The URL can be used to link to this page

Home My WebLink About2020-01-22 e-packet@7:00Wednesday, January 22, 2020 7:00 PM City of South San Francisco P.O. Box 711 South San Francisco, CA Municipal Services Building, Council Chambers 33 Arroyo Drive, South San Francisco, CA City Council Regular Meeting Agenda January 22, 2020City Council Regular Meeting Agenda PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Council business, we proceed as follows: The regular meetings of the City Council are held on the second and fourth Wednesday of each month at 7:00 p.m. in the Municipal Services Building, Council Chambers, 33 Arroyo Drive, South San Francisco, California. The City Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Council action. RICHARD A. GARBARINO, Mayor MARK ADDIEGO, Vice Mayor MARK NAGALES, Councilmember BUENAFLOR NICOLAS, Councilmember KARYL MATSUMOTO, Councilmember FRANK RISSO, City Treasurer ROSA GOVEA ACOSTA, City Clerk MIKE FUTRELL, City Manager SKY WOODRUFF, City Attorney PLEASE SILENCE CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT AVAILABLE FOR USE BY THE HEARING IMPAIRED AT CITY COUNCIL MEETINGS In accordance with California Government Code Section 54957.5, any writing or document that is a public record, relates to an open session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the City Clerk’s Office located at City Hall. If, however, the document or writing is not distributed until the regular meeting to which it relates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda. The address of City Hall is 400 Grand Avenue, South San Francisco, California 94080. Page 2 City of South San Francisco Printed on 2/3/2020 January 22, 2020City Council Regular Meeting Agenda CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE AGENDA REVIEW ANNOUNCEMENTS FROM STAFF PRESENTATIONS Presentation of a proclamation recognizing February as Black History Month. (Richard Garbarino, Mayor) 1. Presentation of a Certificate of Appreciation to San Francisco Host Lions Club for their dedicated community service through hosting free health fairs and flu clinics in South San Francisco since 2007. (Buenaflor Nicolas, Councilmember) 2. PUBLIC COMMENTS For those wishing to address the City Council on any Agenda or non-agendized item, please complete a Speaker Card located at the entrance to the Council Chamber’s and submit it to the City Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents the City Council from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. When your name is called, please come to the podium, state your name and address (optional) for the Minutes. COMMENTS ARE LIMITED TO THREE (3) MINUTES PER SPEAKER. Thank you for your cooperation. COUNCIL COMMENTS/REQUESTS CONSENT CALENDAR Motion to approve the Minutes for the meeting of November 13, 2019. (Rosa Govea Acosta, City Clerk) 3. Report regarding a resolution authorizing the acceptance of $8,000 in grant funding from the Silicon Valley Community Foundation (SVCF) to support the South San Francisco Public Library’s 2020 Voter Engagement project and approving Budget Amendment 20.032. (Valerie Sommer, Library Director) 4. Page 3 City of South San Francisco Printed on 2/3/2020 January 22, 2020City Council Regular Meeting Agenda Resolution authorizing the acceptance of $8,000 in grant funding from the Silicon Valley Community Foundation to support the South San Francisco Public Library’s 2020 Voter Engagement project and approving Budget Amendment 20.032. 4a. Report regarding a resolution making findings and determining that the disposition of the City of South San Francisco-owned property located at 323 Miller Avenue, in the Residential Core District is in conformity with the South San Francisco adopted General Plan in accordance with provisions of State Planning Law (Govt. Code Section 65402) (Heather Ruiz, Management Analyst) 5. Resolution making findings and determining that the disposition of the City of South San Francisco-owned property located at 323 Miller Avenue, in the Residential Core District is in conformity with the South San Francisco adopted General Plan in accordance with provisions of State Planning Law (Govt. Code Section 65402). 5a. Report regarding a resolution approving a Purchase and Sale Agreement with Baden Developments LLC for the sale of 432 Baden Avenue for $1,100,000 and authorizing the City Manager to execute the agreement, and a resolution making findings and determining that the disposition of the City of South San Francisco-owned property located at 432 Baden Avenue in the Downtown Residential Core conforms with the adopted South San Francisco General Plan in accordance with provisions of State Planning Law (Govt. Code Section 65402) (Julie Barnard, Economic Development Coordinator). 6. Resolution approving a Purchase and Sale Agreement with Baden Developments LLC for the sale of 432 Baden Avenue for $1,100,000 and authorizing the City Manager to execute the agreement. 6a. Resolution making findings and determining that the disposition of the City of South San Francisco-owned property located at 432 Baden Avenue in the Residential Core District conforms with the adopted South San Francisco General Plan in accordance with provisions of State Planning Law (Govt. Code Section 65402). 6b. ADMINISTRATIVE BUSINESS Presentation of an education and outreach campaign to ensure a complete, fair, and accurate count of the South San Francisco population in the 2020 Census. (Sheri Boles, Community Programs Manager) 7. Report regarding audited financial statements, including the Comprehensive Annual Financial Report and approving Budget Amendment 20.027. (Janet Salisbury, Director of Finance) 8. Page 4 City of South San Francisco Printed on 2/3/2020 January 22, 2020City Council Regular Meeting Agenda Resolution acknowledging receipt of the Fiscal Year 2018-19 audited financial statements, including the Comprehensive Annual Financial Report and approving Budget Amendment 20.027. 8a. ITEMS FROM COUNCIL – COMMITTEE REPORTS AND ANNOUNCEMENTS CLOSED SESSION Closed Session: Conference with Real Property Negotiators (Pursuant to Government Code Section 54956.8) Property: Hotel Site at Oyster Point (APN 015-010-970) Agency negotiator: Ernesto Lucero, Alex Greenwood, and Nell Selander Negotiating parties: City of South San Francisco and Ensemble Investments Under negotiation: Price and Terms of City property disposition 9. Closed Session: Conference with Real Property Negotiators (Pursuant to Government Code Section 54956.8) Properties: Willow Gardens (APNs: 011-270-200, 011-270-100, 011-270-120, 011-271-100, 011-270-170-1, 011-270-300) and Greenridge Developments (APN: 010-440-670) City Negotiators: Deanna Talavera and Nell Selander Negotiating Parties: MidPen Housing Corporation Under Negotiation: Review of Price and Terms 10. ADJOURNMENT Page 5 City of South San Francisco Printed on 2/3/2020 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:20-39 Agenda Date:1/22/2020 Version:1 Item #:1. Presentation of a proclamation recognizing February as Black History Month. (Richard Garbarino, Mayor) City of South San Francisco Printed on 2/3/2020Page 1 of 1 powered by Legistar™ Dated: January 22, 2020 RECOGNITION OF FEBRUARY AS BLACK HISTORY MONTH January 22, 2020 WHEREAS, Black History Month is an annual celebration of achievements of African Americans and a time for recognizing the central role of blacks in U.S. history; and WHEREAS, Black History Month originated from “Negro History Week,” which was inspired by historian Carter G. Woodson as well as other prominent African Americans in U.S. history and celebrated the second week in February,1926, to coincide with the birthdays of renowned leaders Abraham Lincoln and Frederick Douglass; and WHEREAS, since 1976 every U.S. president has officially designated the month of February as Black History Month; and WHEREAS, this year’s theme of “African Americans and the Vote” marks the centennial of the Nineteenth Amendment and the culmination of the women’s suffrage movement. The theme speaks, therefore, to the ongoing struggle on the part of both black men and black women for the right to vote; and WHEREAS, this theme has a rich and long history, which begins at the turn of the nineteenth century, in the era of the Early Republic, with the states’ passage of laws that democratized the vote for white men while disfranchising free black men; and WHEREAS, the important contribution of black suffragists occurred not only within the larger women’s movement, but within the larger black voting rights movement. Through voting- rights campaigns and legal suits from the turn of the twentieth century to the mid-1960s, African Americans made their voices heard as to the importance of the vote. WHEREAS, Black History Month is also an occasion to commemorate the countless contributions of African Americans, many of whom lived through and surmounted the scourge of segregation, racial prejudice, and discrimination to enrich every fiber of American life; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco does hereby proclaim February as Black History Month and encourages all residents and visitors alike to join us in celebrating this special month. ________________________________ Richard Garbarino, Mayor ________________________________ Mark Addiego, Vice Mayor ________________________________ Karyl Matsumoto, Councilmember ________________________________ Mark Nagales, Councilmember ________________________________ Buenaflor Nicolas, Councilmember City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:19-1062 Agenda Date:1/22/2020 Version:1 Item #:2. Presentation of a Certificate of Appreciation to San Francisco Host Lions Club for their dedicated community service through hosting free health fairs and flu clinics in South San Francisco since 2007. (Buenaflor Nicolas, Councilmember) City of South San Francisco Printed on 1/23/2020Page 1 of 1 powered by Legistar™ CITY OF SOUTH SAN FRANCISCO Certificate of Appreciation San Francisco Host Lions Club Mayor Richard Garbarino and the City Council of South San Francisco do hereby recognize and thank San Francisco Host Lions Club for their dedicated community service through hosting free health fairs and flu clinics in South San Francisco since 2007. Venues in 2019 included Mater Dolorosa Catholic Church, Francisco Drake Masonic Lodge, Saint Augustine Catholic Church, and Paradise Valley Clubhouse—Boys & Girls Clubs of North San Mateo County. Thank you for serving and keeping healthy our South San Francisco community. Presented on this 22nd day of January, 2020, by the City Council of South San Francisco. Richard Garbarino, Mayor Mark Addiego, Vice Mayor Karyl Matsumoto, Councilmember Mark Nagales, Councilmember Buenaflor Nicolas, Councilmember City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:20-33 Agenda Date:1/22/2020 Version:1 Item #:3. Motion to approve the Minutes for the meeting of November 13, 2019.(Rosa Govea Acosta, City Clerk) City of South San Francisco Printed on 1/23/2020Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:20-12 Agenda Date:1/22/2020 Version:1 Item #:4. Report regarding a resolution authorizing the acceptance of $8,000 in grant funding from the Silicon Valley Community Foundation (SVCF)to support the South San Francisco Public Library’s 2020 Voter Engagement project and approving Budget Amendment 20.032.(Valerie Sommer, Library Director) RECOMMENDATION It is recommended that the City Council adopt a resolution authorizing the acceptance of $8,000 in grant funding from the Silicon Valley Community Foundation (SVCF)to support the South San Francisco Public Library’s 2020 Voter Engagement project and approving Budget Amendment 20.032. BACKGROUND/DISCUSSION South San Francisco Public Library was awarded $8,000 in grant funding from the Silicon Valley Community Foundation (SVCF)to support programs and outreach campaigns to encourage voter registration and “get out the vote”in the March 2020 election.This special grant opportunity comes from the County of San Mateo via SVCF and is intended to engage voters innovatively and creatively in the election process by targeting specific neighborhoods with outreach and program opportunities.The main focus of this project is the Westborough precincts close to the Main Library;however,Library programs reach community members from all local neighborhoods,providing greater impact to this project.The Library will partner with the League of Women Voters,the Pilipino Bayanahan Resource Center,and local schools and organizations to promote voter engagement, schedule panel discussions and “tabling” at local events. FISCAL IMPACT Grant funds will be used to amend the Library Department’s current Fiscal Year (FY)2020-2021 Operating Budget via Budget Amendment 20.032. Receipt of these funds does not commit the City to ongoing funding. RELATIONSHIP TO STRATEGIC PLAN Acceptance of this grant will contribute to the City’s Strategic Plan under Priority #6:Community Connections, by providing outreach and programs to engage voters. CONCLUSION Receipt of these funds will enable the Library to support programs and outreach campaigns.It is recommended that the City Council accept $8,000 in grant funding to support the Voter Engagement project and approve Budget Amendment 20.032. City of South San Francisco Printed on 1/23/2020Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:20-13 Agenda Date:1/22/2020 Version:1 Item #:4a. Resolution authorizing the acceptance of $8,000 in grant funding from the Silicon Valley Community Foundation to support the South San Francisco Public Library’s 2020 Voter Engagement project and approving Budget Amendment 20.032. WHEREAS,the City of South San Francisco (“City”)Library Department’s Five Year Strategic Plan includes a goal of creating community connections; and WHEREAS,the Silicon Valley Community Foundation has awarded the City $8,000 in grant funding to support outreach campaigns and programs for 2020 Voter Engagement project; and WHEREAS,funding from the Silicon Valley Community Foundation will help support programs and outreach campaigns to encourage voter registration in the March 2020 election; and WHEREAS,the Library will partner with the League of Women Voters and local schools and organizations to promote voter engagement, schedule panel discussions and “tabling” at local events; and WHEREAS,staff recommends the acceptance of the grant funding in the amount of $8,000 from the Silicon Valley Community Foundation to support the South San Francisco Public Library’s 2020 Voter Engagement project outreach and programming; and WHEREAS,the grant funds will be used to amend Fiscal Year (FY)2020-2021 Operating Budget of the Library Department via Budget Amendment 20.032. NOW,THEREFORE,BE IT RESOLVED that the City Council of the City of South San Francisco does hereby accept $8,000 in grant funding from the Silicon Valley Community Foundation and approve Budget Amendment 20.032 to amend the Library Department’s FY 2020-2021 Operating Budget in order to reflect an increase of $8,000. ***** City of South San Francisco Printed on 1/30/2020Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:19-1059 Agenda Date:1/22/2020 Version:1 Item #:5. Report regarding a resolution making findings and determining that the disposition of the City of South San Francisco-owned property located at 323 Miller Avenue,in the Residential Core District is in conformity with the South San Francisco adopted General Plan in accordance with provisions of State Planning Law (Govt. Code Section 65402) (Heather Ruiz, Management Analyst) RECOMMENDATION It is recommended that the City Council make findings that determine that the disposition of the City of South San Francisco-owned property located at 323 Miller Avenue,in the Residential Core District,is in conformity with the South San Francisco adopted General Plan in accordance with provisions of State Planning Law (Govt. Code Section 65402) BACKGROUND/DISCUSSION In January 2020,United Food and Commercial Workers Unions,Local 5 (“UFCW”)purchased the vacant,unimproved commercial space at 323 Miller Avenue (“Site”)and 329 Miller Avenue for development into an office space for their South San Francisco agency.The Site,combined with 329 Miller Avenue,is a vacant 7,343 square foot commercial space located on the ground floor of the Miller Parking Garage. Since the Site is a Former Redevelopment Agency property,it is subject to the State-approved Long Range Property Management Plan (“LRPMP”).The Site measures as a 3,500 square foot lot,is currently used for an elevator and public circulation with a small amount of unimproved commercial space on the ground floor.Per the terms of the LRPMP,and the grant deed to the City,the Former RDA property is deed restricted to government/public uses.The City’s Zoning Code allows for commercial uses, including office space, at this location. On February 13,2019,the City Council held a closed session to review an unsolicited Letter of Interest (“LOI”)from the United Food and Commercial Food Workers Union,Local 5 offering to purchase the vacant 7,343 square foot commercial space for $1,250,000.The City Council directed staff to negotiate a Purchase and Sale Agreement (“PSA”)with UFCW and executed the PSA on December 17, 2019. Following the City Council acceptance of the purchase price,the developer submitted a Planning application that intends on developing the vacant,unimproved commercial space for general office use in accordance with Title 20 of the Municipal Code.This is in conformity with the Downtown Station Area Specific Plan. The Planning application was deemed complete on November 20, 2019. GENERAL PLAN CONSISTENCY In accordance with provisions of State Planning Law (Govt.Code Section 65402),prior to disposition of City-owned real property,the Planning Commission as the planning agency for the City is required to determine that the proposed sale and disposition is consistent with the adopted South San Francisco General Plan. City of South San Francisco Printed on 1/23/2020Page 1 of 2 powered by Legistar™ File #:19-1059 Agenda Date:1/22/2020 Version:1 Item #:5. The General Plan Land Use Designation for the 323 Miller Avenue property is Residential Core District,which includes specific policies related to development within the Downtown,in an effort to “Promote infill development,intensification,and reuse of currently underutilized sites”.The zoning designation permits office development with a minor use permit (see pages 3-8 of the General Plan Land Use element). The proposed project furthers the goals and policies of the General Plan: 3.1-G-1 Promote Downtown’s vitality and economic well-being, and its presence as the city’s center. 3.1-G-2 Encourage development of Downtown as a pedestrian-friendly mixed use activity center with retail and visitor-oriented uses,business and personal services,government and professional offices, civic uses, and a variety of residential types and densities. 3.1-G-3 Promote infill development, intensification, and reuse of currently underutilized sites. Therefore,the proposed sale of the property and the entitlements that will ensue for this project would improve a vacant opportunity site in the Downtown area,help to activate the ground floor on Miller Avenue,and relocate an existing office use in the Downtown.Parking is provided on-site for the use, and the operating characteristics of an office are compatible with the surrounding neighborhood. Therefore, the proposed project will continue to conform to the General Plan. CONCLUSION It is recommended that the City Council make findings that determine that the disposition of the City of South San Francisco-owned property located at 323 Miller Avenue,in the Residential Core District, is in conformity with the South San Francisco adopted General Plan in accordance with provisions of State Planning Law (Govt. Code Section 65402). City of South San Francisco Printed on 1/23/2020Page 2 of 2 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:19-1060 Agenda Date:1/22/2020 Version:1 Item #:5a. Resolution making findings and determining that the disposition of the City of South San Francisco-owned property located at 323 Miller Avenue,in the Residential Core District is in conformity with the South San Francisco adopted General Plan in accordance with provisions of State Planning Law (Govt.Code Section 65402). WHEREAS,the City of South San Francisco (“City”)is the owner of certain real property located in the City of South San Francisco,California,known as County Assessor’s Parcel 012-312-070 (“323 Miller Avenue”); and, WHEREAS,323 Miller Avenue is a former Redevelopment Agency property,and thus is subject to the State- approved Long Range Property Management Plan (“LRPMP”); and, WHEREAS,323 Miller Avenue is deed restricted to government/public uses and the City’s Zoning Code allows for commercial uses, including office space. WHEREAS,323 Miller Avenue,is a 3,500 square foot lot,currently used for an elevator and public circulation with a small amount of unimproved commercial space on the ground floor of the Miller Parking Garage; and, WHEREAS,in closed session on February 13,2019 the South San Francisco City Council (“City Council”) accepted United Food and Commercial Workers Unions,Local 5 (“Buyer”)’s offer to purchase an unimproved commercial space within the Miller Avenue Garage that includes 323 Miller Avenue and directed staff to negotiate a Purchase and Sale Agreement (“PSA”); and, WHEREAS,Buyer submitted a Planning application that intends on developing the vacant,unimproved commercial space for general office use in accordance with Title 20 of the Municipal Code.; and, WHEREAS, the planning application was deemed complete on November 20, 2019; and, WHEREAS, City and Buyer executed the PSA on December 17, 2019; and, WHEREAS,prior to disposition of real property owned by the City,the Planning Commission as the planning agency for the City is required to find such disposition is in conformity with the adopted general plan in accordance with Government Code section 65402; and, WHEREAS,on January 16,2020 the Planning Commission adopted a resolution making findings and determining that the disposition of 323 Miller Avenue is in conformance with the South San Francisco adopted City of South San Francisco Printed on 1/23/2020Page 1 of 2 powered by Legistar™ File #:19-1060 Agenda Date:1/22/2020 Version:1 Item #:5a. General Plan; and, WHEREAS,the General Plan Land Use Designation for the 323 Miller Avenue property is Downtown Residential Core,which includes specific policies related to development within the Downtown in an effort to “Promote infill development, intensification, and reuse of currently underutilized sites”; and, WHEREAS, the zoning designation permits office development with a minor use permit; and WHEREAS,the proposed sale of the property and the entitlements that will ensue for this project would improve a vacant opportunity site in the Downtown area,help to activate the ground floor on Miller Avenue, and relocate an existing office use in the Downtown. A.General Findings 1.The foregoing recitals are true and correct and made a part of this resolution. 2.The documents and other material constituting the record for these proceedings are located at the Planning Division for the City of South San Francisco,315 Maple Avenue,South San Francisco,CA 94080, and in the custody of the Chief Planner, Sailesh Mehra. 3.The 323 Miller Avenue project is consistent with the General Plan which promote infill development, intensification, and reuse of currently underutilized sites. NOW,THEREFORE,BE IT FURTHER RESOLVED that in accordance with California Government Code section 65402,the location,the City Council hereby finds that the location,purpose and extent of the proposed disposition of 323 Miller Avenue (012-312-070) is in conformity with the City’s adopted General Plan. ***** City of South San Francisco Printed on 1/23/2020Page 2 of 2 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:19-1011 Agenda Date:1/22/2020 Version:1 Item #:6. Report regarding a resolution approving a Purchase and Sale Agreement with Baden Developments LLC for the sale of 432 Baden Avenue for $1,100,000 and authorizing the City Manager to execute the agreement,and a resolution making findings and determining that the disposition of the City of South San Francisco-owned property located at 432 Baden Avenue in the Downtown Residential Core conforms with the adopted South San Francisco General Plan in accordance with provisions of State Planning Law (Govt.Code Section 65402)(Julie Barnard, Economic Development Coordinator). RECOMMENDATION Staff recommends that the South San Francisco City Council (“Council”)adopt a resolution approving a Purchase and Sale Agreement (“PSA”)with Baden Developments LLC for the sale of 432 Baden Avenue for $1,100,000 and adopt a resolution making findings and determining that the disposition of the City of South San Francisco-owned property located at 432 Baden Avenue in the Downtown Residential Core conforms with the adopted South San Francisco General Plan in accordance with provisions of State Planning Law (Govt. Code Section 65402). BACKGROUND/DISCUSSION On January 8,1997,the South San Francisco Redevelopment Agency Board (“Agency)approved Resolution 1- 97 authorizing the execution of a Purchase and Sale Agreement for 432 Baden Avenue (“the Site”).This property was acquired for the development of a public parking lot to serve the 400 block of Grand Avenue,in the Historic Downtown Business District and Downtown/Central Redevelopment Project Area.The residential property that existed on the site was demolished and a new Agency surface parking lot was constructed.The Agency appraised the property and negotiated a final purchase price of $270,000. Pursuant to the City of South San Francisco’s (“City”)Long Range Property Management Plan (“LRPMP”)the site was designated ‘For Sale.’At the time the LRPMP was approved in 2015,the estimated value of the site was $560,000. The Property is very small,approximately 6,900 square feet or 0.16 acres,and is used as a parking lot,which generates less than $10,000 per year in revenue for the City’s Parking Place District and no property taxes. In September 2018,Baden Development,LLC (then Sierra Investment Group)(“Developer”)purchased the adjacent property,428 Baden Avenue,for development of a small multi-family housing project.During the entitlement process for 428 Baden Avenue,the developer approached the City with a proposal to purchase the Site in order to assemble land for a larger housing project. Typically,the City would undergo a competitive bid process for the sale of properties.However,because the adjacent property owner made an offer on the Property with the intent to develop a project that is determined to be the highest and best use of the assembled properties,the City has considered the proposal exclusively in order to determine whether or not a better offer might be made on the open market.In this case,this sole offer with the site assembly would provide a housing project with more housing units (rather than being developed individually)and higher property taxes,further,the price offer is above the appraised value.It is highly unlikely that the City would receive a price offer and project that is more competitive if the Property were sold on theCity of South San Francisco Printed on 1/17/2020Page 1 of 3 powered by Legistar™ File #:19-1011 Agenda Date:1/22/2020 Version:1 Item #:6. that the City would receive a price offer and project that is more competitive if the Property were sold on the open market. By assembling 428 and 432 Baden,the developer would be able to pursue a project with better design and more housing units,including 10%Below Market Rate (“BMR”)units at the very low income level.On September 23,2019,Developer provided the City with a Letter of Intent (“LOI”)to purchase the Site,see Attachment 1. On October 9,2019,the City Council considered the LOI and agreed that the site had a far greater value if assembled with 428 Baden rather than disposing of it as a stand-alone site.The City Council provisionally accepted the offer price of $1,100,000,subject to an appraisal confirming the property value and directed staff to negotiate a Purchase and Sale Agreement (“PSA”) with the developer. Following Council’s direction,staff commissioned an appraisal by Colliers International Valuation and Advisory Services (the “Appraisal”).The Appraisal,see Attachment 2,valued the property at $1,020,000,or $80,000 less than Baden Development’s offer. Staff and the Developer negotiated a Purchase and Sale Agreement with (in addition to the purchase price) includes the following key terms: ·City review of the financing plan and construction contract; ·Assignment of the PSA must be approved by Council; ·Escrow to open when building permits are submitted and escrow to close when building permits are ready to be issued; and ·Parking lot to remain open for public use until close of escrow. Subsequent to Council’s provisional acceptance of the $1,100,000 purchase price,the Developer submitted a Planning application to construct 36 residential units across the two sites.This infill housing project utilizes the State Density Bonus and provides three BMR units.Pursuant to redevelopment law,final approval of the sale price of the Property must also be approved by the Oversight Board to the Successor Agency of South San Francisco. The Planning application was deemed complete on October 29,2019 and will appear before the Design Review Board, Planning Commission and the Housing Subcommittee for review and approval later this year. GENERAL PLAN CONSISTENCY In accordance with provisions of State Planning Law (Govt.Code Section 65402),prior to disposition of real property owned by the City,the Planning Commission as the planning agency for the City is required to find such disposition is in conformity with the adopted general plan. The General Plan Land Use Designation for the 432 Baden property is Downtown Residential Core,which includes specific policies related to development within the Downtown in an effort to “Promote infill development, intensification, and reuse of currently underutilized sites”. The proposed sale of the property and the entitlements that will ensue for this project will provide for higher density residential than what is currently allowed but will still be compatible in scale with the remaining Downtown residential districts.The proposed project will provide a mix of housing opportunities and continue to conform to the General Plan Land Use Policies. On January 16,2020,at its regular meeting,the Planning Commission adopted a resolution that made findings that determined that the disposition of the City of South San Francisco-owned property located at 432 Baden City of South San Francisco Printed on 1/17/2020Page 2 of 3 powered by Legistar™ File #:19-1011 Agenda Date:1/22/2020 Version:1 Item #:6. that determined that the disposition of the City of South San Francisco-owned property located at 432 Baden Avenue,in the Downtown Residential Core is in conformity with the South San Francisco adopted General Plan in accordance with provisions of State Planning Law (Govt. Code Section 65402) ENVIRONMENTAL REVIEW The proposed construction of 36 residential units at 428 and 432 Baden Avenue is considered an infill housing project given its size and location,and will be subject to further environmental review and determination pursuant the California Environmental Quality Act,Pub.Resources Code §21000,et seq.(“CEQA”)as a part of the planning entitlements approval process. FISCAL IMPACT At the outset of negotiations with the Developer,staff collected a $25,000 cost recovery deposit to cover staff time,City Attorney time as well as any other third party assistance (the appraisal,for example).Therefore there is no impact to the General Fund. Once the property is sold,the sale proceeds will be distributed to the taxing entities with the City’s share being 16.7% or $183,700. CONCLUSION It is recommended that the South San Francisco City Council adopt a resolution approving a Purchase and Sale Agreement with Baden Developments LLC for the sale of 432 Baden Avenue for $1,100,000 and authorize the City Manager to execute the agreement,and to adopt a resolution making findings and determining that the disposition of the City of South San Francisco-owned property located at 432 Baden Avenue in the Downtown Residential Core conforms with the adopted South San Francisco General Plan in accordance with provisions of State Planning Law (Govt. Code Section 65402). Attachments: 1.Developer Letter of Intent (September 23, 2019) 2.432 Baden Avenue Appraisal (November 25, 2019) City of South San Francisco Printed on 1/17/2020Page 3 of 3 powered by Legistar™ Sierra Investments 311 9th Avenue San Mateo, CA 94401 September 23, 2019 City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Mr. Mike Futrell and Mr. Alex Greenwood RE: Offer for Purchase of 432 Baden, South San Francisco, CA Dear Mr. Futrell and Mr. Greenwood: Sierra Investments, a California Corporation (“Buyer”) hereby submits the following proposal to CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“Seller”) for Buyer’s purchase of the real property and improvements located at and commonly known as 432 Baden, South San Francisco, California and consisting of San Mateo County Assessor’s Parcel Numbers 012-321-060 (the “Property”). If the terms hereof are acceptable to Seller then Buyer will proceed with the preparation of a definitive Purchase and Sale Agreement (“Purchase Agreement”). This letter shall serve as a letter of intent, which shall not be deemed contractually binding unless and until the parties execute the Purchase Agreement. This letter is merely an expression of the current intent of the parties. The general terms and conditions shall be as follows: 1. Purchase Price. Purchase price will be ONE MILLION ONE HUNDRED THOUSAND DOLLARS ($1,100,000.00). The purchase price will be paid all cash at the close of escrow, including the deposits previously made into escrow. 2. Deposits. Buyer shall place THIRTY THOUSAND DOLLARS ($30,000.00) in an escrow account to be established with North American Title Company (“Escrow Holder”) at its office located at 330 Primrose Road, Burlingame, CA 94010, Attn: Annette Ross, Escrow Officer within two business days after the complete execution of the Purchase Agreement. Until the Feasibility Period expires, all deposits shall be fully refundable; thereafter, all deposits shall be nonrefundable (unless Seller defaults or unless the conditions to Buyer’s obligation to purchase the Property at closing are not fully satisfied or waived in writing by Buyer). All deposits shall be applicable to the purchase price and shall be deemed to be liquidated damages if Buyer defaults on its obligation to purchase the Property. LOI to City of South San Francisco September 23, 2019 Page Two 3. Feasibility Period. Buyer shall have 60 days following the mutual execution of the Purchase Agreement to perform its due diligence and feasibility analysis of the Property. Seller shall within 3 days after execution of the Purchase Agreement deliver to Buyer a preliminary title report, underlying documents relating thereto, and all leases, contracts, files relative to the operation and maintenance of the Property and any environmental, soils, structural, roof, HVAC and other reports in Seller’s possession and other due diligence material reasonably requested by Buyer for its review during the Feasibility Period. 4. Close of Escrow. The Closing will occur on the date that is sixty (60) days after expiration of the Feasibility Period (or the next business day of such date does not fall on a business day. 5. Representations and Warranties: Representations and warranties customary in agreements of this nature will be provided in the Purchase Agreement. 6. Conditions. Buyer’s obligation to purchase the Property shall be subject to satisfaction of the following conditions precedent at or prior to the close of escrow: A. Seller shall deliver to Buyer a grant deed conveying title to the Property to Buyer, a title insurance policy acceptable to Buyer and an assignment of leases and contracts approved by Buyer; B. All representations and warranties shall be true as of close of escrow and there shall have been no material change in the condition of the Property between the date the Purchase Agreement is executed and the date of the close of escrow; 7. Brokerage Commissions: Seller is not represented by any broker in this transaction. Buyer is represented by Victor Lo of Sierra Investments (“Buyer’s Broker”). Buyer and Seller acknowledge and agree that Buyer’s Broker is now and has at all times material to this transaction been the agent of Buyer only and has no fiduciary duty to or with Seller. Seller shall not to be required to pay any commission or fee to Buyer’s Broker at the close of escrow. Except for the foregoing, each party represents to the other that it has not dealt with any broker, agent, or finder for which a commission or fee is payable by the other party, and each party shall indemnity, defend, and hold harmless the other from any claims, demands, liabilities, or judgments for commissions or fees arising from such party’s breach of this representation. 8. Closing Costs: Seller and Buyer shall pay their respective shares of all transfer taxes, title insurance premiums and escrow costs in accordance with the custom in the county in which the Property is located. Each party shall be responsible for its own legal fees in connection with this transaction. 9. Prorations; Deposits: Revenues and operating expenses and taxes for the Property shall be prorated as of the close of escrow and possession shall be delivered at the close LOI to City of South San Francisco September 23, 2019 Page Three of escrow. Buyer shall be entitled to a credit for any deposits owed to tenants as of the close of escrow. 10. Beneficiaries. This letter of intent is made for the benefit of the Seller and the Buyer, their respective heirs, successors and assigns. 11. Applicable Laws. This letter of intent and the Purchase Agreement contemplated herein shall be governed by, construed and enforced in accordance with the laws of the State of California. 12. Non-Binding Letter. This letter of intent is not intended as and does not constitute a binding agreement by either party. Rather, this letter of intent is intended to specify the proposed terms and conditions of the transactions contemplated hereby. Buyer and Seller fully understand that neither party shall have any legal obligation to the other, or with respect to the proposed transaction, until the Purchase Agreement has been executed by both parties, except as otherwise expressly provided herein. This letter of intent shall be deemed terminated and shall be null and void if not accepted by Seller and a signed and dated counterpart of this letter is not received by Buyer by 5:00 p.m. on the date that is seven (7) days after the date of this letter. If the foregoing terms and conditions are acceptable to Seller, please sign this letter where indicated below and return a copy to the Buyer. Following receipt of Seller’s signed letter, Buyer will cause the Purchase Agreement to be prepared, which will incorporate the terms and conditions set forth herein and such other terms and condition as the parties shall agree upon in their sole discretion. The parties shall use their reasonable efforts to complete and execute the Purchase Agreement within 15 days after the mutual execution of this letter. * * * * * * * LOI to City of South San Francisco September 23, 2019 Page Four We look forward to working with you on this transaction. Very truly yours, Sierra Investments, a California Corporation By: SIERRA INVESTMENTS, a California Corporation Its: President By: _________________________ Victor Lo Its: President ACKNOWLEDGED AND AGREED: CITY OF SOUTH SAN FRANCISCO, a municipal corporation By:_______________________________ Name (print):____________________________ Title (print): _____________________________ Dated: City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:20-08 Agenda Date:1/22/2020 Version:1 Item #:6a. Resolution approving a Purchase and Sale Agreement with Baden Developments LLC for the sale of 432 Baden Avenue for $1,100,000 and authorizing the City Manager to execute the agreement. WHEREAS,on June 29,2011,the Legislature of the State of California (“State”)adopted Assembly Bill x1 26 (“AB 26”),which amended provisions of the State’s Community Redevelopment Law (Health and Safety Code sections 33000 et seq.)(“Dissolution Law”),pursuant to which the former Redevelopment Agency of the City of South San Francisco (“City”) was dissolved on February 1, 2012; and WHEREAS,the City elected to become the Successor Agency to the Redevelopment Agency of the City of South San Francisco (“Successor Agency”); and WHEREAS,pursuant to Health and Safety Code Section 34191.5(c)(2)(C),property shall not be transferred to a successor agency,city,county or city and county,unless a Long Range Property Management Plan (“LRPMP”)has been approved by the Oversight Board and the California Department of Finance (“DOF”); and WHEREAS,in accordance with the Dissolution Law,the Successor Agency prepared a LRPMP,which was approved by a resolution of the Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco (“Oversight Board”)on May 21,2015,and was approved by the DOF on October 1, 2015; and WHEREAS,consistent with the Dissolution Law and the LRPMP,certain real properties located in the City of South San Francisco,that were previously owned by the former Redevelopment Agency,were transferred to the Successor Agency (“Agency Properties”); and WHEREAS,on October 18,2016,the City entered into an Amended and Restated Master Agreement for Taxing Entity Compensation (“Compensation Agreement”)with the various local agencies who receive shares of property tax revenues from the former redevelopment project area (“Taxing Entities”),which provides that upon approval by the Oversight Board of the sale price,and consistent with the LRPMP,the proceeds from the sale of any of the Agency Properties will be distributed to the Taxing Entities in accordance with their proportionate contributions to the Real Property Tax Trust Fund for the former Redevelopment Agency; and WHEREAS, the former Redevelopment Agency purchased the Property in 1997; and, WHEREAS,the LRPMP,prepared by the Successor Agency and approved by the Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco (“Oversight Board”), designated 432 Baden Avenue,County Assessor's Parcel Number 012-321-160 (“Property”),to be sold,with the proceeds of the sale distributed to the taxing entities; and, WHEREAS,consistent with the LRPMP and the Oversight Board resolution,the Successor Agency executed and recorded a grant deed on May 16,2017,transferring the Agency Properties,including the Property to theCity of South San Francisco Printed on 1/23/2020Page 1 of 3 powered by Legistar™ File #:20-08 Agenda Date:1/22/2020 Version:1 Item #:6a. and recorded a grant deed on May 16,2017,transferring the Agency Properties,including the Property to the City; and, WHEREAS, the LRPMP designated the site in the ‘For Sale’ disposition category; and, WHEREAS, Baden Developments LLC (“Developer”) own the adjacent property, 428 Baden Avenue; and, WHEREAS,during the entitlement process for 428 Baden Avenue,Developer approached the City with a price offer and a proposal to assemble the site with a larger project with housing units and better design; and, WHEREAS,on September 23,2019,Developer provided the City with a Letter of Intent (“LOI”)for the purchase of the Property; and, WHEREAS,typically the City would undergo a competitive bid process for the sale of a property but it was determined that this sole offer from Developer would render the highest and best use of both properties,and consistent with the LRPMP; and, WHEREAS,on October 9,2019,the City Council considered the LOI and agreed that the site had a far greater value if assembled with 428 Baden rather than disposing of it as a stand-alone site and provisionally accepted the offer price of $1,100,000, subject to an appraisal; and, WHEREAS,staff commissioned an appraisal by Colliers International Valuation and Advisory Services (“Appraiser”) which valued the property at $1,020,000; and, WHEREAS,Developer submitted a Planning application that assembles the two sites for the construction of 36 residential units; and, WHEREAS,this infill housing project utilizes the State Density Bonus and provides three BMR units at the Very Low-Income level; and, WHEREAS, there is no cost to the General Fund for the sale of this property; and, WHEREAS, the City’s share of the sale proceeds are 16.7% or $183,700; and, WHEREAS,pursuant to redevelopment law and the Compensation Agreement,final approval of the sale price of the Property must be approved by the Oversight Board to the Successor Agency of South San Francisco; and WHEREAS,the City and the Developer now wish to enter into a Purchase and Sale Agreement for the Property, attached hereto and incorporated herein as Exhibit A; and WHEREAS,the proposed construction of 36 residential units at 428 and 432 Baden Avenue is an infill housing project given its size and location,and will be subject to further environmental review and determination pursuant the California Environmental Quality Act,Pub.Resources Code §21000,et seq.(“CEQA”)as a part of the planning entitlements approval process; and, WHEREAS,on January 16,2020,at its regular meeting,the Planning Commission determined that the sale of the Property at 432 Baden Avenue was consistent with the South San Francisco General Plan. City of South San Francisco Printed on 1/23/2020Page 2 of 3 powered by Legistar™ File #:20-08 Agenda Date:1/22/2020 Version:1 Item #:6a. NOW,THEREFORE,BE IT RESOLVED that the City Council of the City of South San Francisco does hereby resolve as follows: 1.The foregoing recitals are true and correct and made a part of this Resolution. 2.Subject to approval by the Oversight Board of the final sale price,a Purchase and Sale Agreement with Baden Developments LLC in substantially the same form attached hereto as Exhibit A,for the disposition of 432 Baden Avenue (APN 012-321-160) for $1,100,000, is hereby approved. 3.The City Manager is hereby authorized to enter into and execute on behalf of the City Council the Purchase and Sale Agreement,in substantially the same form attached hereto as Exhibit A;and to make any non-material revisions,amendments or modifications deemed necessary to carry out the intent of this Resolution and subject to the Oversight Board’s review of this transaction and approval of the final sale price. 4.The City Manager is hereby authorized to execute any other necessary documents related to the sale of the Property,and to take any and all other actions necessary to implement this intent of this Resolution,subject to approval as to form by the City Attorney. ***** Exhibit A: Purchase and Sale Agreement for 432 Baden Avenue. City of South San Francisco Printed on 1/23/2020Page 3 of 3 powered by Legistar™ PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (“this Agreement”) is entered into as of ________________, 2020 (the “Effective Date”), by and between the City of South San Francisco, a municipal corporation, (“Seller”) and Baden Development, LLC, a California limited liability company (“Buyer”). Seller and Buyer are collectively referred to herein as the “Parties.” RECITALS A. Seller is owner of certain real property with an address of 432 Baden Avenue, South San Francisco, California, also known as San Mateo County Assessor’s Parcel Numbers 012-321- 160 and as more particularly described in Exhibit A attached hereto and incorporated herein (“Property”). B. The former Redevelopment Agency of the City of South San Francisco (“RDA”) purchased the Property on April 16, 1997. C. On, June 29, 2011 the legislature of the State of California (the “State”) adopted Assembly Bill x1 26 (“AB 26”), which amended provisions of the Redevelopment Law, and the California Supreme Court decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., upheld AB 26 (together with AB 1484, the “Dissolution Law”), and the RDA was dissolved on February 1, 2012. D. Pursuant to the Dissolution Law, the South San Francisco Successor Agency (“Agency”) prepared a Long Range Property Management Plan (“LRPMP”), which was approved by a resolution of the Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco (“Oversight Board”) on November 19, 2013, and on May 21, 2015, the Oversight Board approved the Amended Long Range Property Management Plan (“LRPMP”), which was approved by the California Department of Finance (“DOF”) on October 1, 2015. E. Pursuant to the LRPMP and Dissolution Law, the Agency’s transfer of real property assets to the City for disposition consistent with the LRPMP is subject to entering into a Master Agreement for Taxing Entity Compensation by all Taxing Entities. F. The City and Taxing Entities entered into an Amended and Restated Master Agreement for Taxing Entity Compensation, dated October 18, 2016 (“Master Compensation Agreement”), which governs the distribution of any net proceeds received from the sale of the Property, as defined herein. G. The Property was transferred from the Agency to the City pursuant to a grant deed recorded on May 16, 2017. 2 H. Buyer agrees to purchase the Property, and Seller agrees to sell the Property to Buyer, subject to the terms and conditions of this Agreement. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged by the parties, Seller and Buyer hereby agree as follows: 1. INCORPORATION OF RECITALS AND EXHIBITS. The Recitals set forth above and the Exhibits attached to this Agreement are each incorporated into the body of this Agreement as if set forth in full. 2. PURCHASE AND SALE. 2.1 Agreement to Buy and Sell. Subject to the terms and conditions set forth herein, Seller agrees to sell the Property to Buyer, and Buyer hereby agrees to acquire the Property from Seller. 2.2 Purchase Price. The purchase price for the Property to be paid by Buyer to Seller (the “Purchase Price”) is one million one hundred thousand dollars ($1,100,000.00). The Purchase Price shall be paid in cash at the Closing to the Seller. 3. ESCROW. 3.1 Escrow Account. Seller has opened an interest-bearing escrow account (the “Escrow”) maintained by North American Title Company in San Mateo (the “Escrow Holder”), with interest accruing to the benefit of Buyer. Escrow Holder shall perform all escrow and title services in connection with this Agreement. 3.2 Opening of Escrow. Within seven (7) business days after the Effective Date, the Parties will deposit into Escrow the fully executed Agreement, or executed counterparts thereto. The date that is the later of the following to occur shall be deemed the “Opening of Escrow”: (a) the date that such fully executed Agreement is received by Escrow Holder. (b) the date that Buyer submits Developer’s Financing Plan (as defined in Section 5.2(e) below) to Seller for review. (c) the date that Buyer submits an application for building permits to develop the Property to Seller for review. 3.3 Buyer’s Deposit. Within three (3) business days after the Effective Date, Buyer shall deposit thirty thousand dollars ($30,000.00) with Seller, to be held in trust pursuant to this Agreement (“Initial Deposit”). Within three (3) business days after the Opening of Escrow, Seller shall deposit the Initial Deposit into Escrow with Escrow Holder on behalf of Buyer. If Buyer issues an Approval Notice (as defined in Section 3.4 below), Buyer shall deposit an additional seventy thousand dollars ($70,000.00) in Escrow (the “Additional Deposit”). The 3 Initial Deposit and Additional Deposit are sometimes collectively referred to herein as the “Deposits.” The Deposits shall be applied toward the Purchase Price in the event of Closing. 3.4 Satisfaction of Due Diligence Contingency. Buyer shall have the right, in its sole discretion, to terminate this Agreement for any reason prior to the expiration of the Due Diligence Contingency Period (as defined in Section 5(a) below) by providing written notice thereof and to receive a refund of the Deposits. Buyer hereby agrees to provide written notice to Seller prior to the expiration of the Due Diligence Contingency Period if Buyer approves all due diligence items (“Approval Notice”). If Buyer provides a termination notice to Seller before 11:59 p.m. on the last day of the Due Diligence Contingency Period, this Agreement shall terminate, and all amounts deposited by Buyer into escrow (except the Independent Consideration), together with interest thereon, if any, will be returned to Buyer, and neither party shall have any further rights or obligations hereunder except those which expressly survive the termination hereof. If Buyer fails to deliver the Approval Notice to Seller prior to 11:59 p.m. on the last day of the Due Diligence Contingency Period, it will be conclusively presumed that Buyer has disapproved all such items, matters or documents, and this Agreement shall terminate and the Deposits shall be refunded to Buyer. 3.5 Independent Consideration. As independent consideration for Seller’s entering into this Agreement to sell the Property to Buyer, Buyer shall deliver the sum of one hundred dollars ($100.00) to Seller through Escrow (“Independent Consideration”). In the event that Buyer terminates this Agreement in accordance with Section 3.4 above, Seller shall retain the Independent Consideration; in the event that Buyer does not terminate this Agreement as aforesaid, the Independent Consideration shall be applied to the Purchase Price at Closing. 4. PROPERTY DISCLOSURE REQUIREMENTS. 4.1 Condition of Title/Preliminary Title Report. Escrow Holder shall deliver a Preliminary Title Report for the Property (the “Preliminary Report”) to Buyer within three (3) days after the Effective Date. Buyer shall have until the end of the Due Diligence Contingency Period to approve the condition of title to the Property. If Buyer delivers the Approval Notice, Buyer agrees to take title to the Property subject to the following “Permitted Exceptions”: (a) standard printed exceptions in the Preliminary Report; (b) general and special real property taxes and assessments constituting a lien not yet due and payable; and (c) the Schedule B exceptions to the title referenced in the Approval Notice. In no event shall any monetary liens be deemed a Permitted Exception. Buyer shall provide any objections to the condition of title to Seller in writing prior to the Due Diligence Contingency Period. 4.2 Environmental Condition of Property. Seller has provided Buyer with all documents reasonably known to Seller pertaining to the environmental condition of the Property. At Closing, the Buyer agrees to take title of the Property in AS- IS WHERE-IS condition with no environmental remediation work required by or indemnities from the Seller or the Agency. Seller, at Buyer’s expense, agrees to cooperate with Buyer to obtain regulatory approval of any necessary environmental work for the Property. Buyer explicitly acknowledges that Buyer will be responsible to manage and complete any remediation work for the Property after Closing. After 4 Closing, Seller shall have no further obligations with respect to environmental and/or natural hazards remediation costs. 4.3 Environmental and Natural Hazards Disclosure. California Health & Safety Code section 25359.7 requires owners of non-residential real property who know, or have reasonable cause to believe, that any release of hazardous substances are located on or beneath the real property to provide written notice of same to the buyer of real property. Other applicable laws require Seller to provide certain disclosures regarding natural hazards affecting the Property. Pursuant to Section 4.2, Seller agrees to make any necessary disclosures required by law. 5. CLOSING AND PAYMENT OF PURCHASE PRICE. 5.1 Closing. The closing (the “Closing” or “Close of Escrow”) will occur no later than one hundred eighty (180) calendar days after the Effective Date (“Closing Date”) or such other date that the Parties agree in writing. 5.2 Buyer’s Conditions to Closing. Buyer's obligation to purchase the Property is subject to the satisfaction of all of the following conditions or Buyer's written waiver thereof (in Buyer’s sole discretion) on or before the Closing Date: (a) Buyer has approved the condition of the Property. Buyer will have sixty (60) calendar days from the Effective Date (the “Due Diligence Contingency Period”) to complete physical inspections of the Property and due diligence related to the purchase of the Property. Seller shall provide to Buyer copies of all reasonably available and known documents relating to the ownership and operation of the Property, including but not limited to plans, permits and reports (environmental, structural, mechanical, engineering and land surveys) that Seller has in its possession not later than two (2) business days following the execution and delivery of this Agreement. All physical inspections must be coordinated with Seller’s representative. Buyer hereby agrees to indemnify and hold Seller harmless for any damage to the Property caused (but not merely revealed) by Buyer’s inspections. (b) Seller has performed all obligations to be performed by Seller pursuant to this Agreement. (c) Seller’s representations and warranties herein are true and correct in all material respects as of the Closing Date. (d) The Title Company is irrevocably committed to issue an ALTA standard coverage title insurance policy to Buyer, effective as of the Closing Date, insuring title to Buyer in the full amount of the Purchase Price. (e) Seller shall have approved Buyer’s financing plan for the development of the Property, which shall include a proforma reasonably acceptable to Seller and proof of construction loan necessary to reasonably complete the development of the Property (the “Developer’s Financing Plan”). 5 (f) Seller shall have approved the construction contract for Buyer’s development of the Property (the “Construction Contract”). (g) Seller shall have approved the merger of the Property with the adjacent lot located at 428 Baden Avenue, South San Francisco, California (the “Adjacent Lot”). (h) Buyer and Seller shall have executed an Affordable Housing Agreement ( “AHA”) for the Property on commercially reasonable terms and which shall include the following provisions: (1) Below Market Rate units shall be constructed by Buyer to meet or exceed South San Francisco Municipal Code Chapter 20.380 requirements; (2) Seller shall approve any proposed assignment of the AHA or disposition of the Property prior to completion of the development of the Property, and Seller’s approval of the same, shall not be unreasonably withheld or delayed, it being acknowledged that the City Council would need to review and approve of any such proposed assignment. 5.3 Seller’s Conditions to Closing. The Close of Escrow and Seller’s obligation to sell and convey the Property to Buyer are subject to the satisfaction of the following conditions or Seller’s written waiver (in Seller’s sole discretion) of such conditions on or before the Closing Date: (a) Buyer shall have submitted Developer’s Financing Plan to Seller for approval. (b) Buyer shall have obtained Seller’s approval of a Construction Contract for development of the Property by Buyer. (c) Buyer shall have taken all necessary actions for the issuance of building permits from Seller necessary to enable to development of the Property. (d) Buyer shall have taken all necessary actions to obtain the approval of the merger of the Property with the Adjacent Lot and such approval shall be ready to be recorded promptly following the Closing. (e) Buyer has performed all obligations to be performed by Buyer pursuant to this Agreement before Closing Date. (f) Buyer's representations and warranties set forth herein are true and correct in all material respects as of the Closing Date. 5.4 Conveyance of Title. Seller will deliver marketable fee simple title to Buyer at the Closing, subject only to the Permitted Exceptions. The Property will be conveyed by Seller to Buyer in an “as is” condition, with no warranty, express or implied, by Seller as to the physical condition including, but not limited to, the soil, its geology, or the presence of known or unknown faults or Hazardous Materials or hazardous waste (as defined by Section 12); provided, however, that the foregoing shall not relieve Seller from disclosure of any such conditions of which Seller has actual knowledge. 6 5.5 Deliveries at Closing. (a) Deliveries by Seller. Seller shall deposit into the Escrow for delivery to Buyer at Closing: (i) a grant deed, substantially in the form attached hereto as Exhibit B (“Grant Deed”); (ii) an affidavit or qualifying statement which satisfies the requirements of paragraph 1445 of the Internal Revenue Code of 1986, as amended, any regulations thereunder (the “Non-Foreign Affidavit”); (iii) a California Franchise Tax Board form 590 (the “California Certificate”) to satisfy the requirements of California Revenue and Taxation Code Section 18805(b) and 26131. (b) Deliveries by Buyer. No less than one (1) business day prior to the close of escrow, Buyer shall deposit into escrow immediately available funds in the amount, which together with the Independent Consideration and the Deposits is equal to: (i) the Purchase Price as adjusted by any prorations between the Parties; (ii) the escrow fees and recording fees; and (iii) the cost of the Title Policy. (c) Closing. Upon Closing, Escrow Holder shall: (i) record the Grant Deed; (ii) disburse to Seller the Purchase Price, less Seller’s share of any escrow fees, costs and expenses; (iii) deliver to Buyer the Non-Foreign Affidavit, the California Certificate and the original recorded Grant Deed; (iv) pay any commissions and other expenses payable through escrow; and (vi) distribute to itself the payment of escrow fees and expenses required hereunder. (d) Closing Costs. Buyer will pay all escrow fees (including the costs of preparing documents and instruments), and recording fees. Buyer will also pay title insurance and title report costs. Seller will pay all transfer taxes and governmental conveyance fees, where applicable. (e) Pro-Rations. At the close of escrow, the Escrow Agent shall make the following prorations: (i) property taxes will be prorated as of the close of escrow based upon the most recent tax bill available, including any property taxes which may be assessed after the close of escrow but which pertain to the period prior to the transfer of title to the Property to Buyer, regardless of when or to whom notice thereof is delivered; and (ii) any bond or assessment that constitutes a lien on the Property at the close of escrow will be assumed by Buyer. Seller does not pay ad valorem taxes. 5.6 Post-Closing Obligations. The following obligations shall survive the Close of Escrow: (a) Permits. Buyer shall take all necessary actions for construction permits to be issued to Buyer for the development of the Property within ten (10) business days following the Close of Escrow. (b) Commence Work. Buyer shall commence work to develop the Property within forty-five (45) days of the Close of Escrow. (c) Lot Merger. Buyer shall record the merger of the Property with the Adjacent Lot within ten (10) business days of the Close of Escrow. 7 6. REPRESENTATIONS, WARRANTIES AND COVENANTS. 6.1 Seller’s Representations, Warranties and Covenants. In addition to the representations, warranties and covenants of Seller contained in other sections of this Agreement, Seller hereby represents, warrants and covenants to Buyer that the statements below in this Section 6.1 are each true and correct as of the Closing Date provided however, if to Seller’s actual knowledge any such statement becomes untrue prior to Closing, Seller will notify Buyer in writing and Buyer will have three (3) business days thereafter to determine if Buyer wishes to proceed with Closing or terminate this Agreement and receive a refund of the Deposits. If Buyer determines it does not wish to proceed, then the terms of Section 3.4 will apply. (a) Authority. Seller is a municipal corporation, lawfully formed, in existence and in good standing under the laws of the State of California. Seller has the full right, capacity, power and authority to enter into and carry out the terms of this Agreement. This Agreement has been duly executed by Seller, and upon delivery to and execution by Buyer is a valid and binding agreement of Seller. (b) Encumbrances. Seller has not alienated, encumbered, transferred, mortgaged, assigned, pledged, or otherwise conveyed its interest in the Property or any portion thereof, nor entered into any Agreement to do so, and there are no liens, encumbrances, mortgages, covenants, conditions, reservations, restrictions, easements or other matters affecting the Property, except as disclosed in the Preliminary Report. Seller will not, directly or indirectly, alienate, encumber, transfer, mortgage, assign, pledge, or otherwise convey its interest prior to the Close of Escrow, as long as this Agreement is in force. (c) There are no agreements affecting the Property except those which have been disclosed by Seller. There are no agreements which will be binding on the Buyer or the Property after the Close of Escrow, which cannot be terminated on thirty (30) days prior written notice. (d) Conflicts and Pending Actions. There is no agreement to which Seller is a party or, to Seller’s knowledge, binding on Seller, which is in conflict with this Agreement. There is no action, suit, arbitration, unsatisfied order or judgment, governmental investigation or proceeding pending or, to Seller’s knowledge, threatened against the Property or the transaction contemplated by this Agreement. (f) Lease. There are no leases of space in the Property, subleases, licenses, franchise agreements or other agreements to occupy or utilize all or any portion of the Property that will be in force after the Closing. At Closing, Seller shall deliver the Property to Buyer vacant of any occupants. (g) Condemnation. No condemnation proceedings relating to the Property are pending or, to Seller’s knowledge, threatened. (h) Foreign Person; OFAC. Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended. Seller 8 represents and warrants that (a) Seller and, to Seller’s actual knowledge, each person or entity owning an interest in Seller is (i) not currently identified on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control, Department of the Treasury (“OFAC”) and/or on any other similar list maintained by OFAC pursuant to any authorizing statute, executive order or regulation (collectively, the “List”), and (ii) not a person or entity with whom a citizen of the United States is prohibited to engage in transactions by any trade embargo, economic sanction, or other prohibition of United States law, regulation, or Executive Order of the President of the United States, and (iii) not an Embargoed Person (as hereinafter defined), (b) to Seller’s actual knowledge, none of the funds or other assets of Seller constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person, and (c) to Seller’s actual knowledge, no Embargoed Person has any interest of any nature whatsoever in Seller (whether directly or indirectly). The term “Embargoed Person” means any person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder. (i) Compliance. Seller has not received any written notice from any governmental authority that the Property is not in material compliance with all applicable laws and regulations (including environmental and zoning laws and regulations), other than such violations as have been fully cured. To Seller’s knowledge, neither Seller nor the Property are in default or breach of any material obligation under any encumbrances, covenants or easement agreements recorded against the Property. (j) Hazardous Materials. Except as otherwise disclosed to Buyer by Seller (including in any materials delivered or made available to Buyer), Seller has received no written notice from any local, state or national governmental entity or agency of any asbestos, lead or other Hazardous Materials existing or potentially existing with respect to the Property. As used herein, “Hazardous Material” means any hazardous, toxic or dangerous waste, substance or material, pollutant or contaminant, as defined for purposes of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), as amended, or the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), as amended, or any other laws, or any substance which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous, or any substance which contains gasoline, diesel fuel or other petroleum hydrocarbons, polychlorinated biphenyls (PCBs), or radon gas, urea formaldehyde, asbestos or lead. (k) Purchase Options. There are no outstanding rights of first refusal, rights of first offer, purchase options or similar purchase rights with respect to the Property. (l) Management Agreements. There are no management agreements, leasing agreements, brokerage agreements or similar agreements which affect the Property and will survive Closing. (m) Taxes. To Seller’s knowledge, there are no impositions of new special assessments with respect to the Property. 9 The truth and accuracy of each of the representations and warranties, and the performance of all covenants of Seller contained in this Agreement are conditions precedent to Buyer’s obligation to proceed with the Closing hereunder. The foregoing representations and warranties shall survive the expiration, termination, or close of escrow of this Agreement and shall not be deemed merged into the deed upon closing. 6.2 Buyer’s Representations and Warranties. In addition to the representations, warranties and covenants of Buyer contained in other sections of this Agreement, Buyer hereby represents, warrants and covenants to Seller that the statements below in this Section 6.2 are each true as of the Effective Date, and, if to Buyer’s actual knowledge any such statement becomes untrue prior to Closing, Buyer shall so notify Seller in writing and Seller shall have at least three (3) business days thereafter to determine if Seller wishes to proceed with Closing. (a) Buyer is a California limited liability company. Buyer has the full right, capacity, power and authority to enter into and carry out the terms of this Agreement. This Agreement has been duly executed by Buyer, and upon delivery to and execution by Seller shall be a valid and binding agreement of Buyer. (b) Buyer is not bankrupt or insolvent under any applicable federal or state standard, has not filed for protection or relief under any applicable bankruptcy or creditor protection statute, and has not been threatened by creditors with an involuntary application of any applicable bankruptcy or creditor protection statute. (c) Pending Actions. There is no action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending against Buyer which, if adversely determined, could individually or in the aggregate materially interfere with the consummation of the transaction contemplated by this Agreement. (d) ERISA. Buyer is not acquiring the Property with the assets of an employee benefit plan as defined in Section 3(3) of ERISA. (e) Foreign Person; OFAC. Buyer is not a “foreign person” within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended. Buyer and, to Buyer’s actual knowledge, each person or entity owning an interest in Buyer is (i) not currently identified on the Specially Designated Nationals and Blocked Persons List maintained by the OFAC and/or on any other similar List, (ii) not a person or entity with whom a citizen of the United States is prohibited to engage in transactions by any trade embargo, economic sanction, or other prohibition of United States law, regulation, or Executive Order of the President of the United States, and (iii) not an “Embargoed Person,” to Buyer’s actual knowledge, none of the funds or other assets of Buyer constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person, and to Buyer’s actual knowledge, no Embargoed Person has any interest of any nature whatsoever in Buyer (whether directly or indirectly). The truth and accuracy of each of the representations and warranties, and the performance of all covenants of Buyer contained in this Agreement are conditions precedent to Seller’s obligation to proceed with the Closing hereunder. 10 6.3 Property Sold, “AS IS”. Buyer specifically acknowledges that the Seller is selling the Property on an “AS IS”, “WHERE IS” and “WITH ALL FAULTS” basis and that, subject to Seller's representations, warranties, covenants and obligations set forth in this Agreement, and all exhibits attached hereto and incorporated herein, and any obligations arising under applicable law, and any document or instrument executed and delivered in connection with Closing, Buyer is not relying on any representations or warranties of any kind whatsoever, express or implied, from Seller, or its employees, appointed or elected officials, agents, or brokers as to any matters concerning the Property. Subject to Seller's representations, warranties, covenants and obligations set forth in this Agreement, and all exhibits attached hereto and incorporated herein, and any obligations arising under applicable law, and any document or instrument executed and delivered in connection with Closing, Seller makes no representations or warranties as to any matters concerning the Property, including without limitation: (i) the quality, nature, adequacy and physical condition of the Property, (ii) the quality, nature, adequacy, and physical condition of soils, geology and any groundwater, (iii) the existence, quality, nature, adequacy and physical condition of utilities serving the Property, (iv) the development potential of the Property, and the Property's use, habitability, merchantability, or fitness, suitability, value or adequacy of the property for any particular purpose, (v) except as otherwise provided in this Agreement, the zoning or other legal status of the Property or any other public or private restrictions on use of the Property, (vi) the compliance of the Property or its operation with any Environmental Laws, covenants, conditions and restrictions of any governmental or quasi-governmental entity or of any other person or entity, (vii) the presence or removal of Hazardous Materials, substances or wastes on, under or about the Property or the adjoining or neighboring property; (viii) the quality of any labor and materials used in any improvements on the Property, (ix) the condition of title to the Property, (x) the leases, service contracts, or other agreements affecting the Property, or (xi) the economics of the operation of the Property. 7. REMEDIES In the event of a breach or default under this Agreement by Seller, if such breach or default occurs prior to Close of Escrow, Buyer reserves the right to either (a) seek specific performance from Seller or (b) to do any of the following: (i) to waive the breach or default and proceed to close as provided herein; (ii) to extend the time for performance and the Closing Date until Seller is able to perform; or (iii) to terminate this Agreement upon written notice to Seller, whereupon Seller shall cause Escrow Holder to return to Buyer any and all sums placed into the Escrow by Buyer, and except for the rights and obligations expressly provided to survive termination of this Agreement, neither party shall have any further obligations or liabilities hereunder. IN THE EVENT OF A BREACH OR DEFAULT HEREUNDER BY BUYER AND THE CLOSING DOES NOT OCCUR DUE TO SUCH DEFAULT, SELLER’S SOLE REMEDY SHALL BE TO RETAIN THE DEPOSITS AS LIQUIDATED DAMAGES. THE PARTIES AGREE THAT IN SUCH INSTANCE, THE DEPOSITS REPRESENT A REASONABLE APPROXIMATION OF SELLER’S DAMAGES AND ARE NOT INTENDED AS A FORFEITURE OR PENALTY BUT RATHER AN ENFORCEABLE LIQUIDATED DAMAGES PROVISION PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671, ET SEQ. IN NO EVENT SHALL EITHER PARTY BE ENTITLED TO LOST PROFITS OR CONSEQUENTIAL DAMAGES AS A RESULT OF THE OTHER PARTY’S BREACH OF THIS AGREEMENT. 11 Buyer’s Initials Seller’s Initials 8. BROKERS. Seller represents that no real estate broker has been retained by Seller in the sale of the Property or the negotiation of this Agreement. Buyer represents that no real estate broker has been retained by Buyer in the procurement of the Property or negotiation of this Agreement other than Victor Lo of Sierra Investments. Buyer shall indemnify, hold harmless and defend Seller from any and all claims, actions and liability for any commission, finder’s fee, or similar charges arising out of Buyer’s retention of Mr. Lo or any breach of the preceding sentence. 9. ASSIGNMENT. Absent an express signed written agreement between the Parties to the contrary, neither Seller nor Buyer may assign its rights or delegate its duties under this Agreement without the express written consent of the other. No permitted assignment of any of the rights or obligations under this Agreement shall result in a novation or in any other way release the assignor from its obligations under this Agreement. Buyer may not assign its rights under this Agreement without first obtaining Seller’s written consent, which approval may be given or withheld in Seller’s reasonable discretion. Seller’s approval of any assignment pursuant to this Section 9 shall be contingent on the review and approval by the City Council of such proposed assignment. Any transfer, directly or indirectly, of any stock, partnership interest or other ownership interest in Buyer, for the sole purpose of transferring Buyer’s interest in this Agreement, without Seller’s written approval, which approval may be given or withheld in Seller’s reasonable discretion, shall constitute a default by Buyer under this Agreement; provided, however, that a transfer of an ownership interest in Buyer to investors as reasonably necessary to raise funds for the development of the Property will not be a default and will not require advanced consent of Seller, so long as Victor Lo retains exclusive, day-to-day managerial control of Buyer at all times. Without limitation of the foregoing, no assignment by Buyer shall relieve Buyer of any of its obligations or liabilities pursuant to this Agreement. Notwithstanding the foregoing, without having to obtain Seller’s approval, Buyer may assign its interest in this Agreement on or before the Closing Date to an entity (a “Buyer Assignee”) that is (a) an entity of which Buyer has day-to- day managerial control or (b) any joint venture entity in which Buyer maintains a majority economic interest, or may (c) partially assign this Agreement for the purposes of enabling closing as tenant-in-common with an otherwise joint venture partner of Buyer for the purposes of consummating a tax deferred exchange, so long as Buyer and Buyer Assignee execute and deliver an assignment and assumption agreement in form reasonably satisfactory to Seller, pursuant to which Buyer Assignee remakes all of Buyer’s representation and warranties set forth in this Agreement and the transferor shall not be released from the obligations of “Buyer” hereunder. 10. ENVIRONMENTAL INDEMNITY. To the fullest extent allowed by law, Buyer agrees to unconditionally and fully indemnify, protect, defend (with counsel satisfactory to Seller), and hold Seller, and its respective elected and appointed officers, officials, employees, agents, consultants, contractors, and Agency harmless from and against any and all claims (including without limitation third party claims for personal injury, real or personal property damage, or damages to natural resources), actions, administrative proceedings (including without limitation both formal and informal proceedings), judgments, damages, punitive damages, penalties, fines, costs (including without limitation any and all costs relating to investigation, assessment, analysis or clean-up of the Property), liabilities (including without limitation sums paid in settlements of 12 claims), interest, or losses, including reasonable attorneys’ and paralegals’ fees and expenses (including without limitation any such fees and expenses incurred in enforcing this Agreement or collecting any sums due hereunder), together with all other costs and expenses of any kind or nature (collectively, the “Costs”) that arise directly or indirectly from or in connection with the presence, suspected presence, release, or suspected release, of any Hazardous Materials in, on or under the Property or in or into the air, soil, soil gas, groundwater, or surface water at, on, about, around, above, under or within the Property, or any portion thereof, except those Costs that arise solely as a result of actions by Seller, or Seller’s agents, employees, or contractors. The indemnification provided pursuant to this Section shall specifically apply to and include claims or actions brought by or on behalf of employees of Buyer or any of its predecessors in interest and Buyer hereby expressly waives any immunity to which Buyer may otherwise be entitled under any industrial or worker’s compensation laws. In the event the Seller suffers or incurs any Costs, Buyer shall pay to Seller the total of all such Costs suffered or incurred by the Seller upon demand therefore by Seller. The indemnification provided pursuant to this Section shall include, without limitation, all loss or damage sustained by the Seller due to any Hazardous Materials: (a) that are present or suspected by a governmental agency having jurisdiction to be present in the Property or in the air, soil, soil gas, groundwater, or surface water at, on, about, above, under, or within the Property (or any portion thereof) or to have emanated from the Property, or (b) that migrate, flow, percolate, diffuse, or in any way move onto, into, or under the air, soil, soil gas, groundwater, or surface water at, on, about, around, above, under, or within the Property (or any portion thereof) after the date of this Agreement as a result of Seller’s or its predecessors’ activities on the Property, or those of Seller’s agents, employees, or contractors. The provisions of this Section 10 shall survive the termination of this Agreement and the Close of Escrow. 11. RELEASE BY BUYER. Effective upon the Close of Escrow, except with respect to the representations and warranties of Seller under Section 6.1 of this Agreement, Buyer waives releases, remises, acquits and forever discharges Seller, and its officers, directors, board members, managers, employees and agents, and any other person acting on behalf of Seller, from any and all claims, actions, causes of action, demands, rights, damages, costs, expenses and compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, which Buyer now has or which may arise in the future on account of or in any way arising from or in connection with the physical condition of the Property or any law or regulation applicable thereto including, without limiting the generality of the foregoing, any federal, state or local law, ordinance or regulation pertaining to Hazardous Materials. This Section 11 shall survive the termination of this Agreement and the Close of Escrow. BUYER ACKNOWLEDGES THAT BUYER IS FAMILIAR WITH SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY. 13 BY INITIALING BELOW, BUYER EXPRESSLY WAIVES THE BENEFITS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH RESPECT TO THE FOREGOING RELEASE: Buyer’s initials: _____________ 12. HAZARDOUS MATERIALS; DEFINITIONS. 12.1 Hazardous Materials. As used in this Agreement, “Hazardous Materials” means any chemical, compound, material, mixture, or substance that is now or may in the future be defined or listed in, or otherwise classified pursuant to any Environmental Laws (defined below) as a “hazardous substance”, “hazardous material”, “hazardous waste”, “extremely hazardous waste”, infectious waste”, toxic substance”, toxic pollutant”, or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity. The term “Hazardous Materials” shall also include asbestos or asbestos-containing materials, radon, chrome and/or chromium, polychlorinated biphenyls, petroleum, petroleum products or by-products, petroleum components, oil, mineral spirits, natural gas, natural gas liquids, liquefied natural gas, and synthetic gas usable as fuel, perchlorate, and methyl tert butyl ether, whether or not defined as a hazardous waste or hazardous substance in the Environmental Laws. 12.2 Environmental Laws. As used in this Agreement, “Environmental Laws” means any and all federal, state and local statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations or directives, or any other requirements of governmental authorities, as may presently exist, or as may be amended or supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the environment or human, plant or animal health, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Porter-Cologne Water Quality Control Act (Cal. Water Code § 13000 et seq.), the Toxic Mold Protection Act (Cal. Health & Safety Code § 26100, et seq.), the Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code § 25249.5 et seq.), the Hazardous Waste Control Act (Cal. Health & Safety Code § 25100 et seq.), the Hazardous Materials Release Response Plans & Inventory Act (Cal. Health & Safety Code § 25500 et seq.), and the Carpenter-Presley-Tanner Hazardous Substances Account Act (Cal. Health and Safety Code, Section 25300 et seq.). 13. MISCELLANEOUS. 13.1 Attorneys’ Fees. If any party employs counsel to enforce or interpret this Agreement, including the commencement of any legal proceeding whatsoever (including insolvency, bankruptcy, arbitration, mediation, declaratory relief or other litigation), the prevailing 14 party shall be entitled to recover its reasonable attorneys’ fees and court costs (including the service of process, filing fees, court and court reporter costs, investigative fees, expert witness fees, and the costs of any bonds, whether taxable or not) and shall include the right to recover such fees and costs incurred in any appeal or efforts to collect or otherwise enforce any judgment in its favor in addition to any other remedy it may obtain or be awarded. Any judgment or final order issued in any legal proceeding shall include reimbursement for all such attorneys’ fees and costs. In any legal proceeding, the “prevailing party” shall mean the party determined by the court to most nearly prevail and not necessarily the party in whose favor a judgment is rendered. 13.2 Interpretation. This Agreement has been negotiated at arm’s length and each party has been represented by independent legal counsel in this transaction and this Agreement has been reviewed and revised by counsel to each of the Parties. Accordingly, each party hereby waives any benefit under any rule of law (including Section 1654 of the California Civil Code) or legal decision that would require interpretation of any ambiguities in this Agreement against the drafting party. 13.3 Survival. All indemnities, covenants, representations and warranties contained in this Agreement shall survive Close of Escrow. 13.4 Successors. Except as provided to the contrary in this Agreement, this Agreement shall be binding on and inure to the benefit of the Parties and their successors and assigns. 13.5 Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of California. 13.6 Integrated Agreement; Modifications. This Agreement contains all the agreements of the Parties concerning the subject hereof any cannot be amended or modified except by a written instrument executed and delivered by the parties. There are no representations, agreements, arrangements or understandings, either oral or written, between or among the parties hereto relating to the subject matter of this Agreement that are not fully expressed herein. In addition there are no representations, agreements, arrangements or understandings, either oral or written, between or among the Parties upon which any party is relying upon in entering this Agreement that are not fully expressed herein. 13.7 Severability. If any term or provision of this Agreement is determined to be illegal, unenforceable, or invalid in whole or in part for any reason, such illegal, unenforceable, or invalid provisions or part thereof shall be stricken from this Agreement, any such provision shall not be affected by the legality, enforceability, or validity of the remainder of this Agreement. If any provision or part thereof of this Agreement is stricken in accordance with the provisions of this Section, then the stricken provision shall be replaced, to the extent possible, with a legal, enforceable and valid provision this is in keeping with the intent of the Parties as expressed herein. 13.8 Notices. Any delivery of this Agreement, notice, modification of this Agreement, collateral or additional agreement, demand, disclosure, request, consent, approval, waiver, declaration or other communication that either party desires or is required to give to the other party or any other person shall be in writing. Any such communication may be served 15 personally, or by nationally recognized overnight delivery service (i.e., Federal Express) which provides a receipt of delivery, or sent by prepaid, first class mail, return receipt requested to the party’s address as set forth below, or by fax or electronic mail, in each case, sent to the intended addressee at the address set forth below, or to such other address or to the attention of such other person as the addressee shall have designated by written notice sent in accordance herewith, and shall be deemed to have been given either at the time of first attempted delivery at the address and in the manner provided herein, or, in the case of electronic mail for fax, as of the date of the electronic mail or fax: To Buyer: 311 9th Avenue San Mateo, CA 94401 Attn: Mr. Victor Lo Phone: 415-297-0709 Email: victor@sierrainvestments.com With Copy To: Schinner & Shain, LLP 96 Jessie Street San Francisco, CA 94105 Attn: R. Ryan Shain, Esq. Phone: 310-913-4582 Email: shain@schinner.com To Seller: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager, Mike Futrell Email: mike.futrell@ssf.net Telephone No.: (650) 829 6620 Fax (650) 829-6609 With Copy To: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Project Manager, Julie Barnard Email: Julie.barnard@ssf.net Telephone No.: (650) 829 6629 With Copy To: Meyers Nave 555 12th Street, Suite 1500 Oakland, CA 94607 Attn: Sky Woodruff Email: sky@meyersnave.com To Escrow Holder: Katie Berggren North American Title Company 66 Bovet Rd, Suite 200 San Mateo, CA 94402 16 Phone: 650-343-6282 Email: kberggren@nat.com Any party may change its address by notice to the other party. Each party shall make an ordinary, good faith effort to ensure that it will accept or receive notices that are given in accordance with this section and that any person to be given notice actually receives such notice. 13.9 Time. Time is of the essence to the performance of each and every obligation under this Agreement. 13.10 Days of Week. If any date for exercise of any right, giving of any notice, or performance of any provision of this Agreement falls on a Saturday, Sunday or holiday, the time for performance will be extended to 11:59 p.m. on the next business day. 13.11 Reasonable Consent and Approval. Except as otherwise provided in this Agreement, whenever a party is required or permitted to give its consent or approval under this Agreement, such consent or approval shall not be unreasonably withheld or delayed. If a party is required or permitted to give its consent or approval in its sole and absolute discretion or if such consent or approval may be unreasonably withheld, such consent or approval may be unreasonably withheld but shall not be unreasonably delayed. 13.12 Further Assurances. The Parties shall at their own cost and expense execute and deliver such further documents and instruments and shall take such other actions as may be reasonably required or appropriate to carry out the intent and purposes of this Agreement. 13.13 Waivers. Any waiver by any party shall be in writing and shall not be construed as a continuing waiver. No waiver will be implied from any delay or failure to take action on account of any default by any party. Consent by any party to any act or omission by another party shall not be construed to be consent to any other subsequent act or omission or to waive the requirement for consent to be obtained in any future or other instance. 13.14 Signatures/Counterparts. This Agreement may be executed by electronic or facsimile signature. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any one of such completely executed counterparts shall be sufficient proof of this Agreement. 13.15 Date and Delivery of Agreement. Notwithstanding anything to the contrary contained in this Agreement, the parties intend that this Agreement shall be deemed effective, and delivered for all purposes under this Agreement, and for the calculation of any statutory time periods based on the date an agreement between parties is effective, executed, or delivered, as of the Effective Date. 13.16 Representation on Authority of Parties. Each person signing this Agreement represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement. Each party represents and warrants to the other that the execution and delivery of the Agreement and the performance of such party’s obligations 17 hereunder have been duly authorized and that the Agreement is a valid and legal agreement binding on such party and enforceable in accordance with its terms. 13.17 Possession. At Closing, Seller shall deliver sole and exclusive possession of the Property to Buyer. 13.18 Approvals. Whenever this Agreement calls for Seller approval, consent, extension or waiver, the written approval, consent, or waiver of the Seller’s Executive Director or his or her designee(s) shall constitute the approval, consent, extension or waiver of the Seller, without further authorization required from the Seller’s Council. The Seller hereby authorizes the City Manager and his or her designee(s) to deliver any such approvals, consents, or extensions or waivers as are required by this Agreement, or that do not otherwise reduce Seller’s rights under this Agreement, and to waive requirements under this Agreement, on behalf of the Seller. 13.19 Merger, Survival. The provisions of this Agreement shall not merge with the delivery of the Deed or any other instrument delivered at Closing, but shall, except as otherwise provided in this Agreement, survive the Closing. SIGNATURES ON FOLLOWING PAGE 18 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. SELLER: CITY OF SOUTH SAN FRANCISCO By: _______________________________ Mike Futrell City Manager ATTEST: By: _______________________________ City Clerk APPROVED AS TO FORM: By: _______________________________ Sky Woodruff City Attorney BUYER: Baden Development, LLC, a California limited liability company By: _______________________________ Victor Lo Title: Manager APPROVED AS TO FORM: By: _______________________________ Counsel for Buyer 19 LIST OF EXHIBITS Exhibit A Legal Description Exhibit B Grant Deed Exhibit C Permitted Exceptions Exhibit D Form of Affordable Housing Agreement Exhibit E Form of Completion Guaranty 20 Exhibit A LEGAL DESCRIPTION That real property situated in the State of California, County of San Mateo, City of South Su. Francisco, and described as Lot 8 in Block 117, as shown on that certain map entitled "SOUI'H SAN FRANCISCO SAN MATEO CO. CAL PLAT. NO. 1”, filed in the office of the County Recorder of San Mateo County, State of California, on March 1, 1892 in Book “B” of Maps at page(s) 6, and a copy entered in Book 2 of Maps at Page 52. AP. No.: 012-321-160 JPN 012 032 321 16 A 21 Exhibit B GRANT DEED Recording Requested By and When Recorded Return To: Attention: APN: ___________________ (Space above this line for Recorder’s use) GRANT DEED THE UNDERSIGNED GRANTOR(s) DECLARE(s): DOCUMENTARY TRANSFER TAX IS $__________________ computed on full value of property conveyed, or computed on full value less value of liens or encumbrances remaining at time of sale. _______________________________ Signature of Declarant FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, _______________________ _____________________________, a ____________________ (“Grantor”) hereby grants to _____________________________, a _________________ (“Grantee”), the real property located in the City of __________, County of __________, State of __________, described on Exhibit A attached hereto and made a part hereof. GRANTOR: _______________________________, a _______________________________ By: _______________________________ Its: _______________________________ Date: _______________________________ 22 [Exhibit A and notarial acknowledgement to be attached] 23 Exhibit C PERMITTED EXCEPTIONS 24 Exhibit D FORM OF AFFORDABLE HOUSING AGREEMENT RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 Space above this line for Recorder’s use. AFFORDABLE HOUSING REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS for 432 Baden Avenue, South San Francisco by and between THE CITY OF SOUTH SAN FRANCISCO and BADEN DEVELOPMENT LLC 25 This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this “Agreement”) is entered into effective as of _____________, 2020 (“Effective Date”) by and between the City of South San Francisco, a municipal corporation (“City”) and _______________________, a California corporation {INSERT NEW ENTITY IF APPLICABLE AT CLOSING} (“Owner”). City and Owner are hereinafter collectively referred to as the “Parties.” RECITALS A. Owner owns that certain real property located in the City of South San Francisco at 432 Baden Avenue, known as San Mateo County Assessor’s Parcel Nos. 012-321-160 and more particularly described in Exhibit A attached hereto (the “Property”). B. In accordance with that certain Purchase and Sale Agreement executed by and between the Parties and dated as of ____________ (the “PSA”), Owner will re-develop the Property into a high-density, residential apartment building (the “Project”). Capitalized terms used and not defined in this Agreement have the meaning ascribed to them in the PSA. C. As a condition to its agreement to provide the City Grants, the City requires the Property to be subject to the terms, conditions and restrictions set forth herein, specifically, the City requires that for a period of not less than fifty-five (55) years, three (3) of the residential units in the Project be rented at Affordable Rents to Eligible Households. D. The Parties have agreed to enter into and record this Agreement in order to satisfy the conditions described in the foregoing Recitals. The purpose of this Agreement is to regulate and restrict the occupancy and rents of the Project’s Restricted Units for the benefit of the occupants of the Project. The Parties intend the covenants set forth in this Agreement to run with the land and to be binding upon Owner and Owner’s successors and assigns for the full term of this Agreement. E. Chapter 20.380 of the South San Francisco Municipal Code sets forth the requirements for Inclusionary Housing (“Inclusionary Housing Ordinance”) F. The Developer is planning to construct thirty six (36) rental units on the Project Property (the “Project”) and has submitted site development plan for the Project. G. H. The Developer is required by the Inclusionary Housing Ordinance to set aside ten percent (10%) of new housing as low- and moderate-income level housing. I. The Inclusionary Housing Ordinance requires the Developer’s plans and the City’s conditions regarding inclusionary housing be set forth in an Affordable Housing Agreement. J. This Affordable Housing Agreement is required as a condition of future discretionary permits for development of the Project Property and shall be recorded against the Project Property; K. 432 Baden is located in the Residential Core District and the Project allows for 30 The Developer will utilize the State Density Bonus of 35% for the Project by providing 11.5% 26 of the units targeting Very Low Income households (“VLI”). J. The base density for the Project’s 14,000 sf (0.32 acre) lot is 80 du/acre, which allows for 26 units. The 35% density bonus to the base allowable 26 units returns a yield of 36 units. The project will provide 11.5% of the base density of 26 units or 3 units as VLI targeted. NOW THEREFORE, in consideration of the foregoing, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows. AGREEMENT 1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits. “Actual Household Size" means the actual number of persons in the applicable household. “Adjusted for Family Size Appropriate for the Unit” shall be determined consistent with Section 50052.5(h) of the California Health and Safety Code and applicable federal rules (if any) and as defined below: Studio – 1 person One Bedroom – 1.5 people Two Bedroom – 3 people Three Bedroom – 4.5 people "Affordable Rent" means the following amounts, less a utility allowance and such other adjustments as required pursuant to the California Redevelopment Law: (i) for units that are restricted for rental to households with incomes of not more than eighty percent (80%) of AMI (“80% Units”), a monthly rent that does not exceed one-twelfth (1/12) of thirty percent (30%) of eighty percent (80%) of AMI, Adjusted for Family Size Appropriate for the Unit, and (ii) for units that are restricted for rental to households with incomes of not more than one hundred twenty percent (120%) of AMI (“120% Units”), a monthly rent that does not exceed one-twelfth of thirty percent (30%) of one hundred twenty percent (120%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit. "Area Median Income" or "AMI" means the median income for San Mateo County, California, adjusted for Actual Household Size, as determined by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 8 of the United States Housing Act of 1937 and as published from time to time by the State of California Department of Housing and Community Development (“HCD”) in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and Safety Code Section 50093(c). “Claims” is defined in Section 10. 27 "Eligible Household" means a household for which gross household income does not exceed the applicable maximum income level for a Restricted Unit as specified in Section 2.1 and Exhibit B. “Indemnitees” is defined in Section 10. “Very Low-Income” means an annual gross household income that is less than or equal to the qualifying limits for households of Very Low-Income adjusted for actual household size, as determined periodically by HUD on the basis of gross annual household income and published by HCD in the Regulations for San Mateo County. If HUD ceases to make such determination, "Very Low-Income" shall be defined as not greater than 50% of Area Median Income adjusted for actual household size, as published by HCD in the Regulations. If both HCD and HUD cease to make such determinations, City in its reasonable discretion may designate another definition of "Very Low-Income" used by any other federal or state agency so long as such definition is no more restrictive than that set forth herein. “Regulations” means Title 25 of the California Code of Regulations. “Rent-Restricted” means a dwelling unit for which the gross rent charged for such unit does not exceed the Affordable Rent, as adjusted for assumed household size in accordance with the Department of Housing and Community Development (“HCD”) guidelines. "Restricted Unit" means a dwelling unit which is reserved for occupancy at an Affordable Rent by a household of not more than a specified household income in accordance with and as set forth in Sections 2.1 and 2.2 and Exhibit B. 2. Use and Affordability Restrictions. Owner hereby covenants and agrees, for itself and its successors and assigns, that the Property shall be used solely for the operation of a mixed-use, multifamily rental housing development in compliance with the DA and the requirements set forth herein. Owner represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Owner covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City. 2.1 Affordability Requirements. 2.1.1 Property. For a term of fifty-five (55) years commencing upon the date of issuance of a final certificate of occupancy for the Project, not less than three (3) of the residential units of the Project shall be both Rent Restricted (as defined below) and occupied (or if vacant, available for occupancy), available at Affordable Rents to Eligible Households with income no greater than 50% of Area Median Income. The three (3) residential units are allocated across unit type as specified in Exhibit B. 2.1.2 Recertification. In the event that recertification of Eligible Household incomes indicates that the number of Restricted Units actually occupied by Eligible Households falls below the number reserved for each income group as specified in this Section 2.1 and Exhibit 28 B, Owner shall rectify the condition by renting the next available dwelling unit(s) in the Project to Eligible Household(s) until the required income mix is achieved. 2.2 Rents for Restricted Units. Rents for Restricted Units shall be limited to Affordable Rents for households of the applicable income limit in accordance with Section 2.1 and Exhibit B. Notwithstanding the foregoing, no Eligible Household qualifying for a Restricted Unit shall be denied continued occupancy of a unit in the Project because, after admission, such Eligible Household's adjusted income increases to exceed the qualifying limit for such Restricted Unit. A household which at initial occupancy qualifies in a particular income category shall be treated as continuing to be of such income category so long as the household’s gross income does not exceed 140% of the applicable income limit. In the event the gross household income of a household that qualified at the applicable income limit at initial occupancy exceeds the applicable income limit for a unit, that unit will continue to be considered as satisfying the applicable income limit if the unit remains Rent-Restricted. If upon recertification of Eligible Household incomes, Owner determines that a Eligible Household has a household income exceeding the maximum qualifying income for such Eligible Household’s unit, the Eligible Household shall be permitted to continue to occupy the unit, and upon expiration of the Eligible Household's lease and upon sixty (60) days’ written notice, Owner may increase the rent for such unit to the fair market rent, and Owner shall rent the next available unit to a Eligible Household whose household income does not exceed the applicable income limit in order to achieve the affordability requirements of this Agreement. 2.3 Unit Sizes, Design and Location. The Restricted Units shall be of comparable design quality as unrestricted units in the Project. Eligible Households of Restricted Units shall have access to all common facilities of the Project equal to that of Eligible Households of units in the Project that are not Restricted Units. The Restricted Units shall be allocated among affordability categories as set forth in Exhibit B. 2.4 City Grant Funds. Owner shall ensure that all City Grant Funds are used for the construction of affordable units in a manner consistent with the applicable City Grant Funds requirements, which at a minimum, requires residential rental units assisted For with funds from the City’s low- and moderate-income housing fund to remain affordable for the longest feasible time. 2.5 No Condominium Conversion. Owner shall not convert the residential units in the Project to condominium or cooperative ownership or sell condominium or cooperative rights to the residential portion of the Project or any part thereof unless Owner obtains the City's consent and meets the affordability requirements of Section 2.1. City’s prior written consent shall be required with respect to the sale or condominium conversion of the retail/commercial portion of the Project or any part thereof. 2.6 Non-Discrimination; Compliance with Fair Housing Laws. 2.6.1 Preferences. In order to ensure that there is an adequate supply of affordable housing within the City for City residents and employees of businesses located within the City, to the extent permitted by law and consistent with the program regulations for funding sources used 29 for development of the Project, at initial lease up, Owner shall give a preference in the rental of the residential units in the Project to Eligible Households that include at least one member who lives or works in the City of South San Francisco. If there are fewer Eligible Households than the number of such units, the units will be made available to the general public. Notwithstanding the foregoing, in the event of a conflict between this provision and the provisions of Section 42 of the Internal Revenue Code of 1986, as amended, the provisions of such Section 42 shall control. 2.6.2 Fair Housing. Owner shall comply with state and federal fair housing laws in the marketing and rental of the units in the Project. Owner shall accept as Eligible Households, on the same basis as all other prospective Eligible Households, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto. 2.6.3 Non-Discrimination. Owner shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Owner covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Owner or any person claiming under or through Owner establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of Eligible Households, lessees, sub-Eligible Households, sublessees or vendees in, of, or for the Property or part thereof. Owner shall include such provision in all deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same diligently and in good faith. 3. Reporting Requirements. 3.1. Eligible Household Certification. Owner or Owner’s authorized agent shall obtain from each household prior to initial occupancy of each Restricted Unit, and on every anniversary thereafter, a written certificate containing all of the following in such format and with such supporting documentation as City may reasonably require: (a) The identity of each household member; and (b) The total gross household income; Owner shall retain such certificates for not less than three (3) years, and upon City’s request, shall make the certificates available for City inspection. 3.2 Annual Report; Inspections. By not later than April 30th of each year during the term of this Agreement, Owner shall submit an annual report (“Annual Report”) to the City in form satisfactory to City, together with a certification that the Project is in compliance with the requirements of this Agreement. The Annual Report shall, at a minimum, include the following 30 information for each dwelling unit in the Project: (i) unit number; (ii) number of bedrooms; (iii) current rent and other charges; (iv) dates of any vacancies during the previous year; (v) number of people residing in the unit; (vi) total gross household income of residents; (vii) documentation of source of household income; and (viii) the information required by Section 3.1. Owner shall include with the Annual Report, an income recertification for each household, documentation verifying Eligible Household eligibility, and such additional information as City may reasonably request from time to time in order to demonstrate compliance with this Agreement. The Annual Report shall conform to the format requested by City; provided however, during such time that the Project is subject to a regulatory agreement restricting occupancy and/or rents pursuant to requirements imposed in connection with the use of state or federal low-income housing tax credits, Owner may satisfy the requirements of this Section by providing City with a copy of compliance reports required in connection with such financing. 3.3 On-site Inspection. Owner shall permit representatives of City to enter and inspect the Property and the Project during reasonable business hours in order to monitor compliance with this Agreement upon 48-hours advance notice of such visit to Owner or to Owner's management agent. 3.4 Additional Information. Owner shall provide any additional information reasonably requested by City. The City shall have the right to examine and make copies of all books, records, or other documents of the Owner which pertain to the Project. 3.5 Records. The Owner shall maintain complete, accurate and current records pertaining to the Development, and shall permit any duly authorized representative of the City to inspect records, including records pertaining to income and household size of Eligible Households. All Eligible Household lists, applications and waiting lists relating to the Project shall at all times be kept separate and identifiable from any other business of the Owner and shall be maintained in a reasonable condition for proper audit and subject to examination during business hours by representatives of the City. The Owner shall retain copies of all materials obtained or produced with respect to occupancy of the Units for a period of at least three (3) years, and for any period during which there is an audit undertaken by the City pursuant to the DA. 4. Term of Agreement. 4.1 Term of Restrictions. Unless extended by mutual agreement of the Parties, upon the 55th anniversary of issuance of the final certificate of occupancy for the residential portion of the Project, this Agreement shall automatically terminate and be of no further force or effect. 4.2 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This Agreement shall remain effective and fully binding for the full term hereof, as such may be extended pursuant to Section 4.1, regardless of any sale, assignment, transfer, or conveyance of the Property or the Project or any part thereof or interest therein. 4.3 Reconveyance. Upon the expiration of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided, however, the execution and recordation of such instruments shall not be necessary or a prerequisite to evidence the expiration of this Agreement, or to evidence the release and discharge of this Agreement as a matter of title. 31 5. Binding Upon Successors; Covenants to Run with the Land. Owner hereby subjects its interest in the Property and the Project to the covenants and restrictions set forth in this Agreement. The Parties hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Parties, regardless of any sale, assignment, conveyance or transfer of the Property, the Project or any part thereof or interest therein. Any successor-in-interest to Owner, including without limitation any purchaser, transferee or lessee of the Property or the Project (other than the Eligible Households of the individual dwelling units or retail/commercial space within the Project) shall be subject to all of the duties and obligations imposed hereby for the full term of this Agreement. Each and every contract, deed, ground lease or other instrument affecting or conveying the Property or the Project or any part thereof, shall conclusively be held to have been executed, delivered and accepted subject to the covenants, restrictions, duties and obligations set forth herein, regardless of whether such covenants, restrictions, duties and obligations are set forth in such contract, deed, ground lease or other instrument. If any such contract, deed, ground lease or other instrument has been executed prior to the date hereof, Owner hereby covenants to obtain and deliver to City an instrument in recordable form signed by the parties to such contract, deed, ground lease or other instrument pursuant to which such parties acknowledge and accept this Agreement and agree to be bound hereby. Owner agrees for itself and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Property and the Project in favor of City. 6. Property Management; Repair and Maintenance; Marketing. 6.1 Management Responsibilities. Owner, or Owner’s designee, shall be responsible for all management functions with respect to the Property and the Project, including without limitation the selection of Eligible Households, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. City shall have no responsibility for management or maintenance of the Property or the Project. 6.2 Repair, Maintenance and Security. Throughout the term of this Agreement, Owner, or Owner’s designee, shall at its own expense, maintain the Property and the Project in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations. Without limiting the foregoing, Owner agrees to maintain the Project and the Property (including without limitation, the residential units, common areas, meeting rooms, landscaping, driveways, parking areas and walkways) in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Property or at the Project. Owner shall prevent and/or rectify any physical deterioration of the Property and the Project and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. Owner shall provide adequate security services for occupants of the Project. 32 6.2.1 City’s Right to Perform Maintenance. In the event that Owner breaches any of the covenants contained in Section 6.2, and such default continues for a period of thirty (30) days after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from City (with respect to landscaping, building improvements and general maintenance), then City, in addition to any other remedy it may have under this Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and the landscaped areas on the Property. 6.2.2 Costs. All costs expended by City in connection with the foregoing Section 6.2.1, shall be paid by Owner to City upon demand. All such sums remaining unpaid thirty (30) days following delivery of City’s invoice therefor shall bear interest at the lesser of 8% per annum or the highest rate permitted by applicable law. Notwithstanding anything to the contrary set forth in this Section, City agrees that it will provide Owner with not less than thirty (30) days’ written notice prior to undertaking any work for which Owner will incur a financial obligation. 6.3 Marketing and Management Plan. Within 180 days following the Effective Date of this Agreement, Owner shall submit for City review and approval, a plan for marketing and managing the Property ("Marketing and Management Plan" or “Plan”). The Marketing and Management Plan shall address in detail how Owner plans to market the Restricted Units to prospective Eligible Households in accordance with fair housing laws and this Agreement, Owner’s Eligible Household selection criteria, and how Owner plans to certify the eligibility of Eligible Households. The Plan shall also describe the management team and shall address how the Owner and the management entity plan to manage and maintain the Property and the Project. The Plan shall include the proposed management agreement and the form of rental agreement that Owner proposes to enter into with Project Eligible Households. Owner shall abide by the terms of the Marketing and Management Plan in marketing, managing, and maintaining the Property and the Project, and throughout the term of this Agreement. 6.4 Approval of Amendments. If City has not responded to any submission of the Management and Marketing Plan, the proposed management entity, or a proposed amendment or change to any of the foregoing within thirty (30) days following City’s receipt of such plan, proposal or amendment, the plan, proposal or amendment shall be deemed approved by City. 6.5 Fees, Taxes, and Other Levies. Owner shall be responsible for payment of all fees, assessments, taxes, charges, liens and levies applicable to the Property or the Project, including without limitation possessory interest taxes, if applicable, imposed by any public entity, and shall pay such charges prior to delinquency. However, Owner shall not be required to pay any such charge so long as (a) Owner is contesting such charge in good faith and by appropriate proceedings, (b) Owner maintains reserves adequate to pay any contested liabilities, and (c) on final determination of the proceeding or contest, Owner immediately pays or discharges any decision or judgment rendered against it, together with all costs, charges and interest. Nothing in this Section 6.6 is intended to prohibit Owner from applying for any exemption from property taxes and fees that may be available to the owners of low-income housing. 33 6.6 Insurance Coverage. Throughout the term of this Agreement Owner shall comply with the insurance requirements set forth in the DA, and shall, at Owner’s expense, maintain in full force and effect insurance coverage as specified in the DA. 6.7 Property Damage or Destruction. If any part of the Project is damaged or destroyed, Owner shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced as soon as reasonably practicable after the damage or loss occurs and shall be completed within one year thereafter or as soon as reasonably practicable, provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financially feasible. During such time that lenders or low-income housing tax credit investors providing financing for the Project impose requirements that differ from the requirements of this Section the requirements of such lenders and investors shall prevail. 7. Recordation; Subordination. This Agreement shall be recorded in the Official Records of San Mateo County. Owner hereby represents, warrants and covenants that with the exception of easements of record, absent the written consent of City, this Agreement shall not be subordinated in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, or other interest in the Property or the Project. If at the time this Agreement is recorded, any interest, lien, or encumbrance has been recorded against the Project in position superior to this Agreement, upon the request of City, Owner hereby covenants and agrees to promptly undertake all action necessary to clear such matter from title or to subordinate such interest to this Agreement consistent with the intent of and in accordance with this Section 7, and to provide such evidence thereof as City may reasonably request. Notwithstanding the foregoing, the City agrees that pursuant to Health and Safety Code Section 33334.14(a)(4), the City will not withhold consent to reasonable requests for subordination of this Agreement to deeds of trust provided for the benefit of lenders identified in the Financing Plan approved in connection with the DA, provided that the instruments effecting such subordination include reasonable protections to the City in the event of default consistent with the requirements of Health and Safety Code Section 33334.14(a)(4), including without limitation, extended notice and cure rights. 8. Transfer and Encumbrance. 8.1 Restrictions on Transfer and Encumbrance. Upon issuance of a final certificate of occupancy for the Project, or any portion thereof, Owner may freely transfer or assign all or any portion of its interests, rights or obligations in the Property, or under this Agreement, to any third party, and, as this Agreement “runs with the land” this Agreement shall be binding on Owner’s successors and assigns for the full term of this Agreement. 34 Prior to issuance of a final certificate of occupancy for the Project, or any portion thereof, Owner may transfer or assign all or any portion of its interest, right or obligations in the Property only as set forth in the DA, and with City’s prior written consent, which consent City shall not withhold provided that (1) the Project is and shall continue to be operated in compliance with this Agreement; (2) the transferee expressly assumes all obligations of Owner imposed by this Agreement; (3) the transferee executes all documents reasonably requested by the City with respect to the assumption of the Owner’s obligations under this Agreement, and upon City’s and/or Agency’s request, delivers to the City an opinion of its counsel to the effect that such document and this Agreement are valid, binding and enforceable obligations of such transferee; and (4) either (A) the transferee has at least three years’ experience in the ownership, operation and management of low-income multifamily rental housing projects of similar size to that of the Project, without any record of material violations of nondiscrimination provisions or other state or federal laws or regulations applicable to such projects, or (B) the transferee agrees to retain a property management firm with the experience and record described in sub-clause (A). Consent to any proposed Transfer may be given by the City’s City Manager unless the City Manager, in his or her discretion, refers the matter of approval to the City’s governing board. If a proposed Transfer has not been approved by City in writing within thirty (30) days following City’s receipt of written request by Owner, it shall be deemed rejected. Owner shall reimburse City for all City costs, including but not limited to reasonable attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City’s delivery of an invoice detailing such costs. 8.3 Encumbrances. Owner agrees to use best efforts to ensure that all deeds of trust or other security instruments and any applicable subordination agreement recorded against the Property, the Project or part thereof for the benefit of a lender (“Lender”) shall contain each of the following provisions: (i) Lender shall use its best efforts to provide to City a copy of any notice of default issued to Owner concurrently with provision of such notice to Owner; and, (ii) City shall 35 have the reasonable right, but not the obligation, to cure any default by Owner within the same period of time provided to Owner for such cure extended by an additional 90 days. Owner agrees to provide to City a copy of any notice of default Owner receives from any Lender within thirty (30) business days following Owner’s receipt thereof. 8.4 Mortgagee Protection. No violation of any provision contained herein shall defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon all or any portion of the Project or the Property, and the purchaser at any trustee’s sale or foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the acquisition of title by such purchaser. Such purchaser shall be bound by and subject to this Agreement from and after such trustee’s sale or foreclosure sale. Promptly upon determining that a violation of this Agreement has occurred, City shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Project or the Property that such violation has occurred. 9. Default and Remedies. 9.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"): (a) The occurrence of a Transfer in violation of Section 8 hereof; (b) Owner’s failure to maintain insurance on the Property and the Project as required hereunder, and the failure of Owner to cure such default within thirty (30) days of written notice from City; (c) Subject to Owner’s right to contest the following charges, Owner’s failure to pay taxes or assessments due on the Property or the Project or failure to pay any other charge that may result in a lien on the Property or the Project, and Owner’s failure to cure such default within sixty (60) days of delinquency; (d) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan; (e) Owner’s default in the performance of any material term, provision or covenant under this Agreement (other than an obligation enumerated in this Subsection 9.1), and unless such provision specifies a shorter cure period for such default, the continuation of such default for thirty (30) days in the event of a monetary default or sixty (60) days in the event of a non-monetary default following the date upon which City shall have given written notice of the default to Owner, or if the nature of any such non-monetary default is such that it cannot be cured within 60 days, Owner’s failure to commence to cure the default within thirty (60) days and thereafter prosecute the curing of such default with due diligence and in good faith. 9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, City may proceed with any of the following remedies: 36 A. Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking declaratory relief; B. For violations of obligations with respect to rents for Restricted Units, impose as liquidated damages a charge in an amount equal to the actual amount collected in excess of the Affordable Rent; C. Pursue any other remedy allowed at law or in equity. Each of the remedies provided herein is cumulative and not exclusive. The City may exercise from time to time any rights and remedies available to it under applicable law or in equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this Agreement. 10. Indemnity. To the fullest extent permitted by law, Owner shall indemnify, defend (with counsel approved by City) and hold City and its respective elected and appointed officers, officials, employees, agents, and representatives (collectively, the “Indemnitees”) harmless from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) arising directly or indirectly, in whole or in part, as a result of or in connection with Owner’s construction, management, or operation of the Property and the Project or any failure to perform any obligation as and when required by this Agreement. Owner’s indemnification obligations under this Section 10 shall not extend to Claims resulting solely from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 10 shall survive the expiration or earlier termination of this Agreement. It is further agreed that City do not and shall not waive any rights against Owner that they may have by reason of this indemnity and hold harmless agreement because of the acceptance by, or the deposit with City by Owner, of any of the insurance policies described in this Agreement or the DA. 11. Miscellaneous. 11.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties. 11.2 No Waiver. Any waiver by City of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by City to take action on any breach or default hereunder or to pursue any remedy allowed under this Agreement or applicable law. No failure or delay by City at any time to require strict performance by Owner of any provision of this Agreement or to exercise any election contained herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach of the same or any other provision hereof or a relinquishment for the future of such election. 11.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified 37 below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return receipt; or (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service. If to City, to: City of South San Francisco 400 Grand Avenue Attn: City Manager South San Francisco, CA 94080 Phone: (650) 877-8500 With a Copy to: City of South San Francisco 400 Grand Avenue Attn: ECD Director South San Francisco, CA 94080 Phone: (650) 829-6622 Email: alex.greenwood@ssf.net With a Copy to: Meyers Nave Attn: Sky Woodruff 555 12th Street, Suite 1500 Oakland, CA 94607 Tel (510) 808-2000 Email sky@meyersnave.com If to Developer: 311 9th Avenue San Mateo, CA 94401 Attn: Mr. Victor Lo Phone: 415-297-0709 Email: victor@sierrainvestments.com 11.4 Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement. 11.5 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. 38 11.6 Action by the City. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City Manager or by any person who shall have been designated by the City Manager, without further approval by the governing board of the City at the discretion of the City Manager. 11.7 Non-Liability of City Officials, Employees and Agents. No member, official, employee or agent of the City shall be personally liable to Owner or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Owner or its successor or for any obligation of City under this Agreement. 11.8 Headings; Construction. The headings of the sections and paragraphs of this Agreement are for convenience only and shall not be used to interpret this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. 11.9 Time is of the Essence. Time is of the essence in the performance of this Agreement. 11.10 Governing Law. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. 11.11 Attorneys' Fees and Costs. If any legal or administrative action is brought to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover all reasonable attorneys' fees and costs incurred in such action. 11.12 Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby. 11.13 Entire Agreement; Exhibits. This Agreement, together with the DA, and the other City Documents and Agency Documents contains the entire agreement of Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto. Exhibits A and B, attached hereto are incorporated herein by this reference. 11.14 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. SIGNATURES ON FOLLOWING PAGE. IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above. CITY THE CITY OF SOUTH SAN FRANCISCO, a municipal corporation - 2 - 219\3220028.3 By: __________________________________ Name:________________________________ Title:_________________________________ ATTEST: By: _________________________________ Krista Martinelli, City Clerk APPROVED AS TO FORM: By: _________________________________ Jason Rosenberg, City Attorney OWNER ROEM DEVELOPMENT CORPORATION, A CALIFORNIA CORPORATION By: ______________________________ Its: _______________________________ SIGNATURES MUST BE NOTARIZED. - 3 - 219\3220028.3 STATE OF CALIFORNIA ) ) COUNTY OF SAN MATEO ) On , 20__, before me, ______________________, (here insert name and title of the officer), personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature _______________________________ (Seal) STATE OF CALIFORNIA ) ) COUNTY OF SAN MATEO ) On , 20__, before me, ______________________, (here insert name and title of the officer), personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. - 4 - 219\3220028.3 I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature _______________________________ (Seal) - 5 - 219\3220028.3 Exhibit A 432 BADEN AVENUE LEGAL DESCRIPTION That real property situated in the State of California, County of San Mateo, City of South Su. Francisco, and described as Lot 8 in Block 117, as shown on that certain map entitled "SOUI'H SAN FRANCISCO SAN MATEO CO. CAL PLAT. NO. 1”, filed in the office of the County Recorder of San Mateo County, State of California, on March 1, 1892 in Book “B” of Maps at page(s) 6, and a copy entered in Book 2 of Maps at Page 52. AP. No.: 012-321-160 JPN 012 032 321 16 A - 6 - 219\3220028.3 Exhibit B Number of Units by Unit Size and Targeted Area Median Income (AMI) Levels 432 Baden Avenue Property Maximum Household Income 30-60% AMI Up to 60% AMI 60% - 80% AMI 80% -120% AMI Total Studio 1-Bedroom 2-Bedroom 3-Bedroom Total - 7 - 219\3220028.3 Exhibit E FORM OF COMPLETION GUARANTY THIS COMPLETION GUARANTY (the “Guaranty”) is made this ___day of _____________________, 2020 by and between THE CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“City”) and ____________________________________(“Guarantor”). RECITALS A. On _______, _______________________________, a _________ (“Developer”) acquired the real property commonly known as 432 Baden Avenue, South San Francisco, California (the “Property”) from the City pursuant to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated ____________, 2020 (the “PSA”). B. As set forth in the PSA, Developer is to construct a 36 residential unit project, three (3) of which are required to be below market rate units (“Project”). C. As a condition precedent to transferring the Property to Developer, the City requires Guarantor to execute and deliver this Guaranty Guarantying the lien-free completion of the Project pursuant to, and in accordance with, the PSA, and providing for the performance of other covenants contained herein. GUARANTY AND AGREEMENT NOW, THEREFORE, in consideration of the foregoing and the agreements set forth below, Guarantor hereby agrees as follows: 1. Guaranty. Subject to the terms and conditions set forth herein, Guarantor unconditionally and irrevocably guarantees the full and timely performance of Developer’s obligations under the DA, to construct and complete the Project in accordance with the DA, free and clear of all mechanics liens. 2. Remedies. If Developer fails to timely perform an of its obligations under the PSA with respect to the construction and completion of the Project, after expiration of any applicable notice and cure periods, the City, prior to exercising any of its remedies hereunder, shall demand (by written notice) that Guarantor perform the same on Developer’s behalf. If, within thirty (30) days after receiving such demand, Guarantor advises the City in writing that Guarantor will commence and diligently proceed to cure all defaults of Developer under the DA, which by their nature are capable of being cured by Guarantor, then the PSA shall remain in full force and effect, and the City shall perform for the benefit of the Guarantor any unperformed obligations of the City under the DA. If Guarantor fails to respond to City’s written notice, or fails to perform as herein above provided, the City shall have the following remedies in addition to other remedies expressly provided herein: - 8 - 219\3220028.3 (a) From time to time and without first being required to exhaust any or all security held by the City, if any, to require performance by the Guarantor of any obligation to be performed on the part of the Guarantor pursuant to the terms hereof, by action at law or in equity or both. Nothing herein shall be construed to prohibit the City from pursuing any remedies under any other agreement, against any person other than the Guarantor. (b) If Guarantor does not timely perform its obligations under this Guaranty, the City, at City’s option, shall have the right to perform any obligation required to be performed by Guarantor under this Guaranty, which City reasonably deems necessary, and expend such sums as City reasonably deems proper in order so to complete such obligation. The amount of any and all reasonable expenditures made by City shall be immediately due and payable by Guarantor to City, notwithstanding City’s pursuit of any other rights or remedies. 3. Termination. This Guaranty shall terminate and be of no further force or effect upon the occurrence of either (i) upon issuance of a final certificate of occupancy for the Project, or (ii) termination of the PSA by either City or Developer in accordance with its own terms. 4. Interest. Any sums required to be paid by the Guarantor to the City pursuant to the terms hereof that are not paid within thirty (30) days of the date due, shall bear interest at the prime rate announced by the Bank of America plus three percent (3%), from the date said sums shall have become due until the date said sums are paid. 5. Consideration. Guarantor acknowledges that the undertakings given hereunder are given in consideration of the City's conveyance of the Property to Developer pursuant to the PSA and City’s performance under the DA, and that the City would not convey the Property were it not for Guarantor’s execution and delivery of this Guaranty. 6. No Waiver, Extension or Modification. No failure on the part of the City to pursue any remedy hereunder shall constitute a waiver on its part of the right to pursue said remedy on the basis of the same or a subsequent breach. No extension, modification, amendment or renewal of the PSA shall serve to waive the provisions hereof or discharge the Guarantor from any obligation herein contained, in whole or in part, except to the extent expressly approved by the City by written instrument signed by the City, specifying the nature and the extent of the intended waiver and discharge of the Guarantor. 7. Covenant of Guarantor. Guarantor shall promptly advise the City in writing of any material adverse change in the business or financial condition of Guarantor. 8. Guaranty Independent; Waiver of Exoneration. (a) Guarantor agrees that the obligations hereunder are independent of and in addition to the undertakings of the Developer pursuant to the DA, any other Guarantees given in connection with the DA, and other obligations of the Guarantor to the City. - 9 - 219\3220028.3 (b) Guarantor agrees that the validity of this Guaranty shall continue and the obligations of Guarantor hereunder shall in no way be terminated, affected, diminished or impaired by reason of any bankruptcy, insolvency, reorganization, arrangement, assignment for the benefit of creditors, receivership or trusteeship affecting the Developer or its partners, parents, principals, or members whether or not notice is given to the Guarantor, or by any other circumstances or condition that may grant or result in a discharge, limitation or reduction of liability of the Developer or its partners, parents, principals, members or of a surety or a guarantor. (c) Guarantor waives all rights and remedies accorded by applicable law to guarantors and agrees not to assert or take advantage of any such rights or remedies including but not limited to any right to require the City to, after expiration of applicable notice and cure periods to Developer, (1) proceed against the Developer, any partner or member of the Developer or any other person, (2) proceed against or exhaust any security held by the City, or (3) pursue any remedy in the power of the City whatsoever. If Guarantor is liable pursuant to this Guaranty, Guarantor waives any defense arising by reason of any disability or other defense of the Developer or any partner or member of the Developer, or any of their parents, principals, or affiliated entities or by reason of the cessation from any cause whatsoever of the liability of the Developer or any member or partner of the Developer, or any of their parents, principals, or affiliated entities other than the full discharge and performance of all of Developer’s obligations under the DA. Guarantor, except as expressly set forth herein, waives any defense it may acquire by reason of the City's election of any remedy against it or the Developer, or both, even though the Guarantors’ right of subrogation may be impaired thereby or extinguished under the antideficiency statutes of the State of California. Without limiting the generality of the foregoing, Guarantor waives (a) any defense that may arise by reason of the lack of authority or of any other person or persons or the failure of City to file or enforce a claim against the estate (in administration, bankruptcy, or any other proceeding) of any other person or persons; (b) demand, protest and notice of any kind including but not limited to notice of any kind (except for the notice required in Sections 2 and 10 hereof or under the DA) including but not limited to notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any action or nonaction on the part of Developer, City, any endorser or creditor of Developer or Guarantor or on the part of any other person whomsoever under this or any other instrument in connection with any obligation or evidence of indebtedness held by City as collateral or in connection with any obligations the performance of which are hereby Guaranty; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (d) any duty on the part of City to disclose to Guarantor any facts City may now or hereafter know about Developer, regardless of whether City has reason to believe that any such facts materially increase the risk beyond that which Guarantor intended to assume or has reason to believe that such facts are unknown to Guarantor; (e) any defense arising because of City's election, in any proceeding instituted under the federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code; and (f) any defense based on any borrowing or grant of a security interest under Section 364 of - 10 - 219\3220028.3 the Federal Bankruptcy Code. Without limiting the generality of the foregoing or any other provision hereof, Guarantor hereby expressly waives any and all benefits which might otherwise be available to Guarantor under California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899, and 3433 and California Code of Civil Procedure Sections 580(a), 580(b), 580(d), and 726. (e) Until termination of this Guaranty (as set forth in Section 3), Guarantor shall have no right of subrogation, and waives any right to enforce any remedy that the City now has or may hereafter have against the Developer or any member of Developer, or any other person, and waives the benefit of, and any right to participate in, any security now or hereafter held by City from the Developer. 9. Continued Existence; No Transfer or Assignment. (a) Guarantor does hereby further agree that as long as this Guaranty is in effect, it will not dispose of all or substantially all of its assets without the express written approval of the City, which shall not be unreasonably withheld. (b) The obligations of Guarantor under this Guaranty may not be assigned or transferred without, in each case, the express written approval of the City, which approval shall be within the sole and absolute discretion of the City. 10. Notices. City shall provide Guarantor with all written notices delivered to Developer pursuant to the PSA at the same time such notice is delivered to Developer. Guarantor shall not be liable under this Guaranty unless and until it has received such notice. The Guarantor shall have the right to perform any and all of Developer’s obligations under the DA. 11. Miscellaneous. (a) This Guaranty shall inure to the benefit of City and its successors and assigns and shall bind the heirs, executors, administrators, personal representatives, successors and assigns of Guarantor. (b) This Guaranty shall be governed by and shall be construed in accordance with the laws of the State of California. (c) Time is of the essence hereof. (d) If any term, provision, covenant or condition hereof or any application thereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, provisions, covenants and conditions hereof and all applications thereof not held invalid, void or unenforceable shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby. (e) Guarantor assumes the responsibility for keeping informed of (1) the financial condition of Developer, (2) any change in the management or control of Developer, - 11 - 219\3220028.3 and (3) all other circumstances bearing upon the risk of nonperformance by Developer of its obligations under the DA. (f) This Guaranty shall be construed and enforced in accordance with the laws of the State of California. Any action to enforce or interpret this Agreement shall be filed and heard in the Superior Court of San Mateo County, California. (g) Any notice or communication required hereunder between City or Guarantor must be in writing, and may be given either personally, by e-mail (with original forwarded by regular U.S. Mail), by registered or certified mail (return receipt requested), or by Federal Express or other similar courier promising overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the party to whom it is addressed. If given by email transmission, a notice or communication shall be deemed to have been given and received upon actual physical receipt of the entire document by the receiving party. Notices transmitted after 5:00 p.m. on a normal business day or on a Saturday, Sunday, or holiday shall be deemed to have been given and received on the next normal business day. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of: (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any party hereto may at any time, by giving ten (10) days written notice to the other party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the parties at their addresses set forth below: If to City, to: City of South San Francisco 400 Grand Avenue Attn: City Manager South San Francisco, CA 94080 Phone: (650) 877-8500 Fax: (650) 829-6609 With a Copy to: City of South San Francisco 400 Grand Avenue Attn: ECD Director South San Francisco, CA 94080 Phone: (650) 829-6622 alex.greenwood@ssf.net - 12 - 219\3220028.3 With a Copy to: Meyers Nave Attn: Sky Woodruff 555 12th Street, Suite 1500 Oakland, CA 94607 Tel (510) 808-2000 Email sky@meyersnave.com If to Guarantor: With Copies to: (h) In any legal action or other proceeding brought by either party to enforce or interpret a provision of this Guaranty, the prevailing party is entitled to reasonable attorneys’ fees and any other costs incurred in that proceeding in addition to any other relief to which it is entitled. IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of the day and year first above written. GUARANTOR By:_____________________________ Name: __________________________ Its______________________________ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:19-1058 Agenda Date:1/22/2020 Version:1 Item #:6b. Resolution making findings and determining that the disposition of the City of South San Francisco-owned property located at 432 Baden Avenue in the Residential Core District conforms with the adopted South San Francisco General Plan in accordance with provisions of State Planning Law (Govt. Code Section 65402). WHEREAS,the City of South San Francisco (“City”)is the owner of certain real property located in the City of South San Francisco,California,known as County Assessor’s Parcel 012-321-160 (“432 Baden Avenue”); and, WHEREAS,432 Baden Avenue is a former Redevelopment Agency property,and thus is subject to the State- approved Long Range Property Management Plan (“LRPMP”) which requires the site to be sold; and, WHEREAS,432 Baden Avenue is currently used as a parking lot and generates roughly $8,000 in revenue for the Parking Place District; and, WHEREAS,Baden Development,LLC (“Developer”)purchased 428 Baden Avenue for development into a small multi-family housing project; and, WHEREAS,during the entitlement process for 428 Baden Avenue,the developer approached the City with a proposal to purchase the adjacent parcel at 432 Baden in order to assemble land for a larger housing project; and, WHEREAS,assembling 428 and 432 Baden,would allow Developer to pursue a project with better design and more housing units, including three Below Market Rate (“BMR”) units at the very low income level; and, WHEREAS,Developer submitted a Planning application that proposes entitling the assembled sites for an infill housing development comprised of 36 residential units; and, WHEREAS, the planning application was deemed complete on October 29, 2019; and, WHEREAS,in closed session on October 9,2019 the South San Francisco City Council (“City Council”) accepted Developer’s offer and directed staff to negotiate a Purchase and Sale Agreement (“PSA”); and, WHEREAS,City and Developer entered into an Exclusive Negotiating Rights Agreement (“ENRA”)in order to negotiate the PSA; and, WHEREAS,prior to disposition of real property owned by the City,the Planning Commission as the planning agency for the City is required to find such disposition is in conformity with the adopted general plan in City of South San Francisco Printed on 1/23/2020Page 1 of 2 powered by Legistar™ File #:19-1058 Agenda Date:1/22/2020 Version:1 Item #:6b. agency for the City is required to find such disposition is in conformity with the adopted general plan in accordance with Government Code section 65402; and, WHEREAS,on January 16,2020 the Planning Commission adopted a resolution making findings and determining that the disposition of 432 Baden Avenue is in conformance with the South San Francisco adopted General Plan; and, WHEREAS,the General Plan Land Use Designation for the 432 Baden property is Downtown Residential Core,which includes specific policies related to development within the Downtown in an effort to “Promote infill development, intensification, and reuse of currently underutilized sites”; and, WHEREAS,the proposed sale of the property and the entitlements that will ensue for this project will provide for higher density residential than what is currently allowed but will still be compatible in scale with the remaining Downtown residential districts.The proposed project will provide a mix of housing opportunities and continue to conform to the General Plan Land Use Policies. NOW THEREFORE,based on the entirety of the record before it,the City Council of the City of South San Francisco hereby finds as follows: A.General Findings 1.The foregoing recitals are true and correct and made a part of this resolution. 2.The documents and other material constituting the record for these proceedings are located at the Planning Division for the City of South San Francisco,315 Maple Avenue,South San Francisco,CA 94080, and in the custody of the Chief Planner, Sailesh Mehra. 3.The 428-432 Baden project is consistent with the General Plan which promotes infill development and the intensification of an underutilized site for higher density residential. NOW,THEREFORE,BE IT FURTHER RESOLVED that in accordance with California Government Code section 65402,the City Council hereby finds that the location,purpose and extent of the proposed disposition of 432 Baden Avenue (APN 012-321-160), is in conformity with the City’s adopted General Plan. ***** City of South San Francisco Printed on 1/23/2020Page 2 of 2 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:19-1065 Agenda Date:1/22/2020 Version:1 Item #:7. Presentation of an education and outreach campaign to ensure a complete,fair,and accurate count of the South San Francisco population in the 2020 Census. (Sheri Boles, Community Programs Manager) RECOMMENDATION Staff recommends that the City Council receive an update on the City of South San Francisco’s efforts to achieve a complete, fair, and accurate count of the South San Francisco population in the 2020 Census. BACKGROUND/DISCUSSION The U.S.Census Bureau is constitutionally mandated to count every person residing in the United States every 10 years.The decennial census is the cornerstone of our democracy,ensuring equitable political representation and fair allocation of resources at all levels of government.Ensuring an accurate count of all county residents in the Census 2020 is essential. Unfortunately,there are several new and significant challenges facing the Census 2020,including the following: ·The 2020 Census Count has been underfunded.The U.S.Census Bureau has less funding per household than previous years. ·For the first time,the census will be primarily online.Less than 20 percent of residents will receive paper surveys, based on existing broadband access. ·There will be less Census staff.The Bureau will have fewer local offices,less field staff,and limited follow-up. ·The potential citizenship question increases anxiety in immigrants.Confidentiality of the surveys may be questioned, reducing participation. ·There is fear and lack of trust in federal government.Concerns about data security and how information might be used will deter participation. ·There are challenges hiring qualified staff for Census field operations.Census enumerators may lack language and cultural skills for follow up. In addition to the previously mentioned challenges,San Mateo County has been identified as Hard to Count/Least Likely to Respond with 14 out of 20 Cities that include metrics in the California-Focused Hard-to- Count Variables (See Attachment).Furthermore,five portions of the City of South San Francisco,amounting to nearly 25,000 individuals or more than 26 percent of the total population of South San Francisco,have higher indexes of being Hard To Count/Least Likely to Respond,which makes education and outreach even more challenging.To overcome these new and significant challenges,the City of South San Francisco proposes to provide supplementary outreach and education efforts beyond those provided by the U.S.Census Bureau, State of California,and County of San Mateo in order to achieve a fair and accurate count of the City’s City of South San Francisco Printed on 1/23/2020Page 1 of 8 powered by Legistar™ File #:19-1065 Agenda Date:1/22/2020 Version:1 Item #:7. population. U.S. CENSUS BUREAU’S ROLE The U.S.Census Bureau (Census Bureau)serves as the administrator in the nationwide questionnaire, providing support to each state and all counties within each state,by helping to recruit and hire Census Bureau workers and providing webinar trainings and workshops of data collection to respective states and counties. 2020 TIMELINE DATE ACTIVITIES March 12-20 Invitations mailed/households to begin receiving official Census Bureau mail with detailed information on how to respond online, by phone, or by email March 16-24 Reminder letters mailed March 26-April 3 Reminder postcards mailed March 30-April 1 Census Bureau to count people who are experiencing homelessness over three days. Includes the counting of people in shelters, soup kitchens, mobile food vans, on the streets, and non-sheltered/outdoor locations April 1 National Census Day (by this date, every home to receive an invitation to participate). Individuals need to tell the Census Bureau where they live, effective April 1, 2020 April Census Bureau to begin visiting college students who live on campus, people living in senior centers, and others who live among large groups of people April 8-16 Hard copy census questionnaires mailed April 20-27 Final postcards mailed May 12 Non-response/follow-up begins by Census Bureau May-July Census Bureau to begin visiting homes that have not responded July 31 Deadline to complete the Census 2020 City of South San Francisco Printed on 1/23/2020Page 2 of 8 powered by Legistar™ File #:19-1065 Agenda Date:1/22/2020 Version:1 Item #:7. December Census Bureau to deliver apportionment counts to the U.S. President and Congress as required by law March 31, 2021 Census Bureau to send restricting counts to states that are used to redraw legislative districts based on population changes STATE OF CALIFORNIA’S ROLE State of California (State)leaders have invested $187.2 million to the California Complete Count -Census 2020 (California Census Office) outreach and communication efforts. The California Census Office has developed a statewide community engagement campaign to reach the Hard to Count/Least Likely To Respond population that supports the U.S. Census Bureau’s efforts. The State’s funding is allocated for outreach in communities,including distributions in the form of contracts to county and local government ($26.68 million),Tribal Government (68 Tribal Funding Agreements of $316,500),Administrative-Based Organizations ($32,950,000);and Community-Based Organization ($22.95 million;State to augment this amount with an additional $10 million to bolster on-the-ground Non-Response Follow Up (NRFU)work within communities with low response rates),Education,and Outreach and Public Relations Campaign ($46 million).Media funding supplements this outreach by using local ethnic media to target specific communities and cover any gaps identified in the Census Bureau’s media campaign in California. The State funded counties that opted-in for funding,by requiring each county to convene a Complete County Committee and write an approved Strategic Plan. COUNTY OF SAN MATEO’S ROLE In December 2018 the County of San Mateo (County) formed a Census 2020 Steering Committee (Committee) convened by the County Manager’s Office of Community Affairs to provide guidance, coordination, and support for census efforts across the county. The Committee met five times in 2019 to develop consistent messaging and materials, strategized to develop activities to educate, motivate, and activate residents, and discussed and addressed ways to overcome barriers to survey completion. They will now meet monthly until the end of the 2020 Census enumeration in July. The outcome of the collaborative meetings resulted in the Census 2020 in San Mateo County “Everyone Counts!” webpage. The Committee has been working in collaboration with the U.S.Census Bureau and California Census Office to support countywide efforts,especially those areas that are deemed Hard To Count/Least Likely to Respond, by assisting in the Federal recruiting efforts for San Mateo County.The US Census Bureau has reported that they will be hiring approximately 800 individuals to serve as enumerators during the Non-Response Follow-Up period.These folks ideally will be hired to work in their local communities,and will go to residences that have not submitted their surveys to offer assistance or answer any questions those households may have.The Census Bureau states that in order to hire 800 individuals,they would need a pipeline of approximately 5,000 candidates to apply. At this time, they are at 50% of this goal. The County has contracted with Thrive,the Alliance of Nonprofits,to coordinate the organizations funded by San Mateo County.As a part of this contract,they have developed a project management tool called Cureo. Within this tool is a calendar function,where organizations can post their outreach activities or any required City of South San Francisco Printed on 1/23/2020Page 3 of 8 powered by Legistar™ File #:19-1065 Agenda Date:1/22/2020 Version:1 Item #:7. Within this tool is a calendar function,where organizations can post their outreach activities or any required staffing assistance.The City of South San Francisco will have access to this tool to ensure that there is no duplication of efforts. SOUTH SAN FRANCISCO PUBLIC LIBRARY’S ROLE As South San Francisco has been identified as an area that is Hard to Count/Least Likely to Respond, City Library staff applied for and was awarded two grants to support the Census 2020 outreach and education efforts; they include and involve the following components: ·Silicon Valley Community Foundation - $10,000 Grant (awarded) ·United Way of the Bay Area #1 - $25,000 Grant (awarded) ·County of San Mateo - $25,000 Contract (pending) OBJECTIVES: ·Hiring of nine Community Ambassadors and one Census Assistant ·Reaching 3,000 individuals through Learning Wheels, Community Learning Center, and Library programming ·Hosting of 12 Community Events at the Community Learning Center, Main Library, and Grand Avenue Library to promote Census ·Assisting 320 individuals with filling out and completing the Census questionnaire at the Community Learning Center, Main Library, and Grand Avenue Library ·Hosting of two educational presentations with the League of Women Voters ·Providing Census presentations at 12 partner agencies/organizations ·Reaching 14,971 individuals through library newsletters and social media channels ·Hosting one family event for special-needs population ·Training of 18 staff at the Community Learning Center and 44 City staff at Main and Grand Avenue libraries TIMELINE DATE ACTIVITIES November 2019-February 2020 Recruit and train nine Community Ambassadors October 2019-May 2020 Host 12 presentations (Community Learning Center - eight, Grand Avenue Library - two, Main Library - two) City of South San Francisco Printed on 1/23/2020Page 4 of 8 powered by Legistar™ File #:19-1065 Agenda Date:1/22/2020 Version:1 Item #:7. January-June Census 2020 messaging via Library’s social media and webpage Distribution of Census 2020 collateral Articles in Library newsletters February-June Outreach via Learning Wheels (goal: reaching 3,000 individuals) Community outreach to Hard to Count/Least Likely To Respond Neighborhoods 12 presentations at Partner Agencies/Organizations February-April Census 2020 outreach and assistance during tax season/VITA March-April Co-host two presentations at Community Learning Center with League of Women Voters March-July Census 2020 Assistance Centers, assisting individuals (goal: 320) fill out and complete questionnaires at Main Library, Community Learning Center, and Grand Avenue Library The nine Community Ambassadors hired through these grants work part-time and are paid stipends of $2,300 for their work during the course of the census count campaign.These city census workers are envisioned to work primarily at night and on weekends,and in hard to reach neighborhoods where community connections and multi-language capability is essential. CITY OF SOUTH SAN FRANCISCO’S CENSUS 2020 OUTREACH AND EDUCATION CAMPAIGN The City is launching its Census 2020 campaign to augment existing efforts by the federal,state,and county governments.Over one quarter of South San Francisco’s population is considered Hard To Count/Least Likely To Respond,necessitating additional efforts by the City to ensure everyone who should be counted,is counted. It is vitally important that every resident in South San Francisco is counted.In addition to the count driving the size and shape of political voting districts,it is estimated that for every additional person counted,a city will receive approximately $1,000 per year in additional federal,state or county funding.For every individual not counted in South San Francisco,the City can lose up to $10,000 per person since the Census takes place only every 10 years. City Staff recommends a robust local outreach program from March through July,2020,to include banners, mailers,digital billboard announcements,social media and,most impactful,hiring of a local team to outreach face-to-face with residents to ensure they are counted.The City Census Team would include a Team Leader and six field workers operating full time during this census count period,working out of space in City Hall.The workers,although working full-time,are considered temporary and not eligible for CALPERS retirement; however,since they are hired for a period greater than 90 days,they are eligible for medical benefits during the course of their employment. Executive direction for the team will come from the City Manager and Sheri Boles,Community Programs Manager.The Team Leader has tentatively been identified as Kathy Blandón Escobar,currently working full City of South San Francisco Printed on 1/23/2020Page 5 of 8 powered by Legistar™ File #:19-1065 Agenda Date:1/22/2020 Version:1 Item #:7. Manager.The Team Leader has tentatively been identified as Kathy Blandón Escobar,currently working full time in the Library Community Learning Center,who would be reassigned to lead this team until the census is complete.The remaining team members would be hired over the course of the next eight weeks,in time to “hit the streets”by the time the census starts on April 1,2020.The work of the City Census Team will be supplemented by the work of the part-time Community Ambassadors hired through the grants, noted above. The proposed timeline for the City’s efforts during the census period is as follows: TIMELINE CENSUS2020 DATE ACTIVITY 2020 January 22 Staff Report at City Council Meeting January 23 Postings on City social media (Facebook, Twitter, and NextDoor) with Census 2020 messaging Implementation of “In South San Francisco,Everyone Counts!”Census 2020 logo added to All City Email Users signature blocks with pitch for everyone to pledge their support Begin transition of HR Conference Room to Census 2020 Work Room January 23-July Implementation of weekly Census 2020 key messaging to All City Email Users (emphasis for public-facing employees) January 24 Census 2020 Team Leader start date at City Manager’s Office January 24-February Recruiting, hiring, and training of Census 2020 Team January 27 Launch of “In South San Francisco, Everyone Counts!” webpage February Working with Library to include “In South San Francisco,Everyone Counts!”Census 2020 logo on all computer and iPad home screens Direct Mailers Article in Citywide Newsletter Order Census 2020 SWAG Order Census 2020 Banners February-July Regular updates to City Council on Census 2020 outreach and education campaign March-July 31 Census 2020 banners displayed Citywide City of South San Francisco Printed on 1/23/2020Page 6 of 8 powered by Legistar™ File #:19-1065 Agenda Date:1/22/2020 Version:1 Item #:7. March 30-April 1 Census 2020 Team working with SSFPD Downtown Bicycle Patrol to assist homeless individuals in shelters, mobile homes, cars, and urban encampments complete questionnaires March-July Census 2020 Team canvassing Hard To Count/Least Likely To Respond Neighborhoods The Census Team Leader will develop week-by-week activities for the local city team,such as door to door contact,booths at city events (i.e.Farmer’s Market,etc.),outreach at local gathering spots such as Pacific Market, Starbucks and local ball games, school outreach events, etc. The overall strategy for the census count in South San Francisco is one of “layering.”The first layer is the effort made by the federal government,followed by the layer provided at the County level,followed by the part -time,grant-funded local layer provided by the Community Ambassadors,and finally a full-time local team, which makes sure no individual living in South San Francisco on April 1, 2020, is left behind in the count. Anticipated Cost The anticipated cost of the City’s census outreach is $200,000, broken down as follows: 1.Team Leader.Kathy Blandón Escobar reassigned from the Library.Estimated cost for five months at Management Analyst I salary,Step 2,of $42.68 per hour,working 40 hours per week for five months is $37,217.There is likely some increased labor cost to backfill a portion of Kathy Blandón Escobar’s position at the Library. The estimated cost for backfilling is $25,000. 2.Team Members.Estimated cost for six community workers at $35 per hour,working up to 40 hours per week for five months is $130,800. 3.Supplies.Each team member will be outfitted with a City uniform,mobile phone and an I-Pad used to sign up residents on-line and in real time.Combined with the cost of preparing the Census 2020 Work Room,ordering equipment and office supplies,City logo items,incentives for individuals to pledge their support and complete the census,and miscellaneous supplies,the total supplies cost is estimated at $4,200. 4.Promotions Cost. Two rounds of direct Mailers, banners, flyers, etc., are estimated to cost $40,000. FISCAL IMPACT The total budget for the City led efforts is $200,000,as detailed above.Sources of identified City funding include $100,000 from the Fiscal Year 2018-2019 General Fund surplus and $100,000 from the Fiscal Year 2020-2021 General Fund budget.Staff will submit a separate Council action request to fund the City’s census effort, pending direction from City Council. RELATIONSHIP TO STRATEGIC PLAN The City’s Census 2020 outreach and education effort aligns with the City’s strategic priority of maintaining a Quality of Life for residents,businesses,and visitors by building and maintaining a Sustainable City through providing multi-modal transportation options,offering a full range of housing and learning options,and delivering active recreation and learning programs with ample parks and green spaces. CONCLUSION Staff seeks City Council’s direction on proposed efforts to ensure a full census count in 2020 of all residents City of South San Francisco Printed on 1/23/2020Page 7 of 8 powered by Legistar™ File #:19-1065 Agenda Date:1/22/2020 Version:1 Item #:7. Staff seeks City Council’s direction on proposed efforts to ensure a full census count in 2020 of all residents South San Francisco. Attachment: San Mateo County Hard To Count Census Block Groups City of South San Francisco Printed on 1/23/2020Page 8 of 8 powered by Legistar™ Text PORTOLAVALLEY LA HONDA LOMA MAR PESCADERO District 5 District 1 District 2 District 4 District 3 UNINCORPORATED REDWOOD CITY PACIFICA SANMATEO DALYCITY MENLOPARK BELMONT SANBRUNO SANCARLOS HILLSBOROUGH SOUTHSAN FRANCISCO ATHERTON FOSTERCITY MILLBRAE BURLINGAME BRISBANE COLMA WOODSIDE HALFMOONBAY SAN BRUNOMTN PARK EASTPALO ALTO BROADMOOR REDWOODCITY SFO PacificOcean SanFranciscoBay S A N M A T E O C O U N T YH A R D T O C O U N T / L E A S T L I K E L Y T O R E S P O N D C E N S U S B L O C K G R O U P S 0 1 2 3 40.5 1 Mile Z Disclaimer This product is for informational purposes and may not havebeen prepared for, or be suitable for legal, engineering, orsurveying purposes. Users of this information should reviewor consult theprimary data and information sources toascertain the usability of the information. 1. Percent of households without broadband subscriptions2. Percent of households that are non-family3. Percent of occupied housing units that are renter-occupied4. Percent of total housing units that are vacant5. Percent crowded6. Percent of population that is foreign-born7. Percent of adults (25+) who are not high school graduates8. Percent of population with income below 150% of poverty level9. Percent of households receiving public assistance10. Percent of persons (ages16 or older) unemployed11. Limited English speaking12. Moved into county within last year13. Population 0-514. Three or more units in a multi-unit structure California-Focused Hard-to-Count Metric Variables Z:\CountyofSanMateo\Projects\Census_2020\GIS\ArcMap\SMC_HardToCount_Overal_06242019l.mxd 6/24/2019 Rev. 6/2019 Many California residents live in areas that, based ondemographic, socioeconomic and housing characteristics, maybe hard to count in 2020. The California Department of FinanceDemographic Research Unit has created a California-focusedhard-to-count metric. This map shows the 462 census block groupsin San Mateo County shaded by their California Hard-to-CountIndex. Hard-to-Count Index The index incorporates 14 variables re-coded from 0-11, with thesum of the values representing a block group's index. Census blockgroups with higher CA-HTC indexes are likely to be places that willpose significant challenges to enumerate in 2020, while blockgroups with lower indexes should be easier to count. The California Hard-to-Count (CA-HTC) index is based on thesemultiple demographic, housing and socioeconomic variablescorrelated with an area being difficult to enumerate. See tableabove for the specific metrics included in the model. This information was presented to the San Mateo County CensusSteering Committee and Complete Count Committees for anopportunity to augment this data with their direct experience andunderstanding of the communities they serve. These areas wereadded to the map to provide a comprehensive HTC/LLTR map. Source: SwORD, 2018; ACS 2012-2017 Hard to Count / Least Likelyto Respond Map Description LEGEND California Hard to Count /Least Likely to RespondIndex Block Group Level* >49 - 102 >33 - 49 >20 - 33 >11 - 20 0 - 11 SMC-Identified HTC /LLTR Areas Supervisor Districts City Boundary Legend *Statewide, the median block group CA-HTC Index is 37 # City of South San Francisco In South San Francisco, Everyone Counts! Census 2020 Outreach and Education Campaign Presentation City Council Meeting Wednesday, January 22, 2020 Government Code Section 54957.5 SB 343 Agenda: 01/22/2020 Item # 7 •Census 2020 is underfunded •For the first time, the census is primarily online •Fewer Census Bureau staff •Previously considered citizenship question increases anxiety in immigrants •Fear and lack of trust in federal government •Census Bureau facing challenges hiring qualified staff for Census field operations Overall Challenges •San Mateo County has been identified as Hard to Count/Least Likely to Respond with 14 out of 20 Cities that include metrics in the California- Focused Hard-to-Count Variables •California-Focused Hard-to-Count Variables include, for example, households that are •Foreign-born •Renter-occupied •Non-family •Non-high school graduates, •Income below 150% of poverty level •Receiving public assistance income •Minimal to no broadband access (less than 20%) Challenges Facing San Mateo County Challenges Facing South San Francisco Census 2020 Timeline Multiple Layers of Outreach •Administrator of questionnaire •Supports each state by hiring Census Bureau workers •Provides webinar training and workshops of data collection •Invested $187.2 million to the California Census Office for outreach and communication efforts •Formed a Census 2020 Steering Committee •Contracted with Thrive, the Alliance for Nonprofits, to coordinate organizations funded by SMC •City’s Library Department awarded grants to hire ambassadors •Additional outreach and education •Internal publicity push •External publicity push •Administrator of the census questionnaire •Hiring of Census Bureau workers •NOTE: At present, only 50% of their targeted goal to hire pool of applicants to select from is reached; from this pool, they are hiring 800 to represent the entire San Mateo County Federal Outreach •California Census Office developed a statewide community engagement campaign to reach Hard to Count/Least Likely to Respond population •Invested $187.2 million to the California Complete Count –Census 2020 (California Census Office) outreach and communication efforts •The State funded counties that opted-in for funding by requiring each county to convene a Complete Count Committee and write an approved Strategic Plan State of California Outreach •In December 2018 the County of San Mateo formed a Census 2020 Steering Committee •The Committee working in collaboration with the Census Bureau and California Census Office to support countywide efforts •The County contracted with Thrive, the Alliance for Nonprofits, to coordinate outreach efforts San Mateo County Outreach •Important that every resident in South San Francisco is counted •Drives the size and shape of political voting districts •For every individual counted, South San Francisco will receive up to $1,000 per year in additional funding •Conversely, for every individual not counted, South San Francisco can lose up to $10,000 per person as the census takes place every 10 years South San Francisco Outreach •The City’s Library Department was awarded two grants to support Census 2020 outreach and education •Hiring nine part-time Community Ambassadors and one Census Assistant •Targeted to work evenings during the weekdays and on weekends to reach Hard To Count/Least Likely to Respond populations South San Francisco Outreach •External and Internal outreach and educational campaign: March through July, 2020 •City’s Census 2020 Team •Canvassing HTV/LLTR areas before, during, and after Census Bureau’s mailing of questionnaires South San Francisco Outreach •Internal Publicity Push •Implementation of weekly Census 2020 key messaging to All City Email Users (emphasis on public-facing employees) •All City Email Users’ signature blocks will automatically display the “In South San Francisco, Everyone Counts/Census 2020 logo”, which is a hyperlink to the County’s Census 2020 webpage South San Francisco Outreach •External Publicity Push •Development of “In South San Francisco, Everyone Counts!” webpage on City website •Regular postings on City’s social media to encourage everyone to “Take the Census 2020 Pledge and be counted” South San Francisco Outreach •External Publicity Push (cont.) •Working with the Library to include “In South San Francisco, Everyone Counts” logo as homepage on all computers and iPads •Two rounds of direct mailers in the form of postcards •Census 2020 article in Citywide newsletter •“In South San Francisco, Everyone Counts!” banners displayed Citywide South San Francisco Outreach •External Publicity Push (cont.) •Recruiting/Hiring/Training of City’s Census 2020 Team (Team Leader, Six Team Members, working up to 30 hours a week) •Heavy canvassing of five areas of South San Francisco identified as Hard To Count/Least Likely to Respond •Going door-to-door •Working in close partnership with the Library’s Community Ambassadors to support presence at community events, presentations, and being available at Questionnaire Assistance Kiosks (pop-ups at CLC, Main Library, and Grand Avenue Library) South San Francisco Outreach •External Publicity Push (cont.) •Census 2020 Team to work closely with SSFPD Downtown Bicycle Patrol on March 30, March 31, and April 1 to assist homeless individuals in shelters, mobile homes, cars, and urban encampments complete census questionnaires •Census 2020 Team Leader will develop weekly outreach activities for the Team Members to supplement the Library’s Community Ambassadors outreach •Information booths at high pedestrian-trafficked areas such as shopping centers, restaurants, coffee shops, school events and ballgames, Farmers’ markets South San Francisco Outreach Questions? South San Francisco Outreach City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:20-31 Agenda Date:1/22/2020 Version:1 Item #:8. Report regarding audited financial statements, including the Comprehensive Annual Financial Report and approving Budget Amendment 20.027.(Janet Salisbury, Director of Finance) RECOMMENDATION Staff requests that the City Council accept the review of the Budget Standing Committee and approve a resolution accepting the Fiscal Year 2018-19 Comprehensive Annual Financial Report for the City of South San Francisco (“FY2019 CAFR”)and appropriating the Fiscal Year 2018-19 General Fund surplus as recommended. BACKGROUND/DISCUSSION The information and recommendation herein was reviewed and accepted by the Budget Standing Committee of the City Council on January 6, 2020. The following provides an overview of the City of South San Francisco’s financial results for the fiscal year that ended June 30, 2019. I.GENERAL FUND OVERVIEW The General Fund is the City’s main operating fund,where the bulk of the essential services delivered by departments such as Police,Fire,Library,Parks and Recreation,Economic and Community Development and City Administration are budgeted.The General Fund accounted for 41 percent of all operating revenues and 34 percent of operating expenditures in Fiscal Year (FY) 2018-19. As noted in the General Fund Summary,which is included as Attachment 1 of this report,in Fiscal Year (FY) 2018-19,the City received $121.9 million in General Fund operating revenues,which was $12.7 million or 11.6 percent above the amended budget of $109.2 million.Including carryover purchase orders,General Fund expenditures were $114.3 million,a favorable variance of $377 thousand,or 0.3 percent.Including transfers in and out,the net change in fund balance was approximately $21 million.It is important to note that these numbers do not include any Measure W activities. In compliance with the City’s Reserves Policy,$2.05 million of the surplus is necessary for additional contributions towards General Fund reserves.In addition,after all outstanding set-asides for open purchase orders,transfers to capital improvement programs already approved by Council,and other accounting treatments are taken into account,$11.1 million is available as unencumbered General Fund surplus.Staff recommends transferring $10.9 million to Infrastructure Reserves,and the remaining $200 thousand to be split respectively between the Summer Jobs for Youth Program and community outreach for the Census 2020. II.GENERAL FUND VARIANCE ANALYSIS (BUDGET V. ACTUAL) The following details notable variances only between FY2018-19 budget and actuals across the major subcategories within the General Fund. City of South San Francisco Printed on 1/23/2020Page 1 of 6 powered by Legistar™ File #:20-31 Agenda Date:1/22/2020 Version:1 Item #:8. A.Revenue Variance Rationale (includes Measure W) Favorable results,meaning a net positive for the City’s finances,are noted with a “+”,and conversely, unfavorable results are noted with a “-“ in the following section. 1.Property Tax +$3,313,915 Property tax revenues,one of the City’s primary recurring General Fund revenue sources,totaled $38.7 million in FY 2018-19.Revenues came in 9.4 percent,or $3.3 million higher than budget,primarily due to the former RDA property tax allocation,which was $2.3 million over expected budget.In addition to RDA property tax allocations coming in higher than budgeted,the secured property tax came in higher than anticipate by $700 thousand.The FY 2018-19 budget assumptions for current year secured property tax are a combination of information from the County of San Mateo Assessor’s office,which estimates the annual increase in assessed value,and known developments in South San Francisco that were expected to be added to the City’s property tax roll for FY 2018-19. 2.Sales & Use Tax +$2,402,963 Sales and Use Tax totaled $19.6 million in FY 2018-19,which was $2.4 million above the amended budget. Budget projections are based on information received from the City’s Sales &Use Tax consultant who analyzes trends and makes projections for future fiscal years.Every one of the City’s business sectors,including general retail,food products,transportation,and construction is performing on an upward trend compared to the prior year, which speaks to the general health of the local economy. 3.Measure W +$486,947 Measure W brought in $12.6 million,or $486 thousand over budget expectations.The adopted budget of $9.7 million reflected estimates from the City’s sales tax advisors and was amended to reflect anticipated higher revenue to $12.1 million during the Mid-Year budget process.Measure W revenues are subject to the same economic trends of Sales and Use Taxes,thus benefitted from the same upward trajectory across every business sector in FY 2018-19. 4.Transient Occupancy Tax +1,257,222 |Commercial Parking Tax -$946,804 Transient Occupancy Tax (TOT)revenues reached $17.1 million in FY 2018-19,which was $1.3 million above the amended budget.Average room rates and occupancy rates sustained the high levels indicative of the robust tourism industry in the San Francisco Bay Area.The FY 2018-19 adopted budget assumed that one new hotel would go into service and a one percent increase in the TOT rate on January 1, 2019. Commercial Parking Tax revenues,which move in parallel trends with TOT revenues,finished the year $946 thousand below projections with a total of $2.8 million received.While expansion at private parking facilities in South San Francisco have a positive impact on commercial parking tax revenues,Transportation Network Companies,such as Uber and Lyft,have had and will continue to have an offsetting negative impact on the City’s commercial parking tax revenues, which declined by nine percent compared to the prior fiscal year. 5.Franchise Fees +$469,808 The City receives franchise fees from utility service providers from various industries,including solid waste disposal,cable,electric,and gas.Each franchise fee is based on a percentage of operating revenue,thus revenues from franchise fees increase as utility rates increase.FY 2018-19 franchise fee revenues were $4.5 million,or $470 thousand above the amended budget.This is consistent with the amount that was collected in City of South San Francisco Printed on 1/23/2020Page 2 of 6 powered by Legistar™ File #:20-31 Agenda Date:1/22/2020 Version:1 Item #:8. the previous fiscal year which saw an almost eight percent increase. 6.Building & Fire Permits +$3,309,365 In FY 2018-19,permit revenues reflected the numerous residential and commercial developments currently under construction in South San Francisco.As such,the City’s permit revenues reached a new record of $15.3 million,or $3.3 million more than the amended budget.Permit revenues are largely dependent upon prevailing winds in the local development environment.Staff from the Finance and Economic &Community Development departments meet regularly to review developments that are entitled,permitted,and under construction to project one-time permit and impact fee revenues,as well as the impact to recurring tax revenues. 7.Fines & Forfeitures +$308,228 Revenues from traffic and court fines outperformed the adopted budget by $308,228 in FY 2018-19.The increase to $926 thousand is primarily due to Traffic and Court Fines which was a direct result of the Police Department being fully staffed and able to patrol more actively resulting in more citations. Revenue from administrative citation fines was $23 thousand in FY 2018-19,which was $56 thousand under budget expectations.While this revenue source was as high as $843,000 in FY 2010-11,the recovery of the local economy significantly reduced the prevalence of foreclosures in the community,which significantly diminished the number of citations that were issued.In FY 2018-19,code enforcement duties,which for many years were under the domain of the Fire Department’s Safety Inspection staff,transitioned to a separate Code Enforcement division in the Public Works Department in January,had a positive impact on revenue from administrative citations from the low of $17 thousand in FY 2017-18. 8.Intergovernmental -$544,281 The City received a total of $2.2 million in revenue from other government agencies.The $544 thousand variance is a timing issue related to reimbursements for the City’s shuttle service.It is expected that this variance will resolve itself in FY2019-20. 9.Charges for Services +$2,235,227 Revenue from Charges for Services reflects services from various City departments,including Economic & Community Development,Fire,Parks &Recreation,Police,Public Works,and Library.The primary driver behind the favorable revenue results stem from a one-time $1.1 million in developer deposit fees relating to Oyster Point development.In addition to developer related fees the Fire Department’s ambulance collection rates continue to remain strong reflecting efforts to refine billing practices,which resulted in $673 thousand over the FY 2018-19 amended budget of $2.1 million. 10.Use of Money and Property +$769,339 Revenue from Use of Money and Property came in $769 thousand over the amended FY 2018-19 budget for a total of $6.1 million.This positive result is primarily driven by higher interest rates on investments than were originally projected.The Finance Department conservatively projects interest income and received $730 thousand more than the amended budget. B.Expenditure Variance Rationale Favorable results,meaning a net positive for the City’s finances,are noted with a “-”,and conversely, unfavorable results are noted with a “+“in the following section.The variance analysis includes all open City of South San Francisco Printed on 1/23/2020Page 3 of 6 powered by Legistar™ File #:20-31 Agenda Date:1/22/2020 Version:1 Item #:8. purchase orders and accompanying budget appropriations that were rolled over to the subsequent fiscal year. 1.City Manager -$373,758 The City Manager’s Office was under the FY 2018-19 amended budget of $5.7 million dollars by $373 thousand.The favorable budget results was a result of reduced spending on professional and specialized services, specifically outside consulting firms. 2.Finance -$210,388 The Finance Department was under the FY 2018-19 amended budget of $3.4 million dollars by $210 thousand. The favorable budget result was due to vacancies for a Financial Services Manager and Accounting Assistant during the first half of the fiscal year. 3.Non-Departmental +$133,937 The Non-Departmental program primarily consists of programs and costs which benefit the City as a whole and cannot be attributed one specific department,this includes Animal Services,C/CAG and various dues and memberships. The unfavorable budget variance is primarily due to under budgeting for these expenses. 4.Economic & Community Development +$1,874,612 In FY 2018-19,the Economic &Community Development Department (ECD)has an unfavorable budget variance of $1.8 million.This variance is the result of a timing error of encumbering two separate contracts,one for West Coast Consulting and CSG twice in one year.The four encumbrances each encumbered $1.4 million creating a total encumbrance $5.6 million instead of the intended $2.8 million.There were not any actual expenses that created the budget deficit of $1.8 but rather a placeholder for the next fiscal year FY 19-20 since the encumbrance will roll over.In FY 19-20 this will automatically correct itself and the ECD budget will be made whole. 5.Public Works +$318,990 Public Work’s budget variance of $319 thousand,or 12 percent above the amended budget,was driven largely by a two transactions: (1)Invoices already paid for the City’s shuttle service in the amount of $153 thousand.This was an administrative error where invoices already paid were not marked against an outstanding purchase order. This will automatically correct itself in FY19-20. (2)Due to City operational needs,Public Works spent $100 thousand of operational budget for minor capital improvements. III.OTHER FUNDS In addition to the General Fund,Staff also reviews the financial results of other funds which are used to account for the resources needed to provide various services to the community.The fund summaries for all other funds are included in Attachment 2, with notable budget variances discussed in detail below. 1.Common Green Funds The Common Green Funds include a collection of landscape maintenance district funds in the Westborough area -West Park,Stonegate Ridge,and Willow Gardens.The Common Green Funds are supported by a portion of the City’s share of the one percent property tax levy.FY 2018-19 Common Greens total revenues were $1.9 million,which were $207,000 over the budgeted amount.The favorable budget results reflected the impact of a robust real estate market. City of South San Francisco Printed on 1/23/2020Page 4 of 6 powered by Legistar™ File #:20-31 Agenda Date:1/22/2020 Version:1 Item #:8. 2.Capital Improvement Projects The Capital Improvement Projects (CIP)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.As such,the fund accounts for capital expenses on a pass-through basis,therefore,any unexpended capital budget appropriations are carried over to the subsequent fiscal year.Of the $73 million in amended budget, $47.5 will be carried over in FY 2019-20. 3.Programs Special Revenue Fund The City Programs Special Revenue Fund accounts for donations and other accounts that are dedicated for a particular program.There was a $2.2 million corrective transfer from the General Fund to this fund.This transfer corrected a previous transfer of funds related to Police Asset Seizure. 4.Sewer Enterprise Fund The Sewer Enterprise Fund provides for the operation,maintenance and improvements of the Water Quality Control Plant (WQCP)and provides funding for reinvestment in critical sewer collection infrastructure. Revenues were $31 million,falling short of projections by $73 million.The majority of the budget variance, $53 million,was due to the projected receipt of State Revolving Fund (SRF)loan proceeds,which did not occur last year.Service charge revenues reflected a shortfall of $6 million from budget expectations.This is in part due to water conservation of commercial customers as sewer charges are based on a prior year look-back of water usage and water conservation was a high priority in prior years.Overall,the fund remains in positive territory as expenditures fell below expectations,primarily due to unspent capital project funding.These types of projects span multiple fiscal years,and the funding for these expenditures will roll forward to the current year. 5.Parking District Fund In FY 2018-19,Parking District revenues totaled $1.3 million,which was $418,000 short of the amended budget.The variance is primarily attributable to a budgeted transfer in to the Parking District Fund that did not occur.Revenues for parking meter fees were $240,000 higher than the budgeted amount.Revenue from the Miller Avenue Garage also exceeded the budgeted amount by $285,000. FY 2018-19 Self Insurance Fund total expenditures were $6.1 million,which were $1.5 million over budget. The variance is primarily due to workers compensation and general liability claims,which came in collectively at 1,073,000 over budget.Expenditures in this fund were offset by revenues that exceeded the budget by 40%. The funds interest income under the Use of Money and Property group outperformed budgeted expectations. IV.DEVELOPER IMPACT FEES The City has a number of developer impact fees in place to ensure that new development pays its fair share of the impact to the City’s infrastructure and capital needs.Each of the various impact fees are noted below,along with an indication of the revenue received in FY 2018-19,which reflect the robust development climate in South San Francisco: ·Sewer Capacity Charge - $3.2 million ·Park Land Acquisition Fee - $311,000 ·Parks Construction Fee - $2.1 million ·East of 101 Sewer Impact Fee - $1.9 million ·East of 101 Traffic Impact Fee - $8.8 million City of South San Francisco Printed on 1/23/2020Page 5 of 6 powered by Legistar™ File #:20-31 Agenda Date:1/22/2020 Version:1 Item #:8. ·Public Safety Impact Fee - $479,000 ·Bicycle/Pedestrian Impact Fee - $50,000 ·Child Care Impact Fee - $920,000 ·Oyster Point Interchange Impact Fee - $3.5 million V.RESERVES In FY 2018-19,General Fund revenues,excluding Measure W,were $121.9 million.In keeping with the City’s Reserve Policy of maintaining 20 percent of operating revenues,the City’s reserves levels will need to increase by approximately $2.0 million, from $22.3 million to $24.4 million. FISCAL IMPACT After meeting the reserves requirement noted above,the General Fund has $11.1 million in surplus equity.Staff recommends that the City Council authorize transfer of $10.9 million to the City’s Infrastructure Reserve Fund to support future infrastructure needs.Staff further recommends that the $100,000 be appropriated for Census 2020 and $100,000 be appropriated for the Jobs for Youth Program. CONCLUSION The surge in development and strength of the larger Bay Area economy has helped fuel the health of the City of South San Francisco’s financial position,as reflected in the FY2018-19 CAFR.Staff recommends that the City Council accept the CAFR and approve both the financial results and appropriation request. City of South San Francisco Printed on 1/23/2020Page 6 of 6 powered by Legistar™ FY2018-19 YEAR END SUMMARY GENERAL FUND OPERATING SUMMARY Favorable/ (Unfavorable)% Variance Property Taxes 34,143,627$ 35,345,743$ 38,659,658$ 3,313,915$ 9.4% Sales Tax 17,567,674 17,203,726 19,606,689 2,402,963 14.0% Transient Occupancy Tax 13,978,533 15,834,000 17,091,222 1,257,222 7.9% Other Taxes 5,869,611 5,833,028 4,995,404 (837,624) -14.4% Franchise Fees 4,403,493 4,000,000 4,469,808 469,808 11.7% Building and Fire Permits 14,674,810 12,072,049 15,381,415 3,309,365 27.4% Fines and Forfeitures 423,604 618,500 926,728 308,228 49.8% Intergovernmental 2,610,231 3,412,076 2,867,795 (544,281) -16.0% Charges for Services 10,924,666 9,328,527 11,563,754 2,235,227 24.0% Use of Money & Property 6,837,571 5,309,459 6,078,798 769,339 14.5% Other Revenues 266,838 289,171 330,845 41,674 14.4% Total Revenues 111,700,656$ 109,246,280$ 121,972,118$ 12,725,838$ 11.6% Add Prior Year Committed reserves - 7,215,213 - - Total Available Resources 111,700,656$ 116,461,493$ 121,972,118$ 12,725,838$ (Favorable)/ Unfavorable % Variance City Council 239,260$ 280,694$ 258,759$ -$ (21,935.08)$ -7.8% City Clerk 660,306$ 817,567$ 770,987$ 32,924 (13,656.03)$ -1.7% City Treasurer 135,218$ 132,900$ 123,504$ - (9,395.84)$ -7.1% City Attorney 996,380$ 1,081,463$ 961,588$ - (119,874.92)$ -11.1% City Manager 2,668,716$ 5,684,184$ 2,298,368$ 3,012,058 (373,757.98)$ -6.6% Finance 3,080,770$ 3,384,365$ 2,789,191$ 384,786 (210,387.65)$ -6.2% Non-Departmental 1,049,187$ 1,130,087$ 1,218,354$ 45,669 133,936.81$ 11.9% Human Resources 1,541,521$ 1,780,097$ 1,621,404$ 124,203 (34,490.14)$ -1.9% Economic & Community Development 7,722,681$ 12,443,981$ 8,433,295$ 5,885,299 1,874,612.83$ 15.1% Fire 26,059,068$ 28,959,533$ 27,563,733$ 1,048,780 (347,020.46)$ -1.2% Police 26,639,005$ 29,254,475$ 28,482,441$ - (772,033.81)$ -2.6% Public Works 5,014,342$ 6,512,375$ 5,787,769$ 1,043,595 318,989.67$ 4.9% Library 5,379,836$ 6,149,810$ 5,628,684$ 26,858 (494,267.76)$ -8.0% Parks & Recreation 15,468,353$ 17,103,184$ 16,530,599$ 264,516 (308,069.20)$ -1.8% Total Expenditures 96,654,644$ 114,714,714$ 102,468,676$ 11,868,688$ (377,350)$ -0.3% Net Operating Surplus/ (Deficit)15,046,012$ 1,746,779$ 19,503,442$ Other Financing Sources / (Uses) Transfers in 8,710,123$ 5,579,214$ 7,143,014$ -$ 1,563,800$ 28% Transfers out 20,887,464 5,637,057 5,651,831 - 14,774 0% Total Other Financing Sources/ (Uses)(12,177,341)$ (57,844)$ 1,491,183$ -$ 1,549,027$ 28% Net Change in Fund balance 2,868,671$ 1,688,935$ 20,994,625$ Net Fund Balance 20,994,625 Amount needed to meet the City's Reserves Policy 2,053,489 Encumbrances and Commitments to long-term projects (CIP, etc)7,841,136 General Fund Surplus Equity 11,100,000 Recommended Appropriations: Transfer to Infrastructure Reserves $ 10,900,000 Census 2020 Outreach 100,000$ Summer Jobs for Youth Program 100,000$ Variance from 2018-19 Amended Expenditures Actual 2017-18 Amended 2018-19 Actual 2018-19 Carryover Purchase Orders Variance from 2018-19 Amended Revenues Actual 2017-18 Amended 2018-19 Actual 2018-19 Gas Tax Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Intergovernmental $ 1,531,782 $ 1,700,688 $ 1,700,688 $ 1,805,564 $ (104,876)106% Use of Money & Property $ 547 $ 15,000 $ 15,000 $ 15,032 $ (32)100% Transfers In $ - $ - $ - $ - n/a Total Revenues $ 1,532,329 $ 1,715,688 $ 1,715,688 $ 1,820,596 $ (104,908)106% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Transfers Out $ 1,936,652 $ 1,591,301 $ 2,455,104 $ 1,825,697 $ 629,407 74% Total Expenditures $ 1,936,652 $ 1,591,301 $ 2,455,104 $ 1,825,697 $ 629,407 74% Net Surplus / (Deficit) $ (5,101) Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances $ - $ - $ - CIP $ 836,803 $ 552,995 $ 283,808 Unrealized $ 10,205 $ 16,933 $ (6,728) Unassigned $ (319,785) $ (42,705) $ (277,080) Total Fund $ 527,223 $ 527,223 $ - Measure A Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Sales Tax 1,476,167$ 1,458,995$ 1,468,995$ 1,762,540$ (293,545)$ 120% Use of Money & Property 4,544$ 25,000$ 25,000$ 111,632$ (86,632)$ 447% Total Revenues 1,480,711$ 1,483,995$ 1,493,995$ 1,874,172$ (380,177)$ 125% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Transfers Out 704,199$ 1,616,268$ 4,545,940$ 1,431,441$ 3,114,499$ 31% Total Expenditures 704,199$ 1,616,268$ 4,545,940$ 1,431,441$ 3,114,499$ 31% Net Surplus / (Deficit) 442,731$ Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances -$ -$ -$ CIP 2,920,772$ 3,085,421$ (164,649)$ Unrealized Gains/Losses (15,658)$ 34,278$ (49,936)$ Unassigned 60,816$ (153,769)$ 214,585$ Total Fund Balance 2,965,930$ 2,965,930$ -$ Road Maintenance & Rehabilitation Act (SB 1) Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Intergovernmental 301,706$ 1,109,449$ 1,109,449$ 1,207,751$ (98,302)$ 109% Use of Money & Property (627)$ -$ -$ 24,436$ (24,436)$ n/a Total Revenues 301,079$ 1,109,449$ 1,109,449$ 1,232,187$ (122,738)$ 111% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Transfers Out 30,130$ 1,089,000$ 1,408,870$ 175,641$ 1,233,229$ 12% Total Expenditures 30,130$ 1,089,000$ 1,408,870$ 175,641$ 1,233,229$ 12% Net Surplus / (Deficit) 1,056,546$ Reserve Type Beginning Ending Balance (Increase) / Encumbrances -$ -$ -$ CIP 319,870$ 1,233,228$ (913,358)$ Unrealized Gains/Losses (1,217)$ 10,264$ (11,481)$ Unassigned (47,704)$ (972,543)$ 924,839$ Total Fund Balance 270,949$ 270,949$ -$ Airport Noise Insulation Program (ANIP) Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Intergovernmental 5,345$ -$ -$ -$ -$ n/a Use of Money & Property 880$ 4,000$ 4,000$ 25,264$ (21,264)$ 632% Total Revenues 6,225$ 4,000$ 4,000$ 25,264$ (21,264)$ 632% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Supplies & Services 6,225$ -$ -$ 25,264$ (25,264)$ n/a Total Expenditures 6,225$ -$ -$ 25,264$ (25,264)$ n/a Net Surplus / (Deficit) -$ Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances -$ -$ -$ CIP -$ -$ -$ Unrealized Gains/Losses 26,608$ 37,917$ (11,309)$ Unassigned (26,608)$ (37,917)$ 11,309$ Total Fund Balance -$ -$ -$ 25,264.00 Community Development Block Grant (CDBG) Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Intergovernmental 818,724$ 415,000$ 415,000$ 447,793$ (32,793)$ 108% Use of Money & Property 22,133$ 80,000$ 80,000$ 21,156$ 58,844$ 26% Miscellaneous Revenue -$ -$ -$ 11,130$ (11,130)$ n/a Total Revenues 840,857$ 495,000$ 495,000$ 480,079$ 14,921$ 97% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 78,516$ 81,535$ 81,535$ 1,820$ $ 79,715 2% Supplies & Services 971,879$ 496,950$ 810,495$ 197,024$ $ 613,471 24% Transfers Out -$ -$ 95,330$ -$ 95,330$ 0% Total Expenditures 1,050,395$ 578,485$ 987,360$ 198,844$ 788,516$ 0% Net Surplus / (Deficit) 281,235$ Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances 313,544$ 196,793$ 116,751$ Loans Receivable 418,484$ 309,823$ 108,661$ CIP 95,330$ -$ 95,330$ Unassigned (558,007)$ (237,265)$ (320,742)$ Total Fund Balance 269,351$ 269,351$ -$ Common Greens Funds Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Property Tax 1,846,016$ 1,730,539$ 1,730,539$ 1,937,909$ 207,370$ 112% Total Revenues 1,846,016$ 1,730,539$ 1,730,539$ 1,937,909$ 207,370$ 112% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 494,390$ 730,819$ 730,819$ 554,693$ $ (176,126)76% Supplies & Services 452,555$ 514,148$ 564,088$ 585,741$ $ 21,653 104% Interdepartmental Charges 319,335$ 328,870$ 328,870$ 328,870$ $ - 100% Transfers Out -$ -$ $ - n/a Total Expenditures 1,266,280$ 1,573,837$ 1,623,777$ 1,469,304$ (154,473)$ 90% Net Surplus / (Deficit) 468,605$ Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances -$ Unrealized Gains/Losses -$ CIP 73,542$ 73,542$ -$ Unassigned 3,068,562$ 3,068,562$ -$ Total Fund Balance 3,142,104$ 3,142,104$ -$ City Housing Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property 585,163$ 167,000$ 167,000$ 304,949$ (137,949)$ 183% Other Revenues -$ 140,000$ 140,000$ -$ 140,000$ 0% Total Revenues 585,163$ 307,000$ 307,000$ 304,949$ 2,051$ 99% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 62,757$ 75,000$ 75,000$ 38,158$ $ 36,842 51% Supplies & Services (602,814)$ 462,800$ 463,099$ 52,496$ $ 410,603 11% Interdepartmental Charges 5,150$ 5,305$ 5,305$ 5,305$ $ - 100% Transfers Out -$ -$ -$ -$ $ - n/a Total Expenditures (534,907)$ 543,105$ 543,404$ 95,959$ 447,445$ 18% Net Surplus / (Deficit) $ 208,990 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances 299$ 6,267$ (5,968)$ CIP -$ -$ -$ Loans Receivable 1,020,193$ 891,227$ 128,966$ ROEM Development 2,450,000$ 2,450,000$ -$ Unrealized Gains/Losses (65,245)$ 7,223$ (72,468)$ Unassigned 2,373,001$ 2,423,531$ (50,530)$ Total Fund Balance 5,778,248$ 5,778,248$ -$ Solid Waste Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Charges for Services 195,059$ 180,000$ 180,000$ 201,008$ (21,008)$ 112% Total Revenues 195,059$ 180,000$ 180,000$ 201,008$ (21,008)$ 112% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Supplies & Services 67,008$ 110,150$ 181,230$ 49,360$ $ 131,870 27% Interdepartmental Charges 20,188$ 20,794$ 20,794$ 20,794$ $ - 100% Transfers Out 225,408$ -$ 146,537$ 4,272$ $ 142,265 3% Total Expenditures 312,604$ 130,944$ 348,561$ 74,426$ 274,135$ 21% Net Surplus / (Deficit) $ 126,582 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances 71,080$ 123,886$ (52,806)$ CIP 165,930$ 142,265$ 23,665$ Unrealized Gains/Losses -$ -$ -$ Unassigned 188,442$ 159,301$ 29,141$ Total Fund Balance 425,452$ 425,452$ -$ Supplemental Law Enforcement Services Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Sales Tax 139,556$ 100,000$ 100,000$ 150,768$ $ (50,768)151% Use of Money & Property 231$ -$ -$ 1,075$ (1,075)$ n/a Total Revenues 139,787$ 100,000$ 100,000$ 151,843$ (51,843)$ 152% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 139,787$ -$ -$ 50,847$ $ (50,847)n/a Transfers Out -$ 100,000$ 100,000$ 100,000$ $ - 100% Total Expenditures 139,787$ 100,000$ 100,000$ 150,847$ (50,847)$ 151% Net Surplus / (Deficit) $ 996 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances -$ CIP -$ Unrealized Gains/Losses (794)$ (331)$ (463)$ Unassigned 896$ 433$ 463$ Total Fund Balance 102$ 102$ -$ Developer Deposits Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Charges for Services 2,474,089$ -$ -$ 1,616,937$ $ (1,616,937)n/a Use of Money & Property 8,490$ -$ -$ 190,566$ $ (190,566)n/a Other Revenues 32,911$ -$ -$ -$ $ - n/a Total Revenues 2,515,490$ -$ -$ 1,807,503$ (1,807,503)$ n/a Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 8,942$ -$ -$ 11,791$ $ (11,791)n/a Supplies & Services 373,252$ -$ 97,670$ 229,801$ $ (132,131)235% Transfers Out 659,965$ 1,307,500$ 4,348,487$ 3,975,947$ $ 372,540 91% Total Expenditures 1,042,159$ 1,307,500$ 4,446,157$ 4,217,539$ 228,618$ 95% Net Surplus / (Deficit) $ (2,410,036) Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances 97,670$ 103,424$ (5,754)$ CIP -$ 212,539$ (212,539)$ Unrealized Gains/Losses (74,991)$ 10,088$ (85,079)$ Permit Program Maintenance 252,739$ 319,207$ General Plan Maintenance 3,706,552$ 1,012,868$ Fire Department (Genesis Development)286,100$ 286,100$ Fire Department (Fire & Life Safety)-$ 345,295$ Unassigned 482,253$ 2,460,802$ (1,978,549)$ Total Fund Balance 4,750,323$ 4,750,323$ (2,281,921)$ City Programs Special Revenue Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Charges for Services 56,614$ -$ -$ 71,186$ $ (71,186)n/a Use of Money & Property 3,251$ -$ -$ 106,854$ $ (106,854)n/a Transfers In -$ -$ -$ 2,236,224$ $ (2,236,224)n/a Other Revenues 723,616$ 1,000,000$ 1,000,000$ 1,179,126$ $ (179,126)118% Total Revenues 783,481$ 1,000,000$ 1,000,000$ 3,593,390$ (2,593,390)$ 359% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Supplies & Services 447,729$ 3,000$ 3,000$ 333,024$ $ (330,024)11101% Capital Outlay -$ -$ -$ -$ $ - n/a Transfers Out 3,096,156$ 620,000$ 967,496$ 88,274$ $ 879,222 9% Total Expenditures 3,543,885$ 623,000$ 970,496$ 421,298$ 549,198$ 43% Net Surplus / (Deficit) $ 3,172,092 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances -$ -$ -$ CIP 322,686$ -$ 322,686$ Unrealized Gains/Losses (74,805)$ (41,527)$ (33,278)$ All Other Reserves 1,368,066$ 4,540,159$ Unassigned (240,906)$ (3,123,591)$ 2,882,685$ Total Fund Balance 1,375,041$ 1,375,041$ 3,172,093$ Transit Station Enhancement In-Lieu Fee Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property 903$ -$ -$ 41,513$ $ (41,513)n/a Other Revenues 599,718$ -$ -$ 1,338,235$ $ (1,338,235)n/a Total Revenues 600,621$ -$ -$ 1,379,748$ (1,379,748)$ n/a Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Transfers Out 72$ -$ 743,166$ 235,718$ $ 507,448 32% Total Expenditures 72$ -$ 743,166$ 235,718$ 507,448$ 32% Net Surplus / (Deficit) $ 1,144,030 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances -$ -$ -$ CIP 493,166$ 299,211$ 193,956$ Unrealized Gains/Losses (10,420)$ 7,969$ (18,389)$ Unassigned 176,784$ 352,351$ (175,567)$ Total Fund Balance 659,530$ 659,530$ -$ Capital Improvements Projects Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Intergovernmental 3,079,247$ 7,010,680$ 20,637,483$ 6,641,790$ $ 13,995,693 32% Charges for Services -$ 1,820,480$ 2,820,480$ -$ $ 2,820,480 0% Other Revenues -$ -$ 850,000$ 850,000$ $ - 100% Transfers In 10,217,391$ 23,359,987$ 48,448,953$ 15,087,485$ $ 33,361,468 31% Total Revenues 13,296,638$ 32,191,147$ 72,756,916$ 22,579,275$ 50,177,641$ 31% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 406,847$ -$ (108,096)$ 275,047$ $ (383,143)-254% Supplies & Services 12,604,045$ 32,191,147$ 73,393,626$ 25,433,784$ $ 47,959,842 35% Total Expenditures 13,010,892$ 32,191,147$ 73,285,530$ 25,708,831$ 47,576,699$ 35% Net Surplus / (Deficit) $ (3,129,556) Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances 14,197,099$ 18,444,492$ (4,247,393)$ ADA Improvements 151,664$ 144,703$ 6,961$ Unrealized Gains/Losses -$ -$ -$ Unassigned (14,151,347)$ (18,391,779)$ 4,240,432$ Total Fund Balance 197,416$ 197,416$ 0$ Genentech Prepaid Capital Projects Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property (127)$ -$ -$ 6,371$ $ (6,371)n/a Total Revenues (127)$ -$ -$ 6,371$ (6,371)$ n/a Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Supplies & Services 69,153$ -$ -$ -$ $ - n/a Transfers Out -$ -$ 1,525,129$ -$ $ 1,525,129 0% Total Expenditures 69,153$ -$ 1,525,129$ -$ 1,525,129$ 0% Net Surplus / (Deficit) $ 6,371 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances -$ -$ -$ CIP 1,525,129$ -$ 1,525,129$ Unrealized Gains/Losses (92,558)$ (88,159)$ (4,399)$ Unassigned (1,429,326)$ 91,404$ (1,520,730)$ Total Fund Balance 3,245$ 3,245$ (0)$ Oyster Point Development Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Charges for Services 503,827$ -$ -$ 781,238$ $ (781,238)n/a Use of Money & Property -$ -$ -$ 600$ $ (600)n/a Transfers In 3,707,728$ -$ -$ 4,940,441$ $ (4,940,441)n/a Total Revenues 4,211,554$ -$ -$ 5,722,279$ (5,722,279)$ n/a Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Supplies & Services 4,420,044$ -$ -$ 5,437,619$ $ (5,437,619)n/a Total Expenditures 4,420,044$ -$ -$ 5,437,619$ (5,437,619)$ n/a Net Surplus / (Deficit) $ 284,660 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Encumbrances 246,374$ 241,002$ 5,372$ CIP -$ -$ Unrealized Gains/Losses -$ -$ -$ Unassigned (454,864)$ (449,492)$ (5,372)$ Total Fund Balance (208,490)$ (208,490)$ -$ Sewer Enterprise Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Charges for Services 28,251,611$ 31,936,708$ 35,924,315$ 29,900,342$ $ 6,023,973 83% Use of Money & Property 35,878$ 110,000$ 110,000$ 488,429$ $ (378,429)444% Other Financing Sources -$ 2,192,400$ 53,403,000$ -$ $ 53,403,000 n/a Other Revenues -$ -$ -$ 5,213$ $ (5,213)n/a Transfers In 111,936$ 7,464,775$ 14,656,056$ 651,572$ $ 14,004,484 4% Total Revenues 28,399,425$ 41,703,883$ 104,093,371$ 31,045,555$ 73,047,816$ 30% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 10,528,403$ 9,395,920$ 9,930,962$ 10,940,416$ $ (1,009,454)110% Supplies & Services 10,175,459$ 19,896,431$ 92,680,281$ 26,075,155$ $ 66,605,126 28% Capital Outlay 1,251,848$ 276,000$ 276,000$ (13,755,428)$ $ 14,031,428 -4984% Debt Service 964,352$ 5,707,526$ 5,707,526$ 838,647$ $ 4,868,879 15% Interdepartmental Charges 1,532,275$ 1,591,306$ 1,591,306$ 1,591,306$ $ (0)100% Transfers Out 54,549$ -$ -$ -$ $ - n/a Total Expenditures 24,506,886$ 36,867,183$ 110,186,075$ 25,690,096$ 84,495,979$ 23% Net Surplus / (Deficit) $ 5,355,459 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned (26,855,915)$ (78,743,978)$ 51,888,063$ Investment in Capital Assests - Net of Debt 77,283,881$ 86,966,608$ (9,682,726)$ Encumbrances 7,480,241$ 46,087,497$ Capital Reserve 4,074,000$ 4,074,000$ Operating Reserve 4,369,942$ 4,893,885$ (523,943)$ Current CIP 10,339,600$ 13,197,393$ Unrealized Gains/Losses (250,055)$ (33,710)$ San Bruno Future CIP 59,241$ 59,241$ 218 Littlefield Loading Dock 65,520$ 65,520$ -$ Total Fund Balance 76,566,456$ 76,566,456$ 41,681,394$ Parking District Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Charges for Services 1,084,472$ 895,000$ 895,000$ 1,180,538$ $ (285,538)132% Use of Money & Property 101,929$ 10,000$ 10,000$ 105,817$ $ (95,817)1058% Transfers In -$ 800,000$ 800,000$ -$ $ 800,000 0% Total Revenues 1,186,401$ 1,705,000$ 1,705,000$ 1,286,355$ 418,645$ 75% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 312,335$ 322,945$ 339,666$ 295,417$ $ 44,249 87% Supplies & Services 627,636$ 996,232$ 1,372,609$ 235,288$ $ 1,137,321 17% Capital Outlay 253,826$ -$ -$ 253,826$ $ (253,826)0% Interdepartmental Charges 108,013$ 111,327$ 111,327$ 111,327$ $ - 100% Total Expenditures 1,301,809$ 1,430,504$ 1,823,602$ 895,857$ 927,745$ 49% Net Surplus / (Deficit) $ 390,498 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 2,400,824$ 1,963,282$ 437,541$ Investment in Capital Assests - Net of Debt 10,946,647$ 10,692,822$ 253,826$ Encumbrances 249,273$ 135,899$ 113,374$ CIP 238,770$ 996,338$ (757,567)$ Unrealized Gains/Losses (41,502)$ 5,672$ (47,174)$ Total Fund Balance 13,794,013$ 13,794,013$ 0$ Sewer Capacity Charges Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property 12,600$ -$ -$ 361,686$ $ (361,686)n/a Other Revenues 5,552,734$ 200,000$ 200,000$ 2,825,571$ $ (2,625,571)1413% Total Revenues 5,565,334$ 200,000$ 200,000$ 3,187,257$ (2,987,257)$ 1594% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Supplies & Services (564)$ -$ -$ (2,100)$ $ 2,100 n/a Interdepartmental Charges 2,575$ 2,652$ 2,652$ 2,652$ $ - 100% Transfers Out -$ -$ 6,132,988$ 369,745$ 6% Total Expenditures 2,011$ 2,652$ 6,135,640$ 370,297$ 2,100$ 6% Net Surplus / (Deficit) $ 2,816,960 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 9,606,306$ 3,681,528$ 5,924,777$ CIP -$ 5,763,243$ (5,763,243)$ Unrealized Gains/Losses (99,708)$ 61,826$ (161,534)$ Total Fund Balance 9,506,598$ 9,506,598$ 0$ Storm Water Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Fines & Forfeitures 3,100$ 5,000$ 5,000$ 2,700$ $ 2,300 54% Intergovernmental 247,151$ -$ -$ 752,849$ $ (752,849)n/a Charges for Services 406,064$ 405,000$ 405,000$ 410,600$ $ (5,600)101% Use of Money & Property 1,943$ 5,000$ 5,000$ 39,477$ $ (34,477)790% Transfers In 2,023,518$ 1,120,000$ 1,833,540$ 1,449,650$ $ 383,890 79% Total Revenues 2,681,776$ 1,535,000$ 2,248,540$ 2,655,276$ (406,736)$ 118% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 738,171$ 712,095$ 712,095$ 704,852$ $ 7,243 99% Supplies & Services 1,605,782$ 429,688$ 2,127,497$ 1,342,307$ $ 785,190 63% Capital Outlay (1,377,519)$ -$ -$ (936,473)$ $ 936,473 n/a Interdepartmental Charges 68,719$ 70,425$ 70,425$ 70,425$ $ - 100% Transfers Out 83,528$ -$ -$ -$ $ - 0% Total Expenditures 1,118,681$ 1,212,208$ 2,910,017$ 1,181,111$ 1,728,906$ 41% Net Surplus / (Deficit) $ 1,474,165 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 118,975$ (453,696)$ 572,671$ Investment in Capital Assests - Net of Debt 1,867,376$ 2,803,849$ (936,473)$ Encumbrances 832,439$ 551,572$ 280,866$ CIP 190,359$ 89,861$ 100,498$ Unrealized Gains/Losses (26,646)$ (9,084)$ (17,562)$ Total Fund Balance 2,982,502$ 2,982,502$ 0$ City Service (Garage) Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property 694$ -$ -$ 18,890$ $ (18,890)n/a Other Revenues 1,650,018$ 1,650,000$ 1,650,000$ 1,650,018$ $ (18)100% Total Revenues 1,650,712$ 1,650,000$ 1,650,000$ 1,668,908$ (18,908)$ 101% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 653,854$ 641,697$ 641,697$ 625,761$ $ 15,936 98% Supplies & Services 917,143$ 968,150$ 968,150$ 1,084,951$ $ (116,801)112% Capital Outlay 580$ -$ -$ 290$ $ (290)n/a Interdepartmental Charges 20,433$ 21,397$ 21,397$ 21,397$ $ 0 100% Total Expenditures 1,592,010$ 1,631,244$ 1,631,244$ 1,732,399$ (101,155)$ 106% Net Surplus / (Deficit) $ (63,491) Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 433,537$ 425,398$ 8,139$ Investment in Capital Assests - Net of Debt 290$ -$ 290$ Unrealized Gains/Losses (14,197)$ (5,768)$ (8,429)$ Total Fund Balance 419,630$ 419,630$ -$ Self Insurance Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Intergovernmental 18,271$ -$ -$ 18,271$ $ (18,271)n/a Charges for Services (2,739)$ -$ -$ -$ $ - n/a Use of Money & Property 16,053$ 75,000$ 75,000$ 419,878$ $ (344,878)560% Other Revenues 4,249,265$ 4,559,604$ 4,559,604$ 6,057,262$ $ (1,497,659)133% Total Revenues 4,280,851$ 4,634,604$ 4,634,604$ 6,495,411$ (1,860,808)$ 140% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 1,087,131$ 650,000$ 650,000$ 925,210$ $ (275,210)142% Supplies & Services 3,442,507$ 3,909,596$ 3,909,596$ 5,196,932$ $ (1,287,336)133% Total Expenditures 4,529,638$ 4,559,596$ 4,559,596$ 6,122,142$ (1,562,546)$ 134% Net Surplus / (Deficit) $ 373,269 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 890,331$ 702,834$ 187,497$ Unrealized Gains/Losses (206,053)$ (18,556)$ (187,497)$ Total Fund Balance 684,278$ 684,278$ -$ Benefits Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Charges for Services 1,893$ -$ -$ 1,171$ $ (1,171)n/a Use of Money & Property 12,646$ 100,000$ 100,000$ 366,556$ $ (266,556)367% Other Revenues 13,688,876$ 13,235,490$ 13,235,490$ 13,779,943$ $ (544,453)104% Transfers In 1,296,000$ 250,000$ 250,000$ 250,000$ $ 0 100% Total Revenues 14,999,415$ 13,585,490$ 13,585,490$ 14,397,670$ (812,180)$ 106% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 12,916,577$ 14,908,907$ 14,908,907$ 14,074,609$ $ 834,298 94% Supplies & Services 1,684$ 10,000$ 10,000$ 44,483$ $ (34,483)445% Total Expenditures 12,918,261$ 14,918,907$ 14,918,907$ 14,119,092$ 799,815$ 95% Net Surplus / (Deficit) $ 278,578 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned (1,855)$ (166,540)$ 164,685$ Post Employment Benefits 4,522,063$ 4,522,063$ -$ Unrealized Gains/Losses (317,001)$ (152,316)$ (164,685)$ CalPERS Stabilization 5,545,104$ 5,545,104$ -$ Total Fund Balance 9,748,311$ 9,748,311$ 0$ Equipment Replacement Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property 46,212$ 95,000$ 95,000$ 184,281$ $ (89,281)194% Other Financing Sources -$ 700,000$ 700,000$ -$ $ 700,000 0% Other Revenues 1,808,587$ 1,746,503$ 1,746,503$ 1,634,961$ $ 111,541 94% Transfers In 1,200,000$ -$ -$ -$ $ - n/a Total Revenues 3,054,799$ 2,541,503$ 2,541,503$ 1,819,242$ 722,260$ 72% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Supplies & Services (372,203)$ 176,844$ 208,538$ -$ $ 208,538 0% Capital Outlay 509,864$ 1,200,000$ 3,194,347$ -$ $ 3,194,347 0% Debt Service 585,851$ 523,766$ 523,766$ -$ $ 523,766 0% Transfers Out 184,087$ 35,000$ 43,336$ -$ $ 43,336 0% Total Expenditures 907,599$ 1,935,610$ 3,969,987$ -$ 3,969,987$ 0% Net Surplus / (Deficit) $ 1,819,242 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 1,334,137$ 1,957,152$ (623,015)$ Investment in Capital Assests - Net of Debt 4,308,511$ 4,157,938$ 150,573$ Encumbrances 2,026,041$ 1,454,847$ 571,193$ Vehicle Replacement 431,812$ 431,812$ -$ CIP 8,336$ 43,336$ (35,000)$ Unrealized Gains/Losses (38,730)$ 25,022$ (63,752)$ Equipment Replacement 140,526$ 140,526$ 0$ Computer Hardware Replacement 140,526$ 140,526$ 0$ Total Fund Balance 8,351,159$ 8,351,159$ (0)$ Information Technology (IT) Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Charges for Services 56,001$ 40,000$ 40,000$ 96,326$ $ (56,326)241% Use of Money & Property 1,676$ 14,000$ 14,000$ 41,598$ $ (27,598)297% Other Revenues 2,584,771$ 2,670,676$ 2,670,676$ 2,670,676$ $ (1)100% Transfers In -$ 240,000$ 445,000$ -$ $ 445,000 0% Total Revenues 2,642,448$ 2,964,676$ 3,169,676$ 2,808,600$ 361,075$ 89% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Salaries & Benefits 1,145,674$ 1,313,513$ 1,313,513$ 1,317,355$ $ (3,842)100% Supplies & Services 1,078,430$ 1,739,317$ 2,470,574$ 1,367,270$ $ 1,103,304 55% Interdepartmental Charges 11,077$ 11,845$ 11,845$ 11,845$ $ - 100% Total Expenditures 2,235,180$ 3,064,676$ 3,795,932$ 2,696,470$ 1,099,462$ 71% Net Surplus / $ 112,130 Reserve Type Beginning Ending (Increase) / Unassigned 76,436$ (249,532)$ 325,967$ Encumbrances 526,257$ 833,711$ (307,454)$ Unrealized Gains/Losses (18,523)$ (10)$ (18,513)$ Telecommunications Equipment 349,130$ 349,130$ -$ GIS Mapping Enhancements 76,275$ 76,275$ -$ Total Fund Balance 1,009,575$ 1,009,575$ (0)$ Public Educational Government (PEG) Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Franchise Fees 173,849$ 125,000$ 125,000$ 166,476$ $ (41,476)133% Use of Money & Property 1,351$ 5,000$ 5,000$ 38,074$ $ (33,074)761% Total Revenues 175,200$ 130,000$ 130,000$ 204,550$ (74,550)$ 157% Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Supplies & Services 4,585$ -$ 68,891$ 77,364$ $ (8,473)112% Total Expenditures 4,585$ -$ 68,891$ 77,364$ (8,473)$ 112% Net Surplus / (Deficit) $ 127,186 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 1,090,426$ 1,142,301$ (51,875)$ Encumbrances 68,891$ -$ 68,891$ Unrealized Gains/Losses (17,407)$ (390)$ (17,017)$ Total Fund Balance 1,141,910$ 1,141,910$ (0)$ Park Land Acquisition Fee Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property (14)$ -$ -$ 16,622$ $ (16,622)n/a Impact Fees 54,678$ -$ -$ 294,649$ $ (294,649)n/a Total Revenues 54,664$ -$ -$ 311,271$ (311,271)$ n/a Net Surplus / (Deficit) $ 311,271 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 55,110$ 47,106$ 8,004$ Unrealized Gains/Losses (446)$ 7,558$ (8,004)$ Total Fund Balance 54,664$ 54,664$ -$ Park Construction Fee Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property (5)$ -$ -$ 20,812$ $ (20,812)m/a Impact Fees 25,169$ -$ -$ 2,092,001$ $ (2,092,001)n/a Total Revenues 25,164$ -$ -$ 2,112,813$ (2,112,813)$ n/a Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Transfers Out 7,550$ -$ 188,796$ 13,918$ $ 174,878 7% Total Expenditures 7,550$ -$ 188,796$ 13,918$ 174,878$ 7% Net Surplus / (Deficit) $ 2,098,895 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned (207,159)$ (166,207)$ (40,952)$ CIP 224,950$ 174,878$ 50,072$ Unrealized Gains/Losses (172)$ 8,948$ (9,120)$ Total Fund Balance 17,619$ 17,619$ -$ East of 101 Sewer Impact Fee Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property 2,655$ -$ -$ 100,304$ $ (100,304)n/a Impact Fees 2,262,536$ -$ -$ 1,781,407$ $ (1,781,407)n/a Total Revenues 2,265,191$ -$ -$ 1,881,711$ (1,881,711)$ n/a Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Indepartmental Charges 2,575$ 2,652$ 2,652$ 2,652$ $ - 100% Transfers Out 111,936$ 3,300,000$ 3,527,395$ 281,827$ $ 3,245,568 8% Total Expenditures 114,511$ 3,302,652$ 3,530,047$ 284,479$ 3,245,568$ 8% Net Surplus / (Deficit) $ 1,597,232 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 2,524,888$ (495,967)$ 3,020,855$ CIP 228,306$ 3,204,378$ (2,976,072)$ Unrealized Gains/Losses 85,709$ 130,492$ (44,783)$ Total Fund Balance 2,838,902$ 2,838,902$ -$ East of 101 Traffic Impact Fee Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property 17,423$ -$ -$ 533,381$ $ (533,381)n/a Impact Fees 5,698,649$ -$ -$ 8,304,582$ $ (8,304,582)n/a Total Revenues 5,716,072$ -$ -$ 8,837,963$ (8,837,963)$ n/a Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Indepartmental Charges 2,575$ 2,652$ 2,652$ 2,652$ $ - 100% Transfers Out 299,685$ 2,550,000$ 5,942,618$ 701,659$ $ 5,240,959 12% Total Expenditures 302,260$ 2,552,652$ 5,945,270$ 704,311$ 5,240,959$ 12% Net Surplus / (Deficit) $ 8,133,652 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 9,282,680$ 8,171,097$ 1,111,583$ CIP 3,239,818$ 4,113,613$ (873,795)$ Unrealized Gains/Losses (62,693)$ 175,095$ (237,788)$ Total Fund Balance 12,459,805$ 12,459,805$ (0)$ Public Safety Impact Fee Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property 1,538$ -$ -$ 33,639$ $ (33,639)n/a Impact Fees 867,869$ -$ -$ 445,462$ $ (445,462)n/a Total Revenues 869,407$ -$ -$ 479,101$ (479,101)$ n/a Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Supplies & Services -$ -$ 4,391$ 4,391$ $ - 100% Transfers Out 427,503$ 250,880$ 328,601$ 9,517$ $ 319,084 3% Total Expenditures 427,503$ 250,880$ 332,992$ 13,908$ 319,084$ 4% Net Surplus / $ 465,193 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 766,675$ 514,693$ 251,982$ Encumbrances 4,391$ -$ 4,391$ CIP 77,721$ 319,084$ (241,363)$ Unrealized Gains/Losses (12,749)$ 2,261$ (15,010)$ Total Fund Balance 836,038$ 836,038$ 0$ Bicycle/Pedestrian Impact Fee Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property (1)$ -$ -$ 746$ $ (746)n/a Impact Fees 927$ -$ -$ 49,602$ $ (49,602)n/a Total Revenues 926$ -$ -$ 50,348$ (50,348)$ n/a Net Surplus / (Deficit) $ 50,348 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 932$ 607$ 325$ Unrealized Gains/Losses (6)$ 319$ (325)$ Total Fund Balance 926$ 926$ -$ Child Care Impact Fee Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property 5,928$ -$ -$ 172,624$ $ (172,624)n/a Impact Fees 1,289,382$ -$ -$ 747,845$ $ (747,845)n/a Total Revenues 1,295,310$ -$ -$ 920,469$ (920,469)$ n/a Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Supplies & Services -$ -$ 99,988$ 73,500$ $ 26,488 74% Salaries & Benefits 12$ -$ -$ -$ $ - n/a Interdepartmental Charges 2,575$ 2,652$ 2,652$ 2,652$ $ - 100% Total Expenditures 2,587$ 2,652$ 102,640$ 76,152$ 26,488$ 74% Net Surplus / (Deficit) $ 844,317 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned 4,653,006$ 4,649,402$ 3,604$ Encumbrances 75,000$ 1,500$ 73,500$ Unrealized Gains/Losses (35,595)$ 41,509$ (77,104)$ Total Fund Balance 4,692,411$ 4,692,411$ -$ Oyster Point Interchange Fund Revenues 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Use of Money & Property 2,629$ 46,385$ $ (46,385)n/a Impact Fees 2,379,998$ 3,460,060$ $ (3,460,060)n/a Total Revenues 2,382,627$ -$ -$ 3,506,445$ (3,506,445)$ n/a Expenditures 2017-18 Actual 2018-19 Adopted 2018-19 Amended 2018-19 Actual Variance from Amended Budget % of Budget Supplies & Services -$ -$ 52,561$ -$ $ 52,561 0% Debt Service 2,382,000$ -$ -$ 3,464,000$ $ (3,464,000)n/a Total Expenditures 2,382,000$ -$ 52,561$ 3,464,000$ (3,411,439)$ 6590% Net Surplus / (Deficit) $ 42,445 Reserve Type Beginning Balance Ending Balance (Increase) / Decrease Unassigned (30,139)$ 2,175$ (32,314)$ CIP 52,561$ -$ 52,561$ Unrealized Gains/Losses 7,389$ 27,636$ (20,247)$ Total Fund Balance 29,811$ 29,811$ 0$ FY 2018-2019 Year-End Results Presentation to City Council Janet Salisbury 22 JANUARY 2020 DISCLAIMER: Information contained herein represent the City’s financial position based upon information available as of December 4, 2019. As it is being presented prior to release of final opinion of the City’s auditors, it is subject to change. AGENDA 1 Financial Highlights 2 General Fund Overview 3 Developer Impact Fees 4 Enterprise Funds 5 Recommended Council Actions 2 Citywide Financial Highlights for FY2018-19 1Financial Highlights General Fund* Operating Surplus = $19.5 million –Revenues (excluding transfers) = $121.9 million –Expenditures (excluding transfers) = $102.5 million Measure W Sales Tax Revenues = $12.6 million –Represents $1.5 million (13%) increase from prior year Pension Liability = $182.7 million OPEB Liability = $ 60.5 million Combined = $243.2 million * Excludes Measure W Sales Tax 3 Property Tax and AV Growth Assessed Value of SSF Taxable Property 7.7 8.4 9.3 9.5 10.4 11.3 12.3 14.9 14.0 13.6 13.8 14.0 14.3 14.9 15.5 16.5 17.3 19.1 0 2 4 6 8 10 12 14 16 18 20 200220032004200520062007200820092010201120122013201420152016201720182019$ billion4 1Financial Highlights For Every $1 of Property Tax Paid: 13.8¢ -SSF 43.7¢ -SSF USD 14.4¢ -ERAF 14.2¢ -County 7.3¢ -Jr. College 3.8¢ -Education Tax General Fund Revenues Revenue Comparison (FY17-18, FY18-19 Adopted Budget, FY18-19) 38.66 19.60 17.09 5.00 4.47 15.38 0.93 2.87 11.56 6.10 0.33 0 5 10 15 20 25 30 35 40 $ millionFY2017-18 Results FY2018-19 Adopted Budget FY2018-19 Results 5 2General Fund Overview TOTAL FY2018-19 Revenues (excluding transfers): $121.9M General Fund Expenditures Expenditure Comparison (FY17-18, FY18-19 Adopted Budget, FY18-19) 0.26 0.80 0.12 0.96 5.36 3.17 1.27 1.75 28.62 28.48 6.83 16.80 5.66 14.32 0 5 10 15 20 25 30 $ millionFY2017-18 Results FY2018-19 Adopted Budget FY2018-19 Results 6 2General Fund Overview TOTAL FY2018-19 Expenditures (excluding transfers): $102.5M Measure W Summary Revenues/Expenditures by Fiscal Year 0 2 4 6 8 10 12 14 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19$ millionRevenue Expenditure 7 2General Fund Overview Total Fund Balance as of June 30, 2019: $14.07M Total Fund Balance as of Dec. 15, 2019: $16.46M Estimated Revenue for FY2019-20: $12.60M* *Source: Avenu Insights & Analytics (Economic Review 2019Q2) Developer Impact Fees Revenue Comparison (FY16-17, FY17-18, FY18-19) - 1 2 3 4 5 6 7 8 9 E101 Sewer E101 Traffic Sewer Capacity Charge Oyster Point Improvement Oyster Point Development$ millionFY2016-17 FY2017-18 FY2018-19 8 3Impact Fees Developer Impact Fees (cont.) Revenue Comparison (FY16-17, FY17-18, FY18-19) - 0.5 1.0 1.5 2.0 2.5 Public Safety Child Care Park Land Acquisition Parks Construction Bike/Ped Impact$ millionFY2016-17 FY2017-18 FY2018-19 9 3Impact Fees Enterprise Funds (Business Type Activities) 4Enterprise Funds Sewer Enterprise –Net Position Increase = $5.3 million –Revenues = $29.9 million –Expenses = $24.9 million Parking District –Net Position Increase = $0.4 million –Revenues = $1.2 million –Expenses = $0.9 million Storm Water Management –Net Position Increase = $1.5 million –Revenues = $0.4 million –Expenses = $1.2 million 1 0 Recommended Council Actions 5Council Actions General Fund Operating Surplus for FY 2018-19 = $19.5 million Surplus Needed for General Reserves = $2.0 million Encumbrances and other Accounting Transfers = $6.3 million Remaining General Fund Surplus = $11.1 million Recommended Council Appropriations: –Jobs for Youth Program = $100,000 –Census 2020 = $100,000 –Transfer to Infrastructure Reserve = $10.9 million 1 1 QUESTIONS 12 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:20-30 Agenda Date:1/22/2020 Version:1 Item #:8a. Resolution acknowledging receipt of the Fiscal Year 2018-19 audited financial statements,including the Comprehensive Annual Financial Report and approving Budget Amendment 20.027. WHEREAS,the Budget Standing Committee accepted the Fiscal Year (“FY”)2018-19 year-end financial results on January 6, 2019; and WHEREAS,the City of South San Francisco’s independent auditor opined that that the City’s financial statements present fairly, in all material respects, the City’s financial position; and WHEREAS,the Memorandum on Internal Control indicated that there were no findings in the auditor’s review of the City’s internal controls; and WHEREAS, the City’s FY 2018-19 audited financial statements affirm prudent financial stewardship; and WHEREAS, Fiscal Year (FY) 2018-19 concluded on June 30, 2019; and WHEREAS,staff recommends that the City Council authorize the transfer and appropriation of $10,900,000 of the General Fund surplus to the City’s Infrastructure Reserve to support future infrastructure needs; and WHEREAS,staff further recommends that the City Council authorize the transfer and appropriation of $100,000 of the General Fund surplus to the Summer Jobs for Youth Program; and WHEREAS,staff further recommends that the City Council authorize the transfer and appropriation of $100,000 of the General Fund surplus to the 2020 Census Outreach Program. NOW,THEREFORE,BE IT RESOLVED that the City Council of the City of South San Francisco does hereby: 1.Accept the financial results for the fiscal year ended June 30, 2019. 2.Accept the FY 2018-19 audited financial statements attached herein as Exhibit A. 3.Approve Budget Amendment 20.027,which is the transfer and appropriation of $11.1 million of General Fund surplus as detailed above. ***** City of South San Francisco Printed on 1/23/2020Page 1 of 2 powered by Legistar™ File #:20-30 Agenda Date:1/22/2020 Version:1 Item #:8a. City of South San Francisco Printed on 1/23/2020Page 2 of 2 powered by Legistar™ COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF SOUTH SAN FRANCISCO CALIFORNIA YEAR ENDED JUNE 30, 2019 Exhibit A CITY OF SOUTH SAN FRANCISCO, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2019 Prepared by: Department of Finance This Page Left Intentionally Blank CITY OF SOUTH SAN FRANCISCO, CALIFORNIA Comprehensive Annual Financial Report For the Year Ended June 30, 2019 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 .................................................................................................................. 25 Statement of Activities ...................................................................................................................... 26 Fund Financial Statements: Major Governmental Funds: Balance Sheet ................................................................................................................................ 30 Reconciliation of Governmental Fund Balances to Net Position of Governmental Activities .... 32 Statement of Revenues, Expenditures, and Changes in Fund Balances ....................................... 34 Reconciliation of the Net Change in Fund Balances Total Governmental Funds with the Statement of Activities ........................................................................................................ 36 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Budgetary Basis: General Fund ....................................................................................................................... 37 Low and Moderate Income Housing Assets ....................................................................... 38 Major Proprietary Funds: Statement of Net Position .............................................................................................................. 40 Statement of Revenues, Expenses, and Changes in Fund Net Position ........................................ 41 Statement of Cash Flows ............................................................................................................... 42 i CITY OF SOUTH SAN FRANCISCO, CALIFORNIA Comprehensive Annual Financial Report For the Year Ended June 30, 2019 Table of Contents Page FINANCIAL SECTION (Continued) Fiduciary Funds: Statement of Fiduciary Net Position ............................................................................................. 44 Statement of Changes in Fiduciary Net Position .......................................................................... 45 Notes to Basic Financial Statements ...................................................................................................... 47 Required Supplementary Information: Schedule of Changes in Net Pension Liability and Related Ratios- Miscellaneous Plan .............................................................................................................. 92 Schedule of Contributions – Miscellaneous Plan .......................................................................... 93 Schedule of Changes in Net Pension Liability and Related Ratios – Safety Plan ........................ 94 Schedule of Contributions – Safety Plan ....................................................................................... 95 Schedule of Changes in the Net OPEB Liability and Related Ratios ........................................... 96 Schedule of Contributions – Retiree Healthcare OPEB Plan ........................................................ 97 Notes to Schedule of Employer Contributions .............................................................................. 97 Supplementary Information: General Fund: Combining Balance Sheets ............................................................................................................. 102 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances ..................................................................................................................... 103 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual - (Non GAPP Legal Basis) ........................................... 104 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) .................................... 108 East of 101 Sewer Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ................ 109 East of 101 Traffic Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ............... 110 Child Care Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ............................ 111 ii CITY OF SOUTH SAN FRANCISCO, CALIFORNIA Comprehensive Annual Financial Report For the Year Ended June 30, 2019 Table of Contents Page FINANCIAL SECTION (Continued) Developer Deposits Capital Projects Fund (Non GAAP Legal Basis) .................................. 112 Capital Infrastructure Reserve Fund (Non GAAP Legal Basis) ............................................ 113 Non-major Governmental Funds: Combining Balance Sheet ............................................................................................................... 118 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ..................................................................................................................... 122 Budgeted Non-major Government Funds: Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual ................................................................................... 126 Internal Service Funds: Combining Statement of Net Position ............................................................................................ 136 Combining Statement of Revenues, Expenses and Changes in Fund Net Position ....................... 137 Combining Statement of Cash Flows ............................................................................................. 138 Fiduciary Funds: Statement of Changes in Assets and Liabilities – Agency Fund .................................................. 140 STATISTICAL SECTION Net Position by Component – Last Ten Fiscal Years .................................................................... 143 Changes in Net Position - Last Ten Fiscal Years ........................................................................... 144 Fund Balances of Governmental Funds - Last Ten Fiscal Years ................................................... 148 Changes in Fund Balance of Governmental Funds – Last Ten Fiscal Years ................................ 150 Assessed Value of Taxable Property - Last Ten Fiscal Years ....................................................... 152 Direct and Overlapping Governments - Property Tax Rates Last Ten Fiscal Years ................................................................................................................ 153 Principal Property Taxpayers – Current Year and Nine Years Ago .............................................. 154 Twenty Largest Taxable Property Owners for Merged RDA Project Area .................................. 155 Property Tax Levies and Collections – Last Ten Fiscal Years ...................................................... 156 iii CITY OF SOUTH SAN FRANCISCO, CALIFORNIA Comprehensive Annual Financial Report For the Year Ended June 30, 2019 Table of Contents Page STATISTICAL SECTION (Continued) Ratio of Outstanding Debt by Type – Last Ten Fiscal Years ........................................................ 157 Computation of Direct and Overlapping Debt ............................................................................... 158 Computation of Legal Bonded Debt Margin ................................................................................. 159 Revenue Bond Coverage Sewer Rental Enterprise Fund – Last Ten Fiscal Years ....................... 160 Sewer Debt Service Coverage Sewer Rental Enterprise Fund – Last Five Fiscal Years .............. 161 Redevelopment Pledged Revenue Coverage – Last Seven Fiscal Years....................................... 162 Demographic and Economic Statistics – Last Ten Fiscal Years ................................................... 163 Principal Employers – Current Year and Nine Years Ago ............................................................ 164 Full-Time Equivalent City Governmental Employees by Function – Last Ten Fiscal Years ....... 165 Operating Indicators by Function/Program – Last Five Fiscal Years ............................................ 166 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ......................................... 167 Miscellaneous Information – Last Three Fiscal Years .................................................................. 168 iv v vi vii viii ix Citizens of South San Francisco City Council Richard Garbarino, Mayor Mark Addiego, Vice Mayor Karyl Matsumoto, Councilmember Mark Nagales, Councilmember Buenaflor Nicolas, Councilmember City Clerk Rosa Govea Acosta City Treasurer Frank Risso City Manager Mike Futrell City Attorney Sky Woodruff Assistant to the City Manager Christina Fernandez Administrative Departments Operating Departments Fire Chief Jess Magallanes Public Works Director Eunejune Kim Library Director Valerie Sommer Capital Projects Director Jacob Gilchrist Econ. & Comm. Dev. Dir. Alex Greenwood Chief of Police Jeff Azzopardi Human Resources Director Leah Lockhart Finance Director Janet Salisbury Assistant City Manager/ Parks & Recreation Director Sharon Ranals Communications Director Leslie Arroyo Information Technology Director Tony Barrera *As of December 15, 2019 x City Council & Directory of Officials* City Council Richard Garbarino Mayor Mark Addiego Vice Mayor Karyl Matsumoto Councilmember Mark Nagales Councilmember Buenaflor Nicolas Councilmember Elected Officials Rosa Govea Acosta City Clerk Frank Risso City Treasurer Appointed Officials Mike Futrell City Manager Sharon Ranals Assistant City Manager / Parks & Recreation Director Janet Salisbury Finance Director Leslie Arroyo Communications Director Jeff Azzopardi Chief of Police Tony Barrera Information Technology Director Jacob Gilchrist Capital Projects Director Alex Greenwood Economic & Community Development Director Leah Lockhart Human Resources Director Jess Magallanes Fire Chief Eunejune Kim Public Works Director Valerie Sommer Library Director Budget Subcommittee Mark Addiego Buenaflor Nicolas *As of December 15, 2019 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, 2019, 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. The financial statements of the Authority were audited by other auditors, whose report has been furnished to us and our opinion, insofar as it relates to the amounts included for the Authority, is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government 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. We did not audit the discretely presented component unit financial statements of the South San Francisco Conference Center Authority (Authority), which represents 1%, 2%, and 2%, respectively, of the assets, net position, and revenue of the primary government. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Authority, is based solely on the report of the other auditors. 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, 2019, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparisons listed in the Table of Contents as part of the basic financial statements for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter Management adopted the provisions of the following Governmental Accounting Standards Board Statement, which became effective during the year ended June 30, 2019: Governmental Accounting Standards Board Statement 88 – Certain Disclosures Related to Debt including Direct Borrowings and Direct placements. See Note 5 to the financial statements for relevant disclosures. The emphasis of these matters does not constitute a modification of our opinion. 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 as listed in the Table of Contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about 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. 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. 2 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 18, 2019 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 18, 2019 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 YEAR (FY) 2018-19 FINANCIAL HIGHLIGHTS Summary: The Fiscal Year 2018-19 financials reflect the continuation of a robust economy and development climate in South San Francisco. The General Fund, excluding transfers, generated an operating surplus of $31.3 million; this surplus includes the 2016 voter-approved Measure W half-cent transactions and use tax collection of $12.6 million. General Fund revenues (excluding operating transfers in) increased by $14.1million from the prior year, representing a 11.9% increase. Much of the revenue growth stemmed from increases in the top three tax categories (property, sales, and transient occupancy), along with an increase in interest and rentals. Demand for residential and non-residential development in South San Francisco remained high, which was observed in the record $15.4 million collection in licenses and permits fees. As in years past, the General Fund reserves were fully funded in accordance with the City’s Reserves Policy, which follows best practices as recommended by the Government Finance Officers’ Association (GFOA). City-wide financial highlights of the year include the following: Total Net Position for Governmental Activities in FY 2018-19 increased by $54 million in comparison to prior year (from $221 million to $275 million). This increase was driven not only by increases in taxes, but also across all program revenues (i.e., service charges and operating grants and contributions). Net pension liability remained fairly static at $182.7 million, representing a nominal decrease of approximately $172,000 from prior year. The stasis was largely a result of no radical changes in CalPERS’s actuarial assumptions; current year assumption changes were limited to a small reduction of assumed inflation rate from 2.75% to 2.50%, which nominally worked in the City’s favor in terms of calculating the City’s net pension liability. Sales tax revenues increased from $28.7 million in FY 2017-18 to $32.3 million in FY 2018- 19. While a healthy increase of 12.3%, reflective the City’s strong economy, it was a slight softening versus prior year’s increase of 17.4%. Revenue from licenses and permits for Governmental Funds continued to increase from $14.7 million to $15.4 million, indicative of the City’s notable and prudent investments to strengthening development in the area. South San Francisco continues to see unprecedented levels of new construction, especially in the East of 101 area along with high density residential in the downtown area. 5 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information 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; 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 position 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. 6 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information 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:  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. 7 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information 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. 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 position 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 The following analyses focus on the net position and changes in the City’s Governmental Activities (Tables 1 through 3 and Chart 1) and Business-type Activities (Tables 4 and 5), which are presented in the City-wide Statement of Net Position and Statement of Activities. The comparative results for FY 2018-19 are presented against FY 2017-18. Governmental Activities Net position may serve over time as a useful indicator of the City’s financial condition. Table 1 below shows that total assets deferred outflows of resources exceed the total liabilities and deferred inflow of resources as of June 30, 2019 for governmental activities: 8 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Governmental Net Position Table 1 Governmental Net Position at June 30 (In Millions) The total net position for Governmental Activities increased by $54 million in FY 2018-19 compared to the prior year, reflecting significant increases in assets, primarily in cash and investments. The increase in assets reflects the continued growth in the local economy, comprised of robust development within the area. Pursuant to GASB 75 requirements, the City, as in the prior year, recognized the full OPEB liability of $60.6 million. The City’s net pension liability remained flat with a nominal decrease of $172,000 to $182.7 million from prior year’s liability of $182.9 million. 2019 2018 Cash and investments 195.4$ 146.6$ Other assets 36.6 35.9 Capital assets 272.1 255.7 Total assets 504.1 438.2 Total outflows of resources 32.4 44.0 Total outflow of resources 32.4 44.0 Long‐term debt outstanding 5.3 9.1 Other liabilities 253.9 250.0 Total liabilities 259.2 259.1 Deferred inflows of resources 2.2 2.0 Total deferred inflow of resources 2.2 2.0 Net po sition: Net investment in capital assets 271.3 254.6 Restricted 128.7 96.3 Unrestricted (124.9) (129.8) Total net position 275.1$ 221.1$ 9 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information The following table shows the changes in net position for governmental activities: Table 2 Program Revenue and Expense Comparison in Governmental Activities (In Millions) 2018‐19 2017‐18 Revenues Program revenues: Charges for services 62.7$ 52.9$ Operating grants and contributions 12.1 5.8 Capital grants and contributions 1.6 2.5 Total program revenues 76.4$ 61.2$ General revenues: Taxes: Property taxes 33.5$ 29.6$ Sales taxes 31.8 28.4 Transient occupancy taxes 17.1 14.0 Other taxes 9.5 10.3 Property taxes in lieu 7.2 6.4 Investment earnings 4.8 1.1 Miscellaneous 8.6 5.2 Extraordinary Item (0.5) (7.2) Total general revenues 112.0$ 87.8$ Total revenues 188.4$ 149.0$ Expenses General government 12.1$ 12.5$ Fire department 32.0 30.3 Police department 33.0 30.7 Public works department 20.4 18.4 Recreation and community development 18.0 17.2 Library 6.2 5.9 Economic and community development 10.6 10.1 Interest on long‐term debt ‐ ‐ Total expenses 132.3$ 125.1$ Excess (deficiency) before transfers 56.1$ 23.9$ Transfers (2.1) (2.0) Change in net position 54.0 21.9 Net position ‐ beginning 221.1 199.2 Net position ‐ ending 275.1$ 221.1$ 10 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Governmental program expenses increased by $7.2 million in comparison to the prior year due to normal salary increases along with additional expenditures related to professional services. However, compared to prior year, increases in total revenues significantly outpaced increases in total expenditures. The almost $32.6 million increase from the prior year total revenues reflect strong and consistent increases among almost all the revenue categories and absent of any extraordinary items. For FY2018-19, revenues for the City’s Governmental Activities Funds are distributed as follows: Chart 1 Revenues by Source - Governmental Activities 2018-19 The revenue distribution in the above chart remains relatively unchanged from the prior year, with no more than a 2% variance in any one category versus the prior year. Similar to Table 2 above, Table 3 below illustrates 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 taxes, transient occupancy taxes, and investment earnings, cover the shortfall between program revenues and program expenses. Charges for Services 33% Operating Grants and Contributions 6% Capital Grants and Contributions 1% Property taxes 21% Sales taxes 17% Transient occupancy taxes 9% Franchise fees 2% Other taxes 3%Interest and rentals 3% Miscellaneous 5% 11 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Table 3 Net (Expense) Revenue from Services Governmental Activities (In Millions) In FY 2018-19, the net expense for governmental activities decreased from $63.9 million to $55.8 million, primarily driven by enhanced collections within Public Works department and significant decreases in general government expenditures. Business Type Activities Table 4 below shows that total assets deferred outflows of resources exceed the total liabilities and deferred inflow of resources as of June 30, 2019 for business-type activities: `2018‐19 2017‐18 General government (2.8)$ (9.4)$ Fire department (25.9) (24.0) Police department (30.0) (27.8) Public works department 17.3 10.8 Recreation and community services (12.8) (11.9) Library (5.7) (5.4) Economic and community development 4.1 3.8 Interest on long‐term debt Total (55.8)$ (63.9)$ 12 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Table 4 Business-type Net Position at June 30 (in Millions) The total net position for business-type activities increased by $7.2 million compared to the prior year. Total assets increased by $16.3 million, or 10.9%, reflecting increases of capital assets related to upgrades in the City’s Wastewater Treatment Plant (Wet Weather Digester Project). However, total liabilities increased by $7.8 million due to debt service on the State Revolving Fund loan. 2019 2018 Cash and Investments 26.1$ 24.3$ Other assets 0.5 0.5 Capital assets 138.6 124.1 Total assets 165.2 148.9 Deferred outflows related to pension 3.6 4.9 Total Deferred outflow of resources 3.6 4.9 Long‐term liabilities outstanding 33.2 29.3 Other liabilities 34.9 31.0 Total liabilities 68.1 60.3 Deferred inflows related to pension 0.2 0.2 Total deferred inflow of resources 0.2 0.2 Net position: Net investment in capital assets 100.5 90.1 Restricted ‐ ‐ Unrestricted 0.0 3.2 Total net position 100.5$ 93.3$ 13 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Table 5 below shows the changes in net position for business-type activities: Table 5 Change in Business-type Net Position (In Millions) Business-type activity ended the fiscal year with a positive change in its net position by $7.2 million compared to $5.4 million the previous fiscal year. This positive $7.2 million change was partially attributable to revenues from sanitary sewer service fee rate increases. 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. At June 30, 2019, the City’s governmental funds reported combined fund balances of $185.1 million, an increase of $45.3 million, or 32.4%, compared to the prior year. The General Fund ending fund balance was $84.9 million, reflecting an increase of $23.6 million, or 38.6%. The change in fund balance was largely attributable to the continuation of the robust economic conditions in South San Francisco. 2018‐19 2017‐18 Expenses Sewer Enterprise 25.7$ 24.4$ Parking District 0.9 1.2 Storm Water 1.2 1.0 Total expenses 27.8 26.6 Revenues Program Revenues Charges for Services 25.8 24.2 Operating grants and contributions 6.5 5.8 Total program revenues 32.3 30.0 General revenues Investment earnings 0.6 0.0 Total general revenues 0.6 0.0 Excess (deficiency) before transfers 5.1 3.4 Transfers 2.1 2.0 Change in net position 7.2 5.4 Net position ‐ beginning (as adjusted) 93.3 87.9 Net position ‐ ending 100.5$ 93.3$ 14 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Total governmental fund revenues increased by $31.0 million, from $156.1 million to $187.1 million, with increases among almost all the categories, indicative of the vitality of the local economy and development environment. Total governmental fund expenditures increased by $19.7 million, from $120.1 million to $139.8, or 16.4%, largely stemming from increased Capital Improvement projects vis a vis the Public Works department. In addition, the City’s personnel costs for salaries and pensions increased in accordance with negotiated increases and increases in the cost for various benefits, primarily pensions and healthcare. 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: 15 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) Revenues Original Budget Final Budget Change Pct Change Discussion: (Items of more than 5% and $100,000 variance) Property taxes 34,556$ 35,346$ 790$ 2.3% Received Education Revenue Augmentation fund (ERAF) property tax refund from the County. Sales taxes 26,935 29,361 2,426 9.0% Amended budget to account for City's consultants projection of 1/2 cent sales tax in Measure W revenues. Transient occupancy taxes 15,834 15,834 - Other taxes 5,833 5,833 - Franchise Fee 4,000 4,000 - Intergovernmental 1,473 3,412 1,939 131.6% Reflects the Federal and State Grants that the Library, Police, Parks and Recreation, and Economic & Community Development Departments often receives after the year starts. Additionally, cost reimbursement from CAL OES for mutual aid provided by the Fire Department. Interest and rentals 3,059 3,059 - Licenses and permits 12,072 12,072 - Charges for services 8,989 9,329 340 3.8% The budget was increased due to anticipated additional revenue from Fire Services/Ambulance billing. Fines and forfeitures 619 619 - Other 178 289 111 62.4% Amended budget in acceptance of donation and partial reimbursements from Risk Management. Total 113,548$ 119,154$ 5,606$ 4.9% Expenditures Original Budget Final Budget Change Pct Change Discussion: (Items of more than 5% and $100,000 variance) City Council 280$ 280$ -$ City Clerk 818 818 - City Treasurer 133 133 - City Attorney 1,064 1,081 17 1.6% City Manager 2,959 5,738 2,779 93.9% Accounts for carryover purchase orders for professional services primarily related to community outreach, General Plan Update and establishment of Community Facilities Districts. Finance 3,022 3,384 362 12.0% Accounts for carryover purchase orders related to implementation of the new Human Capital Management System (HCMS), Updating Policies and Procedures and Special Tax Consultant-potential CFD. Non-Departmental 1,072 1,131 59 5.5% Accounts for carryover purchase orders for professional services related to Grant Writing Services. Human Resources 1,535 1,780 245 16.0% Accounts for carryover purchase orders for professional services for recruitment. Fire 27,712 29,105 1,393 5.0% Accounts for carryover purchase orders primarily for Fire plan check review services. Police 29,174 29,254 80 0.3% Public Works 6,285 6,512 227 3.6% Accounts for carryover purchase orders primarily for various On-call Professional Services. Parks and Recreation 16,295 17,103 808 5.0% Library 5,806 6,150 344 5.9% Accounts for miscellaneous donations and grants received after the year starts. Economic and Community Development 9,009 12,444 3,435 38.1% Accounts for carryover purchase orders for plan review and building inspection professional services. Total 105,164$ 114,913$ 9,749$ 9.3% 16 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Analysis of Major Governmental Funds General Fund Revenues. In FY 2018-19, total General Fund revenues, excluding transfers in, were $133.8 million, which was $12.4 million, or 10.2 percent over the final amended budget. Total General Fund expenditures, excluding transfers out, ended FY 2018-19 at $102.5 million, which was $12.2 million, or 10.7 percent under budget. Overall, including transfers, the General Fund ended FY 2018-19 with a surplus of $23.7 million, predominantly due to the items discussed below. Property tax collections in FY 2018-19 was $38.7 million, which was $3.3 million 9.4% or over budget. This was mainly due to higher than expected increases in assessed values. Sales tax revenues, including Measure W, was $2.9 million or 9.9% over budget, which was indicative of the strong economic base in South San Francisco, where nearly every business category increased its taxable sales on a year-over-year basis. Transient occupancy taxes saw a marked $1.3 million or 7.9% increase over budget, representing a higher than expected demand for lodging within the area. Permit revenues were $3.3 million over budget, setting an all-time record for a fiscal year, largely attributable to non-residential development in the East of 101 area and high density residential development in the downtown area. The increase in revenue also reflect the continuing effects of City Council’s prior year approval of a comprehensive fee study that improved the cost recovery rate from 57 to 81 percent. Charges for services was $2.2 million over budget, largely through higher than expected fee collection in Developer Contributions, Paramedic Service Fees, and Electric Permit Fees. The above higher than budgeted revenues offset negative variances for other tax collection ($0.8 million below budget) and intergovernmental revenues ($0.5 million below budget). Expenditures. General Fund expenditures, excluding transfers out, largely remained within budget (less than $0.5 million variance). Higher than expected expenditures as a result of multi- year encumbrances within the Economic and Community Development department ($1.8 million over budget) were offset by expenditure “savings” as a result of staff vacancies in multiple departments. Compared to the prior year, General Fund expenditures increased from $101 million to $114.4 million, largely driven by increased cost for necessary professional services in addition to normal increases in employee salary and benefits. As of June 30, 2019, the General Fund total fund balance was $85.0 million, which included $22.6 million in committed reserves, $19.2 million in restricted reserves, and $31.2 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. 17 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information 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. As of June 30, 2019, the fund balance was $6 million. In FY 2018-19, the City Housing Fund received for $0.3 million in revenues. The fund had $0.1 million in expenses, the majority of which was for administrative staff costs to support the City’s Housing Division. 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. Developer Impact Fees In FY 2018-19, commensurate with the robust development climate in South San Francisco, and to ensure that new development pays its fair share of the impact on the City’s capital and infrastructure, the City accounted for significant collection of developer impact fees, including $1.9 million in East of 101 Sewer Impact Fees, $8.8 million in East of 101 Traffic Impact Fees, $0.9 million in Child Care Impact Fees, and $3.5 million in Oyster Point Interchange Impact Fees. Other Governmental Funds Presented as a group in the Basic Financial Statements, these funds are individually presented as Supplementary Information. 18 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information Enterprise Funds Sewer Enterprise Fund The Sewer Enterprise fund reported operating income (before non-operating revenues and operating transfers) of $5 million in FY 2018-19. Operating revenues increased from $28.3 million to $29.9 million (increase of 5.9%). Operating expenses increased from $23.5 million to $24.9 million, an increase of $1.4 million or 5.8%, reflecting the impact of increases in employee compensation along with slight increases in normal expenditures like professional services and supplies. Parking District Fund In FY 2018-19, operating revenues increased from $1.1 million to $1.2 million, principally due to additional revenues from parking meters, reflecting the City’s investment in smart meter technology. Operating expenses decreased from $1.3 million to $0.9 million as the prior year’s expenditures included the purchase and implementation of smart meters. Net position increased from $13.8 million to $14.1 million, largely driven by lower expenditures. 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 $0.4 million, primarily from a levy on property owners. Transfers in totaled $1.4 million, primarily comprised of $0.6 million from the General Fund and $0.8 from non-major governmental funds. Expenses totaled just below $1.2 million, which was a $146 thousand or 14% increase from prior year. Much of the increases were a result of higher supplies cost and depreciation. Net position increased from $3.0 million to $4.5million, an increase of $1.5 million. 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, 2019, the City had $410.7 million in capital assets, net of depreciation, representing a sizable increase of $30.9 million from the prior year, largely driven by in progress construction projects. 19 CITY OF SOUTH SAN FRANCISCO MANAGEMENT’S DISCUSSION AND ANALYSIS Required Supplementary Information The City’s various capital asset types used in governmental and business-type activities, are illustrated in Table 7 below: Table 7 Capital Assets (in Millions) at June 30 2019 2018 Governmental Activities: Land 67.9$ 67.2$ Buildings and improvements 96.2 94.9 Equipment and vehicles 22.8 21.9 Furniture and fixtures 2.6 2.6 Infrastructure ‐ streets*199.7 195.0 Infrastructure ‐ traffic control devices* 10.8 10.1 Infrastructure ‐ storm drains*8.9 8.9 Construction in progress 35.3 18.0 Less accumulated depreciation (172.1) (162.9) Totals 272.1$ 255.7$ * Additions during the fiscal year only Business‐type Activities Land 0.8$ 0.8$ Buildings and improvements 67.1 66.9 Clean water facilities and transmission line 79.9 75.5 Infrastructure ‐ storm drains 5.6 4.8 Infrastructure ‐ streets 7.3 7.4 Equipment and vehicles 18.5 18.5 Construction in progress 25.1 11.2 Less accumulated depreciation (65.7) (61.0) Totals 138.6$ 124.1$ Total City 410.7$ 379.8$ 20 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 increase in Business-type Activities outstanding debt of $4.1 million stems from additional State Water Resources Board loans. The largest remaining debt obligations are the following: - Three loans to the City’s Sewer Enterprise Fund from the State Water Resources Control Board to finance the expansion of the City’s water quality control plant and pay for Wet Weather improvements which will improve environmental impacts on the Bay. Principal and interest repayments commence on the loans upon completion of the project related to each loan package. The three current loans outstanding have fixed interest of 2.6%, 2.5% and 2.4% are due in 2022, 2026 and 2028. Because of the regional benefits and equity interest in these projects, the City of San Bruno shares in the loan repayments for the first two of the three current loans. ECONOMIC OUTLOOK AND MAJOR ACCOMPLISHMENTS The economic outlook and major accomplishments of the City are discussed in the accompanying Transmittal Letter. CONTACTING THE CITY’S FINANCIAL MANAGEMENT This Comprehensive Annual Financial Report is intended to provide readers with a general overview of the City’s finances. Questions about this report or requests for additional financial information should be directed to the City of South San Francisco Finance Department, P.O. Box 711, South San Francisco, CA 94083, and phone (650) 877-8512. The City’s website is at www.ssf.net. Governmental Activities 2019 2018 Loan payable to Successor Agency 4.8$ 8.3$ Capital leases 0.8 1.1 Total Governmental Activities Outstanding Debt 5.6$ 9.4$ Business‐type Activities State Water Resources Board loans 35.1$ 30.8$ 2005 Sewer Bonds 3.0 3.2 Total Business‐type Activities Outstanding Debt 38.1$ 34.0$ 21 This Page Left Intentionally Blank 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. 23 This Page Left Intentionally Blank Component Unit Primary Government South San Francisco Governmental Business-Type Conference Activities Activities Total Center ASSETS Cash and investments (Note 2)$195,442,088 $26,151,985 $221,594,073 $4,399,644 Receivables: Accounts 11,264,055 445,162 11,709,217 335,440 Accrued interest 1,006,236 118,580 1,124,816 Loans 1,699,277 1,699,277 Deposit 129,101 129,101 14,206 Inventory 372 372 Prepaid items 869,945 869,945 Restricted cash and investments (Note 2)352,222 66 352,288 Internal balances (Note 4A)54,847 (54,847) Properties held for redevelopment (Note 1N)21,101,948 21,101,948 Capital assets (Note 3): Nondepreciable 103,254,548 25,883,165 129,137,713 17,500 Depreciable, net accumulated depreciation 168,848,435 112,698,319 281,546,754 3,264,004 Total Assets 504,076,663 165,242,430 669,319,093 8,030,794 DEFERRED OUTFLOW OF RESOURCES Related to pension (Note 7)28,600,842 3,177,871 31,778,713 Related to OPEB (Note 9)3,823,200 424,800 4,248,000 Total Deferred Outflow of Resources 32,424,042 3,602,671 36,026,713 LIABILITIES Accounts payable 6,187,567 4,047,423 10,234,990 352,231 Accrued salaries and benefits 1,659,795 1,659,795 61,896 Accrued interest payable 485,800 485,800 Other payable 1,729,185 356,564 2,085,749 Deposits 2,673,535 7,500 2,681,035 312,064 Unearned revenue 902,991 199,636 1,102,627 Accrued insurance losses (Note 11): Due within one year 712,000 712,000 Due in more than one year 13,739,253 13,739,253 Compensated absences obligation (Note 1L): Due within one year 4,331,917 501,011 4,832,928 Due in more than one year 2,701,136 43,937 2,745,073 Debt and capital lease obligations (Note 5): Due within one year 263,838 4,906,394 5,170,232 Due in more than one year 5,334,933 33,211,810 38,546,743 Net OPEB Liability - due in more than one year (Note 9)54,525,600 6,058,400 60,584,000 Net pension liability - due in more than one year (Note 7)164,429,247 18,269,916 182,699,163 Total Liabilities 259,190,997 68,088,391 327,279,388 726,191 DEFERRED INFLOW OF RESOURCES Related to pension (Note 7)1,746,574 194,064 1,940,638 Related to OPEB (Note 9)489,600 54,400 544,000 Total Deferred Inflow of Resources 2,236,174 248,464 2,484,638 NET POSITION (Note 6) Net investment in capital assets 271,349,364 100,463,280 371,812,644 3,281,504 Restricted for: Special revenue projects 37,102,503 37,102,503 Capital projects 61,448,139 61,448,139 Redevelopment and community development activities 19,201,948 19,201,948 Total Restricted Net Position 117,752,590 117,752,590 Unrestricted (114,028,420)44,966 (113,983,454)4,023,099 Total Net Position $275,073,534 $100,508,246 $375,581,780 $7,304,603 See accompanying notes to financial statements CITY OF SOUTH SAN FRANCISCO STATEMENT OF NET POSITION JUNE 30, 2019 25 Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary Government Governmental Activities: General Government $12,139,671 $7,930,983 $1,452,636 Fire 31,986,738 6,052,804 Police 32,994,122 2,351,491 648,796 Public Works 20,425,958 27,811,701 8,301,786 $1,629,730 Parks and Recreation 17,962,298 4,293,474 852,154 Library 6,241,093 105,466 387,914 Economic and Community Development 10,557,116 14,214,991 447,793 Total Governmental Activities 132,306,996 62,760,910 12,091,079 1,629,730 Business-type Activities Sewer 25,719,049 24,078,076 5,827,480 Parking District 896,994 1,180,538 Storm Water 1,188,182 540,679 625,470 Total Business-type Activities 27,804,225 25,799,293 6,452,950 Total Primary Government $160,111,221 $88,560,203 $18,544,029 $1,629,730 Component Unit Conference Center $4,198,022 $2,331,740 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 Gain from sale of property Miscellaneous Special Item: Assets transferred from the Successor Agency (Note 13C) Remittance of land sale proceeds to taxing entities Transfers (Note 4) Total general revenues, special item 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, 2019 Program Revenues 26 Component Unit South San Francisco Governmental Business-Type Conference Activities Activities Total Center ($2,756,052)($2,756,052) (25,933,934)(25,933,934) (29,993,835)(29,993,835) 17,317,259 17,317,259 (12,816,670)(12,816,670) (5,747,713)(5,747,713) 4,105,668 4,105,668 (55,825,277)(55,825,277) $4,186,507 4,186,507 283,544 283,544 (22,033)(22,033) 4,448,018 4,448,018 (55,825,277)4,448,018 (51,377,259) ($1,866,282) 33,446,750 33,446,750 31,843,568 31,843,568 17,091,222 17,091,222 2,243,066 4,469,808 4,469,808 4,995,404 4,995,404 32,200 32,200 7,150,867 7,150,867 4,808,664 633,704 5,442,368 76,759 840,298 840,298 7,799,392 7,799,392 11,575 829,315 829,315 (1,360,906)(1,360,906) (2,101,222)2,101,222 109,845,360 2,734,926 112,580,286 2,331,400 54,020,083 7,182,944 61,203,027 465,118 221,053,451 93,325,302 314,378,753 6,839,485 $275,073,534 $100,508,246 $375,581,780 $7,304,603 Primary Government Net (Expenses) Revenues and Changes in Net Position 27 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 2019. 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). 29 GOVERNMENTAL FUNDS BALANCE SHEET JUNE 30, 2019 Low and Moderate East of 101 General Income Capital Sewer Fund Housing Assets Improvement Impact Fees ASSETS Cash and investments (Note 2)$60,775,901 $5,057,889 $9,525 $4,417,241 Receivables: Accounts 8,581,277 7,550 2,147,656 Accrued interest 274,790 30,572 18,893 Due from Conference Center 53,589 Loans 891,227 Due from other funds (Note 4B)1,100,000 Inventory 372 Prepaid items 39,205 Restricted cash and investments (Note 2)200,000 Properties held for redevelopment (Note 1N)19,201,948 $90,187,877 $5,987,238 $2,196,386 $4,436,134 Total Assets LIABILITIES Liabilities: Accounts payable $2,609,145 $3,122,071 Accrued salaries and benefits 1,659,795 Other payable 65,755 906,455 Deposits 763,563 Unearned revenue 146,436 Due to other funds (Note 4B)1,100,000 Total Liabilities 5,244,694 5,128,526 Fund Balances (Note 6): Nonspendable 372 39,205 Restricted 19,201,948 5,987,238 $4,436,134 Committed 22,619,868 Assigned 11,881,363 Unassigned 31,239,632 (2,971,345) Total Fund Balances (Deficits)84,943,183 5,987,238 (2,932,140)4,436,134 Total Liabilities and Fund Balances (Deficits)$90,187,877 $5,987,238 $2,196,386 $4,436,134 See accompanying notes to basic financial statements CITY OF SOUTH SAN FRANCISCO Capital Projects Funds 30 East of 101 Capital Other Total Traffic Child Care Developer Infrastructure Governmental Governmental Impact Fees Impact Fees Deposit Reserve Fund Funds Funds $20,493,141 $5,504,200 $10,055 $18,978,469 $47,248,727 $162,495,148 492,055 11,228,538 100,316 32,528 1,856 129,503 230,942 819,400 53,589 808,050 1,699,277 1,100,000 372 39,205 152,222 352,222 1,900,000 21,101,948 $20,593,457 $5,536,728 $11,911 $19,107,972 $50,831,996 $198,889,699 $223,707 $5,954,923 1,659,795 480,000 1,452,210 $2,295 1,907,677 2,673,535 756,555 902,991 1,100,000 2,295 3,367,939 13,743,454 39,577 $20,593,457 $5,536,728 9,616 $19,107,972 47,464,057 122,337,150 22,619,868 11,881,363 28,268,287 20,593,457 5,536,728 9,616 19,107,972 47,464,057 185,146,245 $20,593,457 $5,536,728 $11,911 $19,107,972 $50,831,996 $198,889,699 Capital Projects Funds 31 CITY OF SOUTH SAN FRANCISCO GOVERNMENTAL FUNDS BALANCE SHEET - RECONCILIATION OF GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES JUNE 30, 2019 Total fund balances reported on the governmental funds balance sheet $185,146,245 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.267,191,425 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.21,770,119 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 (4,845,152) Deferred outflows related pension 28,600,842 Deferred outflows related to OPEB 3,823,200 Net OPEB liability (54,525,600) Net pension liability (164,429,247) Deferred inflows related to OPEB (489,600) Deferred inflows related to pension (1,746,574) Non-current portion of compensated absences (5,422,124) Net position of governmental activities $275,073,534 See accompanying notes to financial statements 32 This Page Left Intentionally Blank Low and Moderate East of 101 General Income Capital Sewer Fund Housing Assets Improvement Impact Fees REVENUES Property taxes $38,659,657 Sales taxes 32,251,636 Transient occupancy taxes 17,091,222 Franchise Fees 4,469,808 Other taxes 4,995,404 Intergovernmental 2,876,545 $6,641,789 Interest and rentals 4,409,185 $304,949 $100,304 Licenses and permits 15,381,416 Charges for services 11,563,755 1,781,407 Fines and forfeitures 926,729 Other 330,881 850,000 Total Revenues 132,956,238 304,949 7,491,789 1,881,711 EXPENDITURES Current: City Council 258,760 City Clerk 770,985 City Treasurer 123,505 City Attorney 961,588 City Manager 2,339,342 Finance 2,789,187 Non-departmental 1,219,533 2,652 Human Resources 1,621,409 Fire 27,572,488 Police 28,482,445 Public Works 5,787,782 25,688,553 Parks and Recreation 16,530,603 Library 5,628,693 Economic and Community Development 8,433,298 95,960 20,276 Other Debt service: Principal repayments Total Expenditures 102,519,618 95,960 25,708,829 2,652 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 30,436,620 208,989 (18,217,040)1,879,059 OTHER FINANCING SOURCES (USES) Proceeds from sale of property 840,298 Transfers in (Note 4C)4,906,791 15,087,484 Transfers out (Note 4C)(11,995,827)(281,827) Total Other Financing Sources (Uses)(6,248,738)15,087,484 (281,827) Net Change in Fund Balances before special items 24,187,882 208,989 (3,129,556)1,597,232 SPECIAL ITEMS Assets transferred from the Successor Agency (Note 13C)829,315 Remittance of land sale proceeds (1,360,906) Net Change in Fund Balances 23,656,291 208,989 (3,129,556)1,597,232 Fund balances (deficits) - July 1 61,286,892 5,778,249 197,416 2,838,902 Fund balances (deficits) - June 30 $84,943,183 $5,987,238 ($2,932,140) $4,436,134 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, 2019 34 East of 101 Capital Other Total Traffic Child Care Developer Infrastructure Governmental Governmental Impact Fees Impact Fees Deposit Reserve Fund Funds Funds $1,937,960 $40,597,617 32,251,636 17,091,222 4,469,808 1,913,308 6,908,712 3,661,259 13,179,593 $533,381 $172,624 $6,371 $683,549 1,020,940 7,231,303 15,381,416 8,304,582 747,845 18,658,070 41,055,659 926,729 6,813,820 7,994,701 8,837,963 920,469 6,371 683,549 34,005,357 187,088,396 258,760 770,985 123,505 961,588 2,339,342 2,789,187 2,652 77,364 1,302,201 1,621,409 4,391 27,576,879 50,847 28,533,292 2,652 73,500 6,907,476 38,459,963 16,530,603 5,628,693 535,856 9,085,390 333,024 333,024 3,464,000 3,464,000 2,652 76,152 11,372,958 139,778,821 8,835,311 844,317 6,371 683,549 22,632,399 47,309,575 840,298 2,236,224 22,230,499 (701,659)(3,161,063)(8,441,345) (24,581,721) (701,659)(3,161,063)(6,205,121)(1,510,924) 8,133,652 844,317 6,371 (2,477,514)16,427,278 45,798,651 829,315 (1,360,906) 8,133,652 844,317 6,371 (2,477,514)16,427,278 45,267,060 12,459,805 4,692,411 3,245 21,585,486 31,036,779 139,879,185 $20,593,457 $5,536,728 $9,616 $19,107,972 $47,464,057 $185,146,245 Capital Projects Funds 35 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, 2019 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $45,267,060 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 26,003,235 Retirement and adjustment of capital assets (634,406) Current year depreciation (8,438,645) 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 balance 3,464,000 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 (383,849) Net pension liability, deferred outflows and inflows of resources (11,680,328) Net OPEB liability, deferred outflows and inflows of resources (1,116,480) 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.1,539,496 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $54,020,083 See accompanying notes to financial statements The amount below included in the Statement of Activities does not require the use 36 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, 2019 Variance with Final Budget Actual Positive Original Final Amount (Negative) Resources (inflows): Property taxes $34,555,659 $35,345,744 $38,659,657 $3,313,913 Sales taxes 26,935,176 29,361,726 32,251,636 2,889,910 Transient occupancy taxes 15,834,000 15,834,000 17,091,222 1,257,222 Franchise fees 4,000,000 4,000,000 4,469,808 469,808 Other taxes 5,833,028 5,833,028 4,995,404 (837,624) Intergovernmental 1,473,470 3,412,076 2,876,545 (535,531) Interest and rentals 3,059,459 3,059,459 4,409,185 1,349,726 Licenses and permits 12,072,049 12,072,049 15,381,416 3,309,367 Charges for services 8,988,527 9,328,528 11,563,755 2,235,227 Fines and forfeitures 618,500 618,500 926,729 308,229 Other 178,171 289,171 330,881 41,710 Amounts available for appropriation 113,548,039 119,154,281 132,956,238 13,801,957 Charges to appropriations (outflows): City Council 280,694 280,694 258,760 21,934 City Clerk 817,567 817,567 803,909 13,658 City Treasurer 132,900 132,900 123,505 9,395 City Attorney 1,063,691 1,081,462 961,588 119,874 City Manager 2,958,815 5,737,833 5,364,075 373,758 Finance 3,022,116 3,384,364 3,173,973 210,391 Non-departmental 1,072,087 1,130,087 1,265,202 (135,115) Human Resources 1,535,163 1,780,097 1,745,612 34,485 Fire 27,711,586 29,104,944 28,621,268 483,676 Police 29,174,475 29,254,475 28,482,445 772,030 Public Works 6,284,775 6,512,375 6,831,377 (319,002) Parks and Recreation 16,294,509 17,103,184 16,795,119 308,065 Library 5,806,294 6,149,808 5,655,551 494,257 Economic and Community Development 9,009,367 12,443,981 14,318,597 (1,874,616) Total charges to appropriations 105,164,039 114,913,771 114,400,981 512,790 OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets 2,250,000 2,250,000 840,298 (1,409,702) Transfers in (Note 4C) 2,987,105 5,579,214 4,906,791 (672,423) Transfers out (Note 4C) (2,883,001) (5,637,057) (11,995,827) (6,358,770) Total Other Financing Sources (Uses) 2,354,104 2,192,157 (6,248,738) (8,440,895) NET CHANGE IN FUND BALANCES BEFORE SPECIAL ITEMS 10,738,104 6,432,667 12,306,519 5,873,852 SPECIAL ITEMS Assets transferred from the Successor Agency (Note 13C)829,315 829,315 Remittance of land sale proceeds (1,360,906) (1,360,906) NET CHANGE IN FUND BALANCE $10,738,104 $6,432,667 11,774,928 $5,342,261 Fund Balance - July 1 61,286,892 Adjustment to budgetary basis: Encumbrance adjustments 11,881,363 Fund Balance - June 30 $84,943,183 See accompanying notes to financial statements Budgeted Amounts 37 Variance with Final Budget Positive Budget Actual Amounts (Negative) REVENUES: Interest and rental $167,000 $304,949 $137,949 Other 140,000 (140,000) Total Revenues 307,000 304,949 (2,051) EXPENDITURES: Current: Economic and Community Development 543,403 95,960 447,443 Total Expenditures 543,403 95,960 447,443 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (236,403) 208,989 445,392 NET CHANGE IN FUND BALANCE ($236,403) 208,989 $445,392 Fund balance - July 1 5,778,249 Fund balance - June 30 $5,987,238 SPECIAL REVENUE FUND See accompanying notes to financial statements 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, 2019 38 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. 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. 39 CITY OF SOUTH SAN FRANCISCO PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2019 Governmental Business-type Activities - Enterprise Funds Activities Sewer Parking Storm Internal Enterprise District Water Total Service Funds ASSETS Current assets: Cash and investments (Note 2)$20,642,375 $3,489,666 $2,019,944 $26,151,985 $32,946,940 Receivables: Accounts 442,162 3,000 445,162 35,517 Accrued interest 91,270 19,901 7,409 118,580 186,836 Deposits 129,101 Restricted cash and investments (Note 2)66 66 Prepaid Items 830,740 Total current assets 21,175,873 3,512,567 2,027,353 26,715,793 34,129,134 Noncurrent assets: Capital assets (Note 3): Nondepreciable 23,699,347 421,149 1,762,669 25,883,165 Depreciable, net accumulated depreciation 101,385,468 10,271,672 1,041,179 112,698,319 4,911,558 Total non-current assets 125,084,815 10,692,821 2,803,848 138,581,484 4,911,558 Total Assets 146,260,688 14,205,388 4,831,201 165,297,277 39,040,692 DEFERRED OUTFLOWS OF RESOURCES Related to pension (Note 7)3,177,871 3,177,871 Related to OPEB (Note 9)424,800 424,800 Total Deferred Outflows of Resources 3,602,671 3,602,671 LIABILITIES Current liabilities: Accounts payable 4,020,181 200 27,042 4,047,423 232,644 Other payable 228,340 128,224 356,564 276,975 Accrued interest payable 485,800 485,800 Deposits payable 7,500 7,500 Unearned revenue 199,636 199,636 Accrued insurance loss (Note 11)712,000 Compensated absences obligation (Note 1L)476,973 4,589 19,449 501,011 721,104 Current portion of long-term debt (Note 5)4,906,394 4,906,394 263,838 Total current liabilities 10,125,188 4,789 374,351 10,504,328 2,206,561 Noncurrent liabilities: Accrued insurance losses (Note 11)13,739,253 Compensated absences obligation (Note 1L)27,664 16,090 183 43,937 889,825 Noncurrent portion of long-term debt (Note 5)33,211,810 33,211,810 489,781 Net OPEB liability (Note 9)6,058,400 6,058,400 Net pension liability (Note 7)18,269,916 18,269,916 Total noncurrent liabilities 57,567,790 16,090 183 57,584,063 15,118,859 Total Liabilities 67,692,978 20,879 374,534 68,088,391 17,325,420 DEFERRED INFLOWS OF RESOURCES Related to pension (Note 7)194,064 194,064 Related to OPEB (Note 9)54,400 54,400 Total Deferred Inflows of resources 248,464 248,464 NET POSITION: Net investment in capital assets 86,966,611 10,692,821 2,803,848 100,463,280 4,157,939 Unrestricted (deficit)(5,044,694) 3,491,688 1,652,819 99,813 17,557,333 Total Net Position $81,921,917 $14,184,509 $4,456,667 100,563,093 $21,715,272 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 activities (54,847) $100,508,246 See accompanying notes to financial statements 40 CITY OF SOUTH SAN FRANCISCO PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION FOR THE YEAR ENDED JUNE 30, 2019 Governmental Business-type Activities - Enterprise Funds Activities Sewer Parking Storm Internal Enterprise District Water Total Service Funds OPERATING REVENUES Charges for services $23,556,871 $410,600 $23,967,471 $25,835,889 Other cities' participation 5,827,480 5,827,480 Permit fees 521,205 521,205 Parking fees $1,180,538 1,180,538 Total Operating Revenues 29,905,556 1,180,538 410,600 31,496,694 25,835,889 OPERATING EXPENSES Personnel expenses 10,406,362 295,390 704,855 11,406,607 16,609,532 Professional services 1,722,664 182,109 176,380 2,081,153 908,237 OPEB Expenses 535,039 535,039 Program supplies 1,629,685 9,317 181,413 1,820,415 1,246,415 Insurance 210,870 3,698 214,568 1,602,819 Self-insurance and claims 3,323,889 Repair and maintenance 1,212,045 1,212,045 574,807 Rents and leases 1,689,059 1,689,059 Utilities 1,593,208 48,144 19,409 1,660,761 148,225 Administration 1,380,437 107,045 66,727 1,554,209 Depreciation 4,453,302 253,826 25,032 4,732,160 830,054 Other 18,788 3,597 22,385 412,787 Total Operating Expenses 24,851,459 895,831 1,181,111 26,928,401 25,656,765 Operating Income (Loss)5,054,097 284,707 (770,511) 4,568,293 179,124 NONOPERATING REVENUES (EXPENSES) Interest income 488,437 105,790 39,477 633,704 989,587 Gain on dispositions of capital assets 41,611 Interest expense (838,647)(838,647)(30,743) Subventions and grants 625,470 625,470 Other 130,079 130,079 72,740 Total Nonoperating Revenues (Expenses)(350,210)105,790 795,026 550,606 1,073,195 Income (loss) before transfers 4,703,887 390,497 24,515 5,118,899 1,252,319 TRANSFERS Transfers in (Note 4C)651,572 1,449,650 2,101,222 250,000 Change in Net Position 5,355,459 390,497 1,474,165 7,220,121 1,502,319 Net Position (Deficits) - July 1 76,566,458 13,794,012 2,982,502 93,342,972 20,212,953 Net Position (Deficits) - June 30 $81,921,917 $14,184,509 $4,456,667 100,563,093 $21,715,272 Change in Net Position 7,220,121 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 (37,177) Change in Net Position of Business-Type Activities $7,182,944 See accompanying notes to financial statements 41 CITY OF SOUTH SAN FRANCISCO PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2019 Governmental Business-type Activities - Enterprise Funds Activities Sewer Parking Storm Internal Enterprise District Water Total Service Funds CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $29,643,870 $1,177,538 $962,565 $31,783,973 Cash payments to suppliers for goods and services (6,283,419) (399,808) (457,820) (7,141,047) ($4,932,308) Cash payments to employees for services (8,998,734) (292,815) (705,689) (9,997,238) (16,284,429) Cash received from interfund service provided 25,116,781 Cash payments for judgments and claims (1,665,992) Net Cash Provided by (Used in) Operating Activities 14,361,717 484,915 (200,944) 14,645,688 2,234,052 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Subventions and grants 625,470 625,470 Transfers in 651,572 1,449,650 2,101,222 250,000 Net Cash Provided by Noncapital Financing Activities 651,572 2,075,120 2,726,692 250,000 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from issuance of debt 8,854,738 8,854,738 Principal paid on long-term debt (4,782,036)(4,782,036)(381,482) Interest paid on long-term debt (925,490)(925,490)(30,743) Acquisition of capital assets, net (18,356,759)(961,505) (19,318,264)(335,751) Proceeds from the sale of capital assets 79,653 Net Cash Used in Capital and Related Financing Activities (15,209,547)(961,505) (16,171,052)(668,323) CASH FLOWS FROM INVESTING ACTIVITIES Interest received 690,891 145,358 55,224 891,473 1,380,951 Changes in market value of investments (216,345)(47,174)(17,562) (281,081)(442,876) Net Cash Provided by Investing Activities 474,546 98,184 37,662 610,392 938,075 Net Increase (Decrease) in cash and cash equivalents 278,288 583,099 950,333 1,811,720 2,753,804 Cash and cash equivalents, beginning 20,364,153 2,906,567 1,069,611 24,340,331 30,193,136 Cash and cash equivalents, ending $20,642,441 $3,489,666 $2,019,944 $26,152,051 $32,946,940 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss)$5,054,097 $284,707 ($770,511) $4,568,293 $179,124 Adjustments to reconcile operating income (loss) to cash flows from operating activities: Depreciation 4,453,302 253,826 25,032 4,732,160 830,054 Other non-operating revenue (expenses)130,079 130,079 72,740 Net change in assets and liabilities: Accounts and lease receivables (261,686)(3,000) 222,250 (42,436)(35,517) Deposit 74,409 Prepaid items (830,740) Accounts payable 3,619,361 (40,598)(74,321) 3,504,442 98,660 Other payable 89,015 (12,595)67,725 144,145 111,269 Unearned revenue 199,636 199,636 Accrued insurance losses 1,657,897 (Decrease) increase due to OPEB 124,053 124,053 Compensated absence obligations (14,240)2,575 (834)(12,499)76,156 (Decrease) increase due to retirement system 1,297,815 1,297,815 Net Cash Provided by (Used in) Operating Activities $14,361,717 $484,915 ($200,944) $14,645,688 $2,234,052 See accompanying notes to basic financial statements 42 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. 43 Agency Fund Successor SSF Employee Agency Def Comp Private Purpose Trust Trust Fund Oversight ASSETS Cash and investments (Note 2) $6,809,385 $105,115 Accounts receivable 3,049 Interest receivable 46,089 579 Advances to the City (Note 5) 4,845,152 Loans receivable (Note 13B) 159,320 Restricted cash and investments (Note 2) 41,781,296 Capital assets (Note 13C): Nondepreciable 111,219 Depreciable, net accumulated depreciation 257,904 Total Assets 54,013,414 105,694 LIABILITIES Accounts payable 1,706 Deposits 187,519 Other accrued liabilities 103,988 Noncurrent portion of pollution remediation (Note 13E) 537,000 Total Liabilities 724,519 $105,694 NET POSITION Held in trust for other purposes $53,288,895 See accompanying notes to financial statements CITY OF SOUTH SAN FRANCISCO STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2019 44 Successor Agency Private Purpose Trust Fund ADDITIONS Intergovernmental $9,389,320 Interest and rentals 1,031,434 Total Additions 10,420,754 DEDUCTIONS Economic and Community Development 6,572,739 Interest expense 2,375 Depreciation 6,819 Total Deductions 6,581,933 SPECIAL ITEMS Assets transferred to the City of South San Francisco (Note 13C) 829,315 Total Special Items 829,315 Change in net position 3,009,506 NET POSITION HELD IN TRUST FOR OTHER PURPOSES Beginning of the year 50,279,389 End of the year $53,288,895 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, 2019 45 This Page Left Intentionally Blank CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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. 47 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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. 48 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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. 49 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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. 50 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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, 2019. 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.Expenditures in Excess of Appropriations – The City’s General Fund had the following departmental expenditures in excess of appropriations for the year ended June 30, 2019: Expenditures in Excess of Budget (Non GAAP Legal Basis) General Fund: Non-departmental $135,115 Public Works 319,002 Economic and Community Development 1,874,616 51 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I. 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. J. 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. K. Capital Assets – Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are valued at acquisition value. All other capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. 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. L. 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. 52 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The changes of the compensated absences were as follows: Governmental Business-Type Activities Activities Total Beginning Balance $6,573,048 $557,447 $7,130,495 Additions 4,939,616 505,956 5,445,572 Payments (4,479,611) (518,455) (4,998,066) Ending Balance $7,033,053 $544,948 $7,578,001 Current Portion $4,331,917 $501,011 $4,832,928 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. M. 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. N. Properties held for redevelopment – 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). O. Unbilled Services – for the Sewer Rental Enterprise Fund are accrued at year-end. 53 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) P. 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. Q. 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. R. New Accounting Pronouncements Governmental Accounting Standards Board (GASB) Statement No. 83 – Certain Asset Retirement Obligations. This Statement addresses accounting and financial reporting for certain asset retirement obligations (AROs). An ARO is a legally enforceable liability associated with the retirement of a tangible capital asset. A government that has legal obligations to perform future asset retirement activities related to its tangible capital assets should recognize a liability based on the guidance in this Statement. This statement is effective for the 2018-2019 fiscal year and had no effect on the City’s financial statements. Governmental Accounting Standards Board (GASB) Statement No. 88 – Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. The primary objective of this Statement is to improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing information related to debt. This Statement requires that additional essential information related to debt be disclosed in notes to financial statements, including unused lines of credit; assets pledged as collateral for the debt; and terms specified in debt agreements related to significant events of default with finance-related consequences, significant termination events with finance-related consequences, and significant subjective acceleration clauses. For notes to financial statements related to debt, this Statement also requires that existing and additional information be provided for direct borrowings and direct placements of debt separately from other debt. This statement is effective for the 2018-2019 fiscal year. See Note 5 for additional information. 54 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) S. 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. T. OPEB Liabilities, OPEB Expenses, and Deferred Outflows/Inflows of Resources Related to OPEB For purposes of measure the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s OPEB Plan and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis as they are reported by the California Employers’ Retiree Benefit Trust (CERBT). For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. 55 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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. 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, 2019 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 $221,594,073 Restricted cash and investments 352,288 Total Primary Government cash and investments 221,946,361 Statement of Fiduciary Assets: Cash and investments available for operations 6,914,500 Restricted cash and investments 41,781,296 Total Fiduciary cash and investments 48,695,796 Conference Center: Cash and investments available for operations 4,399,644 Total South San Francisco Conference Center cash and investments 4,399,644 Total cash and investments $275,041,801 56 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 2 - CASH AND INVESTMENTS (Continued) 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. 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 Maximum Maximum Maximum Credit Percentage Investment Authorized Investment Type Maturity Quality (A) of Portfolio in One Issuer U.S. Treasury Obligations 5 years N/A No Limit No Limit U.S. Agency Securities 5 years N/A No Limit 25% Asset-Backed Securities 5 years AA 20% 5% Commercial Paper 270 days A1,P1 25% 5% Negotiable Certificates of Deposit 5 years A-1 or A 30% 5% Repurchase Agreements N/A AA No Limit No Limit Local Agency Investment Fund (LAIF) Upon Demand N/A $65 million No Limit Money Market Mutual Funds N/A Aaa 20% 10% Corporate Medium-Term Notes 5 years A 30% 5% Supranational Obligations 5 years AA 30% 10% Rating System, or its equivalent. (A) The City's Investment Policy includes credit ratings provided by Standard and Poor's Investment 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. 57 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 2 - CASH AND INVESTMENTS (Continued) D. Investments Authorized by Debt Agreements The Successor Agency to the former Redevelopment Agency 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 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: Minimum Maximum Maximum Credit Percentage Authorized Investment Type Maturity Quality of Portfolio U.S. Treasury Obligations N/A N/A No Limit U.S. Agency Securities N/A N/A No Limit Commercial Paper 270 days Highest Rating Category No Limit State and Local Investment Pool N/A Highest Rating Category No Limit Guaranteed Investment Contracts (fully collateralized) (A) N/A AAA No Limit Municipal Obligations N/A Highest Rating Category No Limit State Obligations N/A Two Highest Rating Categories No Limit (A) Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury Obligations or U.S. Agency Obligations. E. Investments Authorized by the Authority The City of South San Francisco Conference Center Authority follows the California Government Code which authorizes an agency to invest in their own bonds, certain time deposits, obligations of the U.S. Treasury, agencies and instrumentalities, commercial paper, bankers’ acceptances with maturities not to exceed 270 days, and medium-term notes issued by corporations operating within the U.S., commercial paper rated P-1 or higher by Moody’s or A-1 by Standard & Poor’s commercial paper record, repurchase agreements of obligations of the U.S. Government or its agencies for a term of one year or less and the Local Agency Investment Fund. 58 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 2 - CASH AND INVESTMENTS (Continued) F. 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. 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 than One to Five 1 year Years Total City and Fiduciary: U.S. Agency Securities Non-callable $5,514,700 $30,409,595 $35,924,295 U.S. Treasury Notes 7,514,372 23,921,198 31,435,570 Local Agency Investment Fund 63,923,845 63,923,845 Money Market Funds 41,781,800 41,781,800 Guaranteed Investment Agreements Corporate Notes 8,189,865 25,154,699 33,344,564 Commercial Paper 3,980,718 3,980,718 Negotiable Certificates of Deposit 10,256,911 10,256,911 Asset-Backed Securities 47,439 19,937,764 19,985,203 Supranational Obligations 6,792,243 6,792,243 South San Francisco Conference Center: Local Agency Investment Fund 4,093,496 4,093,496 Total Investments $145,303,146 $106,215,499 251,518,645 Cash in Banks and on Hand - City of South San Francisco 23,217,008 Cash in Banks and on Hand - South San Francisco Conference Center 306,148 Total Cash and Investments $275,041,801 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, 2019, these investments have an average maturity of 173 days. Money market funds are available for withdrawal on demand and as of June 30, 2019 have an average maturity of 20 days. 59 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 2 - CASH AND INVESTMENTS (Continued) G. 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, 2019, for each of the Primary Government’s investment types as provided by Moody’s investment rating system, except as noted: Investment Type Aaa Aaa-mf Aa1-Aa3 A1-A3 P-1 Total City and Fiduciary: U.S. Agency Securities Non-callable $35,924,295 $35,924,295 Money Market Funds $41,781,800 41,781,800 Corporate Notes 1,751,794 $8,193,299 $23,399,471 33,344,564 Commercial Paper $3,980,718 3,980,718 Negotiable Certificates of Deposit 10,256,911 10,256,911 Asset-Backed Securities 12,794,976 12,794,976 Supranational Obligations 6,792,243 6,792,243 Totals $57,263,308 $41,781,800 $8,193,299 $23,399,471 $14,237,629 144,875,507 City and Fiduciary: Not rated: Asset Backed Securities 7,190,227 Local Agency Investment Fund 63,923,845 Exempt from credit rate disclosure: U.S. Treasury Notes 31,435,570 Not rated: Local Agency Investment Fund 4,093,496 Total Investments $251,518,645 South San Francisco Conference Center: H. 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, 2019: Issuer Investment Type Amount Federal National Mortgage Association U.S. Agency Securities $12,781,598 60 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 2 - CASH AND INVESTMENTS (Continued) I. 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, 2019: Level 2 Total Investments by Fair Value Level: City and Fiduciary: U.S. Agency Securities Non-callable $35,924,295 $35,924,295 U.S. Treasury Notes 31,435,570 31,435,570 Corporate Notes 33,344,564 33,344,564 Commercial Paper 3,980,718 3,980,718 Negotiable Certificates of Deposit 10,256,911 10,256,911 Asset Backed Securities 19,985,203 19,985,203 Supranational Obligations 6,792,243 6,792,243 Totals $141,719,504 141,719,504 Investments Measured at Amortized Cost: City and Fiduciary: Money Market Mutual Funds 41,781,800 Investments Exempt from Fair Value Hierarchy: City and Fiduciary: Local Agency Investment Fund 63,923,845 South San Francisco Conference Center: Local Agency Investment Fund 4,093,496 Total Investments $251,518,645 All Investments classified in Level 2 of the fair value hierarchy 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 the City’s investment manager. Money market funds and guaranteed investment agreements were reported at amortized cost. 61 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 3 - CAPITAL ASSETS A.Capital Asset Changes – Changes in capital assets during the fiscal year consist of: Balance 6/30/2018 Additions and Adjustments Retirements and Adjustments Transfers Balance 6/30/2019 Governmental activities Capital assets not being depreciated: Land $67,173,001 $749,398 $67,922,399 Construction in Progress 18,087,541 25,215,794 ($634,406) ($7,336,780) 35,332,149 Total capital assets not being depreciated 85,260,542 25,965,192 (634,406) (7,336,780) 103,254,548 Capital assets being depreciated: Buildings and Improvements 94,859,160 1,315,034 96,174,194 Infrastructure - Streets 194,928,165 4,775,247 199,703,412 Infrastructure - Storm Drains 8,927,492 8,927,492 Infrastructure - Traffic Control Devices 10,195,338 570,721 10,766,059 Equipment and Vehicle 6,654,321 38,043 675,778 7,368,142 Furniture and Fixtures 2,614,215 2,614,215 Total capital assets being depreciated 318,178,691 38,043 7,336,780 325,553,514 Less accumulated depreciation for: Buildings and Improvements (37,330,676) (2,505,926)(39,836,602) Infrastructure - Streets (101,358,967) (5,030,431)(106,389,398) Infrastructure - Storm Drains (3,366,561) (204,500)(3,571,061) Infrastructure - Traffic Control Devices (3,293,879) (439,218)(3,733,097) Equipment and Vehicle (6,222,784) (163,009)(6,385,793) Furniture and Fixtures (1,605,125) (95,561)(1,700,686) Total accumulated depreciation (153,177,992) (8,438,645)(161,616,637) Net Governmental Fund Capital Assets Being Depreciated 165,000,699 (8,400,602)7,336,780 163,936,877 Internal Service Fund Capital Assets Capital assets being depreciated: Equipment and Vehicle 15,179,189 335,751 (38,043)15,476,897 Accumulated depreciation (9,735,285) (830,054)(10,565,339) Net Internal Service Fund Capital Assets Being Depreciated 5,443,904 (494,303) (38,043)4,911,558 Governmental activity capital assets, net $255,705,145 $17,070,287 ($672,449)$272,102,983 62 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 3 - CAPITAL ASSETS (Continued) Balance Balance June 30, 2018 Additions Retirements Transfers June 30, 2019 Business-type activities Capital assets, not being depreciated: Land $794,587 $794,587 Construction in Progress 11,162,897 $19,318,264 ($148,029) ($5,244,554)25,088,578 Total capital assets not being depreciated 11,957,484 19,318,264 (148,029) (5,244,554)25,883,165 Capital assets being depreciated: Buildings and Improvements 66,955,777 120,081 67,075,858 Clean Water Facilities and Lines 75,522,774 4,339,320 79,862,094 Infrastructure - Storm Drains 4,773,977 785,153 5,559,130 Infrastructure - Streets 7,377,546 7,377,546 Equipment and Vehicle 18,505,506 18,505,506 Furniture and Fixtures 31,154 31,154 Total capital assets being depreciated 173,166,734 5,244,554 178,411,288 Less accumulated depreciation for: Buildings and Improvements (17,762,000) (1,609,793)(19,371,793) Clean Water Facilities and Lines (29,165,952) (1,938,017)(31,103,969) Infrastructure - Storm Drains (1,034,358) (166,984)(1,201,342) Infrastructure - Streets (1,840,691) (209,570)(2,050,261) Equipment and Vehicle (11,146,654) (807,796)(11,954,450) Furniture and Fixtures (31,154)(31,154) Total accumulated depreciation (60,980,809) (4,732,160)(65,712,969) Net capital assets being depreciated 112,185,925 (4,732,160)5,244,554 112,698,319 Business-type activity capital assets, net $124,143,409 $14,586,104 ($148,029)$138,581,484 Balance Balance June 30, 2018 Additions Retirements June 30, 2019 Component Unit: South San Francisco Conference Center Construction in Progress $43,289 $17,500 ($43,289) $17,500 Buildings and Improvements 11,148,265 218,122 (541,411) 10,824,976 Furniture and Fixtures 880,168 88,332 (42,901) 925,599 Machinery and equipment 267,151 115,037 (57,882) 324,306 Total:12,338,873 438,991 (685,483) 12,092,381 Less accumulated depreciation (8,760,696) (692,375) 642,194 (8,810,877) Component unit, net $3,578,177 ($253,384) ($43,289) $3,281,504 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. 63 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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 $663,081 Fire 366,014 Police 93,759 Public works 6,622,326 Parks and recreation 571,118 Library 68,014 Economic and community development 54,333 Total Governmental Functions 8,438,645 Internal Service Funds 830,054 Total Governmental Activities $9,268,699 Business-Type Activities Sewer Enterprise $4,453,302 Parking District 253,826 Storm Water 25,032 Total Business-Type Activities $4,732,160 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 Capital Improvement Capital Projects Fund $1,100,000 64 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 4 - INTER-FUND TRANSACTIONS (Continued) C.Transfers Transfers between funds during the fiscal year ended June 30, 2019 were as follows: FROM FUND (OUT) TO FUND (IN)AMOUNT General Fund Capital Improvement Capital Projects Fund $8,887,591 Storm Water Enterprise Fund 622,012 Non-Major Governmental Funds 2,236,224 Internal Service Funds 250,000 East of 101 Sewer Impact Fees Capital Project Fund Sewer Enterprise Fund 281,827 East of 101 Traffic Impact Fees Capital Project Fund Capital Improvement Capital Projects Fund 701,659 Capital Infrastructure Reserve Capital Projects Fund Capital Improvement Capital Projects Fund 3,123,582 Storm Water Enterprise Fund 37,481 Non-major Governmental Funds General Fund 4,906,791 Capital Improvement Capital Projects Fund 2,374,652 Sewer Enterprise Fund 369,745 Storm Water Enterprise Fund 790,157 Total $24,581,721 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, 2019 follows: Authorized and Balance at Balance at Current Issued June 30, 2018 Additions Retirement June 30, 2019 Portion Governmental Activities - Direct Borrowing: 2007 Loans Payable to the Successor Agency (1) $8,309,152 $3,464,000 $4,845,152 Capital Leases (2): 2008 Two Fire Trucks 54,111 54,111 2010 Two Fire Trucks 322,306 125,154 197,152 $130,146 2013 Fire Truck 686,699 130,232 556,467 133,692 2014 Sweeper 71,985 71,985 Total Capital Leases 1,135,101 381,482 753,619 263,838 Net Governmental Long-Term Debt $9,444,253 $3,845,482 $5,598,771 $263,838 Business-Type Activities - Direct Borrowing: 1999 State Water Resources Loan, 2.6%, due 8/1/22 (3)$47,721,252 $15,164,070 $2,879,154 $12,284,916 $2,954,013 2004 State Water Resources Loan, 2.5%, due 1/1/27 (3)21,258,529 10,052,903 1,150,729 8,902,174 1,179,497 2008 State Water Resources Loan, 2.4%, (5) 9,164,505 5,553,529 447,153 5,106,376 457,884 2018 State Water Resources Loan, 1.8% (6)53,403,000 $8,854,738 8,854,738 2005 Water and Wastewater Revenue Bonds, 2.75 to 4.75%, due 04/30/26 (4) 6,000,000 3,275,000 305,000 2,970,000 315,000 Total Enterprise Fund Long-Term Debt $137,547,286 $34,045,502 $8,854,738 $4,782,036 $38,118,204 $4,906,394 Component Unit - Conference Center: 2003 Revenue Bonds, 2.25% to 4.0%, due 9/1/18 (7)$5,865,000 $460,000 $460,000 Total Conference Center $5,865,000 $460,000 $460,000 65 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 5 - LONG-TERM DEBT (Continued) (1) As of June 30, 2019, 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 $4,845,152 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. The lease agreements contain provisions that in an event of default, the lessor may (a) seize the properties, (b) sell or lease the properties or (c) exercise any and all remedies available to it under applicable law, including the right to enforce the terms of the lease, recover damages from the breach of the lease, and rescind the lease as to any portion of or all of the properties. (3) The two loans were authorized by the State Water Resources Control Board (SWRCB) 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. The loan agreements include provisions that in an event of default, all principal payments shall be immediately due and payable, interests on all amounts owed shall be paid at the highest legal rate, any additional payments shall be made and SWRCB shall enforce its rights under the agreements by any judicial proceeding, whether in law or equity. (4) 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. 66 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 5 - LONG-TERM DEBT (Continued) 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 ranging from the rates of 2.75% to 4.75% is payable semi-annually each April 1 and October 1. The 1999 and 2004 State Water Resources Loans and the 2005 Water and Wastewater Revenue Bonds are secured by a pledge of net revenues of the City’s Sewer Enterprise Fund . Net Revenues available for debt service amounted to $10.8 million which represented coverage of 2.1 over the $5,127,088 in total debt service. (5)State Water Resources Control Board Loan – In November 2007, the City approved the $11.8 million loan agreement with 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. (6)California State Water Resources Control Board Loan – In September 2018, the City entered into a $53.4 million loan agreement with California State Water Resources Control Board (SWRCB) to finance the South San Francisco/San Bruno’s Water Quality Control Plant Wet Weather and Digester Project. A portion of this amount, $4 million, is anticipated to be forgiven on the date of completion of construction. For the remaining $49.4 million, under the terms of the loan agreement the City has agreed to repay $59.2 million to the State. The difference between the repayment obligation and proceeds amounted to $9.8 million and represents in-substance interest on the outstanding balance. At June 30, 2019, the City has drawn down $8.9 million from SWRCB and the remaining balance of $44.5 million is expected to be drawn down in fiscal year 2020. There was no debt service payment required in fiscal year 2019, with the first debt service payment due in fiscal year ending 2024. Future debt service is expected to average $3 million per year through fiscal year 2043. In the event of default has occurred, the City shall, upon demand, immediately accelerate the payment of all principal owed under this loan agreement, if any, which shall be immediately due and payable; pay interest at the highest legal rate on all amounts owed; and pay any additional payments as defined in the loan agreement. The 2008 and 2018 loans are secured by a pledge of sewer service charge revenues of the City’s Sewer Enterprise Fund. Sewer service charge revenues available for debt service amounted to $23.6 million which represented coverage of 44.8 over the $524,906 in debt service. (7) 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. 67 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 5 - LONG-TERM DEBT (Continued) 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 were, in substance, obligations of the Authority and were repaid during fiscal year 2019. 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 was fully amortized during fiscal year 2019. 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 and the 2018 State Water Resource Loan at June 30, 2019, were as follows: For the Year Governmental Activities Business-Type Activities Ended June 30 Principal Interest Principal Interest 2020 $263,839 $20,330 $4,906,394 $428,062 2021 204,251 11,946 5,038,676 698,146 2022 140,892 6,614 5,173,954 570,292 2023 144,637 2,870 5,312,309 347,457 2024 2,180,393 299,594 2025-2029 6,651,740 7,936 Totals 753,619 $41,760 29,263,466 $2,351,487 2007 Loans Payable 4,845,152 2018 State Water Resources Loan 8,854,738 $5,598,771 $38,118,204 Direct Borrowings 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 $5,342,799 68 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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. 69 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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, 2019, are below: Low and Moderate East of 101 General Income Housing Capital Sewer Fund Balance Classifications Fund Assets Improvement Impact Fees Nonspendables: Items not in spendable form: Inventory and prepaid items $372 $39,205 Total Nonspendable Fund Balances 372 39,205 Restricted for: Sewer Impact Fees $4,436,134 Low and moderate housing projects $5,987,238 Redevelopment and community development activities 19,201,948 Total Restricted Fund Balances 19,201,948 5,987,238 4,436,134 Committed for: Capital projects 3,889,594 Local services 18,730,274 Total Committed Fund Balances 22,619,868 Assigned to: Capital projects 11,881,363 Total Assigned Fund Balances 11,881,363 Unassigned: General fund 31,239,632 Capital Improvement Fund (2,971,345) Total Unassigned Fund Balances 31,239,632 (2,971,345) Total Fund Balances $84,943,183 $5,987,238 ($2,932,140) $4,436,134 (Continued) Capital Project Funds 70 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 6 - NET POSITION AND FUND BALANCE (Continued) East of 101 Capital Other Traffic Child Care Developer Infrastructure Governmental Fund Balance Classifications (continued) Impact Fees Impact Fees Deposit Reserve Fund Funds Restricted for: Traffic impact fees projects $20,593,457 Child Care impact fees projects $5,536,728 Developer deposit fees projects $9,616 Capital infrastructure projects $19,107,972 Gas Tax projects $522,122 Developer contributions projects 5,042,661 Community Development Block Grant projects 550,587 Maintenance districts projects 3,610,759 Transportation sales tax projects 3,408,661 City programs projects 4,547,134 Other Special Revenues projects 13,433,341 Capital projects activities 16,348,792 Total Restricted Fund Balances 20,593,457 5,536,728 9,616 19,107,972 47,464,057 Total Fund Balances $20,593,457 $5,536,728 $9,616 $19,107,972 $47,464,057 Capital Project Funds C. Net Deficit The Capital Improvement Capital Projects Fund had net deficit in the amount of $2,932,140. Future revenues are expected to offset the deficit. 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, 2019, were as listed below: Governmental funds:Amount General Fund $11,881,363 Low and Moderate Income Housing Assets Special Revenue Fund 6,267 Capital Improvement Capital Projects Fund 18,444,492 Child Care Impact Fees Capital Projects Fund 1,500 Capital Infrastructure Reserve Capital Projects Fund 1,000,000 Other Governmental Funds 665,105 Total $31,998,727 71 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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. 72 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 7 - PENSION PLAN (Continued) The Plans’ provisions and benefits in effect at June 30, 2019, are summarized as follows: Miscellaneous Classic Plan Classic Plan PEPRA Plan Hire date Prior to After On or after April 25, 2010 April 25, 2010 January 1,2013 Benefit formula 2.7% @ 55 2% @ 60 2% @ 62 Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 55 50 - 67 52 - 67 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 29.179%29.179%6.5% 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 service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly 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% 11.5% Required employer contribution rates 48.901% 48.901% 11.5% Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability (UAL). The dollar amounts are billed on a monthly basis or the City can elect a lump sum payment option. The City’s required contributions for the unfunded liability in the Miscellaneous and Safety Plans were $4,506,009 and $5,959,860, respectively, which were made under the lump sum payment option. Employees Covered – As of the June 30, 2017 actuarial valuation date and the June 30, 2018 measurement date, the following employees were covered by the benefit terms for the Plans: Miscellaneous Safety Inactive employees or beneficiaries currently receiving benefits 440 284 Inactive employees entitled to but not yet receiving benefits 334 105 Active employees 281 159 Total 1,055 548 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. 73 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 7 - PENSION PLAN (Continued) 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, 2018, using an annual actuarial valuation as of June 30, 2017 rolled forward to June 30, 2018 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, 2018, the total pension liabilities were determined by rolling forward the June 30, 2017 total pension liability. The June 30, 2018 total pension liabilities were based on the following actuarial methods and assumptions: Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions: Discount Rate Inflation Payroll Growth Salary Increase Investment Rate of Return Mortality Post Retirement Benefit Increase (1) Net of pension plan investment and administrative expenses, including inflation (2) The mortality table used was developed based on CalPERS' specific data. The tale includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website. 2.50% Varies by Entry Age and Service 7.15% (1) Contract COLA up to 2.00% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.50% thereafter Derived using CalPERS Membership Data for all Funds (2) 3.00% Miscellaneous and Safety June 30, 2017 June 30, 2018 Entry-Age Normal Cost Method 7.15% The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2017 valuation were based on the results of a December 2017 actuarial experience study for the period 1997 to 2015. Further details of the Experience Study can be found on the CalPERS website. Change of Assumptions – For the measurement date of June 30, 2018, the inflation rate reduced from 2.75 percent to 2.50 percent. Discount Rate – The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate for each Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, each Plan’s fiduciary net position was projected to be available to make all projected future benefits payments of current plan members for all plans in the PERF. Therefore, the long- term expected rate of return on plan investment was applied to all periods of projected benefit payment to determine the total pension liability for each Plan. 74 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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. Using historical returns of all the fund’s asset classes, expected compound (geometric) returns were calculated over the short- term (first 10 years) and the long -term (11+ 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 adjusted for assumed administrative expenses. 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 rates of return are net of administrative expenses. Asset Class(a) New Strategic Allocation Real Return Years 1 - 10(b) Real Return Years 11+(c) Global Equity 50.0% 4.80% 5.98% Fixed Income 28.0% 1.00% 2.62% Inflation Assets 0.0% 0.77% 1.81% Private Equity 8.0% 6.30% 7.23% Real Assets 13.0% 3.75% 4.93% Liquidity 1.0% 0.00% -0.92% Total 100% (a)In the System's CAFR, Fixed income is included in Global Debt Securities; Liquidity is included in short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. (b) An expected inflation of 2.0% used for this period. (c) An expected inflation of 2.92% used for this period. 75 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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, 2017 $227,427,722 $149,962,251 $77,465,471 Changes in the year: Service cost 4,001,207 4,001,207 Interest on the total pension liability 15,885,315 15,885,315 Changes of benefit terms Chases of assumptions (1,361,078) Differences between actual and expected experience 187,342 187,342 Plan to plan resource movement (365) 365 Contribution - employer 6,165,764 (6,165,764) Contribution - employees 1,727,041 (1,727,041) Net investment income 12,458,090 (12,458,090) Benefit payments, including refunds of employee contributions (12,164,689) (12,164,689) Administrative expenses (233,683) 233,683 Other Miscellaneous Income/(Expense) (443,767) 443,767 Net changes 6,548,097 7,508,391 (960,294) Balance at June 30, 2018 $233,975,819 $157,470,642 $76,505,177 Safety Plan: Increase (Decrease) Total Pension Liability Plan Fiduciary Net Position Net Pension Liability/(Asset) Balance at June 30, 2017 $314,037,249 $208,630,800 $105,406,449 Changes in the year: Service cost 6,511,672 6,511,672 Interest on the total pension liability 22,129,483 22,129,483 Changes of benefit terms Chases of assumptions (1,293,579) (1,293,579) Differences between actual and expected experience 1,318,613 1,318,613 Plan to plan resource movement (512) 512 Contribution - employer 9,323,936 (9,323,936) Contribution - employees 2,134,552 (2,134,552) Net investment income 17,363,158 (17,363,158) Benefit payments, including refunds of employee contributions (15,629,698) (15,629,698) Administrative expenses (325,104) 325,104 Other Miscellaneous Income/(Expense)(617,378) 617,378 Net changes 13,036,491 12,248,954 787,537 Balance at June 30, 2018 $327,073,740 $220,879,754 $106,193,986 76 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 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: Miscellaneous Safety 1% Decrease 6.15% 6.15% Net Pension Liability $106,628,983 $151,151,365 Current Discount Rate 7.15% 7.15% Net Pension Liability $76,505,177 $106,193,986 1% Increase 8.15% 8.15% Net Pension Liability $51,566,615 $69,322,327 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, 2019, the City recognized pension expenses of $12,587,621 and $17,406,955 for the Miscellaneous and Safety Plans, respectively. At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Miscellaneous Plan: Deferred Outflows Deferred Inflows of Resources of Resources Pension contributions subsequent to measurement date $6,851,612 Changes of assumptions 3,220,352 ($874,979) Differences between actual and expected experience 628,106 Net differences between projected and actual earnings on plan investments 422,905 Total $11,122,975 ($874,979) Safety Plan: Deferred Outflows Deferred Inflows of Resources of Resources Pension contributions subsequent to measurement date $10,164,821 Changes of assumptions 7,095,088 ($913,115) Differences between actual and expected experience 2,711,451 (152,544) Net differences between projected and actual earnings on plan investments 684,378 Total $20,655,738 ($1,065,659) Grand Total $31,778,713 ($1,940,638) 77 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 7 - PENSION PLAN (Continued) $17,016,433 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, 2020. 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 Ended Annual June 30 Amortization 2020 $5,252,328 2021 99,663 2022 (1,565,708) 2023 (389,899) Safety Plan: Year Ended Annual June 30 Amortization 2020 $9,406,529 2021 2,680,468 2022 (2,131,680) 2023 (530,059) 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 - OTHER POST-EMPLOYMENT BENEFITS A. General Information about the City’s Other Post Employment Benefit (OPEB) Plan 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. Plan Description – The City’s Post Employment Benefit Plan is an agent multiple-employer defined benefit OPEB plan. 78 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS (Continued) Benefits provided – The following is a summary of Plan benefits by employee group as of June 30, 2019: Eligibility • Hired < 4/25/20101 • Retire directly from City and elect coverage: • Age 50 and 5 years City service or • Disability retirement with 5 years City service Benefit • City pays single premium up to largest HMO single premium Cap for 2017/18: - $1,184.63/month pre-65 (Blue Shield) - $649.97/month post-65 Medical eligible (Blue Shield) - $1,746.70/ month post-65 not Medicare eligible (Kaiser) • Medicare ineligible retirees allowed to stay in their pre-Medicare premium plans after age 65 Surviving Spouse Benefit • Participation with premium payment • AFSCME, Local 1569, Mid-Management, IAFF  surviving spouses covered 2 months following death of retiree Other OPEB • City also reimburses Medicare Part B • No City-paid contribution for dental, vision, or life For the year ended June 30, 2019, the City’s contributions to the Plan were $4,180,000. Employees Covered by Benefit Terms – Membership in the plan consisted of the following at the measurement date of June 30, 2018: Active employees 388 Inactive employees or beneficiaries currently receiving benefit payments 231 Total 619 79 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS (Continued) B. Net OPEB Liability Actuarial Methods and Assumptions – The City’s net OPEB liability was measured as of June 30, 2018 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2017 that was rolled forward using standard update procedures to determine the total OPEB liability as of June 30, 2108, based on the following actuarial methods and assumptions: Valuation Date • June 30, 2017 Measurement Date • June 30, 2018 Contribution Policy • City contributes $802,000 per year into trust Actuarial Cost Method • Entry Age Normal, Level Percentage of Payroll Amortization Method • Level dollar Amortization Period • Average of 24 years remaining for 2018/19 • 6.75% at June 30, 2018 • 6.75% at June 30, 2017 • Expected City contributions projected to keep sufficient plan assets to pay all benefits from trust. Inflation • 2.75% per annum Salary Increases • Aggregate - 3% • Merit - CalPERS 1997-2015 Experience Study Healthcare/Medical Trend • Non-Medicare - 7.5% for 2020, decreasing to an ultimate rate of 4.0% in 2076 and later years • Medicare - 6.5% for 2020, decreasing to an ultimate rate of 4.0% in 2076 and later years Mortality, Retirement, Disability, Termination • CalPERS 1997-2015 Experience Study Mortality Improvement • Pre-retirement mortality: projected 15-year static with 90% of MP-2016 • Post-retirement mortality: projected fully generational with Healthcare participation for future retirees • 100% if covered, 95% if waived Discount Rate and Long-Term Expected Rate of Return on Assets Actuarial Assumptions The long-term expected rate of return on OPEB plan investments was determined using a building- block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Long-Term Target Expected Real Asset Class Allocation Rate of Return Global equity 57.0% 4.82% Fixed income 27.0% 1.47% TIPS 5.0% 1.29% Commodities 3.0% 0.84% REITs 8.0% 3.76% Total 100.0% Assumed Long-Term Rate of Inflation 2.75% Expected Long-Term Net Rate of Return 6.75% 80 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS (Continued) Discount Rate – The discount rate used to measure the total OPEB liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. C. Changes in Net OPEB Liability The changes in the net OPEB liability follows: Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability/(Asset) (a) (b)(a) - (b) Balance at June 30, 2017 Measurement Date $79,000 $19,710 $59,290 Changes Recognized for the Measurement Period: Service Cost 1,535 1,535 Interest on the total OPEB liability 5,325 5,325 Changes in benefit terms Differences between expected and actual experience 91 91 Changes of assumptions Contributions from the employer 4,128 (4,128) Net investment income 1,566 (1,566) Benefit payments (3,326) (3,326) Administrative expenses (37)37 Net changes 3,625 2,331 1,294 Balance at June 20, 2018 Measurement Date $82,625 $22,041 $60,584 Increase (Decrease) Amounts in 000's The Plan does not issue separate financial statements. D.Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost Trend Rates The following presents the net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.75%) or 1-percentage-point higher (7.75%) than the current discount rate: Net OPEB Liability/(Asset) (Amounts in 000's) Discount Rate -1% Current Discount Rate Discount Rate +1% (5.75%) (6.75%) (7.75%) $72,219 $60,584 $51,052 The following presents the net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates as discussed in the assumptions above: Net OPEB Liability/(Asset) (Amounts in 000's) Current Healthcare Cost 1% Decrease Trend Rates 1% Increase $49,567 $60,584 $74,215 81 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS (Continued) E.OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2019, the City recognized OPEB expense of $5,420,533. At June 30, 2019, the City reported deferred outflows and inflows of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Employer contributions made subsequent to the measurement date $4,180,000 Differences between actual and expected experience 68,000 Changes of assumptions Net differences between projected and actual earnings on plan investments $544,000 Total $4,248,000 $544,000 $4,180,000 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the OPEB liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as part of OPEB expense as follows: Year Annual Ended June 30 Amortization 2020 ($143,000) 2021 (143,000) 2022 (145,000) 2023 (45,000) 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. 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. 82 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 10 - JOINTLY GOVERNED ORGANIZATIONS (continued) 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 San Carlos Finance Department, 666 Elm Street, San Carlos, CA 94070. 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. NOTE 11 - RISK MANAGEMENT A.Insurance Coverage The City participates in Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA), a nonprofit benefit corporation established to provide liability insurance coverage, claims and risk management, and legal defense to its participating members. PLAN JPA provides $2,500,000 of self- funded general liability and automobile coverage and $27,500,000 excess liability coverage per occurrence and is responsible for paying claims in excess of the City’s $100,000 self-insured retention. 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. For the year ended June 30, 2019, the City paid PLAN JPA $1,188,549 in premiums and did not receive a refund of premiums paid in prior years. Financial statements may be obtained from PLAN JPA 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833. 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. 83 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 11 - RISK MANAGEMENT (Continued) 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, 2019 Fiscal Year Workers' General 2017-2018 Compensation Liability Total Total Balance, beginning of year $12,695,000 $98,356 $12,793,356 $12,972,942 Current year claims and changes in estimates of prior years claims 4,537,248 496,109 5,033,357 1,851,121 Claims Paid (3,092,248) (283,212) (3,375,460) (2,030,707) Balance, end of year $14,140,000 $311,253 $14,451,253 $12,793,356 Current portion $562,000 $150,000 $712,000 $660,356 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. 84 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 12 - COMMITMENTS AND CONTINGENCIES (Continued) 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, 2019, was $420,000. The cost and carrying amount of leased land under this lease receivable is $5,040,000. Future minimum lease payments from the Conference Center Authority land leases are as follows: Component Unit Year ending June 30 Conference Center 2020 $420,000 2021 420,000 2022 420,000 2023 420,000 2024 420,000 2025-2029 2,100,000 Total $4,200,000 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 2019 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 2019 lease payments were $51,800. 85 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 12 - COMMITMENTS AND CONTINGENCIES (Continued) Future minimum lease revenues for the Costco and Magnolia Plaza leases are as follows: Year ending June 30: Costco Magnolia Plaza Total 2020 $400,000 $51,800 $451,800 2021 400,000 51,800 451,800 2022 400,000 51,800 451,800 2023 400,000 51,800 451,800 2024 400,000 51,800 451,800 2025-2029 2,000,000 259,000 2,259,000 2030-2034 2,000,000 259,000 2,259,000 2035-2039 259,000 259,000 2040-2044 259,000 259,000 2045-2049 259,000 259,000 2050-2054 259,000 259,000 2055-2059 259,000 259,000 2060-2062 155,400 155,400 $6,000,000 $2,227,400 $8,227,400 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, 2019 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, 2019. 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. 86 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 13 - FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) 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 acquisition value. 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. 87 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 13 - FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) Capital assets recorded at June 30 are comprised of: Balance Transfers to the City Balance June 30, 2018 Additions Adjustments of South San Francisco June 30, 2019 Fiduciary activities Capital assets not being depreciated: Land $940,534 ($829,315) $111,219 Total capital assets not being depreciated 940,534 (829,315) 111,219 Capital assets being depreciated: Buildings and Improvements 329,671 329,671 Equipment and Vehicle 242,190 242,190 Furniture and Fixtures 21,506 21,506 Total capital assets being depreciated 593,367 593,367 Less accumulated depreciation for: Buildings and Improvements (65,274) ($6,593) $100 (71,767) Equipment and Vehicle (241,965) (226) (242,191) Furniture and Fixtures (21,505)(21,505) Total accumulated depreciation (328,744) (6,819) 100 (335,463) Net capital assets being depreciated 264,623 (6,819) 100 257,904 Fiduciary activity capital assets, net $1,205,157 ($6,819)$100 ($829,315) $369,123 Current year transfers to the City of South San Francisco represent property transferred from capital assets in the Successor Agency to property held for redevelopment in the City’s General Fund, which has been reported as a Special Item. 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, 2018 Retirements June 30, 2019 Portion 1999 Revenue Bonds, 3.3 to 5.0%, due 9/1/18 $285,000 ($285,000) Total Successor Agency $285,000 ($285,000) 88 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 13 - FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) 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 became obligations of the Redevelopment Successor Agency. Net proceeds of $9,614,978 of the 1999 Revenue Bonds 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. The 1999 Revenue Bonds were repaid in fiscal year 2019. 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. 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. 89 CITY OF SOUTH SAN FRANCISCO NOTES TO BASIC FINANCIALS STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 13 - FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) 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. 90 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SOUTH SAN FRANCISCO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2019 Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plans Last 10 Years* SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 Total Pension Liability Service cost $3,449,973 $3,075,813 $3,079,994 $3,922,518 $4,001,207 Interest on total pension liability 13,930,544 14,393,013 14,870,988 15,430,998 15,885,315 Changes of benefit terms Changes of assumptions (3,374,655)12,421,358 (1,361,078) Difference between expected and actual experience (1,567,798) (476,337) 1,958,164 187,342 Benefit payments, including refunds of employee contributions (9,287,975) (10,407,243) (11,085,829) (11,565,392) (12,164,689) Net change in total pension liability 8,092,542 2,119,130 6,388,816 22,167,646 6,548,097 Total pension liability - beginning 188,659,588 196,752,130 198,871,260 205,260,076 227,427,722 Total pension liability - ending (a)$196,752,130 $198,871,260 $205,260,076 $227,427,722 $233,975,819 Plan fiduciary net position Contributions - employer $4,235,454 $4,546,984 $5,726,981 $5,228,454 $6,165,764 Contributions - employee 1,466,176 1,411,273 1,622,453 1,720,600 1,727,041 Net investment income 21,712,340 3,221,551 687,860 15,616,363 12,458,090 Benefit payments, including refunds of employee contributions (9,287,975) (10,407,243) (11,085,829) (11,565,392) (12,164,689) Plan to plan resource movement (50,555) 229 (365) Administrative expense (160,268) (86,726) (205,472) (233,683) Other miscellaneous income (443,767) Net change in plan fiduciary net position 18,125,995 (1,438,258) (3,135,032) 10,794,553 7,508,391 Plan fiduciary net position - beginning 125,614,993 143,740,988 142,302,730 139,167,698 149,962,251 Plan fiduciary net position - ending (b)$143,740,988 $142,302,730 $139,167,698 $149,962,251 $157,470,642 Net pension liability - ending (a)-(b)$53,011,142 $56,568,530 $66,092,378 $77,465,471 $76,505,177 Plan fiduciary net position as a percentage of the total pension liability 73.06% 71.56% 67.80% 65.94% 67.30% Covered payroll $17,725,581 $17,798,104 $21,409,193 $29,390,370 $23,630,354 Net pension liability as percentage of covered-employee payroll 299.07% 317.83% 308.71% 263.57% 323.76% Notes to Schedule: *Fiscal year 2015 was the 1st year of implementation. Changes in assumptions:In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016 and 2018, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate. Benefit changes:The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2016 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). 92 CITY OF SOUTH SAN FRANCISCO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2019 Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plans Last 10 Years* SCHEDULE OF CONTRIBUTIONS Fiscal Year Ended June 30 2015 2016 2017 2018 2019 Actuarially determined contribution $4,210,973 $5,399,856 $5,228,454 $6,166,024 $6,851,612 Contributions in relation to the actuarially determined contributions 4,210,973 5,399,856 5,228,454 6,166,024 6,851,612 Contribution deficiency (excess)$0 $0 $0 $0 $0 Covered payroll $17,798,104 $21,409,193 $29,390,370 $23,630,354 $24,993,270 Contributions as a percentage of covered- employee payroll 23.66% 25.22% 17.79% 26.09% 27.41% Notes to Schedule Valuation date: 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 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 Varies by entry age and service 7.50% net of administrative expenses 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 2014 CalPERS Experience Study for the period from 1997 to 2007. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale AA published by the Society of Actuaries 93 CITY OF SOUTH SAN FRANCISCO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2019 Safety Agent Multiple-Employer Defined Benefit Pension Plans Last 10 Years* SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 Total Pension Liability Service cost $5,143,842 $4,968,087 $5,329,842 $6,264,307 $6,511,672 Interest on total pension liability 18,899,544 19,398,484 20,134,558 21,238,842 22,129,483 Changes of benefit terms Changes of assumptions (4,789,129)18,010,606 (1,293,579) Difference between expected and actual experience (4,226,388)(915,267) 4,520,149 1,318,613 Benefit payments, including refunds of employee contributions (13,161,296) (13,556,606) (14,463,995) (14,760,979) (15,629,698) Net change in total pension liability 10,882,090 1,794,448 10,085,138 35,272,925 13,036,491 Total pension liability - beginning 256,002,648 266,884,738 268,679,186 278,764,324 314,037,249 Total pension liability - ending (a)$266,884,738 $268,679,186 $278,764,324 $314,037,249 $327,073,740 Plan fiduciary net position Contributions - employer $6,535,399 $7,191,715 $8,535,737 $8,071,060 $9,323,936 Contributions - employee 2,151,163 1,714,039 1,961,907 1,980,507 2,134,552 Net investment income 29,348,051 4,264,997 950,612 21,553,126 17,363,158 Benefit payments, including refunds of employee contributions (13,161,296) (13,556,606) (14,463,995) (14,760,979) (15,629,698) Plan to plan resource movement (229) (512) Administrative expense (219,696) (118,968) (283,579) (325,104) Other miscellaneous income (617,378) Net change in plan fiduciary net position 24,873,317 (605,551) (3,134,936) 16,560,135 12,248,954 Plan fiduciary net position - beginning 170,937,835 195,811,152 195,205,601 192,070,665 208,630,800 Plan fiduciary net position - ending (b)$195,811,152 $195,205,601 $192,070,665 $208,630,800 $220,879,754 Net pension liability - ending (a)-(b)$71,073,586 $73,473,585 $86,693,659 $105,406,449 $106,193,986 Plan fiduciary net position as a percentage of the total pension liability 73.37%72.65%68.90%66.44%67.53% Covered payroll $15,994,412 $16,679,857 $18,986,895 $19,563,549 $21,932,480 Net pension liability as percentage of covered-employee payroll 444.37%440.49%456.60%538.79% 484.19% 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 June 30, 2016 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes in assumptions:In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016 and 2018, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate. 94 CITY OF SOUTH SAN FRANCISCO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2019 Safety Agent Multiple-Employer Defined Benefit Pension Plans Last 10 Years* SCHEDULE OF CONTRIBUTIONS Fiscal Year Ended June 30 2015 2016 2017 2018 2019 Actuarially determined contribution $7,191,715 $8,538,138 $8,071,060 $9,322,781 $10,164,821 Contributions in relation to the actuarially determined contributions 7,191,715 8,538,138 8,071,060 9,322,781 10,164,821 Contribution deficiency (excess)$0 $0 $0 $0 $0 Covered payroll $16,679,857 $18,986,895 $19,563,549 $21,932,480 $22,975,254 Contributions as a percentage of covered- employee payroll 43.12%44.97% 41.26% 42.51% 44.24% Notes to Schedule Valuation date:6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 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 Varies by entry age and service 7.50% net of administrative expenses The probabilities of Retirement are based on the 2010 CalPERS Experience Study for the period from 1997 to The probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2007. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale AA published by the Society of Actuaries 95 CITY OF SOUTH SAN FRANCISCO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2019 Measurement Date 6/30/17 6/30/18 Total OPEB Liability Service Cost $1,574 $1,535 Interest 5,087 5,325 Changes in benefit terms Differences between expected and actual experience 91 Changes of assumptions Benefit payments (2,901)(3,326) Net change in total OPEB liability 3,760 3,625 Total OPEB liability - beginning 75,240 79,000 Total OPEB liability - ending (a)$79,000 $82,625 Plan fiduciary net position Contributions - employer $3,703 $4,128 Contributions - employee Net investment income 1,803 1,566 Administrative expense (9)(37) Benefit payments (2,901)(3,326) Net change in plan fiduciary net position 2,596 2,331 Plan fiduciary net position - beginning 17,114 19,710 Plan fiduciary net position - ending (b)$19,710 $22,041 Net OPEB liability - ending (a)-(b)$59,290 $60,584 Plan fiduciary net position as a percentage of the total OPEB liability 24.95%26.68% Covered-employee payroll $26,539 $26,986 Net OPEB liability as a percentage of covered-employee payroll 223.41%224.50% *Fiscal year 2018 was the first year of implementation. SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS Retiree Healthcare OPEB Plan - Agent Multiple Employer Last 10 fiscal years* (Amounts in 000's) 96 CITY OF SOUTH SAN FRANCISCO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2019 Fiscal Year Ended June 30, 2018 2019 Actuarially determined contribution $6,279 $6,839 Contributions in relation to the actuarially determined contribution 4,128 4,180 Contribution deficiency (excess)$2,151 $2,659 Covered-employee payroll $26,986 $27,662 Contributions as a percentage of covered-employee payroll 7.97%9.61% *Fiscal year 2018 was the first year of implementation. SCHEDULE OF CONTRIBUTIONS Retiree Healthcare OPEB Plan - Agent Multiple Employer Last 10 fiscal years* (Amounts in 000's) Valuation Date June 30, 2017 Actuarial Cost Method Entry Age Normal, Level Percentage of Payroll Amortization Method Level dollar Amortization Period Average of 24 years remaining for 2018/19 Asset Valuation Method Investment gains and losses spread over 5-year rolling period Discount Rate 6.75% General Inflation 2.75% Medical Trend • Non-Medicare - 7.5% for 2020, decreasing to an ultimate rate of 4% in 2076 Mortality, Retirement, Disability, Termination •CalPERS 1997-2015 Experience Study Mortality Improvement •Pre-retirement mortality: projected 15-year static with 90% of MP-2016 • Post-retirement mortality: projected fully generational with Scale MP-2017 Retiree Healthcare OPEB Plan - Agent Multiple Employer NOTES TO SCHEDULE OF EMPLOYER CONTRIBUTION Methods and Assumptions for Actuarially Determined Contribution 97 This Page Left Intentionally Blank 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 that was passed on November 3, 2015. The tax went into effect April 1, 2016 and will last for 30 years until March 31, 2046. Revenues are committed for maintenance and enhancement of local services. 101 General Purpose Measure W Total ASSETS Cash and investments $44,024,794 $16,751,107 $60,775,901 Receivables: Accounts 6,589,435 1,991,842 8,581,277 Accrued interest 274,790 274,790 Due from other funds 1,100,000 1,100,000 Due from Conference Center 53,589 53,589 Advances to other funds Inventory 372 372 Restricted cash and investments 200,000 200,000 Properties held for redevelopment 19,201,948 19,201,948 Total Assets $71,444,928 $18,742,949 $90,187,877 LIABILITIES Accounts payable $2,609,145 $2,609,145 Accrued salaries and benefits 1,659,795 1,659,795 Other payable 65,755 65,755 Deposits 763,563 763,563 Unearned revenue 146,436 146,436 Total Liabilities 5,244,694 5,244,694 FUND BALANCES Nonspendable 372 372 Restricted 19,201,948 19,201,948 Committed 3,889,594 $18,730,274 22,619,868 Assigned 11,868,688 12,675 11,881,363 Unassigned 31,239,632 31,239,632 Total Fund Balances 66,200,234 18,742,949 84,943,183 Total Liabilities and Fund Balances $71,444,928 $18,742,949 $90,187,877 CITY OF SOUTH SAN FRANCISCO GENERAL FUND COMBINING BALANCE SHEETS JUNE 30, 2019 102 Intra-Fund Transactions General Purpose Measure W Elimination Total REVENUES Property taxes $38,659,657 $38,659,657 Sales taxes 19,606,689 $12,644,947 32,251,636 Transient occupancy taxes 17,091,222 17,091,222 Franchise Fees 4,469,808 4,469,808 Other taxes 4,995,404 4,995,404 Intergovernmental 2,876,545 2,876,545 Interest and rentals 4,409,185 4,409,185 Licenses and permits 15,381,416 15,381,416 Charges for services 11,563,755 11,563,755 Fines and forfeitures 926,729 926,729 Other 330,881 330,881 Total Revenues 120,311,291 12,644,947 132,956,238 EXPENDITURES Current: City Council 258,760 258,760 City Clerk 770,985 770,985 City Treasurer 123,505 123,505 City Attorney 961,588 961,588 City Manager 2,298,368 40,974 2,339,342 Finance 2,789,187 2,789,187 Non-departmental 1,219,533 1,219,533 Human Resources 1,621,409 1,621,409 Fire 27,572,488 27,572,488 Police 28,482,445 28,482,445 Public Works 5,787,782 5,787,782 Parks and Recreation 16,530,603 16,530,603 Library 5,628,693 5,628,693 Economic and Community Development 8,433,298 8,433,298 Total Expenditures 102,478,644 40,974 102,519,618 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 17,832,647 12,603,973 30,436,620 OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets 840,298 840,298 Transfers in 4,906,791 ($2,236,224) 2,670,567 Transfers out (4,289,797) (7,706,030) 2,236,224 (9,759,603) Total Other Financing Sources (Uses)1,457,292 (7,706,030)(6,248,738) Net Change in Fund Balances before special items 19,289,939 4,897,943 24,187,882 SPECIAL ITEMS Assets transferred from the Successor Agency 829,315 829,315 Remittance of land sale proceeds (1,360,906)(1,360,906) Net Change in Fund Balances 18,758,348 23,656,291 Fund balances (deficits) - July 1 47,441,886 13,845,006 61,286,892 Fund balances (deficits) - June 30 $66,200,234 $18,742,949 $84,943,183 CITY OF SOUTH SAN FRANCISCO GENERAL FUND COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2019 103 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, 2019 Variance with Final Budget Actual Positive Original Final Amount (Negative) Resources (inflows): Property taxes $34,555,659 $35,345,744 $38,659,657 $3,313,913 Sales taxes 17,203,726 17,203,726 19,606,689 2,402,963 Transient occupancy taxes 15,834,000 15,834,000 17,091,222 1,257,222 Franchise fees 4,000,000 4,000,000 4,469,808 469,808 Other taxes 5,833,028 5,833,028 4,995,404 (837,624) Intergovernmental 1,473,470 3,412,076 2,876,545 (535,531) Interest and rentals 3,059,459 3,059,459 4,409,185 1,349,726 Licenses and permits 12,072,049 12,072,049 15,381,416 3,309,367 Charges for services 8,988,527 9,328,528 11,563,755 2,235,227 Fines and forfeitures 618,500 618,500 926,729 308,229 Other 178,171 289,171 330,881 41,710 Amounts available for appropriation 103,816,589 106,996,281 120,311,291 13,315,010 Charges to appropriations (outflows) City Council 280,694 280,694 258,760 21,934 City Clerk 817,567 817,567 803,909 13,658 City Treasurer 132,900 132,900 123,505 9,395 City Attorney 1,063,691 1,081,462 961,588 119,874 City Manager 2,958,815 5,684,184 5,310,426 373,758 Finance 3,022,116 3,384,364 3,173,973 210,391 Non-departmental 1,072,087 1,130,087 1,265,202 (135,115) Human Resources 1,535,163 1,780,097 1,745,612 34,485 Fire 27,711,586 29,104,944 28,621,268 483,676 Police 29,174,475 29,254,475 28,482,445 772,030 Public Works 6,284,775 6,512,375 6,831,377 (319,002) Parks and Recreation 16,294,509 17,103,184 16,795,119 308,065 Library 5,806,294 6,149,808 5,655,551 494,257 Economic and Community Development 9,009,367 12,443,981 14,318,597 (1,874,616) Total charges to appropriations 105,164,039 114,860,122 114,347,332 512,790 OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets 2,250,000 2,250,000 840,298 (1,409,702) Transfers in 2,987,105 5,579,214 4,906,791 (672,423) Transfers out (2,883,001) (5,637,057) (4,289,797) 1,347,260 Total Other Financing Sources (Uses) 2,354,104 2,192,157 1,457,292 (734,865) NET CHANGE IN FUND BALANCES BEFORE SPECIAL ITEMS 1,006,654 (5,671,684) 7,421,251 13,092,935 SPECIAL ITEMS Assets transferred from the Successor Agency 829,315 829,315 Remittance of land sale proceeds (1,360,906) (1,360,906) Net Change in Fund Balances $1,006,654 ($5,671,684) 6,889,660 $12,561,344 Fund Balance - July 1 47,441,886 Adjustment to budgetary basis: Encumbrance adjustments 11,868,688 Fund Balance - June 30 $66,200,234 (Continued) Budgeted Amounts General Purpose 104 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, 2019 Variance with Final Budget Actual Positive Original Final Amount (Negative) Resources (inflows): Property taxes Sales taxes $9,731,450 $12,158,000 $12,644,947 $486,947 Transient occupancy taxes Franchise fees Other taxes Intergovernmental Interest and rentals Licenses and permits Charges for services Fines and forfeitures Other Amounts available for appropriation 9,731,450 12,158,000 12,644,947 486,947 Charges to appropriations (outflows) City Council City Clerk City Treasurer City Attorney City Manager 53,649 53,649 Finance Non-departmental Human Resources Fire Police Public Works Parks and Recreation Library Economic and Community Development Total charges to appropriations 53,649 53,649 OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets Transfers in Transfers out (7,706,030) (7,706,030) Total Other Financing Sources (Uses)(7,706,030) (7,706,030) NET CHANGE IN FUND BALANCES BEFORE SPECIAL ITEMS 9,731,450 12,104,351 4,885,268 (7,219,083) SPECIAL ITEMS Assets transferred from the Successor Agency Remittance of land sale proceeds Net Change in Fund Balances $9,731,450 $12,104,351 4,885,268 ($7,219,083) Fund Balance - July 1 13,845,006 Adjustment to budgetary basis: Encumbrance adjustments 12,675 Fund Balance - June 30 $18,742,949 (Continued) Budgeted Amounts Measure W 105 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, 2019 Variance with Final Budget Actual Positive Original Final Amount (Negative) Resources (inflows): Property taxes $34,555,659 $35,345,744 $38,659,657 $3,313,913 Sales taxes 26,935,176 29,361,726 32,251,636 2,889,910 Transient occupancy taxes 15,834,000 15,834,000 17,091,222 1,257,222 Franchise fees 4,000,000 4,000,000 4,469,808 469,808 Other taxes 5,833,028 5,833,028 4,995,404 (837,624) Intergovernmental 1,473,470 3,412,076 2,876,545 (535,531) Interest and rentals 3,059,459 3,059,459 4,409,185 1,349,726 Licenses and permits 12,072,049 12,072,049 15,381,416 3,309,367 Charges for services 8,988,527 9,328,528 11,563,755 2,235,227 Fines and forfeitures 618,500 618,500 926,729 308,229 Other 178,171 289,171 330,881 41,710 Amounts available for appropriation 113,548,039 119,154,281 132,956,238 13,801,957 Charges to appropriations (outflows) City Council 280,694 280,694 258,760 21,934 City Clerk 817,567 817,567 803,909 13,658 City Treasurer 132,900 132,900 123,505 9,395 City Attorney 1,063,691 1,081,462 961,588 119,874 City Manager 2,958,815 5,737,833 5,364,075 373,758 Finance 3,022,116 3,384,364 3,173,973 210,391 Non-departmental 1,072,087 1,130,087 1,265,202 (135,115) Human Resources 1,535,163 1,780,097 1,745,612 34,485 Fire 27,711,586 29,104,944 28,621,268 483,676 Police 29,174,475 29,254,475 28,482,445 772,030 Public Works 6,284,775 6,512,375 6,831,377 (319,002) Parks and Recreation 16,294,509 17,103,184 16,795,119 308,065 Library 5,806,294 6,149,808 5,655,551 494,257 Economic and Community Development 9,009,367 12,443,981 14,318,597 (1,874,616) Total charges to appropriations 105,164,039 114,913,771 114,400,981 512,790 OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets 2,250,000 2,250,000 840,298 (1,409,702) Transfers in 2,987,105 5,579,214 4,906,791 (672,423) Transfers out (2,883,001) (5,637,057) (11,995,827) (6,358,770) Total Other Financing Sources (Uses) 2,354,104 2,192,157 (6,248,738) (8,440,895) NET CHANGE IN FUND BALANCES BEFORE SPECIAL ITEMS 10,738,104 6,432,667 12,306,519 5,873,852 SPECIAL ITEMS Assets transferred from the Successor Agency 829,315 829,315 Remittance of land sale proceeds (1,360,906) (1,360,906) Net Change in Fund Balances $10,738,104 $6,432,667 11,774,928 $5,342,261 Fund Balance - July 1 61,286,892 Adjustment to budgetary basis: Encumbrance adjustments 11,881,363 Fund Balance - June 30 $84,943,183 Budgeted Amounts Total 106 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). 107 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, 2019 Variance with Final Budget Positive Budget Actual Amounts (Negative) REVENUES: Intergovernmental $20,637,483 $6,641,789 ($13,995,694) Charges for services 2,820,480 (2,820,480) Other 850,000 850,000 Total Revenues 24,307,963 7,491,789 (16,816,174) EXPENDITURES: Current: Public works 73,285,530 44,153,321 29,132,209 Total Expenditures 73,285,530 44,153,321 29,132,209 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (48,977,567) (36,661,532) 12,316,035 OTHER FINANCING SOURCES (USES) Transfers in 48,448,954 15,087,484 (33,361,470) Total other financing sources (uses) 48,448,954 15,087,484 (33,361,470) NET CHANGE IN FUND BALANCE ($528,613) (21,574,048) ($21,045,435) Fund balance - July 1 197,416 Adjustment to budgetary basis: Encumbrance adjustments 18,444,492 Fund balance - June 30 ($2,932,140) 108 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, 2019 Variance with Final Budget Positive Budget Actual Amounts (Negative) REVENUES: Interest and rental $100,304 $100,304 Charges for services 1,781,407 1,781,407 Total Revenues 1,881,711 1,881,711 EXPENDITURES: Current: Non-departmental $2,652 2,652 Total Expenditures 2,652 2,652 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (2,652) 1,879,059 1,881,711 OTHER FINANCING SOURCES (USES) Transfers out (3,527,395) (281,827) 3,245,568 Total other financing sources (uses) (3,527,395) (281,827) 3,245,568 NET CHANGE IN FUND BALANCE ($3,530,047) 1,597,232 $5,127,279 Fund balance (deficit) - July 1 2,838,902 Fund balance (deficit) - June 30 $4,436,134 109 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, 2019 Variance with Final Budget Positive Budget Actual Amounts (Negative) REVENUES: Interest and rental $533,381 $533,381 Charges for services 8,304,582 8,304,582 Total Revenues 8,837,963 8,837,963 EXPENDITURES: Current: Public works $2,652 2,652 Total Expenditures 2,652 2,652 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (2,652) 8,835,311 8,837,963 OTHER FINANCING SOURCES (USES) Transfers (out) (5,942,618) (701,659) 5,240,959 Total other financing sources (uses) (5,942,618) (701,659) 5,240,959 NET CHANGE IN FUND BALANCE ($5,945,270) 8,133,652 $14,078,922 Fund balance - July 1 12,459,805 Fund balance - June 30 $20,593,457 110 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, 2019 Variance with Final Budget Positive Budget Actual Amounts (Negative) REVENUES: Interest and rental $172,624 $172,624 Charges for services 747,845 747,845 Total Revenues 920,469 920,469 EXPENDITURES: Current: Non-departmental $2,652 2,652 Public Works 99,988 75,000 (24,988) Total Expenditures 102,640 77,652 (24,988) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (102,640) 842,817 945,457 NET CHANGE IN FUND BALANCE ($102,640) 842,817 $945,457 Fund balance - July 1 4,692,411 Adjustment to budgetary basis: Encumbrance adjustments 1,500 Fund balance - June 30 $5,536,728 111 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, 2019 Variance with Final Budget Final Positive Budget Actual Amounts (Negative) REVENUES: Interest and rental $6,371 $6,371 Total Revenues 6,371 6,371 EXPENDITURES Current: Public works Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 6,371 6,371 OTHER FINANCING SOURCES (USES) Transfers (out) ($1,525,129) 1,525,129 Total other financing sources (uses) (1,525,129) 1,525,129 NET CHANGE IN FUND BALANCE ($1,525,129)6,371 $1,531,500 Fund balance - July 1 3,245 Fund balance - June 30 $9,616 112 Variance with Final Budget Final Positive Budget Actual Amounts (Negative) REVENUES: Interest and rental $683,549 $683,549 Total Revenues 683,549 683,549 EXPENDITURES Current: Public Works $1,000,000 1,000,000 Total Expenditures 1,000,000 1,000,000 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (1,000,000) (316,451) 683,549 OTHER FINANCING SOURCES (USES) Transfers out (10,186,832) (3,161,063) 7,025,769 Total other financing sources (uses) (10,186,832) (3,161,063) 7,025,769 NET CHANGE IN FUND BALANCE ($11,186,832) (3,477,514) $7,709,318 Fund balance - July 1 21,585,486 Adjustment to budgetary basis: Encumbrance adjustments 1,000,000 Fund balance - June 30 $19,107,972 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, 2019 113 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. 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. Transit Station Enhancement in-Lieu Fee – Accounts for revenues that are collected as a negotiated community benefit. Road Maintenance and Rehabilitation – Accounts for State monies received and expended for road maintenance and rehabilitation pursuant to Senate Bill 1, approved in 2017. 115 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 – 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. Oyster Point Development Impact Fees – Accounts for expenditures associated with the acquisition, construction, or improvement related to Oyster Point Development. Park Land Acquisition Fee – Accounts for monies received and expended pursuant to SSFMC Chapter 8.67 and Mitigation Fee Act for park land acquisition. Park Construction Fee – Accounts for monies received and expended pursuant to SSFMC Chapter 8.67 and Mitigation Fee Act for park construction. Bicycle and Pedestrian Impact Fee – Accounts for monies received and expended pursuant to SSFMC Chapter 8.68 for mitigation of impacts of new development on bicycle and pedestrian improvements in the City. 116 This Page Left Intentionally Blank Federal Community Developer Aviation Development Maintenance Gas Tax Contributions Grant Block Grant Districts ASSETS Cash and investments $395,864 $6,940,255 $751,784 $3,641,552 Receivables: Accounts 123,420 $133,641 Accrued interest 2,838 50,177 4,771 Loans 789,824 Restricted cash and investments 152,222 Land held for resale Total Assets $522,122 $6,990,432 $756,555 $1,075,687 $3,641,552 LIABILITIES Liabilities: Accounts payable $40,094 $45,100 $30,793 Other payable 480,000 Deposits 1,907,677 Unearned revenue $756,555 Total Liabilities 1,947,771 756,555 525,100 30,793 Fund Balances: Restricted $522,122 5,042,661 550,587 3,610,759 Total Fund Balances 522,122 5,042,661 550,587 3,610,759 Total Liabilities and Fund Balances $522,122 $6,990,432 $756,555 $1,075,687 $3,641,552 SPECIAL REVENUE FUNDS CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2019 118 SPECIAL REVENUE FUNDS Solid Supplemental Affordable PEG Transit Station Transportation Waste Law Enforce- City Housing Equipment and Enhancement Sales Tax Reduction ment Services Programs Trust Access In-Lieu Fee $3,387,594 $523,393 $903 $4,624,355 $6,545,739 $1,220,782 $1,795,803 33,501 41,135 21,067 196 25,639 16,092 7,179 7,758 18,226 1,900,000 $3,408,661 $556,894 $1,099 $4,649,994 $8,480,057 $1,269,096 $1,803,561 $4,860 $102,860 4,860 102,860 $3,408,661 552,034 $1,099 4,547,134 $8,480,057 $1,269,096 $1,803,561 3,408,661 552,034 1,099 4,547,134 8,480,057 1,269,096 1,803,561 $3,408,661 $556,894 $1,099 $4,649,994 $8,480,057 $1,269,096 $1,803,561 (Continued) 119 SPECIAL REVENUE FUND Road Non-obligated Public Oyster Point Sewer Maintenance Capital Safety Improvement Capacity and Rehabilitation Projects Impact Fee Impact Fees Charges ASSETS Cash and investments $1,207,323 $41,857 $1,294,898 $63,714 $12,255,411 Receivables: Accounts 115,328 Accrued interest 4,843 6,332 8,542 68,146 Loans Restricted cash and investments Land held for resale Total Assets $1,327,494 $41,857 $1,301,230 $72,256 $12,323,557 LIABILITIES Liabilities: Accounts payable Other payable Deposits Unearned revenue Total Liabilities Fund Balances: Restricted $1,327,494 $41,857 $1,301,230 $72,256 $12,323,557 Total Fund Balances 1,327,494 41,857 1,301,230 72,256 12,323,557 Total Liabilities and Fund Balances $1,327,494 $41,857 $1,301,230 $72,256 $12,323,557 CAPITAL PROJECTS FUNDS CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2019 120 Total Oyster Point Park Land Park Bicycle and Nonmajor Development Acquisition Construction Pedestrian Governmental Impact Fees Fee Fee Impact Fee Funds $31,140 $362,557 $2,112,667 $51,136 $47,248,727 45,030 492,055 3,377 3,848 137 230,942 808,050 152,222 1,900,000 $76,170 $365,934 $2,116,515 $51,273 $50,831,996 $223,707 480,000 1,907,677 756,555 3,367,939 $76,170 $365,934 $2,116,515 $51,273 47,464,057 76,170 365,934 2,116,515 51,273 47,464,057 $76,170 $365,934 $2,116,515 $51,273 $50,831,996 CAPITAL PROJECTS FUNDS 121 CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2019 SPECIAL REVENUE FUNDS Federal Community Developer Aviation Development Maintenance Gas Tax Contributions Grants Block Grant Districts REVENUES Property taxes $1,937,960 Other taxes Intergovernmental $1,805,564 $447,793 Interest and rentals 15,032 $267,807 $25,264 21,157 Charges for services 2,874,507 Other 11,130 Total Revenues 1,820,596 3,142,314 25,264 480,080 1,937,960 EXPENDITURES Current: Economic and community development 241,593 25,264 198,845 Public works 1,469,305 Non-departmental Fire Police Other Debt service: Principal repayments Total Expenditures 241,593 25,264 198,845 1,469,305 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,820,596 2,900,721 281,235 468,655 OTHER FINANCING SOURCES (USES) Transfers in Transfers out (1,825,696) (4,187,123) Total Other Financing Sources (Uses)(1,825,696) (4,187,123) Net Change in Fund Balances (5,100) (1,286,402)281,235 468,655 Fund balance - July 1 527,222 6,329,063 269,352 3,142,104 Fund balance - June 30 $522,122 $5,042,661 $550,587 $3,610,759 122 SPECIAL REVENUE FUNDS Solid Supplemental Affordable PEG Transit Station Transportation Waste Law Enforce- City Housing Equipment and Enhancement Sales Tax Reduction ment Services Programs Trust Access In-Lieu Fee $1,762,540 $150,768 111,632 1,075 $106,855 $87,758 $38,073 $41,514 $201,008 4,741,200 1,338,235 1,250,312 166,476 1,874,172 201,008 151,843 1,357,167 4,828,958 204,549 1,379,749 70,154 77,364 50,847 333,024 70,154 50,847 333,024 77,364 1,874,172 130,854 100,996 1,024,143 4,828,958 127,185 1,379,749 2,236,224 (1,431,441)(4,272) (100,000) (88,274)(235,718) (1,431,441)(4,272) (100,000) 2,147,950 (235,718) 442,731 126,582 996 3,172,093 4,828,958 127,185 1,144,031 2,965,930 425,452 103 1,375,041 3,651,099 1,141,911 659,530 $3,408,661 $552,034 $1,099 $4,547,134 $8,480,057 $1,269,096 $1,803,561 (Continued) 123 SPECIAL REVENUE FUND Road Non-obligated Public Oyster Point Sewer Maintenance Capital Safety Improvement Capacity and Rehabilitation Projects Impact Fee Impact Fees Charges REVENUES Property taxes Other taxes Intergovernmental $1,207,750 $200,152 Interest and rentals 24,436 $33,639 $46,385 161,534 Charges for services 3,460,060 2,825,571 Other 445,461 Total Revenues 1,232,186 479,100 3,506,445 3,187,257 EXPENDITURES Current: Economic and community development Public works 552 Non-departmental Fire 4,391 Police Other Debt service: Principal repayments 3,464,000 Total Expenditures 4,391 3,464,000 552 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,232,186 474,709 42,445 3,186,705 OTHER FINANCING SOURCES (USES) Transfers in Transfers out (175,641)(9,517)(369,745) Total Other Financing Sources (Uses)(175,641)(9,517)(369,745) Net Change in Fund Balances 1,056,545 465,192 42,445 2,816,960 Fund balance - July 1 270,949 $41,857 836,038 29,811 9,506,597 Fund balance - June 30 $1,327,494 $41,857 $1,301,230 $72,256 $12,323,557 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, 2019 124 Total Oyster Point Park Land Park Bicycle and Nonmajor Development Acquisition Construction Pedestrian Governmental Impact Fees Fee Fee Impact Fee Funds $1,937,960 1,913,308 3,661,259 $599 $16,621 $20,813 $746 1,020,940 781,238 294,649 2,092,001 49,601 18,658,070 4,940,441 6,813,820 5,722,278 311,270 2,112,814 50,347 34,005,357 535,856 5,437,619 6,907,476 77,364 4,391 50,847 333,024 3,464,000 5,437,619 11,372,958 284,659 311,270 2,112,814 50,347 22,632,399 2,236,224 (13,918)(8,441,345) (13,918)(6,205,121) 284,659 311,270 2,098,896 50,347 16,427,278 (208,489)54,664 17,619 926 31,036,779 $76,170 $365,934 $2,116,515 $51,273 $47,464,057 CAPITAL PROJECTS FUNDS 125 GAS TAX DEVELOPER CONTRIBUTIONS Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Property taxes Other taxes Intergovernmental $1,700,688 $1,805,564 $104,876 Interest and rentals 15,000 15,032 32 $267,807 $267,807 Charges for services 2,874,507 2,874,507 Other Total Revenues 1,715,688 1,820,596 104,908 3,142,314 3,142,314 EXPENDITURES Current: City Council Economic and community development $97,670 345,017 (247,347) Public works Non-departmental Fire Police Other Debt service: Principal repayments Total Expenditures 97,670 345,017 (247,347) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,715,688 1,820,596 104,908 (97,670) 2,797,297 2,894,967 OTHER FINANCING SOURCES (USES) Transfers in Transfers out (2,455,104) (1,825,696) 629,408 (5,836,743) (4,187,123) 1,649,620 Total Other Financing Sources (Uses) (2,455,104) (1,825,696) 629,408 (5,836,743) (4,187,123) 1,649,620 NET CHANGE IN FUND BALANCES ($739,416) (5,100) $734,316 ($5,934,413) (1,389,826) $4,544,587 Adjustment to budgetary basis: Encumbrance adjustments 103,424 Fund balance - July 1 527,222 6,329,063 Fund balance - June 30 $522,122 $5,042,661 AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2019 CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, 126 MAINTENANCE DISTRICTS Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $1,730,539 $1,937,960 $207,421 $415,000 $447,793 $32,793 $4,000 $25,264 $21,264 80,000 21,157 (58,843) 11,130 11,130 4,000 25,264 21,264 495,000 480,080 (14,920) 1,730,539 1,937,960 207,421 25,264 (25,264) 892,029 395,638 496,391 1,623,777 1,469,305 154,472 25,264 (25,264) 892,029 395,638 496,391 1,623,777 1,469,305 154,472 4,000 (4,000) (397,029) 84,442 481,471 106,762 468,655 361,893 (95,330)95,330 (95,330)95,330 $4,000 ($4,000) ($492,359) 84,442 $576,801 $106,762 468,655 $361,893 196,793 269,352 3,142,104 $550,587 $3,610,759 (Continued) GRANT BLOCK GRANT COMMUNITY DEVELOPMENTFEDERAL AVIATION 127 Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Property taxes Other taxes $1,468,995 $1,762,540 $293,545 Intergovernmental Interest and rentals 25,000 111,632 86,632 Charges for services $180,000 $201,008 $21,008 Other Total Revenues 1,493,995 1,874,172 380,177 180,000 201,008 21,008 EXPENDITURES Current: City Council Economic and community development 202,024 194,040 7,984 Public works Non-departmental Fire Police Other Debt service: Principal repayments Total Expenditures 202,024 194,040 7,984 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,493,995 1,874,172 380,177 (22,024) 6,968 28,992 OTHER FINANCING SOURCES (USES) Transfers in Transfers out (4,545,940) (1,431,441) 3,114,499 (146,537) (4,272) 142,265 Total Other Financing Sources (Uses) (4,545,940) (1,431,441) 3,114,499 (146,537) (4,272) 142,265 NET CHANGE IN FUND BALANCES ($3,051,945) 442,731 $3,494,676 ($168,561) 2,696 $171,257 Adjustment to budgetary basis: Encumbrance adjustments 123,886 Fund balance - July 1 2,965,930 425,452 Fund balance - June 30 $3,408,661 $552,034 TRANSPORTATION SALES TAX SOLID WASTE REDUCTION CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2019 128 AFFORDABLE HOUSING TRUST Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $100,000 $150,768 $50,768 1,075 1,075 $106,855 $106,855 $87,758 $87,758 4,741,200 4,741,200 $1,000,000 1,250,312 250,312 100,000 151,843 51,843 1,000,000 1,357,167 357,167 4,828,958 4,828,958 3,000 50,847 (50,847) 333,024 (333,024) 50,847 (50,847) 3,000 333,024 100,000 100,996 996 997,000 1,024,143 27,143 4,828,958 4,828,958 2,236,224 2,236,224 (100,000) (100,000)(967,596) (88,274) 879,322 (100,000) (100,000)(967,596) 2,147,950 3,115,546 996 $996 $29,404 3,172,093 $3,142,689 4,828,958 $4,828,958 103 1,375,041 3,651,099 $1,099 $4,547,134 $8,480,057 (Continued) ENFORCEMENT SERVICES SUPPLEMENTAL LAW CITY PROGRAMS 129 CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) FOR THE YEAR ENDED JUNE 30, 2019 Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Property taxes Other taxes Intergovernmental Interest and rentals $5,000 $38,073 $33,073 $41,514 $41,514 Charges for services 1,338,235 1,338,235 Other 125,000 166,476 41,476 Total Revenues 130,000 204,549 74,549 1,379,749 1,379,749 EXPENDITURES Current: City Council Economic and community development Public works Non-departmental 68,891 77,364 (8,473) Fire Police Other Debt service: Principal repayments Total Expenditures 68,891 77,364 (8,473) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 61,109 127,185 66,076 1,379,749 1,379,749 OTHER FINANCING SOURCES (USES) Transfers in Transfers out ($743,166) (235,718) 507,448 Total Other Financing Sources (Uses)(743,166) (235,718) 507,448 NET CHANGE IN FUND BALANCES $61,109 127,185 $66,076 ($743,166) 1,144,031 $1,887,197 Adjustment to budgetary basis: Encumbrance adjustments Fund balance - July 1 1,141,911 659,530 Fund balance - June 30 $1,269,096 $1,803,561 PEG EQUIPMENT AND ACCESS TRANSIT ENHANCEMENT IN-LIEU FEE 130 Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $1,109,449 $1,207,750 $98,301 24,436 24,436 $33,639 $33,639 445,461 445,461 1,109,449 1,232,186 122,737 479,100 479,100 $4,391 4,391 4,391 4,391 1,109,449 1,232,186 122,737 (4,391) 474,709 479,100 ($1,408,870) (175,641) 1,233,229 (328,601) (9,517) 319,084 (1,408,870) (175,641) 1,233,229 (328,601) (9,517) 319,084 ($299,421) 1,056,545 $1,355,966 ($332,992) 465,192 $798,184 270,949 $41,857 836,038 $1,327,494 $41,857 $1,301,230 (Continued) NONOBLIGATED CAPITAL PROJECTS PUBLIC SAFETY IMPACT FEE ROAD MAINTENANCE AND REHABILITATION 131 Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Property taxes Other taxes Intergovernmental $200,152 $200,152 Interest and rentals $46,385 $46,385 161,534 161,534 Charges for services 3,460,060 3,460,060 $200,000 2,825,571 2,625,571 Other Total Revenues 3,506,445 3,506,445 200,000 3,187,257 2,987,257 EXPENDITURES Current: City Council Economic and community development Public works $52,561 52,561 2,652 552 2,100 Non-departmental Fire Police Other Debt service: Principal repayments 3,464,000 (3,464,000) Total Expenditures 52,561 3,464,000 (3,411,439) 2,652 552 2,100 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (52,561) 42,445 95,006 197,348 3,186,705 2,989,357 OTHER FINANCING SOURCES (USES) Transfers in Transfers out (6,132,988) (369,745) 5,763,243 Total Other Financing Sources (Uses)(6,132,988) (369,745) 5,763,243 NET CHANGE IN FUND BALANCES ($52,561) 42,445 $95,006 ($5,935,640) 2,816,960 $8,752,600 Adjustment to budgetary basis: Encumbrance adjustments Fund balance - July 1 29,811 9,506,597 Fund balance - June 30 $72,256 $12,323,557 FOR THE YEAR ENDED JUNE 30, 2018 CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) SEWER CAPACITY CHARGES OYSTER POINT IMPROVEMENT IMPACT FEES 132 Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $599 $599 $16,621 $16,621 $20,813 $20,813 781,238 781,238 294,649 294,649 2,092,001 2,092,001 4,940,441 4,940,441 5,722,278 5,722,278 311,270 311,270 2,112,814 2,112,814 5,678,621 (5,678,621) 5,678,621 (5,678,621) 43,657 43,657 311,270 311,270 2,112,814 2,112,814 ($188,796) (13,918) 174,878 (188,796) (13,918) 174,878 43,657 $43,657 311,270 $311,270 ($188,796) 2,098,896 $2,287,692 241,002 (208,489)54,664 17,619 $76,170 $365,934 $2,116,515 (Continued) PARK LAND ACQUISITION FEE PARK CONSTRUCTION FEE OYSTER POINT DEVELOPMENT IMPACT FEES 133 Variance Final Positive Budget Actual (Negative) REVENUES Property taxes Other taxes Intergovernmental Interest and rentals $746 $746 Charges for services 49,601 49,601 Other Total Revenues 50,347 50,347 EXPENDITURES Current: City Council Economic and community development Public works Non-departmental Fire Police Other Debt service: Principal repayments Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 50,347 50,347 OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCES 50,347 $50,347 Adjustment to budgetary basis: Encumbrance adjustments Fund balance - July 1 926 Fund balance - June 30 $51,273 FOR THE YEAR ENDED JUNE 30, 2018 AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (NON GAAP LEGAL BASIS) CITY OF SOUTH SAN FRANCISCO NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, BICYCLE AND PEDESTRIAN IMPACT FEE 134 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. 135 CITY OF SOUTH SAN FRANCISCO INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET POSITION JUNE 30, 2019 Health and Self Retirement Equipment City Service Insurance Benefits Replacement Total ASSETS Current assets: Cash and investments $1,841,373 $15,406,142 $10,731,265 $4,968,160 $32,946,940 Receivables: Accounts 35,517 35,517 Accrued interest 11,366 79,099 69,476 26,895 186,836 Deposit 83,091 46,010 129,101 Prepaid items 830,740 830,740 Total current assets 1,888,256 15,568,332 11,677,491 4,995,055 34,129,134 Noncurrent assets: Capital assets: Depreciable, net of accumulated depreciation 4,911,558 4,911,558 Total Assets 1,888,256 15,568,332 11,677,491 9,906,613 39,040,692 LIABILITIES Current liabilities: Accounts payable 107,492 59,532 65,620 232,644 Other payable 126,688 150,287 276,975 Current portion of accrued insurance loss 712,000 712,000 Current portion of compensated absences 88,689 632,415 721,104 Current portion of long-term debt 263,838 263,838 Total current liabilities 322,869 771,532 848,322 263,838 2,206,561 Noncurrent liabilities: Accrued insurance loss 13,739,253 13,739,253 Compensated absences obligation 87,545 802,280 889,825 Noncurrent portion of long-term debt 489,781 489,781 Total noncurrent liabilities 87,545 13,739,253 802,280 489,781 15,118,859 Total Liabilities 410,414 14,510,785 1,650,602 753,619 17,325,420 NET POSITION: Net investment in capital assets 4,157,939 4,157,939 Unrestricted 1,477,842 1,057,547 10,026,889 4,995,055 17,557,333 Total Net Position $1,477,842 $1,057,547 $10,026,889 $9,152,994 $21,715,272 136 Health and Self Retirement Equipment City Service Insurance Benefits Replacement Total OPERATING REVENUES Charges for services $4,417,021 $6,002,793 $13,781,114 $1,634,961 $25,835,889 Total Operating Revenues 4,417,021 6,002,793 13,781,114 1,634,961 25,835,889 OPERATING EXPENSES Personnel expenses 1,968,994 925,210 13,715,328 16,609,532 Professional services 630,525 277,712 908,237 Program supplies 1,220,322 5,500 1,400 19,193 1,246,415 Insurance 12,988 1,589,831 1,602,819 Self-insurance and claims 3,323,889 3,323,889 Repair and maintenance 437,100 137,707 574,807 Utilities 148,225 148,225 Depreciation 290 829,764 830,054 Other 10,424 402,363 412,787 Total Operating Expenses 4,428,868 6,122,142 14,119,091 986,664 25,656,765 Operating Income (Loss)(11,847) (119,349) (337,977)648,297 179,124 NONOPERATING REVENUES (EXPENSES) Interest income 60,486 419,878 366,555 142,668 989,587 Interest expense (30,743) (30,743) Gain from disposal of capital assets 41,611 41,611 Other 72,740 72,740 Total Nonoperating Revenues (Expenses)60,486 492,618 366,555 153,536 1,073,195 Net income (loss) before transfers 48,639 373,269 28,578 801,833 1,252,319 TRANSFERS Transfers in 250,000 250,000 Change in Net Position 48,639 373,269 278,578 801,833 1,502,319 Net Position - (deficits) July 1 1,429,203 684,278 9,748,311 8,351,161 20,212,953 Net Position - (deficits) June 30 $1,477,842 $1,057,547 $10,026,889 $9,152,994 $21,715,272 INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION FOR THE YEAR ENDED JUNE 30, 2019 CITY OF SOUTH SAN FRANCISCO 137 CITY OF SOUTH SAN FRANCISCO INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2019 Health and Self Retirement Equipment City Service Insurance Benefits Replacement Total CASH FLOWS FROM OPERATING ACTIVITIES Cash received from interfund service provided $4,381,504 $6,149,942 $12,950,374 $1,634,961 $25,116,781 Cash payments to suppliers for goods and services (2,459,584) (1,885,776) (403,763) (183,185) (4,932,308) Cash payments to employees for services (1,910,654) (975,514) (13,398,261)(16,284,429) Cash payments for judgments and claims (1,665,992)(1,665,992) Net Cash Provided by Operating Activities 11,266 1,622,660 (851,650) 1,451,776 2,234,052 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in 250,000 250,000 Net Cash Provided by Noncapital Financing Activities 250,000 250,000 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid on capital lease (381,482) (381,482) Interest payments (30,743) (30,743) Acquisition of capital assets, net (335,751) (335,751) Proceeds from the sale of capital assets 79,653 79,653 Net Cash Used in Capital and Related Financing Activities (668,323) (668,323) CASH FLOWS FROM INVESTING ACTIVITIES Interest received 83,939 593,529 511,974 191,509 1,380,951 Changes in market values of investments (26,942) (187,497) (164,685) (63,752) (442,876) Net Cash Provided by Investing Activities 56,997 406,032 347,289 127,757 938,075 Net Increase (Decrease) in cash and cash equivalents 68,263 2,028,692 (254,361) 911,210 2,753,804 Cash and cash equivalents, beginning 1,773,110 13,377,450 10,985,626 4,056,950 30,193,136 Cash and cash equivalents, ending $1,841,373 $15,406,142 $10,731,265 $4,968,160 $32,946,940 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss)($11,847) ($119,349) ($337,977) $648,297 $179,124 Adjustments to reconcile operating income (loss) to cash flows from operating activities: Depreciation 290 829,764 830,054 Other non-operating revenue (expenses)72,740 72,740 Net change in assets and liabilities: Accounts and lease receivables (35,517)(35,517) Deposit 74,409 74,409 Prepaid items (830,740)(830,740) Accounts payable 83,750 (50,304) 65,214 98,660 Other payable (12,733) 150,287 (26,285) 111,269 Accrued insurance losses 1,657,897 1,657,897 Compensated absence obligations (25,410)101,566 76,156 Net Cash Provided by (Used in) Operating Activities $11,266 $1,622,660 ($851,650) $1,451,776 $2,234,052 138 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. 139 Balance Balance June 30, 2018 Additions Deductions June 30, 2019 ASSETS Cash and investments $82,265 $105,115 $82,265 $105,115 Interest receivable 400 579 400 579 Total Assets $82,665 $105,694 $82,665 $105,694 LIABILITIES Accounts payable $2,602 $1,706 $2,602 $1,706 Other accrued liabilities 80,063 103,988 80,063 103,988 Total Liabilities $82,665 $105,694 $82,665 $105,694 CITY OF SOUTH SAN FRANCISCO AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED JUNE 30, 2019 SSF Employee Deferred Comp Trust Oversight 140 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 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 141 STATISTICAL SECTION - (Continued) 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. 142 2010 2011 2012 2013 2014 Governmental activities Net investment in capital assets $209,507,012 $214,246,561 $214,246,561 $216,508,668 $230,440,390 Restricted 78,625,094 163,669,353 163,669,353 30,514,986 42,367,623 Unrestricted 65,537,953 (19,267,010) (19,267,010) 8,021,490 (12,317,511) Total governmental activities net position $353,670,059 $358,648,904 $358,648,904 $255,045,144 $260,490,502 Business-type activities Net investment in capital assets $58,522,676 $66,113,596 $66,113,596 $72,217,660 $78,045,318 Restricted Unrestricted 792,921 9,292,189 9,292,189 13,353,988 15,367,085 Total business-type activities net position $59,315,597 $75,405,785 $75,405,785 $85,571,648 $93,412,403 Primary government Net investment in capital assets $268,029,688 $280,360,157 $280,360,157 $288,726,328 $308,485,708 Restricted 78,625,094 163,669,353 163,669,353 30,514,986 42,367,623 Unrestricted 66,330,874 (9,974,821) (9,974,821) 21,375,478 3,049,574 Total primary government net position $412,985,656 $434,054,689 $434,054,689 $340,616,792 $353,902,905 2015 2016 2017 2018 2019 Governmental activities Net investment in capital assets $230,517,037 $231,142,079 $254,344,554 $254,570,044 $271,349,364 Restricted 49,311,828 52,406,602 54,478,093 96,316,988 117,752,590 Unrestricted (134,389,522) (120,119,617) (86,808,434) (129,833,581) (114,028,420) Total governmental activities net position $145,439,343 $163,429,064 $222,014,213 $221,053,451 $275,073,534 Business-type activities Net investment in capital assets $78,598,277 $83,930,073 $86,167,704 $90,097,907 $100,463,280 Unrestricted 4,196,654 6,243,225 7,199,925 3,227,395 44,966 Total business-type activities net position $82,794,931 $90,173,298 $93,367,629 $93,325,302 $100,508,246 Primary government Net investment in capital assets $308,485,708 $315,072,152 $340,512,258 $344,667,951 $371,812,644 Restricted 42,367,623 52,406,602 54,478,093 96,316,988 117,752,590 Unrestricted 3,049,574 (113,876,392) (79,608,509) (126,606,186) (113,983,454) Total primary government net position $353,902,905 $253,602,362 $315,381,842 $314,378,753 $375,581,780 Source: City of South San Francisco, Department of Finance (a) The City adjusted certain beginning balances during fiscal years 2014-15 and 2017-18 due to the implementation of GASB Statements 68 and 75. Financial data shown for the proceeding year were not adjusted for the presentation. CITY OF SOUTH SAN FRANCISCO (accrual basis of accounting) Last Ten Fiscal Years (a) Net Position by Component ($200) ($100) $0 $100 $200 $300 $400 $500 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Millions Unrestricted Restricted Invested in Capital Assets Net of Related Debt 143 CITY OF SOUTH SAN FRANCISCO Changes in Net Position Last Ten Fiscal Years (Accrual Basis of Accounting) 2010 2011 2012 2013 Expenses Governmental Activities: General Government $6,538,052 $7,711,156 $7,801,328 $8,360,945 Fire Department 17,868,050 20,032,141 20,749,323 22,746,291 Police Department 20,352,570 22,429,782 23,330,208 24,756,958 Public Works 15,873,783 17,127,086 21,269,281 15,773,710 Park, Recreation and Maintenance Services 10,411,821 10,866,568 11,641,892 12,570,236 Library 4,616,658 4,664,490 4,754,760 4,615,967 Economic and Community Development 23,147,877 15,018,495 8,702,949 16,126,427 Interest on Long -Term Debt 5,035,780 4,249,454 3,328,244 52,139 Total Governmental Activities Expenses 103,844,591 102,099,172 101,577,985 105,002,673 Business-Type Activities: Sewer Rental 18,944,267 19,277,959 19,446,739 20,870,522 Parking District 338,995 571,261 769,117 792,609 Storm Water 722,232 710,903 1,010,093 1,655,950 Total Business-Type Activities Expenses 20,005,494 20,560,123 21,225,949 23,319,081 Total Primary Government Expenses $123,850,085 $122,659,295 $122,803,934 $128,321,754 Program Revenues Governmental Activities: Charges for Services: General Government $2,539,316 $2,688,990 $2,032,292 $1,951,016 Fire Department 2,851,984 3,221,837 3,697,665 2,987,956 Police Department 1,479,104 1,815,405 2,599,149 2,640,146 Public Works 4,412,581 3,805,824 3,607,224 2,926,227 Park, Recreation and Maintenance Services 3,032,399 3,004,435 3,178,276 3,433,567 Library 187,380 168,505 143,971 125,416 Economic and Community Development 4,652,031 4,944,328 4,968,383 3,457,020 Operating Grants and Contributions 5,786,227 5,549,711 5,650,685 5,455,010 Capital Grants and Contributions 217,877 2,728,543 1,471,416 4,036,786 Total Government Activities Program Revenues 25,158,899 27,927,578 27,349,061 27,013,144 Business-Type Activities: Charges for Services: Sewer Rental 17,486,418 18,087,695 19,310,286 19,338,107 Parking District 616,578 722,807 760,248 732,932 Storm Water 422,467 406,589 409,498 427,291 Operating Grants and Contributions 5,679,902 5,509,874 5,936,527 6,137,401 Capital Grants and Contributions 24,720 31,670 Total Business-Type Activities Program Revenue 24,230,085 24,758,635 26,416,559 26,635,731 Total Primary Government Program Revenues $49,388,984 $52,686,213 $53,765,620 $53,648,875 Net (Expense)/Revenue Governmental Activities ($78,685,692) ($74,171,594) ($74,228,924) ($77,989,529) Business-Type Activities 4,224,591 4,198,512 5,190,610 3,316,650 Total Primary Government Net Expense ($74,461,101) ($69,973,082) ($69,038,314) ($74,672,879) 144 2014 2015 2016 2017 2018 2019 $7,155,035 $8,421,857 $9,044,518 $10,253,403 $12,506,188 $12,139,671 21,200,903 22,005,883 22,488,964 25,750,126 30,352,387 31,986,738 24,376,379 23,910,436 23,158,168 25,838,242 30,732,288 32,994,122 14,980,417 14,493,039 11,916,572 12,396,998 18,379,278 20,425,958 12,658,309 12,383,880 12,901,657 15,217,677 17,162,377 17,962,298 4,310,550 4,300,885 4,442,577 5,184,282 5,910,406 6,241,093 5,525,541 5,928,316 7,603,275 8,927,162 10,094,626 10,557,116 90,207,134 91,444,296 91,555,731 103,567,890 125,137,550 132,306,996 19,301,103 23,969,579 18,273,580 22,661,768 24,397,607 25,719,049 943,859 503,014 894,769 940,181 1,202,319 896,994 1,078,868 1,234,616 1,289,465 1,333,409 1,026,948 1,188,182 21,323,830 25,707,209 20,457,814 24,935,358 26,626,874 27,804,225 $111,530,964 $117,151,505 $112,013,545 $128,503,248 $151,764,424 $160,111,221 $5,785,598 $3,946,302 $4,194,563 $2,225,049 $1,966,755 $7,930,983 3,304,952 3,520,275 3,450,524 4,242,940 6,327,921 6,052,804 2,805,640 2,370,736 2,076,837 2,146,909 2,230,824 2,351,491 4,734,813 5,071,729 10,361,525 10,869,608 24,727,897 27,811,701 3,571,947 3,708,272 3,744,137 3,756,369 4,489,665 4,293,474 138,827 120,850 164,271 96,987 102,124 105,466 5,800,849 5,337,177 6,131,463 3,911,597 13,052,441 14,214,991 5,601,916 5,753,845 5,581,492 4,533,539 5,827,149 12,091,079 1,538,225 632,735 1,147,337 577,995 2,515,868 1,629,730 33,282,767 30,461,921 36,852,149 32,360,993 61,240,644 76,481,719 19,155,467 19,798,033 19,569,341 19,897,769 22,417,156 24,078,076 785,586 819,051 843,199 916,687 1,084,472 1,180,538 409,458 407,640 412,105 418,840 656,315 540,679 7,619,601 6,242,687 5,802,788 5,763,645 5,834,455 6,452,950 27,970,112 27,267,411 26,627,433 26,996,941 29,992,398 32,252,243 $61,252,879 $57,729,332 $63,479,582 $59,357,934 $91,233,042 $108,733,962 ($56,924,367) ($60,982,375) ($54,703,582) ($71,206,897) ($63,896,906) ($55,825,277) 6,646,282 1,560,202 6,169,619 2,061,583 3,365,524 4,448,018 ($50,278,085) ($59,422,173) ($48,533,963) ($69,145,314) ($60,531,382) ($51,377,259) 145 CITY OF SOUTH SAN FRANCISCO Changes in Net Position (continued) Last Ten Fiscal Years (Accrual Basis of Accounting) 2010 2011 2012 2013 General Revenues and Other Changes in Net Position Governmental Activities: Taxes: Property Taxes $55,014,367 $54,323,420 $37,379,175 $26,420,861 Sales Taxes 9,146,620 11,199,175 11,691,564 12,931,805 Transient Occupancy Tax 5,820,675 7,191,938 8,619,170 9,659,281 Franchise fees Other Taxes 6,768,753 7,071,446 7,089,687 7,588,471 Motor Vehicle In-Lieu 192,035 211,503 168,214 33,767 Property taxes in lieu of vehicle license fees 5,224,547 5,086,144 5,153,384 4,955,873 Interest Earnings 5,127,255 3,944,785 2,384,207 809,721 Gain from sale of property Other 1,496,744 1,891,421 9,300,137 1,965,744 Extraordinary Item (107,717,428) Transfers (1,459,296) (11,769,393) (785,309) (906,857) Special items 11,873,226 Total Government Activities 87,331,700 79,150,439 (26,717,199) 75,331,892 Business-Type Activities: Interest Earnings 175,188 122,283 149,242 95,177 Transfers 1,459,296 11,769,393 785,309 906,857 Total Business-Type Activities 1,634,484 11,891,676 934,551 1,002,034 Total Primary Government $88,966,184 $91,042,115 ($25,782,648) $76,333,926 Change in Net Position Governmental Activities $8,646,008 $4,978,845 ($100,946,123) ($2,657,637) Business-Type Activities 5,859,075 16,090,188 6,125,161 4,318,684 Total Primary Government $14,505,083 $21,069,033 ($94,820,962) $1,661,047 146 2014 2015 2016 2017 2018 2019 $22,890,828 $24,650,648 $24,650,648 $29,023,618 $29,551,445 $33,446,750 12,725,141 13,932,125 13,932,125 24,087,776 28,340,393 31,843,568 11,174,017 12,947,473 12,947,473 13,631,507 13,978,533 17,091,222 4,090,073 4,403,493 4,469,808 8,141,010 8,650,056 8,650,056 5,708,187 5,871,096 4,995,404 40,074 26,995 26,995 28,933 34,452 32,200 5,319,154 5,551,651 5,551,651 6,133,230 6,438,199 7,150,867 1,108,177 629,036 629,036 622,518 1,097,916 4,808,664 840,298 2,012,444 4,577,239 4,577,239 2,365,820 5,180,288 7,799,392 (1,041,120) (1,429,308) (1,429,308) (1,105,038) (1,997,377) (2,101,222) 45,205,422 (7,154,626) (531,591) 62,369,725 69,535,915 69,535,915 129,792,046 85,743,812 109,845,360 153,353 126,874 126,874 27,710 37,072 633,704 1,041,120 1,429,308 1,429,308 1,105,038 1,997,377 2,101,222 1,194,473 1,556,182 1,556,182 1,132,748 2,034,449 2,734,926 $63,564,198 $71,092,097 $71,092,097 $130,924,794 $87,778,261 $112,580,286 $5,445,358 $8,553,540 $8,553,540 $58,585,149 $21,846,906 $54,020,083 7,840,755 3,116,384 3,116,384 3,194,331 5,399,973 7,182,944 $13,286,113 $11,669,924 $11,669,924 $61,779,480 $27,246,879 $61,203,027 147 CITY OF SOUTH SAN FRANCISCO Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (b) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 General Fund Reserved $889,186 Unreserved 14,841,958 Nonspendable $67,129 $90,167 $805,677 $14,163 $1,134 $33,580 $474 $106 $372 Restricted 20,582,335 19,201,948 Committed 401,797 208,054 1,406,430 3,879,451 2,536,790 3,654,283 11,780,724 16,725,897 22,619,868 Assigned 771,849 840,365 566,104 743,746 1,458,029 1,578,153 5,244,279 4,334,322 11,881,363 Unassigned 15,049,168 17,347,445 23,498,194 15,891,899 17,285,422 17,751,169 39,278,746 19,644,232 31,239,632 Total General Fund $15,731,144 $16,289,943 $18,486,031 $26,276,405 $20,529,259 $21,281,375 $23,017,185 $56,304,223 $61,286,892 (a) $84,943,183 All Other Governmental Funds Reserved $64,163,373 Unreserved, reported in: Special revenue funds 11,079,390 Debt service funds 3,198,600 Capital project funds 69,286,211 Nonspendable $39,205 Restricted $163,727,096 $43,364,540 $30,539,396 $42,392,238 $43,437,361 $52,938,897 $55,195,500 $78,603,366 103,135,202 Assigned 2,390,904 2,076,065 1,105,320 6,188,554 367,023 Unassigned (14,353,252) (1,388,956) (1,379,895) (521,604) (40,459)(88,331) (11,073) (2,971,345) Total all other governmental funds $147,727,574 $151,764,748 $44,051,649 $30,264,821 $41,870,634 $49,585,456 $53,305,920 $55,107,169 $78,592,293 $100,203,062 #REF!#REF! 163,458,718 168,054,691 62,537,680 56,541,226 56,541,226 62,399,893 111,411,392 185,146,245 (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 $200,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Thousands Total Committed Total Unassigned Total Assigned Total Restricted Total Nonspendable Total Unreserved Total Reserved 148 This Page Left Intentionally Blank CITY OF SOUTH SAN FRANCISCO Changes in Fund Balance of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) For The Fiscal Year Ended June 30, 2010 2011 2012 2013 Revenues Property Taxes $54,718,916 $54,128,998 $38,174,655 $27,077,697 Other Taxes 19,771,310 23,412,992 28,866,546 31,894,811 Intergovernmental revenues 10,609,605 11,860,658 11,580,530 13,054,594 Interest and Rents 7,680,293 7,612,223 4,955,223 3,238,089 Licenses and permits 7,270,081 7,004,603 3,056,507 3,054,451 Charges for services 9,986,352 10,010,541 10,088,070 9,275,724 Fines and forfeitures 1,054,549 2,133,677 2,184,234 1,753,682 Other 2,542,492 2,261,247 3,000,563 1,837,675 Total Revenues 113,633,598 118,424,939 101,906,328 91,186,723 Expenditures Current: General government 5,916,364 6,407,094 6,485,219 6,658,532 Fire Department 16,790,834 18,140,954 18,812,861 20,877,917 Police Department 19,359,770 20,272,684 21,217,818 22,542,135 Public works 8,416,242 9,856,201 14,253,609 9,186,493 Recreation and Community Services 9,960,090 10,168,425 10,101,408 10,927,433 Library 4,342,662 4,231,762 4,272,701 4,112,570 Economic and Community Development 26,279,406 19,894,692 8,184,334 20,512,545 Other Capital outlay 6,724,022 6,969,052 8,894,514 Debt service: Principal repayment 1,887,434 1,842,000 1,752,000 Interest and fiscal charges 4,255,050 4,274,170 1,817,764 52,139 Total Expenditures 103,931,874 102,057,034 95,792,228 94,869,764 Excess (deficiency) of revenues over (under) expenditures 9,701,724 16,367,905 6,114,100 (3,683,041) Other Financing Sources (Uses) Transfers in 18,047,351 88,175,882 108,413,018 4,467,530 Transfers (out) (22,175,268) (99,947,814) (109,646,766) (6,780,943) Tax allocation bonds issued Premium on bonds Payments to refunded bond escrow Other debt proceeds Sale of capital assets Total other financing sources (uses) (4,127,917) (11,771,932) (1,233,748) (2,313,413) Net Change in fund balances before extraordinary and special items 5,573,807 4,595,973 4,880,352 (5,996,454) Extraordinary item (110,397,363) Special item Net change in fund balances $5,573,807 $4,595,973 ($105,517,011) ($5,996,454) Debt service as a percentage of noncapital expenditures 6.6% 6.7% 4.2% 0.1% 150 For The Fiscal Year Ended June 30, 2014 2015 2016 2017 2018 2019 $23,010,136 $24,650,648 $26,438,620 $35,156,848 $35,989,644 $40,597,617 33,931,446 38,275,478 $41,811,097 $49,608,385 54,597,272 60,721,378 10,757,440 10,453,071 12,360,354 4,019,771 8,433,240 13,179,593 3,632,693 3,531,966 4,207,453 3,100,692 3,524,727 7,231,303 4,366,271 4,795,158 6,896,897 7,823,403 14,674,809 15,381,416 16,864,409 13,387,712 15,386,358 14,485,367 31,961,419 41,055,659 1,528,319 1,221,413 791,756 899,118 423,604 926,729 2,249,728 4,660,668 2,439,579 2,906,625 6,454,460 7,994,701 96,340,442 100,976,114 110,332,114 118,000,209 156,059,175 187,088,396 5,970,429 7,167,969 8,469,924 9,399,930 10,403,449 10,166,977 20,163,759 21,247,989 24,175,340 25,632,366 26,059,072 27,576,879 23,309,568 23,611,743 25,458,986 25,998,097 26,970,854 28,533,292 16,791,894 15,923,071 14,846,346 12,143,965 23,859,399 38,459,963 11,552,502 11,826,407 13,234,028 14,897,157 15,468,370 16,530,603 3,987,928 4,247,650 4,681,188 5,157,355 5,379,836 5,628,693 5,972,966 5,917,508 7,907,655 8,943,111 9,338,793 9,085,390 480,290 395,749 274,183 256,298 333,024 453,381 352,674 656,000 23,000 2,382,000 3,464,000 88,202,427 90,775,301 99,825,216 102,469,164 120,118,071 139,778,821 8,138,015 10,200,813 10,506,898 15,531,045 35,941,104 47,309,575 21,870,234 17,983,227 8,143,075 14,327,130 26,486,651 22,230,499 (24,149,582)(19,717,102)(13,193,699)(16,368,499)(30,795,941)(24,581,721) 1,016,276 3,990,605 840,298 (2,279,348)(1,733,875)(5,050,624)(1,025,093)(318,685)(1,510,924) 5,858,667 8,466,938 5,456,274 14,505,952 35,622,419 45,798,651 20,582,335 (7,154,626)(531,591) $5,858,667 $8,466,938 $5,456,274 $35,088,287 $28,467,793 $45,267,060 0.6%0.4%0.7%2.0%2.1%2.5% 151 Real Property Net Taxable value Total Real Total Fiscal Residential Commercial Industrial Secured Unsecured Total Estimated Direct Year Property Property Property Other Property Property Assessed (a) Full Market (a) Tax Rate (b) 2010 $5,467,563,992 $1,429,401,205 $5,197,739,403 $498,656,817 $12,593,361,417 $1,424,610,941 $14,017,972,358 $14,017,972,358 0.36462% 2011 5,547,292,029 1,509,554,164 4,922,422,763 387,673,530 12,366,942,486 1,279,681,193 13,646,623,679 13,646,623,679 0.36933% 2012 5,579,044,758 1,581,852,456 4,967,158,758 403,895,119 12,531,951,091 1,295,085,027 13,827,036,118 13,827,036,118 0.37860% 2013 5,606,400,603 1,628,754,902 5,050,279,321 418,927,733 12,704,362,559 1,288,434,392 13,992,796,951 13,992,796,951 0.42174% 2014 5,900,441,192 1,713,575,060 4,273,694,531 1,204,288,116 13,091,998,899 1,212,353,871 14,304,352,770 14,304,352,770 0.13474% 2015 6,313,393,048 2,402,335,027 4,588,967,014 345,957,716 13,650,652,805 1,244,971,467 14,895,624,272 14,895,624,272 0.13804% 2016 6,716,642,000 2,000,204,271 5,189,813,366 376,874,603 14,283,534,240 1,197,263,526 15,480,797,766 15,480,797,766 0.13634% 2017 7,087,550,257 2,160,377,671 5,414,028,340 412,344,220 15,074,300,488 1,381,715,511 16,456,015,999 16,456,015,999 0.13632% 2018 7,458,269,085 2,171,084,856 5,838,028,479 383,589,586 15,850,972,006 1,423,348,022 17,274,320,028 17,274,320,028 0.13631% 2019 7,882,766,880 2,511,501,574 6,673,522,321 353,621,189 17,421,411,964 1,765,066,449 19,186,478,413 19,186,478,413 0.13640% Source: HdL Coren & Cone, San Mateo County Assessor 2009/10-2018/19 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 $5,000 $10,000 $15,000 $20,000 $25,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Millions Unsecured Secured 152 Fiscal Basic School Total Direct/Overlapping Year Levy Districts Tax Rates 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) 2017 1.000 0.1749 1.1749 (1,23) 2018 1.000 0.1642 1.1642 (1,24) 2019 1.000 0.1548 1.1548 (1,25) Notes: Source: HDL, Coren & Cone (San mateo County Assessor 2009/10- 2018/19 Tax Rate Table). CITY OF SOUTH SAN FRANCISCO DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (1) Like other cities, South San Francisco includes several property tax rate areas with different rates. (23) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0714 percent, which includes SSFUSD bonds & San Mateo Jr College bond. 4 has a rate of 1.1282 percent which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD, SM Jr College bonds. 1 has a rate of 1.0910 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond and San Mateo Comm Coll bond. (24) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0601 percent, which includes SSFUSD bonds & San Mateo Jr College bond. 4 has a rate of 1.1276 percent which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD, SM Jr College bonds. 1 has a rate of 1.0900 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond and San Mateo Comm Coll bond. (25) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0597 percent, which includes SSFUSD & San Mateo Jr College bond. 4 has a rate of 1.1126 percent which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD, SM Jr College bonds. 1 has a rate of 1.0801 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond and San Mateo Jr. Coll bonds. (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 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. (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. (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, 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. 153 Percentage Percentage of Total City of Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value Genentech Inc. $2,628,033,718 1 13.70% $2,198,149,937 1 15.68% Slough SSF LLC 646,570,261 2 3.37% 465,349,000 3 3.32% ARE San Francisco LLC 454,787,159 3 2.37% 255,371,399 6 1.82% HCP Oyster Point III LLC 439,463,289 4 2.29% -- Brittania Pointe Grand LP 309,612,762 5 1.61% 273,564,000 5 1.95% United Airlines Inc 271,668,869 6 1.42% 289,968,749 4 2.07% AP3-SF2 CT South LLC 216,949,238 7 1.13% -- KR Oyster Point LLC 169,580,792 8 0.88% -- Gateway Center LLC 149,332,226 9 0.78% 131,945,178 9 0.94% SSF Logistics Inc 127,129,688 10 0.66% -- Slough BTC LLC De -- -- -- 546,250,000 2 3.90% ASN Solaire LLC -- -- -- 143,578,457 7 1.02% Myers Peninsula Venture -- -- -- 143,394,742 8 1.02% Oyster Point LLC -- -- -- 84,000,000 10 0.60% Subtotal $5,413,128,002 28.21% $4,531,571,462 32.33% Total Net Assessed Valuation: Fiscal Year 2018-19 $19,186,478,413 Fiscal Year 2009-10 $14,017,972,358 HdL Coren & Cone, 2009-10 & 2018-19 Top Ten Property Taxpayers (Net Values). San Mateo County Assessor 2009-10 & 2018-19 Combined Tax Rolls and the SBE Non Unitary Tax Roll Source: 2018-19 2009-10 CITY OF SOUTH SAN FRANCISCO Principal Property Tax Payers Current Year and Nine Years Ago 154 June 30, 2018Total % of TotalAssessed AV in ProjectProperty Tax PayerSecured Unsecured ValueAreaLand UseGenentech$641,198,159 $102,646,681 $743,844,840 16.02% Industrial, Office, R&DSlough SSF LLC DE683,563,1570 $683,563,157 14.72% IndustrialBritannia Pointe Grand LP446,937,794$446,937,794 9.63% IndustrialARE San Francisco LLC$233,684,862$233,684,862 5.03% Industrial, CommercialBMR 180 Oyster Point LLC217,408,355$217,408,355 4.68% CommercialGateway Center LLC DE146,404,145$146,404,145 3.15% CommercialASN Solaire LLC113,178,0850 $113,178,085 2.44% ResidentialHCP Inc101,628,279$101,628,279 2.19% UnknownCostco Wholesale Corp42,344,580 41,633,076 $83,977,656 1.81% CommercialAmgen SF LLC72,829,868 $72,829,868 1.57% IndustrialHPTMI II Properties Trust67,514,607$67,514,607 1.45% Residential, Hotels, MotelsGateway Boulevard LLC 62,372,093 $62,372,093 1.34% IndustrialPR 701 Gateway LLC 60,114,250 362,729 $60,476,979 1.30% CommercialBP Gateway Center LLC 60,446,565 $60,446,565 1.30% Commercial, Office, 2+ storiesBlue Line Transfer Inc. 47,956,558 $47,956,558 1.03% IndustrialFelcor CMB SSF Holdings LP 40,259,080 $40,259,080 0.87% Residential, Hotels, MotelsAreus Inc 35,946,914 $35,946,914 0.77% Commercial, Office, 2+ storiesCRP 6000 Shoreline LLC 34,105,000 $34,105,000 0.73% Commercial, Office, 2+ storiesTheravance Biopharma 32,362,536 $32,362,536 0.70% Industrial, Office, R&DOCI San Francisco LLC $29,392,581 26,780,291 $56,172,872 0.63% Residential, Hotels, MotelsTotal Top Twenty 3,064,455,064 276,615,181 3,341,070,245 71.36%Percent of AV 91.7% 8.3%Source: San Mateo County Assessor , RDA Secured & Unsecured SSF 2017 Tax RollsSource: Muni Services(1) Given the nature of the research performed at Genentech, a significant portion of the total assessed value of the Genentech Property is likely equipment. It would appear on the secured roll as that contains the value of personal property/improvements CITY OF SOUTH SAN FRANCISCOTwenty Largest Taxable Property Owners for Merged RDA Project Area155 Fiscal Percent of Year Allocations (5) Collections Delinquencies Delinquent taxes 2010 13,697,389 (4)(4)0.0% 2011 13,351,506 (4)(4)0.0% 2012 13,360,854 (4)(4)0.0% 2013 13,740,246 (4)(4)0.0% 2014 14,928,197 (4)(4)0.0% 2015 15,184,788 (4)(4)0.0% 2016 15,994,773 (4)(4)0.0% 2017 17,065,875 (4)(4)0.0% 2018 17,894,855 (4)(4)0.0% 2019 19,365,814 (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 18 19 20 21 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Millions 156 CITY OF SOUTH SAN FRANCISCO Ratio of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Loans from Lease Certificates Fiscal Successor Revenue of Capital Year Agency Bonds Participation Lease Loans Total 2010 0 $4,765,000 $961,671 $3,548,000 $9,274,671 2011 0 4,610,000 2,342,892 3,436,000 10,388,892 2012 $14,120,927 0 4,445,000 2,056,382 3,324,000 23,946,309 2013 13,343,039 0 0 3,084,553 0 16,427,592 2014 11,722,826 0 0 3,316,836 0 15,039,662 2015 11,370,152 0 0 2,786,573 0 14,156,725 2016 10,714,152 0 0 2,238,998 0 12,953,150 2017 10,691,152 0 0 1,673,522 0 12,364,674 2018 8,309,152 0 0 1,135,102 0 9,444,254 2019 4,845,152 0 0 753,619 0 5,598,771 Business-Type Activities Sewer Certificates State Water Total Percentage Fiscal Revenue of Resources Primary of Personal Per Year Bonds Participation Loans Total Government Income (a) Capita (a) 2010 $5,350,000 $65,028,410 $70,378,410 $79,653,081 4.15% 1,209.21 2011 5,120,000 60,831,038 65,951,038 76,339,930 3.95% 1,187.12 2012 4,885,000 56,530,946 61,415,946 85,362,255 4.31% 1,310.70 2013 4,640,000 52,118,587 56,758,587 73,186,179 3.65% 1,113.78 2014 4,385,000 47,591,019 51,976,019 67,015,681 3.30% 1,019.27 2015 4,120,000 43,543,614 47,663,614 61,820,339 2.92% 957.19 2016 3,850,000 39,392,832 43,242,832 56,195,982 2.59% 858.60 2017 3,570,000 35,136,032 38,706,032 51,070,706 2.22% 761.32 2018 3,275,000 30,770,503 34,045,503 43,489,757 1.80% 648.35 2019 2,970,000 35,148,204 38,118,204 43,716,975 n/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 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019MillionsTotal Governmental Total Business 157 CITY OF SOUTH SAN FRANCISCO COMPUTATION OF DIRECT AND OVERLAPPING DEBT JUNE 30, 2019 2018-19 Assessed Valuation:$19,186,478,413 Redevelopment Incremental Valuation:- Adjusted Assessed Valuation:$19,186,478,413 Total Debt City's Share of OVERLAPPING TAX AND ASSESSMENT DEBT:6/30/2019 % Applicable (1) Debt 6/30/19 San Mateo Community College District $801,050,076 8.586% $68,778,160 Jefferson Union High School District 237,695,639 2.154% 5,119,964 South San Francisco Unified School District 170,343,972 89.493% 152,445,931 Brisbane School District 4,835,437 14.707% 711,148 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $227,055,203 OVERLAPPING FUND DEBT: San Mateo County General Fund Obligations $551,005,360 8.586% $47,309,320 San Mateo County Board of Education Certificates of Participation 8,140,000 8.586% 698,900 San Mateo County Flood Control District Certificates of Participation 16,815,000 58.921% 9,907,566 South San Francisco Unified School District Certificates of Participation 3,585,000 89.493% 3,208,324 Jefferson Union High School District Certificates of Participation 655,601 2.154% $14,122 City of South San Francisco Loans Payable 4,845,152 100.000% 4,845,152 City of South San Francisco Capital Leases 753,619 100.000% 753,629 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT:$66,737,013 TOTAL DIRECT DEBT $5,598,781 Total Overlapping Debt $288,193,435 COMBINED TOTAL DEBT $293,792,207 (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 Debt 1.18% Total Direct Debt 0.03% Combined Total Debt 1.53% 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. 158 ASSESSED VALUATION:$19,186,478,413 BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a)719,492,940 LESS AMOUNT OF DEBT SUBJECT TO LIMIT:0 LEGAL BONDED DEBT MARGIN $719,492,940 Total net debt Total Net Debt Legal applicable to the limit Fiscal Debt Applicable to Debt as a percentage Year Limit Limit Margin of debt limit 2010 $525,673,963 0 $525,673,963 0.00% 2011 511,748,388 0 511,748,388 0.00% 2012 518,513,854 0 518,513,854 0.00% 2013 524,729,886 0 524,729,886 0.00% 2014 536,413,229 0 536,413,229 0.00% 2015 558,585,910 0 558,585,910 0.00% 2016 580,561,386 0 580,561,386 0.00% 2017 617,102,145 0 617,102,145 0.00% 2018 647,787,001 0 647,787,001 0.00% 2019 719,492,940 0 719,492,940 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, 2019 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. 159 CITY OF SOUTH SAN FRANCISCO REVENUE BOND COVERAGE SEWER RENTAL ENTERPRISE FUND LAST TEN FISCAL YEARS Net Revenue Debt Service Requirements (4) Fiscal Gross Operating Available for Year Revenue (1)Expenses (2)Debt Service Principal Interest Total Coverage 2010 $23,321,582 $13,774,757 $9,546,825 $225,000 $230,941 $455,941 20.94 2011 23,735,469 13,527,544 10,207,925 230,000 223,973 453,973 22.49 2012 25,365,824 13,924,334 11,441,490 235,000 216,501 451,501 25.34 2013 24,782,587 15,151,968 9,630,619 245,000 208,459 453,459 21.24 2014 26,908,316 14,904,225 12,004,091 255,000 199,831 454,831 26.39 2015 26,147,550 18,630,672 7,516,878 265,000 190,533 455,533 16.50 2016 25,610,518 13,514,706 12,095,812 270,000 180,566 450,566 26.85 2017 25,684,966 17,357,273 8,327,693 280,000 169,976 449,976 18.51 2018 28,287,485 19,073,940 9,213,545 295,000 158,616 453,616 20.31 2019 30,393,993 20,398,157 9,995,836 305,000 146,616 451,616 22.13 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 $35 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019MillionsRevenue (1) Expenses (2) 160 SEWER DEBT SERVICE COVERAGE SEWER RENTAL ENTERPRISE FUND LAST FIVE FISCAL YEARS Fiscal Year 2015 2016 2017 2018 2019 Revenues Service Charges $19,758,128 $19,515,093 $19,750,636 $22,188,154 $23,556,871 Connection and Other Fees 122,640 104,283 147,134 229,002 521,205 Interest Income 106,830 238,389 23,552 31,061 488,437 Developer Fees Other Cities' Participation (1)6,159,937 5,752,765 5,763,644 5,834,455 5,827,480 Total Revenues $26,147,535 $25,610,530 $25,684,966 $28,282,672 $30,393,993 Operating Expenses (2)$14,987,305 $18,759,650 $13,514,718 $19,073,943 $20,398,157 Wastewater System Net Revenues $11,160,230 $6,850,880 $12,170,248 $9,208,729 $9,995,836 Parity Debt Service (3) State Water Resources Control Board Loans $5,445,162 $5,449,692 $5,454,747 $5,469,175 $5,477,075 CSCDA Series 2005D Revenue Bonds 188,148 178,036 167,284 155,706 143,608 Total Parity Debt $5,633,310 $5,627,728 $5,622,031 $5,624,881 $5,620,683 Total Parity Debt Service Coverage 1.98 1.22 2.16 1.64 1.78 10,012,867 10,012,867 10,012,867 10,012,867 10,012,867 (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 161 CITY OF SOUTH SAN FRANCISCO REDEVELOPMENT PLEDGED REVENUE COVERAGE LAST SEVEN FISCAL YEARS Funding Source: RDA tax increment revenues Fiscal Available Debt Service Requirements Fiscal Available Debt Service Requirements Year Revenue Principal Interest Total Coverage Year Revenue Principal Interest Total Coverage 2013 $1,490,000 $3,030,181 $4,520,181 2013 $210,000 $79,995 $289,995 2014 1,545,000 2,971,344 4,516,344 2014 220,000 69,780 289,780 2015 1,605,000 2,904,331 4,509,331 2015 230,000 58,750 288,750 2016 1,680,000 2,834,619 4,514,619 2016 245,000 46,875 291,875 2017 1,745,000 2,761,756 4,506,756 2017 255,000 34,375 289,375 2018 2018 275,000 21,125 296,125 2019 2019 285,000 7,125 292,125 Bond was paid off in fiscal year 2017 Funding Source: RDA tax increment revenues Funding Source: RDA tax increment revenues Fiscal Available Debt Service Requirements Fiscal Available Debt Service Requirements Year Revenue Principal Interest Total Coverage Year Revenue Principal Interest Total Coverage 2013 2014 2015 2016 2017 2018 2019 Funding Source: RDA tax increment revenues Fiscal Available Debt Service Requirements Year Revenue Principal Interest Total Coverage 2013 $1,490,000 $3,030,181 $4,520,181 2014 1,545,000 2,971,344 4,516,344 2015 1,605,000 2,904,331 4,509,331 2016 1,680,000 2,834,619 4,514,619 2017 1,745,000 2,761,756 4,506,756 2018 0 0 0 2019 0 0 0 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 162 City City Estimated Personal Per Capita City San Mateo City City Income (2) Personal Unemployment County Population Year Population (1) (in thousands) Income (2) Rate (3) Population (4) % of County 2009 65,000 $1,948,798 $29,982 10.3% 745,858 8.71% 2010 65,872 1,918,061 29,118 10.7% 754,285 8.73% 2011 64,307 1,932,618 30,053 9.7% 729,443 8.82% 2012 65,127 1,982,857 30,446 6.3% 735,678 8.85% 2013 65,710 2,005,666 30,523 5.2% 747,373 8.79% 2014 65,749 2,033,156 30,923 4.5% 745,635 8.82% 2015 64,585 2,114,826 32,744 3.6% 765,135 8.44% 2016 65,451 2,167,750 33,120 3.2% 764,797 8.56% 2017 67,082 2,303,425 35,193 3.2% 771,410 8.70% 2018 67,078 2,421,033 36,092 2.3% 769,545 8.72% 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. (2) Personal and per capita income: HDL, Coren & Cone (3) Unemployment Data: HDL/California Employment Development Department (4) County population: https://www.smcgov.org/fast-facts CITY OF SOUTH SAN FRANCISCO DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN YEARS $1,000,000 $1,500,000 $2,000,000 $2,500,000 City Personal Income (in Thousands) 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% City Unemployment Rate 8.20% 8.30% 8.40% 8.50% 8.60% 8.70% 8.80% 8.90% City Population % of County $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 City Per Capita Personal Income 163 Percentage Percentage Number of of Total City Number of of Total City Employer Employees Rank Employment Employees Rank Employment Genentech Inc.8,632 1 12.9% 8,552 1 13.0% Costco Wholesale (3 stores)834 2 1.2% 403 3 0.6% Life Technologies Corporation 622 3 0.9% Amgen San Francisco LLC 500 4 0.7% 751 2 1.1% MRL San Francico LLC (2 locations)449 5 0.7% Successfactors, Inc.352 6 0.5% ZS Associates, Inc 300 7 0.4% Amazon.com Services, Inc 291 8 0.4% Fluidigm Corporation 223 9 0.3% American Etc Inc./Royal Laundry 211 10 0.3% 307 4 0.5% Orowheat/Entenmanns 300 5 0.5% Guckenheimer Enterprises Inc 200 6 0.3% Columbus Manufacturing Inc 191 7 0.3% Matagramo Inc.183 8 0.3% Actelion Pharmaceuticals US Inc.176 9 0.3% Nippon Express USA, Inc 174 10 0.3% Subtotal 12,414 18.5% 11,237 17.1% Total City Population 67,078 65,872 Data Sources: (1) SSF Business License Database- Business licenses expiring 12/31/19. (2) City of South San Francisco CAFR 2009-10 (3) Population: HDL/California State Dept of Finance 2009-102018-19 CITY OF SOUTH SAN FRANCISCO Principal Employers Current Year and Nine Years Ago 164 CITY OF SOUTH SAN FRANCISCO Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years (Adopted Operating Budget) Functions 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 General Government (1) 37.00 37.00 36.60 36.60 37.60 40.60 47.10 47.10 43.60 44.60 Fire Department 82.48 82.48 82.48 82.48 82.98 83.48 92.68 92.68 92.68 91.93 Police Department 114.65 112.65 110.65 115.65 119.75 118.87 120.87 120.87 120.87 122.87 Park, Rec. & Maintenance Services (3)116.34 116.05 107.86 111.66 117.21 121.31 134.16 137.19 144.29 144.79 Library 40.81 40.81 35.34 35.35 37.66 37.71 38.71 39.26 40.49 41.49 Economic and Comm. Development (2) 26.45 28.95 24.45 23.45 24.40 26.15 27.15 29.40 30.40 30.40 Public Works (2) (3) 43.85 40.05 43.03 45.02 47.21 47.68 49.00 49.00 49.00 53.00 Water Quality Control Plant 39.54 40.64 38.82 38.82 39.63 39.06 41.74 41.50 41.50 41.50 Total 501.12 498.63 479.23 489.03 506.44 514.86 551.41 557.00 562.83 570.58 Notes: 1. City Manager, Council members, City Treasurer, 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 2018-19 0 100 200 300 400 500 600 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Employee 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 165 2015 2016 2017 2018 2019 Function/Program Public safety: Fire: Inspections conducted 1,817 2,563 3,426 2,292 2,511 Police: Police calls for service 31,532 32,477 33,313 34,811 38,299 Law violations: Part I crimes 1,874 2,126 2,103 2,276 2,007 Physical arrests (adult and juvenile) 1,933 2,071 1,870 1,891 1,943 Traffic violations 3,828 4,211 3,785 3,359 3,620 Parking violations 13,378 12,006 15,291 18,339 26,228 Public works Street resurfacing (miles) (Eng Div)(2) 0 2 8 3.3 7.0 Potholes repaired (square miles prior) /(square feet)0.11 2 0 (5) 3221 410 Asphalt used for street repairs (tons) 250 151 94 148 13 Culture and recreation: Recreation class participants 26,879 (3) 23,399 23,939 25,688 23,394 Library: Total items borrowed (1) 643,630 565,806 558,106 544,059 582,497 Items in collection (1) 130,106 (4) 208,400 209,895 219,114 228,224 Wastewater Residential connections 16,470 16,491 16,488 12,556 12,559 Commercial connections 1,560 1,561 1,562 1,575 1,576 Other connections 128 131 140 140 140 Average daily sewage treatment (millions of gallons)8.89 7.92 8.41 8.62 8.62 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. (5) Beginning 2018, pothole repairs will be measured by square feet instead of square miles. CITY OF SOUTH SAN FRANCISCO Operating Indicators by Function/Program Last Five Fiscal Years 166 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Function/Program Public safety: Fire stations 5 5 5 5555555 Police stations (5) 1 1 1 1111111 Police Fleet (1) 48 52 51 51 50 53 53 52 59 63 Public works Miles of streets 127 127 127 127 127 127 127 127 127 127 Street lights (6) 4,156 4,160 4,160 4,505 4,505 4,505 4,505 4,505 4,531 4,531 Parking District lights (8) 20 20 20 20 20 20 20 16 16 16 Traffic Signals 73 74 74 74 74 74 76 76 76 76 Culture and recreation: Community services: City parks 28 28 28 28 28 28 28 28 28 28 City parks acreage 190 190 190 190 190 190 190 190 190 210 Playgrounds 24 24 24 24 24 24 24 24 24 24 City trails 6 6 6 6666666 Community gardens 1 1 1 1111111 Community centers 4 4 4 4444444 Senior centers (3) 2 1 1 1111111 Skate Park (2) 1 1 1 1111111 Dog park (2) 1 1 1 1111111 Swimming pools 1 1 1 1111111 Tennis courts 7 7 7 7777777 Basketball Courts 12 12 12 12 12 12 12 12 12 12 Baseball/softball diamonds11 1111 11111111111111 Soccer/football fields 5 5 5 5555555 Library: City Libraries (4) 2 2 2 2222222 Wastewater Miles of sanitary sewers 164 164 164 164 164 164 164 164 164 164 Miles of storm sewers 125 125 125 125 125 125 125 125 125 125 Number of treatment plants 1 1 1 1111111 Source: ssf.net/depts/rcs; Director of Rec & Comm Services; Superintendent of parks & Maintenance (1) Year 2009, the 3 units added are not new. These are units that was not included on the previous Fleet count. (2) Year 2010, Skate park and dog park was added on the list. (3) The only senior center is Magnolia Center but programming still continues at El Camino. (4) Community Learning Center not included on count as it is only a homework center not a library. (5) Year 2012 the Police substation located behind Miller parking garage is not included. (6) Year 2013- Includes all lights in SSF billed as LS-2 from PG&E (8) Year 2017- Lot 6 sold for Rotary Plaza development. CITY OF SOUTH SAN FRANCISCO Capital Asset Statistics by Function/Program Last Ten Fiscal Years 167 2017 2018 2019 Transient Occupancy Tax Detail 9% TOT collected $12,256,007 $12,580,680 $15,535,213 1% Measure I Special Tax 1,361,779 1,397,853 1,556,009 Total TOT Collection $13,617,786 $13,978,533 $17,091,222 1% Measure I Special Tax Use Police $272,356 $279,571 $311,202 Fire 272,356 279,571 311,202 Library 272,356 279,571 311,202 Parks 272,356 279,571 311,202 Recreation 272,356 279,571 311,202 Total 1% Measure I Special Tax $1,361,779 $1,397,853 $1,556,009 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. 168 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:20-10 Agenda Date:1/22/2020 Version:1 Item #:9. Closed Session: Conference with Real Property Negotiators (Pursuant to Government Code Section 54956.8) Property: Hotel Site at Oyster Point (APN 015-010-970) Agency negotiator: Ernesto Lucero, Alex Greenwood, and Nell Selander Negotiating parties: City of South San Francisco and Ensemble Investments Under negotiation: Price and Terms of City property disposition City of South San Francisco Printed on 1/17/2020Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:19-913 Agenda Date:1/22/2020 Version:1 Item #:10. Closed Session: Conference with Real Property Negotiators (Pursuant to Government Code Section 54956.8) Properties:Willow Gardens (APNs:011-270-200,011-270-100,011-270-120,011-271-100,011-270-170-1, 011-270-300) and Greenridge Developments (APN: 010-440-670) City Negotiators: Deanna Talavera and Nell Selander Negotiating Parties: MidPen Housing Corporation Under Negotiation: Review of Price and Terms City of South San Francisco Printed on 1/17/2020Page 1 of 1 powered by Legistar™