HomeMy WebLinkAboutReso 06-2017 (17-102)File Number: 17-102 Enactment Number: RES 06-2017
RESOLUTION ACCEPTING THE COMPREHENSIVE ANNUAL
FINANCIAL REPORT AND OTHER YEAR-END REPORTS FOR
FISCAL YEAR (FY) 2015-16.
MIAMMIM",vu TIM. f U
the financial position of the City; and
WHEREAS, the draft FY 2015-16 CAFR was presented to and accepted by the Measure W Citizens'
*versight Committee; and
ae a 1-11TIY-=71�7X was pres to e u ge Ing Conumnee, comprisect ol
the Mayor and Vice Mayor; and
I
11illip!1111i
To
I it 9 1"'Ponn. =qwrm, �
111, 2015-2016 Appropriations Limit Increment Exhibit C);
Measure A Funds, Report on Compliance with the Agreement for Distribution of San Mateo County
Measure A Funds for Local Transportation Purposes (Exhibit D); and
City of South Son Francisco Page 1
File Number. 17-102 Enactment Number. RES 06-2017
Normandy, that this Resolution be approved. The motion passed.
Yes: 4 Vice Mayor Normandy, Councilmember Matsumoto, Mayor Gupta, ani-l'
Council member Addiego
City of South San Francisco Page 2
FYI .CJJ B
City of South San Francisco
California
r
Comprehensive
Financial Report
�
r rt;�
Year Ended June 2012
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2016
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Ended June 30, 2016
Table of Contents
Page
INTRODUCTORY SECTION]
Tableof Contents .................................................................................................................................................
i
Letterof Transmittal ...........................................................................................................................................
v
Certificate o[ Achievement for Excellence in Financial ---------------------'iz
urguuc^aznxn Chart ........................................................ ....................................................................................
x
City Council and Directory nf City Officials ....................................................................................................
xi
I
FINANCIAL SECTION
Independent Auditor's Report ----------------------------------------1
�
Discussion and Analysis ----------------------------------'5
Basic Financial Statements:
Government-wide Financial Statements:
Statementof Net Position ...................................................................................................................
29
Statementof Activities ........................................................................................................................
30
Fund Financial Statements:
Major Governmental Funds:
1)ukuce Sheet .................................................................................................................................. 34
Reconciliation of Governmental Fund Balances to Net Position of Governmental Activities ..... 36
Statement of Revenues, Expenditures, and Changes io Fund Balances ........................................ 38
Reconciliation of the Net Change in Fund Balances Total Governmental Funds with
the Statement oƒ Activities .......................................................................................................... 4O
Statement of Revenues, Expenditures and Changes in FundDalance — Budget and Actual—
Budgetary Basis:
GeneralFund ......................................................................................................................... 4l
/
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Ended June 30, 2016
Table of Contents
Page
FINANCIAL SECTION (Continued)
Major Proprietary Funds:
Statementof Net Position ............................................................................................................... 44
Statement ofRevenues, Expenses, and Changes iu Fund Net Position .-------------.45
Statementn[ Cash Flows ................................................................................................................. 46
Fiduciary Funds:
Statement u[Fiduciary Net Position ............................................................................................... 48
Statement of Changes in Fiduciary Net Position ............................................................................ 49
Notes t°Basic Financial Statements ----------------------------------'5I
Required Supplementary Information:
Schedule of Changes in Net Position Liability and Related Ratios-
Miscellaneous omdSofetnPkoz------------------------------.|O8
Schedule o[ Contributions — Miscellaneous and Safety Plan .......................................................
lUl
Schedule of Changes luNet Pension Liability and Related Ratios .............................................
IU2
Schedule of Contributions — Safety Agent ...................................................................................
lO3
()dherPo Benefits Schedule o[ Funding Progress ...............................................
lO4
Supplementary Information:
General Fund:
CombiningOukuce Sheet .................................................................................................................
lO8
Combining Schedule of Revenues, Expenditures, mnd Changes
onFund Balances .......................................................................................................................
lO9
Combining of Revenues, Expenditures, and Changes
io Fund Balance Budget and Actual - (Non (l&PP Legal Basis) ...........................................
l|0
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 GAAy Legal Basis) ..................................... l|4
East u[|Ol Sewer Impact Fees Capital Ynjuot Fund (Non GAAP Legal Basis) ................. ll5
East o[1011la±fiu Impact Fees Capital Projects Fund (Non G/\/\P Legal Basis) ............... lI6
Child Care Impact Fees Capital Fund (Non GyAy Legal Basis) ---------.117
Developer Deposits CunituPrnuxtFuud(NonG/1APIxeouBuyis)-----------'ll8
Capital Infrastructure Reserve Fund (Non G/\AP Legal Basis) ............................................. ll9
ii
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Ended June 30, 2016
Table of Contents
Page
FINANCIAL SECTION (Continu
Non-major Governmental Funds:
CombiningBalance Sheet .................................................................................................................
l24
Combining Statement of Revenues, Expenditures, and Changes
inFund Balances .......................................................................................................................
l28
Budgeted Non-maj or Government Funds:
Combining Schedule of Revenues, Expenditures, and Changes
bo Fund Balances — Budget and Actual ....................................................................................
l32
Internal Service Funds:
Combining Statement o[Net Position ..............................................................................................
|4O
Combining Statement of Revenues, Expenses and Changes in Fund Net Position ........................
141
Combining Statement of Cash Flows ............................... ...............................................................
l42
Fiduciary Funds:
Statement of Changes io Assets and Liabilities — Agency Fund ...................................................
l44
STATISTICAL SECTION I
Net Position 6v Component — Last Ten Fiscal Years ....................................................................
l47
Changes iu Net Position - Last Ten Fiscal Years ...........................................................................
l48
Fund Balances of Governmental Funds - Last Ten Fiscal Years ..................................................
l50
Changes iu Fund Balance ofGovernmental Funds — Last Ten Fiscal Years ................................
|52
Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years ...................
154
Property Tax Rates — Direct and Overlapping Governments -
Principal Property Taxpayers — Current Year and Nine Years Ago .............................................. l56
Twenty Largest Taxable Property Owners for Merged RDA Project Area .................................. l57
Property Tax Levies and Collections — Last Ten Fiscal Years ...................................................... l5k
Ratio of Outstanding Debt 6v Type — Last Ten Fiscal Years .................. ..................................... l59
Computation u[ Direct and Overlapping Debt ............................................................................... l6O
ff
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Ended June 30, 2016
Table of Contents
Page
STATISTICAL SECTION (Continued)
Computation of Legal Bonded Debt Margin .................................................................................. 161
Revenue Bond Coverage Sewer Rental Enterprise Fund — Last Ten Fiscal Years ....................... 162
Sewer Debt Service Coverage Sewer Rental Enterprise Fund — Last Five Fiscal Years .............. 163
Redevelopment Pledged Revenue Coverage — Last Seven Fiscal Years ...................................... 164
Demographic and Economic Statistics — Last Ten Fiscal Years ................................................... 165
Principal Employers — Current Year and Nine Fiscal Years Ago ................................................. 166
Full-Time Equivalent City Governmental Employees by Function — Last Ten Fiscal Years ...... 167
Operating Indicators by Function/Program — Last Six Fiscal Years ............................................. 168
Capital Asset Statistics by Function/Program — Last Ten Fiscal Years ........................................ 169
Miscellaneous Information — Last Three Fiscal Years .................................................................. 170
iv
Honorable Mayor and Members
Of the City Council
City of South San Francisco
South San Francisco, California
CITY COUNCIL 2016
MARK ADDIEGO, MAYOR
PRADEEP GUPTA, PH.D., VICE MAYOR
LIZA NORMANDY, COUNCILMEMBER
KARYL MATSUMOTO, COUNCILMEMBER
RICHARD A. GARBARINO, COUNCILMEMBER
MIKE FUTRELL, CITY MANAGER
The Comprehensive Annual Financial Report (CAFR) of the City of South San
Francisco (the City) for the fiscal year ended June 30, 2016, is hereby submitted.
Responsibility for the accuracy of the data, and the completeness and fairness of
the presentation, including all disclosures, rests with the City. To the best of our
knowledge and belief, the enclosed data is accurate in all material respects and
is reported in a manner designed to present fairly the financial position and
results of operations of the various funds of the City. All disclosures necessary to
enable the reader to gain an understanding of the City's financial activities have
been included.
This report includes all financial activities of the City of South San Francisco,
including financial information for the City, as the primary government, and for its
component units, for which the City is considered financially accountable. The
component units are included because of the significance of their governing,
operational, and/or financial relationships with the City. The Successor Agency
that was created due to the Redevelopment Agency dissolution is also included
in this report.
Management's Discussion & Analysis (MD&A) provides a narrative introduction
overview and analysis to accompany the basic financial statements. This letter
of transmittal is designed to complement the MD&A and should be read in
conjunction with it. The MD&A is found immediately following the report of the
independent auditor in the financial section.
The City encompasses approximately 9.5 square miles and has a population of
64,585. It employs approximately 479 full-time and part-time regular employees.
400 GRAND AVENUE • P.O. BOX 711 0 SOUTH SAN FRANCISCO, CA 94083
V
South San Francisco is a full service city which includes public safety (police, fire
and paramedics), libraries, parks, cultural and recreational activities, senior
citizen services, public works, public improvements, engineering, planning,
building regulation, economic development, drainage, street lighting, and general
administrative services. Sewer service, downtown parking operations, and storm
water management are accounted for in the City's enterprise funds. The
Conference Center Authority is included in the financial statements by discrete
presentation — that is, the Authority's financial data is reported in a column
separate from the financial data of the City. Water and solid waste services are
provided by private entities.
South San Francisco was incorporated and became a general law city of the
State of California on September 19, 1908. The form of government is the
Council-Manager plan. The Council is composed of a Mayor and four Council
Members who are elected at large. Each Council Member serves a term of four
years, with a rotating Mayor chosen by majority vote of the Council, for a term of
one year. The City Manager is the administrative head of the government of the
City, under the direction of the City Council. The offices of City Clerk and City
Treasurer are elected. The City Attorney is appointed by the City Council.
All department heads are appointed and serve under the administrative direction
of the City Manager. All other officers and employees of the City are appointed
by the City Manager and serve under the administrative direction of their
department heads.
In developing and appraising the City's accounting system, consideration is given
to the adequacy of internal accounting controls. Internal accounting controls are
designed to provide reasonable but not absolute assurance regarding: (1) the
safeguarding of assets against loss from unauthorized use or disposition; (2) the
reliability of financial records for preparing financial statements and maintaining
accountability for assets; and (3) transactions being properly executed in
accordance with management's authorization.
The concept of reasonable assurance recognizes that: (1) the cost of a control
should not exceed the benefits likely to be derived; and (2) the evaluation of
costs and benefits requires estimates and judgments by management.
Basic characteristics of sound internal accounting control include segregation of
accounting duties, approvals of accounting transactions, and regular
reconciliation of detail and control records.
All internal control evaluations occur within this framework. We believe that the
City's internal accounting controls adequately safeguard assets and provide
reasonable assurances of proper recording of financial transactions.
V1
The City adopts fiscal year budgets for its general, special revenue, debt service,
enterprise, and capital project funds. The government also maintains an
encumbrance accounting system as one technique of accomplishing budgetary
control. Encumbered amounts lapse at year-end. However, encumbrances
generally are reappropriated as a part of the following year's budget.
The City's Reserves Policy is aligned with the Government Finance Officers
Association (GFOA) best practices recommendation for reserves, setting aside
15-20 percent of operating revenues. Given the ongoing growth trend in General
Fund operating revenues, the City's Reserves have grown commensurately,
which has a significant impact on the Fiscal Year 2015-16 financial statement.
The Fiscal Year 2015-16 Adopted Budget reflected the priorities of the City's
Strategic Initiatives. One of the primary strategic initiates was to maintain, train
and support a high performing team of City employees, which manifested itself in
the current financial statement through higher salary and benefit costs due to the
labor negotiation process, which served to attract and retain highly qualified
employees by offering competitive employee compensation packages.
To accomplish a multi-year perspective on financial planning, the City has used a
five year model in prior years.
Debt Administration
The Successor Agency has outstanding tax allocation bonds and lease revenue
bonds. These are not considered to be general tax-supported obligations. There
are also various capital leases and notes payable in City's governmental and
proprietary funds.
Capital Assets
The City comprised land, buildings, infrastructure, machinery, equipment,
furniture, fixtures, and vehicles owned and used by general government and
proprietary functions. Assets are reported within the basic financial statements.
Risk Management
The City maintained a risk management program for workers' compensation,
general liability, and property damage. As part of this comprehensive plan,
monies have accumulated in the self-insurance internal service fund to meet
potential losses. In addition, a safety committee of City employees reviews all
accidents and recommends preventive measures to minimize future accident-
related losses. The City self-insures the deductible or retention levels of its
workers compensation, general liability and property damage insurance policies.
A third party administrator handles worker compensation claims. The
Association of Bay Area Governments Pooled Liability Assurance Network
(ABAG PLAN) provides the City's general liability and property damage coverage
Vii
along with claims and risk management services. An employers' casualty
insurance company provides workers compensation coverage in excess of the
deductible.
Independent Audit
The City engaged an independent accounting firm to audit the books of accounts,
financial records, transactions, and financial statements. Their report covering
2015-16 is in the Financial Section of this report.
The City's Comprehensive Annual Financial Report for the fiscal year ended
June 30, 2015, received a Certificate of Achievement for Excellence in Financial
Reporting from the Government Finance Officers Association. The award
signified the report's attainment of easily readable and efficiently organized
content and satisfaction of generally accepted accounting principles and legal
requirements. The award is valid for a period of one year only. However, the
City believes that this current report continues to conform to program eligibility
requirements.
Acknowledgments
The preparation of the Comprehensive Annual Financial Report was made
possible by the dedicated services of the entire staff of the Finance Department
and our auditors. Each member of the department has our sincere appreciation
for the contributions made in the preparation of this report.
Respectfully submitted,
Richard Lee
Director of Finance
IM
Mike Futrell
"City Manager�
ix
Citizens ofSouth San Francisco
City Clerk
City Attorney
Assistant City Manager /nme
Sustainability Officer
Administrative Departments
Finance Director
Human Resources Director
Information Technology
Department
City Council
City Manager
City Treasurer
Communications Director
Operating Departments
Econ. & Comm. Dev. Dir. I I I Public Works Director
Library Director M Fire Chief
Parks and Recreation Director | | |
r� Chief ofPolice
x
City Council & Directory of
City Council
Mark Addiego
Pradeep, Gupta, Ph.D.
Richard A. Garbarino,
Karyl Matsumoto
)fficials
Mayor
Vice Mayor
Councilmember
Councilmember
Liza Normandy Councilmember
Elected Officials
Krista Martinelli City Clerk
Frank Risso City Treasurer
Appointed Officials
Mike Futrell
City Manager
Marian Lee
Assistant City Manager / Chief Sustainability Officer
Leslie Arroyo
Communications Director
Richard Lee
Finance Director
LaTanya Bellow
Human Resources Director
Alex Greenwood
Economic & Community Development Director
Gerald Kohlmann
Fire Chief
Jeff Azzopardi
Chief of Police
Valerie Sommer
Library Director
Brian McMinn
Public Works Director
Sharon Ranals
Parks & Recreation Director
0
This Page Left Intentionally Blank
& ASSOCIATES
INDEPENDENT AUDITOR'S REPORT
Honorable Members of the City Council
City of South San Francisco, California
Report on Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of the City of South San Francisco
(City), California, as of and for the year ended June 30, 2016, and the related notes to the financial statements,
which collectively comprise the City's basic financial statements as listed in the Table of Contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of the
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the
component unit financial statements of the South San Francisco Conference Center Authority (Authority), which
represents 1 %, 2 %, and 3 %, respective, of the assets, net position, and revenue of the entity -wide reporting entity.
These component unit financial statements were audited by other auditors, whose report thereon has been
furnished to us and our opinion, insofar as it relates to the amounts included for the Authority, is based solely on
the report of these auditors. We conducted our audit in accordance with auditing standards generally accepted in
the United States of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
T 925.930.0902
Accountancy Corporation F 925.930.0135
3478 Buskirk Avenue, Suite 215 F maze@mazeassociates.com
Pleasant Hill, CA 94523 w mazeassociates.com
Opinions
In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above
present fairly, in all material respects, the respective financial position of the governmental activities, the
business -type activities, the aggregate discretely presented component unit, each major fund, and the aggregate
remaining information of the City as of June 30, 2016, and the respective changes in financial position and,
where applicable, cash flows thereof and the respective budgetary comparisons listed as part of the basic
financial statements for the year then ended in conformity with accounting principles generally accepted in the
United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management's Discussion
and Analysis and other Required Supplementary Information be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management about
the methods of preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of
the basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements as a whole. The Introductory Section, Supplemental Information,
and Statistical Section as listed in the Table of Contents are presented for purposes of additional analysis and are
not required parts of the basic financial statements.
The Supplemental Information is the responsibility of management and was derived from and relates directly to
the underlying accounting and other records used to prepare the basic financial statements. The information has
been subjected to the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the Supplemental Information is fairly stated, in all material respects,
in relation to the basic financial statements as a whole.
The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the audit
of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on
them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 4, 2016 on
our consideration of the City's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the City's internal control over financial reporting and compliance.
IRAL ()
Pleasant Hill, California
December 4, 2016
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Government Accounting Standards Board Statement 34 (GASB 34) requires the City of South
San Francisco to provide an overview of its financial activities for the fiscal year. Please read
this in conjunction with the accompanying Transmittal Letter and Basic Financial Statements.
FISCAL 2015-16 FINANCIAL HIGHLIGHTS
Summary:
The General Fund ended FY 2015-16 with a surplus of $1.7 million, which included a transfer of
$4.0 million to the PERS Stabilization Reserve, which was created to mitigate the negative
financial impact of volatility with the California Public Employees' Retirement System
(CalPERS). General Fund reserves were fully funded in accordance with the City's Reserves
Policy, which follows the Government Finance Officers' Association (GFOA) best practice of
15-20% of operating revenues.
General Fund revenues (excluding operating transfers in) increased $7.3 million compared to the
prior year. The primary drivers of the year-over-year increase were property tax, sales tax and
permit revenues. The principal sources of additional property taxes were secured property taxes
and the City's share of property taxes from the former redevelopment agency, demonstrating the
strength of the City's property tax roll. The increase in sales tax reflected the final Triple Flip
payment from the State and the passage and implementation of Measure W, a 0.5% transactions
and use tax. Increases in permit revenues were indicative of major developments in the City's
East of 101 area.
City-wide financial highlights of the year include the following:
• Total Net Position for Governmental Activities in FY 2015-16 increased $18.0 million, from
$145.4 million to $163.4 million. The increase was primarily attributed to increases in cash
and investments, evident in the City's impact fees driven by the accelerated development
climate.
• Primary Government deferred inflow of resources decreased $10.9 million, from $23.4
million to $12.5 million. The change in net difference between projected and actual earnings
on plan investments related to pension was the paramount factor in the decrease. In the prior
fiscal year, which was the first year of GASB 68 implementation, the entire $23.4 million in
primary government deferred inflow of resources was attributed to the net difference
between projected and actual earnings on plan investments. In FY 2015-16, as illustrated in
the Statement of Net Position and Note 7 — Pension Plan, the primary government deferred
inflow of resources of $12.5 million is attributed to changes in assumptions ($5.4 million),
differences between actual and expected experience ($4.0 million), and the net differences
between projected and actual earnings on plan investments ($3.1 million).
E
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
• While Expenses for Governmental Activities were relatively flat compared to the prior year,
revenues from Charges for Services increased from $24.1 million to $30.1 million, which
reflected the magnitude and velocity of developments that were issued permits in FY 2015-
16.
Business-type program expenses decreased by $5.3 million in FY 2015-16, most notably in
the Sewer Fund. The year-over-year decrease was due to a significant amount of capital
expense that was offset into construction in progress in FY 2015-16.
• Property tax revenues, excluding those from the former Redevelopment Agency (RDA),
increased $948 thousand, or 5.2 percent compared to the prior year. The increase was
indicative of the City's robust secured property tax base.
• Property taxes from the former RDA increased $750 thousand, or 15.5 percent. As the
Successor Agency pays down the obligations of the former RDA, the proportional share of
property taxes to the taxing entities increases.
• Sales tax revenues increased by $2.4 million, or 15.9 percent over the prior fiscal year. which
In November 2015, South San Francisco residents approved Measure W, a 0.5% transactions
and use tax. The transactions and use tax was implemented on April 1, 2016, and the City
received $1.5 million in revenues, comprised of advances from the State Board of
Equalization for the fourth quarter of FY 2015-16.
• Permit revenues for all Governmental Funds increased $2.1 million, or 43.8 percent over the
prior fiscal year, indicative of the current development climate in South San Francisco and
the greater San Francisco Bay Area. The East of 101 area, in particular, had a number of
high value developments enter the plan submission and review phase at an accelerated pace.
In FY 2015-16, the City received $13.4 million in Transient Occupancy Tax (TOT) revenues.
This was the third consecutive year of record-breaking TOT revenues, which was $495
thousand more than the prior year. Sustained robust TOT revenues were driven by high
room rates and occupancy rates.
'110 a
D MA a
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;
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
5) Other Supplementary Information including combining statements for non-major
governmental funds, internal service funds, other budgetary information, and a fiduciary
statement of changes in assets and liabilities; and
6) The Statistical Section.
Basic Financial Statements
The Basic Financial Statements are comprised of the City-wide Financial Statements and the
Fund Financial Statements. These two sets of financial statements provide two different views of
the City's financial activities and financial position.
The City-wide Financial Statements provide a longer-term view of the City's activities as a
whole, and consist of the Statement of Net Position and the Statement of Activities. The
Statement of Net Position provides information about the financial position of the City as a
whole, including all its capital assets and long-term liabilities on the full accrual basis, similar to
the basis used by corporations. The Statement of Activities provides information about all the
City's revenues and all its expenses, also on the full accrual basis, with the emphasis on
measuring net revenues or expenses of each the City's programs. The Statement of Activities
provides a detailed explanation of the change in Net Assets for the year.
All the amounts in the Statement of Net Position and the Statement of Activities are separated
into Governmental Activities and Business-type Activities in order to provide a summary of
these two activities of the City as a whole.
The Fund Financial Statements report the City's operations in more detail than the government-
wide statements and focus primarily on the short-term activities of the City's General Fund and
other Major Funds. The Fund Financial Statements measure only current revenues, expenditures
and fund balances; they exclude capital assets, long-term debt and other long-term amounts.
Major Funds account for the major financial activities of the City and are presented individually,
while the activities of Non-major funds are presented in summary, with subordinate schedules
presenting the detail for each of these other funds. Major Funds are explained below.
The fiduciary statements provide financial information about the activities of Non-Obligated
Assessment Districts, for which the City acts solely as agent.
Note I to the Basic Financial Statements provides a summary of the City's significant
accounting policies, fund categories, and fund types.
City-wide Financial Statements
The Statement of Net Position and the Statement of Activities present information about the
following:
7
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
• Governmental activities - All of the City's basic services are considered to be governmental
activities, including general government, fire, police, public works, parks and recreation,
library, and economic and community development. These services are supported by general
City revenues such as taxes, and by specific program revenues from grants, contributions,
and fees.
The City's governmental activities also include the City of South San Francisco Capital
Improvements Financing Authority, as the City Council also governs this entity.
• Business-type activities - All the City's enterprise activities are reported here, including
wastewater treatment, parking, and storm water management. Unlike governmental services,
user fees fully support most of these services.
• Component Unit - The City of South San Francisco Conference Center Authority comprises
the component unit. The Authority serves the City and other interests and it has a governing
body separate from the City Council.
Citywide financial statements are prepared on the accrual basis, which means they measure the
flow of all economic resources of the City as a whole.
Fund Financial Statements
The Fund Financial Statements provide detailed information about each of the City's most
significant funds, called Major Funds. The concept of major funds, and the determination of
which are major funds, was established by GASB Statement 34 and replaces the concept of
combining like funds and presenting them in total. Instead, each Major Fund is presented
individually, with all Non-major Funds summarized and presented only in a single column.
Subordinate schedules present the detail of these Non-major funds. Major Funds present the
major activities of the City for the year, and may change from year to year as a result of changes
in the pattern of City's activities. Fund Financial Statements include governmental, enterprise
and internal service funds as discussed below.
Governmental Fund Financial Statements are prepared on the modified accrual basis, which
mean they measure only current financial resources and uses. Capital assets and other long-lived
assets, along with long-term liabilities, are not presented in the Governmental Fund Financial
Statements.
Enterprise and Internal Service Fund financial statements are prepared on the full accrual basis,
as in the past, and include all their assets and liabilities, current and long-term.
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Since the City's Internal Service Funds provide goods and services only to the City's
governmental and business-type activities, their activities are reported only in total at the Fund
level. Internal Service Funds may not be Major Funds because their revenues are derived from
other City Funds. These revenues are eliminated in the citywide financial statements and any
related profits or losses are returned to the activities, which created them, along with any residual
net assets of the Internal Service Funds.
Comparisons of Budget and Actual financial information are required in the Basic Financial
Statements only for the General Fund and other Major Funds that are Special Revenue Funds.
Fiduciary Statements
The City is the agent for certain assessment districts, holding amounts collected from property
owners which await transfer to these Districts' bond trustees. The City's fiduciary activities are
reported in the separate Statement of Fiduciary Net Position and the Statement of Changes in
Fiduciary Net Position. These activities are excluded from the City's other financial statements
because the City cannot use these assets to finance its own operations.
FINANCIAL ACTIVITIES OF THE CITY AS A WHOLE
This analysis focuses on net position and changes in net position of the City's Governmental
Activities (Table and Charts I through 3) and Business-type Activities (Tables 4 and 5)
presented in the City-wide Statement of Net Position and Statement of Activities. A comparative
analysis is presented for fiscal years 2014-15 and 2013-14.
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Governmental Activities
Governmental Net Position
Table I
Governmental Net Position at June 30
(In Millions)
2016 2015
Cash and investments
99.3
90.2
Other assets
12.9
9.5
Capital assets
233.4
233.3
Total assets
345.6
333.0
Total outflows related to pension
12.6
10.3
Total outflow of resources
12.6
10.3
Long-term debt outstanding
12.4
13.6
Other liabilities
171.1
163.2
Total liabilities
183.5
176.8
Deferred inflows related to pension
11.2
21.0
Total deferred inflow of resources
11.2
21.0
Net position:
Invested in capital assets, net of debt 231.1 230.5
Restricted 52.4 49.3
Unrestricted -(120.1) (134.4)
Total net position $ 163.4 $ 145.4
The total net position for Governmental Activities increased by $18.0 million in FY 2015-16
compared to the prior year. Cash and investments was a primary categorical driver for the
increase, representing an increase of $9.1 million in assets, which was attributable to the breadth
and magnitude of major developments via permit revenues and developer impact fees. Total
deferred inflow of resources related to pension was reduced by $9.8 million. FY 2014-15
marked the first year of GASB 68 implementation, where the net differences between projected
and actual earnings on plan investments represented the entire deferred inflows related to
pension. In FY 2015-16, the deferred inflows related to pension was allocated to changes in
assumptions ($2.0 million), Differences between actual and expected experience ($940 thousand)
and net differences between projected and actual earnings on plan investments ($1.4 million).
IM
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Table 2
Expense and Program Revenue Comparison in Governmental Activities
(In Millions)
$9.0
$8.4
22.5
22.0
23.2
23.9
11.9
14.5
12.9
12.4
4.4
4.3
7.6
5.9
2.3
$91.4_
$91.5
$30.1
$24.1
5.6
5.8
1.1
0.6
36.8 $30.S
$26.4
$24.7
15.2
13.9
13.4
13.0
9.1
&7
-
0.0
5.8
5.6
1.3
0.6
2.3
4.6
$71.0
$73.5
$110.3
$101.4
$18.8
$10.0
(0.9)
(1.4)
17.9
8.6
145.5
136.9
$163.4
$145.5
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Governmental program revenues (Table 2) increased by $6.3 million compared to the prior year,
largely due an increase in charges for services, representative of development velocity and
magnitude via the increase trend in permit fees and developer impact fees.
Chart 1
Revenues by Source - Governmental Activities 2015 -16
Miscellaneous g
�Char es for SenAces
2%
27 %,
Franchise Fee
4%
Interest and Rentals
1%
Property Taxes in lieu)
5%
Other taxes
5% Transient occupancy
taxes
12%
Operating Grants and
Contributions
5%
Capital
Property taxes Grants and
24� Contrbutions
1%
Sales taxes
14%
Within Governmental Activity revenue sources, as shown in Chart 1, Charges for Services
increased from 24% to 27 %, indicative of the development climate in South San Francisco,
where a number of high value projects entered the permit issuance phase in FY 2015 -16.
Tables 2 (above) and 3 (below) illustrate the difference between program revenues and expenses.
Program revenues consist of capital and operating grants and contributions and fees for services.
General City revenues, such as property taxes, sales and transient occupancy taxes, motor
vehicle in -lieu taxes, and investment earnings, cover the shortfall between program revenues and
program expenses.
In FY 2015 -16, the net expense for governmental activities decreased from $61.1 million to
$54.7 million. The reduction was principally noted in the Public Works Department, reflecting
the impact of major developments in the East of 101 area entering the permit issuance phase,
bringing an influx of permit fees and developer impact fees.
12
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Table 3
Net (Expense) Revenue from Services
Governmental Activities
(In Millions)
General government
Fire department
Police department
Public works department
Recreation and community services
Library
Economic and community development
Interest on long-term debt
Total
13
2015-16
2014-15
$ (4.8)
$ (4.1)
(19.0)
(18.5)
(20.2)
(20.2)
1.9
(6.4)
(8.3)
(7.8)
(3.1)
(3.6)
(1.1)
(0.4)
$ (54.6)
$ (61.0)
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Business-type Activities
Table 4
Business-type Net Position at June 30 (in Millions)
2016
2015
Cash and Investments
$ 20.1
$ 18.9
Other assets
0.7
0.6
Capital assets
127.2
126.3
Total assets
148.0
145.8
Deferred outflows related to pension
1.4
1.1
Total Deferred outflow of resources
1.4
1.1
Long-term liabilities outstanding
38.7
43.2
Other liabilities
19.2
18.6
Total liabilities
57.9
61.8
Deferred inflows related to pension
1.2
2.3
Total deferred inflow of resources
1.2
2.3
Net position:
Investment in capital assets 83.9 78.6
Restricted - -
Unrestricted 6.2 4.2
Total net position $ 90.1 $ 82.8
The total net position for business-type activities increased by $7.3 million, or 8.8 percent,
primarily due to a reduction in outstanding long-term liabilities, notably the City's debt service
payments on three State Water Resources loans and one sewer revenue bond.
14
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Table 5
Change in Business-type Net Position
(In Millions)
Revenues
Program Revenues
Charges for Services
2015-16
2014-15
Expenses
5.8
6.2
Sewer Enterprise
$ 18.3
$ 24.0
Parking District
0.8
0.5
Storm Water
1.3
1.2
Total expenses
20.4
25.7
Revenues
Program Revenues
Charges for Services
20.8
21.0
Operating grants and contributions
5.8
6.2
Total program revenues
26.6
27.3
General revenues
Investment earnings
0.3
0.1
Total general revenues
0.3
0.1
Excess (deficiency) before transfers
6.5
1.7
Transfers
0.9
1.4
Change in net position
7.4
3.1
Net position - beginning (as adjusted)
82.8
79.7
Net position - ending
$ 90.2
$ 82.8
Business activity expenses decreased $5.3 million compared to the prior year, particularly in
Sewer Enterprise activities, due to $4.8 million in capital expense in FY 2015-16 that was offset
into construction in progress. Business activity revenues slightly decreased by $0.7 million,
primarily due to the impact of a rate increase offset by a reduction in contributions from
participating agencies.
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
Governmental Funds
Governmental funds highlight the City's near-term inflows, outflows, and balances of spendable
resources. Such information can be helpful in determining the City's financial status.
Unrestricted fund balance is a major indicator of designated and uncommitted resources
available for spending in future fiscal years.
15
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
At June 30, 2016, the City's governmental funds reported combined fund balances of $76.3
million, an increase of $5.5 million, or 7.7 percent compared to the prior year. The General
Fund ending fund balance was $23.0 million, reflecting an increase of $1.7 million, or 8.2
percent. The City's Reserves Policy follows the GFOA-recommended threshold (20% of
operating revenues). As such, additional revenues from the passage and implementation of
Measure W, a 0.5 percent transactions and use tax, increased the reserves requirement.
Total governmental fund revenues increased by $9.4 million, from $101.0 million to $110.3
million, primarily attributable to a vibrant local economy, evident through permit revenues and
transient occupancy tax.
Total governmental fund expenditures increased by $9.0 million, from $90.8 million to $99.8
million, or 10.0 percent. Within FY 2015-16, the City completed its labor negotiations process,
which included a number of classification and compensation studies, cost of living adjustments
and other incentives for labor units. In addition, as a result of increases in the employer pension
contribution rate increases from CalPERS, the City paid $2.5 million more than the prior year for
employee pension benefits. The City Council authorized transfer of $4.0 million from the
General Fund to the City's Benefits Fund to mitigate the impact of CaIPERS' volatility with
respect to its return on investment.
Comparison of Final Budgets to Original Adopted Budge
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:
1161
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
Final
Budget
Pet
Change Change
Discussion:
(Items of more than 5% and $100,000 variance)
Property taxes
—Budget
$24,314
$24,314
$ -
Sales taxes
16,530
17,832
1,302 7.9%
The budget was adjusted to account for 1. Final Triple Flip
payment from the State.
The budget increase reflects the City's third consecutive
Transient occupancy
12,000
13,430
1,430 11.9%
record for Transient Occupancy Tax revenues, driven by
taxes
sustained higher occupancy and room rates.
Other taxes
4,385
4,385
-
Franchise Fee
3,344
3,344
-
The majority ofthe budget adjustments reflected
reimbursements from the California Office of Emergency
Intergovernmental
6,370
7,702
1,332 20.9%
Servies (Cal OES) for the Fire Department's response to
mutual aid. In addition, the City received grant fimds from
the California Office of Traffic Safety (OTS) for various
traffic enforcement eff6rts.
Interest and rentals
2,932
2,932
-
A number of high value building permits were issued in the
fiscal year that were not contemplated during the budget
Licenses and permits
3,877
5,962
2,085 53.8%
development process, primarily in the East of 101
biotechnology business area.
Charges for services
8,786
8,717
(69) -0.8%
Fines and forfeitures
839
839
-
Other
234
248
14 6.0%
Total
$83,611
$89,705
$ 6,094 7.3%
IRA
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Table 6 (continued)
Comparison of Final Budgets to Original Adopted Budget (in Thousands)
Expenditures
Original
—Budget
Final
Budget
Change
Pet
Change
Discussion:
(Items of more than 5% and $100,000 variance)
City Council
$ 238
$ 268
$ 30
12.7%
City Clerk
691
751
60
8.6%
City Treasurer
131
131
(0)
-0.1%
City Attorney
783
783
0
0.1%
City Manager
1,588
1,671
83
5.2%
Budget amendments reflect more robust communications
and community outreach efforts.
Budget amendments include TOT/Parking Tax audit
Finance
services and temporary acting pay for staff serving in a
2,028
2,213
185
91%
higher classification for a limited duration.
The primary budget adjustment reflects approval of a new
Non-Departmental
1,014
1,305
291
28.8%
employee safety program
Human Resources
1,476
1,527
51
3.5%
The budget increase was required to address overtime
Fire
21,755
24,104
2,349
10.8%
incurred due to minimum staffing needs and responding to
calls for mutual aid.
Police
24,959
25,357
398
1.6%
The budget increase was required to address over-time
incurred due to minimum staffing needs.
The additional budget reflects continuation of operation of
Public Works
3,912
5,071
1,159
29.6%
the South City Shuttle, and site preparation services for the
Civic Campus,
Parks and Recreation
13,904
13,464
(440)
-3.2%
Library
4,607
4,769
162
3.5%
The additional budgeted reflects professional plan check
Economic and
5,732
6,830
1,098
19.2%
services needed to support the pace and magnitude of the
Community Development
developments that were the primary drivers of the budget
adjustment for license and permit revenues,
Total
$82,818
$88,244
$ 5,426
6.6%
18
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Analysis of Major Governmental Funds
General Fund
Total General Fund revenues in FY 2015-16 were $92.6 million, $1.4 million, or 1.5 percent
over the final amended budget. Total General Fund expenditures ended FY 2015-16 at 86.8
million; $1.8 million, or 2.0 percent under budget. Overall, the General Fund ended FY 2015-16
with a surplus of $1.7 million, notably for the items discussed below.
Property Tax, Sales Tax and Transient Occupancy Tax (TOT), the City's primary revenue
sources, serve as a bellwether of local economic vitality, and also represented the largest year
over year gains. Property Tax revenues were $1.7 million more than the prior year, principally
evident in property tax from the secured roll and from the former Redevelopment Agency
(RDA). Sales tax revenues increased $2.4 million in additional Sales Tax revenues were
comprised of the final Triple Flip payment from the State, as well as passage and implementation
of Measure W, a 0.5% transactions and use tax. For the third year in a row, Transient Occupancy
Tax (TOT) revenues reached record levels at $13.4 million, $495 thousand more than the prior
year. A robust and fast paced development climate led to $2.1 million more in license and permit
revenues.
Revenue from fines and forfeitures decreased by $430 thousand, and was the only General Fund
revenue category that noted a significant year over year decline. Parking citation revenue
continued to decline, with revenues nearly reduced by half compared to two years prior,
reflecting the elimination of the City's red light camera program in the prior year.
General Fund expenditures increased $10.0 million, or 13.0% over the prior fiscal year. FY
2015-16 marked the completion of labor negotiations for all of the City's labor units. The labor
packages included classification and compensation studies, cost of living adjustments and other
incentives that provided employees with competitive compensation.
As of June 30, 2016, the General Fund total fund balance was $23.0 million, which included
$3.8 million in committed reserves, $1.4 million in assigned reserves, and $17.8 million in
unassigned reserves. The unassigned reserves are designated by the City Council based on the
City's Reserves Policy, which follows best practices from the Government Finance Officers'
Association (GFOA) of between 15-20 percent of General Fund operating revenue. Within the
City's unassigned reserves, the City Council designated funds for economic contingencies,
potential catastrophe and budget contingencies.
z
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Other Post Employment Benefit (OPEB) Liability Impact on Fund Balance
The City has a particularly rich retiree health benefit for employees hired prior to April 25, 2010
(legacy employees). Those legacy employees who retire from CalPERS and from the City
concurrently with at least 5 years of service are entitled to 100% coverage of retiree medical
insurance premiums paid by the City. This benefit resulted in an OPEB Unfunded Actuarial
Accrued Liability of $57 million as of June 30, 2015, based the most recent external actuarial
analysis which reflects investment of $13.5 million with the California Employers' Retiree
Benefit Trust (CERBT) in February 2014. In addition, the City Council approved an
appropriation of over $800 thousand ($250 thousand from the General Fund, and the remainder
from enterprise funds) to be contributed to CERBT on an annual basis.
City Housing Fund
Up until Redevelopment Agencies were abolished in FY 2011-12 by the State of California
under ABXI 26, the City set aside 20% of Redevelopment property taxes to fund the provision
of new affordable housing units, as well as the operation and maintenance of housing stock that
the Redevelopment Agency had already funded. That fund was formerly called the
Low/Moderate Income Housing Fund. With its source of funding (20% of Redevelopment
property tax dollars) abolished, the City Council voted to take on the operations of the former
housing units by becoming the Successor Housing Agency, with activities funded primarily from
the rental revenues received by the City for those City-owned occupied housing units. Any
shortfall between the rents received and the operations and maintenance costs of those housing
units are funded by either one time grants or by the General Fund. Any fund balances will be
held for future housing property maintenance needs.
In FY 2015-16, the City Housing Fund received for $416 thousand in revenues, which included
$188 thousand in rent, and $76 thousand in interest income. The fund also had $492 thousand in
expenses, the majority of which was for professional services related to an affordable housing
development.
Capital Improvement Fund
The City consolidates and reports its governmental fund-type capital project expenditures in this
fund. Resources consist of transfers from the General Fund, major and non-major funds,
developer impact fees, and gasoline taxes and transportation sales taxes from non-major
governmental funds. Resources also come from federal, state, and local grants, contributions
from other cities, utilities and private developers. Entire capital projects are appropriated in one-
year, but expended over multiple years, with unspent appropriations carried forward year-to-year
until completion.
9111
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
East of 101 Sewer Impact Fee Fund
In FY 2015-16, this fund received $551 thousand in revenues, indicative of the pace and
magnitude of development in the East of 101 area, which drove fund balance to a positive $504
thousand. The fund had a negative fund balance for many years due to prepayment of impact
fees by a large biotech firm to front-fund a now completed project.
In 2007, the City entered into an agreement with this firm to pre-fund the sewer impact fees for
the East Grand Avenue Sewer Trunk project in order for the project to be completed prior to the
issuance of building permits. As a result, the pre-funding is reported as unearned revenue, a
liability on the fund's balance sheet, until sufficient development generates impact fees to cover
the prepayment of those fees, or until the City has a new agreement with the firm. As of June
30, 2016, the remaining balance of the pre-funding is nearly $2.0 million.
East of 101 Traffic Impact Fee Fund
In FY 2015-16, the City received $1.6 million in traffic impact fees, and transferred out $475
thousand for capital improvements. As of June 30, 2016, the fund has a balance of $7.2 million.
Child Care Impact Fee Fund
The City received $341 thousand in child care impact fees in FY 2015-16. Factoring in limited
expenditures, this fund has a balance of $2.9 million as of June 30, 2016. Larger scale projects
can be funded once a sufficient balance has been accumulated.
Developer Deposit
Since 2007, the City has entered into agreements with a large biotech firm to front-fund sewer
and streetscape projects. The remaining balances of the pre - funding are reported as liability
which will be reduced as related project expenditures are incurred.
21
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Other Governmental Funds
Presented as a group in the Basic Financial Statements, these funds are individually presented as
Supplementary Information.
Enterprise Funds
Sewer Enterprise Fund
The Sewer Enterprise fund reported operating income (before non-operating revenues and
expenses transfers) of $8.0 million in FY 2015-16. Operating revenues decreased by $0.6
million, or 2.4 percent. The Water Quality Control Plant is a shared facility, with the cities of
San Bruno, Millbrae and Burlingame sharing in the cost of operations and capital improvements.
At $4.8 million, FY 2015-16 was closer to the historical average for cash flows out for
acquisition of capital assets compared to the prior year. The City's accounting practice dictates
that capital outlay for enterprise funds are offset by a contra account and the resulting debit
balance recorded to capital assets. Therefore, in comparison to the prior year, operating expenses
decreased by $5.1 million or 22.8 percent. Net position increased $7.1 million to end the year at
$75.0 million.
Parking District Fund
In FY 2015-16, revenues increased by 2.9 percent to $843 thousand, while expenses increased
by $153 thousand, or 20.5 percent. The additional expenses reflected implementation of pilot
program to install new parking meters that employed current technology, including payment by
credit card. Net position decreased slightly by $20 thousand to $13.9 million,
Storm Water Fund
The Storm Water Fund is used to account for resources needed to fund storm drain and storm
infrastructure operations, maintenance, capital replacement, and compliance with various federal
and state regulations regarding storm water runoff. Revenues totaled $405 thousand, primarily
from a levy on property owners. Transfers totaled $930 thousand, the majority of which came
from the Gas Tax Fund in the amount of $670,000 and $250,000 from the General Fund.
Expenses totaled $1.3 million, $1.6 million less than the amended budget, due to the trash
capture devices capital project, which did not enter the construction phase in FY 2015-16 as
projected. Rather, the construction contract is projected to be sent out for bid by the end of FY
2016-17. Reserves as of the fiscal year ended June 30, 2016, totaled $1.2 million. Service fee
revenues remain static in this fund without a ballot measure to increase assessed fees.
22
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
CAPITAL ASSETS
GASB Statement 34 requires the City to add infrastructure to its reportable capital assets.
Infrastructure includes streets, drainage systems, and traffic control and safety devices.
Previously, governments excluded the value of such property from their reports of capital assets.
The City has successfully reported on the depreciated value of all such assets acquired or built
since 1980. The City reports the depreciated book value of other types of capital assets such as
buildings, land, equipment and furniture, on the City-wide Statement of Net Assets. Such
information is summarized below and is more completely detailed in Note 3 to the Basic
Financial Statements. The City depreciates all its capital assets, except land and construction in
progress.
At June 30, 2016, the City had $360.6 million in capital assets, net of depreciation, representing
an increase of $1.0 million from the prior year. The increase reflects the return to a more typical
capital asset addition trend within Business-type activities compared to more typical fiscal years.
23
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
The [ih'`m various capital asset 1Ynca used in governmental and buaincam-b/oc activities, are
illustrated in Table 7 below:
Table
Capital Assets (in Millions) at June 30
* Additions during the fiscal year only
Business-type Activities
Land $
2016
2015
Governmental Activities:
667
66.7
Land
$ 47.6
$ 47.6
Buildings and improvements
85.0
85.0
Equipment and vehicles
19.8
19.6
Furniture and fixtures
1.8
1.8
Infrastructure streets*
183.I
183.1
Infrastructure - traffic control devices*
5.1
5.1
Infrastructure storm drains*
8.9
8.9
Construction inprogress
26.8
18.4
Less accumulated depreciation
Totals
* Additions during the fiscal year only
Business-type Activities
Land $
I-4
$ 1-4
Buildings and improvements
667
66.7
Clean water facilities and transmission |in
75.5
75.5
Infrastructure ' storm drains
4.8
4.8
Infrastructure streets
7.4
7.4
Equipment and vehicles
112
11.2
Construction inprogress
12.1
7.1
Less accumulated depreciation
Totals
Total City
24
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
I " X 3 W.-I UUT I 112113YA, �-§M
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
Governmental Activities
age.
Loan payable to Successor Agency $ 10.7
Capital leases 2.2
Total Governmental Activities Outstanding Debt $ 12.9
Business-type Activities
State Water Resources Board loans $ 39.4
2005 Sewer Bonds 3.8
Total Business-type Activities Outstanding Debt $ 43.2
RIM
$ 11.4
2.8
$ 14.2
$ 43.5
4.1
$ 47.6
The decline in Business-type Activities outstanding debt of $4.4 million is the result of
scheduled repayments.
The largest remaining debt obligations are the following:
Three loans to the City's Sewer Enterprise Fund from the State Water Resources
Control Board to finance the expansion of the City's water quality control plant and
pay for Wet Weather improvements which will improve environmental impacts on
the Bay. Principal and interest repayments commence on the loans upon completion
of the project related to each loan package. The three current loans outstanding
have fixed interest of 2.6%, 2.5% and 2.4% are due in 2022, 2026 and 2028.
Because of the regional benefits and equity interest in these projects, the City of San
Bruno shares in the loan repayments for the first two of the three current loans.
ECONOMIC OUTLOOK AND MAJOR ACCOMPLISHMENTS
The economic outlook and major accomplishments of the City are discussed in the
accompanying Transmittal Letter.
25
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This Comprehensive Annual Financial Report is intended to provide readers with a general
overview of the City's finances. Questions about this report or requests for additional financial
information should be directed to the City of South San Francisco Finance Department, P.O. Box
711, South San Francisco, CA 94083, and phone (650) 877-8512. The City's website is at
www.ssf.net.
26
CITY OF SOUTH SAN FRANCISCO
STATEMENT OF NET POSITION AND
STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire City's financial
activities and financial position.
The Statement of Net Position reports the excess of the City's total assets and deferred outflows of
resources over the City's total liabilities and deferred inflows of resources, including all the City's capital
assets and all its long -term debt. The Statement of Net Position focuses the reader on the composition of
the City's net position, by subtracting total liabilities from total assets.
The Statement of Net Position summarizes the financial position of all the City's Governmental Activities
in a single column, and the financial position of all the City's Business -Type Activities in a single
column; these columns are followed by a total column which presents the financial position of the entire
City.
The City's Governmental Activities include the activities of its General Fund, along with all its Special
Revenue, Capital Projects and Debt Service Funds. Since the City's Internal Service Funds service these
Funds, their activities are consolidated with Governmental Activities, after eliminating inter -fund
transactions and balances. The City's Business Type Activities include all its Enterprise Fund activities.
The Statement of Activities reports increases and decreases in the City's net position. It is also prepared
on the full accrual basis, which means it includes all the City's revenues and all its expenses, regardless of
when cash changes hands. This differs from the "modified accrual" basis used in the Fund financial
statements, which reflect only current assets, current liabilities, available revenues and measurable
expenditures.
The Statement of Activities presents the City's expenses first, listed by program, and follow these with
the expenses of its business -type activities. Program revenues that is, revenues which are generated
directly by these programs —are then deducted from program expenses to arrive at the net expense of each
governmental and business -type program. The City's general revenues are then listed in the
Governmental Activities or Business -type Activities column, as appropriate, and the Change in Net
Position is computed and reconciled with the Statement of Net Position.
Both these Statements include the financial activities of the City and the City of South San Francisco
Capital Improvements Financing Authority that is legally separate but a component unit of the City
because it is controlled by the City, which is financially accountable for its activities. Data for the South
San Francisco Conference Center Authority is reflected as a discretely presented component unit of the
City. This data is presented separately from other funds of the City to reflect operations under control of
a governing body with a voting majority which is different from the City Council.
27
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
STATEMENT OF NET POSITION
JUNE 30, 2016
See accompanying notes to financial statements
we
Component Unit
Primary Government
South San Francisco
Governmental
Business -Type
Conference
Activities
Activities
Total
Center
ASSETS
Cash and investments (Note 2)
$98,914,915
$20,121,456
$119,036,371
$2,830,795
Receivables:
Accounts
8,819,684
586,481
9,406,165
293,558
Accrued interest
231,651
42,833
274,484
Loans
1,776,716
1,776,716
Deposit
203,510
203,510
117,905
Inventory
824
824
Other
3,183
Prepaid items
32,756
32,756
Restricted cash and investments (Note 2)
415,952
6
415,958
488,124
Internal balances (Note 4A)
(47,926)
47,926
Land held for development (Note 1M)
1,900,000
1,900,000
Capital assets: (Note 3)
Nondepreciable
74,351,293
13,508,341
87,859,634
Depreciable, net accumulated depreciation
159,029,784
113,664,564
272,694,348
3,703,675
Total Assets
345,629,159
147,971,607
493,600,766
7,437,240
DEFERRED OUTFLOW OF RESOURCES
Related to pension (Note 7)
12,582,780
1,398,087
13,980,867
Deferred amounts from refunding of debt (Note 5)
50,819
Total Deferred Outflow of Resources
12,582,780
1,398,087
13,980,867
50,819
LIABILITIES
Accounts payable
2,466,101
243,483
2,709,584
299,982
Accrued salaries and benefits
3,621,781
3,621,781
47,094
Accrued interest payable
741,143
741,143
17,194
Other payable
485,235
158,896
644,131
Deposits
1,815,202
7,500
1,822,702
381,312
Unearned revenue
2,821,222
2,821,222
Accrued insurance losses: (Note 11)
Due within one year
712,000
712,000
Due in more than one year
10,688,947
10,688,947
Compensated absences obligation: (Note 1K)
Due within one year
3,537,997
307,164
3,845,161
Due in more than one year
2,489,751
241,290
2,731,041
Debt and capital lease obligations: (Note 5)
Due within one year
565,476
4,536,800
5,102,276
425,000
Due in more than one year
12,387,674
38,706,032
51,093,706
905,000
OPEB obligations - due in more than one year (Note 9)
24,904,700
24,904,700
Net pension liability - due in more than one year (Note 7)
117,037,903
13,004,212
130,042,115
Total Liabilities
183,533,989
57,946,520
241,480,509
2,075,582
DEFERRED INFLOW OF RESOURCES
Related to pension (Note 7)
11,248,886
1,249,876
12,498,762
Total Deferred Inflow of Resources
11,248,886
1,249,876
12,498,762
NET POSITION (Note 6)
Net investment in capital assets
231,142,079
83,930,073
315,072,152
2,373,675
Restricted for:
Debt service
488,124
Special revenue projects
21,324,695
21,324,695
Capital projects
31,081,907
31,081,907
Total Restricted Net Position
52,406,602
52,406,602
488,124
Unrestricted
(120,119,617)
6,243,225
(113,876,392)
2,550,678
Total Net Position
$163,429,064
$90,173,298
$253,602,362
$5,412,477
See accompanying notes to financial statements
we
CITY OF SOUTH SAN FRANCISCO
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2016
Program Revenues
Component Unit
Conference Center
$3,380,041 $1,619,819
General revenues:
Taxes:
Property taxes
Sales taxes
Transient occupancy taxes
Franchise Fees
Other taxes
Motor vehicle in lieu, unrestricted
Property taxes in lieu of vehicle license fees
Investment earnings
Miscellaneous
Transfers (Note 4)
Total general revenues and transfers
Change in Net Position
Net Position - Beginning
Net Position - Ending
See accompanying notes to financial statements
M
Operating
Capital
Charges for
Grants and
Grants and
Functions/Programs
Expenses
Services
Contributions
Contributions
Primary Government
Governmental Activities:
General Government
$9,044,518
$4,194,563
$8,311
Fire
22,488,964
3,450,524
Police
23,158,168
2,076,837
877,165
Public Works
11,916,572
10,361,525
2,293,226
$1,147,337
Parks and Recreation
12,901,657
3,744,137
839,772
Library
4,442,577
164,271
1,224,606
Economic and Community Development
7,603,275
6,131,463
338,412
Total Governmental Activities
91,555,731
30,123,320
5,581,492
1,147,337
Business-type Activities
Sewer
18,273,580
19,569,341
5,802,788
Parking District
894,769
843,199
Storm Water
1,289,465
412,105
Total Business-type Activities
20,457,814
20,824,645
5,802,788
Total Primary Government
$112,013,545
$50,947,965
$11,384,280
$1,147,337
Component Unit
Conference Center
$3,380,041 $1,619,819
General revenues:
Taxes:
Property taxes
Sales taxes
Transient occupancy taxes
Franchise Fees
Other taxes
Motor vehicle in lieu, unrestricted
Property taxes in lieu of vehicle license fees
Investment earnings
Miscellaneous
Transfers (Note 4)
Total general revenues and transfers
Change in Net Position
Net Position - Beginning
Net Position - Ending
See accompanying notes to financial statements
M
Net (Expenses) Revenues and Changes in Net Position
Primary Government Component Unit
South
San Francisco
Governmental Business-Type Conference
Activities Activities Total Center
($4,841,644)
(19,038,440)
(20,204,166)
1,885,516
(8,317,748)
(3,053,700)
(1,133,400)
(54,703,582)
($4,841,644)
(19,038,440)
(20,204,166)
1,885,516
(8,317,748)
(3,053,700)
(1,133,400)
(54,703,582)
$7,098,549 7,098,549
(51,570) (51,570)
(877,360) (877,360)
6,169,619 6,169,619
(54,703,582) 6,169,619 (48,533,963)
26,438,620
15,188,686
13,393,437
3,982,092
51124,574
26,708
5,770,060
1,354,266 289,201
2,334,407
(919,547) 919,547
72,693,303 1,208,748
17,989,721 7,378,367
($1,760,222)
26,438,620
15,188,686
13,393,437 2,172,207
3,982,092
5,124,574
26,708
5,770,060
1,643,467 9,204
2,334,407 97,828
73,902,051 2,279,239
25,368,088 519,017
145,439,343 82,794,931 228,234,274 4,893,460
$163,429,064 $90,173,298 $253,602,362 $5,412,477
31
This Page Left Intentionally Blank
FUND FINANCIAL STATEMENTS
Major funds are defined generally as having significant activities or balances in the current year.
The funds described below were determined to be Major Funds by the City in fiscal 2016. Individual
non -major funds may be found in the Supplemental section.
GENERAL FUND
This fund accounts for resources traditionally associated with government, such as administration, public
safety, library, parks maintenance, and recreation, outside of those accounted for in other funds.
LOW AND MODERATE INCOME HOUSING ASSETS SPECIAL REVENUE FUND
To account for the activities related to the assets assumed by the City as Housing Successor to the
housing activities of the former Redevelopment Agency of the City of South San Francisco.
CAPITAL IMPROVEMENT CAPITAL PROJECTS FUND
To account for expenditures associated with the acquisition, construction, or improvement of City
owned facilities and infrastructure. Funding comes from the general fund, special revenue funds, grants
and fees.
EAST OF 101 SEWER IMPACT FEES CAPITAL PROJECTS FUND
These fees provide new development's share of new and rehabilitated sewer collection and treatment
facilities to serve the East of Highway 101 area.
EAST OF 101 TRAFFIC IMPACT FEES CAPITAL PROJECTS FUND
These fees are to provide new development's share of new and expanded roadway and intersection
improvements to serve the East of Highway 101 area.
CHILD CARE IMPACT FEES CAPITAL PROJECTS FUND
These citywide fees provide new development's share of new and expanded childcare facilities to serve
the childcare needs of working parents.
DEVELOPER DEPOSIT FUND
To account for a deposit by a large corporation for various capital projects the developer agreed to fund.
CAPITAL INFRASTRUCTURE RESERVE FUND
Replacement, upgrade, and maintenance of the City's infrastructure are backlogged, constituting a
significant liability. Funds are set aside in this fund as part of the budget process and as part of the City's
reserve policy to address the replacement and/or upgrade of the city infrastructure (such as parks,
buildings, facilities, streets, sidewalks, and storm water facilities).
33
ASSETS
Cash and investments (Note 2)
Receivables:
Accounts
Accrued interest
Loans
Due from other funds (Note 4B)
Inventory
Restricted cash and investments (Note 2)
Land held for redevelopment (Note IM)
Prepaids
Total Assets
LIABILITIES
Liabilities:
Accounts payable
Accrued salaries and benefits
Other payable
Deposits
Unearned revenue
Due to other funds (Note 413)
Total Liabilities
Fund Balances (Note 6):
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total Fund Balances (Deficits)
Total Liabilities and Fund Balances (Deficits)
CITY OF SOUTH SAN FRANCISCO
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2016
General
Fund
Capital Projects Funds
Low and Moderate East of 101
Income Capital Sewer
Housing Assets Improvement Impact Fees
$19,931,377
$2,190,747 $1,028,163 $2,467,653
7,945,482
8,128 678,625
57,493
5,137 4,992
1,197,700
100
824
66,895
32,756
$27,968,032 $3,468,607 $1,706,788 $2,472,645
$1,006,737 $6,800 $1,173,871
3,621,781
206,402 165,894
115,927 $1,968,879
4,950,847 6,800 1,339,765 1,968,879
33,580
3,461,807 503,766
3,654,283
1,578,153 367,023
17,751,169
23,017,185 3,461,807 367,023 503,766
$27,968,032 $3,468,607 $1,706,788 $2,472,645
34
M
Capital Projects Funds
$2,333,705
East of 101
Capital
Other
Total
Traffic
Child Care Developer
Infrastructure
Governmental
Governmental
Impact Fees
Impact Fees Deposit
Reserve Fund
Funds
Funds
10,999,371
$7,197,036
$2,867,905 $812,017
$17,592,545
$20,112,708
$74,200,151
3,654,283
180,588
8,812,823
16,217
6,936 2,961
45,840
43,578
183,154
21,173,961
76,323,105
$7,213,253 $2,874,841 $814,978 $17,638,385
579,016
1,776,716
100
824
349,057
415,952
1,900,000
1,900,000
32,756
$7,213,253
$2,874,841 $814,978
$17,638,385
$23,164,947
$87,322,476
M
$146,297
$2,333,705
3,621,781
35,065
407,361
$742,094
1,073,108
1,815,202
736,416
2,821,222
100
100
742,094
1,990,986
10,999,371
33,580
$7,213,253 $2,874,841 72,884 $17,638,385
21,173,961
52,938,897
3,654,283
1,945,176
17,751,169
7,213,253 2,874,841 72,884 17,638,385
21,173,961
76,323,105
$7,213,253 $2,874,841 $814,978 $17,638,385
$23,164,947
$87,322,476
M
CITY OF SOUTH SAN FRANCISCO
GOVERNMENTAL FUNDS
BALANCE SHEET - RECONCILIATION OF GOVERNMENTAL
FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES
JUNE 30, 2016
Total fund balances reported on the governmental funds balance sheet $76,323,105
Amounts reported for Governmental Activities in the Statement of Net Position are
different from those reported in the Governmental Funds because of the following:
Capital assets used in Governmental Activities are not financial resources and,
therefore, are not reported in the Governmental Funds. 228,457,320
Internal service funds are used by management to charge the cost of management of
communication, telephone, building, fleet maintenance, equipment replacement, workers'
compensation, employee benefits, insurance, and post - retirement healthcare benefits to
individual funds. The assets and liabilities are included in Governmental Activities in the
Statement of Net Position. (10,303,720)
The assets and liabilities below are not due and payable in the current period and
therefore are not reported in the funds:
Long -term debt (10,714,152)
Deferred outflows related pension 12,582,780
Net pension liability (117,037,903)
Deferred inflows related to pension (11,248,886)
Non - current portion of compensated absences (4,629,480)
Net position of governmental activities $163,429,064
See accompanying notes to financial statements
36
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES
Property taxes
Sales taxes
Transient occupancy taxes
Franchise Fees
Other taxes
Intergovernmental
Interest and rentals
Licenses and permits
Charges for services
Fines and forfeitures
Other
Total Revenues
EXPENDITURES
Current:
City Council
City Clerk
City Treasurer
City Attorney
City Manager
Finance
Non - departmental
Human Resources
Fire
Police
Public Works
Parks and Recreation
Library
Economic and Community Development
Other
Debt service:
Principal repayments
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in (Note 4C)
Transfers out (Note 4C)
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund balances (deficits) - July 1
Fund balances (deficits) - June 30
Capital Projects Funds
Low and Moderate East of 101
General Income Capital Sewer
Fund Housing Assets Improvement Impact Fees
$24,777,659
17,710,425
13,442,952
3,982,092
5,124,574
7,833,659 $2,351,355
3,080,567 $280,436
6,896,897
8,659,873
791,756
336,267 135,680 104,644
92,636,721 416,116 2,455,999
268,133
646,518
118,788
782,389
1,735,423
2,186,648
1,124,348
1,468,785
24,058,478
25,319,536
5,025,897 8,538,733
13,234,028
4,681,188
6,144,861 491,672
$33,489
517,952
551,441
2,500
86,795,020 491,672 8,538,733 2,500
5,841,701 (75,556) (6,082,734) 548,941
1,976,872
(6,082,763)
(4,105,891)
6,161,203
(4,716)
6,161,203 (4,716)
1,735,810 (75,556) 78,469 544,225
21,281,375 3,537,363 288,554 (40,459)
$23,017,185 $3,461,807 $367,023 $503,766
See accompanying notes to financial statements
38
1,743,475
(475,073)
(475,073)
385,146 269,155
1,268,402 385,146
507,476 7,369,294 10,506,898
5,000 8,143,075
(269,155) (527,812) (5,834,180) (13,193,699)
(269,155) (527,812) (5,829,180) (5,050,624)
(20,336) 1,540,114 5,456,274
5,944,851 2,489,695 72,884 17,658,721 19,633,847 70,866,831
$7,213,253 $2,874,841 $72,884 $17,638,385 $21,173,961 $76,323,105
39
Capital Projects Funds
East of 101
Capital
Other
Total
Traffic
Child Care
Developer
Infrastructure
Governmental
Governmental
Fees
Impact Fees
Deposit
Reserve Fund
Funds
Funds
-Impact
$1,660,961
$26,438,620
17,710,425
13,442,952
3,982,092
1,551,054
6,675,628
2,175,340
12,360,354
$108,530
$46,362
$305,480
352,589
4,207,453
6,896,897
1,637,445
341,284
$269,155
3,960,649
15,386,358
791,756
201,996
1,660,992
2,439,579
1,745,975
387,646
269,155
507,476
11,361,585
110,332,114
268,133
646,518
118,788
782,389
1,735,423
2,186,648
2,500
133,892
1,263,240
1,468,785
116,862
24,175,340
139,450
25,458,986
2,500
1,279,216
14,846,346
13,234,028
4,681,188
1,271,122
7,907,655
395,749
395,749
656,000
656,000
2,500
2,500
3,992,291
99,825,216
1,743,475
(475,073)
(475,073)
385,146 269,155
1,268,402 385,146
507,476 7,369,294 10,506,898
5,000 8,143,075
(269,155) (527,812) (5,834,180) (13,193,699)
(269,155) (527,812) (5,829,180) (5,050,624)
(20,336) 1,540,114 5,456,274
5,944,851 2,489,695 72,884 17,658,721 19,633,847 70,866,831
$7,213,253 $2,874,841 $72,884 $17,638,385 $21,173,961 $76,323,105
39
CITY OF SOUTH SAN FRANCISCO
Reconciliation of the
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS
with the
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2016
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $5,456,274
Amounts reported for Governmental Activities in the Statement of Activities are
different because of the following:
Capital Assets Transactions
Governmental funds report capital outlays as expenditures. However, in the Statement of
Activities the cost of those assets is capitalized and allocated over their estimated useful
lives and reported as depreciation expense.
Capital assets additions 8,587,722
Retirement and adjustment of capital assets (173,153)
Current year depreciation (8,128,337)
Long -Term Debt Payments
Repayment of principal is an expenditure in the governmental funds, but
in the Statement of Net Position the repayment reduces long -term liabilities.
Repayment of principal is added back to fund balance 656,000
Accrual of Non - Current Items
The amount below included in the Statement of Activities does not require the use
of current financial resources and therefore is not reported as revenue or expenditures in
governmental funds (net change):
Compensated absences (352,387)
Unavailable revenue (219,545)
Net pension liability, and deferred outflows and inflows of resources 6,739,769
Allocation of Internal Service Fund Activity
Internal service funds are used by management to charge the costs of certain activities to
individual funds. The net revenue of the internal service fund is reported with governmental
activities. 5,423,378
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $17,989,721
See accompanying notes to financial statements
11111
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2016
Amounts available for appropriation
Charges to appropriations (outflows)
City Council
City Clerk
City Treasurer
City Attorney
City Manager
Finance
Non - departmental
Human Resources
Fire
Police
Public Works
Parks and Recreation
Library
Economic and Community Development
Total charges to appropriations
OTHER FINANCING SOURCES (USES)
Transfers in (Note 4C)
Transfers out (Note 4C)
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
Fund Balance - July I
Adjustment to budgetary basis:
Encumbrance adjustments
Fund Balance - June 30
83,610,753
91,205,233
92,636,721
1,431,488
Variance with
Budgeted Amounts
237,768
Final Budget
268,133
2
691,304
Actual
Positive
104,784
Original
Final
Amount
(Negative)
Resources (inflows):
782,578
782,389
189
1,588,362
Property taxes
$24,313,857
$24,313,857
$24,777,659
$463,802
Sales taxes
16,530,436
19,332,436
17,710,425
(1,622,011)
Transient occupancy taxes
12,000,000
13,430,100
13,442,952
12,852
Franchise fees
3,344,000
3,344,000
3,982,092
638,092
Othertaxes
4,385,363
4,385,363
5,124,574
739,211
Intergovernmental
6,369,887
7,702,367
7,833,659
131,292
Interest and rentals
2,931,500
2,931,500
3,080,567
149,067
Licenses and permits
3,876,854
5,961,854
6,896,897
935,043
Charges for services
8,786,108
8,717,108
8,659,873
(57,235)
Fines and forfeitures
838,500
838,500
791,756
(46,744)
Other
234,248
248,148
336,267
88,119
Amounts available for appropriation
Charges to appropriations (outflows)
City Council
City Clerk
City Treasurer
City Attorney
City Manager
Finance
Non - departmental
Human Resources
Fire
Police
Public Works
Parks and Recreation
Library
Economic and Community Development
Total charges to appropriations
OTHER FINANCING SOURCES (USES)
Transfers in (Note 4C)
Transfers out (Note 4C)
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
Fund Balance - July I
Adjustment to budgetary basis:
Encumbrance adjustments
Fund Balance - June 30
83,610,753
91,205,233
92,636,721
1,431,488
237,768
268,135
268,133
2
691,304
751,302
646,518
104,784
131,193
131,192
118,788
12,404
782,578
782,578
782,389
189
1,588,362
1,764,099
1,764,093
6
2,027,713
2,231,312
2,231,311
1
1,013,535
1,305,477
1,305,476
1
1,475,848
1,527,383
1,518,820
8,563
21,754,722
24,103,926
24,103,932
(6)
24,959,424
25,356,509
25,319,536
36,973
3,912,331
5,328,834
5,328,828
6
13,903,626
13,464,414
13,462,221
2,193
4,607,218
4,769,354
4,731,555
37,799
5,731,979
6,849,485
6,791,573
57,912
82,817,601
88,634,000
88,373,173
260,827
1,022,301
2,175,348
1,976,872
(198,476)
(1,700,000)
(8,632,720)
(6,082,763)
2,549,957
(677,699)
(6,457,372)
(4,105,891)
2,351;481
$115,453
($3,886,139)
157,657
$4,043,796
See accompanying notes to financial statements
41
21,281,375
1,578,153
$23,017,185
CITY OF SOUTH SAN FRANCISCO
LOW AND MODERATE INCOME HOUSING ASSETS
SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES:
Interest and rental
Other
Total Revenues
EXPENDITURES:
Current:
Economic and Community Development
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
Fund balance - July I
Fund balance - June 30
3,537,363
$3,461,807
See accompanying notes to financial statements
IN
Variance with
Final Budget
Positive
Budget
Actual Amounts
(Negative)
$167,000
$280,436
$113,436
619,000
135,680
(483,320)
786,000
416,116
(369,884)
2,088,456
491,672
1,596,784
2,088,456
491,672
1,596,784
(1,302,456)
(75,556)
1,226,900
(230)
230
(230)
230
($1,302,686)
(75,556)
$1,227,130
3,537,363
$3,461,807
See accompanying notes to financial statements
IN
MAJOR PROPRIETARY FUNDS —1
Proprietary funds account for City operations financed and operated in a manner similar to a private
business enterprise. The intent of the City is that the cost of providing goods and services be financed
primarily through user charges.
The concept of major funds established by GASB Statement 34 extends to Proprietary Funds. The City
reported all enterprise funds as major proprietary funds.
GASB 34 does not provide for the disclosure of budget versus actual comparisons regarding proprietary
funds that are major funds.
SEWER ENTERPRISE FUND
This fund accounts for user charges and debt proceeds supporting the operation, maintenance, and capital
expansion of the wastewater collection and treatment system.
PARKING DISTRICT FUND
This fund accounts for meter and parking permit fees used to acquire and maintain parking facilities.
STORM WATER FUND
This fund accounts for user charges sustaining the Storm Water Management Program mandated by state
and federal authorities.
43
ASSETS
Current assets:
Cash and investments (Note 2)
Receivables:
Accounts
Accrued interest
Deposit
Restricted cash and investments (Note 2)
Total current assets
Noncurrent assets:
Capital assets: (Note 3)
Nondepreciable
Depreciable, net accumulated depreciation
Total non - current assets
Total Assets
Deferred Outflow
Related to pension (Note 7)
LIABILITIES
Current liabilities:
Accounts payable
Other payable
Accrued interest payable
Deposits payable
Accrued insurance loss (Note 11)
Compensated absences obligation (Note 1K)
Current portion of long -term debt (Note 5)
Total current liabilities
Noncurrent liabilities:
Accrued insurance losses (Note 11)
Compensated absences obligation (Note 1K)
Net OPEB obligation (Note 9)
Noncurrent portion of long -term debt (Note 5)
Net pension liability (Note 7)
Total noncurrent liabilities
Total Liabilities
Deferred Inflow
Related to pension (Note 7)
NET POSITION:
Net investment in capital assets
Unrestricted (deficit)
Total Net Position
CITY OF SOUTH SAN FRANCISCO
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2016
1,398,087
230,252 478
148,930 9,966
741,143
7,500
1,398,087
12,753 243,483 132,396
158,896 77,874
741,143
7,500
Governmental
Business -type Activities - Enterprise Funds
4,062
Activities
Sewer
Parking
Storm
Internal
Enterprise
District
Water
Total
Service Funds
5,994,986
2,276,888
$17,206,677
$1,892,163
$1,022,616
$20,121,456
$24,714,764
579,944
609,126
6,537
586,481
6,861
35,210
4,794
2,829
42,833
48,497
38,706,032
1,673,522
13,004,212
203,510
6
51,902,859
6
36,278
17,821,837
1,896,957
1,031,982
20,750,776
24,973,632
57,946,520
40,153,183
12,312,024
1,023,320
172,997
13,508,341
103,736
102,562,149
11,034,339
68,076
113,664,564
4,820,021
114,874,173
12,057,659
241,073
127,172,905
4,923,757
132,696,010
13,954,616
1,273,055
147,923,681
29,897,389
1,398,087
230,252 478
148,930 9,966
741,143
7,500
1,398,087
12,753 243,483 132,396
158,896 77,874
741,143
7,500
1,249,876 1,249,876
71,631,341 12,057,659 241,073
3,345,179 1,870,054 980,066
$74,976,520 $13,927,713 $1,221,139
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
See accompanying notes to financial statements
44
83,930,073 2,684,759
6,195,299 (12,940,553)
90,125,372 ($10,255,794)
47,926
$90,173,298
712,000
300,217
4,062
2,885
307,164
789,142
4,536,800
4,536,800
565,476
5,964,842
14,506
15,638
5,994,986
2,276,888
10,688,947
192,615
12,397
36,278
241,290
609,126
24,904,700
38,706,032
38,706,032
1,673,522
13,004,212
13,004,212
51,902,859
12,397
36,278
51,951,534
37,876,295
57,867,701
26,903
51,916
57,946,520
40,153,183
1,249,876 1,249,876
71,631,341 12,057,659 241,073
3,345,179 1,870,054 980,066
$74,976,520 $13,927,713 $1,221,139
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
See accompanying notes to financial statements
44
83,930,073 2,684,759
6,195,299 (12,940,553)
90,125,372 ($10,255,794)
47,926
$90,173,298
CITY OF SOUTH SAN FRANCISCO
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2016
NONOPERATING REVENUES (EXPENSES)
Interest income
238,389
32,012
18,800
289,201
Governmental
Crain on dispositions of capital assets
Business -type Activities - Enterprise Funds
Activities
28,272
Sewer
Parking
Storm
Internal
(83,845)
Enterprise
District
Water
Total
Service Funds
OPERATING REVENUES
Total Nonoperating Revenues (Expenses)
(918,535)
32,012
25,800
(860,723)
Charges for services
$19,515,965
7,098,155
$405,105
$19,921,070
$23,721,250
Other cities' participation
5,752,765
5,752,765
Permit fees
53,376
4,716
53,376
935,557
Parking fees
Transfers out (Note 4C)
$843,199
843,199
(16,010)
Total Operating Revenues
25,322,106
843,199
405,105
26,570,410
23,721,250
OPERATING EXPENSES
Net Position (Deficits) - July 1
67,889,659
13,947,777
1,158,654
82,996,090
Personnel expenses
7,165,353
268,371
1,140,766
8,574,490
14,230,674
Professional services
167,746
90,650
258,396
566,256
OPEB expenses
535,039
535,039
1,895,762
Program supplies
303,830
50,415
99,330
453,575
1,994,409
Insurance
144,602
2,536
147,138
1,056,255
Self- insurance and claims
1,924,421
Repair and maintenance
1,111,670
(126,681)
984,989
557,714
Rents and leases
1,592,100
1,592,100
Utilities
1,348,299
50,780
10,971
1,410,050
35,210
Administration
1,290,005
100,900
64,227
1,455,132
Depreciation
3,790,710
257,063
14,527
4,062,300
722,185
Other
23,808
2,935
26,743
282,088
Total Operating Expenses
17,305,416
895,275
1,299,261
19,499,952
23,264,974
Operating Income (Loss)
8,016,690
(52,076)
(894,156)
7,070,458
456,276
NONOPERATING REVENUES (EXPENSES)
Interest income
238,389
32,012
18,800
289,201
324,158
Crain on dispositions of capital assets
28,272
Interest expense
(1,206,947)
(1,206,947)
(83,845)
Other
50,023
7,000
57,023
816,525
Total Nonoperating Revenues (Expenses)
(918,535)
32,012
25,800
(860,723)
1,085,110
Income (loss) before transfers
7,098,155
(20,064)
(868,356)
6,209,735
1,541,386
TRANSFERS
Transfers in (Note 4C)
4,716
930,841
935,557
4,240,000
Transfers out (Note 4C)
(16,010)
(16,010)
(108,923)
Change in Net Position
7,086,861
(20,064)
62,485
7,129,282
5,672,463
Net Position (Deficits) - July 1
67,889,659
13,947,777
1,158,654
82,996,090
(15,928,257)
Net Position (Deficits)- June 30
$74,976,520
$13,927,713
$1,221,139
$90,125,372
($10,255,794)
Change in
Net Position
$7,129,282
Some amounts reported for business -type activities in the
statement of activities are different because the net revenue
(expense) of certain internal service funds is reported
with business -type activities 249,085
Change in Net Position of Business -Type Activities $7,378,367
See accompanying notes to financial statements
45
CITY OF SOUTH SAN FRANCISCO
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2016
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Receipts from other funds
Transfers in 4,716
Transfers out (16,010)
Net Cash Provided by Noncapital Financing Activities (11,294)
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Principal paid on long -term debt
Interest paid on long -term debt
Acquisition of capital assets, net
Proceeds from the sale of capital assets
Net Cash Used in Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Net Cash Provided by Investing Activities
Net Increase (Decrease) in cash and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to cash flows from operating activities:
Depreciation
Other non - operating revenue (expenses)
Net change in assets and liabilities:
Accounts and lease receivables
Accounts payable
Other payable
Accrued insurance losses
OPEB obligations
Compensated absence obligations
(Decrease) increase due to retirement system
Net Cash Provided by (Used in) Operating Activities
100
930,841 935,557 4,240,000
(16,010) (108,923)
930,841 919,547 4,131,177
(4,420,781)
(4,420,781)
(547,574)
(1,285,695)
(1,285,695)
Governmental
(4,808,900)
Business -type Activities - Enterprise Funds
(513,421)
Activities
1,114,967
Sewer
Parking
Storm
(1,116,568)
Internal
Enterprise
District
Water
Total
Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers
$25,634,123
$843,199
$405,568
$26,882,890
Cash payment to suppliers for goods and services
(6,342,845)
(365,612)
(159,833)
(6,868,290)
($5,215,820)
Cash payment to employees for services
(7,887,380)
(263,338)
(1,140,332)
(9,291,050)
(14,408,388)
Cash received from interfund service provided
24,611,366
Cash payment for judgments and claims
(1,867,474)
Other payments
(4,794)
Net Cash Provided by (Used in) Operating Activities
11,403,898
214,249
(894,597)
10,723,550
3,114,890
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Receipts from other funds
Transfers in 4,716
Transfers out (16,010)
Net Cash Provided by Noncapital Financing Activities (11,294)
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Principal paid on long -term debt
Interest paid on long -term debt
Acquisition of capital assets, net
Proceeds from the sale of capital assets
Net Cash Used in Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Net Cash Provided by Investing Activities
Net Increase (Decrease) in cash and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to cash flows from operating activities:
Depreciation
Other non - operating revenue (expenses)
Net change in assets and liabilities:
Accounts and lease receivables
Accounts payable
Other payable
Accrued insurance losses
OPEB obligations
Compensated absence obligations
(Decrease) increase due to retirement system
Net Cash Provided by (Used in) Operating Activities
100
930,841 935,557 4,240,000
(16,010) (108,923)
930,841 919,547 4,131,177
(4,420,781)
(4,420,781)
(547,574)
(1,285,695)
(1,285,695)
(83,845)
(4,808,900)
(164,415) (4,973,315)
(513,421)
331,265
1,114,967
28,272
(10,515,376)
(164,415) (10,679,791)
(1,116,568)
237,739
31,440
18,355
287,534
331,265
237,739
31,440
18,355
287,534
331,265
1,114,967
245,689
(109,816)
1,250,840
6,460,764
16,091,716 1,646,474 1,132,432 18,870,622 18,254,000
$17,206,683 $1,892,163 $1,022,616 $20,121,462 $24,714,764
$8,016,690 ($52,076) ($894,156) $7,070,458 $456,276
3,790,710 257,063 14,527 4,062,300 722,185
50,023 7,000 57,023 816,525
261,994 (6,537) 255,457 73,591
3,699 (5,737) (15,865) (17,903) (202,319)
2,809 9,966 12,775 59,105
56,947
1,094,000
26,836 5,033 434 32,303 38,580
(748,863) (748,863)
$11,403,898 $214,249 ($894,597) $10,723,550 $3,114,890
See accompanying notes to basic financial statements
M
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.
1 1 11 1 11
MUM 1111 0 "I
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.
This fund is used to pay for the administrative costs of monitoring the Deferred Compensation Funds on
behalf of City employees.
47
CITY OF SOUTH SAN FRANCISCO
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2016
Cash and investments (Note 2)
Accounts receivable
Interest receivable
Advances to the City (Note 5)
Loans receivable (Note 13B)
Restricted cash and investments (Note 2)
Capital assets (Note 13C):
Nondepreciable
Depreciable, net accumulated depreciation
Total Assets
INF.11,110
Accounts payable
Accrued interest payable
Deposits
Other accrued liabilities
Noncurrent portion of pollution remediation (Note 13E)
Long-term debt (Note 13D):
Due within one year
Due in more than one year
Total Liabilities
NET POSITION
Held in trust for other purposes
Successor
Agency
Private Purpose
Trust Fund
See accompanying notes to financial statements
$302,408
2,932
10,184
10,714,152
245,103
89,868,512
52,769,724
2,985,964
AL,enev Fund
SSF Employee
Def Comp
Trust
Oversight
$62,944
158
$156,898,979 $63,102
$9,533 $12,500
942,140
37,519
50,602
537,000
2,000,000
55,590,000
59,116,192 $63,102
$97,782,787
CITY OF SOUTH SAN FRANCISCO
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2016
Successor
Agency
Private Purpose
Trust Fund
ADDITIONS
Intergovernmental $3,466,496
Interest and rentals 971,567
Total Additions 4,438,063
014111 s A
Economic and Community Development 1,067,949
Interest expense 2,856,438
Depreciation 86,452
Total Deductions 4,010,839
Change in net position 427,224
NET POSITION HELD IN TRUST FOR OTHER PURPOSES
Beginning of the year 97,355,563
End of the year $97,782,787
See accompanying notes to financial statements
11
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
A. Description of the Financial Reporting Entity
As required by generally accepted accounting principles, the financial statements present the City
of South San Francisco (the City) as the Primary Government, with its component units for which
the City is considered financially accountable. The component units discussed below are
included in the City's reporting entity because of the significance of their operational and
financial relationships with the City.
B. Description of Blended Component Units
The accompanying basic financial statements include all funds and boards and commissions that
are controlled by the City Council. The basic financial statements include the City's blended
component units, entities for which the City is considered to be financially accountable. A
blended component unit, although a legally separate entity, is in substance, part of the City's
operations and so data from this unit is combined with the City. The City's following blended
component units are described below.
The City of South San Francisco Capital Improvements Financing Authority is a joint
exercise of powers authority created in 1991 between the City and the City of South San
Francisco former Redevelopment Agency. The Financing Authority is authorized to borrow
money through the purchase or issuance of bonds, notes, or other obligations for the purpose of
making loans to the City and other public entities to finance capital improvements. The City
Council members serve as the Board of Directors.
C Description of Discrete Component Unit
The City of South San Francisco Conference Center Authority was established in 1992 to
manage and operate the South San Francisco Conference Center. The Authority is governed by a
Board of nine commissioners consisting of two Council members and seven representatives from
various businesses appointed by City Council.
The Authority does not meet the criteria of a blended component unit, since the City Council is
not the component unit's governing body and the Authority does not provide services entirely to
the City. However the City is financially accountable and is able to impose its will on the
Authority. The Authority is therefore considered a discrete component unit with its financial data
reported separately from the financial data of the City.
The City of South San Francisco Conference Center Authority financial statements may be
obtained from the Authority at 255 South Airport Boulevard, South San Francisco, CA 94080.
51
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Basis of Presentation
Government -wide Statements - The Statement of Net Position and the Statement of Activities
display information about the primary government (the City) and its component units. These
statements include the financial activities of the overall City government, except for fiduciary
activities. Interfund transfers and amounts owed between funds within the primary government
have been eliminated from the statements. Amounts representing interfund services and uses
remain in the statements. These statements distinguish between the governmental and business -
type activities of the City. Governmental activities generally are financed through taxes,
intergovernmental revenues, and other nonexchange transactions. Business -type activities are
financed in whole or in part by fees charged to external parties.
The Statement of Activities presents a comparison between direct expenses and program revenues
for each segment of the business -type activities of the City and for each function of the City's
governmental activities. Direct expenses are those that are specifically associated with a program
or function and, therefore, are clearly identifiable to a particular function. Program revenues
include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants
and contributions that are restricted to meeting the operational needs of a particular program and
(c) fees, grants and contributions that are restricted to financing the acquisition or construction of
capital assets. Revenues that are not classified as program revenues, including all taxes, are
presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the City's
funds, including fiduciary funds and blended component units. Separate statements for each fund
category — governmental, proprietary, and fiduciary — are presented. The emphasis of fund
financial statements is on major individual governmental and enterprise funds, each of which is
displayed in a separate column. All remaining governmental and enterprise funds are aggregated
and reported as nonmajor funds.
Proprietary fund operating revenues, such as charges for services, result from exchange
transactions associated with the principal activity of the fund. Exchange transactions are those in
which each party receives and gives up essentially equal values. Nonoperating revenues, such as
subsidies and investment earnings, result from nonexchange transactions or ancillary activities.
E. Major Funds
Major funds are defined as funds that have either assets, liabilities, revenues or
expenditures /expenses equal to ten percent of their fund -type total and five percent of the grand
total. The General Fund is always a major fund. The City may also select other funds it believes
should be presented as major funds.
The City reported the following major governmental funds in the accompanying financial
statements:
General Fund — Accounts for resources traditionally associated with government, such as
administration, public safety, library, parks, maintenance, and recreation, outside of those
accounted for in other funds.
52
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued}
Low and Moderate Income Housing Asset Special Revenue Fund — This fund was established
to account for the activities related to the assets assumed by the City as Housing Successor to the
housing activities of the former Redevelopment Agency of the City.
Capital Improvement Capital Projects Fund - Accounts for expenditures associated with the
acquisition, construction, or improvement of City -owned facilities and infrastructure. Funding
comes from the General Fund, Special Revenue funds, grants and fees.
East of 101 Sewer Impact Fees Capital Projects Fund — These fees provide new
development's share of new and rehabilitated sewer collection and treatment facilities to serve the
East of Highway 101 area.
East of 101 Traffic Impact Fees Capital Projects Fund — These fees are to provide new
developments share of new and expanded roadway and intersection improvements to serve the
East of Highway 101 area.
Child Care Impact Fees Capital Projects Fund — These citywide fees provide new
development's share of new and expanded childcare facilities to serve the City.
Developer Deposits Capital Projects Fund — Accounts for a deposit by a large corporation for
various capital projects the developer agreed to fund.
Capital Infrastructure Reserve Fund — Replacement, upgrade, and maintenance of the City's
infrastructure are backlogged, constituting a significant liability. Funds are set aside in this fund
as part of the budget process and as part of the City's reserve policy to address the replacement
and/or upgrade of the city infrastructure (such as parks, buildings, facilities, streets, sidewalks,
and storm water facilities).
The City reported all enterprise funds as major funds in the accompanying financial statements.
The enterprise funds are:
Sewer Enterprise Fund - Accounts for user charges and debt proceeds supporting the operation,
maintenance, and capital expansion of the wastewater collection and treatment system.
Parking District Fund - Accounts for meter and parking permit fees used to acquire and
maintain parking facilities.
Storm Water Fund - Accounts for user charges sustaining the Storm Water Management
Program mandated by state and federal authorities.
The City also reports the following fund types:
Internal Service Funds - These funds account for City services, self insurance, health and
retirement benefits, and equipment replacement; all of which are provided to other departments
on a cost - reimbursement basis.
53
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
I NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (C
Fiduciary Funds - An agency fund is used to account for assets held by the City as an agent for
SSF Employee Deferred Comp Trust Oversight Fund. The Successor Agency Private-Purpose
Trust Fund accounts for the accumulation of resources to be used for payments at appropriate
amounts and times in the future. The financial activities of the funds are excluded from the
Government-wide financial statements, but are presented in the separate Fiduciary Fund financial
statements.
F. Basis of Accounting
The government-wide, proprietary, private-purpose trust fund, and discretely presented
component unit financial statements are reported using the economic resources measurement
focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses
are recorded at the time liabilities are incurred, regardless of when the related cash flows take
place.
The agency funds which only report assets and liabilities and do not have a measurement focus.
Governmental funds are reported using the current financial resources measurement focus and
the modified accrual basis of accounting. Under this method, revenues are recognized when
measurable and available. The City considers all revenues reported in the governmental funds to
be available if the revenues are collected within sixty days after year-end. Expenditures are
recorded when the related fund liability is incurred, except for principal and interest on long-term
debt, claims and judgments, and compensated absences, which are recognized as expenditures to
the extent they have matured. General capital asset acquisitions are reported as expenditures in
governmental funds. Proceeds from long-term debt and acquisitions under capital leases are
reported as other financing sources.
Those revenues susceptible to accrual are property and sales taxes, certain intergovernmental
revenues, interest revenue, licenses and permits, charges for services, fines and forfeitures. Sales
taxes collected and held by the state at year end on behalf of the City are also recognized as
revenue. Other receipts and taxes are recognized as revenue when the cash is received.
Non-exchange transactions, in which the City gives or receives value without directly, receiving
or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the
accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or
assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in
which all eligibility requirements have been satisfied. Under the terms of grant agreements, the
City may fund certain programs with a combination of cost-reimbursement grants, categorical
block grants, and general revenue. Thus, both restricted and unrestricted net position may be
made available to finance program expenditures. The City's policy is to first apply restricted
grant resources to such programs, followed by general revenues if necessary.
The City considers restricted shared state revenues such as gasoline taxes and public safety sales
taxes, restricted locally imposed transportation sales taxes, fines, forfeitures, licenses, permits,
charges for services, and program grants as program revenues.
54
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
G Budgets, Budgetary Accounting, and Encumbrances
The City is not legally required to budget any of its funds, but does so to enhance City
management's effectiveness in their financial planning efforts and to enhance control over the
City's operations. Budgets are adopted on a modified accrual basis, except for encumbrances and
for the Capital Improvement Fund. Encumbrances are considered expenditures in the year of the
purchase order issuance. The Capital Improvement Fund is adopted on a multi -year project basis
with unexpended and unencumbered budgets reappropriated in the following year. The City
operates under the general laws of the State of California (the State) and annually adopts a budget
effective July 1 for the ensuing fiscal year for the General fund; Special Revenue funds; Capital
Projects funds except for the Developer Deposits Capital Projects Fund; and Enterprise funds.
The budget is adopted by the City Council and controlled at the department level for the General
fund and at the fund level or lower for all other funds with adopted budgets. From the effective
date of the budget, the amounts stated therein as proposed expenditures become appropriations to
the various City departments. The City Council may amend the budget by resolution during the
fiscal year. The department heads may authorize transfers within one object category within the
same department within a fund. The City Manager may authorize transfers between object
categories and departments within a fund.
All appropriations lapse at year -end, except for capital projects and encumbrances. Original
adopted budgets and final amended budgets are presented in the basic financial statements.
Supplementary budget appropriations were necessary during the year ended June 30, 2015.
Encumbrance accounting, under which, purchase orders, contracts and other commitments for the
expenditure of funds are recorded in order to reserve that portion of the applicable appropriation,
is employed as an extension of the budgetary process. Encumbrances outstanding at year -end are
reported as reservations of fund balances since they do not constitute expenditures or liabilities.
Encumbrances are reappropriated in the following year.
The budgetary comparison statements present comparisons of the legally adopted budget with
actual charges to appropriations on a budgetary basis. In order to provide a meaningful
comparison, the actual charges on a budgetary basis include encumbrances, which is a basis that
differs significantly from those used to present financial statements in conformity with generally
accepted accounting principles.
Certain indirect costs are included in program expenses reported for individual functions and
activities.
H. Cash Equivalents - For purposes of the statement of cash flows, the City considers all highly
liquid investments (including all restricted assets) with maturity of three months or less when
purchased to be cash equivalents. The City maintains a cash and investment pool that is available
for use by all funds. As the proprietary funds' share of this pool is readily available when needed,
such share is also considered to be cash equivalent. Deposit assets in the proprietary funds are
related to insurance and benefits and are not considered cash equivalents for purposes of the
statement of cash flows.
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued}
I. Inventory and Prepaid Items - consist of consumable supplies. Inventory is stated at cost (first -
in, first -out method). The costs are recorded as expenditures at the time the individual inventory
or prepaid item is consumed. Reported inventory and prepaid items are equally offset by a fund
balance reservation, which indicates that they do not constitute "available spendable resources"
even though they are a component of net current assets.
J. Capital Assets - All capital assets are valued at historical cost or estimated historical cost if actual
historical cost is not available. Contributed capital assets are valued at their estimated fair market
value on the date contributed.
The purpose of depreciation is to spread the cost of capital assets equitably among all users over
the life of these assets. The amount charged to depreciation expense each year represents that
year's pro rata share of the cost of capital assets.
Depreciation is provided using the straight line method which means the cost of the asset is
divided by its expected useful life in years and the result is charged to expense each year until the
asset is fully depreciated. The City has assigned the useful lives listed below to capital assets:
Buildings 50 years
Clean water facilities and transmission lines 40 years
Improvements 30 years
Machinery and equipment 5 -20 years
Furniture and fixtures 12 years
Infrastructure 20 -40 years
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase is reflected in the capitalized value of the asset
constructed, net of interest earned on the invested proceeds over the same period. The
capitalization level is $20,000 for vehicles, and $100,000 for all else, including all other
equipment that is not a vehicle.
K Vacation and Sick Pay - are accrued as earned. Upon termination, employees are paid for all
unused vacation at their current hourly rates. After five to twenty years of employment, one half
of accumulated sick leave becomes vested, up to a maximum amount as specified under labor
contract provisions. The vested portion is available for current use or, if unused, is payable at
termination or retirement.
The long -term portion of the liability for compensated absences for governmental fund type
operations is recorded as compensated absences in the government -wide financial statements.
The portion expected to be permanently liquidated is recorded in the Health and Retirement
Benefits Internal Service Fund. Proprietary fund liabilities are recorded within their respective
funds.
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The changes of the compensated absences were as follows:
Compensated absences are liquidated by the fund that has recorded the liability. The long -term
portion of governmental activities compensated absences is liquidated primarily by the Health
and Retirement Benefits Internal Service Fund.
L. Property Tax Levy, Collection and Maximum Rates - State of California Constitution Article
XIII A provides that the combined maximum property tax rate on any given property may not
exceed 1% of its assessed value unless an additional amount for general obligation debt has been
approved by voters. Assessed value is calculated at 100% of market value as defined by Article
XIII A and may be adjusted by no more than 2% per year unless the property is sold, transferred,
or substantially improved. The State Legislature has determined the method of distribution of
receipts from a 1% tax levy among the counties, cities, school districts and other districts. The
County of San Mateo assesses properties, bills for and collects property taxes on the schedule that
follows:
Secured Unsecured
Valuation/lien dates January 1 January 1
Levy dates July 1 July 1
Due dates (delinquent as of) 50% on November 1 (December 10) July 1 (August 31)
50% on February 1 (April 10)
The term "unsecured" refers to taxes on personal property other than land and buildings. These
taxes are secured by liens on the property being taxed.
Property taxes levied are recorded as revenue and receivables when they are collected during the
fiscal year of levy or within 60 days of year -end.
57
Governmental
Business -Type
Activities
Activities
Total
Beginning Balance
$5,636,781
$516,151
$6,152,932
Additions
4,215,100
434,153
4,649,253
Payments
(3,824,133)
(401,850)
(4,225,983)
Ending Balance
$6,027,748
$548,454
$6,576,202
Current Portion
$3,537,997
$307,164
$3,845,161
Compensated absences are liquidated by the fund that has recorded the liability. The long -term
portion of governmental activities compensated absences is liquidated primarily by the Health
and Retirement Benefits Internal Service Fund.
L. Property Tax Levy, Collection and Maximum Rates - State of California Constitution Article
XIII A provides that the combined maximum property tax rate on any given property may not
exceed 1% of its assessed value unless an additional amount for general obligation debt has been
approved by voters. Assessed value is calculated at 100% of market value as defined by Article
XIII A and may be adjusted by no more than 2% per year unless the property is sold, transferred,
or substantially improved. The State Legislature has determined the method of distribution of
receipts from a 1% tax levy among the counties, cities, school districts and other districts. The
County of San Mateo assesses properties, bills for and collects property taxes on the schedule that
follows:
Secured Unsecured
Valuation/lien dates January 1 January 1
Levy dates July 1 July 1
Due dates (delinquent as of) 50% on November 1 (December 10) July 1 (August 31)
50% on February 1 (April 10)
The term "unsecured" refers to taxes on personal property other than land and buildings. These
taxes are secured by liens on the property being taxed.
Property taxes levied are recorded as revenue and receivables when they are collected during the
fiscal year of levy or within 60 days of year -end.
57
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
M. Land held far development - is stated at the lower of historical cost or net realizable value (equal
to agreed upon sales price if a disposition and development agreement has been reached with a
developer).
N. Unbilled Services - for the Sewer Rental Enterprise Fund are accrued at year -end.
O. Use of Estimates - The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the
dates of the financial statements and the reported amounts of revenues and expenditures /expenses
during the reporting periods. Actual results could differ from those estimates.
P. Referred OutflowsAn lows of Resources - In addition to assets, the statement of financial
position or balance sheet reports a separate section for deferred outflows of resources. This
separate financial statement element, deferred outflows of resources, represents a consumption of
net position or fund balance that applies to a future period(s) and so will not be recognized as an
outflow of resources (expense /expenditure) until then. In addition to liabilities, the statement of
financial position or balance sheet reports a separate section for deferred inflows of resources.
This separate financial statement element, deferred inflows of resources, represents an acquisition
of net position or fund balance that applies to a future period(s) and so will not be recognized as
an inflow of resources (revenue) until that time.
Q. New Accounting Pronouncements
Governmental Accounting Standards Board (GASB) Statement No. 72 — In February 2015,
GASB issued Statement No. 72, Fair Value Measurement and Application. The intention of this
Statement is to provide guidance for determining a fair value measurement for financial reporting
by requiring measurement of certain assets and liabilities at fair value using a consistent and more
detailed definition of fair value and accepted valuation techniques.
Governmental Accounting Standards Board (GASB) Statement No. 76 — The Hierarchy of
Generally Accepted Accounting Principles for State and Local Governments. The objective of
this statement is to reduce the GAAP hierarchy to two categories of authoritative GAAP from the
four categories under GASB Statement No. 55. The statement is effective for the periods
beginning after June 15, 2015, or the 2015 -2016 fiscal year.
Governmental Accounting Standards Board (GASB) Statement No. 79 — Certain External
Investment Pools and Pool Participants. The objective of this Statement is to address for
certain external investment pool and their participants the accounting and financial reporting
implications that result from changes in the regulatory provisions referenced by previous
accounting and financial reporting standards. This statement is effective for the periods
beginning after December 15, 2015, or the 2015 -2016 fiscal year.
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued}
R. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The City
categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation
techniques used to measure fair value into three levels based on the extent to which inputs used in
measuring fair value are observable in the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs — other than quoted prices included within level I — that are observable
for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the
fair value hierarchy, the measurement is considered to be based on the lowest priority level input
that is significant to the entire measurement.
NOTE 2 - CASH AND INVESTMENTS
The City's goal is to invest at the maximum yield, consistent with safety and liquidity, while
individual funds can process payments for expenditures at any time.
A. Policies
The City invests in individual investments and in investment pools. Individual investments are
evidenced by specific identifiable securities instruments, or by an electronic entry registering the
owner in the records of the institution issuing the security, called the book entry system. In order
to increase security, the City employs the Trust Department of a bank as the custodian of certain
City managed investments, regardless of their form.
California Law requires banks and savings and loan institutions to pledge government securities
with a market value of 110% of the City's cash on deposit, or first trust deed mortgage notes with
a market value of 150% of the deposit, as collateral for these deposits. Under California Law this
collateral is held in a separate investment pool by another institution in the City's name and
places the City ahead of general creditors of the institution.
F1i
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 2 - CASH AND INVESTMENTS (Continued)
The City's investments are carried at fair value, as required by generally accepted accounting
principles. The City adjusts the carrying value of its investments to reflect their fair value at each
fiscal year end, and it includes the effects of these adjustments in income for that fiscal year.
B. Classification
Cash and investments as of June 30, 2016 are classified in the financial statements as shown
below, based on whether or not their use is restricted under the terms of City debt instruments or
agency agreements.
Financial Statement Presentation:
Statement of Net Position:
City of South San Francisco:
Cash and investments available for operations
$119,036,371
Restricted cash and investments
415,958
Total Primary Government cash and investments
119,452,329
Statement of Fiduciary Assets:
Cash and investments available for operations
365,352
Restricted cash and investments
89,8682512
Total Fiduciary cash and investments
90,233,864
Conference Center:
Cash and investments available for operations
2,830,795
Restricted cash and investments
488,124
Total South San Francisco
Conference Center cash and investments
3,318,919
Total cash and investments
$213,005,112
The City does not allocate investments by fund. Each proprietary fund's portion of Cash and
Investments Available for Operations is in substance a demand deposit available to finance
operations, and is considered a cash equivalent in preparing the statement of cash flows.
•i
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 2 - CASH AND INVESTMENTS (Continued)
G 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:
Authorized Investment
U.S. Treasury Obligations
U.S. Agency Securities
Asset Backed Securities
Commercial Paper
Repurchase Agreements
Local Agency Investment Fund (IA1F)
Money Market Mutual Funds
Corporate Medium Term Notes
Supranational Obligations
Minimum Maximum Maximum
Maximum Credit Percentage Investment
Maturity Quality of Portfolio in One Issuer
5 years
N/A
No Limit
No Limit
5 years
N/A
25%
No Limit
5 years
AA
20%
No Limit
270 days
A1,P1
25%
5%
90 days
AA
No Limit
No Limit
Upon Demand
N/A
$65 million
No Limit
N/A
Highest
20%
10%
Rating
Category
5 years
A
30%
5%
5 years
AA
30%
100/0
The City of South San Francisco Conference Center Authority (Authority) maintains its cash and
investments separately from the City. The investment policy of the Authority contains no
limitations on the amount that can be invested in any one issue beyond that stipulated by the
California Government Code.
61
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 2 - CASH AND INVESTMENTS (Continued)
D. Investments Authorized by Debt Agreements
The Successor Agency to the former Redevelopment Agency must maintain required amounts o/f
cash and investments with trustees or fiscal agents under the terms of certain debt issues. These
funds are unexpended bond proceeds or are pledged as reserves to be used if the City fails to meet
its obligations under these debt issues. The California Government Code requires these funds to
be invested in accordance with City ordinance bond indentures or State statute. The table below
identifies the investment types that are authorized for investments held by fiscal agents. The table
also identifies certain provisions of these debt agreements:
62
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
274 days
Highest
No Limit
Rating
Category
State and Local Investment Pool
N/A
Highest
No Limit
Rating
Category
Guaranteed Investment Contracts
N/A
AAA
No Limit
(fully collateralized) (A)
Municipal Obligations
N/A
Highest
No Limit
Rating
Category
State Obligations
N/A
Two Highest
No Limit
Rating
Categories
(A) Guaranteed Investment Contracts
must be fully
collateralized
with U.S. Treasury
Obligations or U.S. Agency Obligations.
62
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 2 - CASH AND INVESTMENTS (Continued)
The City of South San Francisco Conference Center Authority must maintain required amounts of
cash and investments with trustees or fiscal agents under the terms of certain debt issues. These
funds are unexpended bond proceeds or are pledged as reserves to be used if the Authority fails to
meet its obligations under these debt issues. The California Government Code requires these
funds to be invested in accordance with the Authority's ordinance, bond indentures or State
statute. The table below identifies the investment types that are authorized for investments held
by fiscal agents. The table also identifies certain provisions of these debt agreements:
Authorized Investment Type
U.S. Treasury Obligations
U.S. Agency Securities
Negotiable Certificates of Deposit
Commercial Paper
Corporate Notes
Money Market
Guaranteed Investment Contracts (fully
collateralized) (A)
(A) Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury
Obligations or U.S. Agency Obligations.
E. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity
of its fair value to changes in market interest rates. The City also manages its interest rate risk is
by holding most investments to maturity, thus reversing unrealized market gains and losses.
W
Minimum
Maximum
Maximum
Credit
Percentage
Maturity
Quality
ofPortfolio
N/A
N/A
No Limit
N/A
N/A
10%
N/A
A
No Limit
N/A
Aaa
No Limit
N/A
A
No Limit
N/A
N/A
No Limit
N/A
AAA
No Limit
(A) Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury
Obligations or U.S. Agency Obligations.
E. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity
of its fair value to changes in market interest rates. The City also manages its interest rate risk is
by holding most investments to maturity, thus reversing unrealized market gains and losses.
W
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 2 - CASH AND INVESTMENTS (Continued)
Information about the sensitivity of the fair values of the City's investments (including
investments held by bond trustee) to market interest rate fluctuations is provided by the following
table that shows the distribution of the City's investments by maturity or earliest call date:
The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by
California Government Code Section 16429 under the oversight of the Treasurer of the State of
California. The City reports its investment in LAIF at the fair value amount provided by LAIF,
which is the same as the value of the pool share. The balance is available for withdrawal on
demand, and is based on the accounting records maintained by LAIF, which are recorded on an
amortized cost basis. Included in LAIF's investment portfolio are collateralized mortgage
obligations, mortgage - backed securities, other asset - backed securities, loans to certain state funds,
and floating rate securities issued by federal agencies, government- sponsored enterprises, United
States Treasury Notes and Bills, and corporations. At June 30, 2016, these investments have an
average maturity of 167 days.
Money market funds are available for withdrawal on demand and as of June 30, 2016 have an
average maturity of 34 days.
64
Remaining
maturity
Less than
One to Five
1 year
Years
Total
City and Fiduciary:
U.S. Agency Securities
Non - callable
$7,673,908
$31,044,405
$38,718,313
U.S. Treasury Notes
6,116,653
67,613,382
73,730,035
Local Agency Investment Fund
24,101,852
24,101,852
Money Market Funds
25,652,522
25,652,522
Guaranteed Investment Agreements
3,099,750
3,099,750
Corporate Notes
13,745,415
13,745,415
Asset Backed Securities
7,306,649
7,306,649
Supranational Obligations
3,593,064
3,593,064
South San Francisco Conference Center.
Local Agency Investment Fund
2,263,411
2,263,411
Money Market Funds
488,124
488,124
Total Investments
$66,296,470
$126,402,665
192,699,135
Cash in Banks and on Hand - City of South San Francisco
19,738,593
Cash in Banks and on Hand - South San Francisco Conference Center
567,384
Total Cash and Investments
$213,005,112
The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by
California Government Code Section 16429 under the oversight of the Treasurer of the State of
California. The City reports its investment in LAIF at the fair value amount provided by LAIF,
which is the same as the value of the pool share. The balance is available for withdrawal on
demand, and is based on the accounting records maintained by LAIF, which are recorded on an
amortized cost basis. Included in LAIF's investment portfolio are collateralized mortgage
obligations, mortgage - backed securities, other asset - backed securities, loans to certain state funds,
and floating rate securities issued by federal agencies, government- sponsored enterprises, United
States Treasury Notes and Bills, and corporations. At June 30, 2016, these investments have an
average maturity of 167 days.
Money market funds are available for withdrawal on demand and as of June 30, 2016 have an
average maturity of 34 days.
64
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 2 - CASH AND INVESTMENTS (Continued)
F. Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized
statistical rating organization. Presented below is the actual rating as of June 30, 2016, for each
of the Primary Government's investment types as provided by Moody's investment rating system,
except as noted:
Investment Type
City and Fiduciary:
U.S. Agency Securities
Non - callable
Money Market Funds
Corporate Notes
Asset Backed Securities
Supranational Obligations
South San Francisco Conference Center:
Money Market Funds
Totals
City and Fiduciary:
Not rated:
Guaranteed Investment Agreements
Local Agency Investment Fund
Exemptfrom credit rate disclosure:
U.S. Treasury Notes
South San Francisco Conference Center:
Not rated:
Local Agency Investment Fund
Total Investments
G. Concentration of Credit Risk
Aaa Aaa -mf Aal -Aa3 Al -A3 Total
$38,718,313
$38,718,313
$25,652,522
25,652,522
1,472,245 $2,036,170 $10,237,000
13,745,415
7,306,649
7,306,649
3,593,064
3,593,064
488124
488,124
$51,090,271 $26,140,646 $2,036,170 $10,237,000 89,504,087
3,099,750
24,101,852
73,730,035
2,263,411
$192,699,135
The City's investment policy contains limitations on the amount that can be invested in any one
issuer beyond that stipulated by the California Government Code. Investments in any one issuer,
other than U. S. Treasury securities, mutual funds, and external investment pools that represent
5% or more of total Entity -wide investments are as follows at June 30, 2016:
Issuer
Investment
Type
Amount
Federal National Mortgage Association U.S. agency securities $13,600,475
Federal Home Loan Bank U.S. agency securities 12,927,077
65
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
I NOTE 2 - CASH AND INVESTMENTS (Continued)
H. Fair Value Hierarchy
The City categorized its fair value measurements within the fair value hierarchy established by
generally accepted accounting principles. The hierarchy is based on the valuation inputs used to
measure fair value of assets. Level I inputs are quoted prices in an active market for identical
assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant
unobservable inputs.
The following is a summary of the fair value hierarchy of the fair value of investments of the City
as of June 30, 2016:
Investments by Fair Value Level:
City and Fiduciary:
U.S. Agency Securities
Non-callable
U.S. Treasury Notes
Local Agency Investment Fund
Corporate Notes
Asset Backed Securities
Supranational Obligations
South San Francisco Conference Center:
Local Agency Investment Fund
Totals
Investments Measured at Amortized Cost:
City and Fiduciary:
Money Market Mutual Funds
Guaranteed Investment Agreements
South San Francisco Conference Center:
Money Market Mutual Funds
Total Investments
Level 2 Total
$38,718,313
$38,718,313
73,730,035
73,730,035
24,101,852
24,101,852
13,745,415
13,745,415
7,306,649
7,306,649
3,593,064
3,593,064
2,263,411 2,263,411
$163,458,739 163,458,739
25,652,522
3,099,750
488,124
$192,699,135
All Investments classified in Level 2 of the fair value hierarchy, with the exception of the Local
Agency Investment Fund, are valued using various pricing techniques maintained by Interactive
Data Pricing, including benchmark curves, sector groupings and matrix pricing. These prices are
obtained from various pricing sources by our investment manager. The Local Agency Investment
Fund, classified in Level 2 of the fair value hierarchy, are valued using the fair value factor
provided by the Treasurer of the State of California, which is calculated as the fair value divided
by the amortized cost of the investment pool. Money market funds and guaranteed investment
agreements were reported at amortized cost.
66
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 3 - CAPITAL ASSETS
A. Capital Asset Changes — Changes in capital assets during the fiscal year consist of:
Balance Balance
June 30, 2015 Additions Retirements Adjustments Transfers June 30, 2016
Governmental activities
Capital assets not being depreciate&
Land $47,563,435 $47,563,435
Construction in Progress 18,356,005 $8,587,722 ($259,605) 26,684,122
Total capital assets not being depreciated 65,919,440 8,587,722 (259,605) 74,247,557
Capital assets being depreciated:
(2,253,800) 83,745
Buildings and Improvements
84,955,957
Infrastructure - Streets
183,079,365
Infrastructure - Storm Drains
8,927,492
Infrastructure - Traffic Control Devices
5,138,138
Equipment and Vehicle
6,454,247 ($66,248)
Furniture and Fixtures
1,837,554
Total capital assets being depreciated 290,392,753 (66,248)
Less accumulated depreciation for:
Buildings and Improvements
Infrastructure - Streets
Infrastructure - Storm Drains
Infrastructure - Traffic Control Devices
Equipment and Vehicle
Furniture and Fixtures
Total accumulated depreciation
84,955,957
183,079,365
8,927,492
5,138,138
6,387,999
1,837,554
290,326,505
(30,480,269)
(2,253,800) 83,745
(32,650,324)
(85,152,103)
(5,331,486)
(90,483,589)
(2,753,061)
(204,500)
(2,957,561)
(2,403,122)
(183,199)
(2,586,321)
(5,937,788)
(124,200) 66,248 2,707
(5,993,033)
(1,414,762)
(31,152)
(1,445,914)
(128,141,105)
(8,128,337) 66,248 86,452
(136,116,742)
Net Governmental Fund
Capital Assets Being Depreciated 162,251,648 (8,128,337) 86,452
Internal Service Fund Capital Assets
Capital assets not being depreciated:
Construction in Progress 34,854 103,736
Total capital assets not being depreciated 34,854 103,736
Capital assets being depreciated
Equipment and Vehicle 13,146,500 409,685 (191,062)
Accumulated depreciation (8,048,833) (722,185) 191,062
154,209,763
($34,854) 103,736
(34,854) 103,736
34,854 13,399,977
(8,579,956)
Net Internal Service Fund Capital Assets
Being Depreciated 5,097,667 (312,500) 34,854 4,820,021
Governmental activity capital assets, net $233,303,609 $250,621 ($173,153) $233,381,077
roY
�
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 3 - CAPITAL ASSETS (Continued}
Business -type activities
Capital assets, not being depreciated:
Land
Construction in Progress
Total capital assets not being depreciated
Capital assets being depreciated:
Buildings and Improvements
Clean Water Facilities and Lines
Infrastructure - Storm Drains
Infrastructure - Streets
Equipment and Vehicle
Furniture and Fixtures
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings and Improvements
Clean Water Facilities and Lines
Infrastructure - Storm Drains
Infrastructure - Streets
Equipment and Vehicle
Furniture and Fixtures
Total accumulated depreciation
Net capital assets being depreciated
Business -type activity capital assets, net
Component Unit:
South San Francisco Conference Center
Buildings and Improvements
Furniture and Fixtures
Machinery and equipment
Total:
Less accumulated depreciation
Component unit, net
Balance
Balance
June 30, 2015 Additions
June 30, 2016
$1,396,758
$1,396,758
7,138,268 $4,973,315
12,111,583
8,535,026 4,973,315
66,715,639
75,522,774
4,773,977
7,377,546
11,179,118
31,154
165,600,208
13,508,341
66,715,639
75,522,774
4,773,977
7,377,546
11,179,118
31,154
165,600,208
(12,924,189)
(1,619,770)
(14,543,959)
(23,501,744)
(1,888,069)
(25,389,813)
(556,962)
(159,132)
(716,094)
(1,211,981)
(209,570)
(1,421,551)
(9,647,314)
(185,759)
(9,833,073)
(31,154)
(31,154)
(47,873,344)
(4,062,300)
(51,935,644)
117,726,864
(4,062,300)
113,664,564
$126,261,890
$911,015
$127,172,905
Balance
Balance
June 30, 2015
Additions Retirements
June 30, 2016
$10,531,390
$329,141 ($206,433)
$10,654,098
701,402
20,616 (7,860)
714,158
237,802
13,465 (44,371)
206,896
11,470,594
363,222 (258,664)
11,575,152
(7,674,870)
(455,271) 258,664
(7,871,477)
$3,795,724
($92,049)
$3,703,675
B. Capital Asset Contributions - Some capital assets may have been acquired using federal and
State grant funds, or were contributed by developers or other governments. Contributed capital
assets are valued at their estimated acquisition value on the date contributed. GASB Statement 34
requires that these contributions be accounted for as revenues at the time the capital assets are
contributed.
.:+
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 3 - CAPITAL ASSETS (Continued)
C. Depreciation Allocation - Depreciation expense is charged to functions and programs based on
their usage of the related assets. The amounts allocated to each function or program are as
follows:
Governmental Activities
$3,790,710
Governmental functions
257,063
General government
$636,742
Fire
379,703
Police
22,721
Public works
6,553,821
Parks and recreation
373,031
Library
60,452
Economic and community development
101,867
Total Governmental Functions
8,128,337
Internal Service Funds
722,185
Total Governmental Activities
$8,850,522
Business -Type Activities
Sewer Enterprise
$3,790,710
Parking District
257,063
Storm Water
14,527
Total Business -Type Activities
$4,062,300
NOTE 4 - INTER -FUND TRANSACTIONS
A. Internal Balances
Internal balances are presented in the Entity -wide financial statements only. They represent the
net interfund receivables and payables remaining after the elimination of all such balances within
governmental and business -type activities.
B. Inter fund Receivables and Payables
Amounts due to or due from other funds reflect inter -fund balances for services rendered or short-
term loans expected to be repaid in the next fiscal year.
Due From Other Fund
Due to Other Fund
A mnnnt
General Fund Supplemental Law Enforcement Services
Special Revenue Fund $100
•e
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 4 - INTER -FUND TRANSACTIONS (Continued)
C. Transfers
Resources may be transferred from one City fund to another. Transfers routinely fund capital
projects or capital outlays, lease or debt service payments, and operating expenses. The purpose
of majority of these transfers is to reimburse a fund that has made an expenditure on behalf of
another fund. Some expenditures reimbursed were for capital projects, debt service, maintenance
and operating expenses, and contributions for post - employment benefits.
Transfers between funds during the fiscal year ended June 30, 2016 were as follows:
FROM FUND (OUT) TO FUND ON) AMOUNT
General Fund Capital Improvement Capital Projects Fund $1,587,763
Storm Water Enterprise Fund 250,000
Health and Retirement Benefits Internal Service Fund 4,240,000
Non -major Governmental Funds 5,000
Fast of 101 Sewer Impact Fees Capital Project Fund
Fast of 101 Traffic Impact Fees Capital Project Fund
Sewer Enterprise Fund
Capital Improvement Capital Projects Fund
Developer Deposit Capital Projects Funds Capital Improvement Capital Projects Fund
Capital Infrastructure Reserve Capital Projects Fund Capital Improvenent Capital Projects Fund
Non -major Governmental Funds
Sewer Enterprise Fund
General Fund
Capital Improvement Capital Projects Fund
Storm Water Enterprise Fund
General Fund
Capital Improvement Capital Projects Fund
4,716
475,073
269,155
527,812
1,976,848
3,176,491
680,841
24
15,986
Internal Service Fund
Equipment Replacement Fund Capital Improvement Capital Projects Fund 108,923
Total
m
$13,318,632
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
A. Current Year Transactions and Balances
A summary of governmental and business -type activities transactions for the fiscal year ended
June 30, 2016 follows:
71
Authorized
and
Balance at
Balance at
Current
Issued
June 30, 2015
Retirement
June 30, 2016
Portion
Governmental Activities:
2007 Loans Payable to the Successor Agency (1)
$11,370,152
$656,000
$10,714,152
Total Governmental Activities Debt
11,370,152
656,000
10,714,152
Capital Leases (2):
2008 Two Fire Trucks
357,213
97,059
260,154
$100,983
2010 Two Ambulances
216,115
84,156
131,959
87,190
2010 Two Fire Trucks
669,691
111,296
558,395
115,736
2013 Fire Track
1,057,513
120,378
937,135
123,576
2014 Sweeper
486,040
134,685
351,355
137,991
Total Capital Leases
2,786,572
547,574
2,238,998
565,476
Net Governmental Long -Term Debt
$14,156,724
$1,203,574
$12,953,150
$565,476
Business -Type Activities:
1999 State Water Resources Loan, 2.6 %, due 8(1!22 (3)
$47,721,252
$23,371,118
$2,665,772
$20,705,346
$2,735,082
2004 State Water Resources Loan, 2.5 %, due 1(1!27 (3)
21,258,529
13,339,412
1,068,566
12,270,846
1,095,280
2008 State Water Resources Loan, 2.4 %, (4)
9,164,505
6,833,083
416,443
6,416,640
426,438
2005 Sewer Revenue Bonds, 2.75 to 5.0 %, due 04/30126 (5)
6,000,000
4,120,000
270,000
3,850,000
280,000
Total Enterprise Fund Long -Term Debt
$84,144,286
$47,663,613
$4,420,781
$43,242,832
$4,536,800
Component Unit - Conference Center:
2003 Revenue Bonds, 2.25% to 4.0 %, due 9(1!18 (6)
$5,865,000
$1,740,000
$410,000
$1,330,000
$425,000
Unamortized refunding loss on 2003 bonds
(77,334)
(26,515)
(50,819)
Total Conference Center
$5,865,000
$1,662,666
$383,485
$1,279,181
$425,000
71
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 5 - LONG -TERM DEBT (Continued}
(1) As of June 30, 2016, the Oyster Point Improvements Impact Fund owed Successor Agency
(formerly the Merged Redevelopment Project Area Capital Project Fund) for developer fees in the
amount of $10,714,152 for the Flyover and Hookramps Projects that were completed in prior years.
The outstanding balance will be paid off from the future developer fees. With the dissolution of the
Agency effective January 31, 2012, the Successor Agency assumed the asset which the City is to
repay. This payable is recorded as a long -term obligation (see also Note 13). Prior to the
dissolution of all Redevelopment Agencies in California by the State, the former Redevelopment
Agency (Agency) advanced $12,176,207 to the Oyster Point Improvement Impact Fee Capital
Projects Fund (the Oyster Point Fund). The impact fees are collected according to a fee
methodology adopted under the terms of AB 1600. The fees are assessed against commercial
development in a specific geographic area that is primarily east of Highway 101 to repay the former
Agency for the funds it advanced to the Oyster Point Fund to pay for freeway interchange
improvements at Highway 101 and Oyster Point Blvd, and are assessed per an adopted Engineering
report's formula that measures each new development's impact on the area's trip traffic. While the
former Agency advanced the funds, the impact fee was put in place specifically to charge future
developers for their share of traffic trips generated prior to the construction of the improvements.
When the Agency was dissolved, the Successor Agency, and therefore, all local taxing entities, are
entitled to receive future Oyster Point Impact fees collected by the City from developers. Future
developers, not the City of South San Francisco, are legally obligated to pay the future fees until the
liability owed to the Successor Agency is paid off as long as the fee continues to be levied and is in
place. The repayment has significantly slowed since 2007, as development has subsided and fees
assessed have therefore dropped. Management believes it may take 10 -30 years or more before the
Successor Agency is fully paid back.
(2) The City has entered into long -term capital leases with various financing agencies. Under
these capital leases, all leased assets shall be distributed to the City at the end of the lease terms
and shall thereafter remain the sole property of the City. Therefore, these capital leases have been
recorded at the present value of the future minimum lease payments at the date of inception of the
lease, and the corresponding assets have been included in the Statement of Net Position as
appropriate. Capital lease payments are made from revenues of the Equipment Replacement Internal
Service Fund and the General Fund.
(3) The two loans were authorized by the State Water Resources Control Board to improve and
expand the City's wastewater treatment plant. Loan proceeds were issued as the projects
progressed and debt service payments commenced one year after project completion. Sewage
treatment user fees support the debt service payments.
(4) State Water Resources Control Board Loan — In November 2007, the City approved the
$11.8 million loan agreement with State Water Resources Control Board (SWRCB) to finance the
City's Wet Weather Program project. Under the terms of the contract, the City has agreed to
repay $11.8 million to the State in exchange for receiving $9.2 million in proceeds to be used to
fund the Project. The difference between the repayment obligation and proceeds amounted to
$2.6 million and represents in- substance interest on the outstanding balance. Debt service
payments commenced on August 15, 2009.
72
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 5 - LONG -TERM DEBT (Continued)
(5) On October 25, 2005, the California Statewide Communities Development Authority issued
2005D Water and Wastewater Revenue Bonds. The City participated in the pooled bond sale
and the City's portion of debt is $6,000,000. Proceeds were used to finance sewer system capital
improvement. The principal payment on the debt commenced in October 2006 and is due each
October 1. Final principal payment is due on October 1, 2026. Interest payment at the rate of
4.457% is payable semi - annually each April 1 and October 1.
The 2005 Water and Wastewater Revenue Bonds are secured by a pledge of net revenues of the
City's Enterprise system. Net Revenues available for debt service amounted to $12.1 million
which represented coverage of 26.9 over the $450,566 in debt service.
(6) On June 1, 2003, the City of South San Francisco Capital Improvement Financing Authority
(CIFA) issued $5,865,000 of 2003 Revenue Bonds. The CIFA was created through a joint
exercise of powers agreement between the City and the City of South San Francisco Financing
Authority for the purpose of obtaining financing for capital improvements. The 2003 Revenue
Bonds are obligations of the CIFA although the Authority is required to make the bond principal
and interest payments in return for the use and ownership of the improvements to the leased
buildings that comprise the Conference Center's facilities. The Authority has pledged the $2.50
tax imposed on the City's hotel occupants on a per day per room basis as the sole source of
repayment of these obligations. The 2003 revenue bonds are, in substance, obligations of the
Authority and have therefore been recorded as such in these discretely presented component unit
financial statements.
The 2003 revenue bonds were issued for the purpose of refunding the 1993 revenue bonds. The
refunding reduced required interest payments and did not extend the maturities on the bonds. The
advance refunding reduced the Authority's total debt service payments by $846,859 and resulted
in an accounting loss of $401,345, which has been deferred in accordance with GASB Statement
No. 23, Accounting and Financial Reporting for Refunding of Debt Reported by Proprietary
Activities. This loss is being amortized over the remaining life of the old debt and the remaining
balance is reported as a deferred outflow of resources. The 2003 revenue bonds bear interest rates
ranging from 2.25% to 4.00% and mature on September 1, 2018.
73
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 5 - LONG -TERM DEBT (Continued)
B. Debt Service Requirements
Future debt service requirements, including interest and capital leases, but excludes the 2007 and
2008 Loans payable to the Redevelopment Successor Agency at June 30, 2016, were as follows:
For the Year
Governmental Activities
Business -Type
Activities
Component Unit
Conference Center Authority
Ended June 30
Principal
Interest
Principal
Interest
Principal
Interest
2017
$565,476
$65,943
$4,536,800
$566,580
$425,000
$51,581
2018
538,421
47,431
4,660,530
1,060,207
445,000
35,644
2019
381,483
30,743
4,782,037
942,915
460,000
18,400
2020
263,839
20,330
4,906,394
822,328
2021
204,251
11,582
5,038,676
698,146
2022 -2026
285,528
9,484
17,222,442
1,562,106
2026 -2029
2,095,953
57,753
Totals
$2,238,998
$185,513
$43,242,832
$5,710,035
$1,330,000
$105,625
Certificates of Participation and Capital Leases are issued for the purpose of financing the
construction or acquisition of projects defined in each leasing arrangement. Projects are leased to
the City for lease payments which, together with unspent proceeds of the leasing arrangement,
will be sufficient to meet the debt service obligations of the leasing arrangement. At the
termination of the leasing arrangement, title to the project will pass to the City.
Leasing arrangements are similar to debt; they allow investors to participate in a share of
guaranteed payments which are made by the City. Because they are similar to debt, the present
value of the total of the payments to be made by the City is recorded as long -term debt. The
City's leasing arrangements are included in long term obligations discussed above.
A summary of capital assets leased through the issuance of leasing arrangements follows:
Original
Leasing Arrangement Fund /Activity Cost
Capital Leases Governmental Activity $5,842,799
/E'
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
! POSITION 1 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.
VIR
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 6 — NET POSITION AND FUND BALANCE (Continued)
Assigned fund balances are amounts constrained by the City's intent to be used for a specific
purpose, but are neither restricted nor committed. Intent is expressed by the City Council or its
designee and may be changed at the discretion of the City Council or its designee. The City
Council had delegated authority to the Finance Director to assign fund balances which are not
otherwise restricted or committed. This category includes nonspendables, when it is the City's
intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of
Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or
committed.
Unassigned fund balance represents residual amounts that have not been restricted, committed, or
assigned. This includes the residual general fund balance and residual fund deficits, if any, of other
governmental funds.
Minimum Fund Balance Policies - The City's Reserve Policy is to have the General Fund
Reserves equal to at least two months of operating revenues of 15% and up to 20 %, which is in
alignment with GFOA best practices. Included is an emergency reserve that reflects 2% of the
general fund operating expenditures budget as well as an economic contingency which is 7% of
general fund revenues. Funds in excess of these requirements will continue to be earmarked for
paying down long -term liabilities, such as the Retiree Health/Other Post - Employment Benefits
(OPEB) or for Infrastructure and Facilities Replacement needs.
Detailed classifications of the City's Fund Balances, as of June 30, 2016, are below:
(Continued)
►jol
Capital Project Funds
Low and Moderate
East of 101
General
Income Housing
Capital
Sewer
Fund BalanceClassificatiions
Fund
Assets
Improvement
IcapaetFees
Nons pendables:
Items not in spendable form:
Inventory and prepaid items
$33,580
Total Nons pendable Fund Balances
33,580
Restricted for:
Sewer Impact Fees
$503,766
Low and moderate housing projects
$3,461,807
Total Restricted Fund Balances
3,461,807
503,766
Committed for:
Capital projects
2,549,027
Local services
1,105 256
Total Committed Fund Balances
3,654,283
Assigned to:
Capital projects
1,578,153
$367,023
Total Assigned Fund Balances
1,578,153
367,023
Unassigned:
General fund
17,751,169
Total Unassigned Fund Balances
17,751,169
Total Fund Balances
$23,017,185
$3,461,807
$367,023
$503,766
(Continued)
►jol
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 6 — NET POSITION AND FUND BALANCE (Continued)
East of 101 Capital Other
Traffic Child Care Developer Infrastructure Governmental
Fund Balance Classifications (continued) Impact Fees Impact Fees Deposit Reserve Fund Funds
Restricted for:
Traffic impact fees projects
Child Care impact fees projects
Developer deposit fees projects
Capital infrastructure projects
Gas Tax projects
Developer contributions projects
Community Development Block Grant projects
Maintenance districts projects
Transportation sales tax projects
City programs projects
Other Special Revenues projects
Capital projects activities
Total Restricted Fund Balances
Total Fund Balances
C. Net Deficit
$7,213,253
$2,874,841
$72,884
$17,638,385
$1,277,733
2,881,055
897,682
2,153,081
1,276,606
4,194,556
5,182,175
3,311,073
7,213,253 2,874,841 72,884 17,638,385 21,173,961
$7,213,253 $2,874,841 $72,884 $17,638,385 $21,173,961
The Health and Retirement Benefits internal Service Fund had net deficit in the amount of
$18,159,358 at June 30, 2016. This deficit is attributable to the Net OPEB Obligation described in
Footnote 9.
D. Encumbrances
The City uses an encumbrance system as an extension of normal budgetary accounting for
governmental funds. Under this system, purchase orders, contracts, and other commitments for
the expenditure of monies are recorded in order to reserve that portion of applicable
appropriations. Encumbrances outstanding at year -end are recorded as restricted, committed or
assigned fund balance, depending on the classification of the resources to be used to liquidate the
encumbrance, since they do not constitute expenditures or liabilities. Unexpended appropriations
lapse at year -end and must be reappropriated in the following year. Encumbrances outstanding in
governmental funds as of June 30, 2016, were as listed below:
Governmental funds: Amount
General Fund $1,401,976
Capital Improvement Capital Projects Fund 2,885,611
Other Governmental Funds 325,915
Total $4,613,502
77
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 7 — PENSION PLANS
For purposes of measuring the net pension liability and deferred outflows/inflows of resources
related to pensions, and pension expense, information about the fiduciary net position of the
City's California Public Employees' Retirement System (CalPERS) plans (Plans) and additions
to /deductions from the Plans' fiduciary net position have been determined on the same basis as
they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including
refunds of employee contributions) are recognized when due and payable in accordance with the
benefit terms. Investments are reported at fair value.
A. General Information about the Pension Plans
Plan Descriptions — All qualified permanent and probationary employees are eligible to
participate in the City's separate Safety (police and fire) and Miscellaneous (all other) Plans,
agent multiple- employer defied benefit pension plans administered by the California Public
Employees' Retirement System (CalPERS), which acts as a common investment and
administrative agent for its participating member employers. Benefit provisions under the Plans
are established by State statute and City resolution.
CalPERS issues publicly available reports that include a full description of the pension plans
regarding benefit provisions, assumptions and membership information that can be found on the
CalPERS website.
Benefits Provided — CalPERS provides service retirement and disability benefits, annual cost of
living adjustments and death benefits to plan members, who must be public employees and
beneficiaries. Benefits are based on years of credited service, equal to one year of full time
employment. Members with five years of total service are eligible to retire at age 50 with
statutorily reduced benefits. All members are eligible for non -duty disability benefits after 10
years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957
Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments
for each plan are applied as specified by the Public Employees' Retirement Law.
The Plans' provisions and benefits in effect at June 30, 2016, are summarized as follows:
78
Mscellaneous
Classic Plan
Classic Plan
PEPRA Plan
Priorto
After
On or after
Hire date
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
50-60
52-62
Monthly benefits, as a % of eligible compensation
2.0% to 2.7010
1.092 °!o to 2.418%
1.0010 to 2.5%
Required employee contribution rates
8%
7%
6.5%
Required employer contribution rates
25.053%
25.053%
25.053%
78
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 7 — PENSION PLAN (Continued)
Employees Covered — As of the June 30, 2014 actuarial valuation date and the June 30, 2015
measurement date, the following employees were covered by the benefit terms for the Plans:
Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits 401 265
Inactive employees entitled to but not yet receiving benefits 297 107
Active employees 247 151
Total 945 523
Contributions — Section 20814(c) of the California Public Employees' Retirement Law requires
that the employer contribution rates for all public employers be determined on an annual basis by
the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding
contributions for both Plans are determined annually on an actuarial basis as of June 30 by
CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs
of benefits earned by employees during the year, with an additional amount to finance any
unfunded accrued liability. The City is required to contribute the difference between the
actuarially determined rate and the contribution rate of employees.
B. Net Pension Liability
The City's net pension liability for each Plan is measured as the total pension liability, less the
pension plan's fiduciary net position. The net pension liability of each of the Plans is measured
as of June 30, 2015, using an annual actuarial valuation as of June 30, 2014 rolled forward to
June 30, 2015 using standard update procedures. A summary of principal assumptions and
methods used to determine the net pension liability is shown below.
Actuarial Assumptions — For the measurement period ended June 30, 2015, the total pension
liabilities were determined by rolling forward the June 30, 2014 total pension liability. The June
30, 2014 total pension liabilities were based on the following actuarial methods and assumptions:
79
Safety
Classic Plan
Classic Plan
PEPRA Plan
Prior to
After
On or after
Hire date
April 25, 2010
Apri125, 2010
January 1, 2013
Benefit formula
3% @ 50
3%@55
23% @ 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 23%
Required employee contribution rates
9%
9%
12%
Required employer contribution rates
40.741%
40.741%
40.741%
Employees Covered — As of the June 30, 2014 actuarial valuation date and the June 30, 2015
measurement date, the following employees were covered by the benefit terms for the Plans:
Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits 401 265
Inactive employees entitled to but not yet receiving benefits 297 107
Active employees 247 151
Total 945 523
Contributions — Section 20814(c) of the California Public Employees' Retirement Law requires
that the employer contribution rates for all public employers be determined on an annual basis by
the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding
contributions for both Plans are determined annually on an actuarial basis as of June 30 by
CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs
of benefits earned by employees during the year, with an additional amount to finance any
unfunded accrued liability. The City is required to contribute the difference between the
actuarially determined rate and the contribution rate of employees.
B. Net Pension Liability
The City's net pension liability for each Plan is measured as the total pension liability, less the
pension plan's fiduciary net position. The net pension liability of each of the Plans is measured
as of June 30, 2015, using an annual actuarial valuation as of June 30, 2014 rolled forward to
June 30, 2015 using standard update procedures. A summary of principal assumptions and
methods used to determine the net pension liability is shown below.
Actuarial Assumptions — For the measurement period ended June 30, 2015, the total pension
liabilities were determined by rolling forward the June 30, 2014 total pension liability. The June
30, 2014 total pension liabilities were based on the following actuarial methods and assumptions:
79
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 7 — PENSION PLAN (Continued}
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increase
Investment Rate of Return
Post Retirement Benefit Increase
Mortality
Miscellaneous and Safety
June 30, 2014
June 30, 2015
Entry-Age Normal Cost Method
7.65%
2.75%
Varies by Entry Age and Service
7.65% Net of Pension Plan Investment Expenses,
includes Inflation
Contract COLA up to 2.75% until Purchasing Power
applies, 2.75% thereafter
Derived using CalPers Membership Data for all Funds
(1)
(1) The mortality table used was developed based on CalPERS' specific data. The table includes
20 years of mortality improvements using Society of Actuaries Scale BB. For more details
on this table, please refer to the 2014 experience study report.
All other actuarial assumptions used in the June 30, 2014 valuation were based on the results of a
January 2014 actuarial experience study for the period 1997 to 2011, including updates to salary
increase, mortality and retirement rates. Further details of the Experience Study can be found on
the CalPERS website.
Changes of Assumptions — GASB 68, paragraph 68 states that the long -term expected rate of
return should be determined net of pension plan investment expense, but without reduction for
pensions plan administrative expense. The discount rate of 7.50 percent used for the June 30,
2014 measurement date was net of administrative expenses. The discount rate of 7.65 percent
used for the June 30, 2015 measurement date is without reduction of pension plan administrative
expense. All other assumptions for the June 30, 2014 measurement date were the same as those
used for the June 30, 2015 measurement date.
Discount Rate — The discount rate used to measure the total pension liability was 7.65% for each
Plan. To determine whether the municipal bond rate should be used in the calculation of a
discount rate for each plan, CalPERS stress tested plans that would most likely result in a
discount rate that would be different from the actuarially assumed discount rate. Based on the
testing, none of the tested plans run out of assets. Therefore, the current 7.65% discount rate is
adequate and the use of the municipal bond rate calculation is not necessary. The long term
expected discount rate of 7.65% will be applied to all plans in the Public Employees Retirement
Fund (PERF). The stress test results are presented in a detailed report that can be obtained from
the CalPERS website.
R
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 7 — PENSION PLAN (Continued)
The long -term expected rate of return on pension plan investments was determined using a
building -block method in which best- estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each
major asset class.
In determining the long -term expected rate of return, Ca1PERS took into account both short -term
and long -term market return expectations as well as the expected pension fund cash flows. Such
cash flows were developed assuming that both members and employers will make their required
contributions on time and as scheduled in all future years. Using historical returns of all the
funds' asset classes, expected compound (geometric) returns were calculated over the short-term
(first 10 years) and the long -term (11 -60 years) using a building -block approach. Using the
expected nominal returns for both short-term and long -term, the present value of benefits was
calculated for each fund. The expected rate of return was set by calculating the single equivalent
expected return that arrived at the same present value of benefits for cash flows as the one
calculated using both short-term and long -term returns. The expected rate of return was then set
equivalent to the single equivalent rate calculated above and rounded down to the nearest one
quarter of one percent.
The table below reflects the long -term expected real rate of return by asset class. The rate of
return was calculated using the capital market assumptions applied to determine the discount rate
and asset allocation. These geometric rates of return are net of administrative expenses.
New
Strategic
Asset Class Allocation
Global Equity
51.0%
Global Fixed Income
19.0%
Inflation Sensitive
6.0%
Private Equity
10.0%
Real Estate
10.0%
Infrastructure and Forestland
2.0%
Liquidity
2.0%
Total 100%
(a) An expected inflation of 2.5% used for this period.
(b) An expected inflation of 3.0% used for this period.
81
Real Return Real Return
Years 1 - 10(a) Years 11 +(b)
5.25%
5.71%
0.99%
2.43%
0.45%
3.36%
6.83%
6.95%
4.50%
5.13%
4.50%
5.09%
-0.55%
-1.05%
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 7 — PENSION PLAN (Continued}
C. Changes in the Net Pension Liability
The changes in the Net Pension Liability for each Plan are as follows:
Miscellaneous Plan:
Balance at June 30, 2014
Changes in the year:
Service cost
Interest on the total pension liability
Changes of benefittemns
Chases of assumptions
Differences between actual and expected experience
Plan to plan resmuce movement
Contribution - employer
Contribution - employees
Net investment income
Benefit payments, including refunds of employee
contributions
Administrative expenses
Net changes
Balance at June 30, 2015
82
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability /(Asset)
$196,752,130 $143,740,988 $53,011,142
3,075,813
3,075,813
14,393,013
14,393,013
0
(3,374,655)
(3,374,655)
(1,567,798)
(1,567,798)
(50,555)
50,555
4,546,984
(4,546,984)
1,411,273
(1,411,273)
3,221,551
(3,221,551)
(10,407,243) (10,407,243) 0
(160,268) 160,268
2,119,130 (1,438,258) 3,557,388
$198,871,260 $142,302,730 $56,568,530
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 7 — PENSION PLAN (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate — The following
presents the net pension liability of the City for each Plan, calculated using the discount rate for
each Plan, as well as what the City's net pension liability would be if it were calculated using a
discount rate that is 1- percentage point lower or 1- percentage point higher than the current rate:
Miscellaneous Safety
I% Decrease 6.65% 6.65%
Net Pension Liability $81,898,678 $109,770,401
Current Discount Rate 7.65% 7.65%
Net Pension Liability $56,568,530 $73,473,585
1% Increase 8.65% 8.65%
Net Pension Liability $35,564,019 $43,669,692
Pension Plan Fiduciary Net Position — Detailed information about each pension plan's fiduciary
net position is available in the separately issued Ca1PERS financial reports.
D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2016, the City recognized negative pension expense of $3,196,065
and $4,292,567 for the Miscellaneous and Safety Plans, respectively. At June 30, 2016, the City
reported deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Miscellaneous Plan:
Pension contributions subsequent to measurement date
Changes of assumptions
Differences between actual and expected experience
Net differences between projected and actual earnings on
plan investments
Total
83
Deferred Outflows Deferred Inflows
of Resources of Resources
$5,399,856
($2,024,793)
(940,679)
(1,454,500)
$5,399,856 ($4,419,972)
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 7 — PENSION PLAN (Continued)
Safety Plan:
Pension contributions subsequent to measurement date
Changes of assumptions
Differences between actual and expected experience
Net differences between projected and actual earnings on
plan investments
Total
Deferred Outflows Deferred Inflows
of Resources of Resources
$8,581,011
($3,420,806)
(3,018,849)
(1,639,135)
$8,581,011 ($8,078,790)
$13,937,994 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended
June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized as pension expense as follows:
Miscellaneous Plan:
Year Ended
June 30
Annual
Amortization
2017
($2,964,640)
2018
(1,976,150)
2019
(987,658)
2020
1,508,476
2021
-
Thereafter
-
Safety Plan:
Year Ended
Annual
June 30
Amortization
2017
($3,822,025)
2018
(3,822,025)
2019
(2,534,094)
2020
2,099,354
2021
-
Thereafter
-
84
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
A. .Deferred Compensation Plan
City employees may defer a portion of their compensation under a City sponsored Deferred
Compensation Plan created in accordance with Internal Revenue Code Section 457. Under this
Plan, participants are not taxed on the deferred portion of their compensation until it is distributed
to them; distributions may be made only at termination, retirement, death or in an emergency as
defined by the Plan.
The laws governing deferred compensation plan assets require plan assets to be held by a Trust
for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under
these plans are not the City's property and are not subject to City control, they have been
excluded from these financial statements.
NOTE 9 — POST - EMPLOYMENT BENEFITS
The City provides certain health care benefits for all employees who retire after attaining age 50
with at least five years of service or disability at any age. The City provides certain health care
benefits for those employees hired prior to April 25, 2010. In order to reduce the City's OPEB
obligations over time, the City changed to a defined contribution post retirement health plan for
employees hired as of April 25, 2010 or after. For those new hires, the City is now providing a
medical after retirement health plan (MARA), and contributes 1.5% of salary for those plans.
Benefits are provided as authorized by various memorandums of understanding entered into by the
City and its employees. As of June 30, 2016, approximately 365 retirees were eligible to receive
benefits. The City provides fully paid medical coverage under various health care plans. A summary
of eligibility and retiree contribution requirements are shown below by bargaining unit:
85
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 9 — POST - EMPLOYMENT BENEFITS (Continued}
Eligibility
* Hired < 4/2512010
* Age 50 and 5 years City service or disability at any age after 5
years service
Medical Benefit
* City pays single premium up to largest HMO single premium.
Cap for 201512016:
- $1,046.62/month pre -65 (Blue Shield)
- $548.81/month post -65 Medical eligible (Blue Shield)
- $1,669.831 month post -65 not Medicare eligible (Kaiser)
* Medicare ineligible retirees allowed to stay in their
pre - Medicare premium plans after age 65
* City pays premium and reimburses Medicare Part B hired
before 412512010 only
Surviving Spouse
* Participation with premium payment
Benefit
* AFSCME, Local 1569, Mid - Management, IAFF
- surviving spouses covered 2 months following death of retiree
Dental, Vision, &
None
Life
During fiscal year 2009, the City implemented the provisions of Governmental Accounting
Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for
Postemployment Benefits Other Than Pensions. This Statement establishes uniform financial
reporting standards for employers providing postemployment benefits other than pensions
(OPEB). The provisions of this statement are applied prospectively and do affect prior years
financial statements. Required disclosures are presented below. The City offers retirees a single -
employer postemployment benefits plan that is administered by the City. The City's Health and
Retirement Benefits Fund hold assets designated for the payment of City's OPEB obligations.
The City joined the California Employers' Retiree Benefit Trust (CERBT), an agent multiple -
employer plan administered by CALPERS, consisting of an aggregation of single - employer
plans.
A. Funding Policy and Actuarial Assumptions
The annual required contribution (ARC) was determined as part of a June 30, 2015 actuarial
valuation using the entry age normal actuarial cost method. This is a projected benefit cost
method, which takes into account those benefits that are expected to be earned in the future as
well as those already accrued. The actuarial assumptions included (a) 4.0% investment rate of
return if not pre - funded and assets remain in City's own investment portfolio; 5.22% if pre -
funded with CERBT, (b) 3.25% projected annual salary increase, (c) 3.0% inflation rate.
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 9 — POST - EMPLOYMENT BENEFITS (Continued)
The actuarial assumptions also included the following health care cost trend:
Year
Non - Medicare
Medicare
2016
Actual Premiums
2017
Actual Premiums
2018
6.5%
6.7%
2019
6.0%
6.1%
2020
5.5%
5.6%
2021+
5.0%
5.0%
The actuarial methods and assumptions used include techniques that smooth the effects of short-
term volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial
calculations reflect a long -term perspective and actuarial valuations involve estimates of the value
of reported amounts and assumptions about the probability of events far into the future.
Actuarially determined amounts are subject to revision at least biannually as results are compared
to past expectations and new estimates are made about the future. The City's OPEB unfunded
actuarial accrued liability is being amortized as a level percentage of projected payroll on a closed
basis using a 22 -year amortization period.
B. Funding Progress and Funded Status
Generally accepted accounting principles permits contributions to be treated as OPEB assets and
deducted from the Actuarial Accrued Liability (AAL) when such contributions are placed in an
irrevocable trust or equivalent arrangement. In fiscal year 2016, the City made contribution less
than the ARC as presented below:
Annual required contribution (ARC) $6,449,000
Interest on net OPEB Obligation 1,145,000
Adjustment to annual required contribution (2,417,000)
Annual OPEB cost 5,177,000
Contributions made:
Benefits paid 2,878,000
Implied subsidy payments 8,000
Prefnnding contribution to trust 1,197,000
Total contributions 4,083,000
Change in net OPEB Asset / (Obligation) (1,094,000)
Net OPEB Asset / (Obligation) at June 30, 2015 (23,810,700)
Net OPEB Asset / (Obligation) at June 30, 2016 ($24,904,700)
87
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 9 — POST - EMPLOYMENT BENEFITS (Continued)
The Plan's annual required contributions and actual contributions for the year ended June 30,
2016 is set forth below (in thousands):
Funded Status and Funding Progress — As of June 30, 2015, the most recent actuarial valuation
date, the plan was 21.9% funded. The Actuarial Accrued Liability (AAL) for benefits was
$73,752,000 and the Actuarial Value of Plan Assets was $16, 175,000 resulting in an Unfunded
Actuarial Accrued Liability (UAAL) of $57,577,000. The covered payroll (annual payroll of active
employees covered by the plan) was $24,471,000 and the ratio of UAAL to the covered payroll was
235.3% percent.
The schedule of funding progress presented immediately following the financial statements as
required supplementary information, presents multi -year trend information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued
liability for benefits.
A separate audited GAAP basis for this post - employment benefit plan report is not available.
The City participates in the jointly governed organizations discussed below through formally
organized and separate entities established under the Joint Exercise of Powers Act of the State of
California. As separate legal entities, these entities exercise full powers and authorities within the
scope of the related Joint Powers Agreements including the preparation of annual budgets,
accountability for all funds, the power to make and execute contracts and the right to sue and be
sued. Each joint organization is governed by a board consisting of representatives from member
municipalities. Each board controls the operations of the respective joint organization, including
selection of management and approval of operating budgets, independent of any influence by
member municipalities beyond their representation on that board. Obligations and liabilities of
this joint organization are not the City's responsibility and the City does not have an equity
interest in the assets of each joint organization except upon dissolution of the joint organization.
88
Percentage of
Annual OPEB
Actual
Annual OPEB
Net OPEB
Fiscal Year
Cost
Contribution
Contributed
Obligation
6/3012014
$7,086,000
$6,526,000
92%
$31,821,700
613012015
5,884,000
13,895,000
236%
23,810,700
613012016
5,177,000
4,083,000
79%
24,904,700
Funded Status and Funding Progress — As of June 30, 2015, the most recent actuarial valuation
date, the plan was 21.9% funded. The Actuarial Accrued Liability (AAL) for benefits was
$73,752,000 and the Actuarial Value of Plan Assets was $16, 175,000 resulting in an Unfunded
Actuarial Accrued Liability (UAAL) of $57,577,000. The covered payroll (annual payroll of active
employees covered by the plan) was $24,471,000 and the ratio of UAAL to the covered payroll was
235.3% percent.
The schedule of funding progress presented immediately following the financial statements as
required supplementary information, presents multi -year trend information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued
liability for benefits.
A separate audited GAAP basis for this post - employment benefit plan report is not available.
The City participates in the jointly governed organizations discussed below through formally
organized and separate entities established under the Joint Exercise of Powers Act of the State of
California. As separate legal entities, these entities exercise full powers and authorities within the
scope of the related Joint Powers Agreements including the preparation of annual budgets,
accountability for all funds, the power to make and execute contracts and the right to sue and be
sued. Each joint organization is governed by a board consisting of representatives from member
municipalities. Each board controls the operations of the respective joint organization, including
selection of management and approval of operating budgets, independent of any influence by
member municipalities beyond their representation on that board. Obligations and liabilities of
this joint organization are not the City's responsibility and the City does not have an equity
interest in the assets of each joint organization except upon dissolution of the joint organization.
88
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 10 — JOINTLY GOVERNED ORGANIZATIONS (Continued)
A. Oyster Point Marina
(OPM) was established in 1977 by the City and the San Mateo County Harbor District (Harbor
District) for the purpose of expanding, improving and operating the Oyster Point Marina and
Park. The governing board consists of two of the City's council members and two Harbor District
commissioners. The Harbor District operates OPM. Operation of the Marina provides revenues
for the marina's operations. The City retains title to the land; however, the City is not liable for
any obligations of the San Mateo County Harbor District. Condensed unaudited financial
information may be obtained from San Mateo County Harbor District, #1 Johnson Pier, Half
Moon Bay, CA 94019.
B. Peninsula Traffic Congestion Relief Alliance
(PTCRA) was formed from the merger of The Inter City Transportation Systems Management
Agency and Multi -City Transportation Systems Management Agency (MCTSMA) in 2000. The
members are Cities of South San Francisco, Brisbane, Colma, Daly City, Half Moon Bay,
Millbrae, Pacifica and San Bruno and seven other members for the purpose of mitigating traffic
congestion. The governing board consists of one council member from each member city. The
finance director of Daly City acts as the treasurer and controller of PTCRA. The individual cities
are not liable for the debts, liabilities or obligations of PTCRA. Each member city has an equal
interest in PTCRA. Condensed accrual basis unaudited financial information may be obtained
from the City of Daly City Finance Department, 333 90f Street, Daly City, CA 94015.
C. CitylCounty Association of Governments
(C /CAG) was established in 1990 by the County of San Mateo and the Cities of San Mateo
County for preparation, adoption, monitoring and enforcing of Countywide state mandated plans.
A Board of Directors consisting of one council member from each member city and one member
from the County Board of Supervisors governs C /CAG. The city treasurer of San Carlos acts as
the treasurer of C /CAG. The individual cities and the County are not liable for the debts,
liabilities, or obligations of C /CAG. Condensed unaudited cash basis financial information may
be obtained from the City of San Carlos Finance Department, 666 Elm Street, San Carlos, CA
94070.
89
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 34, 2016
NOTE 11- RISK MANAGEMENT
A. Insurance Coverage
The City participates in Association of Bay Area Governments (ABAG) Plan Corporation, a non
profit benefit corporation established to provide liability insurance coverage, claims and risk
management, and legal defense to its participating members. ABAG Plan provides $5,000,000 of
general liability and automobile coverage per occurrence and is responsible for paying claims in
excess of the City's $100,000 self - insured retention. The City's liability coverage through
ABAG is a total of $30 million, with the first $5 million covered out of ABAG's financial
reserves, and with the next $25 million covered from two excess insurance policies acquired by
ABAG. The Plan includes a per occurrence or wrongful act or employee benefit wrongful act up
to $10,000,000 with two retained limits of $5,000,000. A boiler and machinery policy insures up
to a combined limit of $100,000,000 with various deductibles. For the year ended June 30, 2015,
the City paid ABAG Plan $820,014 in premiums and did not receive a refund of premiums paid
in prior years. ABAG Plan has not determined the value of the City's interest in its net position.
Financial statements may be obtained from ABAG Services, P.O. Box 2050, Oakland, CA 94694-
2050.
The City has also purchased excess coverage insurance for worker's compensation claims from
CSAC Excess Insurance Authority $500,000 self - insured retention. For the past five fiscal years,
general liability and worker compensation settlements did not exceed insurance coverage.
B. Liability for Uninsured Claims
The City provides for the uninsured portion of claims and judgments in the Self Insurance
Internal Service Fund. Claims and judgments, including a provision for claims incurred but not
reported, are recorded when a loss is deemed probable of assertion and the amount of the loss is
reasonably determinable. As discussed above, the City has coverage for such claims, but it has
retained the risk for the deductible or uninsured portion of these claims.
The City's liability for uninsured claims is limited to workers' compensation and general liability
claims, as discussed above, and was estimated by management based on prior year's claims
experience as follows:
U11
June 30, 2016
Fiscal Year
Workers'
General
2014 -2015
Compensation
Liability
Total
Total
Balance, beginning of year
$11,081,000
$263,000
$11,344,000
$10,072,000
Current year claims and changes in
estimates of prior years claims
2,014,474
855,273
2,869,747
3,089,440
Claims Paid
(1,867,474)
(945,326)
(2,812,800)
(1,817,440)
Balance, end of year
$11,228,000
$172,947
$11,400,947
$11,344,000
Current portion
$562,000
$150,000
$712,000
$712,000
U11
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
f 1 1 � IMIMM
The City is subject to litigation arising in the normal course of business. In the opinion of the
City Attorney there is no pending litigation which is likely to have a material adverse effect on
the financial position of the City.
The City participates in Federal and State grant programs. These programs have been audited by
the City's independent auditors in accordance with the provisions of the Federal Single Audit Act
as amended and applicable State requirements. No cost disallowances were proposed as a result
of these audits; however, these programs are still subject to further examination by the grantors
and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot
be determined at this time. The City expects such amounts, if any, to be immaterial.
A. Rental Revenues From Use of City Property
The Conference Center Authority, a discrete component unit, leases land from the City under an
operating lease commencing on January 1, 1999, with a 30 -year term from February 1, 1999, to
January 31, 2029. The rent amount is subject to re- negotiation at the option of either party
between January 1 and February 28, 2009 and 2019. These leases are considered for accounting
purposes to be operating leases. Property lease revenue from the Conference Center Authority
during the year fiscal year ended June 30, 2016, was $420,000. The cost and carrying amount of
leased land under this lease receivable is $5,460,000. Future minimum lease payments from the
Conference Center Authority land leases are as follows:
Year ending June 30
2017
2018
Component Unit
Conference Center
$420,000
420,000
2019
420,000
2020
420,000
2021
420,000
2022 -2026
2,100,000
2027 -2029
1,260,000
Total
$5,460,000
a
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 12 - COMMITMENTS AND CONTINGENCIES (Continued)
Price Club Associates leases the land for the Costco store on South Airport Boulevard from the
City. Lease payments are based on a percentage of Costco's gross annual sales, with minimum
annual rent set at $400,000, payable in monthly installments of $33,333. In fiscal 2014, Costco
exercised the option to extend the lease through fiscal year 2029, with an option for a 6 year
extension through fiscal year 2035. In fiscal 2016 lease payments were $400,000.
Magnolia Housing leases the land for Magnolia Plaza Senior Apartments from the City.
Minimum lease payments are set at $51,800, and are payable through the fiscal year 2062. In
fiscal year 2016 lease payments were $51,800.
Future minimum lease revenues for the Costco and Magnolia Plaza leases are as follows:
Year ending June 30:
Costco
Magnolia Plaza
Total
2017
$400,000
$51,800
$451,800
2018
400,000
51,800
451,800
2019
400,000
51,800
451,800
2020
400,000
51,800
451,800
2021
400,000
51,800
451,800
2022 -2026
2,000,000
259,000
2,259,000
2027 -2031
2,000,000
259,000
2,259,000
2032 -2036
1,200,000
259,000
1,459,000
2037 -2041
259,000
259,000
2042 -2046
259,000
259,000
2047 -2051
259,000
259,000
2052 -2056
259,000
259,000
2056 -2061
259,000
259,000
2062
51,800
51,800
$7,200,000
$2,382,800
$9,582,800
NOTE 13 — FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTIVITIES
The activities of the Successor Agency are reported in the Successor Agency to the former
Redevelopment Agency Private - Purpose Trust Fund as the activities are under the control of the
Oversight Board. The City provides administrative services to the Successor Agency to wind
down the affairs of the former Redevelopment Agency.
Information presented in the following footnotes represents assets and liabilities of the Successor
Agency.
A. Cash and Investments
Cash and investments of the Successor Agency as of June 30, 2016 are discussed in Note 2 to the
financial statements. Information presented in the following footnotes represents other assets and
liabilities of the Successor Agency as of June 30, 2016.
M
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 13 — FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTIVITIES (Continued)
B. Loans Receivable
The Successor Agency assumed the non - housing loans receivable of the former Redevelopment
Agency as of February 1, 2012. The former Redevelopment Agency engaged in programs
designed to encourage construction of or improvement to low -to- moderate income housing.
Under these programs, grants or loans were provided to homeowners or developers who agreed to
expend these funds in accordance with the Agency's terms.
C. Capital Assets
The Successor Agency assumed the capital assets of the former Redevelopment Agency as of
February 1, 2012. All capital assets are valued at historical cost or estimated historical cost if
actual historical cost is not available. Contributed capital assets are valued at their estimated fair
market value on the date contributed. The Successor Agency's policy is to capitalize all assets
with costs exceeding certain minimum thresholds and with useful lives exceeding two years.
All capital assets with limited useful lives are depreciated over their estimated useful lives. The
purpose of depreciation is to spread the cost of capital assets equitably among all users over the
life of these assets. The amount charged to depreciation expense each year represents that year's
pro rata share of the cost of capital assets.
Depreciation of all capital assets is charged as an expense against operations each year and the
total amount of depreciation taken over the years, called accumulated depreciation, is reported on
the balance sheet as a reduction in the book value of capital assets.
Depreciation is provided using the straight line method which means the cost of the asset is
divided by its expected useful life in years and the result is charged to expense each year until the
asset is fully depreciated. The Successor Agency has assigned the useful lives listed below to
capital assets:
Buildings
Improvements
Machinery and equipment
Furniture and fixtures
50 years
30 years
5 -20 years
12 years
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase is reflected in the capitalized value of the asset
constructed, net of interest earned on the invested proceeds over the same period. The
capitalization level is $20,000 for vehicles, and $100,000 for all else, including all other
equipment that is not a vehicle.
93
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
VOTE 13 — FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOI7
AGENCY ACTIVITIES (Continued)
U
Capital assets recorded at June 30 are comprised of:
Balance Balance
June 30, 2015 Additions June 30, 2016
Fiduciary activities
Capital assets not being depreciated:
Land $52,769,724 $52,769,724
Total capital assets not
being depreciated 52,769,724 52,769,724
Capital assets being depreciated:
(721,905)
($83,745)
Buildings and Improvements
3,788,506
3,788,506
Equipment and Vehicle
242,190
242,190
Furniture and Fixtures
21,506
21,506
Total capital assets being depreciated
4,052,202
4,052,202
Less accumulated depreciation for
Buildings and Improvements
(721,905)
($83,745)
(805,650)
Equipment and Vehicle
(236,376)
(2,707)
(239,083)
Furniture and Fixtures
(21,505)
(21,505)
Total accumulated depreciation
(979,786)
(86,452)
(1,066,238)
Net capital assets being depreciated
3,072,416
(86,452)
2,985,964
Fiduciary activity capital assets, net
$55,842,140
($86,452)
$55,755,688
Lang -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, 2015 Retirements June 30, 2016 Portion
2006 Revenue Bonds, 3.75 to 5.13 %, due 9/1/35 (1) $58,455,000 ($1,680,000) $56,775,000 $1,745,000
1999 Revenue Bonds, 3.3 to 5.0 %, due 9/1/18 (2) 1,060,000 (245,000) 815,000 255,000
Total Successor Agency $59,515,000 ($1,925,000) $57,590,000 $2,000,000
94
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 13 — FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTIVITIES (Continued)
Debt Service Requirements
Debt service requirements are shown below for all long -term debt.
For the Year
Successor Agency Activities
Ended June 30
Principal
Interest
2017
$2,000,000
$2,702,556
2018
2,100,000
2,606,906
2019
2,195,000
2,509,444
2020
1,990,000
2,407,444
2021
2,090,000
2,300,319
2022 -2026
12,105,000
10,339,895
2027 -2031
15,420,000
6,933,234
2032 -2036
19,690,000
2,557,000
Totals
$57,590,000
$32,356,798
(1) On April 19, 2006, the former Agency issued $70,675,000 of Tax Allocation Revenue Bonds,
Series 2006A to advance refund and defease $9,920,000 of the 1997 Downtown Tax Allocation
Bonds and $23,860,000 of the 1999 Revenue Bonds, and to finance various redevelopment
projects. Net proceeds of $9,364,974 and $3,753,130 plus an additional $801,925 and
$20,039,830 from the 1997 and 1999 bonds were used to purchase U.S. government securities for
the 1997 Downtown Tax Allocation Bonds and 1999 Revenue Bonds, respectively. Those
securities were deposited in irrevocable trust with an escrow agent to provide for all future debt
service payments. The 1997 and 1999 bonds are considered to be defeased and the liabilities for
those bonds have been removed. As of June 30, 2016, $6,755,000 and $11,615,000 of principal
remained outstanding on the defeased 1997 and 1999 bonds, respectively.
The 2006 Bonds are special obligation of the former Redevelopment Agency payable solely from
and secured by a pledge of tax revenues generated within the project area. Interest on the 2006A
Bonds is payable on each March 1 and September 1. Principal payments are due each September
1. The pledge of future tax revenue ends upon repayment of the $94,079,604 in remaining debt
service on the bonds which is scheduled to occur in 2036. On September 1, 2016, the remaining
principal balance of $56,775,000 was repaid.
In September 2012, a bank escrow account in the amount of $50.2 million was established by
action of the Successor Agency Oversight Board and approved by the State Department of
Finance. The purpose of the escrow account is to set aside funds to call and fully repay the 2006
Tax Allocation Revenue Bonds in 2016.
M
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 13 — FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTIVITIES (Continued)
(2) On February 1, 1999, the City of South San Francisco Capital Improvements Financing
Authority (CIFA) issued $31,720,000 of 1999 Revenue Bonds to provide funds to pay loans
(Homart Development), to finance redevelopment and housing activities and to refund the 1993
Gateway tax allocation bonds, which were due in 2018. The 1999 revenue bonds are obligations
of the CIFA although the Redevelopment Agency is required to make bond principal and interest
payments from the Gateway increment tax and housing set -aside revenues. The 1999 Revenue
Bonds are, in substance, obligations of the Redevelopment Agency, and have therefore been
recorded as such in these financial statements. On April 16, 2006, the Gateway principal portion
of the $23,860,000 was refunded as discussed in (1) above. The housing bonds are now
obligations of the Redevelopment Successor Agency.
The 1999 Revenue Bonds were issued and net proceeds of $9,614,978 plus an additional
$956,470 of 1993 bond reserve funds were used to purchase U.S. government securities. Those
securities were deposited in an irrevocable trust with an escrow agent to provide for all future
debt service payments on the 1993 bonds. As a result, the 1993 bonds are considered to be
defeased and the liability for those bonds has been removed.
Pledged Revenues
With the dissolution of the former Redevelopment Agency discussed above, Tax Increment is no
longer distributed, and instead the Successor Agency receives payments from the County's
Redevelopment Property Tax Trust Fund (RPTTF) that are to be used to fund debt service on the
Bonds, with no distinction between housing and non- housing revenues.
E. POLLUTIONREMEDL4TION
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.
a
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2016
NOTE 13 — FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTIVITIES (Continued)
F. COMMITMENTS AND CONTINGENCIES
State Approval of Enforceable Obligations
The Successor Agency prepares a Recognized Obligation Payment Schedule (RODS) semi-
annually that contains all proposed expenditures for the subsequent six -month period. The RODS
is subject to the review and approval of the Oversight Board as well as the State Department of
Finance. Although the State Department of Finance may not question items included on the
ROPS in one period, they may question the same items in a future period and disallow associated
activities. The amount, if any, of current obligations that may be denied by the State Department
of Finance cannot be determined at this time. The City expects such amounts, if any, to be
immaterial.
State Asset Transfer Review
The activities of the former Redevelopment Agency and the Successor Agency are subject to
further examination by the State of California and the amount, if any, of expenditures which may
be disallowed by the State cannot be determined at this time. In addition, the State Controller's
Office will be conducting a review of the propriety of asset transfers between the former
Redevelopment Agency or the Successor Agency and any public agency that occurred on or after
January 1, 2011 and the amount, if any, of assets that may be required to be returned to the
Successor Agency cannot be determined at this time. The City expects such amounts, if any, to
be immaterial.
G. SUBSEQUENT EVENT
In August 2016, the Successor Agency transferred ten properties to the City in accordance with
the Amended Long Range Property Management Plan ( LRPMP) dated May 21, 2015. The ten
properties were valued at $16,973,787. Seven of the ten properties were based on net book value,
while the remaining three properties were based on an appraisal that was performed prior to the
purchase of the properties by the Redevelopment Agency in 2008. The LRPMP stated that the
ten properties were for governmental use, therefore the City received these properties at no cost.
97
This Page Left Intentionally Blank
I' i 1 '' � 1 i' i
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORM ATI ON
For the Fiscal Year Ended June 30, 2016
M iscel laneous Agent M ultiple- Employer Defined Benefit Pension Plans
Last 10 Years*
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
M easarement Date
Total Pension Liability
Servi ce cost
I nterest on total pensi on I i abi I i ty
Changes of benefit terms
Changes of assumptions
Difference between expected and actual experience
Benefi t payments, i ncl udi ng refunds of empl oyee
contri buti ons
Net change in total pension liability
Total pension liability - beginning
Total pension liability - ending (a)
Plan fiduciary net potion
Contri buti ons - empl oyer
Contri buti ons - empl oyee
Net i nvestment income
Other mi scel I aneous i ncome
Benefi t payments, i ncl udi ng refunds of empl oyee
contri buti ons
R an to plan resource movement
Ad rni ni strati ve expense
Net change in plan fiduciary net position
Plan fiduciary net potion - beginning
Plan fiduciary net potion - ending (b)
Net pension liability - ending (a) -(b)
R an f duci ary net posi ti on as a percentage of the total
pensi on I i abi I i ty
Covered payrol I
Net pensi on I i abi I i ty as percentage of covered -empl oyee
pay rol I
r:1K1v`z�i I► �:i[tiv`z�z ti�!
$3,449,973 $3,075,813
13, 930, 544 14, 393, 013
(3,374,655)
(1,567,798)
(9,287,975)
(10,407,243)
8,092,542
2,119,130
188,659,588
196,752,130
$196,752,130
$198,871,260
$4,235,454 $4,546,984
1,466,176 1,411,273
21,712,340 3,221,551
(9,287,975) (10,407,243)
(50,555)
(160,268)
18,125,995 (1,438,258)
125, 614, 993 143, 740, 988
$143,740,988
$53,011,142
73.06%
$17,725,581
299.07%
$142,302,730
$56,568,530
71.56%
$17,798,104
317.83%
Notes to Schedule:
Benefit changes. The f gures above do not i ncl ude any I i abi I i ty i mpact that may have resul ted
f rom pl an changes whi ch occurred after the actuari al vat uati on date. Thi s appl i es for vol untary
benef i t changes as wel I as any offers of Two Y ears Additional Seri viceCredit(a.k.a. Golden
Handshakes).
Changes in assumptions, GASB 68, paragraph 68 states that the long long-term expected rate of
return should be determined net of pension plan investment expense, but without reduction for
pension plan adrni ni strati ve expense. The discount rate of 7.50% used for the June 30, 2014
measurement date was net of adrni ni strati ve expenses. The discount rate of 7.65% used for the
June 30, 2015 measurement date i s wi thout reduction of pension plan admi ni strati ve expense. All
other assumpti ons for the June 30, 2014 measurement date were the same as those used for the
June 30, 2015 measurement date.
- Fiscal year 2015 was the 1st year of i mpl ementati on.
100
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2016
Miscellaneous Agent Multiple- Employer Defined Benefit Pension Plans
Last 10 Years*
S CBEDULE OF CONTRIBUTIONS
Fiscal Year Ended June 30 2015 2016
Actuarially determined contribution $4,210,973
Contributions in relation to the actuarially
determined contributions 4,210,973
Contribution deficiency (excess) $0
Covered payroll $17,798,104
Contributions as a percentage of covered -
employee payroll 23.66%
Notes to Schedule
Valuation date: 613012012
Methods and assumptions used to determine contribution rates:
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Inflation
Salary increases
Investment rate of return
Retirement age
Mortality
$5,399,856
5,399,856
$0
$21,409,193
25.22%
61302013
Entry age
Level percentage of payroll
24 years as of the Valuation Date
15 -year smoothed market
2.75%
3.30% to 14.20% depending on Age,
Service, and type of employment
7.50% net of administrative expenses
The probabilities of Retirement are
based on the 2010 Ca1PERS Experience
The probabilities of mortality are based
on the 2010 CalPERS Experience Study
for the period from 1997 to 2007. Pre -
retirement and Post - retirement mortality
rates include 5 years of projected
mortality improvement using Scale AA
published by the Society of Actuaries
* - Fiscal year 2015 was the 1st year of implementation.
101
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2016
Safety Agent Multiple- Employer Defined Benefit Pension Plans
Last 10 Years*
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Measurement Date
Total Pension Liability
Service cost
Interest on total pension liability
Changes of benefit terms
Changes of assumptions
Difference between expected and actual experience
Benefit payments, including refunds of employee
contributions
Net change in total pension liability
Total pension liability - beginning
Total pension liability - ending (a)
Plan fiduciary net position
Contributions - employer
Contributions - employee
Net investment income
Other miscellaneous income
Benefit payments, including refunds of employee
contributions
Plan to plan resource movement
Administrative expense
Net change in plan fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position - ending (b)
Net pension liability - ending (a) -(b)
Plan fiduciary net position as a percentage of the total
pension liability
Covered payroll
Net pension liability as percentage of covered- employee
payroll
Notes to Schedule:
6130/2014 6130/2015
$5,143,842
$4,968,087
18,899,544
19,398,484
(4,789,129)
(4,226,388)
(13,161,296)
(13,556,606)
10,882,090
1,794,448
256,002,648
266,884,738
$266,884,738
$268,679,186
$6,535,399
$7,191,715
2,151,163
1,714,039
29,348,051
4,264,997
(13,161,296)
(13,556,606)
(219,696)
24,873,317
(605,551)
170,93 7,835
195,811,152
$195,811,152
$195,205,601
$71,073,586
173,473,585
73.37%
72.65%
$15,994,412
$16,679,857
444.37% 440.49%
Benefit chances. The figures above do not include any liability impact that may have resulted from
plan changes which occurred after the actuarial valuation date. This applies or voluntary benefit
changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes in assumptions. GASB 68, paragraph 68 states that the long long -term expected rate of
return should be determined net of pension plan investment expense, but without reduction for
pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014
measurement date was net of administrative expenses. The discount rate of 7.65% used for the June
30, 2015 measurement date is without reduction of pension plan administrative expense. All other
assumptions for the June 30, 2014 measurement date were the same as those used for the June 30,
2015 measurement date.
* - Fiscal year 2015 was the Ist year of implementation.
102
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2016
Safety Agent Multiple - Employer Defined Benefit Pension Plans
Last 10 Years*
SCHEDULE OF CONTRIBUTIONS
Fiscal Year Ended June 30 2015 2016
Actuarially determined contribution
Contributions in relation to the actuarially
determined contributions
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered -
employee payroll
Notes to Schedule
Valuation date:
$7,191,715 $8,538,138
7,191,715 8,538,138
$0 $0
$16,679,857
43.12%
6/30/2012
Methods and assumptions used to determine contribution rates:
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Inflation
Salary increases
Investment rate of return
Retirement age
Mortality
$18,986,895
44.97%
61302013
Entry age
Level percentage of payroll
24 years as of the Valuation Date
15 -year smoothed market
2.75%
3.30% to 14.20% depending on Age,
Service, and type of employment
7.50% net of administrative expenses
The probabilities of Retirement are based
on the 2010 CalPERS Experience Study for
The probabilities of mortality are based on
the 2010 CalPERS Experience Study for the
period from 1997 to 2007. Pre - retirement
and Post - retirement mortality rates include 5
years of projected mortality improvement
using Scale AA published by the Society of
Actuaries
* - Fiscal year 2015 was the 1st year of implementation.
U10x1
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2016
104
Overfunded
(Underfunded)
Actuarial
Liability as
Percentage of
Covered Payroll
(226.9 %)
(222.1%)
(235.3 %)
Other Post - Employment Benefits Schedule of Funding Progress
(In Thousands)
Overfunded
Entry Age
(Underfunded)
Actuarial
Actuarial
Actuarial
Actuarial
Valuation
Value of
Accrued
Accrued
Funded
Covered
Date
Assets
Liability
Liability
Ratio
Payroll
6/30/2012
$0
$71,306
($71,306)
0%
$31,431
6/30/2013
0
66,444
(66,444)
0%
29,914
6/30/2015
16,175
73,752
(57,577)
21.9%
24,471
104
Overfunded
(Underfunded)
Actuarial
Liability as
Percentage of
Covered Payroll
(226.9 %)
(222.1%)
(235.3 %)
This Page Left Intentionally Blank
GENERALFUND
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 find. The General Fund is comprised of
the following:
This fund accounts for resources traditionally associated with government, such as administration, public
safety, library, parks maintenance, and recreation, outside of those accounted for in other funds.
MEASURE W FUND
This fund accounts for revenue as the result of the voter-approved one-half percent sales and use tax.
Revenues are committed for maintenance and enhancement of local services.
1019
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
COMBINING BALANCE SHEETS
JUNE 30, 2016
ASSETS
Cash and investments
Receivables:
Accounts
Accrued interest
Due from other funds
Inventory
Prepaids
Total Assets
LIABILITIES
Accounts payable
Accrued salaries and benefits
Other payable
Unearned revenue
Total Liabilities
FUND BALANCES
Nonspendable
Committed
Assigned
Unassigned
Total Fund Balances
Total Liabilities and Fund Balances
General Purpose
Measure W Total
$19,653,889
$277,488
$19,931,377
6,900,682
1,044,800
7,945,482
57,493
57,493
100
100
824
824
32,756
32,756
$26,645,744
$1,322,288
$27,968,032
$965,882
$40,855
$1,006,737
3,621,781
3,621,781
206,402
206,402
115,927
115,927
4,909,992
40,855
4,950,847
33,580
2,549,027
1,401,976
17,751,169
21.735.752
1,105,256
176,177
1,281,433
33,580
3,654,283
1,578,153
17,751,169
23.017.185
$26,645,744 $1,322,288 $27,968,032
100
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES
Property taxes
Sales taxes
Transient occupancy taxes
Franchise Fees
Othertaxes
Intergovernmental
Interest and rentals
Licenses and permits
Charges for services
Fines and forfeitures
Other
Total Revenues
EXPENDITURES
Current:
City Council
City Clerk
City Treasurer
City Attorney
City Manager
Finance
Non - departmental
Human Resources
Fire
Police
Public Works
Parks and Recreation
Library
Economic and Community Development
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund balances (deficits) - July 1
Fund balances (deficits) - June 30
General Purpose
Measure W
Total
$24,777,659
$24,777,659
16,217,000
1,493,425
17,710,425
13,442,952
13,442,952
3,982,092
3,982,092
5,124,574
5,124,574
7,833,659
7,833,659
3,080,567
3,080,567
6,896,897
6,896,897
8,659,873
8,659,873
791,756
791,756
336,267
336,267
91,143,296
1,493,425
92,636,721
268,133
268,133
646,518
646,518
11 8,788
118,788
782,389
782,389
1,642,688
92,735
1,735,423
2,168,369
18,279
2,186,648
1,124,348
1,124,348
11468,785
1,468,785
24,058,478
24,058,478
25,319,536
25,319,536
4,943,919
81,978
5,025,897
13,234,028
13,234,028
4,681,188
4,681,188
6,125,861
19,000
6,144,861
86,583,028
211,992
86,795,020
4,560,268
1,281,433
5,841,701
1,976,872 1,976,872
(6,082,763) (6,082,763)
(4,105,891)
454,377
21,281,375
1,281,433
(4,105,891)
1,735,810
21,281,375
$21,735,752 $1,281,433 $23,017,185
109
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2016
General Purpose
Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amount (Negative)
Resources (inflows):
237,768
268,135
268,133
2
Property taxes
$24,313,857
$24,313,857
$24,777,659
$463,802
Sales taxes
16,530,436
17,832,436
16,217,000
(1,615,436)
Transient occupancy taxes
12,000,000
13,430,100
13,442,952
12,852
Franchise fees
3,344,000
3,344,000
3,982,092
638,092
Othertaxes
4,385,363
4,385,363
5,124,574
739,211
Intergovernmental
6,369,887
7,702,367
7,833,659
131,292
Interest and rentals
2,931,500
2,931,500
3,080,567
149,067
Licenses and permits
3,876,854
5,961,854
6,896,897
935,043
Charges for services
8,786,108
8,717,108
8,659,873
(57,235)
Fines and forfeitures
838,500
838,500
791,756
(46,744)
Other
234,248
248,148
336,267
88,119
Amounts available for appropriation
83,610,753
89,705,233
91,143,296
1,438,063
Charges to appropriations (outflows)
City Council
237,768
268,135
268,133
2
City Clerk
691,304
751,302
646,518
104,784
City Treasurer
131,193
131,192
118,788
12,404
City Attorney
782,578
782,578
782,389
189
City Manager
1,588,362
1,671,362
1,671,358
4
Finance
2,027,713
2,213,033
2,213,032
1
Non - departmental
1,013,535
1,305,477
1,305,476
1
Human Resources
1,475,848
1,527,383
1,518,820
8,563
Fire
21,754,722
24,103,926
24,103,932
(6)
Police
24,959,424
25,356,509
25,319,536
36,973
Public Works
3,912,331
5,070,679
5,070,673
6
Parks and Recreation
13,903,626
13,464,414
13,462,221
2,193
Library
4,607,218
4,769,354
4,731,555
37,799
Economic and Community Development
5,731,979
6,830,485
6,772,573
57,912
Total charges to appropriations
82,817,601
88,245,829
87,985,004
260,825
OTHER FINANCING SOURCES (USES)
Transfers in
1,022,301
2,175,348
1,976,872
(198,476)
Transfers out
(1,700,000)
(8,632,720)
(6,082,763)
2,549,957
Total Other Financing Sources (Uses)
(677,699)
(6,457,372)
(4,105,891)
2,351,481
NET CHANGE IN FUND BALANCES
$115,453
($4,997,968)
(947,599)
$4,050,369
Fund Balance - July 1
21,281,375
Adjustment to budgetary basis:
Encumbrance adjustments
1,401,976
Fund Balance - June 30
$21,735,752
110
Measure W
Total
21,281,375
176,177 1,578,153
$1,281,433 $23,017,185
Variance with
Variance with
Budgeted Amounts
Final Budget
Budgeted Amounts
Final Budget
Actual
Positive
Actual
Positive
Original Final
Amount
(Negative)
Original
Final
Amount
(Negative)
$24,313,857
$24,313,857
$24,777,659
$463,802
$1,500,000
$1,493,425
($6,575)
16,530,436
19,332,436
17,710,425
(1,622,011)
12,000,000
13,430,100
13,442,952
12,852
3,344,000
3,344,000
3,982,092
638,092
4,385,363
4,385,363
5,124,574
739,211
6,369,887
7,702,367
7,833,659
131,292
2,931,500
2,931,500
3,080,567
149,067
3,876,854
5,961,854
6,896,897
935,043
8,786,108
8,717,108
8,659,873
(57,235)
838,500
838,500
791,756
(46,744)
234,248
248,148
336,267
88,119
1,500,000
1,493,425
(6,575)
83,610,753
91,205,233
92,636,721
1,431,488
237,768
268,135
268,133
2
691,304
751,302
646,518
104,784
131,193
131,192
118,788
12,404
782,578
782,578
782,389
189
92,737
92,735
2
1,588,362
1,764,099
1,764,093
6
18,279
18,279
2,027,713
2,231,312
2,231,311
1
1,013,535
1,305,477
1,305,476
1
1,475,848
1,527,383
1,518,820
8,563
21,754,722
24,103,926
24,103,932
(6)
24,959,424
25,356,509
25,319,536
36,973
258,155
258,155
3,912,331
5,328,834
5,328,828
6
13,903,626
13,464,414
13,462,221
2,193
4,607,218
4,769,354
4,731,555
37,799
19,000
19,000
5,731,979
6,849,485
6,791,573
57,912
388,171
388,169
2
82,817,601
88,634,000
88,373,173
260,827
1,022,301
2,175,348
1,976,872
(198,476)
(1,700,000)
(8,632,720)
(6,082,763)
2,549,957
(677,699)
(6,457,372)
(4,105,891)
2,351,481
$1,111,829
1,105,256
($6,573)
$115,453
($3,886,139)
157,657
$4,043,796
21,281,375
176,177 1,578,153
$1,281,433 $23,017,185
This Page Left Intentionally Blank
MAJOR GOVERNMENTAL FUNDS OTHER THAN
GENERAL FUND AND SPECIAL REVENUE FUNDS
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.
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.
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.
Replacement, upgrade, and maintenance of the City's infrastructure are backlogged, constituting a
significant liability. Funds are set aside in this fund as part of the budget process and as part of the City's
reserve policy to address the replacement and/or upgrade of the city infrastructure (such as parks,
buildings, facilities, streets, sidewalks, and storm water facilities).
113
CITY OF SOUTH SAN FRANCISCO
CAPITAL IMPROVEMENT CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES:
Intergovernmental
Other
Total Revenues
EXPENDITURES:
Current:
Public works
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Proceeds from debt
Transfers in
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
Fund balance - July 1
Adjustment to budgetary basis:
Encumbrance adjustments
Fund balance - June 30
114
Variance with
Final Budget
Positive
Budget Actual Amounts (Negative)
$5,395,139 $2,351,355 ($3,043,784)
79,000 104,644 25,644
5,474,139 2,455,999 (3,018,140)
25,957,338 11,440,084 14, 517,254
25,957,338 11,440, 084 14, 517,254
(20,483,199) (8,984,085) 11,499,114
500,000 (500,000)
19,460,128 6,161,203 (13,298,925)
19,960,128 6,161,203 (13,798,925)
($523,071) (2,822,882) ($2,299,811)
288,554
2,901,351
$367,023
CITY OF SOUTH SAN FRANCISCO
EAST OF 101 SEWER IMPACT FEES CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES:
Interest and rental
Charges for services
Total Revenues
EXPENDITURES:
Current:
Non - departmental
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
Fund balance (deficit) - July 1
Fund balance (deficit) - June 30
115
Variance with
Final Budget
Positive
Budget Actual Amounts (Negative)
$33,489 $33,489
$520,000 517,952 (2,048)
520,000 551,441 31,441
$2,500 2,500
2,500 2,500
517,500 548,941 31,441
(46,817) (4,716) 42,101
(46,817) (4,716) 42,101
$470,683 544,225 $73,542
(40,459)
$503,766
CITY OF SOUTH SAN FRANCISCO
EAST OF 101 TRAFFIC IMPACT FEES CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES:
Interest and rental
Charges for services
Total Revenues
EXPENDITURES:
Current:
Public works
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers (out)
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
Fund balance - July 1
Fund balance - June 30
116
Variance with
Final Budget
Positive
Budget Actual Amounts (Negative)
$108,530 $108,530
$1,700,000 1,637,445 (62,555)
1,700,000 1,745,975 45,975
$2,500 2,500
2,500 2,500
1,697,500 1,743,475 45,975
(3,708,709) (475,073) 3,233,636
(3,708,709) (475,073) 3,233,636
($2,011,209) 1,268,402 $3,279,611
5,944,851
$7,213,253
CITY OF SOUTH SAN FRANCISCO
CHILD CARE IMPACT FEES CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES:
Interest and rental
Charges for services
Total Revenues
EXPENDITURES:
Current:
Non - departmental
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
I► . = ♦ 1� A � iil�►t�1�!
Fund balance - July 1
Fund balance - June 30
117
2,489,695
$2,874,841
Variance with
Final Budget
Positive
Budget
Actual Amounts
(Negative)
$46,362
$46,362
$342,000
341,284
(716)
342,000
387,646
45,646
$2,500
2,500
2,500
2,500
339,500
385,146
45,646
$339,500
385,146
$45,646
117
2,489,695
$2,874,841
CITY OF SOUTH SAN FRANCISCO
DEVELOPER DEPOSIT CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES:
Charges for services
Total Revenues
OTHER FINANCING SOURCES (USES)
Transfers (out)
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
Fund balance - July 1
Variance with
Final Budget
Final Positive
Budget Actual Amounts (Negative)
$270,000 $269,155 ($845)
270,000 269,155 (845)
(1,799,387) (269,155) 1,530,232
(1,799,387) (269,155) 1,530,232
($1,529,387) $1,529,387
72,884
Fund balance - June 30 $72,884
118
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 .TUNE 30, 2016
REVENUES:
Interest and rental
Other
Total Revenues
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
Fund balance - July 1
Variance with
Final Budget
Final Positive
Budget Actual Amounts (Negative)
$305,480 $305,480
201,996 201,996
507,476 507,476
($1,810,900) (527,812) 1,283,088
(1,810,900) (527,812) 1,283,088
($1,810,900) (20,336) $1,790,564
17,658,721
Fund balance - June 30 $17,638,385
119
This Page Left Intentionally Blank
NON-MAJOR GOVERNMENTAL FUNDS —1
Special revenue funds are used to account for revenue sources that are restricted by law or administrative
action to expenditures for specified purposes. Special revenue funds used by the City of South San
Francisco include:
Gas Tax - Accounts for State monies received and expended for street improvements, repairs,
engineering, and administration under Streets and Highway Code Sections 2105, 2106, 2107, and
2107.5. Includes sales taxes on gasoline received from the State's Traffic Congestion Relief Fund.
Developer Contributions – Accounts for fees deposited for planning and engineering reviews or
for future project development.
Federal Aviation Grant – This fund accounts for federal monies received for insulating
structures against airport noise.
Community Development Block Grant - Accounts for Federal monies received to be expended
for development of jobs and suitable housing for low-income residents.
Miscellaneous Grants - Accounts for federal monies received for miscellaneous projects.
Maintenance District - Accounts for a portion of property tax dedicated to provide for the
maintenance of landscaped areas within housing developments.
Transportation Sales Tax - Accounts for the sales tax that provides resources for street
improvements and repairs.
Solid Waste Reduction - Accounts for revenues and expenditures associated with the waste
reduction, recycling, composting and household hazardous waste programs for residents and
businesses.
Supplemental Law Enforcement Services – Accounts for State monies provided for designated
Police department services.
City Programs – Organizations and individuals provide revenues that fund certain programs and
services.
Affordable Housing Trust – The inclusionary housing requirement in the City provides that 20%
of new residential housing units (for projects of 4 or more units) be affordable. These in-lieu fees
(in-lieu of production of affordable housing units by the developer) provide new residential
development's share of affordable housing units.
PEG Equipment and Access – Accounts for the one percent of money set-aside from cable
franchise fees that are used to support public, educational and governmental (PEG) channels.
121
NON -MAJOR GOVERNMENTAL FUNDS (Continued)
Capital projects funds are used to account for resources used for the acquisition and construction of
capital facilities or major capital equipment, except for capital improvements financed by proprietary
funds. Capital projects funds used at the City of South San Francisco include:
Non - obligated Capital Projects - Accounts for the construction of assets financed by non -
obligated debt.
Public Safety Impact Fee — These fees are to provide new development's share of funding for
the replacement of public safety capital equipment, vehicles and facilities.
Oyster Point Improvements Impact Fees Capital Projects Fund - These fees provide new
development's share of funding for the Oyster Point at Highway 101 interchange improvements.
Sewer Capacity Charges — accounts for cost recovery charged to new development based on
proportional benefit, associated with providing sewer collection and treatment capacity to new
development, both through existing infrastructure provided, and through future capital projects
not funded by other sources.
122
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2016
LIABILITIES
Liabilities:
Accounts payable
$23,909
SPECIAL REVENUE FUNDS
Other payable
10,065
25,000
Federal
Community
Due to other funds
Developer
Aviation
Development Miscellaneous
Gas Tax
Contributions
Grant
Block Grant Grants
ASSETS
Restricted
$1,277,733 2,881,055
Cash and investments
$1,274,331
$3,978,759
$734,473
Total Liabilities and Fund Balances
Receivables:
$736,416 $972,674
Accounts
$86,639
Accrued interest
3,402
9,378
1,943
Loans
536,978
Due from other fiords
Restricted cash and investments
349,057
Land held for resale
Total Assets
$1,277,733
$3,988,137
$736,416
$972,674
LIABILITIES
Liabilities:
Accounts payable
$23,909
$49,992
Other payable
10,065
25,000
Deposits
1,073,108
Due to other funds
Unearned revenue
$736,416
Total Liabilities
1,107,082
736,416 74,992
Fund Balances:
Restricted
$1,277,733 2,881,055
897,682
Total Fund Balances
1,277,733 2,881,055
897,682
Total Liabilities and Fund Balances
$1,277,733 $3,988,137
$736,416 $972,674
124
Maintenance Transportation
$2,127,351 $1,269,173
25,867
7,433
Solid
Supplemental
Affordable
PEG
Waste
Law Enforce-
City
Housing
Equipment and
Reduction
ment Services
Programs
Trust
Access
$750,167
$21
$4,244,213
$1,679,002
$742,864
15,476
330
45,976
182
10,699
4,349
1,870
42,038
1,900,000
$2,153,218 $1,276,606 $765,643 $203 $4,254,912 $3,625,719 $790,710
$137 $60,356
$100
137 100 60,356
2,153,081 $1,276,606 $765,643 103 4,194,556 $3,625,719 $790,710
2,153,081 1,276,606 765,643 103 4,194,556 3,625,719 790,710
$2,153,218 $1,276,606 $765,643 $203 $4,254,912 $3,625,719 $790,710
(Continued)
125
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2016
w4i
CAPITAL PROJECTS FUNDS
Total
Non - obligated
Public
Oyster Point
Sewer
Nonmajor
Capital
Safety
Improvement
Capacity
Governmental
Projects
Impact Fee
Impact Fees
Charges
Funds
ASSETS
Cash and investments
$517,077
$463,586
$28,200
$2,303,491
$20,112,708
Receivables:
Accounts
6,300
180,588
Accrued interest
863
329
3,130
43,578
Loans
579,016
Due from other funds
Restricted cash and investments
349,057
Land held for resale
1,900,000
Total Assets
$517,077
$464,449
$28,529
$2,312,921
$23,164,947
LIABILITIES
Liabilities:
Accounts payable
$11,903
$146,297
Other payable
35,065
Deposits
1,073,108
Due to other funds
100
Unearned revenue
736,416
Total Liabilities
11,903
1,990,986
Fund Balances:
Restricted
$517,077
452,546
$28,529
$2,312,921
21,173,961
Total Fund Balances
517,077
452,546
28,529
2,312,921
21,173,961
Total Liabilities and Fund Balances
$517,077
$464,449
$28,529
$2,312,921
$23,164,947
w4i
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES
Property taxes
Other taxes
Intergovernmental
Interest and rentals
Charges for services
Other
Total Revenues
EXPENDITURES
Current:
Economic and community development
Public works
Non - departmental
Fire
Police
Other
Debt service:
Principal repayments
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
SPECIAL REVENUE FUNDS
Federal Community
Developer Aviation Development Miscellaneous
Gas Tax Contributions Grants Block Grant Grants
$1,824,853 $338,412
22,505 $57,958 $12,949 74,361
1,359,911
9,397
1,847,358 1,417,869 12,949 422,170
547,674 12,949 529,115
15,193
562,867 12,949 529,115
1,847,358 855,002 (106,945)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
(2,063,932)
(130,158)
(143)
($136,869)
Total Other Financing Sources (Uses)
(2,063,932)
(130,158)
(143)
(136,869)
Net Change in Fund Balances
(216,574)
724,844
(107,088)
(136,869)
Fund balance - July 1
1,494,307
2,156,211
1,004,770
136,869
Fund balance - June 30
$1,277,733
$2,881,055
$897,682
128
SPECIAL REVENUE FUNDS
181,384
1,261,523
139,450
395,749
133,892
1,261,523
Solid
Supplemental
Affordable
PEG
Maintenance
Transportation
Waste
Law Enforce-
City
Housing
Equipment and
Districts
Sales Tax
Reduction
ment Services
Programs
Trust
Access
5,000
(47,904)
$1,660,961
(189,308)
(516,800)
(47,904)
(2,587,442)
(189,308)
$1,412,863
$138,191
351,534
49,427
(182,043)
1,259
$72,582
$31,399
$12,441
2,401,758
947,686
$188,649
3,594,320
728,262
$2,153,081
$1,276,606
$765,643
$103 $4,194,556
$3,625,719
$790,710
1,205,241
183,899
1,660,961
1,462,290
188,649
139,450
1,277,823
31,399
196,340
181,384
1,261,523
139,450
395,749
133,892
1,261,523
181,384
139,450 395,749
133,892
399,438
1,462,290
7,265
882,074
31,399
62,448
5,000
(47,904)
(2,587,442)
(189,308)
(516,800)
(47,904)
(2,587,442)
(189,308)
(511,800)
351,534
(1,125,152)
(182,043)
370,274
31,399
62,448
1,801,547
2,401,758
947,686
103 3,824,282
3,594,320
728,262
$2,153,081
$1,276,606
$765,643
$103 $4,194,556
$3,625,719
$790,710
(Continued)
Hal
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES
Property taxes
Othertaxes
Intergovernmental
Interest and rentals
Charges for services
Other
Total Revenues
EXPENDITURES
Current:
Economic and community development
Public works
Non - departmental
Fire
Police
Other
Debt service:
Principal repayments
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDTTURES
OTHER FINANCING SOURCES (USES)
CAPITAL PROJECTS FUNDS
Total
Non - obligated Public Oyster Point Sewer Nonmajor
Capital Safety Improvement Capacity Governmental
Projects Impact Fee Impact Fees Charges Funds
1,271,122
2,500 1,279,216
133,892
116,862 116,862
139,450
395,749
656,000 656,000
116,862 656,000 2,500 3,992,291
151,416 2,996 1,774,553 7,369,294
Transfers in
$1,660,961
5,000
1,551,054
$12,075
2,175,340
$5,823 $2,393 9,492
352,589
656,603 1,755,486
3,960,649
262,455
1,660,992
Fund balance - July 1
268,278 658,996 1,777,053
11,361,585
1,271,122
2,500 1,279,216
133,892
116,862 116,862
139,450
395,749
656,000 656,000
116,862 656,000 2,500 3,992,291
151,416 2,996 1,774,553 7,369,294
Transfers in
5,000
Transfers out
($161,624)
(5,834,180)
Total Other Financing Sources (Uses)
(161,624)
(5,829,180)
Net Change in Fund Balances
(161,624) 151,416
2,996 1,774,553 1,540,114
Fund balance - July 1
678,701 301,130
25,533 538,368 19,633,847
Fund balance - June 30
$517,077 $452,546
$28,529 $2,312,921 $21,173,961
130
This Page Left Intentionally Blank
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, 2016
REVENUES
Property taxes
Other taxes
Intergovernmental
Interest and rentals
Charges for services
Other
Total Revenues
EXPENDITURES
Current:
Economic and community development
Public works
Non-departmental
Fire
Other
Police
Debt service:
Principal repayments
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
Adjustment to budgetary basis:
Encumbrance adjustments
Fund balance - July 1
Fund balance - June 30
GAS TAX
DEVELOPER CONTRIBUTIONS
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
$1,625,570 $1,824,853 $199,283
15,000 22,505 7,505 $1,380,000 $57,958 ($1,322,042)
1,359,911 1,359,911
1,640,570 1,847,358 206,788 1,380,000 1,417,869 37,869
721,718 706,324
15,193
721,718 721,517
15,394
(15,193)
201
1,640,570 1,847,358 206,788 658,282 696,352 38,070
(3,463,799)
(2,063,932)
1,399,867
($704,670)
(130,158)
574,512
(3,463,799)
(2,063,932)
1,399,867
(704,670)
(130,158)
574,512
($1,823,229)
(216,574)
$1,606,655
($46,388)
566,194
$612,582
1,494,307
$1,277,733
132
158,650
2,156,211
$2,881,055
FEDERAL AVIATION COMMUNITY DEVELOPMENT
GRANT BLOCK GRANT MISCELLANEOUS GRANTS
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative)
$641,864 $338,412 ($303,452)
$4,000 $12,949 $8,949 74,361 74,361
8,762 9,397 635
4,000 12,949 8,949 650,626 422,170 (228,456)
12,949 (12,949) 705,026 668,433 36,593
12,949 (12,949) 705,026 668,433 36,593
4,000 (4,000) (54,400) (246,263) (191,863)
(95,473)
(143)
95,330
($136,869)
($136,869)
(95,473)
(143)
95,330
(136,869)
(136,869)
$4,000 ($4,000) ($149,873)
(246,406)
($96,533)
(136,869)
($136,869)
139,318
1,004,770
$897,682
133
$136,869
(Continued)
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, 2016
REVENUES
Property taxes
Other taxes
Intergovernmental
Interest and rentals
Charges for services
Other
Total Revenues
EXPENDITURES
Current:
Economic and community development
Public works
Non-departmental
Fire
Other
Police
Debt service:
Principal repayments
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
Adjustment to budgetary basis:
Encumbrance adjustments
Fund balance - July I
Fund balance - June 30
MAINTENANCE DISTRICTS TRANSPORTATION SALES TAX
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
$1,389,805 $1,660,961 $271,156
$1,400,000 $1,412,863 $12,863
25,000 49,427 24,427
1,389,805 1,660,961 271,156 1,425,000 1,462,290 37,290
1,561,998 1,261,523 300,475
1,561,998 1,261,523 300,475
(172,193) 399,438 571,631 1,425,000 1,462,290 37,290
(216,426)
(47,904)
168,522
(3,666,287)
(2,587,442)
1,078,845
(216,426)
(47,904)
168,522
(3,666,287)
(2,587,442)
1,078,845
($388,619)
351,534
$740,153
($2,241,287)
(1,125,152)
$1,116,135
1,801,547
$2,153,081
134
2,401,758
$1,276,606
SUPPLEMENTAL LAW
SOLID WASTE REDUCTION ENFORCEMENT SERVICES CITY PROGRAMS
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative)
$100,000 $138,191 $38,191
1,259 1,259 $72,582 $72,582
$180,000 $188,649 $8,649
$1,211,000 1,205,241 (5,759)
180,000 188,649 8,649 100,000 139,450 39,450 1,211,000 1,277,823 66,823
204,289 209,331 ($5,042)
100,000 139,450 (39,450)
395,000 395,749 (749)
204,289 209,331
(5,042) 100,000 139,450
(39,450) 395,000
395,749
(749)
(24,289) (20,682)
3,607
816,000
882,074
66,074
5,000
5,000
(756,178) (189,308)
566,870
($1,741,478)
(516,800)
1,224,678
(756,178) (189,308)
566,870
(1,741,478)
(511,800)
1,229,678
($780,467) (209,990)
$570,477
($925,478)
370,274
$1,295,752
27,947
947,686 103 3,824,282
$765,643 $103 $4,194,556
(Continued)
135
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, 2016
REVENUES
Property taxes
Other taxes
Intergovernmental
Interest and rentals
Charges for services
Other
Total Revenues
EXPENDITURES
Current:
Economic and community development
Public works
Non-departmental
Fire
Other
Police
Debt service:
Principal repayments
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
Adjustment to budgetary basis:
Encumbrance adjustments
Fund balance - July I
Fund balance - June 30
PEG
AFFORDABLE HOUSING TRUST EQUIPMENT AND ACCESS
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
$31,399 $31,399 $5,000 $12,441 $7,441
125,000 183,899 58,899
31,399 31,399 130,000 196,340 66,340
196,500 133,892 62,608
196,500 133,892 62,608
31,399 31,399 (66,500) 62,448 128,948
31,399 $31,399 ($66,500) 62,448 $128,948
3,594,320
$3,625,719
136
728,262
$790,710
NONOBLIGATED PUBLIC SAFETY OYSTER POINT
CAPITAL PROJECTS IMPACT FEE IMPROVEMENT IMPACT FEES
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative)
$5,823 $5,823 $2,393 $2,393
$657,000 656,603 (397)
$263,000 262,455 (545)
263,000 268,278 $5,278 657,000 658,996 1,996
52,561
123,648 116,862 6,786
52,561
656,000 656,000
123,648 116,862 (6,786) 708,561 656,000 52,561
139,352 151,416 12,064 (51,561) 2,996 54,557
($636,844) ($161,624) $475,220
(636,844) (161,624) 475,220
($636,844) (161,624) $475,220 $139,352 151,416 $12,064 ($51,561) 2,996 $54,557
$678,701 301,130 25,533
$517,077 $452,546 $28,529
137
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, 2016
REVENUES
Property taxes
Othertaxes
Intergovernmental
Interest and rentals
Charges for services
Other
Total Revenues
EXPENDITURES
Current:
Economic and community development
Public works
Non-departmental
Fire
Other
Police
Debt service:
Principal repayments
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
Adjustment to budgetary basis:
Encumbrance adjustments
Fund balance - July I
Fund balance - June 30
SEWER
CAPACITY CHARGES
Variance
Final Positive
Budget Actual (Negative)
$12,075 $12,075
9,492 9,492
$200,000 1,755,486 1,555,486
200,000 1,777,053 1,577,053
2,500 2,500
2,500 2,500
197,500 1,774,553 1,577,053
$197,500 1,774,553 $1,577,053
538,368
$2,312,921
138
INTERNAL SERVICE FUNDS
Internal service funds account for department services and financing performed for other departments
within the same governmental jurisdiction. Funding comes from charges assessed to the departments
benefiting from the service. Internal service funds used at the City include:
City Service — Accounts for vehicle maintenance and information technology services provided
to City departments.
Self Insurance — Accounts for workers' compensation, general liability and property damage
claim activity and financing is represented in this fund.
Health and Retirement Benefits - Accounts for health and retirement benefits paid on the behalf
of eligible City employees.
Equipment Replacement — Accounts for resources set -aside for the future replacement of City
vehicles and equipment.
139
ASSETS
Current assets:
Cash and investments
Receivables:
Accounts
Accrued interest
Deposit
Total current assets
CITY OF SOUTH SAN FRANCISCO
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
JUNE 30, 2016
Health and
Self Retirement Equipment
City Service Insurance Benefits Replacement
$1,156,291 $12,224,874 $7,917,534 $3,416,065 $24,714,764
6,861 6,861
2,664 30,612 6,774 8,447 48,497
157,500 46,010 203,510
1,165,816 12,412,986 7,970,318 3,424,512 24,973,632
Noncurrent assets:
Capital assets:
Nondepreciable 103,736 103,736
Depreciable, net of accumulated depreciation 1,451 4,818,570 4,820,021
Total Assets 1,167,267 12,412,986 7,970,318 8,346,818 29,897,389
LIABILITIES
Current liabilities:
Accounts payable
Other payable
Current portion of accrued insurance loss
Current portion of compensated absences
Current portion of long -term debt
Total current liabilities
Noncurrent liabilities:
Accrued insurance loss
Compensated absences obligation
Net OPEB obligation
Noncurrent portion of long -term debt
Total noncurrent liabilities
Total Liabilities
NET POSITION:
Net investment in capital assets
Unrestricted
Total Net Position
121,027
1,100
13
10,256
132,396
77,874
77,874
712,000
712,000
76,463
712,679
789,142
565,476
565,476
197,490
790,974
712,692
575,732
2,276,888
10,688,947
10,688,947
96,842
512,284
609,126
24,904,700
24,904,700
1,673,522
1,673,522
96,842
10,688,947
25,416,984
1,673,522
37,876,295
294,332
11,479,921
26,129,676
2,249,254
40,153,183
1,451
2,683,308
2,684,759
871,484
933,065
(18,159,358)
3,414,256
(12,940,553)
$872,935
$933,065
($18,159,358)
$6,097,564
($10,255,794)
140
CITY OF SOUTH SAN FRANCISCO
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2016
OPERATING REVENUES
Charges for services
Total Operating Revenues
OPERATING EXPENSES
Personnel expenses
OPEB expenses
Professional services
Program supplies
Insurance
Self - insurance and claims
Repair and maintenance
Utilities
Depreciation
Other
Total Operating Expenses
Operating Income (Loss)
NONOPERATING
REVENUES (EXPENSES)
Interest income
Interest expense
Gain from disposal of capital assets
Other
Total Nonoperating
Revenues (Expenses)
Net income (loss) before transfers
TRANSFERS
Transfers in
Transfers out
Change in Net Position
Net Position - (deficits) July 1
Net Position - (deficits) June 30
141
Health and
Self
Retirement
Equipment
City Service
Insurance
Benefits
Replacement
Total
$3,883,266
$3,874,155
$14,285,369
$1,678,460
$23,721,250
3,883,266
3,874,155
14,285,369
1,678,460
23,721,250
1,833,054
804,124
11,593,496
14,230,674
1,895,762
1,895,762
226,572
339,684
566,256
1,072,287
632,768
4,958
284,396
1,994,409
8,906
1,047,349
1,056,255
1,924,421
1,924,421
376,787
180,927
557,714
35,210
35,210
580
721,605
722,185
8,807
261,073
12,208
282,088
3,562,203
4,748,346
13,755,289
1,199,136
23,264,974
321,063
(874,191)
530,080
479,324
456,276
17,900
204,649
45,545
56,064
324,158
(83,845)
(83,845)
28,272
28,272
816,525
816,525
17,900
1,021,174
45,545
491
1,085,110
338,963
146,983
575,625
479,815
1,541,386
4,240,000
4,240,000
(108,923)
(108,923)
338,963
146,983
4,815,625
370,892
5,672,463
533.972
786,082
(22,974,983)
5,726,672
(15,928,257)
$872,935
$933,065
($18,159,358)
$6,097,564
($10,255,794)
141
CITY OF SOUTH SAN FRANCISCO
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from interfund service provided
Cash payment to suppliers for goods and services
Cash payment to employees for services
Cash payment for judgments and claims
Other payments
Net Cash Provided by Operating Activities
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Repayments from other fiords
Transfers in
Transfers out
Net Cash Provided by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Principal paid on capital lease
Interest payments
Acquisition of capital assets, net
Proceeds from the sale of capital assets
Net Cash Used in Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Net Cash Provided by Investing Activities
Net Increase (Decrease) in cash and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to cash flows from operating activities:
Depreciation
Other non - operating revenue (expenses)
Net change in assets and liabilities:
Accounts and lease receivables
Accounts payable
Other payable
Accrued insurance losses
OPEB obligations
Compensated absence obligations
Net Cash Provided by (Used in) Operating Activities
(547,574) (547,574)
Health and
(83,845)
(83,845)
Self
Retirement
Equipment
(513,421)
City Service
Insurance
Benefits
Replacement
Total
$3,884,641
$4,690,680
$14,285,369
$1,750,676
$24,611,366
(1,728,569)
(1,941,927)
(1,067,793)
(477,531)
(5,215,820)
(1,854,942)
(983,522)
(11,569,924)
101,381
(14,408,388)
100,995
(1,867,474)
838,019
12,123,493
(1,867,474)
3,315,070
18,254,000
$1,156,291
(4,794)
(4,794)
301,130
(102,243)
1,647,652
1,268,351
3,114,890
$479,324
$456,276
580
721,605
722,185
100
100
4,240,000
1,375
4,240,000
72,216
73,591
(108,923)
(108,923)
(61,174)
5,479
4,240,000
(108,823)
4,131,177
(547,574) (547,574)
142
(83,845)
(83,845)
(513,421)
(513,421)
28,272
28,272
(1,116,568)
(1,116,568)
17,142
203,624
52,464
58,035
331,265
17,142
203,624
52,464
58,035
331,265
318,272
101,381
5,940,116
100,995
6,460,764
838,019
12,123,493
1,977,418
3,315,070
18,254,000
$1,156,291
$12,224,874
$7,917,534
$3,416,065
$24,714,764
$321,063
($874,191)
$530,080
$479,324
$456,276
580
721,605
722,185
816,525
816,525
1,375
72,216
73,591
32,774
(179,398)
(61,174)
5,479
(202,319)
77,874
(8,496)
(10,273)
59,105
56,947
56,947
1,094,000
1,094,000
(54,662)
93,242
38,580
$301,130
($102,243)
$1,647,652
$1,268,351
$3,114,890
142
I AGENCY FUND
An agency fund is used to account for monies where the City is acting as an agent for another
government entity. The agency fund used at the City of South San Francisco consisted of-
SSF Employee Deferred Comp Trust Oversight — This fund is used to pay for the
administrative costs of monitoring the Deferred Compensation Funds on behalf of City
employees.
143
CITY OF SOUTH SAN FRANCISCO
AGENCY FUND
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED JUNE 30, 2016
SSF Employee Deferred Camp Trust Oversight
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
ASSETS
Cash and investments
$49,140
$62,944
$49,140
$62,944
Interest receivable
134
158
134
158
Total Assets
$49,274
$63,102
$49,274
$63,102
LIABILITIES
Accounts payable
$231
$12,500
$231
$12,500
Other accrued liabilities
49,043
50,602
49,043
50,602
Total Liabilities
$49,274
$63,102
$49,274
$63,102
144
STATISTICAL SECTION
This part of the City's Comprehensive Annual Financial Report presents detailed information as a context
for understanding what the information in the financial statements, note disclosures, and required
supplementary information says about the City's overall financial health. In contrast to the financial
section, the statistical section information is not subject to independent audit.
Financial Trends
These schedules contain trend information to help the reader understand how the City's financial
performance and well being have changed over time:
1. Net Position by Component
2. Changes in Net Position
3. Fund Balances of Governmental Funds
4. Changes in Fund Balance of Governmental Funds
Revenue Capacity
These schedules contain information to help the reader assess the City's most significant local revenue
source, the property tax:
1. Assessed Value and Estimated Market Value of Taxable Property
2. All Overlapping Property Tax Rates
3. Principal Property Tax Payers
4. Twenty Largest Taxable Property Owners for Merged RDA Project Area
5. Property Tax Levies and Collections
Debt Capacity
These schedules present information to help the reader assess the affordability of the City's current levels
of outstanding debt and the City's ability to issue additional debt in the future:
1. Ratio of Outstanding Debt by Type
2. Computation of Direct and Overlapping Debt
3. Computation of Legal Bonded Debt Margin
4. Continuing Disclosure Requirements:
a. Revenue Bond Coverage
b. Sewer Debt Service Coverage
c. Bonded Debt Pledge Revenue Coverage
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the City's financial activities take place:
1. Demographic and Economic Statistics
2. Principal Employers
145
STATISTICAL SECTION - (Continued)
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information
in the City's financial report relates to the services the City provides and the activities it performs:
1. Full -Time City Government Employees by Function
2. Operating Indicators by Function/Program
3. Capital Asset Statistics by Function/Program
Miscellaneous Information
1. Collection and Use of 1% Special Transient Occupancy Tax
Sources
Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual
Financial Reports for the relevant year.
146
®Un ticted
IDResnietad
®Invested in CapiWt Assets Net of Related Debt
$500
$400
$300
$200
$100
$0
($100)
($200)
Governmental activities
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total governmental activities net position
Business -type activities
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total business -type activities net position
Primary government
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total primary government net position
Governmental activities
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total governmental activities net position
Business -type activities
Invested in capital assets,
net of related debt
Unrestricted
Total business -type activities net position
Primary government
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total primary government net position
CITY OF SOUTH SAN FRANCISCO
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Millions
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2007 2008 2009 2010 2011.
$212,273,574
$233,230,681
$237,441,155
$209,507,012
$214,246,561
89,194,344
80,346,634
86,962,890
78,625,094
163,669,353
3,306,910
9,205,150
21,455,067
65,537,953
(19,267,010)
$304,774,828
$322,782,465
$322,782,465
$353,670,059
$358,648,904
$34,640,593 $45,635,119 $52,347,955 $58,522,676 $66,113,596
2,806,562 1,480,000 4,971,538
3,951,703 (2,674,600) (3,496,600) 792,921 9,292,189
$41,398,858 $44,440,519 $44,440,519 $59,315,597 $75,405,785
$246,914,167
$278,865,800
$289,789,110
$268,029,688
$280,360,157
92,000,906
81,826,634
91,935,428
78,625,094
163,669,353
7,258,613
6,530,550
17,958,467
66,330,874
(9,974,821)
$346,173,686
$367,222,984
$399,683,005
$412,985,656
$434,054,689
2012 2013 2014 2015 2016
218,218,696
$216,508,668
$230,440,390
$230,517,037
$231,1.42,079
43,321,286
30,514,986
42,367,623
49,311,828
52,406,602
(3,837,201)
8,021,490
(12,317,511)
(134,389,522)
(120,119,617)
$257,702,781
$257,702,781
$260,490,502
$145,439,343
$163,429,064
$70,653,841 $72,217,660 $78,045,318 $78,598,277 $83,930,073
10,877,105 13,353,988 15,367,085 4,196,654 6,243,225
$81,530,946 $81,530,946 $93,412,403 $82,794,931 $90,173,298
$288,872,537
$288,726,328
$308,485,708
$309,115,314
$315,072,152
43,321,286
30,514,986
42,367,623
49,311,828
52,406,602
7,039,904
21,375,478
3,049,574
(130,192,868)
(113,876,392)
$339,233,727
$340,616,792
$353,902,905
$228,234,274
$253,602,362
Source: City of South San Francisco, Department of Finance
147
w or
azho
Gw
148
�
cl� Iq C� r-�
o� I q
I V
oc�
69
b4 64
N 0 P 7 1
C� c,� m
S
148
�
cl� Iq C� r-�
o� I q
I V
69
b4 64
N 0 P 7 1
C� c,� m
S
64
b4 69
O 4 4 N
N � ll� C� G� ll� �li
z� I P � ll�
-1�
17� 17^
lc�
ol�
cl� I C� -1�
li C� 1-� 1-�
'C� ll�
lc� 1-� C�
h o� 6 C,� 4
. . . . I
a� . . .
cl�
.
FA
-c� C� M C�
ib
4,
lj
15
6
E E
t8
A. �5
,21
u
148
nn
O
a.
F
z
>
o
ol
149
ll� -C� oc� N
oc�
1
0�
gl
ll� lc�
M Q1 O G6 C� ll�
cl�
O
a.
F
z
>
o
ol
149
CITY OF SOUTH SAN FRANCISCO
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
■T,L,d Committed
m Tom] U —igned
81'om1 Assigned
❑'1'olal Restricted
❑Total Nonspendablc
❑Tom! Unreserved
®Tuml Reserved
(b)
2007 2005 2009 2010 2011 2012 2013 2014 2015 2016
General Fund
Reserved
$732,903
$283,435
$554,692
$889,186
Unreserved
20,359,471
14,503,263
17,509,823
14,841,958
Nonspendable
67,129
$90,167
$805,677
$14,163
$1,134
$33,580
Committed
401,797
208,054
1,406,430
3,879,451
2,536,790
3,654,283
Assigned
771,849
840,365
566,104
743,746
1,458,029
1,578,153
Unassigned
15,049,168
17,347,445
23,498,194
15,891,899
17,285,422
17,751,169
Total General Fund
$21,092,374
$14,786,698
$18,064,515
$15,731,144
$16,289,943
$18,486,031
$26,276,405
$20529,259
$21,281,375 (a)
$23,017,185
All Other Governmental Funds
Reserved
$84,748,754
$70,194,663
$65,117,971
$64,163,373
Unreserved, reported in:
Special revenue funds
17,973,390
21,286,431
23,826,184
11,079,390
Debt service funds
124,003
119,525
121,764
3,198,600
Capital project funds
29,928,573
3,578,595
51,589,538
69,286,211
Restricted
$163,727,096
$43,364,540
$30,539,396
$42,392,238
$43,437,361
$52,938,897
Assigned
2,390,904
2,076,065
1.,105,320
0
6,188,554
367,023
Unassigned
(14,353,252)
(1,388,956)
(1,379,895)
(521,604)
(40,459)
0
Total all other governmental funds
$132,774,720
$95,179,214
$140,655,457
$147,727,574
$151,764,748
$44,051,649
$30,264,821
$41,870,634
$49,585,456
$53,305,920
(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.
150
This Page Left Intentionally Blank
Revenues
Property Taxes
Other Taxes
intergovernmental revenues
Interest and Rents
Licenses and permits
Charges for services
Fines and forfeitures
Other
Total Revenues
Expenditures
Current:
General government
Fire Department
Police Department
Public works
Recreation and Community Services
Library
Economic and Community Development
Other
Capital outlay
Debt service:
Principal repayment
Interest and fiscal charges
Total Expenditures
Excess (deficiency) of revenues over
(under) expenditures
Other Financing Sources (Uses)
Transfers in
Transfers (out)
Tax allocation bonds issued
Premium on bonds
Payments to refunded bond escrow
Other debt proceeds
Sale of capital assets
Total other financing sources (uses)
Net Change in fund balances
before extraordinary item
Extraordinary item
Net change in fund balances
Debt service as a percentage of
noncapital expenditures
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,
2007 2008 2009 2010 2011
$41,469,349
$44,165,490
$59,369,550
23,505,138
24,313,543
22,755,561
9,103,859
13,219,053
15,088,171
1,043,528
12,318,594
7,625,428
5,557,296
5,716,017
5,957,815
6,729,772
10,792,043
13,644,314
10,691,238
1,073,603
1,013,434
17,083,402
1,091,514
3,722,979
115,183,582
112,689,857
129,177,252
$54,718,916
$54,128,998
19,771,310
23,412,992
10,609,605
11, 860,658
7,680,293
7,612,223
7,270,081
7,004,603
9,986,352
10,010,541
1,054,549
2,133,677
2,542,492
2,261,247
113,633,598 118,424,939
4,451,564
5,897,066
5,752,948
5,916,364
6,407,094
14,972,467
16,875,311
17,724,990
16,790,834
18,140,954
18,040,508
18,757,394
19,989,136
19,359,770
20,272,684
15,038,206
14,910,401
12,360,989
8,416,242
9,856,201
4,927,687
10,826,041
10,700,332
9,960,090
10,168,425
4,399,017
4,766,821
4,679,270
4,342,662
4,231,762
15,675,694
13,848,049
19,554,780
26,279,406
19,894,692
633,060
1,023,435
474,805
844,744
36,544,741
4,247,021
6,724,022
6,969,052
8,610, 556
1,692,296
1,755,426
1,887,434
1,842,000
5,500,469
5,441,036
4,571,150
4,255,050
4,274,170
93,093,972
130,582,591
101,810,847
103,931,874
102,057,034
22,089,610
(17,892,734)
27,366,405
9,701,724
16,367,905
14,505,346
20,182,014
18,754,214
18,047,351
88,175,882
(14,351,319)
(24,253,621)
(19,330,934)
(22,175,268)
(99,947,814)
13,750 13,750 13,784
167,777 (4,057,857) (562,936) (4,127,917) 11,771,932
22,257,387 (21,950,591) 26,803,469 5,573,807 4,595,973
$22,257,387 ($21,950,591) $26,803,469 $5,573,807 $4,595,973
13.9% 3.9% 6.8% 6.6% 6.7%
152
6,485,219
For The
Fiscal Year Ended June 30,
7,167,969
8,469,924
2012
2013
2014
2015
2016
$38,174,655
$27,077,697
$23,010,136
$24,650,648
$26,438,620
28,866,546
31,894,811
33,931,446
38,275,478
41,811,097
11,580,530
13,054,594
10,757,440
10,453,071
12,360,354
4,955,223
3,238,089
3,632,693
3,531,966
4,207,453
3,056,507
3,054,451
4,366,271
4,795,158
6,896,897
10,088,070
9,275,724
16,864,409
13,387,712
15,386,358
2,184,234
1,753,682
1,528,319
1,221,413
791,756
3,000,563
1,837,675
2,249,728
4,660,668
2,439,579
101,906,328
91,186,723
96,340,442
100,976,114
110,332,114
6,485,219
6,658,532
5,970,429
7,167,969
8,469,924
18,812,861
20,877,917
20,163,759
21,247,989
24,175,340
21,217,818
22,542,135
23,309,568
23,611,743
25,458,986
14,253,609
9,186,493
16,791,894
15,923,071
14,846,346
10,101,408
10,927,433
11,552,502
11,826,407
13,234,028
4,272,701
4,112,570
3,987,928
4,247,650
4,681,188
8,184,334
20,512,545
5,972,966
5,917,508
7,907,655
480,290
395,749
8,894,514
1,752,000
453,381
352,674
656,000
1,817,764
52,139
95,792,228
94,869,764
88,202,427
90,775,301
99,825,216
6,114,100
(3,683,041)
8,138,015
10,200,813
10,506,898
108,413,018
4,467,530
21,870,234
17,983,227
8,143,075
(109,646,766)
(6,780,943)
(24,149,582)
(19,717,102)
(13,193,699)
(1,233,748) (2,313,413) (2,279,348) (1,733,875) (5,050,624)
4,880,352 (5,966,454) 5,858,667 8,466,938 5,456,274
(110,39 "1,363)
($105,517,011) ($5,966,454) $5,858,667 $8,466,938 $5,456,274
4.2% 0.1% 0.6% 0.4% 0.7%
153
CITY OF SOUTH SAN FRANCISCO
ASSESSED VALUE
OFTAXABLEPROPERTY
LAST TEN FISCAL YEARS
Total Real
Secured
Property
$9,992,519,424
10,971,077,988
12,552,709,821
12,593,361,417
12,366,942,486
12,531,951,091
12,704,362,559
13,091,998,899
13,650,652,805
14,283,534,240
Unsecured Total
Property Assessed (a)
$1,294,249,195 $11,286,768,619
1,365,179,480 12,336,257,468
2,373,808,053 14,926,517,874
1,424,610,941 14,017,972,358
1,279,681,193 13,646,623,679
1,295,085,027 13,827,036,118
1,288,434,392 13,992,796,951
1,212,353,871 14,304,352,776
1,244,971,467 14,895,624,272
1,197,263,526 15,480,797,766
Total
Estimated Direct
Full Market (a) Tax Rate (b)
$11,286,768,619 030977%
12,336,257,468 0.31878%
14,926,517,874 0.34939%
14,017,972,358 0.36462%
13,646,623,679 0.36933%
13,827,036,118 0.37860%
13,992,796,951 0.42174%
14,304,352,770 0.13474%
14,895,624,272 0.13804%
15,480,797,766 0.13634%
Source: HdL Coren & Cone, San Mateo County Assessor 2015 -16 Combined Tax Rolls.
(a) 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.
(b) California cities do not set their own direct tax rate. The state constitution establishes the rate at I% and allocates a portion of that amount, by an annual calculation, to all the taxing
entities within a tax rate area.
154
Real Property
Net Taxable value
Fiscal
Residential
Commercial
Industrial
Year
Property
Property
Property
Other
2007
$5,088,269,711
$1,166,696,622
$3,456,741,386
$280,811,705
2008
5,484,465,766
1,227,775,836
3,934,414,550
324,421,836
2009
5,790,070,116
1,368,274,141
4,871,255,093
523,110,471
2010
5,467,563,992
1,429,401,205
5,197,739,403
498,656,817
2011
5,547,292,029
1,509,554,164
4,922,422,763
387,673,530
2012
5,579,044,758
1,581,852,456
4,967,158,758
403,895,119
2013
5,606,400,603
1,628,754,902
5,050,279,321
418,927,733
2014
5,900,441,192
1,713,575,060
4,273,694,531
1,204,288,116
2015
6,313,393,048
2,402,335,027
4,588,967,014
345,957,716
2016
6,716,642,000
2,000,204,271
5,189,813,366
376,874,603
Total Real
Secured
Property
$9,992,519,424
10,971,077,988
12,552,709,821
12,593,361,417
12,366,942,486
12,531,951,091
12,704,362,559
13,091,998,899
13,650,652,805
14,283,534,240
Unsecured Total
Property Assessed (a)
$1,294,249,195 $11,286,768,619
1,365,179,480 12,336,257,468
2,373,808,053 14,926,517,874
1,424,610,941 14,017,972,358
1,279,681,193 13,646,623,679
1,295,085,027 13,827,036,118
1,288,434,392 13,992,796,951
1,212,353,871 14,304,352,776
1,244,971,467 14,895,624,272
1,197,263,526 15,480,797,766
Total
Estimated Direct
Full Market (a) Tax Rate (b)
$11,286,768,619 030977%
12,336,257,468 0.31878%
14,926,517,874 0.34939%
14,017,972,358 0.36462%
13,646,623,679 0.36933%
13,827,036,118 0.37860%
13,992,796,951 0.42174%
14,304,352,770 0.13474%
14,895,624,272 0.13804%
15,480,797,766 0.13634%
Source: HdL Coren & Cone, San Mateo County Assessor 2015 -16 Combined Tax Rolls.
(a) 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.
(b) California cities do not set their own direct tax rate. The state constitution establishes the rate at I% and allocates a portion of that amount, by an annual calculation, to all the taxing
entities within a tax rate area.
154
CITY OF SOUTH SAN FRANCISCO
DIRECT AND OVERLAPPING
PROPERTY TAX RATES
LAST TEN FISCAL YEARS
Fiscal
Basic
School Total Direct /Overlapping
Year
Levy
Districts
Tax Rates
2007
1.000
0.1287
1.1287
(1,13)
2009
1.000
0.1426
1.1426
(1,16)
2011
1.000
0.1707
1.1707
(1,17)
(1,18)
2013
1.000
0.1959
1.1959
400
(1,20)
2015
1.000
0.1822
1.1822
2016
1.000
0.1750
1.1750 x(1,22)
Notes:
(1) Like other cities, South San Francisco includes several property tax rate areas with different rates. A mean average is indicated.
(13) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0379 percent, which includes South San Francisco Unified School
District bonds and San Mateo Jr. College bond, 3 have a rate of 1.0612, which includes Jefferson Union School bonds, one
has a rate of 1.0664, which includes San Bruno Park Elementary and San Mateo High bonds, and one at a tax rate of 1.0575,
for Brisbane ESD bonds and Jefferson Union High School bonds.
(14) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0360 percent which includes South San Francisco Unified School Distiict
bonds and San Mateo Jr. College bond, 3 have the rate of 1.0756, which includes Jefferson Union School bonds, one has a rate of 1.0716,
which includes San Bruno Park Elementary and San Mateo High bonds, and one at a tax rate of of 1.0596 percent, for Brisbane ESD bonds
and Jefferson union High School bonds.
(15) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0327 percent, which includes South San francisco Unified School District
bonds and San Mateo Jr. College bond. 2 have the rate of 1.0719 and one has a rate of 1.0689, which includes Jefferson Union School bonds
and Brisbane ESD bonds, and one has a rate of 1.0710 which includes San BrunoPark Elementary.
(16) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0377 percent, which includes South San francisco Unified School District
bonds and San Mateo Jr. College bond. 3 have the rate of 1.0783 and one has a rate of 1.0748, which includes Jefferson Union School bonds,
and Brisbane ESD bonds, and one has a rate of 1.0804 which includes San BrunoPark Elementary.
(17) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0389 percent, which includes SSFUSD bonds and San mateo Jr College bond.
3 has a rate of 1.0870 percent and one at 1.0832 percent which includes Jefferson Union School bonds and Brisbane ESD bonds. One has
a rate of 1.0834 percent which includes San Bruno Park Elementary.
(18) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0420 percent, which includes SSFUSD bonds and San mateo Jr College bond.
3 has a rate of 1.0893 percent and one at 1.0854 percent which includes Jefferson Union School bond, Brisbane ESD bonds & San Mateo JR
College bonds and one has a rate of 1.0909 percent which includes San Bruno Park Elementary.
(19) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0521 percent, which includes SSFUSD bonds, San Mateo Jr College bond,
and San Mateo Comm College. 4 has a rate of 1.0921 percent which includes Brisbane ESD Bond, Jefferson High bonds, SM Jr College bond
and San Mateo Comm College. 1 has a rate of 1.0905 percent, which includes San Bruno Pk Elem bond, SM Union High, SM Jr College
bond and San Mateo Comm Coll bond.
(20) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0522 percent, which includes SSFUSD bonds, San Mateo Jr College bond,
and San Mateo Comm College. 4 has a rate of 1.1048 percent which includes Brisbane ESD Bond, Jefferson High bonds, SM Jr College bond
and San Mateo Comm College. 1 has a rate of 1.0864 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High,
SM Jr College bond and San Mateo Comm Coll bond.
(21) Ofthe 68 tax rate areas in the City, 63 have a tax rate of 1.0703 percent, which includes SSFUSD bonds, San Mateo Jr College bond,
and San Mateo Comm College. 4 has a rate of 1.0991 percent which includes Brisbane ESD Bond, Jefferson High bonds, SM Jr College bond
and San Mateo Comm College. 1 has a rate of 1.0983 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High,
SM Jr College bond and San Mateo Comm Coll bond.
(22) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0707 percent, which includes SSFUSD bonds, San Mateo Jr College bond,
and San Mateo Comm College, 3 has a rate of 1.1080 percent and 1 with 1.1068 percent rate which includes College bond
Brisbane ESD Bond, Jefferson High bonds, SM Jr and San Mateo Comm College. 1 has a rate of 1.0929 percent, which includes
San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond and San Mateo Comm Coll bond.
Source: HDL, Coren & Cone (San mateo County Assessor 2006/07- 2015/1.6 Tax Rate Table).
155
Taxpayer
Slough SSF LLC
Brittania Pointe Grand LP
Gateway Center LLC
A)�'
BMR 180 Oyster Point LLC
ASN Solaire LLC
SFO Fuel Company LLC
Ac
Costco Wholesale Corporation
Subtotal
CITY OF SOUTH SAN FRANCISCO
Principal Property Tax Payers
Current Year and Nine Years Ago
2015 -16
Percentage
of Total City
Taxable Taxable Taxable
Assessed Assessed Assessed
Value Rank Value Value
Total Net Assessed Valuation:
Fiscal Year 2015 -16 $15,480,797,766
Fiscal Year 2006 -07 $11,286,768,619
2006 -07
Percentage
of Total City
Taxable
Assessed
Rank Value
7.00% 271,624,939 3
1.89% 150,263,303 4
0.91% 124,334,894 5
0.78%
0.71%
-- 66,320,744 7
/n'
,
-- 60,590,226 9
..., „
28.69% $2,768,224,013
Source:
HdL Coren & Cone, 2006 -07 & 2015 -16 Top Ten Property Taxpayers (Net Values).
San Mateo County Assessor 2015/16 combined Tax Rolls and the SBE Non Unitary Tax Roll
156
2.41%
1.33%
1.10%
0.59%
0.54%
24,53%
`V
.Q
v
�o
r®
W �
U �
O
N
� � O
F �z
O
i.
O a
f�l �
U
H
bA
i.�
C�
�i
H
4)
I✓
c�
v
H � �
4.
Q y
'C
V
W
b
D
V
6)
k
c�
H
157
0
0
U
ro
y
) N O N
'7-. 'yti �3-. �3..
O
O O O
..d
�d N N N N
�
-�
Fa�O
o O 0 O 0 O O
C -�G � t tO
N
73
3
E '0
i a
° o o i o TS O O 7� o o o 7)
UUF4U�D u U UU�
000000000000000001.10
0
M 00 jc� M M .�-� O O 00 00 ONO C',
. . .
0
a
d- V) 00 •--i 01 r- M I`- l- 00 .--+ O O V) 01 N V) 00 V)
I- d' O 00 C, d' m 00 00 O O M O 01 m O O
00
4p
y
�t � � d N 00 \U N l� � •--� O 6 00 Vl V) \p N l� 00
('y
�
•--� M It O1 M M C) •-+ O O r+ C\ r- N
110
ONO 01 m \o h M 00 m r- O V') 01
O \o O M N V) •-+ N m tl- r- — O Ln V)
u
m 00 N cl cp C; O 00 l� C U Vi M [� Vi d- O
00.
Ln m 00 N - d o l- 110 �o V) kn � m m m m
C1 d' m '-+ 64 69 6s G9 69 G9 G9 6s G/} G9 G9 Gs G9
o
EA os 69 G9 G9 6s 69
rlj
0 0 0 o
00-
o
N 00
N
o
00
kn
^.1';
41
cq
0
O
U
h t- 00 •--i O O (n O1 V1 V) 00
N[� w 01 V' M V') 01 00 C) C)
d Ln - d N oo O O t� Om0 N h
00
ONO ON1 \O \O h C- 00 M h O tr) N I
00
O AO A0 O M N 00 O V)
01:
.-� .-� •-i V) 00 N C1 O O1 O 00 Il- 01 O; M h V) 't
V1
V) M d N rt O d D V) V1 It m M M
V)
69 69
ro
b
C N
U P,
-1
s' o
W U H U o O
U a a
o
° � a) s°J ° C,3 ,N P H pa U
73
�o
CL
N +C� 7' O N U
w0
4
cq 3 U 3 O
>
o° n
v�WC7�P1C7dU�C7P�w� W�Owv�QH
157
0
CITY 0F SOUTH SAN FRANCISCO
PROPERTY TAX LEVIES AND COLLECTIONS (l)
LAST TEN FISCAL YEARS
Notes:
(D Excludes State Reimbursed Exemptions and deductions for County property tax administration.
[D County adopted full cosh value method of valuation rather than uaaosnnd vokzn1iou.
(3) Levies include real and personal property.
(4) Information not applicable. All general purpose property taxes are levied 6v the County and
allocated to other governmental Cu1diea.
(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
158
2008
Notes:
(D Excludes State Reimbursed Exemptions and deductions for County property tax administration.
[D County adopted full cosh value method of valuation rather than uaaosnnd vokzn1iou.
(3) Levies include real and personal property.
(4) Information not applicable. All general purpose property taxes are levied 6v the County and
allocated to other governmental Cu1diea.
(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
158
$90
c
0
$80
$70
$60
$50
$40
$30
$20
$10
$0
CITY OF SOUTH SAN FRANCISCO
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Governmental Activities
2010
RDA Tax
Lease
Certificates Special
Fiscal
Allocation
Revenue
of Assessment
Year
Bonds
Bonds
Participation Debt Loans Total
2007
$72,400,000
194,156
5,200,000 $3,884,000 $81,678,156 ;
2008
71,000,000
153,860
5,060,000 3,772,000 79,985,860
2010
68,030,000
0
4,765,000
3,548,000
76,343,000
2011
66,455,000
0
4,610,000
3,436,000
74,541,000
2012
64,815,000
0
4,445,000
3,324,000
72,584,000
2013
63,115,000
0
0
0
63,115,000
2014
61,350,000
0
0
0
61,350,000
2015
59,515,000
0
0
0
59,515,000
2016
57,590,000
0
0
0
57,590,000
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)
2007
$6,000,000
$67,133,165
$73,133;165
$154,811,321
8,14%
$2,491.21
2008
5,790,000
67,878,194
73,668,194
153,654,054
7.82%
2,419.29
2009
5;575,000
69,025,322
74,600 322
152,830,756
7,84%
2,351.24
2010
5,350,000
65,028,410
70,378,410
146,721,410
7.65%
2,227.37
2011
5,120,000
60,831,038
65,951,038
140,452,038
7,27%
2,184,09
2012
4,885,000
56,530,946
61,415,946
133,999,946
6.76%
2,057.52
2013
4,,640,000
52,118,587
56,758,587
119,873,587
5.98%
1,824.28
2014
4,385,000
47,591,019
51,976,019
113,326,019
5.57%
1,723.62
2015
4,120,000
43,543,614
47,663,614
107,178,614
5.07%
1,659.50
2016
3,850,000
39,392,832
43,242,832
100,832,832
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.
159
CITY OF SOUTH SAN FRANCISCO
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
JUNE 30, 2016
2015 -16 Assessed Valuation:
Redevelopment Incremental Valuation:
Adjusted Assessed Valuation:
$15,481,636,953
$15,481,636,953
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $221,111,838
Ratio to 2015 -16 Assessed Valuation:
Total Overlapping Tax and Assessment Debt......... 1.43%
OVERLAPPING FUND DEBT:
Total Debt
City's Share of
OVERLAPPING TAX AND ASSESSMENT DEBT:
6/30/2016
% Applicable (1)
Debt 6/30/16
San Mateo Community College District
$644,384,027
8.680%
$55;932,534
Jefferson Union High School District
183,678,786
1.627
2,988,454
South San Francisco Unified School District
181,153,045
89.127
1611,456,274
Brisbane School District
6,255,437
11.743
734,576
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $221,111,838
Ratio to 2015 -16 Assessed Valuation:
Total Overlapping Tax and Assessment Debt......... 1.43%
OVERLAPPING FUND DEBT:
San Mateo County General Fund Obligations
$432,359,816
8.680%
37,528,832 '
San Mateo County Board of Education Certificates of Participation
9,890,000
8.68%
858,452
San Mateo County Flood Control District Certificates of Participation
18,725,000
6057,500% '
11;342,669
South San Francisco Unified School District Certificates of Participation
493,946
89.127
440,239
Jefferson Union High School District Certificates of Participation
1,580,000
162.7%
25,707
City of South San Francisco Loans Payable
10,714,152
100.000%
10,714,152
City of South San Francisco Capital Leases
$2,238,998
100%
2,238,998
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT:
OVERLAPPING TAX INCREMENT DEBT (Successor Agency):
Total Overlapping Debt
COMBINED TOTAL DEBT
$57,590,000
$63,149,049
100.000% $57,590,000
$12,953,150
$328,897,737
$341,850,887 (2)
(1) Percentage of overlapping agency's assessed valuation located within boundaries of the city.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, tax allocation bonds, and Successor Agency Debt.
Ratios to Adjusted Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.43%
Total Direct Debt 0.08%
Combined Total Debt 2.21%
Ratios to Redevelopment Successor Agency Incremental Valuation ($3,918,692,457):
Total Overlapping Tax Increment Debt 1.47%
Source: California Municipal Statistics, Inc. and City of South San Francisco
510- 658 -2640 Austin Busch
160
NOTE: (a)
CITY OF SOUTH SAN FRANCISCO
COMPUTATION OF LEGAL BONDED DEBT MARGIN
JUNE 30, 2016
ASSESSED VALUATION:
BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a)
LESS AMOUNT OF DEBT SUBJECT TO LIMIT:
LEGAL BONDED DEBT MARGIN
Total Net Debt Legal
Fiscal Debt Applicable to Debt
Year Limit Limit Margin
$15,481,636,953
580,561,386
$580,561,386
Total net debt
applicable to the limit
as a percentage
of debt limit
2007
$423,253,823
0
$423,253,823
0.00%
2008
469,575,123
0
469,575,123
0.00%
2009
559,744,420
0
559,744,420
0.00%
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%
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.
Source: HDL Coren & Cone, San Mateo County Assessor - Combined Tax Rolls
161
$30
N
C
O
$25
$20
$15
$10
$5
CITY OF SOUTH SAN FRANCISCO
REVENUE BOND COVERAGE
SEWER RENTAL ENTERPRISE FUND
LAST TEN FISCAL YEARS
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Net Revenue Debt Service Requirements (4)
Fiscal Gross Operating Available for
Year Revenue (1) Expenses (2) Debt Service Principal
Interest
Total
Coverage
2008
18,418,866
12,096,256
6,322,610
(3)
241,846
241,846
26.14
2009
20,722,778
13,228,883
7,493,895
215,000
235,897
450,897
16.62
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
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
162
CITY OF SOUTH SAN FRANCISCO
SEWER DEBT SERVICE COVERAGE
SEWER RENTAL ENTERPRISE FUND
LAST FIVE FISCAL YEARS
WIN
Fiscal Year
2012
2013
2014
2015
2016
Revenues
Service Charges
$19,193,259
$19,310,559
$19,129,475
$19,758,128
$19,515,093
Connection and Other Fees
117,027
27,548
25,992
122,640
104,283
Interest Income
119,011
80,692
133,248
106,830
238,389
Developer Fees
Other Cities' Participation (1)
5,936,526
6,137,401
7,619,601
6,159,937
5,752,753
Total Revenues
$25,365,824
$25,556,200
$26,908,316
$26,147,535
$25,610,518
Operating Expenses (2)
$13,924,334
$15,151,968
$14,904,225
$18,759,650
$13,514,706
Wastewater System Net Revenues
$11,441,490
$10,404,232
$12,004,091
$7,387,885
$12,095,812
Parity Debt Service (3)
State Water Resources Control Board Loans
$5,997,459
$6,012,716
$6,022,799
$5,445,162
$5,449,692
CSCDA Series 2005D Revenue Bonds
214,589
206,405
197,630
188,148
178,036
Total Parity Debt
$6,212,048
$6,219,121
$6,220,429
$5,633,310
$5,627,728
Total Parity Debt Service Coverage
1.84
1.67
1.93
1.31
2.15
(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.
(2) Excludes depreciation, capital expenditures and debt service.
(3) Includes Sewer Revenue Bonds and State Water Loan payments
(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.
WIN
CITY OF SOUTH SAN FRANCISCO
REDEVELOPMENT PLEDGED REVENUE COVERAGE
LAST SEVEN FISCAL YEARS
2006 RDA Revenue Bonds 1999 RDA Revenue Bonds (Housing)
Funding Source: RDA tax increment revenues Funding Source: RDA Gateway and Low Moderate Income Housing tax increment revenues.
Gateway bonds defeased in FY 05 -06.
Fiscal Available Debt Service Requirements Fiscal Available Debt Service Requirements
Year Revenue Principal Interest Total Coverage Year Revenue Principal Interest Total Coverage
2010
$35,871,577 $1,330,000
$3,193,869
$4,523,869 7.93
2010 .
$5,798,618 $185,000
$107,205
$292,205 19.84
2011
44,300,878 1,380;000
3,141,394
4,521;394 9.80
2011!
5,732,171 195,000
98,748
293,748 19.51',
2012
25,114,631 1,435,000
3,086,819
4,521,819 5.55
2012
25,114,631 205,000
89,645
294,645 85.24
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
(1) New issuance.
Retirement ofprincipal and interest begins in fiscal year 2007.
1999 Certificates of Participation 1989 Cal Health Facilities Financing Authority Revenue Bonds
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
2010 $35,871,577 $150,000
2011 44,300,878 155,000
2012 25,114,631 165,000
2013
2014
2015
2016
$244,775 $394,775 90.87 2010 $35,871,577 $110,434 $6,428 $116,862 306.96
238,250 4 393,250 112,65
230,500 395,500 63.50
RDA All Non- housing (A)
Funding Source: RDA tax increment revenues
Fiscal Available Debt Service Requirements
Year Revenue Principal Interest Total Coverage
2010
$35,871,577 $1,590,434
$3,445,072
$5,035,506 7.12
2011
44,300,578 1,535,000
3,379,644
4,914,644 - 9,01
2012
25,114,631 1,600,000
3,317,319
4,917,319 5.11
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
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
164
CITY OF SOUTH SAN FRANCISCO
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN YEARS
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: HDLKCsdUbmia State Dept ofFinance. Estimated City's population aoof January 2014
(2) Personal and per capita income: HDL.Coron&Cone
(3) Unemployment Data: HDL/Ca|domia Employment Development Department
165
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 (I % of County
l
$61,444
$1,681,507
2006
61,729
1,810,075
29,323
4.6%
724,104
852%
2,007
62,143
1,903,016
30,623
47%
733,496
8.47%
2008
63,512
1,964,028
30,924
6.0%
739,469
8.59%
2009
65,000
1,948,798
29,982
10,3%
746,858
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
66,710
2,005,666
30,623
6,2%
747,373
8.79%
2014
65,749
2,033,156
30,923
4.5%
745,635
8.82%
2015
64,585
2,114,826
30,923
3.6%
765,135
8,44%
Notes:
** All data were updated to reflect the City of South San Francisco's current information available
through HDL.Coren&Cone
Data Sources:
(1) Population: HDLKCsdUbmia State Dept ofFinance. Estimated City's population aoof January 2014
(2) Personal and per capita income: HDL.Coron&Cone
(3) Unemployment Data: HDL/Ca|domia Employment Development Department
165
CITY OF SOUTH SAN FRANCISCO
Principal Employers
Current Year and Nine Years Ago
Subtotal
12,979
2015-16
35.9%
Total City Population
2006-07
62,614
Percentage
Percentage
Number of
of Total City
Number of
of Total City
Employer
Employees
Rank
Employment
Employees-
Rank
Employment
Genentech
8,446
1
13.1%
8,170
2
13.0%
Layton Construction Co Inc
779
2
1.2%
Onyx Pharmaceuticals Inc
650
3
1.0%
Life Technologies Corporation
622
4
1.0%
Costo Wholesalers (2 stores)
616
5
1.0%
798
4
1.3%
Amgen San Francisco LLC
406
6
0.6%
Successfactors, Inc.
400
7
0.6%
675
6
1.1%
SBM Site Services LLC
388
8
0.6%
Wave Division Holdings LLC
344
9
0.5%
Tobi.com, LLC
328
10
0.5%
United Airlines
9,000
1
14.4%
Kaiser Medical Center
1,100
3
1.8%
United Parcel Service
790
5
1.3%
Elan Pharmaceuticals
650
7
1.0%
Exelixis
550
8
0.9%
Cell Genesis
375
9
0.6%
Monogram Biosciences
350
10
0.6%
Subtotal
12,979
20.1% 22,458
35.9%
Total City Population
64,585
62,614
Source:
SSE Business License Database- Business licenses expiring 12/31116.
CAER 2006-07
166
600
500
400
300
200
100
0
CITY OF SOUTH SAN FRANCISCO
Full-Time Equivalent City Government Employees by Function
Last Ten Fiscal Years (Adopted Operating Budget)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
-_------- -
El General Government (1) 0 Fire Department
* Police Department IM Public Works (2) (3)
■ Park, Rec. & Maintenance Services (3) E Library
* Economic and Comm. Development (2) ❑ Water Quality Control Plant
Functions
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
General Government (1)
35.48
35.67
35.60
37.00
37.00
36.60
36.60
37.60
40.60
47.10
Fire Department
76.48
77.48
80.48
82.48
82.48
82,48
82.48
82.98
83.48
92.68
Police Department
107.45
110.85
111.65
114.65
112.65
110.65
115.65
119.75
118.87
120.87
Park, Rec. & Maintenance Services (3)
105.49
115.15
116.371
116.34
116.05
107.86
111.66
117.21
121.31
134.16
Library
38.54
38.68
40.21
40.81
40.81
35.34
35.35
37.66
37.71
38.71
Economic and Comm. Development (2)
37.21
33,35
35.35
26.45
28.95
24.45
2145
24.40
26.15
27.15
Public Works (2) (3)
39.76
42.00
42.10
43.85
40.05
43.03
45.02
47.21
47.68
49.00
Water Quality Control Plant
37.59
38.59
38.59
39.54
40.64
38,82
38.82
39.63
39.06
41.74
Total
478.00
491.77
500.35
501.12
498.63
479.23
489.03
506.44
514.86
551.41
Notes:
1. City Manager, Council members, City Clerk, HR, IT and Finance are under General Government.
2. Oversight of the Engineering has been moved from Economic and Community Development to Public Works.
3.Oversight of Parks and Common Greens was moved from PW to Parks, Rec and Maintenance Services
Source: City of South San Francisco Adopted Operating Budget FY 2015-16
167
CITY OF SOUTH SAN FRANCISCO
Operating Indicators by Function /Program
Last Five Fiscal Years
2012 2013 2014 2015 2416
Function/Program
Public safety:
Fire:
Inspections
1,997
2,369
2,574
1,817
Police:
Police calls for service
29,195'
33,657
29,3$9'
31,532
Law violations:
Part I crimes
2,012'
1,874
1,780!
1,874
Physical arrests (adult and juvenile)
1,790'
2,081
2,158
1,933
Traffic violations
3,954
3,632
4,175'
3,828
Parking violations
19,108'
14,648
16,597
13,378
Public works
Street resurfacing (miles) (Eng Div)
4,75'
3
22 (2)
0
Potholes repaired (square miles)
0.37
0.13
4.20
0.11
Asphalt used for street repairs (tons)
420
287
435
250
Culture and recreation:
Recreation class participants
26,737
27,184
26,694
26,879
Library:
Total items borrowed
731,911
701,721
686,491' (1) 643,630
Items in collection
181,905'
188,394
185,482' (1) 130,106
Wastewater
Residential connections
16,466:
16,466
16,482'
16,470
Commercial connections
1,576'
1,566
1,562'
1,560
Other connections
140!
127
128
128
Average daily sewage treatment (millions of gallons)
9.18`
9.27
8,28
8.89
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.
168
Function /Program
Public safety:
Fire stations
Police stations
Police Fleet
Public works
Miles of streets
Street lights
Parking District lights
Traffic Signals
Culture and recreation:
Community services:
City parks
City parks acreage
Playgrounds
City trails
Community gardens
Community centers
Senior centers
Skate Park
Dog park
Swimming pools
Tennis courts
Basketball Courts
Baseball/softball diamonds
Soccer /football fields
Library:
City Libraries (6)
Wastewater
Miles of sanitary sewers
Miles of storm sewers
Number of treatment plants
CITY OF SOUTH SAN FRANCISCO
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
Source: ssf.net/depts /res; Director of Rec & Comm Services; Superintendent of parks & Maintenance
(1) Police patrol units consists of 35 marked/unmarked cars, 6 motorcycles, 1 SWAT and 3 cushman.
(2) Year 2009, the 3 units added are not new. These are units that was not included on the previous Fleet count.
(3) Year 2010, Skate park and dog park was added on the list.
(4) The only senior center is Magnolia Center but programming still continues at El Camino.
(5) Community Learning Center not included on count as it is only a homework center not a library.
(6) Police substation located behind Miller parking garage not included.
(7) Includes all lights in SSF billed as LS -2 from PG &E
(8) One less motorcycle from last year.
CITY OF SOUTH SAN FRANCISCO
Miscellaneous Information
Last Three Fiscal Years
Transient Occupancy Tax Detail
9% TOT collected
1% Measure I Special Tax
Total TOT Collection
1% Measure I Special Tax Use
Police
Fire
Library
Parks
Recreation
Total 1% Measure I Special Tax
* Note: Measure I, a one percent supplemental special tax to the already existing 9% general transient occupancy tax (TOT) was approved on Nov. 2, 2004 and took
effect January 1, 2005. Special tax was earmarked for use to supplement Police, Fire, Library, and Parks and Recreation expenditures.
170
FYI .CJJ C
CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
AND
REQUIRED COMMUP]ICATIONS
FOR THE YEAR ENDED
JUNE 30, 2016
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
AND
REQUIRED COMMUNICATIONS
For the Year Ended June 30, 2016
Table of Contents
Page
Memorandumon Internal Control ..................................................................................... ............................... 1
Scheduleof Other Matters ......................................................................................... ............................... 3
Schedule of Prior Year Other Matters ....................................................................... ............................... 5
RequiredCommunications ................................................................................................. ............................... 7
SignificantAudit Findings ............................................................................................. ............................... 7
AccountingPolicies .................................................................................................. ............................... 7
Unusual Transactions, Controversial or Emerging Areas ...................................... ............................... 8
AccountingEstimates ................................................................................................ ............................... 8
Disclosures................................................................................................................. ............................... 9
Difficulties Encountered in Performing the Audit .................................................. ............................... 9
Corrected and Uncorrected Misstatements .............................................................. ............................... 9
Disagreementswith Management ............................................................................ ............................... 9
ManagementRepresentations .................................................................................. ............................... 9
Management Consultations with Other Independent Accountants ......................... ............................... 9
OtherAudit Findings or Issues ............................................................................... ............................... 10
Other Information Accompanying the Financial Statements ....................................... .............................10
This Page Left Intentionally Blank
MEMORANDUM ON INTERNAL CONTROL
To the City Council of
The City of South San Francisco, California
We have audited the basic financial statements of the City of South San Francisco for the year ended June
30, 2016, and have issued our report thereon dated DATE. Our opinions on the basic financial statements
and this report, insofar as they relate to the South San Francisco Conference Center Authority, are based
solely on the report of other auditors. In planning and performing our audit of the basic financial
statements of the City of South San Francisco as of and for the year ended June 30, 2016, in accordance
with auditing standards generally accepted in the United States of America, we considered the City's
internal control over financial reporting (internal control) as a basis for designing our audit procedures
that are appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal
control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the City's financial statements will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control was for the limited purpose described in the first paragraph and was
not designed to identify all deficiencies in internal control that might be material weaknesses. In addition,
because of inherent limitations in internal control, including the possibility of management override of
controls, misstatements due to error or fraud may occur and not be detected by such controls. Given these
limitations, during our audit we did not identify any deficiencies in internal control that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified.
Included in the Schedule of Other Matters are recommendations not meeting the above definitions that we
believe to be of potential benefit to the City.
This communication is intended solely for the information and use of management, City Council, others
within the organization, and agencies and pass - through entities requiring compliance with Government
Auditing Standards and is not intended to be and should not be used by anyone other than these specified
parties.
IM tA
Pleasant Hill, California
December 4, 2016
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
NEW GASB PRONOUNCEMENTS OR PRONOUNCEMENTS NOT YET EFFECTIVE
The following comment represents new pronouncements taking effect in the next few years. We have
cited them here to keep you abreast of developments:
Effective in fiscal year 2016 -17:
GASB 73 — Accountink and Financial Reporting for Pensions and RelatedAssets That Are Not within
the Scope of GASB Statement 68
This Statement establishes requirements for defined benefit pensions that are not within the scope of
Statement No. 68, Accounting and Financial Reporting for Pensions, as well as for the assets
accumulated for purposes of providing those pensions. In addition, it establishes requirements for defined
contribution pensions that are not within the scope of Statement 68. It also amends certain provisions of
Statement No. 67, Financial Reporting for Pension Plans, and Statement 68 for pension plans and
pensions that are within their respective scopes.
GASB 74 — Financial Reporting for Post - employment Benefit Plans Other Than Pension Plans
The objective of this Statement is to improve the usefulness of information about post - employment
benefits other than pensions (other post - employment benefits or OPEB) included in the general purpose
external financial reports of state and local governmental OPEB plans for making decisions and assessing
accountability. This Statement results from a comprehensive review of the effectiveness of existing
standards of accounting and financial reporting for all post- employment benefits (pensions and OPEB)
with regard to providing decision - useful information, supporting assessments of accountability and inter -
period equity, and creating additional transparency.
GASB 77 — Tax Abatement Disclosures
This Statement establishes financial reporting standards for tax abatement agreements entered into by
state and local governments. The disclosures required by this Statement encompass tax abatements
resulting from both (a) agreements that are entered into by the reporting government and (b) agreements
that are entered into by other governments and that reduce the reporting government's tax revenues.
GASB 78 — Pensions Provided through Certain Multiple - Employer Defined Benefit Pension Plans
This Statement amends the scope and applicability of Statement 68 to exclude pensions provided to
employees of state or local governmental employers through a cost - sharing multiple - employer defined
benefit pension plan that (1) is not a state or local governmental pension plan, (2) is used to provide
defined benefit pensions both to employees of state or local governmental employers and to employees of
employers that are not state or local governmental employers, and (3) has no predominant state or local
governmental employer (either individually or collectively with other state or local governmental
employers that provide pensions through the pension plan). This Statement establishes requirements for
recognition and measurement of pension expense, expenditures, and liabilities; note disclosures; and
required supplementary information for pensions that have the characteristics described above.
CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 80 – Blending Requirements for Certain Component Units —an amendment of GASB Statement
No. 14
This Statement amends the blending requirements for the financial statement presentation of component
units of all state and local governments. The additional criterion requires blending of a component unit
incorporated as a not - for -profit corporation in which the primary government is the sole corporate
member. The additional criterion does not apply to component units included in the financial reporting
entity pursuant to the provisions of Statement No. 39, Determining Whether Certain Organizations Are
Component Units.
Effective in fiscal year 2017 -18:
GASB 75 – Accounting and Financial Reporting for Post - employment Benefits Other Than Pensions
The primary objective of this Statement is to improve accounting and financial reporting by state and
local governments for post- employment benefits other than pensions (other post - employment benefits or
OPEB). It also improves information provided by state and local governmental employers about financial
support for OPEB that is provided by other entities. This Statement results from a comprehensive review
of the effectiveness of existing standards of accounting and financial reporting for all post - employment
benefits (pensions and OPEB) with regard to providing decision - useful information, supporting
assessments of accountability and inter- period equity, and creating additional transparency.
GASB 81– Irrevocable Split - Interest Agreements
This Statement requires that a government that receives resources pursuant to an irrevocable split- interest
agreement recognize assets, liabilities, and deferred inflows of resources at the inception of the
agreement. Furthermore, this Statement requires that a government recognize assets representing its
beneficial interests in irrevocable split- interest agreements that are administered by a third parry, if the
government controls the present service capacity of the beneficial interests. This Statement requires that a
government recognize revenue when the resources become applicable to the reporting period.
CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF PRIOR YEAR OTHER MATTERS
2015 -01 Segregation of Duties
Criteria: To strengthen internal controls over revenue collection, cash receipts reconciliation should be
performed by an employee independent of the cash collection process.
Condition: During our review of internal controls over the parking meter cash collection process, we
noted that one employee is responsible for the entire process from collecting the coins from the meters to
performing the coin counting, to preparing bank deposits. In addition, coins are not kept in a concealed
environment during the process allowing access by the employee. Quarterly, this employee also performs
an audit of meter coin collections. Using a handheld device, total meter collections are uploaded from
each meter into the City's software, and compared against total receipts generated for that period.
However, this reconciliation is not reviewed by another employee.
Cause: City staff was not aware that such a review process was deemed necessary.
Potential Effect: Without the involvement of a second employee reviewing the reconciliations, there
exists a risk that parking revenue can be intercepted before it is recorded in the City's system.
Recommendation: We recommend the City implement a review process, in which a second employee
reviews the quarterly reconciliations performed by the parking meter attendant. To provide evidence that
such review has taken place, the reviewer should sign off on the reconciliations.
Current Status: Implemented.
This Page Left Intentionally Blank
REQUIRED COMMUNICATIONS
To the City Council of
the City of South San Francisco, California
We have audited the basic financial statements of the City of South San Francisco for the year ended June
30, 2016. We did not audit the financial statements of the South San Francisco Conference Center
Authority as of and for the year ended June 30, 2016, which represent 1 %,2 %, and 3% of the assets, net
position and revenues, respectively, of the entity -wide reporting entity. These component unit financial
statements were audited by another auditor, whose report thereon has been furnished to us, and our
opinion, insofar as it relates to the amounts included for this entity, is based solely on the report of the
other auditor.
Professional standards require that we communicate to you the following information related to our audit
under generally accepted auditing standards and Government Auditing Standards and the Uniform
Guidance.
Significant Audit Findings
Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by City of South San Francisco are described in Note 1 to the financial
statements. No new accounting policies were adopted and the application of existing policies was not
changed during the year, except as follows:
The following Governmental Accounting Standards Board (GASB) pronouncements became effective,
but did not have a material effect on the financial statements:
GASB Statement No. 76 — The Hierarchy of Generally Accepted Accounting Principles for
State and Local Governments
GASB Statement No. 79 — Certain External Investment Pools and Pool Participants
The following pronouncements became effective and required modifications to the financial statements.
GASB Statements No. 72 —Fair Value Measurement and Application
This Statement addresses accounting and financial reporting issues related to fair value
measurements. The definition of fair value is 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. This Statement provides guidance for determining a fair value measurement
for financial reporting purposes. This Statement also provides guidance for applying fair value to
certain investments and disclosures related to all fair value measurements.
N
The requirements of this Statement enhance comparability of financial statements among
governments by requiring measurement of certain assets and liabilities at fair value using a
consistent and more detailed definition of fair value and accepted valuation techniques. This
Statement also enhances fair value application guidance and related disclosures in order to
provide information to financial statement users about the impact of fair value measurements on a
government's financial position.
GASB 82 – Pension Issues —an amendment of GASB Statements No. 67, No. 68, and No. 73
The objective of this Statement is to address certain issues that have been raised with respect to
Statements No. 67, Financial Reporting for Pension Plans, No. 6$, Accounting and Financial
Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and
Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain
Provisions of GASB Statements 67 and 68. Specifically, this Statement addresses issues regarding
(1) the presentation of payroll - related measures in required supplementary information, (2) the
selection of assumptions and the treatment of deviations from the guidance in an Actuarial
Standard of Practice for financial reporting purposes, and (3) the classification of payments made
by employers to satisfy employee (plan member) contribution requirements.
Unusual Transactions, Controversial or Emerging Areas
We noted no transactions entered into by the City during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's current judgments. Those judgments are normally based on knowledge and
experience about past and current events and assumptions about future events. Certain accounting
estimates are particularly sensitive because of their significance to the financial statements and because of
the possibility that future events affecting them may differ markedly from management's current
judgments. The most sensitive accounting estimates affecting the financial statements were depreciation,
compensated absences, net pension liabilities, and pension- related deferred outflows and inflows of
resources.
As of June 30, 2016, cash and investments were measured by fair value. Fair value is essentially market
pricing in effect as of June 30, 2016. These fair values are not required to be adjusted for changes in
general market conditions occurring subsequent to June 30, 2016.
Management's estimate of the net pension liabilities and deferred outflows /inflows of resources are
disclosed in Note 7 to the financial statements and are based on actuarial studies determined by a
consultant, which are based on the experience of the City. We evaluated the key factors and assumptions
used to develop the estimate and determined that it is reasonable in relation to the basic financial
statements taken as a whole.
Management's estimate of the depreciation is based on useful lives determined by management. These
lives have been determined by management based on the expected useful life of assets as disclosed in
Note 1J of the basic financial statements. We evaluated the key factors and assumptions used to develop
the depreciation estimate and determined that it is reasonable in relation to the financial statements taken
as a whole.
Disclosures
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are clearly trivial, and communicate them to the appropriate level of
management. Management has corrected all/certain such misstatements. In addition, none of the
misstatements detected as a result of audit procedures and corrected by management were material, either
individually or in the aggregate, to each opinion unit's financial statements taken as a whole.
Professional standards require us to accumulate all known and likely uncorrected misstatements identified
during the audit, other than those that are trivial, and communicate them to the appropriate level of
management. We have no such misstatements to report to the City Council.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor's report. We are pleased to report that no such disagreements arose during the
course of our audit.
Management Representations
We have requested certain representations from management that are included in a management
representation letter dated December 4, 2016.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves
application of an accounting principle to the City's financial statements or a determination of the type of
auditor's opinion that may be expressed on those statements, our professional standards require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our
knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the governmental unit's auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses were
not a condition to our retention.
Other Information Accompanying the Financial Statements
We applied certain limited procedures to the required supplementary information that accompanies and
supplements the basic financial statements. Our procedures consisted of inquiries of management
regarding 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 did not audit the required supplementary information
and do not express an opinion or provide any assurance on the required supplementary information.
We were engaged to report on the supplementary information which accompany the financial statements,
but are not required supplementary information. With respect to this supplementary information, we made
certain inquiries of management and evaluated the form, content, and methods of preparing the
information to determine that the information complies with accounting principles generally accepted in
the United States of America, the method of preparing it has not changed from the prior period, and the
information is appropriate and complete in relation to our audit of the financial statements. We compared
and reconciled the supplementary information to the underlying accounting records used to prepare the
financial statements or to the financial statements themselves.
We were not engaged to report on the Introductory and Statistical Sections which accompany the financial
statements, but are not required supplementary information. Such information has 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.
This information is intended solely for the use of City Council and management and is not intended to be,
and should not be, used by anyone other than these specified parties.
AAJf
Pleasant Hill, California
December 4, 2016
10
FYI .CJJ D
INDEPENDENT ACCOUNTANT'S REPORT ON
AGREED UPON PROCEDURES REPORT FOR
COMPLIANCE WITH THE PROPOSITION 111
2015 -2016 APPROPRIATIONS LEMT INCREMENT
Honorable Mayor and Members of the City Council
City of South San Francisco, California
We have performed the procedures below to the Appropriations Limit Worksheet which were agreed to by
the City of South San Francisco (City), California, for the year ended June 30, 2016. These procedures,
which were suggested by the League of California Cities and presented in their Article XIIM
Appropriations Limitation Uniform Guidelines, were performed solely to assist you in meeting the
requirements of Section 1.5 of Article XRM of the California Constitution. Management is responsible for
the Appropriations Limit Worksheet. This agreed -upon procedures engagement was conducted in
accordance with attestation standards established by the American Institute of Certified Public Accountants.
The sufficiency of these procedures is solely the responsibility of the City. Consequently, we make no
representation regarding the sufficiency of the procedures described below either for the purpose for which
this report has been requested or for any other purpose.
The procedures you requested us to perform and our findings were as follows:
A. We obtained the Appropriations Limitation Worksheet and determined that the 2015 -2016 Limit of
$121,263,600 and annual adjustment factors were adopted by Ordinance of City Council. We
determined that the population and inflation options were selected by a recorded vote of the City
Council.
B. We computed the 2015 -2016 Appropriations Limit by multiplying the 2014 -2015 Prior Year
Appropriations Limit by the Total Growth Factor. We recomputed the Total Growth Factor by
multiplying the inflation option by the population option, selected by the City.
C. For the Appropriations Limitation Worksheet, we agreed the Per Capita Income, County and City
Population Factors to California State Department of Finance Worksheets.
We were not engaged to, and did not, conduct an audit, the objective of which would be the expression of an
opinion on the Appropriations Limit Worksheet. Accordingly, we do not express such an opinion. Had we
performed additional procedures, other matters might have come to our attention that would have been
reported to you.
This report is intended solely for the information and use of management and the City Council and is not
intended to be and should not be used by anyone other than those specified parties; however, this
restriction is not intended to limit the distribution of this report, which is a matter of public record.
e-
Pleasant Hill, California
December 4, 2016
FYI .CJJ E
CITY OF SOUTH SAN FRANCISCO
MEASURE A FUNDS
Report on Compliance with the
Agreement for Distribution of San Mateo County
Measure A Funds for Local Transportation Purposes
For the Year Ended June 30, 2016
CITY OF SOUTH SAN FRANCISCO
MEASURE A COMPLIANCE
For the Year Ended June 30, 2016
Table of Contents
Page
Independent Auditor's Report on Management's Assertion ............................. ............................... l
Financial Statements:
BalanceSheet ...................................................................................................... ..............................2
Schedule of Revenues, Expenditures and Changes in Measure A Fund Balance ..........................3
Notes to Schedule of Revenues, Expenditures and Changes in Measure A Fund Balance ............4
Management's Report on Compliance With The
Agreement For Distribution of San Mateo County
Measure A Funds for Local Transportation Purposes ................................... ............................... 5
INDEPENDENT AUDITOR'S REPORT ON MANAGEMENT'S ASSERTION
Honorable Mayor and Members of City Council of the
City of South San Francisco, California
We have examined management's assertion, included in accompanying Management's Report on Compliance
with the Agreement for Distribution of San Mateo County Measure A Funds for Local Transportation Purposes
(the Agreement) between the City and the San Mateo County Transportation Authority dated March 5, 2009,
that the City of South San Francisco complied with the requirements of the Agreement during the year ended
June 30, 2016. Management is responsible for the City's compliance with those requirements. Our
responsibility is to express an opinion on management's assertion about the City's compliance based upon our
examination.
Our examination was conducted in accordance with the attestation standards established by the American
Institute of Certified Public Accountants and accordingly, included examining, on a test basis, evidence about
the City's compliance with those requirements and performing such other procedures as considered necessary
in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provided legal determination of the City's compliance with specified requirements.
In our opinion, the City complied, in all material respects, with the aforementioned requirements for the year
ended June 30, 2016.
This communication is intended solely for the information and use of the City Council, management and the
San Mateo County Transportation Authority Board and Management, and is not intended to be and should not
be used by anyone other than these specified parties.
)i�� Aw
Pleasant Hill, California
December 4, 2016
CITY OF SOUTH SAN FRANCISCO
MEASURE A FUND
BALANCESHEET
JUNE 30, 2016
ASSETS:
Cash and investments $1,269,173
Accrued interest receivable 7,433
TOTAL ASSETS $1,276,606
FUND BALANCE:
Restricted for Measure A capital projects and maintenance $1,276,606
TOTAL FUND BALANCE $1,276,606
See accompanying notes to the financial statements.
CITY OF SOUTH SAN FRANCISCO
MEASURE A FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES
Sales tax from the County of San Mateo $1,412,863
Interest and investment income 49,427
Total Revenues 1,462,290
TRANSFERS OUT
Capital Improvements Projects:
South Linden Avenue Grade Separation
59
Street Rehabilitation Program
1,527,846
Dubuque Avenue & East Grand Avenue Improvement
18,779
South Airport Boulevard Bridge Replacement
34,718
Sidewalk Gap Closure Project
248
Grand Boulevard Project
49,437
Grand Boulevard Project - Kaiser to BART
23,742
Evergreen/Mission Traffic Signal
161,027
Downtown Truck Restriction Project
20,188
Grand Avenue/Magnolia Avenue Traffic Signal
124,446
Los Cerritos West Orange Avenue Improvement
415,783
Fairway & West Orange Traffic Calming Improvements
238
Junipero Serra/King Drive Intersection Improvement
78,979
Oyster Point Bike Lanes
64,835
SSF Caltrain Station Pedestrian/Bike Underpass
17,200
General Fund Projects:
South City Shuttle 49,917
Total Transfers 2,587,442
Net Change in Fund Balance (1,125,152)
Fund Balance, July 1 2,401,758
Fund Balance, June 30 $1,276,606
CITY OF SOUTH SAN FRANCISCO
MEASURE A FUNDS
Notes to Financial Statements
For the Year Ended June 30, 2016
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
At the General Election of June 7, 1988, the voters of City of San Mateo County approved
Measure A, which is an ordinance providing for the creation of the San Mateo County
Transportation Authority for the imposition of a one -half of one percent sales transaction and
use tax. Twenty percent of the aforementioned tax is to be allocated to the cities of San Mateo
County and to the County of San Mateo for the improvement of local transportation, including
streets and roads in accordance with Measure A requirements.
B. Basis of Accounting
The Schedule of Measure A Funds (Transportation Sales Tax), a special revenue fund of the
City of South San Francisco, California, have been prepared in conformity with accounting
principles generally accepted in the United States of America as applied to governmental units.
The Governmental Accounting Standards Board is the accepted standard - setting body for
establishing governmental accounting and financial reporting principles.
The Measure A Funds are accounted for using the modified accrual basis of accounting. Under
this basis, revenues are recognized when they become both measurable and available to finance
expenditures of the fiscal period. Expenditures are recognized when the liability is incurred.
FINANCE DEPARTMENT
650 -877 -8507
December 4, 2016
San Mateo County Transportation Authority
1250 San Carlos Avenue
San Carlos, California 94070
CITY COUNCIL 2016
MARK ADDIEGO, MAYOR
PRADEEP GUPTA, PH.D., VICE MAYOR
RICHARD A. GARBARINO, COUNCILMEMBER
KARYL MATSUMOTO, COUNCILMEMBER
LIZA NORMANDY, COUNCILMEMBER
MIKE FUTRELL, CITY MANAGER
RE: Management's Report on Compliance with the Agreement for Distribution of San
Mateo County Measure A Funds for Local Transportation Purposes
The City of South San Francisco is responsible for complying with the Agreement for
Distribution of San Mateo County Measure A Funds for Local Transportation Purposes (the
Agreement) between the City and the San Mateo County Transportation Authority effective on
January 1, 2009. The Agreement states that in return for receiving an annual allocation of a
specified portion of the retail transactions and use tax approved by Measure A — San Mateo
County Transportation Expenditure Plan (the Measure), the City agrees that funds, "shall not be
used to replace funds previously provided by property tax or other local revenues for public
transportation purposes, and that City will limit the use of funds provided pursuant to this
agreement to the improvement and maintenance of local transportation, including streets and
road improvements."
With respect to compliance with the Agreement, management attests to the following for the
year ended June 30, 2016:
Management is responsible for establishing and maintaining an effective internal control
structure with respect to compliance with the Agreement;
Management is responsible for complying with the Agreement;
Management has evaluated the City's compliance with the requirements of the Agreement;
All Transactions, as summarized in the attached Schedule of Measure A Funds for the Year
Ended June 30, 2016, are in compliance with the Agreement.
Richard Lee
Finance Director
�r
',,Mike Futrell
City Manager
400 GRAND AVENUE o P.O. BOX 711 • SOUTH .FAN FRANCISCO, CA 94083
FYI .CJJ F
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT
ACT ARTICLE III FUND
BASIC FINANCIAL STATEMENTS
FOR THE YEARS ENDED
JUNE 30, 2016 AND 2015
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
Basic Financial Statements
For the Years Ended June 30, 2016 and 2015
Table of Contents
Page
IndependentAuditor's Report .......................................................................................... ............................... 1
Fund Financial Statements:
ComparativeBalance Sheet ....................................................................................... ............................... 3
Comparative Statement of Revenues, Expenditures and Changes in Fund Balance .............................. 4
Notesto Financial Statements ................................................................................... ............................... 5
Independent Auditor's Report on Internal Control Over Financial Reporting,
on Compliance with the Transportation Development Act
and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards ................................ ............................... 7
This Page Left Intentionally Blank
INDEPENDENT AUDITOR'S REPORT
Honorable Members of the City Council of the
City of South San Francisco
South San Francisco, California
We have audited the accompanying financial statements of the City of South San Francisco Transportation
Development Act Article III Fund (TDA Fund), which are included in the Capital Projects Fund of the City
of South San Francisco (City), California, as of and for the years ended June 30, 2016 and 2015, and related
notes to the financial statements which collectively comprise the TDA Fund'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 audits. We conducted
our audits 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 audits to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the TDA Fund'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 TDA Fund'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.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial positions of the TDA Fund as of June 30, 2016 and 2015, and the respective changes
in financial positions for the years then ended in conformity with accounting principles generally accepted
in the United States of America.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the TDA Fund and do not purport to, and do
not present fairly the financial positions of the City as of June 30, 2016 and 2015 the changes in its
financial positions, or, where applicable, its cash flows for the years then ended in accordance with
accounting principles generally accepted in the United States of America. Our opinion is not modified
with respect to this matter.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 4,
2016, on our consideration of the TDA Fund'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 TDA Fund's internal control over
financial reporting and compliance.
b
Pleasant Hill, California
December 4, 2016
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
COMPARATIVE BALANCE SHEET
JUNE 30, 2016 AND 2015
ASSETS
Due from Metropolitan Transportation Commission
Total Assets
LIABILITIES
Due to the City
Total Liabilities
FUND BALANCE
Total Fund Balance and Liability
2016
Allocation
Instruction
Number
14nn11nn 2015
$163,318 $86,468
$163,318 $86,468
$163,318 $86,468
163,318 86,468
$163,318 $86,468
See accompanying notes to financial statements
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
FOR THE YEARS ENDED JUNE 30, 2016 AND 2015
REVENUES
TDA Article 3.0 (Note 2)
Total Revenues
EXPENDITURES
Oyster Point Bike Land Improvement
In- Ground Lighted Crosswalk
(Pedestrian Crossing Improvement)
Total Expenditures
Net change in fund balance
Fund balance at beginning of year
Fund balance at end of year
2016
Allocation
Instruction
Number
14001100 2015
$163,318 $86,468
163,318 86,468
163,318 18,782
67,686
163,318 86,468
See accompanying notes to financial statements
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
Notes to the Financial Statements
For the Years Ended June 30, 2016
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of South San Francisco, California (City), Transportation Development Act Article III Fund
(TDA Fund) includes the financial activities associated with the State of California Transportation
Development Act. The State of California created a local transportation fund for each County
funded by a portion of the State sales tax.
The TDA Fund is distributed through the Metropolitan Transportation Commission (MTC) which is
the agency responsible for allocation of funds to eligible claimants within the greater San Francisco
Bay Area.
The TDA Fund is included in a Capital Projects Fund of the Comprehensive Annual Financial
Report of the City. The financial statements are intended to present the financial position and results
of operation for the TDA Fund, and not those of the City as a whole.
B. Basis of Accounting
Basis of accounting refers to when revenues and expenditures are recognized. The TDA Fund is
accounted for in a governmental fund type and the modified accrual basis of accounting is used.
Under the modified accrual basis, revenues are recognized when they become measurable and
available as net current assets. TDA Article 3.0 revenues are recognized when qualifying project
expenditures are incurred. Expenditures are generally recognized when they are incurred.
NOTE 2 - TDA ARTICLE 3.0 REVENUE
As of the year ended June 30, 2016 and 2015 the City received allocation instructions from the
Metropolitan Transportation Commission for the following project:
Instruction Number
Project Name Grant Award 2016
14001100 Oyster Point Blvd. Bike Lane Improvement
14001110 Pedestrian Crossing Improvement
Revenue
2015
$182,100 $163,318 $18,782
98,000 67,686
$163,318 $86,468
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE IH FUND
Notes to the Financial Statements
For the Years Ended June 30, 2016
NOTE 3 - COMMITMENTS AND CONTINGENCIES
The City participates in several grant programs. These programs have been audited by the City's
independent accountants in accordance with the provisions of 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 to be
immaterial.
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.
INDEPENDENT AUDITOR'S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING,
ON COMPLIANCE WITH TIE TRANSPORTATION DEVELOPMENT ACT
AND OTHER MATTERS BASED ON
AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT A UDITING STANDARDS
Honorable Members of the City Council of
City of South San Francisco
South San Francisco, California
We have audited, in accordance with the 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, the basic financial statements of the Transportation
Development Act Article M Fund (the TDA Fund) of the City of South San Francisco (City), California, as
of and for the year ended June 30, 2016, and the related notes to the financial statements, and have issued
our report thereon dated December 4, 2016.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the TDA Fund's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the TDA Fund's internal control. Accordingly, we
do not express an opinion on the effectiveness of the TDA Fund's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the TDA Fund's
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts,
and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. Our procedures included the applicable audit procedures
contained in §6666 of Title 21 of California Code of Regulations and tests of compliance with the
applicable provisions of the Transportation Development Act and the Allocation Instructions and
Resolutions of the Metropolitan Transportation Commission. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that
are required to be reported under Government Auditing Standards.
We have also issued a separate Memorandum. on Internal Control dated December 4, 2016 which is an
integral part of our audit and should be read in conjunction with this report.
City's Response to Findings
City's response to the findings identified in our audit are described in our separately issued Memorandum
on Internal Control, dated December 4, 2016, which is an integral part of our audits and should be read in
conjunction with this report. City's response was not subjected to the auditing procedures applied in an
audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the TDA Fund's
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the TDA Fund's internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
0
Pleasant Hill, California
December 4, 2016