negative) REVENUES: Interest and rental $108,530 $108,530 Charges for services $1,700,0001,637,445 (62,555) Total Revenues 1,700,0001,745,975 45,975 EXPENDITURES: Current: Public works $2,500 2,500 Total Expenditures 2,500 2,500 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 1,697,5001,743,475 45,975 OTHER FINANCING SOURCES (USES) Transfers (out)(3,708,709)(475,073)3,233,636 Total other financing sources (uses)(3,708,709)(475,073)3,233,636 NET CHANGE IN FUND BALANCE ($2,011,209)1,268,402$3,279,611 Fund balance - July 1 5,944,851 Fund balance - June 30 $7,213,253 116 CITY OF SOUTH SAN FRANCISCO CHILD CARE IMPACT FEES CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2016 Variance with Final Budget Positive BudgetActual Amounts(Negative) REVENUES: Interest and rental $46,362 $46,362 Charges for services $342,000 341,284 (716) Total Revenues 342,000 387,646 45,646 EXPENDITURES: Current: Non-departmental $2,500 2,500 Total Expenditures 2,500 2,500 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 339,500 385,146 45,646 NET CHANGE IN FUND BALANCE $339,500 385,146 $45,646 Fund balance - July 1 2,489,695 Fund balance - June 30 $2,874,841 117 CITY OF SOUTH SAN FRANCISCO DEVELOPER DEPOSIT CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2016 Variance with Final Budget Final Positive BudgetActual Amounts(Negative) REVENUES: Charges for services $270,000 $269,155 ($845) Total Revenues 270,000 269,155 (845) OTHER FINANCING SOURCES (USES) Transfers (out)(1,799,387)(269,155)1,530,232 Total other financing sources (uses)(1,799,387)(269,155)1,530,232 NET CHANGE IN FUND BALANCE ($1,529,387)$1,529,387 Fund balance - July 1 72,884 Fund balance - June 30 $72,884 118 Variance with Final Budget Final Positive BudgetActual Amounts(Negative) REVENUES: Interest and rental $305,480 $305,480 Other 201,996 201,996 Total Revenues 507,476 507,476 OTHER FINANCING SOURCES (USES) Transfers in Transfers out ($1,810,900)(527,812)1,283,088 Total other financing sources (uses)(1,810,900)(527,812)1,283,088 NET CHANGE IN FUND BALANCE ($1,810,900)(20,336)$1,790,564 Fund balance - July 1 17,658,721 Fund balance - June 30 $17,638,385 CITY OF SOUTH SAN FRANCISCO CAPITAL INFRASTRUCTURE RESERVE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2016 119 This Page Left Intentionally Blank NON-MAJOR GOVERNMENTAL FUNDS Special revenue funds are used to account for revenue sources that are restricted by law or administrative action to expenditures for specified purposes. Special revenue funds used by the City of South San Francisco include: Gas Tax - Accounts for State monies received and expended for street improvements, repairs, engineering, and administration under Streets and Highway Code Sections 2105, 2106, 2107, and 2107.5. Includes sales taxes on gasoline received from the State’s Traffic Congestion Relief Fund. Developer Contributions – Accounts for fees deposited for planning and engineering reviews or for future project development. Federal Aviation Grant – This fund accounts for federal monies received for insulating structures against airport noise. Community Development Block Grant - Accounts for Federal monies received to be expended for development of jobs and suitable housing for low-income residents. Miscellaneous Grants - Accounts for federal monies received for miscellaneous projects. Maintenance District - Accounts for a portion of property tax dedicated to provide for the maintenance of landscaped areas within housing developments. Transportation Sales Tax - Accounts for the sales tax that provides resources for street improvements and repairs. Solid Waste Reduction - Accounts for revenues and expenditures associated with the waste reduction, recycling, composting and household hazardous waste programs for residents and businesses. Supplemental Law Enforcement Services – Accounts for State monies provided for designated Police department services. City Programs – Organizations and individuals provide revenues that fund certain programs and services. Affordable Housing Trust – The inclusionary housing requirement in the City provides that 20% of new residential housing units (for projects of 4 or more units) be affordable. These in-lieu fees (in-lieu of production of affordable housing units by the developer) provide new residential development’s share of affordable housing units. PEG Equipment and Access – Accounts for the one percent of money set-aside from cable franchise fees that are used to support public, educational and governmental (PEG) channels. 121 NON-MAJOR GOVERNMENTAL FUNDS (Continued) Capital projects funds are used to account for resources used for the acquisition and construction of capital facilities or major capital equipment, except for capital improvements financed by proprietary funds. Capital projects funds used at the City of South San Francisco include: Non-obligated Capital Projects - Accounts for the construction of assets financed by non- obligated debt. Public Safety Impact Fee – These fees are to provide new development’s share of funding for the replacement of public safety capital equipment, vehicles and facilities. Oyster Point Improvements Impact Fees Capital Projects Fund - These fees provide new development’s share of funding for the Oyster Point at Highway 101 interchange improvements. Sewer Capacity Charges – accounts for cost recovery charged to new development based on proportional benefit, associated with providing sewer collection and treatment capacity to new development, both through existing infrastructure provided, and through future capital projects not funded by other sources. 122 This Page Left Intentionally Blank Federal Community Developer AviationDevelopmentMiscellaneous Gas TaxContributionsGrantBlock GrantGrants ASSETS Cash and investments $1,274,331$3,978,759$734,473 Receivables: Accounts $86,639 Accrued interest 3,402 9,378 1,943 Loans 536,978 Due from other funds Restricted cash and investments 349,057 Land held for resale Total Assets $1,277,733$3,988,137$736,416$972,674 LIABILITIES Liabilities: Accounts payable $23,909 $49,992 Other payable 10,065 25,000 Deposits 1,073,108 Due to other funds Unearned revenue $736,416 Total Liabilities 1,107,082736,416 74,992 Fund Balances: Restricted $1,277,7332,881,055 897,682 Total Fund Balances 1,277,7332,881,055 897,682 Total Liabilities and Fund Balances$1,277,733$3,988,137$736,416$972,674 JUNE 30, 2016 SPECIAL REVENUE FUNDS CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET 124 SolidSupplemental AffordablePEG MaintenanceTransportationWasteLaw Enforce-City HousingEquipment and DistrictsSales TaxReductionment ServicesProgramsTrust Access $2,127,351$1,269,173$750,167 $21$4,244,213$1,679,002$742,864 25,867 15,476 330 45,976 7,433 182 10,699 4,349 1,870 42,038 1,900,000 $2,153,218$1,276,606$765,643 $203$4,254,912$3,625,719$790,710 $137 $60,356 $100 137 100 60,356 2,153,081$1,276,606$765,643 1034,194,556$3,625,719$790,710 2,153,0811,276,606765,643 1034,194,5563,625,719790,710 $2,153,218$1,276,606$765,643 $203$4,254,912$3,625,719$790,710 (Continued) SPECIAL REVENUE FUNDS 125 Total Non-obligatedPublicOyster PointSewer Nonmajor CapitalSafetyImprovementCapacityGovernmental ProjectsImpact FeeImpact FeesChargesFunds ASSETS Cash and investments$517,077$463,586$28,200$2,303,491$20,112,708 Receivables: Accounts 6,300180,588 Accrued interest8633293,13043,578 Loans 579,016 Due from other funds Restricted cash and investments 349,057 Land held for resale 1,900,000 Total Assets$517,077$464,449$28,529$2,312,921$23,164,947 LIABILITIES Liabilities: Accounts payable $11,903 $146,297 Other payable 35,065 Deposits 1,073,108 Due to other funds 100 Unearned revenue 736,416 Total Liabilities 11,903 1,990,986 Fund Balances: Restricted $517,077452,546$28,529$2,312,92121,173,961 Total Fund Balances 517,077452,546 28,5292,312,92121,173,961 Total Liabilities and Fund Balances $517,077$464,449$28,529$2,312,921$23,164,947 CAPITAL PROJECTS FUNDS CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2016 126 This Page Left Intentionally Blank Federal Community Developer AviationDevelopmentMiscellaneous Gas TaxContributionsGrantsBlock GrantGrants REVENUES Property taxes Other taxes Intergovernmental $1,824,853 $338,412 Interest and rentals 22,505$57,958$12,94974,361 Charges for services 1,359,911 Other 9,397 Total Revenues 1,847,3581,417,86912,949422,170 EXPENDITURES Current: Economic and community development 547,67412,949529,115 Public works 15,193 Non-departmental Fire Police Other Debt service: Principal repayments Total Expenditures 562,86712,949529,115 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,847,358855,002 (106,945) OTHER FINANCING SOURCES (USES) Transfers in Transfers out (2,063,932)(130,158)(143)($136,869) Total Other Financing Sources (Uses)(2,063,932)(130,158)(143)(136,869) Net Change in Fund Balances (216,574)724,844 (107,088)(136,869) Fund balance - July 1 1,494,3072,156,211 1,004,770 136,869 Fund balance - June 30 $1,277,733$2,881,055 $897,682 SPECIAL REVENUE FUNDS CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2016 128 SolidSupplemental AffordablePEG MaintenanceTransportationWasteLaw Enforce-City HousingEquipment and DistrictsSales TaxReductionment ServicesProgramsTrust Access $1,660,961 $1,412,863 $138,191 49,427 1,259$72,582$31,399$12,441 $188,649 1,205,241 183,899 1,660,9611,462,290188,649139,4501,277,823 31,399196,340 181,384 1,261,523 133,892 139,450 395,749 1,261,523 181,384139,450395,749 133,892 399,4381,462,290 7,265 882,074 31,399 62,448 5,000 (47,904)(2,587,442)(189,308)(516,800) (47,904)(2,587,442)(189,308)(511,800) 351,534(1,125,152)(182,043)370,274 31,399 62,448 1,801,5472,401,758947,686 1033,824,2823,594,320728,262 $2,153,081$1,276,606$765,643 $103$4,194,556$3,625,719$790,710 (Continued) SPECIAL REVENUE FUNDS 129 Total Non-obligatedPublicOyster PointSewer Nonmajor CapitalSafety ImprovementCapacity Governmental ProjectsImpact FeeImpact FeesChargesFunds REVENUES Property taxes $1,660,961 Other taxes 1,551,054 Intergovernmental $12,0752,175,340 Interest and rentals$5,823$2,3939,492352,589 Charges for services656,6031,755,4863,960,649 Other262,4551,660,992 Total Revenues268,278658,9961,777,05311,361,585 EXPENDITURES Current: Economic and community development 1,271,122 Public works 2,5001,279,216 Non-departmental 133,892 Fire 116,862 116,862 Police 139,450 Other 395,749 Debt service: Principal repayments 656,000 656,000 Total Expenditures 116,862656,0002,5003,992,291 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 151,416 2,9961,774,5537,369,294 OTHER FINANCING SOURCES (USES) Transfers in 5,000 Transfers out ($161,624)(5,834,180) Total Other Financing Sources (Uses)(161,624)(5,829,180) Net Change in Fund Balances (161,624)151,416 2,9961,774,5531,540,114 Fund balance - July 1 678,701301,130 25,533538,36819,633,847 Fund balance - June 30 $517,077$452,546$28,529$2,312,921$21,173,961 CAPITAL PROJECTS FUNDS CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2016 130 This Page Left Intentionally Blank GAS TAX DEVELOPER CONTRIBUTIONS VarianceVariance FinalPositiveFinalPositive BudgetActual(Negative)BudgetActual(Negative) REVENUES Property taxes Other taxes Intergovernmental$1,625,570$1,824,853$199,283 Interest and rentals15,00022,5057,505$1,380,000$57,958($1,322,042) Charges for services 1,359,9111,359,911 Other Total Revenues1,640,5701,847,358206,7881,380,0001,417,86937,869 EXPENDITURES Current: Economic and community development721,718706,32415,394 Public works 15,193(15,193) Non-departmental Fire Other Police Debt service: Principal repayments Total Expenditures 721,718721,517201 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES1,640,5701,847,358206,788658,282696,35238,070 OTHER FINANCING SOURCES (USES) Transfers in Transfers out(3,463,799)(2,063,932)1,399,867($704,670)(130,158)574,512 Total Other Financing Sources (Uses)(3,463,799)(2,063,932)1,399,867(704,670)(130,158)574,512 NET CHANGE IN FUND BALANCES($1,823,229)(216,574)$1,606,655($46,388)566,194$612,582 Adjustment to budgetary basis: Encumbrance adjustments 158,650 Fund balance - July 11,494,3072,156,211 Fund balance - June 30$1,277,733$2,881,055 COMBINING SCHEDULE OF REVENUES, EXPENDITURES, CITY OF SOUTH SAN FRANCISCO FOR THE YEAR ENDED JUNE 30, 2016 NONMAJOR GOVERNMENTAL FUNDS AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) 132 Variance Variance Variance Final PositiveFinal PositiveFinal Positive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) $641,864$338,412($303,452) $4,000$12,949$8,949 74,36174,361 8,762 9,397 635 4,00012,9498,949650,626422,170(228,456) 12,949(12,949)705,026668,43336,593 12,949(12,949)705,026668,43336,593 4,000 (4,000)(54,400)(246,263)(191,863) (95,473)(143)95,330 ($136,869)($136,869) (95,473)(143)95,330 (136,869)(136,869) $4,000 ($4,000)($149,873)(246,406)($96,533)(136,869)($136,869) 139,318 1,004,770 $136,869 $897,682 (Continued) GRANT MISCELLANEOUS GRANTS BLOCK GRANT COMMUNITY DEVELOPMENTFEDERAL AVIATION 133 Variance Variance Final PositiveFinal Positive BudgetActual(Negative)BudgetActual(Negative) REVENUES Property taxes $1,389,805$1,660,961$271,156 Other taxes $1,400,000$1,412,863$12,863 Intergovernmental Interest and rentals 25,00049,42724,427 Charges for services Other Total Revenues 1,389,8051,660,961271,1561,425,0001,462,29037,290 EXPENDITURES Current: Economic and community development Public works 1,561,9981,261,523300,475 Non-departmental Fire Other Police Debt service: Principal repayments Total Expenditures 1,561,9981,261,523300,475 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (172,193)399,438571,6311,425,0001,462,29037,290 OTHER FINANCING SOURCES (USES) Transfers in Transfers out (216,426)(47,904)168,522(3,666,287)(2,587,442)1,078,845 Total Other Financing Sources (Uses)(216,426)(47,904)168,522(3,666,287)(2,587,442)1,078,845 NET CHANGE IN FUND BALANCES ($388,619)351,534$740,153($2,241,287)(1,125,152)$1,116,135 Adjustment to budgetary basis: Encumbrance adjustments Fund balance - July 1 1,801,547 2,401,758 Fund balance - June 30 $2,153,081 $1,276,606 FOR THE YEAR ENDED JUNE 30, 2016 BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS CITY OF SOUTH SAN FRANCISCO TRANSPORTATION SALES TAXMAINTENANCE DISTRICTS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, 134 VarianceVarianceVariance FinalPositiveFinalPositiveFinalPositive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) $100,000$138,191$38,191 1,2591,259 $72,582$72,582 $180,000$188,649$8,649 $1,211,0001,205,241(5,759) 180,000188,6498,649100,000139,45039,4501,211,0001,277,82366,823 204,289209,331($5,042) 395,000395,749(749) 100,000139,450(39,450) 204,289209,331(5,042)100,000139,450(39,450)395,000395,749(749) (24,289)(20,682)3,607816,000882,07466,074 5,0005,000 (756,178)(189,308)566,870($1,741,478)(516,800)1,224,678 (756,178)(189,308)566,870(1,741,478)(511,800)1,229,678 ($780,467)(209,990)$570,477($925,478)370,274$1,295,752 27,947 947,6861033,824,282 $765,643$103$4,194,556 (Continued) SOLID WASTE REDUCTIONENFORCEMENT SERVICES SUPPLEMENTAL LAW CITY PROGRAMS 135 Variance Variance Final PositiveFinal Positive BudgetActual(Negative)BudgetActual(Negative) REVENUES Property taxes Other taxes Intergovernmental Interest and rentals $31,399$31,399$5,000$12,441$7,441 Charges for services Other 125,000183,89958,899 Total Revenues 31,39931,399130,000196,34066,340 EXPENDITURES Current: Economic and community development Public works Non-departmental 196,500133,89262,608 Fire Other Police Debt service: Principal repayments Total Expenditures 196,500133,89262,608 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 31,39931,399(66,500)62,448128,948 OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCES 31,399$31,399($66,500)62,448$128,948 Adjustment to budgetary basis: Encumbrance adjustments Fund balance - July 1 3,594,320 728,262 Fund balance - June 30 $3,625,719 $790,710 PEG AFFORDABLE HOUSING TRUSTEQUIPMENT AND ACCESS NONMAJOR GOVERNMENTAL FUNDS CITY OF SOUTH SAN FRANCISCO FOR THE YEAR ENDED JUNE 30, 2016 BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) AND CHANGES IN FUND BALANCES COMBINING SCHEDULE OF REVENUES, EXPENDITURES, 136 Variance Variance Variance Final PositiveFinal PositiveFinal Positive BudgetActual(Negative)BudgetActual(Negative)BudgetActual(Negative) $5,823$5,823 $2,393$2,393 $657,000656,603 (397) $263,000262,455 (545) 263,000268,278$5,278657,000658,9961,996 52,561 52,561 123,648116,8626,786 656,000656,000 123,648116,862(6,786)708,561656,00052,561 139,352151,41612,064(51,561)2,99654,557 ($636,844)($161,624)$475,220 (636,844)(161,624)475,220 ($636,844)(161,624)$475,220$139,352151,416$12,064($51,561)2,996$54,557 $678,701 301,130 25,533 $517,077 $452,546 $28,529 NONOBLIGATED CAPITAL PROJECTS OYSTER POINT PUBLIC SAFETY IMPACT FEE IMPROVEMENT IMPACT FEES 137 Variance FinalPositive BudgetActual(Negative) REVENUES Property taxes Other taxes Intergovernmental$12,075$12,075 Interest and rentals9,4929,492 Charges for services$200,0001,755,4861,555,486 Other Total Revenues200,0001,777,0531,577,053 EXPENDITURES Current: Economic and community development Public works2,5002,500 Non-departmental Fire Other Police Debt service: Principal repayments Total Expenditures2,5002,500 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES197,5001,774,5531,577,053 OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCES$197,5001,774,553$1,577,053 Adjustment to budgetary basis: Encumbrance adjustments Fund balance - July 1538,368 Fund balance - June 30$2,312,921 CAPACITY CHARGES SEWER BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2016 CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 138 INTERNAL SERVICE FUNDS Internal service funds account for department services and financing performed for other departments within the same governmental jurisdiction. Funding comes from charges assessed to the departments benefiting from the service. Internal service funds used at the City include: City Service – Accounts for vehicle maintenance and information technology services provided to City departments. Self Insurance – Accounts for workers' compensation, general liability and property damage claim activity and financing is represented in this fund. Health and Retirement Benefits - Accounts for health and retirement benefits paid on the behalf of eligible City employees. Equipment Replacement – Accounts for resources set-aside for the future replacement of City vehicles and equipment. 139 CITY OF SOUTH SAN FRANCISCO INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET POSITION JUNE 30, 2016 Health and SelfRetirementEquipment City ServiceInsuranceBenefitsReplacementTotal ASSETS Current assets: Cash and investments $1,156,291$12,224,874$7,917,534$3,416,065$24,714,764 Receivables: Accounts 6,861 6,861 Accrued interest 2,664 30,612 6,774 8,447 48,497 Deposit 157,50046,010 203,510 Total current assets 1,165,81612,412,9867,970,3183,424,51224,973,632 Noncurrent assets: Capital assets: Nondepreciable 103,736103,736 Depreciable, net of accumulated depreciation 1,451 4,818,5704,820,021 Total Assets 1,167,26712,412,9867,970,3188,346,81829,897,389 LIABILITIES Current liabilities: Accounts payable 121,027 1,100 13 10,256132,396 Other payable 77,874 77,874 Current portion of accrued insurance loss 712,000 712,000 Current portion of compensated absences 76,463 712,679 789,142 Current portion of long-term debt 565,476565,476 Total current liabilities 197,490790,974712,692575,7322,276,888 Noncurrent liabilities: Accrued insurance loss 10,688,947 10,688,947 Compensated absences obligation 96,842 512,284 609,126 Net OPEB obligation 24,904,700 24,904,700 Noncurrent portion of long-term debt 1,673,5221,673,522 Total noncurrent liabilities 96,84210,688,94725,416,9841,673,52237,876,295 Total Liabilities 294,33211,479,92126,129,6762,249,25440,153,183 NET POSITION: Net investment in capital assets 1,451 2,683,3082,684,759 Unrestricted 871,484933,065(18,159,358)3,414,256(12,940,553) Total Net Position $872,935$933,065($18,159,358)$6,097,564($10,255,794) 140 Health and Self Retirement Equipment City ServiceInsuranceBenefitsReplacementTotal OPERATING REVENUES Charges for services $3,883,266$3,874,155$14,285,369$1,678,460$23,721,250 Total Operating Revenues 3,883,2663,874,15514,285,3691,678,46023,721,250 OPERATING EXPENSES Personnel expenses 1,833,054804,12411,593,496 14,230,674 OPEB expenses 1,895,762 1,895,762 Professional services 226,572339,684 566,256 Program supplies 1,072,287632,768 4,958 284,3961,994,409 Insurance 8,9061,047,349 1,056,255 Self-insurance and claims 1,924,421 1,924,421 Repair and maintenance 376,787 180,927 557,714 Utilities 35,210 35,210 Depreciation 580 721,605 722,185 Other 8,807 261,073 12,208 282,088 Total Operating Expenses 3,562,2034,748,34613,755,2891,199,13623,264,974 Operating Income (Loss)321,063(874,191)530,080 479,324 456,276 NONOPERATING REVENUES (EXPENSES) Interest income 17,900204,649 45,545 56,064 324,158 Interest expense (83,845)(83,845) Gain from disposal of capital assets 28,272 28,272 Other 816,525 816,525 Total Nonoperating Revenues (Expenses)17,9001,021,174 45,545 4911,085,110 Net income (loss) before transfers 338,963146,983 575,625 479,8151,541,386 TRANSFERS Transfers in 4,240,000 4,240,000 Transfers out (108,923)(108,923) Change in Net Position 338,963146,9834,815,625 370,8925,672,463 Net Position - (deficits) July 1 533,972786,082(22,974,983)5,726,672(15,928,257) Net Position - (deficits) June 30 $872,935$933,065($18,159,358)$6,097,564($10,255,794) INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION FOR THE YEAR ENDED JUNE 30, 2016 CITY OF SOUTH SAN FRANCISCO 141 CITY OF SOUTH SAN FRANCISCO INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2016 Health and SelfRetirementEquipment City ServiceInsuranceBenefitsReplacementTotal CASH FLOWS FROM OPERATING ACTIVITIES Cash received from interfund service provided $3,884,641$4,690,680$14,285,369$1,750,676$24,611,366 Cash payment to suppliers for goods and services (1,728,569)(1,941,927)(1,067,793)(477,531)(5,215,820) Cash payment to employees for services (1,854,942)(983,522)(11,569,924)(14,408,388) Cash payment for judgments and claims (1,867,474)(1,867,474) Other payments (4,794)(4,794) Net Cash Provided by Operating Activities 301,130(102,243)1,647,6521,268,3513,114,890 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Repayments from other funds 100 100 Transfers in 4,240,000 4,240,000 Transfers out (108,923)(108,923) Net Cash Provided by Noncapital Financing Activities 4,240,000(108,823)4,131,177 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid on capital lease (547,574)(547,574) Interest payments (83,845)(83,845) Acquisition of capital assets, net (513,421)(513,421) Proceeds from the sale of capital assets 28,27228,272 Net Cash Used in Capital and Related Financing Activities (1,116,568)(1,116,568) CASH FLOWS FROM INVESTING ACTIVITIES Interest received 17,142203,624 52,464 58,035331,265 Net Cash Provided by Investing Activities 17,142203,624 52,464 58,035331,265 Net Increase (Decrease) in cash and cash equivalents 318,272101,3815,940,116100,9956,460,764 Cash and cash equivalents, beginning 838,01912,123,4931,977,4183,315,07018,254,000 Cash and cash equivalents, ending $1,156,291$12,224,874$7,917,534$3,416,065$24,714,764 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss)$321,063($874,191)$530,080$479,324$456,276 Adjustments to reconcile operating income (loss) to cash flows from operating activities: Depreciation 580 721,605722,185 Other non-operating revenue (expenses)816,525 816,525 Net change in assets and liabilities: Accounts and lease receivables 1,375 72,21673,591 Accounts payable 32,774(179,398)(61,174)5,479(202,319) Other payable 77,874 (8,496)(10,273)59,105 Accrued insurance losses 56,947 56,947 OPEB obligations 1,094,000 1,094,000 Compensated absence obligations (54,662)93,242 38,580 Net Cash Provided by (Used in) Operating Activities $301,130($102,243)$1,647,652$1,268,351$3,114,890 142 AGENCY FUND An agency fund is used to account for monies where the City is acting as an agent for another government entity. The agency fund used at the City of South San Francisco consisted of: SSF Employee Deferred Comp Trust Oversight – This fund is used to pay for the administrative costs of monitoring the Deferred Compensation Funds on behalf of City employees. 143 Balance Balance June 30, 2015AdditionsDeductionsJune 30, 2016 ASSETS Cash and investments $49,140$62,944$49,140$62,944 Interest receivable 134 158 134 158 Total Assets $49,274$63,102$49,274$63,102 LIABILITIES Accounts payable $231$12,500$231$12,500 Other accrued liabilities 49,04350,60249,043 50,602 Total Liabilities $49,274$63,102$49,274$63,102 CITY OF SOUTH SAN FRANCISCO AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED JUNE 30, 2016 SSF Employee Deferred Comp Trust Oversight 144 STATISTICAL SECTION This part of the City’s Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. In contrast to the financial section, the statistical section information is not subject to independent audit. Financial Trends These schedules contain trend information to help the reader understand how the City’s financial performance and well being have changed over time: 1.Net Position by Component 2.Changes in Net Position 3.Fund Balances of Governmental Funds 4.Changes in Fund Balance of Governmental Funds Revenue Capacity These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax: 1.Assessed Value and Estimated Market Value of Taxable Property 2.All Overlapping Property Tax Rates 3.Principal Property Tax Payers 4.Twenty Largest Taxable Property Owners for Merged RDA Project Area 5.Property Tax Levies and Collections Debt Capacity These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future: 1.Ratio of Outstanding Debt by Type 2.Computation of Direct and Overlapping Debt 3.Computation of Legal Bonded Debt Margin 4.Continuing Disclosure Requirements: a.Revenue Bond Coverage b.Sewer Debt Service Coverage c.Bonded Debt Pledge Revenue Coverage Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place: 1.Demographic and Economic Statistics 2.Principal Employers 145 STATISTICAL SECTION - (Continued) Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs: 1.Full-Time City Government Employees by Function 2.Operating Indicators by Function/Program 3.Capital Asset Statistics by Function/Program Miscellaneous Information 1.Collection and Use of 1% Special Transient Occupancy Tax Sources Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year. 146 2007 2008 2009 2010 2011 Governmental activities Invested in capital assets, net of related debt $212,273,574$233,230,681$237,441,155$209,507,012$214,246,561 Restricted 89,194,34480,346,63486,962,89078,625,094163,669,353 Unrestricted 3,306,910 9,205,15021,455,06765,537,953(19,267,010) Total governmental activities net position$304,774,828$322,782,465$322,782,465$353,670,059$358,648,904 Business-type activities Invested in capital assets, net of related debt $34,640,593$45,635,119$52,347,955$58,522,676$66,113,596 Restricted 2,806,562 1,480,000 4,971,538 Unrestricted 3,951,703(2,674,600)(3,496,600)792,921 9,292,189 Total business-type activities net position $41,398,858$44,440,519$44,440,519$59,315,597$75,405,785 Primary government Invested in capital assets, net of related debt $246,914,167$278,865,800$289,789,110$268,029,688$280,360,157 Restricted 92,000,90681,826,63491,935,42878,625,094163,669,353 Unrestricted 7,258,613 6,530,55017,958,46766,330,874(9,974,821) Total primary government net position $346,173,686$367,222,984$399,683,005$412,985,656$434,054,689 2012 2013 2014 2015 2016 Governmental activities Invested in capital assets, net of related debt 218,218,696$216,508,668$230,440,390$230,517,037$231,142,079 Restricted 43,321,28630,514,98642,367,62349,311,82852,406,602 Unrestricted (3,837,201)8,021,490(12,317,511)(134,389,522)(120,119,617) Total governmental activities net position$257,702,781$257,702,781$260,490,502$145,439,343$163,429,064 Business-type activities Invested in capital assets, net of related debt $70,653,841$72,217,660$78,045,318$78,598,277$83,930,073 Unrestricted 10,877,10513,353,98815,367,085 4,196,654 6,243,225 Total business-type activities net position $81,530,946$81,530,946$93,412,403$82,794,931$90,173,298 Primary government Invested in capital assets, net of related debt $288,872,537$288,726,328$308,485,708$309,115,314$315,072,152 Restricted 43,321,28630,514,98642,367,62349,311,82852,406,602 Unrestricted 7,039,90421,375,478 3,049,574(130,192,868)(113,876,392) Total primary government net position $339,233,727$340,616,792$353,902,905$228,234,274$253,602,362 Source: City of South San Francisco, Department of Finance CITY OF SOUTH SAN FRANCISCO (accrual basis of accounting) Last Ten Fiscal Years Net Position by Component ($200) ($100) $0 $100 $200 $300 $400 $500 2007200820092010201120122013201420152016 Millions Unrestricted Restricted Invested in Capital Assets Net of Related Debt 147 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 20 1 3 201420152016 Ex p e n s e s Go v e r n m e n t a l A c t i v i t i e s : Ge n e r a l G o v e r n m e n t $6 , 2 7 8 , 6 6 9 $ 7 , 4 3 5 , 3 5 0 $ 7 , 1 4 0 , 6 7 6 $ 6 , 5 3 8 , 0 5 2 $ 7 , 7 1 1 , 1 5 6 $ 7 , 8 0 1 , 3 2 8 $ 8 , 3 6 0 , 9 4 5 $ 7 , 1 5 5 , 0 3 5 $ 8 , 4 2 1 , 8 5 7 $ 9 , 0 4 4 , 5 1 8 Fi r e D e p a r t m e n t 14 , 9 6 0 , 2 7 0 1 7 , 1 4 7 , 6 7 0 1 9 , 0 4 7 , 8 7 7 1 7 , 8 6 8 , 0 5 0 2 0 , 0 3 2 , 1 4 1 2 0 , 7 4 9 , 3 2 3 2 2 , 7 4 6 , 2 9 1 2 1 , 2 0 0 , 9 0 3 2 2 , 0 0 5 , 8 8 3 2 2 , 4 8 8 , 9 6 4 Po l i c e D e p a r t m e n t 17 , 9 5 1 , 5 0 8 1 8 , 9 5 9 , 3 7 3 2 1 , 0 5 1 , 2 6 3 2 0 , 3 5 2 , 5 7 0 2 2 , 4 2 9 , 7 8 2 2 3 , 3 3 0 , 2 0 8 2 4 , 7 5 6 , 9 5 8 2 4 , 3 7 6 , 3 7 9 2 3 , 9 1 0 , 4 3 6 2 3 , 1 5 8 , 1 6 8 Pu b l i c W o r k s 13 , 4 7 2 , 0 8 4 1 6 , 2 8 6 , 5 9 2 2 0 , 9 2 4 , 1 3 2 1 5 , 8 7 3 , 7 8 3 1 7 , 1 2 7 , 0 8 6 2 1 , 2 6 9 , 2 8 1 1 5 , 7 7 3 , 7 1 0 1 4 , 9 8 0 , 4 1 7 1 4 , 4 9 3 , 0 3 9 1 1 , 9 1 6 , 5 7 2 Pa r k , R e c r e a t i o n a n d M a i n t e n a n c e S e r v i c e s 4, 9 8 9 , 6 0 1 1 1 , 2 3 3 , 1 7 0 1 1 , 5 7 4 , 8 0 8 1 0 , 4 1 1 , 8 2 1 1 0 , 8 6 6 , 5 6 8 1 1 , 6 4 1 , 8 9 2 1 2 , 5 7 0 , 2 3 6 1 2 , 6 5 8 , 3 0 9 1 2 , 3 8 3 , 8 8 0 1 2 , 9 0 1 , 6 5 7 Li b r a r y 4, 4 3 2 , 7 3 1 4 , 7 1 9 , 2 3 3 4, 9 5 9 , 1 3 8 4 , 6 1 6 , 6 5 8 4 , 6 6 4 , 4 9 0 4, 7 5 4 , 7 6 0 4 , 6 1 5 , 9 6 7 4 , 3 1 0 , 5 5 0 4 , 3 0 0 , 8 8 5 4 , 4 4 2 , 5 7 7 Ec o n o m i c a n d C o m m u n i t y D e v e l o p m e n t 16 , 1 5 8 , 9 9 8 4 , 7 1 2 , 2 3 9 1 5 , 8 8 6 , 8 3 4 2 3 , 1 4 7 , 8 7 7 1 5 , 0 1 8 , 4 9 5 8, 7 0 2 , 9 4 9 1 6 , 1 2 6 , 4 2 7 5 , 5 2 5 , 5 4 1 5 , 9 2 8 , 3 1 6 7 , 6 0 3 , 2 7 5 In t e r e s t o n L o n g - T e r m D e b t 4, 8 8 3 , 0 5 3 5 , 6 9 4 , 0 9 7 5, 2 8 9 , 8 1 8 5 , 0 3 5 , 7 8 0 4 , 2 4 9 , 4 5 4 3, 3 2 8 , 2 4 4 52 , 1 3 9 To t a l G o v e r n m e n t a l A c t i v i t i e s E x p e n s e s 83 , 1 2 6 , 9 1 4 8 6 , 1 8 7 , 7 2 3 1 0 5 , 8 7 4 , 5 4 6 1 0 3 , 8 4 4 , 5 9 1 1 0 2 , 0 9 9 , 1 7 2 1 0 1 , 5 7 7 , 9 8 5 1 0 5 , 0 0 2 , 6 7 3 9 0 , 2 0 7 , 1 3 4 9 1 , 4 4 4 , 2 9 6 9 1 , 5 5 5 , 7 3 1 Bu s i n e s s - T y p e A c t i v i t i e s : Se w e r R e n t a l 14 , 7 0 5 , 7 0 9 1 6 , 3 4 0 , 3 4 4 1 7 , 5 4 9 , 6 9 0 1 8 , 9 4 4 , 2 6 7 1 9 , 2 7 7 , 9 5 9 1 9 , 4 4 6 , 7 3 9 2 0 , 8 7 0 , 5 2 2 1 9 , 3 0 1 , 1 0 3 2 3 , 9 6 9 , 5 7 9 1 8 , 2 7 3 , 5 8 0 Pa r k i n g D i s t r i c t 35 2 , 6 2 9 36 3 , 8 7 8 34 1 , 1 0 0 3 3 8 , 9 9 5 57 1 , 2 6 1 76 9 , 1 1 7 79 2 , 6 0 9 943,859503,014894,769 St o r m W a t e r 68 3 , 4 5 8 70 5 , 0 9 9 74 6 , 3 1 6 7 2 2 , 2 3 2 71 0 , 9 0 3 1, 0 1 0 , 0 9 3 1 , 6 5 5 , 9 5 0 1 , 0 7 8 , 8 6 8 1 , 2 3 4 , 6 1 6 1 , 2 8 9 , 4 6 5 To t a l B u s i n e s s - T y p e A c t i v i t i e s E x p e n s e s 15 , 7 4 1 , 7 9 6 1 7 , 4 0 9 , 3 2 1 1 8 , 6 3 7 , 1 0 6 2 0 , 0 0 5 , 4 9 4 2 0 , 5 6 0 , 1 2 3 2 1 , 2 2 5 , 9 4 9 2 3 , 3 1 9 , 0 8 1 2 1 , 3 2 3 , 8 3 0 2 5 , 7 0 7 , 2 0 9 2 0 , 4 5 7 , 8 1 4 To t a l P r i m a r y G o v e r n m e n t E x p e n s e s $9 8 , 8 6 8 , 7 1 0 $ 1 0 3 , 5 9 7 , 0 4 4 $ 1 2 4 , 5 1 1 , 6 5 2 $ 1 2 3 , 8 5 0 , 0 8 5 $ 1 2 2 , 6 5 9 , 2 9 5 $ 1 2 2 , 8 0 3 , 9 3 4 $ 1 2 8 , 3 2 1 , 7 5 4 $ 1 1 1 , 5 3 0 , 9 6 4 $ 1 1 7 , 1 5 1 , 5 0 5 $ 1 1 2 , 0 1 3 , 5 4 5 Pr o g r a m R e v e n u e s Go v e r n m e n t a l A c t i v i t i e s : Ch a r g e s f o r S e r v i c e s : Ge n e r a l G o v e r n m e n t $2 , 4 0 3 , 6 9 7 $ 2 , 5 7 8 , 3 8 4 $ 2 , 6 8 9 , 3 7 0 $ 2 , 5 3 9 , 3 1 6 $ 2 , 6 8 8 , 9 9 0 $ 2 , 0 3 2 , 2 9 2 $ 1 , 9 5 1 , 0 1 6 $ 5 , 7 8 5 , 5 9 8 $ 3 , 9 4 6 , 3 0 2 $ 4 , 1 9 4 , 5 6 3 Fi r e D e p a r t m e n t 2, 6 9 9 , 4 2 6 2 , 4 2 5 , 6 7 3 2, 4 1 5 , 6 1 7 2 , 8 5 1 , 9 8 4 3 , 2 2 1 , 8 3 7 3, 6 9 7 , 6 6 5 2 , 9 8 7 , 9 5 6 3 , 3 0 4 , 9 5 2 3 , 5 2 0 , 2 7 5 3 , 4 5 0 , 5 2 4 Po l i c e D e p a r t m e n t 1, 7 6 5 , 5 0 7 1 , 6 8 5 , 5 1 4 1, 6 5 0 , 6 2 0 1 , 4 7 9 , 1 0 4 1 , 8 1 5 , 4 0 5 2, 5 9 9 , 1 4 9 2 , 6 4 0 , 1 4 6 2 , 8 0 5 , 6 4 0 2 , 3 7 0 , 7 3 6 2 , 0 7 6 , 8 3 7 Pu b l i c W o r k s 16 4 , 8 4 6 2 , 9 7 3 , 2 9 7 2, 4 6 2 , 5 3 8 4 , 4 1 2 , 5 8 1 3 , 8 0 5 , 8 2 4 3, 6 0 7 , 2 2 4 2 , 9 2 6 , 2 2 7 4 , 7 3 4 , 8 1 3 5 , 0 7 1 , 7 2 9 1 0 , 3 6 1 , 5 2 5 Pa r k , R e c r e a t i o n a n d M a i n t e n a n c e S e r v i c e s 2, 7 5 7 , 5 1 3 3 , 7 5 5 , 3 6 8 4, 8 7 2 , 7 1 8 3 , 0 3 2 , 3 9 9 3 , 0 0 4 , 4 3 5 3, 1 7 8 , 2 7 6 3 , 4 3 3 , 5 6 7 3 , 5 7 1 , 9 4 7 3 , 7 0 8 , 2 7 2 3 , 7 4 4 , 1 3 7 Li b r a r y 19 2 , 4 4 5 23 3 , 7 5 3 24 0 , 5 4 2 1 8 7 , 3 8 0 16 8 , 5 0 5 14 3 , 9 7 1 12 5 , 4 1 6 138,827120,850164,271 Ec o n o m i c a n d C o m m u n i t y D e v e l o p m e n t 10 , 0 4 1 , 0 0 2 4 , 4 8 3 , 2 9 2 4, 8 6 8 , 4 4 5 4 , 6 5 2 , 0 3 1 4 , 9 4 4 , 3 2 8 4, 9 6 8 , 3 8 3 3 , 4 5 7 , 0 2 0 5 , 8 0 0 , 8 4 9 5 , 3 3 7 , 1 7 7 6 , 1 3 1 , 4 6 3 Op e r a t i n g G r a n t s a n d C o n t r i b u t i o n s 5, 7 1 9 , 4 4 0 6 , 8 4 0 , 6 2 8 1 3 , 3 8 8 , 0 1 6 5 , 7 8 6 , 2 2 7 5 , 5 4 9 , 7 1 1 5, 6 5 0 , 6 8 5 5 , 4 5 5 , 0 1 0 5 , 6 0 1 , 9 1 6 5 , 7 5 3 , 8 4 5 5 , 5 8 1 , 4 9 2 Ca p i t a l G r a n t s a n d C o n t r i b u t i o n s 8, 4 3 3 , 7 8 5 3 , 1 1 3 , 6 7 4 18 2 , 4 6 2 2 1 7 , 8 7 7 2 , 7 2 8 , 5 4 3 1, 4 7 1 , 4 1 6 4 , 0 3 6 , 7 8 6 1 , 5 3 8 , 2 2 5 632,7351,147,337 To t a l G o v e r n m e n t A c t i v i t i e s P r o g r a m R e v e n u e s 34 , 1 7 7 , 6 6 1 2 8 , 0 8 9 , 5 8 3 3 2 , 7 7 0 , 3 2 8 2 5 , 1 5 8 , 8 9 9 2 7 , 9 2 7 , 5 7 8 2 7 , 3 4 9 , 0 6 1 2 7 , 0 1 3 , 1 4 4 3 3 , 2 8 2 , 7 6 7 3 0 , 4 6 1 , 9 2 1 3 6 , 8 5 2 , 1 4 9 Bu s i n e s s - T y p e A c t i v i t i e s : Ch a r g e s f o r S e r v i c e s : Se w e r R e n t a l 12 , 5 6 8 , 5 3 3 1 4 , 1 1 2 , 0 5 1 1 5 , 7 7 0 , 4 7 0 1 7 , 4 8 6 , 4 1 8 1 8 , 0 8 7 , 6 9 5 1 9 , 3 1 0 , 2 8 6 1 9 , 3 3 8 , 1 0 7 1 9 , 1 5 5 , 4 6 7 1 9 , 7 9 8 , 0 3 3 1 9 , 5 6 9 , 3 4 1 Pa r k i n g D i s t r i c t 44 9 , 9 4 5 55 3 , 3 1 7 60 6 , 8 4 7 6 1 6 , 5 7 8 72 2 , 8 0 7 76 0 , 2 4 8 73 2 , 9 3 2 785,586819,051843,199 St o r m W a t e r 41 3 , 0 8 7 42 1 , 7 2 7 41 9 , 4 4 6 4 2 2 , 4 6 7 40 6 , 5 8 9 40 9 , 4 9 8 42 7 , 2 9 1 409,458407,640412,105 Op e r a t i n g G r a n t s a n d C o n t r i b u t i o n s 5, 7 0 9 , 2 5 8 4 , 9 5 1 , 0 1 3 1 0 , 3 9 2 , 2 1 9 5 , 6 7 9 , 9 0 2 5 , 5 0 9 , 8 7 4 5, 9 3 6 , 5 2 7 6 , 1 3 7 , 4 0 1 7 , 6 1 9 , 6 0 1 6 , 2 4 2 , 6 8 7 5 , 8 0 2 , 7 8 8 Ca p i t a l G r a n t s a n d C o n t r i b u t i o n s 3, 0 9 6 , 7 2 8 17 3 , 7 6 7 16 2 , 5 9 9 24 , 7 2 0 31 , 6 7 0 To t a l B u s i n e s s - T y p e A c t i v i t i e s P r o g r a m R e v e n u e 22 , 2 3 7 , 5 5 1 2 0 , 2 1 1 , 8 7 5 2 7 , 3 5 1 , 5 8 1 2 4 , 2 3 0 , 0 8 5 2 4 , 7 5 8 , 6 3 5 2 6 , 4 1 6 , 5 5 9 2 6 , 6 3 5 , 7 3 1 2 7 , 9 7 0 , 1 1 2 2 7 , 2 6 7 , 4 1 1 2 6 , 6 2 7 , 4 3 3 To t a l P r i m a r y G o v e r n m e n t P r o g r a m R e v e n u e s $5 6 , 4 1 5 , 2 1 2 $ 4 8 , 3 0 1 , 4 5 8 $ 6 0 , 1 2 1 , 9 0 9 $ 4 9 , 3 8 8 , 9 8 4 $ 5 2 , 6 8 6 , 2 1 3 $ 5 3 , 7 6 5 , 6 2 0 $ 5 3 , 6 4 8 , 8 7 5 $ 6 1 , 2 5 2 , 8 7 9 $ 5 7 , 7 2 9 , 3 3 2 $ 6 3 , 4 7 9 , 5 8 2 Ne t ( E x p e n s e ) / R e v e n u e Go v e r n m e n t a l A c t i v i t i e s ($ 4 8 , 9 4 9 , 2 5 3 ) ( $ 5 8 , 0 9 8 , 1 4 0 ) ( $ 7 3 , 1 0 4 , 2 1 8 ) ( $ 7 8 , 6 8 5 , 6 9 2 ) ( $ 7 4 , 1 7 1 , 5 9 4 ) ( $ 7 4 , 2 2 8 , 9 2 4 ) ( $ 7 7 , 9 8 9 , 5 2 9 ) ( $ 5 6 , 9 2 4 , 3 6 7 ) ( $ 6 0 , 9 8 2 , 3 7 5 ) ( $ 5 4 , 7 0 3 , 5 8 2 ) Bu s i n e s s - T y p e A c t i v i t i e s 6, 4 9 5 , 7 5 5 2 , 8 0 2 , 5 5 4 8 , 7 1 4 , 4 7 5 4 , 2 2 4 , 5 9 1 4 , 1 9 8 , 5 1 2 5 , 1 9 0 , 6 1 0 3 , 3 1 6 , 6 5 0 6 , 6 4 6 , 2 8 2 1 , 5 6 0 , 2 0 2 6 , 1 6 9 , 6 1 9 To t a l P r i m a r y G o v e r n m e n t N e t E x p e n s e ($ 4 2 , 4 5 3 , 4 9 8 ) ( $ 5 5 , 2 9 5 , 5 8 6 ) ( $ 6 4 , 3 8 9 , 7 4 3 ) ( $ 7 4 , 4 6 1 , 1 0 1 ) ( $ 6 9 , 9 7 3 , 0 8 2 ) ( $ 6 9 , 0 3 8 , 3 1 4 ) ( $ 7 4 , 6 7 2 , 8 7 9 ) ( $ 5 0 , 2 7 8 , 0 8 5 ) ( $ 5 9 , 4 2 2 , 1 7 3 ) ( $ 4 8 , 5 3 3 , 9 6 3 ) CI T Y O F S O U T H S A N F R A N C I S C O Ch a n g e s i n N e t P o s i t i o n La s t T e n F i s c a l Y e a r s (A c c r u a l B a s i s o f A c c o u n t i n g ) 14 8 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 20 1 3 201420152016 Ge n e r a l R e v e n u e s a n d O t h e r C h a n g e s i n N e t P o s i t i o n Go v e r n m e n t a l A c t i v i t i e s : Ta x e s : Pr o p e r t y T a x e s $4 1 , 4 6 9 , 3 4 9 $ 4 4 , 1 6 5 , 4 9 0 $ 5 9 , 3 6 9 , 5 5 0 $ 5 5 , 0 1 4 , 3 6 7 $ 5 4 , 3 2 3 , 4 2 0 $ 3 7 , 3 7 9 , 1 7 5 $ 2 6 , 4 2 0 , 8 6 1 $ 2 2 , 8 9 0 , 8 2 8 $ 2 4 , 6 5 0 , 6 4 8 $ 2 6 , 4 3 8 , 6 2 0 Sa l e s T a x e s 12 , 4 4 6 , 9 2 1 1 2 , 1 8 0 , 8 8 5 1 1 , 7 5 2 , 7 7 6 9 , 1 4 6 , 6 2 0 1 1 , 1 9 9 , 1 7 5 1 1 , 6 9 1 , 5 6 4 1 2 , 9 3 1 , 8 0 5 1 2 , 7 2 5 , 1 4 1 1 3 , 9 3 2 , 1 2 5 1 5 , 1 8 8 , 6 8 6 Tr a n s i e n t O c c u p a n c y T a x 5, 9 5 9 , 0 3 4 7 , 0 9 8 , 2 8 4 6 , 1 7 8 , 3 9 1 5 , 8 2 0 , 6 7 5 7 , 1 9 1 , 9 3 8 8 , 6 1 9 , 1 7 0 9 , 6 5 9 , 2 8 1 1 1 , 1 7 4 , 0 1 7 1 2 , 9 4 7 , 4 7 3 1 3 , 3 9 3 , 4 3 7 Fr a n c h i s e f e e s 3,982,092 Ot h e r T a x e s 5, 3 6 9 , 8 6 8 6 , 0 8 3 , 1 6 2 6 , 8 7 0 , 7 9 1 6 , 7 6 8 , 7 5 3 7 , 0 7 1 , 4 4 6 7 , 0 8 9 , 6 8 7 7 , 5 8 8 , 4 7 1 8 , 1 4 1 , 0 1 0 8 , 6 5 0 , 0 5 6 5 , 1 2 4 , 5 7 4 Mo t o r V e h i c l e I n - L i e u 41 1 , 0 9 8 26 7 , 0 6 1 18 3 , 1 9 3 19 2 , 0 3 5 21 1 , 5 0 3 16 8 , 2 1 4 33 , 7 6 7 40,07426,99526,708 Pr o p e r t y t a x e s i n l i e u o f v e h i c l e l i c e n s e f e e s 4, 2 0 6 , 7 9 9 4 , 6 0 8 , 6 4 9 5 , 5 6 3 , 1 6 5 5 , 2 2 4 , 5 4 7 5 , 0 8 6 , 1 4 4 5 , 1 5 3 , 3 8 4 4 , 9 5 5 , 8 7 3 5 , 3 1 9 , 1 5 4 5 , 5 5 1 , 6 5 1 5 , 7 7 0 , 0 6 0 In t e r e s t E a r n i n g s 6, 9 2 4 , 2 9 2 8 , 9 9 4 , 2 0 3 4 , 7 6 0 , 3 4 5 5 , 1 2 7 , 2 5 5 3 , 9 4 4 , 7 8 5 2 , 3 8 4 , 2 0 7 80 9 , 7 2 1 1 , 1 0 8 , 1 7 7 629,0361,354,266 Ot h e r 4, 5 5 1 , 0 5 0 1 , 4 1 7 , 7 7 3 1 , 9 2 5 , 6 6 6 1 , 4 9 6 , 7 4 4 1 , 8 9 1 , 4 2 1 9 , 3 0 0 , 1 3 7 1 , 9 6 5 , 7 4 4 2 , 0 1 2 , 4 4 4 4 , 5 7 7 , 2 3 9 2 , 3 3 4 , 4 0 7 Ex t r a o r d i n a r y I t e m (1 0 7 , 7 1 7 , 4 2 8 ) Tr a n s f e r s (1 7 6 , 6 8 0 ) ( 1 6 9 , 3 3 0 ) ( 4 2 3 , 0 1 2 ) ( 1 , 4 5 9 , 2 9 6 ) ( 1 1 , 7 6 9 , 3 9 3 ) ( 7 8 5 , 3 0 9 ) ( 9 0 6 , 8 5 7 ) ( 1 , 0 4 1 , 1 2 0 ) ( 1 , 4 2 9 , 3 0 8 ) ( 9 1 9 , 5 4 7 ) Sp e c i a l i t e m (8 , 5 4 0 , 4 0 0 ) 11 , 8 7 3 , 2 2 6 To t a l G o v e r n m e n t A c t i v i t i e s 81 , 1 6 1 , 7 3 1 7 6 , 1 0 5 , 7 7 7 9 6 , 1 8 0 , 8 6 5 8 7 , 3 3 1 , 7 0 0 7 9 , 1 5 0 , 4 3 9 - 2 6 , 7 1 7 , 1 9 9 7 5 , 3 3 1 , 8 9 2 6 2 , 3 6 9 , 7 2 5 6 9 , 5 3 5 , 9 1 5 7 2 , 6 9 3 , 3 0 3 Bu s i n e s s - T y p e A c t i v i t i e s : In t e r e s t E a r n i n g s 35 9 , 0 4 1 69 , 7 7 7 24 4 , 8 8 7 17 5 , 1 8 8 12 2 , 2 8 3 14 9 , 2 4 2 95 , 1 7 7 153,353126,874289,201 Tr a n s f e r s 17 6 , 6 8 0 16 9 , 3 3 0 42 3 , 0 1 2 1 , 4 5 9 , 2 9 6 1 1 , 7 6 9 , 3 9 3 78 5 , 3 0 9 90 6 , 8 5 7 1 , 0 4 1 , 1 2 0 1 , 4 2 9 , 3 0 8 919,547 To t a l B u s i n e s s - T y p e A c t i v i t i e s 53 5 , 7 2 1 23 9 , 1 0 7 66 7 , 8 9 9 1 , 6 3 4 , 4 8 4 1 1 , 8 9 1 , 6 7 6 93 4 , 5 5 1 1 , 0 0 2 , 0 3 4 1 , 1 9 4 , 4 7 3 1 , 5 5 6 , 1 8 2 1 , 2 0 8 , 7 4 8 To t a l P r i m a r y G o v e r n m e n t $8 1 , 6 9 7 , 4 5 2 $ 7 6 , 3 4 4 , 8 8 4 $ 9 6 , 8 4 8 , 7 6 4 $ 8 8 , 9 6 6 , 1 8 4 $ 9 1 , 0 4 2 , 1 1 5 ( $ 2 5 , 7 8 2 , 6 4 8 ) $ 7 6 , 3 3 3 , 9 2 6 $ 6 3 , 5 6 4 , 1 9 8 $ 7 1 , 0 9 2 , 0 9 7 $ 7 3 , 9 0 2 , 0 5 1 Ch a n g e i n N e t P o s i t i o n Go v e r n m e n t a l A c t i v i t i e s $3 2 , 2 1 2 , 4 7 8 $ 1 8 , 0 0 7 , 6 3 7 $ 2 3 , 0 7 6 , 6 4 7 $ 8 , 6 4 6 , 0 0 8 $ 4 , 9 7 8 , 8 4 5 ( $ 1 0 0 , 9 4 6 , 1 2 3 ) ( $ 2 , 6 5 7 , 6 3 7 ) $ 5 , 4 4 5 , 3 5 8 $ 8 , 5 5 3 , 5 4 0 $ 1 7 , 9 8 9 , 7 2 1 Bu s i n e s s - T y p e A c t i v i t i e s 7, 0 3 1 , 4 7 6 3 , 0 4 1 , 6 6 1 9 , 3 8 2 , 3 7 4 5 , 8 5 9 , 0 7 5 1 6 , 0 9 0 , 1 8 8 6 , 1 2 5 , 1 6 1 4 , 3 1 8 , 6 8 4 7 , 8 4 0 , 7 5 5 3 , 1 1 6 , 3 8 4 7 , 3 7 8 , 3 6 7 To t a l P r i m a r y G o v e r n m e n t $3 9 , 2 4 3 , 9 5 4 $ 2 1 , 0 4 9 , 2 9 8 $ 3 2 , 4 5 9 , 0 2 1 $ 1 4 , 5 0 5 , 0 8 3 $ 2 1 , 0 6 9 , 0 3 3 ( $ 9 4 , 8 2 0 , 9 6 2 ) $ 1 , 6 6 1 , 0 4 7 $ 1 3 , 2 8 6 , 1 1 3 $ 1 1 , 6 6 9 , 9 2 4 $ 2 5 , 3 6 8 , 0 8 8 (A c c r u a l B a s i s o f A c c o u n t i n g ) CI T Y O F S O U T H S A N F R A N C I S C O Ch a n g e s i n N e t P o s i t i o n (c o n t i n u e d ) La s t T e n F i s c a l Y e a r s 14 9 CITY OF SOUTH SAN FRANCISCO Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (b) 2007200820092010201120122013201420152016 General Fund Reserved $732,903$283,435$554,692$889,186 Unreserved 20,359,47114,503,26317,509,82314,841,958 Nonspendable 67,129$90,167$805,677$14,163$1,134 $33,580 Committed 401,797208,0541,406,4303,879,4512,536,7903,654,283 Assigned 771,849840,365566,104743,7461,458,0291,578,153 Unassigned 15,049,16817,347,44523,498,19415,891,89917,285,42217,751,169 Total General Fund $21,092,374$14,786,698$18,064,515$15,731,144$16,289,943$18,486,031$26,276,405$20,529,259$21,281,375 (a)$23,017,185 All Other Governmental Funds Reserved $84,748,754$70,194,663$65,117,971$64,163,373 Unreserved, reported in: Special revenue funds 17,973,39021,286,43123,826,18411,079,390 Debt service funds 124,003119,525121,7643,198,600 Capital project funds 29,928,5733,578,59551,589,53869,286,211 Restricted $163,727,096$43,364,540$30,539,396$42,392,238$43,437,361$52,938,897 Assigned 2,390,9042,076,0651,105,32006,188,554367,023 Unassigned (14,353,252)(1,388,956)(1,379,895)(521,604)(40,459)0 Total all other governmental funds $132,774,720$95,179,214$140,655,457$147,727,574$151,764,748$44,051,649$30,264,821$41,870,634$49,585,456$53,305,920 #REF!153,867,094109,965,912158,719,972163,458,718168,054,691168,054,69162,537,68070,866,83176,323,105 (a)The change in total fund balance for the General Fund and other governmental funds is explained in Management's Discussion and Analysis. (b)In fiscal year 2011, the City implemented GASB 54, Fund Balance Reporting and Governmental Fund Type Definitions, which requires the City to classify its fund balances based on spending constraints imposed on the use of resources. $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 2007200820092010201120122013201420152016 Thousands Total Committed Total Unassigned Total Assigned Total Restricted Total Nonspendable Total Unreserved Total Reserved 150 This Page Left Intentionally Blank 2007 2008 2009 2010 2011 Revenues Property Taxes $41,469,349$44,165,490$59,369,550$54,718,916$54,128,998 Other Taxes 23,505,13824,313,54322,755,561 19,771,31023,412,992 Intergovernmental revenues 9,103,85913,219,05315,088,171 10,609,60511,860,658 Interest and Rents 1,043,52812,318,594 7,625,428 7,680,293 7,612,223 Licenses and permits 5,557,296 5,716,017 5,957,815 7,270,081 7,004,603 Charges for services 6,729,77210,792,04313,644,314 9,986,35210,010,541 Fines and forfeitures 10,691,238 1,073,603 1,013,434 1,054,549 2,133,677 Other 17,083,402 1,091,514 3,722,979 2,542,492 2,261,247 Total Revenues 115,183,582112,689,857129,177,252113,633,598118,424,939 Expenditures Current: General government 4,451,564 5,897,066 5,752,948 5,916,364 6,407,094 Fire Department 14,972,46716,875,31117,724,990 16,790,83418,140,954 Police Department 18,040,50818,757,39419,989,136 19,359,77020,272,684 Public works 15,038,20614,910,40112,360,989 8,416,242 9,856,201 Recreation and Community Services 4,927,68710,826,04110,700,332 9,960,09010,168,425 Library 4,399,017 4,766,821 4,679,270 4,342,662 4,231,762 Economic and Community Development15,675,69413,848,04919,554,780 26,279,40619,894,692 Other 633,060 1,023,435 474,805 Capital outlay 844,74436,544,741 4,247,021 6,724,022 6,969,052 Debt service: Principal repayment 8,610,556 1,692,296 1,755,426 1,887,434 1,842,000 Interest and fiscal charges 5,500,469 5,441,036 4,571,150 4,255,050 4,274,170 Total Expenditures 93,093,972130,582,591101,810,847103,931,874102,057,034 Excess (deficiency) of revenues over (under) expenditures 22,089,610(17,892,734)27,366,405 9,701,72416,367,905 Other Financing Sources (Uses) Transfers in 14,505,34620,182,01418,754,214 18,047,35188,175,882 Transfers (out)(14,351,319)(24,253,621)(19,330,934)(22,175,268)(99,947,814) Tax allocation bonds issued Premium on bonds Payments to refunded bond escrow Other debt proceeds Sale of capital assets 13,750 13,750 13,784 Total other financing sources (uses)167,777 (4,057,857)(562,936)(4,127,917)11,771,932 Net Change in fund balances before extraordinary item 22,257,387(21,950,591)26,803,469 5,573,807 4,595,973 Extraordinary item Net change in fund balances $22,257,387($21,950,591)$26,803,469 $5,573,807$4,595,973 Debt service as a percentage of noncapital expenditures 13.9%3.9%6.8%6.6%6.7% For The Fiscal Year Ended June 30, CITY OF SOUTH SAN FRANCISCO Changes in Fund Balance of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) 152 2012 2013 2014 2015 2016 $38,174,655$27,077,697$23,010,136$24,650,648$26,438,620 28,866,54631,894,81133,931,44638,275,47841,811,097 11,580,53013,054,59410,757,44010,453,07112,360,354 4,955,223 3,238,089 3,632,693 3,531,966 4,207,453 3,056,507 3,054,451 4,366,271 4,795,158 6,896,897 10,088,070 9,275,72416,864,40913,387,71215,386,358 2,184,234 1,753,682 1,528,319 1,221,413 791,756 3,000,563 1,837,675 2,249,728 4,660,668 2,439,579 101,906,32891,186,72396,340,442100,976,114110,332,114 6,485,219 6,658,532 5,970,429 7,167,969 8,469,924 18,812,86120,877,91720,163,75921,247,98924,175,340 21,217,81822,542,13523,309,56823,611,74325,458,986 14,253,609 9,186,49316,791,89415,923,07114,846,346 10,101,40810,927,43311,552,50211,826,40713,234,028 4,272,701 4,112,570 3,987,928 4,247,650 4,681,188 8,184,33420,512,545 5,972,966 5,917,508 7,907,655 480,290 395,749 8,894,514 1,752,000 453,381 352,674 656,000 1,817,764 52,139 95,792,22894,869,76488,202,42790,775,30199,825,216 6,114,100 (3,683,041)8,138,01510,200,81310,506,898 108,413,018 4,467,53021,870,23417,983,227 8,143,075 (109,646,766)(6,780,943)(24,149,582)(19,717,102)(13,193,699) (1,233,748)(2,313,413)(2,279,348)(1,733,875)(5,050,624) 4,880,352 (5,966,454)5,858,667 8,466,938 5,456,274 (110,397,363) ($105,517,011)($5,966,454)$5,858,667$8,466,938$5,456,274 4.2%0.1%0.6%0.4%0.7% For The Fiscal Year Ended June 30, 153 Real Property Net Taxable value Total Real Total FiscalResidentialCommercialIndustrial Secured UnsecuredTotal EstimatedDirect YearPropertyPropertyPropertyOther PropertyPropertyAssessed (a)Full Market (a)Tax Rate (b) 2007$5,088,269,711$1,166,696,622$3,456,741,386$280,811,705$9,992,519,424$1,294,249,195$11,286,768,619$11,286,768,6190.30977% 20085,484,465,766 1,227,775,836 3,934,414,550 324,421,836 10,971,077,988 1,365,179,480 12,336,257,46812,336,257,4680.31878% 20095,790,070,116 1,368,274,141 4,871,255,093 523,110,471 12,552,709,821 2,373,808,053 14,926,517,87414,926,517,8740.34939% 20105,467,563,992 1,429,401,205 5,197,739,403 498,656,817 12,593,361,417 1,424,610,941 14,017,972,35814,017,972,3580.36462% 20115,547,292,029 1,509,554,164 4,922,422,763 387,673,530 12,366,942,486 1,279,681,193 13,646,623,67913,646,623,6790.36933% 20125,579,044,758 1,581,852,456 4,967,158,758 403,895,119 12,531,951,091 1,295,085,027 13,827,036,11813,827,036,1180.37860% 20135,606,400,603 1,628,754,902 5,050,279,321 418,927,733 12,704,362,559 1,288,434,392 13,992,796,95113,992,796,9510.42174% 20145,900,441,192 1,713,575,060 4,273,694,531 1,204,288,116 13,091,998,899 1,212,353,871 14,304,352,77014,304,352,7700.13474% 20156,313,393,048 2,402,335,027 4,588,967,014 345,957,716 13,650,652,805 1,244,971,467 14,895,624,27214,895,624,2720.13804% 20166,716,642,000 2,000,204,271 5,189,813,366 376,874,603 14,283,534,240 1,197,263,526 15,480,797,76615,480,797,7660.13634% Source: HdL Coren & Cone, San Mateo County Assessor 2015-16 Combined Tax Rolls. (a) (b) CITY OF SOUTH SAN FRANCISCO The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of no more than two percent annually, plus any local over-rides. These values are considered to be full market values. California cities do not set their own direct tax rate. The state constitution establishes the rate at 1% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area. ASSESSED VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 2007200820092010201120122013201420152016 Mi l l i o n s Unsecured Secured 154 Fiscal BasicSchool Total Direct/Overlapping Year LevyDistrictsTax Rates 2007 1.000 0.1287 1.1287 (1,13) 2008 1.000 0.1370 1.1370 (1,14) 2009 1.000 0.1426 1.1426 (1,15) 2010 1.000 0.1600 1.1600 (1,16) 2011 1.000 0.1707 1.1707 (1,17) 2012 1.000 0.1824 1.1824 (1,18) 2013 1.000 0.1959 1.1959 (1,19) 2014 1.000 0.2046 1.2046 (1,20) 2015 1.000 0.1822 1.1822 (1,21) 2016 1.000 0.1750 1.1750 (1,22) Notes: (1) Like other cities, South San Francisco includes several property tax rate areas with different rates. A mean average is indicated. (13) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0379 percent, which includes South San Francisco Unified School District bonds and San Mateo Jr. College bond, 3 have a rate of 1.0612, which includes Jefferson Union School bonds, one has a rate of 1.0664, which includes San Bruno Park Elementary and San Mateo High bonds, and one at a tax rate of 1.0575, for Brisbane ESD bonds and Jefferson Union High School bonds. (14) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0360 percent which includes South San Francisco Unified School Distirct bonds and San Mateo Jr. College bond, 3 have the rate of 1.0756, which includes Jefferson Union School bonds, one has a rate of 1.0716, which includes San Bruno Park Elementary and San Mateo High bonds, and one at a tax rate of of 1.0596 percent, for Brisbane ESD bonds and Jefferson union High School bonds. (15) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0327 percent, which includes South San francisco Unified School District bonds and San Mateo Jr. College bond. 2 have the rate of 1.0719 and one has a rate of 1.0689, which includes Jefferson Union School bonds and Brisbane ESD bonds, and one has a rate of 1.0710 which includes San BrunoPark Elementary. (16) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0377 percent, which includes South San francisco Unified School District bonds and San Mateo Jr. College bond. 3 have the rate of 1.0783 and one has a rate of 1.0748, which includes Jefferson Union School bonds, and Brisbane ESD bonds, and one has a rate of 1.0804 which includes San BrunoPark Elementary. (17) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0389 percent, which includes SSFUSD bonds and San mateo Jr College bond. 3 has a rate of 1.0870 percent and one at 1.0832 percent which includes Jefferson Union School bonds and Brisbane ESD bonds. One has a rate of 1.0834 percent which includes San Bruno Park Elementary. (18) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0420 percent, which includes SSFUSD bonds and San mateo Jr College bond. 3 has a rate of 1.0893 percent and one at 1.0854 percent which includes Jefferson Union School bond, Brisbane ESD bonds & San Mateo JR College bonds and one has a rate of 1.0909 percent which includes San Bruno Park Elementary. (19) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0521 percent, which includes SSFUSD bonds, San Mateo Jr College bond, and San Mateo Comm College. 4 has a rate of 1.0921 percent which includes Brisbane ESD Bond, Jefferson High bonds, SM Jr College bond and San Mateo Comm College. 1 has a rate of 1.0905 percent, which includes San Bruno Pk Elem bond, SM Union High, SM Jr College bond and San Mateo Comm Coll bond. (20) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0522 percent, which includes SSFUSD bonds, San Mateo Jr College bond, and San Mateo Comm College. 4 has a rate of 1.1048 percent which includes Brisbane ESD Bond, Jefferson High bonds, SM Jr College bond and San Mateo Comm College. 1 has a rate of 1.0864 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond and San Mateo Comm Coll bond. (21) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0703 percent, which includes SSFUSD bonds, San Mateo Jr College bond, and San Mateo Comm College. 4 has a rate of 1.0991 percent which includes Brisbane ESD Bond, Jefferson High bonds, SM Jr College bond and San Mateo Comm College. 1 has a rate of 1.0983 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond and San Mateo Comm Coll bond. (22) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0707 percent, which includes SSFUSD bonds, San Mateo Jr College bond, and San Mateo Comm College. 3 has a rate of 1.1080 percent and 1 with 1.1068 percent rate which includes College bond Brisbane ESD Bond, Jefferson High bonds, SM Jr and San Mateo Comm College. 1 has a rate of 1.0929 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond and San Mateo Comm Coll bond. Source: HDL, Coren & Cone (San mateo County Assessor 2006/07- 2015/16 Tax Rate Table). CITY OF SOUTH SAN FRANCISCO DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS 155 Percentage Percentage of Total City of Total City Taxable TaxableTaxable Taxable Assessed AssessedAssessed Assessed Taxpayer ValueRankValueValue RankValue Genentech Inc.$1,789,391,673111.56%$1,594,845,246114.13% Slough SSF LLC 1,083,914,6512 7.00%271,624,9393 2.41% ARE San Francisco LLC 434,382,6233 2.81% Brittania Pointe Grand LP 293,120,0704 1.89%150,263,3034 1.33% United Airlines Inc 209,576,6485 1.35%304,050,4802 2.69% Gateway Center LLC 141,377,4736 0.91%124,334,8945 1.10% AP3-SF2 CT South LLC 139,343,3367 0.90% BMR 180 Oyster Point LLC 120,500,0008 0.78% SSF Logistics Inc 120,357,6409 0.78% ASN Solaire LLC 109,279,633100.71% Fairfield South San Francisco LLC------72,634,8936 0.64% SFO Fuel Company LLC ------66,320,7447 0.59% AMB Fund III Spruce LLC ------63,340,0008 0.56% Costco Wholesale Corporation ------60,590,2269 0.54% Britannia Biotech Gateway LP ------60,219,28810 0.53% Subtotal $4,441,243,747 28.69%$2,768,224,013 24.53% Total Net Assessed Valuation: Fiscal Year 2015-16 $15,480,797,766 Fiscal Year 2006-07 $11,286,768,619 HdL Coren & Cone, 2006-07 & 2015-16 Top Ten Property Taxpayers (Net Values). San Mateo County Assessor 2015/16 combined Tax Rolls and the SBE Non Unitary Tax Roll Source: 2015-16 2006-07 CITY OF SOUTH SAN FRANCISCO Principal Property Tax Payers Current Year and Nine Years Ago 156 CI T Y O F S O U T H S A N F R A N C I S C O Tw e n t y L a r g e s t T a x a b l e P r o p e r t y O w n e r s f o r M e r g e d R D A P r o j e c t A r e a To t a l % o f T o t a l As s e s s e d A V i n P r o j e c t Pr o p e r t y T a x P a y e r Se c u r e d U n s e c u r e d Va l u e Ar e a La n d U s e Sl o u g h $9 5 1 , 0 8 2 , 4 7 4 $9 5 1 , 0 8 2 , 4 7 4 2 2 . 3 7 % I n d u s t r i a l Br i t a n n i a P o i n t e G r a n d L P 43 1 , 5 9 2 , 5 4 5 $4 3 1 , 5 9 2 , 5 4 5 1 0 . 1 5 % I n d u s t r i a l Ge n e n t e c h 24 1 , 6 1 5 , 1 7 2 1 4 8 , 0 1 9 , 7 3 6 $ 3 8 9 , 6 3 4 , 9 0 8 9 . 1 6 % I n d u s t r i a l , O f f i c e , R & D AR E S a n F r a n c i s c o E x c h L L C $ 2 2 5 , 6 6 1 , 4 8 1 $2 2 5 , 6 6 1 , 4 8 1 5 . 3 1 % I n d u s t r i a l , C o m m e r c i a l BM R G a t e w a y L L C 21 8 , 0 6 3 , 2 9 9 $2 1 8 , 0 6 3 , 2 9 9 5 . 1 3 % C o m m e r c i a l Ga t e w a y C e n t e r L L C 14 2 , 3 6 4 , 8 4 7 0 $ 1 4 2 , 3 6 4 , 8 4 7 3 . 3 5 % C o m m e r c i a l AS N S o l a i r e L L C 10 9 , 2 7 9 , 6 3 3 $1 0 9 , 2 7 9 , 6 3 3 2 . 5 7 % R e s i d e n t i a l Co s t c o W h o l e s a l e C o r p 40 , 8 7 4 , 0 5 7 3 8 , 6 5 9 , 2 3 0 $ 7 9 , 5 3 3 , 2 8 7 1 . 8 7 % C o m m e r c i a l HC P O y s t e r P o i n t I I I L L C 69 , 1 8 3 , 7 1 7 $6 9 , 1 8 3 , 7 1 7 1 . 6 3 % U n k n o w n Ga t e w a y B o u l e v a r d L L C 60 , 2 3 0 , 5 9 8 $6 0 , 2 3 0 , 5 9 8 1 . 4 2 % I n d u s t r i a l BP G a t e w a y C e n t e r L L C 58 , 3 7 1 , 1 8 1 $5 8 , 3 7 1 , 1 8 1 1 . 3 7 % C o m m e r c i a l , O f f i c e , 2 + s t o r i e s PR 7 0 1 G a t e w a y L L C 57 , 7 0 0 , 0 0 0 $5 7 , 7 0 0 , 0 0 0 1 . 3 6 % C o m m e r c i a l HP T M I I I P r o p e r t i e s T r u s t 49 , 7 5 0 , 0 0 0 $4 9 , 7 5 0 , 0 0 0 1 . 1 7 % R e s i d e n t i a l , H o t e l s , M o t e l s Bl u e L i n e T r a n s f e r I n c . 49 , 7 2 1 , 8 3 5 $4 9 , 7 2 1 , 8 3 5 1 . 1 7 % I n d u s t r i a l Am g e n S F L L C 45 , 2 1 9 , 5 1 1 $ 4 5 , 2 1 9 , 5 1 1 1 . 0 6 % I n d u s t r i a l OI K S i e r r a P o i n t L L C 43 , 1 9 7 , 5 0 9 $4 3 , 1 9 7 , 5 0 9 1 . 0 2 % C o m m e r c i a l , O f f i c e , 2 + s t o r i e s Fe l c o r C M B S S F H o l d i n g s L P 3 7 , 0 1 6 , 6 9 5 $3 7 , 0 1 6 , 6 9 5 0 . 8 7 % R e s i d e n t i a l , H o t e l s , M o t e l s Sa n M a t e o H e a l t h c o m m i s s i o n 3 5 , 5 6 4 , 2 3 5 $3 5 , 5 6 4 , 2 3 5 0 . 8 4 % C o m m e r c i a l , O f f i c e , 2 + s t o r i e s Ar e u s I n c 34 , 7 1 2 , 7 0 8 $3 4 , 7 1 2 , 7 0 8 0 . 8 2 % C o m m e r c i a l , O f f i c e , 2 + s t o r i e s Th e r a v a n c e I n c . 30 , 5 4 6 , 8 0 5 $ 3 0 , 5 4 6 , 8 0 5 0 . 7 2 % I n d u s t r i a l , O f f i c e , R & D To t a l T o p T w e n t y 2, 8 5 5 , 9 8 1 , 9 8 6 2 6 2 , 4 4 5 , 2 8 2 3 , 1 1 8 , 4 2 7 , 2 6 8 7 3 . 3 6 % Pe r c e n t o f A V 91 . 6 % 8. 4 % So u r c e : S a n M a t e o C o u n t y A s s e s s o r , R D A S e c u r e d & U n s e c u r e d S S F 2 0 1 5 T a x R o l l s So u r c e : M u n i S e r v i c e s (1 ) G i v e n t h e n a t u r e o f t h e r e s e a r c h p e r f o r m e d a t G e n e n t e c h , a s i g n i f i c a n t p o r t i o n o f t h e t o t a l a s s e s s e d v a l u e o f t h e G e n e n t e c h P r o p e r t y i s l i k e l y e q u i p m e n t . I t w o u l d a p p e a r o n t h e s e c u r e d r o l l a s t h a t c o n t a i n s th e v a l u e o f p e r s o n a l p r o p e r t y / i m p r o v e m e n t s JU N E 3 0 , 2 0 1 6 15 7 Fiscal Percent of YearRate (2)Levies (3)Allocations (5)CollectionsDelinquenciesDelinquent taxes 20071.00(4)$12,281,105(4)(4)0.0% 20081.00(4)13,177,156 (4)(4)0.0% 20091.00(4)14,979,798 (4)(4)0.0% 20101.00(4)13,697,389 (4)(4)0.0% 20111.00(4)13,351,506 (4)(4)0.0% 20121.00(4)13,360,854 (4)(4)0.0% 20131.00(4)13,740,246 (4)(4)0.0% 20141.00(4)14,928,197 (4)(4)0.0% 20151.00(4)15,184,788 (4)(4)0.0% 20161.00(4)15,994,773 (4)(4)0.0% Notes: (1) Excludes State Reimbursed Exemptions and deductions for County property tax administration. (2) County adopted full cash value method of valuation rather than assessed valuation. (3) Levies include real and personal property. (5) San Mateo County controller's Office. Adjusted estimated revenue for City of South San Francisco. Source: San Mateo County Auditor -- Controller's Office; Finance Department Revenue Reports (4) Information not applicable. All general purpose property taxes are levied by the County and allocated to other governmental entities. CITY OF SOUTH SAN FRANCISCO PROPERTY TAX LEVIES AND COLLECTIONS (1) LAST TEN FISCAL YEARS $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 2007200820092010201120122013201420152016 Mi l l i o n s 158 CITY OF SOUTH SAN FRANCISCO Ratio of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities RDA TaxLeaseCertificatesSpecial FiscalAllocationRevenue ofAssessment Year BondsBondsParticipationDebt LoansTotal 2007$72,400,000$194,156$5,200,000 $3,884,000$81,678,156 200871,000,000153,8605,060,000 3,772,00079,985,860 200969,545,000110,4344,915,000 3,660,00078,230,434 201068,030,000 04,765,000 3,548,00076,343,000 201166,455,000 04,610,000 3,436,00074,501,000 201264,815,000 04,445,000 3,324,00072,584,000 201363,115,000 0 0 063,115,000 201461,350,000 0 0 061,350,000 201559,515,000 0 0 059,515,000 201657,590,000 0 0 057,590,000 Business-Type Activities SewerCertificatesState Water TotalPercentage FiscalRevenue ofResources Primaryof PersonalPer YearBondsParticipationLoansTotalGovernmentIncome (a)Capita (a) 2007$6,000,000 $67,133,165$73,133,165$154,811,3218.14%$2,491.21 20085,790,000 67,878,19473,668,194153,654,0547.82%2,419.29 20095,575,000 69,025,32274,600,322152,830,7567.84%2,351.24 20105,350,000 65,028,41070,378,410146,721,4107.65%2,227.37 20115,120,000 60,831,03865,951,038140,452,0387.27%2,184.09 20124,885,000 56,530,94661,415,946133,999,9466.76%2,057.52 20134,640,000 52,118,58756,758,587119,873,5875.98%1,824.28 20144,385,000 47,591,01951,976,019113,326,0195.57%1,723.62 20154,120,000 43,543,61447,663,614107,178,6145.07%1,659.50 20163,850,000 39,392,83243,242,832100,832,832n/a n/a Note : Debt amounts exclude any premiums, discounts, or other amortization amounts. Sources:City of South San Francisco State of California, Department of Finance (population) U.S. Department of commerce, Bureau of the Census (income) (a) See Schedule of Demographic and Economic Statistics for personal income and population data. $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 2007200820092010201120122013201420152016 Mi l l i o n s Total Governmental Total Business 159 CITY OF SOUTH SAN FRANCISCO COMPUTATION OF DIRECT AND OVERLAPPING DEBT JUNE 30, 2016 2015-16 Assessed Valuation:$15,481,636,953 Redevelopment Incremental Valuation:- Adjusted Assessed Valuation:$15,481,636,953 Total Debt City's Share of OVERLAPPING TAX AND ASSESSMENT DEBT:6/30/2016% Applicable (1)Debt 6/30/16 San Mateo Community College District $644,384,0278.680%$55,932,534 Jefferson Union High School District 183,678,786 1.627 2,988,454 South San Francisco Unified School District 181,153,045 89.127 161,456,274 Brisbane School District 6,255,437 11.743 734,576 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $221,111,838 Ratio to 2015-16 Assessed Valuation: Total Overlapping Tax and Assessment Debt………1.43% OVERLAPPING FUND DEBT: San Mateo County General Fund Obligations$432,359,8168.680%37,528,832 San Mateo County Board of Education Certificates of Participation9,890,000 8.68%858,452 San Mateo County Flood Control District Certificates of Participation18,725,0006057.500%11,342,669 South San Francisco Unified School District Certificates of Participation493,946 89.127 440,239 Jefferson Union High School District Certificates of Participation 1,580,000162.7%25,707 City of South San Francisco Loans Payable 10,714,152100.000%10,714,152 City of South San Francisco Capital Leases$2,238,998100%2,238,998 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT:$63,149,049 OVERLAPPING TAX INCREMENT DEBT (Successor Agency):$57,590,000100.000%$57,590,000 TOTAL DIRECT DEBT $12,953,150 Total Overlapping Debt $328,897,737 COMBINED TOTAL DEBT $341,850,887(2) (1) Percentage of overlapping agency's assessed valuation located within boundaries of the city. Ratios to Adjusted Assessed Valuation: Total Overlapping Tax and Assessment Debt1.43% Total Direct Debt0.08% Combined Total Debt2.21% Ratios to Redevelopment Successor Agency Incremental Valuation ($3,918,692,457): Total Overlapping Tax Increment Debt 1.47% Source: California Municipal Statistics, Inc. and City of South San Francisco 510-658-2640 Austin Busch (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, tax allocation bonds, and Successor Agency Debt. 160 ASSESSED VALUATION:$15,481,636,953 BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a)580,561,386 LESS AMOUNT OF DEBT SUBJECT TO LIMIT:0 LEGAL BONDED DEBT MARGIN $580,561,386 Total net debt Total Net DebtLegal applicable to the limit Fiscal Debt Applicable to Debt as a percentage Year Limit Limit Margin of debt limit 2007 $423,253,823 0$423,253,823 0.00% 2008 469,575,123 0469,575,123 0.00% 2009 559,744,420 0559,744,420 0.00% 2010 525,673,963 0525,673,963 0.00% 2011 511,748,388 0511,748,388 0.00% 2012 518,513,854 0518,513,854 0.00% 2013 524,729,886 0524,729,886 0.00% 2014 536,413,229 0536,413,229 0.00% 2015 558,585,910 0558,585,910 0.00% 2016 580,561,386 0580,561,386 0.00% NOTE: (a) Source: HDL Coren & Cone, San Mateo County Assessor - Combined Tax Rolls CITY OF SOUTH SAN FRANCISCO COMPUTATION OF LEGAL BONDED DEBT MARGIN JUNE 30, 2016 California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted prior to the change in basing assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is one-fourth the limit to account for the adjustment of showing assessed valuation at full cash value. 161 CITY OF SOUTH SAN FRANCISCO REVENUE BOND COVERAGE SEWER RENTAL ENTERPRISE FUND LAST TEN FISCAL YEARS Net Revenue Debt Service Requirements (4) FiscalGrossOperatingAvailable for Year Revenue (1)Expenses (2)Debt ServicePrincipalInterestTotalCoverage 2007$21,409,055$11,146,870$10,262,185 (3)$248,914$248,91441.23 200818,418,86612,096,2566,322,610 (3)241,846241,84626.14 200920,722,77813,228,8837,493,895215,000235,897450,89716.62 201023,321,58213,774,7579,546,825225,000230,941455,94120.94 201123,735,46913,527,54410,207,925230,000223,973453,97322.49 201225,365,82413,924,33411,441,490235,000216,501451,50125.34 201324,782,58715,151,9689,630,619245,000208,459453,45921.24 201426,908,31614,904,22512,004,091255,000199,831454,83126.39 201526,147,55018,630,6727,516,878265,000190,533455,53316.50 201625,610,51813,514,70612,095,812270,000180,566450,56626.85 Notes:Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) Gross revenue includes operating revenue and non-operating revenue. (2) Direct operating expenses include operating expenses (except depreciation) and non-operating expenses (except interest expense). (3) Retirement of principal for 2005 Sewer Revenue Bonds begins in fiscal year 2008. (4) The requirement does not include loan payments on State Water Resources Board loans. See schedule of Sewer Debt service coverage for details. Source: City of South San Francisco, Department of Finance $5 $10 $15 $20 $25 $30 2007200820092010201120122013201420152016 Mi l l i o n s Revenue (1) Expenses (2) 162 SEWER DEBT SERVICE COVERAGE SEWER RENTAL ENTERPRISE FUND LAST FIVE FISCAL YEARS Fiscal Year 2012 2013 2014 2015 2016 Revenues Service Charges $19,193,259$19,310,559$19,129,475$19,758,128$19,515,093 Connection and Other Fees 117,027 27,548 25,992 122,640 104,283 Interest Income 119,011 80,692133,248 106,830 238,389 Developer Fees Other Cities' Participation (1)5,936,5266,137,4017,619,601 6,159,937 5,752,753 Total Revenues $25,365,824$25,556,200$26,908,316$26,147,535$25,610,518 Operating Expenses (2)$13,924,334$15,151,968$14,904,225$18,759,650$13,514,706 Wastewater System Net Revenues $11,441,490$10,404,232$12,004,091 $7,387,885$12,095,812 Parity Debt Service (3) State Water Resources Control Board Loans$5,997,459$6,012,716$6,022,799 $5,445,162$5,449,692 CSCDA Series 2005D Revenue Bonds 214,589206,405197,630 188,148 178,036 Total Parity Debt $6,212,048$6,219,121$6,220,429 $5,633,310$5,627,728 Total Parity Debt Service Coverage 1.84 1.67 1.93 1.31 2.15 10,012,86710,012,86710,012,867 10,012,86710,012,867 (2) Excludes depreciation, capital expenditures and debt service. (3) Includes Sewer Revenue Bonds and State Water Loan payments (1) Primarily consists of payments from the City of San Bruno. The City of San Bruno is a co-owner of the Plant and pays the City in advance on a quarterly basis for the City of San Bruno's share of operating costs. See "Wastewater System" herein. (4) Reflects an adopted increase in rates for Fiscal Year 2004-05 of 25% per Resolution No. 68-2004, adopted by the City Council on July 14, 2004 and effective on and after July 1, 2004 and an adopted increase in rates for Fiscal Year 2005-06 of 9% per Resolution No. 68-2005, adopted by the City Council on June 22, 2005 and effective on and after June 22, 2005. CITY OF SOUTH SAN FRANCISCO 163 CITY OF SOUTH SAN FRANCISCO REDEVELOPMENT PLEDGED REVENUE COVERAGE LAST SEVEN FISCAL YEARS Funding Source: RDA tax increment revenues FiscalAvailableDebt Service Requirements FiscalAvailableDebt Service Requirements YearRevenuePrincipalInterestTotalCoverageYearRevenuePrincipalInterestTotalCoverage 2010$35,871,577 $1,330,000$3,193,869 $4,523,8697.93 2010$5,798,618$185,000$107,205$292,20519.84 201144,300,878 1,380,0003,141,394 4,521,3949.80 2011 5,732,171195,00098,748293,74819.51 201225,114,631 1,435,0003,086,819 4,521,8195.55 201225,114,631205,00089,645294,64585.24 2013 1,490,0003,030,181 4,520,181 2013 210,00079,995289,995 2014 1,545,0002,971,344 4,516,344 2014 220,00069,780289,780 2015 1,605,0002,904,331 4,509,331 2015 230,00058,750288,750 2016 1,680,0002,834,619 4,514,619 2016 245,00046,875291,875 (1) New issuance. Retirement of principal and interest begins in fiscal year 2007. Funding Source: RDA tax increment revenues Funding Source: RDA tax increment revenues FiscalAvailableDebt Service Requirements FiscalAvailableDebt Service Requirements YearRevenuePrincipalInterestTotalCoverageYearRevenuePrincipalInterestTotalCoverage 2010$35,871,577$150,000$244,775$394,77590.872010$35,871,577$110,434$6,428$116,862306.96 201144,300,878155,000238,250393,250112.65 201225,114,631165,000230,500395,50063.50 2013 2014 2015 2016 Funding Source: RDA tax increment revenues FiscalAvailable Debt Service Requirements YearRevenuePrincipalInterestTotalCoverage 2010 $35,871,577$1,590,434$3,445,072$5,035,5067.12 201144,300,8781,535,0003,379,6444,914,6449.01 201225,114,6311,600,0003,317,3194,917,3195.11 2013 1,490,0003,030,1814,520,181 2014 1,545,0002,971,3444,516,344 2015 1,605,0002,904,3314,509,331 2016 1,680,0002,834,6194,514,619 Note: Redevelopment Agencies abolished as of 1/31/2012. Numbers for 2012 include the first and second RPTTF distributions received. (A) Shows coverage of all non-housing bonds pledged to tax increment. Source: City of South San Francisco, Department of Finance RDA All Non-housing (A) 2006 RDA Revenue Bonds Funding Source: RDA Gateway and Low Moderate Income Housing tax increment revenues. Gateway bonds defeased in FY 05-06. 1999 RDA Revenue Bonds (Housing) 1989 Cal Health Facilities Financing Authority Revenue Bonds1999 Certificates of Participation 164 City City EstimatedPersonalPer CapitaCitySan MateoCity CityIncome (2)PersonalUnemploymentCountyPopulation YearPopulation (1)(in thousands)Income (2)Rate (3)Population (1) % of County 2005$61,444$1,681,507$27,3665.3%$723,4538.49% 200661,7291,810,07529,3234.6%724,1048.52% 200762,1431,903,01630,6234.7%733,4968.47% 200863,5121,964,02830,9246.0%739,4698.59% 200965,0001,948,79829,98210.3%745,8588.71% 201065,8721,918,06129,11810.7%754,2858.73% 201164,3071,932,61830,0539.7%729,4438.82% 201265,1271,982,85730,4466.3%735,6788.85% 201365,7102,005,66630,5235.2%747,3738.79% 201465,7492,033,15630,9234.5%745,6358.82% 201564,5852,114,82630,9233.6%765,1358.44% Notes: ** All data were updated to reflect the City of South San Francisco's current information available through HDL, Coren & Cone Data Sources: (1) Population: HDL/California State Dept of Finance. Estimated City's population as of January 2014 (2) Personal and per capita income: HDL, Coren & Cone (3) Unemployment Data: HDL/California Employment Development Department CITY OF SOUTH SAN FRANCISCO DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN YEARS $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 $2,200,000 City Personal Income (in Thousands) 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 20052006200720082009201020112012201320142015 City Unemployment Rate  8.20% 8.30% 8.40% 8.50% 8.60% 8.70% 8.80% 8.90% City Population % of County $25,000 $26,000 $27,000 $28,000 $29,000 $30,000 $31,000 20052006200720082009201020112012201320142015 City Per Capita Personal Income 165 Percentage Percentage Number ofof Total CityNumber ofof Total City EmployerEmployeesRankEmploymentEmployeesRankEmployment Genentech8,446113.1%8,170213.0% Layton Construction Co Inc77921.2% Onyx Pharmaceuticals Inc65031.0% Life Technologies Corporation62241.0% Costo Wholesalers (2 stores)61651.0%79841.3% Amgen San Francisco LLC40660.6% Successfactors, Inc.40070.6%67561.1% SBM Site Services LLC38880.6% Wave Division Holdings LLC34490.5% Tobi.com, LLC328100.5% United Airlines9,000114.4% Kaiser Medical Center1,10031.8% United Parcel Service79051.3% Elan Pharmaceuticals65071.0% Exelixis55080.9% Cell Genesis37590.6% Monogram Biosciences350100.6% Subtotal12,97920.1%22,45835.9% Total City Population64,58562,614 Source: SSF Business License Database- Business licenses expiring 12/31/16. CAFR 2006-07 2006-072015-16 CITY OF SOUTH SAN FRANCISCO Principal Employers Current Year and Nine Years Ago 166 CITY OF SOUTH SAN FRANCISCO Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years (Adopted Operating Budget) Functions2007200820092010201120122013201420152016 General Government (1) 35.4835.6735.6037.0037.0036.6036.6037.6040.6047.10 Fire Department 76.4877.4880.4882.4882.4882.4882.4882.9883.4892.68 Police Department107.45110.85111.65114.65112.65110.65115.65119.75118.87120.87 Park, Rec. & Maintenance Services (3)105.49115.15116.37116.34116.05107.86111.66117.21121.31134.16 Library38.5438.6840.2140.8140.8135.3435.3537.6637.7138.71 Economic and Comm. Development (2) 37.2133.3535.3526.4528.9524.4523.4524.4026.1527.15 Public Works (2) (3)39.7642.0042.1043.8540.0543.0345.0247.2147.6849.00 Water Quality Control Plant37.5938.5938.5939.5440.6438.8238.8239.6339.0641.74 Total478.00491.77500.35501.12498.63479.23489.03506.44514.86551.41 Notes: 1.City Manager, Council members, City Clerk, HR, IT and Finance are under General Government. 2.Oversight of the Engineering has been moved from Economic and Community Development to Public Works. 3.Oversight of Parks and Common Greens was moved from PW to Parks, Rec and Maintenance Services Source: City of South San Francisco Adopted Operating Budget FY 2015-16 0 100 200 300 400 500 600 2007200820092010201120122013201420152016 Em p l o y e e General Government (1)Fire Department Police Department Public Works (2) (3) Park, Rec. & Maintenance Services (3)Library Economic and Comm. Development (2)Water Quality Control Plant 167 20122013201420152016 Function/Program Public safety: Fire: Inspections 1,997 2,3692,5741,8172,563 Police: Police calls for service 29,19533,65729,35931,53232,477 Law violations: Part I crimes 2,0121,8741,7801,8742,126 Physical arrests (adult and juvenile)1,7902,0812,1581,9332,071 Traffic violations3,9543,6324,1753,8284,211 Parking violations 19,10814,64816,59713,37812,006 Public works Street resurfacing (miles) (Eng Div)4.75322 (2) 0 2 Potholes repaired (square miles)0.370.130.200.112 Asphalt used for street repairs (tons)420287435250151 Culture and recreation: Recreation class participants26,73727,18426,69426,879 (3) 23,399 Library: Total items borrowed731,911701,721686,491 (1) 643,630 565,806 Items in collection181,905188,394185,482 (1) 130,106 (4) 208,400 Wastewater Residential connections16,46616,46616,48216,47016,491 Commercial connections1,5761,5661,5621,5601,561 Other connections140127128128131 Average daily sewage treatment (millions of gallons)9.189.278.288.897.92 Note: N/A denotes information not available. (1) Year 2015 decrease is due to clearing out of outdated and damaged items in the collection. Prior to Grand library's remodel, most of the outdated items are already cleaned out. (2) Street resurfacing project estimated early next year (2016). (3) Registration counts have excluded all withdrawals from the classes for the year while the numbers in 2011-2015 did not. (4) New items added for Grand Library and electronic books are also included. CITY OF SOUTH SAN FRANCISCO Operating Indicators by Function/Program Last Five Fiscal Years 168 ` 2007200820092010201120122013201420152016 Function/Program Public safety: Fire stations5555555555 Police stations11111 (6) 1 (6) 1 111 Police Fleet 41 (1) 45 (2) 48 (2) 48 525151 (8) 50 5353 Public works Miles of streets127127127127127127127127127127 Street lights3,7383,7793,7794,1564,1604,160 (7) 4,505 4,5054,5054,505 Parking District lights20202020202020202020 Traffic Signals70707073747474747476 Culture and recreation: Community services: City parks25282828282828282828 City parks acreage189190190190190190190190190190 Playgrounds24242424242424242424 City trails6666666666 Community gardens1111111111 Community centers4444444444 Senior centers2222 (4) 1 11111 Skate Park (3) 1 111111 Dog park (3) 1 111111 Swimming pools1111111111 Tennis courts7777777777 Basketball Courts12121212121212121212 Baseball/softball diamonds11111111111111111111 Soccer/football fields5555555555 Library: City Libraries (6)2222222222 Wastewater Miles of sanitary sewers164164164164164164164164164164 Miles of storm sewers125125125125125125125125125125 Number of treatment plants1111111111 Source: ssf.net/depts/rcs; Director of Rec & Comm Services; Superintendent of parks & Maintenance (1) Police patrol units consists of 35 marked/unmarked cars, 6 motorcycles, 1 SWAT and 3 cushman. (2) Year 2009, the 3 units added are not new. These are units that was not included on the previous Fleet count. (3) Year 2010, Skate park and dog park was added on the list. (4) The only senior center is Magnolia Center but programming still continues at El Camino. (5) Community Learning Center not included on count as it is only a homework center not a library. (6) Police substation located behind Miller parking garage not included. (7) Includes all lights in SSF billed as LS-2 from PG&E (8) One less motorcycle from last year. CITY OF SOUTH SAN FRANCISCO Capital Asset Statistics by Function/Program Last Ten Fiscal Years 169 2014 2015 2016 Transient Occupancy Tax Detail 9% TOT collected $10,056,615$11,652,726$12,054,094 1% Measure I Special Tax 1,117,4021,294,7471,339,344 Total TOT Collection $11,174,017$12,947,474$13,393,437 1% Measure I Special Tax Use Police $223,480$258,949$267,869 Fire 223,480 258,949 267,869 Library 223,480 258,949 267,869 Parks 223,480 258,949 267,869 Recreation 223,480 258,949 267,869 Total 1% Measure I Special Tax $1,117,402$1,294,747$1,339,344 CITY OF SOUTH SAN FRANCISCO Collection and Use of 1% Special Transient Occupancy Tax (TOT) Approved by Voters as Measure I * Miscellaneous Information Last Three Fiscal Years * Note: Measure I, a one percent supplemental special tax to the already existing 9% general transient occupancy tax (TOT) was approved on Nov. 2, 2004 and took effect January 1, 2005. Special tax was earmarked for use to supplement Police, Fire, Library, and Parks and Recreation expenditures. 170 CITY OF SOUTH SAN FRANCISCO MEMORANDUM DATE: 01/10/17 TO: Mayor, Vice Mayor and Councilmembers FROM: Mike Brosnan, Interim Chair, Measure W Citizens’ Oversight Committee CC: Mike Futrell, City Manager SUBJECT: Confirmation of Fiscal Year 2015-16 Measure W Revenues and Expenditures Honorable Mayor, Vice Mayor, and Councilmembers, The purpose of this memo is to inform the City Council that the Measure W Citizen’s Oversight Committee acknowledges receipt of the Fiscal Year 2015-16 Comprehensive Annual Financial Report and independently confirms the Measure W funds were received and spent in accordance with the Measure W ballot measure language. Respectfully Submitted, Michael R. Brosnan Interim Chair, Measure W Citizen’s Oversight Committee Attachment 2 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:16-816 Agenda Date:10/19/2016 Version:1 Item #:1. ReportprovidingMeasureWfinancialoverviewandtransmittingresultsforFiscalYear2015-16.(Richard Lee, Finance Director) RECOMMENDATION This item is for information only. No formal action is needed. BACKGROUND/DISCUSSION MeasureW,ahalf-centtransactionsandusetax,wasapprovedbySouthSanFranciscovotersinNovember 2015.TheballotresultswereconfirmedinDecember2015.TheBoardofEqualizationimplementedthetax beginning on April 1, 2016. MeasureWwaspassedasageneraltax,andthereforethefundsmaybeusedforanyvalidgovernmental purpose.However,basedoninputreceivedthroughcommunitymeetingsandnumeroussurveys,SouthSan FranciscoresidentsidentifiedthefollowingprioritiesthatwereincorporatedintotheMeasureWballot language: ·Maintain public safety and essential services; ·Improveemergencyresponsetimes,neighborhoodpatrols,crimepreventionprograms,gang suppression programs; ·Provide programs for seniors and disabled residents; ·Maintainstreetsandfixpotholes,includingatleast$18millioninstreetmaintenanceandpothole repair. InthethreemonthsofFiscalYear(FY)2015-16whichMeasureWwasinplace,theCityreceived$1.49 millionintransactionsandusetaxrevenue,whichreflectsadvancesfromtheStateBoardofEqualizationfor theperiodofAprilthroughJuneof2016.Themajorityofthe$212,000inexpendituretransactionswasrelated tositeanalysis,planning,outreachandengineeringservicesrelatedtotheCommunityCivicCampusproject. Thenetsurplus(revenueslessexpenditures)forMeasureWinFY2015-16was$1.28million.Theincome statement and transaction detail reports are attached for the Committee’s information. CONCLUSION InFY2015-16,theCityreceived$1.49millioninMeasureWtaxrevenuesandexpended$212,000in compliance with the Measure W ballot measure language. Attachments: 1.Financial Status Balances - Fund 101 - Measure W 2.Revenue Detail Report - Measure W Revenues FY 2015-16 3.Expenditure Detail Report - Measure W Expenditures FY 2015-16 4.PowerPoint Presentation 5.Audit Overview from Maze & Associates City of South San Francisco Printed on 3/9/2017Page 1 of 2 powered by Legistar™ Attachment 3 File #:16-816 Agenda Date:10/19/2016 Version:1 Item #:1. City of South San Francisco Printed on 3/9/2017Page 2 of 2 powered by Legistar™ Financial Status Balances Page 1 of 1 Criteria: As Of = 6/30/2016; Period = 0,1..12,13,14,15,16; Fund = 101 Object Title Month-To-Date Actual Year-To-Date Ado Budget Year-To-Date Adjustments Year-To-Date Adj Budget Year-To-Date Actual Year-To-Date Encumbrances Bdgt. to Act. Variance Pct. Spent Fund 101 -- MEASURE W Revenues Object Group 30000 -- TAXES 30207MEASURE W AND USE TAX (0.5%)448,625.27 0.00 1,500,000.00 1,500,000.00 1,493,425.27 0.00 6,574.7399.6% Total TAXES 448,625.27 0.00 1,500,000.00 1,500,000.00 1,493,425.27 0.00 6,574.73 99.6% Total Revenues 448,625.27 0.00 1,500,000.00 1,500,000.00 1,493,425.27 0.00 6,574.73 99.6% Expenditures Object Group 5000 -- SUPPLIES & SERVICES 5999PROJ ACCT SUPPLIES & SCVS 137,464.64 0.00 0.00 0.00 211,992.38 0.00 -211,992.380.0% Total SUPPLIES & SERVICES 137,464.64 0.00 0.00 0.00 211,992.38 0.00 -211,992.38 0.0% Total Expenditures 137,464.64 0.00 0.00 0.00 211,992.38 0.00 -211,992.38 0.0% Total MEASURE W 311,160.63 0.00 1,500,000.00 1,500,000.00 1,281,432.89 0.00 218,567.11 85.4% Total 311,160.63 0.00 1,500,000.00 1,500,000.00 1,281,432.89 0.00 218,567.11 85.4% Attachment 4 09/26/2016 CITY OF SOUTH SAN FRANCISCO 1 12:40PM Page:revdetl.rpt Revenue Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Revenues FY 2015-16 MEASURE W101 Account Number Adjusted Estimate Revenues Year-to-date Revenues Balance Prct Rcvd 101-00000 NON EXPENSE ACCT 101-00000-30000 TAXES 101-00000-30207 MEASURE W AND USE TAX (0.5%) 0.00 0.00 0.00 0.00 0.00 3/24/2016 budadj BA 03.24.16AT 1,500,000.00 101 Line Description: Measure W Document Description : 2015-16 MIDYEAR RESO 30-2016 6/24/2016 gl_cr CR 53108 448,625.27 101 Line Description: MEASEURE W Sales Tax Document Description : MEASURE W LOCAL SALES TAX 6/30/2016 acrul_r_je GJ 53720 447,800.00 101 Line Description: FY15-16 Measure W Sales Tax-CA Document Description : FY 2015-2016 YEAR END ACCRUAL 6/30/2016 acrul_r_je GJ 54266 597,000.00 101 Line Description: FY15-16 Measure W Sales Tax Document Description : FY 2015-2016 YEAR END ACCRUAL 101-00000-30207 MEASURE W AND USE TAX (0.5%) 1,493,425.27 1,493,425.27 99.56 1,500,000.00 6,574.73 Total MEASURE W 99.56 1,493,425.27 1,493,425.27 1,500,000.00 6,574.73 Grand Total 1,493,425.27 1,493,425.27 99.56 1,500,000.00 6,574.73 1Page: Attachment 5 09/26/2016 CITY OF SOUTH SAN FRANCISCO 1 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 CITY COUNCIL01000 Prct UsedBalance Year-to-date Encumbrances Year-to-date ExpendituresExpenditures Adjusted AppropriationAccount Number 101-01000-5000 SUPPLIES & SERVICES 0.00 0.00 0.00 0.00 0.00 0.00Total CITY COUNCIL 1Page: Attachment 6 09/26/2016 CITY OF SOUTH SAN FRANCISCO 2 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 CITY CLERK02000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-02000-5000 SUPPLIES & SERVICES 0.00 0.00 0.00 0.00 0.00 0.00Total CITY CLERK 2Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 3 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 CITY TREASURER03000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-03000-5000 SUPPLIES & SERVICES 0.00 0.00 0.00 0.00 0.00 0.00Total CITY TREASURER 3Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 4 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 CITY ATTORNEY04000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-04000-5000 SUPPLIES & SERVICES 0.00 0.00 0.00 0.00 0.00 0.00Total CITY ATTORNEY 4Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 5 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 CITY MANAGER05000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-05000-5000 SUPPLIES & SERVICES 101-05101-5999 PROJ ACCT SUPPLIES & SCVS 0.00 0.00 0.00 0.00 0.00 0.00 invoice IN 9502 60,730.91 6/9/2016 Line Description: GROUP 4 MEASURE W - SSF PUC SI Document Description : MEASURE W - SSF PUC SITE ANALYSIS - APRI101 000355Vendor:GROUP 4 ARCHITECTURE Check # 250753 invoice IN 9549 32,005.21 6/30/2016 Line Description: GROUP 4 MEASURE W- SSF PUC SIT Document Description : GROUP 4 SSF PUC SITE ANALYSIS 101 000355Vendor:GROUP 4 ARCHITECTURE Check # 251608 92,736.12 92,736.12 0.00101-05101-5999 PROJ ACCT SUPPLIES & SCVS 0.00 -92,736.12 0.00 0.00 92,736.12 92,736.12 0.00 -92,736.12 0.00Total CITY MANAGER 5Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 6 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 FINANCE DEPARTMENT06000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-06000-5000 SUPPLIES & SERVICES 101-06101-5999 PROJ ACCT SUPPLIES & SCVS 0.00 0.00 0.00 0.00 0.00 0.00 invoice IN 16640 18,278.52 6/10/2016 Line Description: FINANCIAL CONSULTING Document Description : FINANCIAL ADVISOR SERVICES 101 100013Vendor:PUBLIC FINANCIAL MANAGEMENT IN Check # 250787 18,278.52 18,278.52 0.00101-06101-5999 PROJ ACCT SUPPLIES & SCVS 0.00 -18,278.52 0.00 0.00 18,278.52 18,278.52 0.00 -18,278.52 0.00Total FINANCE DEPARTMENT 6Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 7 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 NON-DEPARTMENTAL07000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-07000-5000 SUPPLIES & SERVICES 0.00 0.00 0.00 0.00 0.00 0.00Total NON-DEPARTMENTAL 7Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 8 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 HUMAN RESOURCES09000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-09000-5000 SUPPLIES & SERVICES 0.00 0.00 0.00 0.00 0.00 0.00Total HUMAN RESOURCES 8Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 9 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 ECONOMIC & COMMUNITY DEVELOPMENT DEPT10000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-10000-5000 SUPPLIES & SERVICES 101-10101-5999 PROJ ACCT SUPPLIES & SCVS 0.00 0.00 0.00 0.00 0.00 0.00 invoice IN 16-ASF-045-1 15,000.00 3/10/2016 Line Description: APPRAISAL REPORT~Document Description : APPRAISAL REPORT : MSB PARCELS, PUC SITE101 105975Vendor:CARNEGHI AND PARTNERS INC.Check # 248273 invoice IN 16-ASF-087-1 4,000.00 5/11/2016 Line Description: PUC PROPERTY - MEASURE W - APP Document Description : PUC PROPERTY - MEASURE W - APPRAISAL FOR101 105975Vendor:CARNEGHI AND PARTNERS INC.Check # 249857 19,000.00 19,000.00 0.00101-10101-5999 PROJ ACCT SUPPLIES & SCVS 0.00 -19,000.00 0.00 0.00 19,000.00 19,000.00 0.00 -19,000.00 0.00Total ECONOMIC & COMMUNITY DEVELOPMENT DEPT 9Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 10 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 FIRE DEPARTMENT11000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-11000-5000 SUPPLIES & SERVICES 0.00 0.00 0.00 0.00 0.00 0.00Total FIRE DEPARTMENT 10Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 11 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 POLICE DEPARTMENT12000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-12000-5000 SUPPLIES & SERVICES 0.00 0.00 0.00 0.00 0.00 0.00Total POLICE DEPARTMENT 11Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 12 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 PUBLIC WORKS13000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-13000-5000 SUPPLIES & SERVICES 101-13101-5999 PROJ ACCT SUPPLIES & SCVS 0.00 0.00 0.00 0.00 0.00 0.00 invoice IN 3144 9,520.00 2/29/2016 Line Description: Project cost planning for new Document Description : PROJECT COST PLANNING SERVICES FOR MEASU101 105919Vendor:MACK5 Check # 248038 invoice IN 9411 21,830.00 3/9/2016 Line Description: Task Order No. 2016-1: SSF PUC Document Description : ON-CALL ARCHITECTURAL SVCS FOR SSF PUC A101 000355Vendor:GROUP 4 ARCHITECTURE Check # 248301 invoice IN 26688 364.25 3/16/2016 Line Description: Flood Elevations at Colma Cree Document Description : ON-CALL WATER RESOURCES SERVICES 101 104710Vendor:SCHAAF & WHEELER CONSULTING, CIVIL ENGINEERSCheck # 248451 invoice IN 26764 11,505.60 4/15/2016 Line Description: Flood Elevations at Colma Cree Document Description : ON-CALL WATER RESOURCES SERVICES 101 104710Vendor:SCHAAF & WHEELER CONSULTING, CIVIL ENGINEERSCheck # 249337 invoice IN 62989 4,550.00 5/13/2016 Line Description: New Civic Center Measure W- re Document Description : ON-CALL STRUCTURAL ENGINEERING SERVICES101 105647Vendor:LIONAKIS Check # 249973 invoice IN 3237 6,205.00 5/13/2016 Line Description: (1) CO#1 approved 04/14/16 can Document Description : PROJECT COST PLANNING SERVICES FOR MEASU101 105919Vendor:MACK5 Check # 249975 invoice IN 66637 1,552.89 5/25/2016 Line Description: PUC site development. Oak Aven Document Description : ON CALL SERVICES FOR TRAFFIC ENGINEERING101 105067Vendor:NELSON/NYGAARD CONSULT ASSOC Check # 250347 invoice IN 1604068 17,600.00 6/8/2016 Line Description: TASK ORDER NO. 2016-2- ALTA SU Document Description : ON CALL SERVICES FOR SURVEYING, MAPPING,101 101112Vendor:SANDIS CIVIL ENG SURVEYORS Check # 250685 invoice IN 1605031 8,850.00 6/30/2016 Line Description: TASK ORDER NO. 2016-2- ALTA SU Document Description : ON CALL SERVICES FOR SURVEYING, MAPPING,101 101112Vendor:SANDIS CIVIL ENG SURVEYORS Check # 251576 81,977.74 81,977.74 0.00101-13101-5999 PROJ ACCT SUPPLIES & SCVS 0.00 -81,977.74 0.00 0.00 81,977.74 81,977.74 0.00 -81,977.74 0.00Total PUBLIC WORKS 12Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 13 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 LIBRARY DEPARTMENT15000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-15000-5000 SUPPLIES & SERVICES 0.00 0.00 0.00 0.00 0.00 0.00Total LIBRARY DEPARTMENT 13Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 14 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 INFORMATION TECHNOLOGY DEPARTMENT16000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-16000-5000 SUPPLIES & SERVICES 0.00 0.00 0.00 0.00 0.00 0.00Total INFORMATION TECHNOLOGY DEPARTMENT 14Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 15 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 PARKS & RECREATION DEPARTMENT17000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-17000-5000 SUPPLIES & SERVICES 0.00 0.00 0.00 0.00 0.00 0.00Total PARKS & RECREATION DEPARTMENT 15Page: 09/26/2016 CITY OF SOUTH SAN FRANCISCO 16 12:37PM Page:expdetl.rpt Expenditure Detail Report 07/01/2015 through 06/30/2016 Periods: 0 through 16 Measure W Expenditures FY 2015-16 MEASURE W101 CIP99000 Prct Used Balance Year-to-date Encumbrances Year-to-date Expenditures Expenditures Adjusted Appropriation Account Number 101-99000-9000 TRANSFERS 0.00 0.00 0.00 0.00 0.00 0.00Total CIP 0.00 211,992.38 211,992.38 0.00 -211,992.38 0.00Total MEASURE W Grand Total 211,992.38 211,992.38 0.00 0.00 -211,992.38 0.00 16Page: City of South San Francisco Measure W Citizens’ Oversight Committee October 19, 2016 Attachment 7 Overview •Background •FY 2015-16 Reports •FY 2016-17 Adopted Budget •Committee Scope •Independent Auditor •Q & A Measure W Background •0.5% Transactions and Use Tax •General Tax •November 2015 Ballot •Implemented April 1, 2016 •Projected to bring in $7.0M in revenues FY 2015-16 Revenues •$1.49M in revenues •Monthly advances from 2016 Q2 (April – June) •Accounting policy – accrue up to 60 days FY 2015-16 Expenditures •$212k Total Expenditures o Site analysis o Planning o Outreach o Engineering FY 2016-17 Adopted Budget •$7.0M revenues; •$5.5M appropriations (expenditures): o $3.0M Annual road project; o $1.5M Civic campus project management; o $0.9M Design/site analysis; o $0.1M Financial advisor. Committee Scope/Bylaws •Committee Function o To periodically report to the City Council on the collection and expenditures of Measure W revenue •Committee Actions o Meet with auditor to outline issues of particular interest to Committee and be briefed on auditor’s plan/schedule o Review annual audit and prepare written report to City Council regarding auditor’s findings regarding Measure W revenues and expenditures o Serves as advisory role to City Council o Committee has no role in contracting, project management or other aspect related to use of Measure W revenue Audit Scope/Timeline Katherine Yuen, Maze and Associates Questions? CITY OF SOUTH SAN FRANCISCO Measure W Citizen Oversight Committee Audit Overview October 19, 2016 1 Our Responsibility under U.S. Generally Accepted Auditing Standards Our responsibility, as described by professional standards, is to express an opinion about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement. As part of the audit we will consider the City’s internal control. Such considerations are solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reportin g process. However, we are not required to design procedures specifically to identify such matters. Materiality Financial Accounting Standards Board Statement of Financial Accounting Concepts No. 2 (CON- 2), Qualitative Characteristics of Accounting Information, defines materiality as the "magnitude of an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement." In planning and performing the audit, we use professional judgment to determine a level of materiality. Factors considered in this evaluation include the components of the financial statements believed to be the most critical to users and the extent of adjustments detected in prior audits. Audit Scope Council approved our contract in 2016 which incorporates our proposal detailing our audit approach and timing. Audit scope generally includes the following subject to adaptation from our risk assessment process: Perform risk assessment brainstorming and planning Create audit plan tailored to the City and sector Transactions cycles subject to control testing and sampling: Transactions cycles testing: Transactions and balances tested in total: Evaluate overall duty assignment including: Information system controls tests: Perform compliance tests Attachment 8 CITY OF SOUTH SAN FRANCISCO Measure W Citizen Oversight Committee Audit Overview October 19, 2016 2 Audit Timing We have met with staff and agreed the following schedule:  Interim fieldwork: May 2016  Final fieldwork: October 2016  Reports finalization: December 2016 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:16-958 Agenda Date:12/7/2016 Version:1 Item #:3. ReportregardingaresolutionacknowledgingreceiptofthedraftFiscalYear2015-16ComprehensiveAnnual Financial Report.(Richard Lee, Director of Finance) RECOMMENDATION ItisrecommendedthattheMeasureWCitizens’OversightCommitteeacknowledgereceiptofthedraft Fiscal Year 2015-16 Comprehensive Annual Financial Report. BACKGROUND/DISCUSSION TheMeasureWCitizens’OversightCommitteereviewedMeasureWfinancialreportsatitsfirstmeetingon October19,2016.Asrequiredbycommitteebylaws,thecommitteeshallmeetwiththeCity’sindependent auditor to review the audit findings in advance of the presentation of the final audit report to the City Council. TheCity’sdraftFiscalYear2015-16ComprehensiveAnnualFinancialReport(CAFR)isattachedforthe committee’sconsiderationandcomments.TheGeneralFundCombiningBalanceSheetsreportisprovidedon page93ofthedraftreport,whichprovidesassets,liabilitiesandfundbalancesforbothGeneralPurpose(Fund 100)andMeasureW(Fund101),whicharecombinedforcompliance,reportingandpresentationpurposesas the“GeneralFund”throughouttheCAFR.AsofJune30,2016,MeasureWassetstotaled$1.32million,while total liabilities were $41 thousand, leaving $1.28 million in fund balance. TheGeneralFundCombiningScheduleofRevenues,Expenditures,andChangesinFundBalances, colloquiallytermedtheincomestatementorprofitandlossstatement,isonpage94ofthereport.Theaudited revenuesof$1.49millionand$212thousandreconcilewiththereportspresentedtotheCOCatitsprevious meeting. StaffrecommendsthattheCOCacceptthedraftFiscalYear2015-16CAFR,andinareporttotheCity Council, to be transmitted through the City Manager’s Office: ·IndependentlyverifytheaccuracyoftheauditedreportsregardingMeasureWrevenuesand expenditures for Fiscal Year 2015-16; and ·IndependentlyconfirmthatMeasureWfundscollectedwereusedinaccordancewithMeasureWballot language in FY 2015-16. CONCLUSION TheCityofSouthSanFrancisco’sdraftFiscalYear2015-16ComprehensiveAnnualFinancialReportpresents fairly,inallmaterialsrespects,therespectivefinancialpositionoftheCity’sfinancialposition.MeasureW funds collected in FY 2015-16 were spent in accordance with the ballot language. City of South San Francisco Printed on 12/7/2016Page 1 of 1 powered by Legistar™ Attachment 9 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:17-280 Agenda Date:3/15/2017 Version:1 Item #:2. Report regarding Measure W Community Civic Campus delivery option recommendation. (Marian Lee, Assistant City Manager and Dolores Montenegro, Kitchell Program Manager) RECOMMENDATION It is recommended that the Measure W Subcommittee review the information in this report. There are no actions for consideration at this time. This is an information item only. BACKGROUND/DISCUSSION Since January 2017,Kitchell has been working with the City’s Measure W Community Civic Center internal working team comprised of department directors and key staff in evaluating various options for project delivery.Determining the best delivery option is an important decision when embarking on any large scale/complex construction program/project. In all delivery options,there are three parties involved:the owner (City of South San Francisco), designer (to be selected),and builder/contractor (to be selected).It is important to choose a delivery method that best meets the unique needs of each owner and their project(s).The delivery options considered include: ·Design-Bid-Build (DBB) ·Construction Manager at Risk (CMAR) ·Design-Build (DB) In summary,DBB is widely used for projects where an owner wants greater control over the entire process.The DBB process is most commonly used procurement method by public entities,because it generates maximum competition amongst contractors.CMAR is used when there is a need for early involvement by the builder and early knowledge of project costs.CMAR can also result in faster delivery of a project.DB,also known as integrated project delivery,is used when an owner wants the advantage of working with designers and contractor as a single entity.DB requires construction guarantee at the design stage and the owner is able to direct performance requirements and specifications for the project(s). Based on input from the working group and experience by Kitchell,the recommended delivery option for the Library and Recreation facility is DBB.For this building,the City would obtain a master architect first to prepare 100%design under City direction.Then the City would procure a contractor to build the facility through a competitive bidding process.The key reasons for selecting the DBB method is because this method provides the City with the greatest control over the entire design process that can maximize community input and discussion. For the Police and Fire stations,the best delivery option is DB.For these buildings,the City would ultimately obtain one design and build team to both prepare 100%design and construct the project. Procuring the DB team would include prequalifying DB teams then selecting the DB team with the best value.The DB contract must require an enforceable commitment for hiring a skilled and trained workforce.The key reason for selecting the DB method is to maximize building performance while knowing the project cost and schedule upfront and transferring the risk between the designer and the builder from the City to the DB team.As a pre-cursor to issuing a DB package for the Police and Fire stations,we would first obtain a master architect to prepare approximately 15%design under City City of South San Francisco Printed on 3/9/2017Page 1 of 2 powered by Legistar™ File #:17-280 Agenda Date:3/15/2017 Version:1 Item #:2. stations,we would first obtain a master architect to prepare approximately 15%design under City direction.This will allow the City to set the “bones”of the building before procuring a DB team to complete the design to 100%and build.Please note,if after 15%design,the City does not want to pursue DB,the architect can finish the design and the City can complete the project using the traditional DBB approach. The power point presentation attached identifies the delivery options reviewed and the recommendation.Dolores Montenegro from Kitchell will present the attached materials at the Subcommittee meeting. Next steps related to procuring the master architect are as follows: ·Prepare Draft RFQ/P for Architectural Service - April/May 2017 ·Issue RFQ/P - June/July 2017 ·Select Architectural Team - October 2017 ·Begin Design - November 2017 FUNDING There is no funding impact. This is an information item. CONCLUSION It is recommended that the Measure W Subcommittee review the information in this report.Questions and feedback from the Subcommittee is being requested by staff. Attachment: Powerpoint Presentation Project Delivery Recommendation City of South San Francisco Printed on 3/9/2017Page 2 of 2 powered by Legistar™ MEASURE W –COMMUNITY CIVIC CAMPUS PROJECT DELIVERY APPROACH •Establishes when parties become engaged •Establishes contractual relationship amongst parties •Influences ownership, impact of changes, modification of project costs Importance of Project Delivery Method •Design-bid-build (DBB) •Construction Management at Risk (CMAR) •Design-build (DB) Project Delivery Methods City Considerations •Owner Control -Design Options -Project Outcome -Architectural Distinction •Owner Relationships -Direct Relationship with Designer -Direct Relationship with Contractor •Project/Program Schedule(s) -Timing to Establish Definitive Project Scope -Timing for Community Input •Owner Risk -Liability for the Success or Failure of the Design -Potential Adversarial Relationships -Potential for Claims and Litigation City Considerations, cont. •Owner control over the entire process •Designer works directlyfor owner •Contractor works directlyfor owner •Maximum competitiveness Design-Bid-Build (DBB) •Designer works directly for owner •More professional/direct relationship with contractor •Earlier knowledge of costs •Possible earlier involvement of builder •Two-contract system vs. three or more •Project delivery faster than traditional DBB Construction Manager at Risk (CMAR) •Single point of responsibility for owner •Errors addressed by DB team •Early contractor involvement enhances constructability •Project could benefit from value engineering and innovation •Project requires a construction cost guarantee during design •Allocate risks to those who can best manage •Design submission and pricing project at proposal stage possible •Owner is able to specify performance requirements and specifications •Speed to market Design-Build (DB) Contractor Involvement…When? Design & Bid Construction No Project Contractor Involvement Design & Bid Construction Extensive Contractor Involvement Possible CMAR Overlapped design and construction DBB Contractor Involvement…When? Design & Bid Construction No Project Contractor Involvement Construction Extensive Contractor Involvement DB Key Subs included in design phase DBB Approach •Different delivery methods for 3 facilities •Library and Recreation facility –DBB –Maximizes City control of design up to 100% •Police and Fire stations –Design to 15% Schematic Engineering then DB* –Maximizes City control of design up to 15% –DB team to finalizing design and construction with performance oversight from City *At 15%, City has option to continue DBB if uncomfortable with DB. RFQ/P Next Steps •Prepare RFQ/P for Master Campus Architect (April/May) •Issue RFQ/P (June/July) •Select Master Architect (September/October) •Process -Set up evaluation committees -Pre-proposal meeting and pre-qualify -Score final selection -Negotiate final contract