HomeMy WebLinkAboutReso 28-2018 (18-55)City of South San Francisco P.O. Box 711 (City Hall,
• 400 Grand Avenue)
South San Francisco, CA
• City council
Resolution: RES 28 -2018
File Number: 18 -55 Enactment Number: RES 28 -2018
RESOLUTION ACKNOWLEDGING RECEIPT OF THE FISCAL
YEAR 2016 -17 AUDITED FINANCIAL STATEMENTS, INCLUDING
THE COMPREHENSIVE ANNUAL FINANCIAL REPORT.
WHEREAS, the Budget Standing Committee accepted the FY 2016 -17 year -end financial results on
October 25, 2017; and
WHEREAS, the City Council accepted the FY 2016 -17 year -end financial results on November 8, 2017;
and
WHEREAS, the City of South San Francisco's independent auditor opined that that the City's financial
statements present fairly, in all material respects, the City's financial position; and
WHEREAS, the Memorandum on Internal Control indicated that there were no findings in the auditor's
review of the City's internal controls; and
WHEREAS, the City's FY 2016 -17 audited financial statements affirm prudent financial stewardship.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco does
hereby accept the FY 2016 -17 audited financial statements, attached herein as Exhibits A, B, C, and D.
At a meeting of the City Council on 2/14/2018, a motion was made by Mark Addiego, seconded by Richard
Garbarino, that this Resolution be approved. The motion passed.
Yes: 4 Mayor Normandy, Mayor Pro Tem Matsumoto, Councilmember Garbarino, and
Councilmember Addiego
Absent: 1 Councilmember.Gupta
Attes by
a a i ell
City of South San Francisco Page 1
EXHIBIT A
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2017
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Ended June 30, 2017
Table of Contents
I INTRODUCTORY SECTION I
Table of Contents ................................................................................................................................................. i
Letter of Transmittal ........................................................................................................................................... v
Certificate of Achievement for Excellence in Financial Reporting ................................................................. ix
Organization Chart ............................................................................................................................................. x
City Council and Directory of City Officials .................................................................................................... xi
I FINANCIAL SECTION I
Independent Auditor's Report ........................................................................................................................ I
Management's Discussion and Analysis ........................................................................................................ 5
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position ................................................................................................................... 27
Statement of Activities ........................................................................................................................ 28
Fund Financial Statements:
Major Governmental Funds:
Balance Sheet .................................................................................................................................. 3 2
Reconciliation of Governmental Fund Balances to Net Position of Governmental Activities ..... 34
Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................ 36
Reconciliation of the Net Change in Fund Balances Total Governmental Funds with
the Statement of Activities .......................................................................................................... 3 8
Statement of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual-
Budgetary Basis:
General Fund ......................................................................................................................... 3 9
Low and Moderate Income Housing Assets ......................................................................... 40
Major Proprietary Funds:
Statement of Net Position ............................................................................................................... 42
Statement of Revenues, Expenses, and Changes in Fund Net Position ......................................... 43
Statement of Cash Flows ................................................................................................................. 44
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Ended June 30, 2017
Table of Contents
I FINANCIAL SECTION (Continued) I
Fiduciary Funds:
Statement of Fiduciary Net Position ............................................................................................... 46
Statement of Changes in Fiduciary Net Position ............................................................................ 4 7
Notes to Basic Financial Statements ........................................................................................................ 49
Required Supplementary Information:
Schedule of Changes in Net Position Liability and Related Ratios-
Miscellaneous and Safety Plan ............................................................................................. 98
Schedule of Contributions -Miscellaneous and Safety Plan ......................................................... 99
Schedule of Changes in Net Pension Liability and Related Ratios ............................................. 100
Schedule of Contributions -Safety Agent ................................................................................... 101
Other Post-Employment Benefits Schedule of Funding Progress ............................................... 102
Supplementary Information:
General Fund:
Combining Balance Sheet. ................................................................................................................ 106
Combining Schedule of Revenues, Expenditures, and Changes
in Fund Balances ....................................................................................................................... 107
Combining Schedule of Revenues, Expenditures, and Changes
in Fund Balance Budget and Actual -(Non GAPP Legal Basis) ............................................ 108
Major Governmental Funds Other Than the General Fund and Special Revenue Funds:
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual:
Capital Improvement Capital Projects Fund (Non GAAP Legal Basis) ..................................... 112
East of 101 Sewer Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ................. 113
East of 101 Traffic Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ............... 114
Child Care Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ............................. 115
Developer Deposits Capital Projects Fund (Non GAAP Legal Basis) ................................... 116
Capital Infrastructure Reserve Fund (Non GAAP Legal Basis) ............................................. 117
II
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Ended June 30, 2017
Table of Contents
I FINANCIAL SECTION (Continued)
Non-major Governmental Funds:
Combining Balance Sheet. ................................................................................................................ 122
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances ....................................................................................................................... 126
Budgeted Non-major Government Funds:
Combining Schedule of Revenues, Expenditures, and Changes
in Fund Balances -Budget and Actual .................................................................................... 130
Internal Service Funds:
Combining Statement of Net Position .............................................................................................. 139
Combining Statement of Revenues, Expenses and Changes in Fund Net Position ........................ 140
Combining Statement of Cash Flows ............................................................................................... 141
Fiduciary Funds:
Statement of Changes in Assets and Liabilities -Agency Fund ................................................... 144
I STATISTICAL SECTION I
Net Position by Component-Last Ten Fiscal Years .................................................................... 147
Changes in Net Position -Last Ten Fiscal Years ........................................................................... 148
Fund Balances of Governmental Funds -Last Ten Fiscal Years .................................................. 150
Changes in Fund Balance of Governmental Funds -Last Ten Fiscal Years ................................ 152
Assessed and Estimated Actual Value of Taxable Property -Last Ten Fiscal Years ................... 154
Property Tax Rates -Direct and Overlapping Governments -
Last Ten Fiscal Years ................................................................................................................ 15 5
Principal Property Taxpayers-Current Year and Nine Years Ago .............................................. 156
Twenty Largest Taxable Property Owners for Merged RDA Project Area .................................. 157
Property Tax Levies and Collections-Last Ten Fiscal Years ...................................................... 158
Ratio of Outstanding Debt by Type -Last Ten Fiscal Years ........................................................ 159
Computation of Direct and Overlapping Debt ............................................................................... 160
111
CITY OF soum SAN FRANCISCO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Ended June 30, 2017
Table of Contents
I STATISTICAL SECTION (Continued) I
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 Five Fiscal Years ........................................... 168
Capital Asset Statistics by Function/Program -Last Ten Fiscal Years ........................................ 169
Miscellaneous Information -Last Three Fiscal Years .................................................................. 170
IV
F I NANCE DEPARTMENT
650-877-8507
December 15, 2017
Honorable Mayor and Members
Of the City Counci l
City of South San Francisco
South San Francisco, California
C ITY COUNCIL 2017
PRADEEP GUPTA, PH.D ., MAYOR
LIZA NORMANDY, VICE MAYOR
KARYL MATSUMOTO, COUNCILMEMBER
RICHARD A. GARBARINO, COUNCILMEMBER
MARK ADDIEGO, 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, 2017, is hereby submitted_
Responsibility for the accuracy of the data, and the completeness and fairness of
the presentation, including all disclosures, rests with the City . To the best of our
knowledge and belief, the enclosed data is accurate in all material respects and
is reported in a manner designed to present fairly the financial position and
results of operations of the various funds of the City. All disclosures necessary to
enable the reader to gain an understanding of the City's financial activities have
been included.
This report includes all financial activities of the City of South San Francisco,
including financial information for the City, as the primary government, and for its
component units, for which the City is considered financially accountable. The
component units are included because of the significance of their governing,
operational, and/or financial relationships with the City. The Successor Agency
that was created due to the Redevelopment Agency dissolution is also included
in this report.
Management's Discussion & Analysis (MD&A) provides a narrative introduction
overview and analysis to accompany the basic financial statements. This letter of
transmittal is designed to complement the MD&A and should be read in
conjunction with it. The MD&A is found immediately following the report of the
independent auditor in the financial section.
BACKGROUND OF THE CITY
The City encompasses approximately 9.5 square miles and has a population of
64,451. It employs approximately 464 full-time regular employees. South San
400 GRAND AVENUE • P .O . BOX 711 • SOUTH SAN FRANCISCO, CA 94083
v
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 department heads.
FINANCIAL INFORMATION
In developing and appraising the City's accounting system, consideration is given
to the adequacy of internal accounting controls. Internal accounting controls are
designed to provide reasonable but not absolute assurance regarding: (1) the
safeguarding of assets against loss from unauthorized use or disposition; (2) the
reliability of financial records for preparing financial statements and maintaining
accountability for assets; and (3) transactions being properly executed in
accordance with management's authorization.
The concept of reasonable assurance recognizes that: (1) the cost of a control
should not exceed the benefits likely to be derived; and (2) the evaluation of
costs and benefits requires estimates and judgments by management.
Basic characteristics of sound internal accounting control include segregation of
accounting duties, approvals of accounting transactions, and regular
reconciliation of detail and control records.
All internal control evaluations occur within this framework. We believe that the
City's internal accounting controls adequately safeguard assets and provide
reasonable assurances of proper recording of financial transactions.
vi
The City adopts fiscal year budgets for its general, special revenue, debt service,
enterprise, and capital project funds. The government also maintains an
encumbrance accounting system as one technique of accomplishing budgetary
control. Encumbered amounts lapse at year-end. However, encumbrances
generally are reappropriated as a part of the following year's budget.
The City's Reserves Policy is aligned with the Government Finance Officers
Association (GFOA) best practices recommendation for reserves, setting aside
15-20 percent of operating revenues. Given the ongoing growth trend in General
Fund operating revenues, the City's Reserves have grown commensurately,
which is reflected on the Fiscal Year 2016-17 financial statement.
The Fiscal Year 2016-17 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's capital assets are comprised of 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's deductible or retention levels of its workers
compensation, general liability and property damage insurance policies are
$500,000, $100,000, and $5,000, respectively. A third party administrator
handles workers' compensation claims. The Association of Bay Area
VII
Citizens of South San Francisco
City Council
Pradeep Gupta, Ph.D., Mayor
City Clerk -Liza Normandy, Vice Mayor -City Treasurer
Krista Martinelli Mark Addiego, Council member Frank Risso
Richard A. Garbarino, Council member
Karyl Matsumoto, Councilmember
City Attorney
Jason Rosenberg
Assistant City Manager I City Manager Communications Director Chief Sustainability Officer --Marian Lee Mike Futrell Leslie Arroyo
I
Information Technology
Department
Administrative Departments Operating Departments
Finance Director Econ. & Comm. Dev. Dir. Public Works Director -...._
Richard Lee Alex Greenwood Euneiune Kim
Human Resources Director Library Director Fire Chief -_,_
LaTanya Bellow Valerie Sommer Gerry Kohlmann
Parks and Recreation Director Chief of Police --Sharon Ranals Jeff Azzopardi
x
City Council & Directory of Officials
City Council
Pradeep Gupta, Ph.D.
Liza Normandy
Mark N. Addiego
Richard A. Garbarino
Karyl Matsumoto
Elected Officials
Krista Martinefli
Frank Risso
Appointed Officials
Mike Futrell
Marian Lee
Leslie Arroyo
Richard Lee
LaTanya Bellow
Tony Barrera
Alex Greenwood
Gerry Kohlmann
Jeff Azzopardi
Valerie Sommer
Eunejune Kim
Sharon Ranals
Budget Subcommittee
Pradeep Gupta, Ph.D.
Liza Normandy
Mayor
Vice Mayor
Councilmember
Councilmember
Councilmember
City Clerk
City Treasurer
City Manager
Assistant City Manager I Chief Sustainability Officer
Communications Director
Finance Director
Human Resources Director
Chief Innovation Officer
Economic & Community Development Director
Fire Chief
Chiefof Police
library Director
Public Works Director
Parks & Recreation Director
XI
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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, 2017, and the related notes to the financial statements,
which collectively comprise the City's basic financial statements as listed in the Table of Contents. We did not
audit the component unit financial statements of the South San Francisco Conference Center Authority (Authority),
which is discretely presented and represents 1 %, 2%, and 2%, respective, of the assets, net position, and revenue of
the entity-wide reporting entity.
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 op1mons on these financial statements based on our audit. These financial
statements of the Authority were audited by other auditors, whose report thereon has been furnished to us and our
opinion, insofar as it relates to the amounts included for the Authority, is based solely on the report of these
auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
1
1
Opinions
In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above
present fairly, in all material respects, the respective financial position of the governmental activities, the
business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate
remaining information of the City as of June 30, 2017, and the respective changes in financial position and,
where applicable, cash flows thereof and the respective budgetary comparisons listed in the Table of Contents as
part of the basic financial statements for the year then ended in 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 as listed in the Table of Contents be presented to
supplement the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential
part of financial reporting for placing the basic financial statements in an appropriate operational, economic or
historical context. We have applied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other knowledge
we obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The Introductory Section, Supplemental Information, and
Statistical Section as listed in the Table of Contents are presented for purposes of additional analysis and are not
required parts of the basic financial statements.
The Supplemental Information is the responsibility of management and was derived from and relates directly to
the underlying accounting and other records used to prepare the basic financial statements. The information has
been subjected to the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the Supplemental Information is fairly stated, in all material respects,
in relation to the basic financial statements as a whole.
The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the audit
of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on
them.
2
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 14, 2017
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.
~}e-14~
Pleasant Hill, California
December 14, 2017
3
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CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Government Accounting Standards Board Statement 34 (GASB 34) requires the City of South
San Francisco to provide an overview of its financial activities for the fiscal year. Please read
this in conjunction with the accompanying Transmittal Letter and Basic Financial Statements.
FISCAL YEAR (FY) 2016-17 FINANCIAL HIGHLIGHTS
Summary:
In FY 2016-17, the South San Francisco Successor Agency of the former Redevelopment
Agency transferred property from its Long Range Property Management Plan (LRPMP) to the
City of South San Francisco. The carrying value of the properties, which is accounted for in
General Fund Use of Money and Property revenue of $20.6 million as property held for
redevelopment. Once the properties have subsequently been sold, the City will receive a share of
the net proceeds, along with the other taxing entities included in the former Redevelopment
Agency.
The General Fund, excluding the $20.6 million in property held for redevelopment, ended FY
2016-17 with a surplus of $12.7 million. The majority of the $12.7 million surplus was used to
assign or commit General Fund reserves for outstanding purchase orders and multi-year capital
projects. Reserves assigned for outstanding purchase orders increased from $1.5 million to $5.2
million. Reserves committed for multi-year capital projects, including the Community Civic
Campus, increased from $3.7 million to $11.8 million. All of the above changes in reserves are
funded by the General Fund operating surplus. In addition, 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. After meeting the
City's reserves requirement, the City Council authorized transfer of $2.3 million in remaining
surplus to the Infrastructure Reserves.
During FY 2016-17, Finance Department staff reclassified Property Tax in lieu of Vehicle
License Fee (VLF) from the Intergovernmental revenue category to the Property Tax revenue
category. This revenue reclassification accounts for a legislative change from 2004, where the
State of California eliminated the allocation of Vehicle License Fees to local agencies, and
backfilled the lost revenue with an additional share of property tax revenues.
General Fund revenues (excluding operating transfers in and $20.6 million in property held for
redevelopment) increased by $12.3 million compared to the prior year. The primary drivers of
the year-over-year increase were property tax, sales tax and permit revenues. Property Tax
revenues, accounting for the Property Tax in lieu of VLF reclassification discussed above,
increased by $2.8 million, reflecting steady growth in assessed value of the City's secured
property tax roll. Measure W, the City's half-cent transactions and use tax, was implemented in
April 2016, thus FY 2016-17 was the first full year with Measure W in place. As such, Sales Tax
revenues increased $6.8 million. Permit revenues increased $927 thousand, indicative of major
commercial developments in the City's East of 101 area.
5
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
City-wide financial highlights of the year include the following:
• Total Net Position for Governmental Activities in FY 2016-17 increased $58.6 million in
comparison to the prior year, from $163.4 million to $222.0 million. The increase in net
position was evident through changes in all asset categories -cash and investments, other
assets, and capital assets.
• Governmental cash and investments increased by $17. 7 million, of which the General Fund
represents $14.6 in additional cash and investments, reflecting the year over year revenue
increases discussed above. In addition, cash and investments within the City Housing Fund
increased by $1.3 million, largely due to the sale of a City-owned property located at 380
Alta Vista. Cash and investments in the Developer Contributions Fund increased by $2.6
million, representative of $633 thousand in General Plan Maintenance Fees and $600
thousand in developer contributions that were recognized as a negotiated community benefit
fee pursuant to a development agreement. Offset by reduction of $3 .1 in the Capital
Infrastructure Reserve Fund, which reflected a planned spend of existing resources to fund
one-time expenditures.
• Governmental other assets increased by $18.6 million, while capital assets increased by
$22.6 million compared to the prior year. The increase within both categories was due to the
transfer of property from the Successor Agency to the City. The properties that were
designated for governmental use in the Long Range Property Management Plan were given
the City at no cost, while taxing entities will proportionally share the net proceeds of
properties that were designated for redevelopment once they have been sold.
• Governmental outflows related to pension increased from $12.6 million to $28.3 million,
while deferred inflows related to pension decreased from $11.2 million to $5 .2 million. The
change primarily reflected the impact of variance between CalPERS discount rate and its
actual return on investment.
• Expenses for Governmental Activities increased by $12.1 million, largely due to increases in
employee salaries as negotiated through the collective bargaining process as well as increases
in pension costs due to ongoing amortization of investment losses with CalPERS.
• Business-type program expenses increased by $4.5 million in FY 2016-17, most notably in
the Sewer Fund. The year-over-year increase was largely due to a significant reduction in
capital expenses compared to the prior year. The Sewer Fund, as a proprietary fund, offsets
capital expenses when realizing new capital asset additions. As such, the capital expense
offset was larger in the prior year.
• Property tax revenues, accounting for the reclassification of Property Tax in lieu of VLF,
increased $2.9 million, or 9.2 percent compared to the pnor year. The increase was
indicative of the City's robust secured property tax base.
6
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
• Sales tax revenues increased by $6.8 million, or 38.2 percent over the prior fiscal year.
Measure W, the City's half-cent transactions and use tax was implemented in April 2016.
Thus, FY 2016-17 was the first full fiscal year that Measure W was in place, and represented
the crux of the increase.
• Permit revenues for all Governmental Funds increased $927 thousand, or 13.4 percent over
the prior fiscal year, indicative of the continuing robust development climate in the East of
101 area of South San Francisco and the greater San Francisco Bay Area.
• In FY 2016-17, Transient Occupancy Tax (TOT) revenues increased by $189 thousand, the
fourth consecutive year of record breaking revenues, reflecting the trend of high occupancy
and high room rates.
OVERVIEW OF THE COMPREHENSIVE ANNUAL FINANCIAL REPORT
This Comprehensive Annual Financial Report is in six parts:
1) The Introductory Section, which includes the Transmittal Letter and general information;
2) Management's Discussion and Analysis (this part);
3) The Basic Financial Statements, which include the Government-wide and the Fund
Financial Statements, along with the notes accompanying these statements;
4) Required Supplementary Information and the accompanying notes;
5) Other Supplementary Information including combining statements for non-major
governmental funds, internal service funds, other budgetary information, and a fiduciary
statement of changes in assets and liabilities; and
6) The Statistical Section.
Basic Financial Statements
The Basic Financial Statements are comprised of the City-wide Financial Statements and the
Fund Financial Statements. These two sets of financial statements provide two different views of
the City's financial activities and financial position.
The City-wide Financial Statements provide a longer-term view of the City's activities as a
whole, and consist of the Statement of Net Position and the Statement of Activities. The
Statement of Net Position provides information about the financial position of the City as a
whole, including all its capital assets and long-term liabilities on the full accrual basis, similar to
the basis used by corporations. The Statement of Activities provides information about all the
City's revenues and all its expenses, also on the full accrual basis, with the emphasis on
measuring net revenues or expenses of each the City's programs. The Statement of Activities
provides a detailed explanation of the change in Net Position for the year.
7
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
All the amounts in the Statement of Net Position and the Statement of Activities are separated
into Governmental Activities and Business-type Activities in order to provide a summary of
these two activities of the City as a whole.
The Fund Financial Statements report the City's operations in more detail than the government-
wide statements and focus primarily on the short-term activities of the City's General Fund and
other Major Funds. The Fund Financial Statements measure only current revenues, expenditures
and fund balances; they exclude capital assets, long-term debt and other long-term amounts.
Major Funds account for the major financial activities of the City and are presented individually,
while the activities of Non-major funds are presented in summary, with subordinate schedules
presenting the detail for each of these other funds. Major Funds are explained below.
The fiduciary statements provide financial information about the activities of Non-Obligated
Assessment Districts, for which the City acts solely as agent.
Note 1 to the Basic Financial Statements provides a summary of the City's significant
accounting policies, fund categories, and fund types.
City-wide Financial Statements
The Statement of Net Position and the Statement of Activities present information about the
following:
• 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.
8
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
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.
Since the City's Internal Service Funds provide goods and services only to the City's
governmental and business-type activities, their activities are reported only in total at the Fund
level. Internal Service Funds may not be Major Funds because their revenues are derived from
other City Funds. These revenues are eliminated in the citywide financial statements and any
related profits or losses are returned to the activities, which created them, along with any residual
net position of the Internal Service Funds.
Comparisons of Budget and Actual financial information are required in the Basic Financial
Statements only for the General Fund and other Major Funds that are Special Revenue Funds.
Fiduciary Statements
The City is the agent for certain assessment districts, holding amounts collected from property
owners which await transfer to these Districts' bond trustees. The City's fiduciary activities are
reported in the separate Statement of Fiduciary Net Position and the Statement of Changes in
Fiduciary Net Position. These activities are excluded from the City's other financial statements
because the City cannot use these assets to finance its own operations.
9
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
FINANCIAL ACTIVITIES OF THE CITY AS A WHOLE
This analysis focuses on net position and changes in net position of the City's Governmental
Activities (Table and Charts 1 through 3) and Business-type Activities (Tables 4 and 5)
presented in the City-wide Statement of Net Position and Statement of Activities. A comparative
analysis is presented for fiscal years 2016-17 and 2015-16.
Governmental Activities
Governmental Net Position
Table 1
Governmental Net Position at June 30
(In Millions)
2017 2016
Cash and investments $ 117.0 $ 99.3
Other assets 31.5 12.9
Capital assets 256.0 233.4
Total assets 404.5 345.6
Total outflows related to pension 28.3 12.6
Total outflow of resources 28.3 12.6
Long-term debt outstanding 11.8 12.4
Other liabilities 193.8 171.1
Total liabilities 205.6 183.5
Deferred inflows related to pension 5.2 11.2
Total deferred inflow of resources 5.2 11.2
Net position:
Net investment in capital assets 254.3 231.1
Restricted 54.5 52.4
Unrestricted (86.8) (120.1)
Total net position $ 222.0 $ 163.4
10
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
The total net position for Governmental Activities increased by $58.6 million in FY 2016-17
compared to the prior year, primarily due to increases in every asset category. The majority of
the $17. 7 million increase in cash and investments was due to additional property tax, sales tax,
and permit revenues. The year over year increase in property tax and permit revenues were
demonstrative of the current robust economy in South San Francisco. Measure W, a half-cent
transactions and use tax, was implemented as of April 1, 2016, thus FY 2015-16 only included
two advances from the State Board of Equalization, while FY 2016-17 represented the first full
fiscal year of the tax measure being in place.
Other assets increased by $18.6 million, while capital assets increased by $22.6 million, both
changes indicative of property transferred from the Successor Agency to the City for both
governmental use and redevelopment purposes.
Table 2
Expense and Program Revenue Comparison in Governmental Activities
(In Millions)
Expenses
General government
Fire department
Police department
Public works department
Recreation and community services
Library
Economic and community development
Interest on long-term debt
Total expenses
Revenues
Program revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
Total program revenues
General revenues:
Taxes:
Property taxes
Sales taxes
Transient occupancy taxes
Other taxes
Motor vehicle in lieu
Property taxes in lieu
Investment earnings
Miscellaneous
Extraordinary Item
Total general revenues
Total revenues
Excess (deficiency) before transfers
Transfers
Change in net position
Net position -beginning•
Net position -ending
11
2016-17
$10.3
25.8
25.8
12.4
15.2
5.2
8.9
$103.6
$27.3
4.5
0.6
$32.4
$29.1
24.1
13.6
9.8
6.1
0.6
2.4
45.2
$130.9
$163.3
$59.7
( 1.1)
58.6
163.4
$222.0
2015-16
$9.0
22.5
23.2
11.9
12.9
4.4
7.6
$91.5
$30.1
5.6
1.1
$36.8
$26.4
15.2
13.4
9.1
5.8
1.3
2.3
$73.5
$110.3
$18.8
(0.9)
17.9
145.5
$163.4
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Governmental program expenses increased by $12.1 million in comparison to the prior year,
primarily due increases in employee compensation and pension costs . Governmental program
revenues decreased by $4.4 million from the prior year, most notably in charges for services,
reflecting $2.1 in impact fees collected in the prior year, while impact fees for FY 2016-17 were
not as robust.
General Revenues increased by $57.4 million, most notably due to an Extraordinary Item -the
transfer of the former Redevelopment Agency property listed on the Long Range Property
Management Plan to the City for governmental use and redevelopment. The carrying value of
the properties was used to record the value of the land assets within the General Fund. Excluding
this item, the most significant general revenue increase was $6.8 million in sales tax, reflecting a
full year of Measure W transactions and use tax being in effect. The increase in General
Revenues served as the primary cause of the $58.6 million increase in net position.
Chart 1
Revenues by Source -Governmental Activities 2016-17
Charges for
Services
23%
Mscellaneous \
2% \ \
Franchise Fee_ ,
3% ----
Interest and~
Rentals
Othafl!axes j
5% Transient
occupancy taxes
12%
Operating Grants
and Contributions
4%
Capital Grants
_,._._and Contributions
0%
Property tax es
30%
Within Governmental Activity revenue sources, as shown in Chart 1, the reclassification of
Property Tax In Lieu of VLF from Intergovernmental to Property Tax is reflected . The most
notable change in proportional Governmental Activities revenues was in Sales taxes, which
increased from 14 percent in the prior year to 20 percent in FY 2016-17 of Total Governmental
Activities Revenues. This proportional change represented a full fiscal year of the Measure W
transactions and use tax being in place.
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 2016-17, the net expense for governmental activities increased from $54.7 million to
$71.2 million. The increase was spread fairly equally across all departments, generally reflecting
increases in employee compensation and pension costs.
12
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Table 3
Net (Expense) Revenue from Services
Governmental Activities
General government
Fire department
Police department
(In Millions)
Public works department
Recreation and community services
Library
Economic and community development
Interest on long-term debt
Total
13
2016-17 2015-16
$ (7. 7) $ (4.8)
(21.5) (19.0)
(23.1) (20.2)
1.1 1.9
(10. 7) (8.3)
(4.7) (3.1)
(4.6) (1.1)
$ (71.2) $ (54.6)
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)
2017 2016
Cash and Investments $ 21.8 $ 20.1
Other assets 0.2 0.7
Capital assets 124.9 127.2
Total assets 146.9 148.0
Deferred outflows related to pension 3.1 1.4
Total Deferred outflow of resources 3.1 1.4
Long-term liabilities outstanding 34.0 38.7
Other liabilities 22.1 19.2
Total liabilities 56.1 57.9
Deferred inflows related to pension 0.6 1.2
Total deferred inflow of resources 0.6 1.2
Net position:
Net investment in capital assets 86.2 83.9
Restricted
Unrestricted 7.2 6.2
Total net position $ 93.4 $ 90.1
The total net position for business-type activities increased by $3.3 million, or 3.7 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)
2016-17 2015-16
Expenses
Sewer Enterprise $ 22.7 $ 18.3
Parking District 0.9 0.8
Storm Water 1.3 1.3
Total expenses 24.9 20.4
Revenues
Program Revenues
Charges for Services 21.2 20.8
Operating grants and contributions 5.8 5.8
Total program revenues 27.0 26.6
General revenues
Investment earnings 0.0 0.3
Total general revenues 0.0 0.3
Excess (deficiency) before transfers 2.1 6.5
Transfers 1.1 0.9
Change in net position 3.2 7.4
Net position -beginning (as adjusted) 90.2 82.8
Net position -ending $ 93.4 $ 90.2
Business activity expenses increased $4.5 million compared to the prior year, particularly in
Sewer Enterprise activities, largely due to $3 .4 million less in capital expenses. As part of the
year end accounting process, new capital assets are added to proprietary funds via an offsetting
credit in a contra account. Given the reduced capital expenses in FY 2016-17, the offset amount
was lower compared to the prior year. Business activity revenues increased slightly by $0.4
million, reflecting a rate increase in the sanitary sewer service fee.
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, 2017, the City's governmental funds reported combined fund balances of $111.4
million, an increase of $35.1 million, or 46.0 percent compared to the prior year. The General
Fund ending fund balance was $56.3 million, reflecting an increase of $33.3 million, or 144.7
percent. The significant change in fund balance represented two notable items: 1) the transfer of
property from the Successor Agency to the City for governmental use and redevelopment
purposes, and 2) a full fiscal year of the Measure W transactions and use tax being in place.
Total governmental fund revenues increased by $7.7 million, from $110.3 million to $118.0
million, primarily attributable to the Measure W transactions and use tax.
Total governmental fund expenditures increased by $2.6 million, from $99.8 million to $102.5
million, or 2.64 percent, reflecting additional costs for employee salaries and pensions. All of the
City's Memoranda of Understanding (MOU) expired on June 30, 2017, thus FY 2016-17
represented the final year of negotiated salary increases. In addition, employer pension
contribution rates with the California Public Employees' Retirement System (CalPERS) continue
to increase due to increases in the Unfunded Accrued Liability (UAL), reflecting the disparity
between the discount rate and the actual interest earnings.
Comparison of Final Budgets to Original Adopted Budget
The budget is initially adopted by the City Council in June, based on revenue projections that are
up to date through May. Between May and the end of the fiscal year, there can be major
fluctuations in revenues depending on the economy and/or actions by the State of California.
There can also be significant changes to departmental expenditure budgets to the extent
unforeseen expenses occur. In the Fund Financial Statements, the page titled "Statement of
Revenues, Expenditures, and Changes in Fund Balances Budget and Actual" later in this
document shows the initial adopted and final budgets for the General Fund. Significant changes
between the adopted and final budgets are described below:
16
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Table 6
Comparison of Final Budgets to Original Adopted Budget (in Thousands)
Original Final Pct Discussion:
Revenues Budget Bu~et Cha~e Change (Items of more than 5% and $100,000 variance)
Proper1y taxes $25,487 $ 32,550 $ 7,063 27.7% Reflects reclassification of Proper1y Tax In Lieu of VLF
from Intergovernmental category
Sales taxes 23,105 23,105
Transient occupancy 13,100 taxes 13,500 400 3.1%
Other taxes 5,083 5,483 400 7.9% Account for increases in Parking Tax and Proper1y
Transfer Tax Revenues
Franchise Fee 4,060 4,060
Reflects reclassification of Proper1y Tax In Lieu of VLF to
Intergovernmental 6,795 2,504 ( 4,291) -63.1% Property Taxes category offset by federal and state grants
received throughout the fiscal year.
Interest and rentals 3,072 3,072 Amended budget in anticipation of sale of a City-owned
proper1y.
Licenses and permits 8,412 8,412
Charges for services 8,601 8,682 81 0.9%
Fines and forfeitures 839 839
Other 165 186 21 12.7%
Total $98,719 $ 102,393 $ 3,674 3.7%
17
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Table 6 (continued)
Comparison of Final Budgets to Original Adopted Budget (in Thousands)
Original Final Pct Discussion:
Expenditures Bu!'!get Budget Change Change {Items of more than 5% and $100,000 variance}
City Council $ 205 $ 208 $ 3 1.5%
City Clerk 648 703 55 8.5%
City Treasurer 123 123
The robust pace of business required the City Attorney to
City Attorney 802 1,188 386 48.1% invest a sigoificant number of billable hours to meet
demand.
City Manager 1,926 2,633 707 36.7% Professional services required that are related to a large
development in the EastoflOl area
Finance Additional appropriations needed for the Human Capital
2,478 3,045 567 22.9% Management System implementation
Non-Departmental 473 1,212 739 156.2% Accounts for City Council-authorized year end transfers.
Human Resources 1,458 1,622 164 11.2% Professional services needed for recruitment and
succession development.
The budget increase was required to address overtime
Fire 25,690 26,121 431 1.7% incurred due to minimum staffing needs and responding to
calls for mutual aid.
Police 27,105 26,320 (785) -2.9% Budget savings from various staff vacancies provided
surplus budget to fund other department budget overages.
Carryover purchase orders from prior year for Bay
Public Works 5,152 5,405 253 4.9% Conservation and Development Commission and
downtown construction coordinator services.
Parks and Recreation 14.553 15.361 808 5.6% Account for Big Lift literacv grant.
Library 5,052 5,372 320 6.3% Account for various grant funds received during the year.
Economic and 10,331 11,115 784 7.6%
Professional services for determining feasibility of
Community Development various land-secured infrastructure financing.
Total $95,996 $ 100,428 $ 4,432 4.6%
18
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Analysis of Major Governmental Funds
General Fund
In FY 2016-17, total General Fund revenues, excluding transfers in and the $20.6 million in
property transferred from the Successor Agency, were $105.0 million, $2.6 million, or 2.5
percent over the final amended budget. Total General Fund expenditures, excluding transfers
out, ended FY 2016-17 at $92.4 million; $8.1 million, or 8 percent under budget. Overall,
excluding operating transfers and the property transferred from the Successor Agency, the
General Fund ended FY 2016-17 with a surplus of $12.6 million, notably for the items discussed
below.
Property Tax, Sales Tax and Transient Occupancy Tax (TOT), serve as both the City's primary
revenue sources and economic indicators. Property Tax revenues, accounting for the
reclassification of Property Tax In Lieu of VLF, were $2.9 million more than the prior year,
principally evident in secured property taxes. Sales tax revenues increased $6.8 million, as FY
2016-17 represented the first full fiscal year of the Measure W transactions and use tax being in
effect. For the fourth year in a row, Transient Occupancy Tax (TOT) revenues reached record
levels at $13.6 million, $188 thousand more than the prior year. The robust and accelerated
development climate in the City's East of 101 area served as the impetus for $927 thousand more
in permit revenues.
Intergovernmental revenues decreased by $6.2 million, which was the result of reclassifying
Property Tax in lieu of VLF from the Intergovernmental to Property Tax revenue category.
Revenue from charges for services increased by $792 thousand, principally in ambulance
transport and reimbursement revenues for a development in the City's East of 101 area. The
increase in ambulance service revenues accounted for a rate increase and a change to a new third
party billing service.
General Fund expenditures, excluding transfers out, increased $5.6 million, or 6.4 percent over
the prior fiscal year, primarily due to increases in employee salaries and pension costs. All of the
City's MOU expired on June 30, 2017, thus FY 2016-17 reflected the final year of negotiated
salary increases. In addition, the City's employer pension contribution to CalPERS, inclusive of
normal cost and unfunded accrued liability, continued to increase due to the difference between
the discount rate and actual return on investment.
As of June 30, 2017, the General Fund total fund balance was $56.3 million, which included
$11.8 million in committed reserves, $5.2 million in assigned reserves, and $39.3 million in
unassigned reserves. The unassigned reserves are designated by the City Council based on the
City's Reserves Policy, which follows best practices from the Government Finance Officers'
Association (GFOA) of between 15-20 percent of General Fund operating revenue. Within the
City's unassigned reserves, the City Council designated funds for economic contingencies,
potential catastrophe and budget contingencies.
19
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Other Post Employment Benefit (OPEB) Liability Impact on Fund Balance
The City has a particularly rich retiree health benefit for employees hired prior to April 25, 2010
(legacy employees). Those legacy employees who retire from CalPERS and from the City
concurrently with at least 5 years of service are entitled to 100% coverage of retiree medical
insurance premiums paid by the City. The current amortized cost of this benefit is $26.2 million,
as reflected on the Statement of Net Position. Key actuarial assumptions behind the OPEB
obligation include projected healthcare premium increases, discount rate, mortality, and
contributions to the OPEB trust fund through the California Employers' Retiree Benefit Trust
(CERBT). Any changes to actuarial assumptions will have an impact on the OPEB obligation. In
addition, beginning in FY 2017-18, in compliance with GASB Statement No. 75, the City will
record the entire OPEB liability, rather than an amortized liability under the provisions of GASB
Statement No. 45.
City Housing Fund
Up until Redevelopment Agencies were abolished in FY 2011-12 by the State of California
under ABXl 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 2016-17, the City Housing Fund, excluding proceeds from the sale of capital assets,
received for $662 thousand in revenues, which included $108 thousand in rent, $84 thousand in
interest income, $164 thousand in loan repayments, and $305 thousand to account for housing
bond proceeds that were used for an affordable housing development. The fund also had $482
thousand in expenses, the majority of which was for expenses related to same affordable housing
development.
Capital Improvement Fund
The City consolidates and reports its governmental fund-type capital project expenditures in this
fund. Resources consist of transfers from the General Fund, major and non-major funds,
developer impact fees, and gasoline taxes and transportation sales taxes from non-major
governmental funds. Resources also come from federal, state, and local grants, contributions
from other cities, utilities and private developers. Entire capital projects are appropriated in one-
year, but expended over multiple years, with unspent appropriations carried forward year-to-year
until completion.
20
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
East of 101 Sewer Impact Fee Fund
In FY 2016-17, this fund received $189 thousand in revenues, comprised primarily of the East of
101 Sewer Impact Fees. 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 A venue 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, 2017, the remaining balance of the pre-funding is $1.8 million.
East of 101 Traffic Impact Fee Fund
In FY 2016-17, the City received $110 thousand in traffic impact fees, and transferred out $284
thousand for capital improvements. As of June 30, 2017, the fund has a balance of $7.0 million.
Child Care Impact Fee Fund
The City received $523 thousand in child care impact fees in FY 2016-17. Factoring in limited
expenditures, this fund has a balance of $3.4 million as of June 30, 2017. 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
operating transfers) of $4.2 million in FY 2016-17. Operating revenues of $25.6 million were
flat compared to the prior year. Operating expenses increased from $17.3 million to $21.5
million, primarily within personnel expenses. Personnel expenses increased by $1.0 million,
reflecting the impact of negotiated increases in employee salaries as well as pension costs, which
is primarily the byproduct of the disparity between CalPERS' discount rate and actual interest
earnings.
Parking District Fund
In FY 2016-1 7, revenues increased by 8. 7 percent to $917 thousand, while expenses increased
by $42 thousand, or 4.7 percent, largely representing additional employee costs. Net position
decreased slightly by $19 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 $404 thousand, primarily
from a levy on property owners. Transfers in totaled $1.1 million, which came from the Gas Tax
Fund in the amount of $670 thousand, $276 thousand from the General Fund, and $157 thousand,
from the Solid Waste Fund. Expenses totaled $1.3 million, $1.7 million less than the amended
budget, due to the trash capture devices capital project, which staff was able to find a more cost-
efficient solution to. Net position as of the fiscal year ended June 30, 2017, totaled $1.4 million.
Service fee revenues remain static in this fund without a ballot measure to increase assessed fees.
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.
22
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
At June 30, 2017, the City had $380.9 million in capital assets, net of depreciation, representing
an increase of $20.3 million from the prior year, primarily in the Governmental Activities land
category, reflecting the transfer of property from the Successor Agency.
The City's various capital asset types used in governmental and business-type activities, are
illustrated in Table 7 below:
Table 7
Capital Assets (in Millions) at June 30
Governmental Activities:
Land
Buildings and improvements
Equipment and vehicles
Furniture and fixtures
Infrastructure -streets*
Infrastructure -traffic control devices*
Infrastructure -storm drains*
Construction in progress
Less accumulated depreciation
Totals
* Additions during the fiscal year only
Business-type Activities
Land
Buildings and improvements
Clean water facilities and transmission line
Infrastructure -storm drains
Infrastructure -streets
Equipment and vehicles
Construction in progress
Less accumulated depreciation
Totals
Total City
2017 2016
$
$
$
70.2
91.5
21.6
2.6
195.0
9.5
8.9
10.8
(154.1)
256.0
1.4
66.7
75.5
4.8
7.4
18.5
6.9
(56.3)
$ 124.9
$ 380.9
23
$
$
$
47.6
85.0
19.8
1.8
183.1
5.1
8.9
26.8
(144.7)
233.4
1.4
66.7
75.5
4.8
7.4
11.2
12.1
(51.9)
$ 127.2
$ 360.6
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
DEBT ADMINISTRATION
Each of the City's debt issuances is discussed in detail in Note 5 to the Basic Financial
Statements. A summary of the City's outstanding debt for the past two fiscal years is as follows:
Governmental Activities
Loan payable to Successor Agency
Capital leases
Table 8
Outstanding Debt
(In Millions) at June 30
2017
$ 10.7
1.7
Total Governmental Activities Outstanding Debt $ 12.4
Business-type Activities
State Water Resources Board loans $ 35 .1
2005 Sewer Bonds 3.6
Total Business-type Activities Outstanding Debt $ 38 .7
2016
$ 10.7
2.2
$ 12.9
$ 39.4
3.8
$ 43.2
The decline in Business-type Activities outstanding debt of $4.5 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 m the
accompanying Transmittal Letter.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This Comprehensive Annual Financial Report is intended to provide readers with a general
overview of the City 's finances. Questions about this report or requests for additional financial
information should be directed to the City of South San Francisco Finance Department, P.O. Box
711 , South San Francisco, CA 94083, and phone (650) 877-8512. The City's website is at
www.ssf.net.
24
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.
25
This Page Left Intentionally Blank
ASSETS
Cash and investments (Note 2)
Receivables:
Accounts
Accrued interest
Loans
Due from Conference Center
Deposit
Inventory
Other
Restricted cash and investments (Note 2)
Internal balances (Note 4 A)
Property held for development (Note IN)
Capital assets (Note 3):
Nondepreciable
Depreciable, net accumulated depreciation
Total Assets
DEFERRED OUTFLOW OF RESOURCES
Related to pension (Note 7)
Deferred amounts from refunding of debt (Note 5)
Total Deferred Outflow of Resources
LIABILITIES
Accounts payable
Accrued salaries and benefits
Accrued interest payable
Other payable
Deposits
Unearned revenue
Accrued insurance losses (Note 11 ):
Due within one year
Due in more than one year
Compensated absences obligation (Note IL):
Due within one year
Due in more than one year
Debt and capital lease obligations (Note 5):
Due within one year
Due in more than one year
CITY OF SOUTH SAN FRANCISCO
STATEMENT OF NET POSITION
JUNE 30, 2017
Governmental
Activities
$116,928,766
6,800,996
338,339
1,475,697
43,668
203,510
474
108,377
77,418
22,482,335
81,058,461
174,959,616
404,477,657
28,332,483
28,332,483
2,756,611
1,569,242
634,197
2,410,033
2,674,256
712,000
12,260,942
3,681,331
2,832,974
Primary Government
Business-Type
Activities
$21,768,943
259,601
63,883
15
(77,418)
8,245,302
116,628,434
146,888,760
3,148,054
3,148,054
765,438
657,288
185,895
7,500
396,691
91,826
4,660,529
34,045,503
OPEB obligations -due in more than one year (Note 9)
Net pension liability -due in more than one year (Note 7)
538,421
11,826,254
26,173,032
137,507,433 15,278,604
Total Liabilities
DEFERRED INFLOW OF RESOURCES
Related to pension (Note 7)
Total Deferred Inflow of Resources
NET POSITION (Note 6)
Net investment in capital assets
Restricted for:
Debt service
Special revenue projects
Capital projects
Total Restricted Net Position
Unrestricted
Total Net Position
205,576,726
5,219,201
5,219,201
254,344,554
25,054,817
29,423,276
54,478,093
(86,808,434)
$222,014,213
56,089,274
579,911
579,911
86,167,704
7,199,925
$93,367,629
See accompanying notes to financial statements
27
Total
$138,697,709
7,060,597
402,222
1,475,697
43,668
203,510
474
108,392
22,482,335
89,303,763
291,588,050
551,366,417
31,480,537
31,480,537
3,522,049
1,569,242
657,288
820,092
2,417,533
2,674,256
712,000
12,260,942
4,078,022
2,924,800
5,198,950
45,871,757
26,173,032
152,786,037
261,666,000
5,799,112
5,799,112
340,512,258
25,054,817
29,423,276
54,478,093
(79 ,608,509)
$315,381,842
Component Unit
South San Francisco
Conference
Center
$3,240,137
325,234
40,510
1,522
480,922
3,619,573
7,707,898
24,304
24,304
306,554
51,003
11,881
252,744
445,000
460,000
1,527,182
2,714,573
480,922
480,922
3,009,525
$6,205,020
Functions/Programs
Primary Government
Governmental Activities:
General Government
Fire
Police
Public Works
Parks and Recreation
Library
CITY OF SOUTH SAN FRANCISCO
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2017
Expenses
$10,253,403
25,750,126
25,838,242
12,396,998
15,217,677
Charges for
Services
Program Revenues
Operating
Grants and
Contributions
$338,764
4,890
611,824
Economic and Community Development
5,184,282
8,927,162
$2,225,049
4,242,940
2,146,909
10,869,608
3,756,369
96,987
3,911,597
2,048,816
777,838
373,937
377,470
Total Governmental Activities
Business-type Activities
Sewer
Parking District
Storm Water
Total Business-type Activities
Total Primary Government
Component Unit
Conference Center
103,567,890
22,661,768
940,181
1,333,409
24,935,358
$128,503,248
$3,225,404
General revenues:
Truces:
Property truces
Sales truces
27,249,459
19,897,769
916,687
418,840
21,233,296
$48,482,755
$1,852,250
Transient occupancy truces
Franchise Fees
Other truces
Motor vehicle in lieu, unrestricted
Property truces in lieu of vehicle license fees
Investment earnings
Miscellaneous
Special Item:
4,533,539
5,763,645
5,763,645
$10,297,184
Assets transferred from the Successor Agency (Note 13G)
Transfers (Note 4)
Total general revenues, special item and transfers
Change in Net Position
Net Position -Beginning
Net Position -Ending
See accompanying notes to financial statements
28
Capital
Grants and
Contributions
$577,995
577,995
$577,995
Net (Expenses) Revenues and Changes in Net Position
Primary Government Component Unit
South
San Francisco
Governmental Business-Type Conference
Activities Activities Total Center
($7,689,590) ($7,689,590)
(21,502,296) (21,502,296)
(23,079,509) (23,079,509)
1,099,421 1,099,421
(10,683,470) (I 0,683,4 70)
( 4, 713,358) (4,713,358)
(4,638,095) (4,638,095)
(71,206,897) (71,206,897)
$2,999,646 2,999,646
(23,494) (23,494)
(914,569) (914,569)
2,061,583 2,061,583
(71,206,897) 2,061,583 (69,145,314)
($1,373,154)
29,023,618 29,023,618
24,087,776 24,087,776
13,631,507 13,631,507 2,146,545
4,090,073 4,090,073
5,708,187 5,708,187
28,933 28,933
6,133,230 6,133,230
622,518 27,710 650,228 19,152
2,365,820 2,365,820
45,205,422 45,205,422
(1,105,038) 1,105,038
129,792,046 1,132,748 130,924,794 2,165,697
58,585,149 3,194,331 61,779,480 792,543
163,429,064 90,173,298 253,602,362 5,412,477
$222,014,213 $93,367,629 $315,381,842 $6,205,020
29
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 2017. 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 IMP ACT 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 IMP ACT 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).
31
ASSETS
Cash and investments (Note 2)
Receivables:
Accounts
Accrued interest
Due from Conference Center
Loans
Due from other funds (Note 4B)
Inventory
Restricted cash and investments (Note 2)
Property held for redevelopment (Note lM)
Total Assets
LIABILITIES
Liabilities:
Accounts payable
Accrued salaries and benefits
Other payable
Deposits
Unearned revenue
Due to other funds (Note 4B)
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, 2017
Low and Moderate
General Income
Fund Housing Assets
$33,222,598 $3,533,395
6,021,069 7,340
64,817 11,414
43,668
1,106,160
336,000
474
20,582,335
$60,270,961 $4,658,309
$2,012,208
1,569,242
278,678 $131
106,610
3,966,738 131
474
4,658,178
11,780,724
5,244,279
39,278,746
56,304,223 4,658,178
$60,270,961 $4,658,309
32
Ca~ital Projects Funds
East of 101
Capital Sewer
Improvement Impact Fees
$5,459 $2,504,553
610,245
8,383
$615,704 $2,512,936
$362,903
6,132 $1,824,713
335,000
704,035 1,824,713
688,223
(88,331)
(88,331) 688,223
$615,704 $2,512,936
EastoflOl
Traffic
Impact Fees
$7,019,792
26,201
$7,045,993
$7,045,993
7,045,993
$7,045,993
Capital Projects Funds
Child Care
Impact Fees
$3,388,222
11,466
$3,399,688
$3,399,688
3,399,688
$3,399,688
Developer
Deposit
$807,622
3,543
$811,165
$738,281
738,281
72,884
72,884
$811,165
33
Capital
Infrastructure
Reserve Fund
$14,473,785
51,660
$14,525,445
$14,525,445
14,525,445
$14,525,445
Other
Governmental
Funds
$24,782,784
152,214
71,657
369,537
108,377
1,900,000
$27,384,569
$167,225
2,702
1,671,752
736,801
1,000
2,579,480
24,805,089
24,805,089
$27,384,569
Total
Governmental
Funds
$89,738,210
6,790,868
249,141
43,668
1,475,697
336,000
474
108,377
22,482,335
$121,224, 770
$2,542,336
1,569,242
281,511
2,410,033
2,674,256
336,000
9,813,378
474
55,195,500
11,780,724
5,244,279
39,190,415
111,411,392
$121,224,770
CITY OF SOUTH SAN FRANCISCO
GOVERNMENTAL FUNDS
BALANCE SHEET -RECONCILIATION OF GOVERNMENTAL
FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES
JUNE 30, 2017
Total fund balances reported on the governmental funds balance sheet
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.
Internal servi,ce 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 ofNet Position.
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
Deferred outflows related pension
Net pension liability
Deferred inflows related to pension
Non-current portion of compensated absences
Net position of governmental activities
See accompanying notes to financial statements
34
$111,411,392
250,225,973
(9,526,437)
(10,691,152)
28,332,483
(137,507,433)
(5,219,201)
(5,011,412)
$222,014,213
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, 2017
Cal!ital Projects Funds
Low and Moderate EastoflOl
General Income Capital Sewer
Fund Housing Assets Im}!rovement Im}!act Fees
REVENUES
Property taxes $33,405,829
Sales taxes 24,479,476
Transient occupancy taxes 13,631,507
Franchise Fees 4,090,073
Other taxes 5,708,187
Intergovernmental 1,593,508 $505,664
Interest and rentals 2,784,072 $193,162 $3,065
Licenses and permits 7,823,403
Charges for services 9,451,835 185,752
Fines and forfeitures 899,118
Other 1,092,691 469,014 110,019
Total Revenues 104,959,699 662,176 615,683 188,817
EXPENDITURES
Current:
City Council 206,950
City Clerk 607,096
City Treasurer 110,559
City Attorney 1,187,716
City Manager 1,948,911
Finance 2,613,473
Non-departmental 1,145,698 2,500
Human Resources 1,571,647
Fire 25,567,548
Police 25,539,781
Public Works 4,654,758 6,250,681
Parks and Recreation 14,897,157
Library 5,157,355
Economic and Co=unity Development 7,158,564 482,081
Other
Debt service:
Principal repayments
Total Expenditures 92,367,213 482,081 6,250,681 2,500
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 12,592,486 180,095 (5,634,998) 186,317
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 1,016,276
Transfers in (Note 4C) 6,021,853 5,179,644
Transfers out (Note 4C) (5,909,636) (1,860~
Total Other Financing Sources (Uses) 112,217 1,016,276 5,179,644 (1,860)
Net Change in Fund Balances before special items 12,704,703 1,196,371 (455,354) 184,457
SPECIAL ITEMS
Assets transferred from the
Successor Agency (Note 13G) 20,582,335
Net Change in Fund Balances 33,287,038 1,196,371 (455,354) 184,457
Fund balances (deficits) -July 1 23,017,185 3,461,807 367,023 503,766
Fund balances (deficits) -June 3 0 $56,304,223 $4,658,178 ~$88,331~ $688,223
See accompanying notes to financial statements
36
Capital Projects Funds
East of 101 Capital Other Total
Traffic Child Care Developer Infrastructure Governmental Governmental
Impact Fees Impact Fees Deposit Reserve Fund Funds Funds
$1,751,019 $35,156,848
24,479,476
13,631,507
4,090,073
1,699,142 7,407,329
1,920,599 4,019,771
$9,506 $4,489 $16,555 89,843 3,100,692
7,823,403
109,867 522,858 $5,103 4,209,952 14,485,367
899,118
1,234,901 2,906,625
119,373 527,347 5,103 16,555 10,905,456 118,000,209
206,950
607,096
110,559
1,187,716
1,948,911
2,613,473
2,500 2,880 1,153,578
1,571,647
64,818 25,632,366
458,316 25,998,097
2,500 1,236,026 12,143,965
14,897,157
5,157,355
1,302,466 8,943,111
274,183 274,183
23,000 23,000
2,500 2,500 3,361,689 102,469 ,164
116,873 524,847 5,103 16,555 7,543,767 15,531,045
1,016,276
2,666,000 459,633 14,327,130
(284,133) (5,103) (5, 795,495) (4,372,272) (16,368,499)
(284,133) (5,103) (3,129,495) (3,912,639) (1,025,093)
(167,260) 524,847 (3,112,940) 3,631,128 14,505,952
20,582,335
(167,260) 524,847 (3,112,940) 3,631,128 35,088,287
7,213,253 2,874,841 72,884 17,638,385 21,173,961 76,323,105
$7,045,993 $3,399,688 $72,884 $14,525,445 $24,805,089 $111,411,392
37
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, 2017
NET CHANGE IN FUND BALANCES -TOTAL GOVERNMENTAL FUNDS
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
Retirement and adjustment of capital assets
Current year depreciation
Capital assets transferred from the Successor Agency
Long-Term Debt Payments
Repayment of principal is an expenditure in the governmental funds, but
in the Statement ofNet Position the repayment reduces long-term liabilities.
Repayment of principal is added back to fund balance
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
Net pension liability, and deferred outflows and inflows ofresources
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.
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES
See accompanying notes to financial statements
38
$35,088,287
6,313,012
(697,131)
(8,4 70,315)
24,623,087
23,000
(381,932)
1,309,858
777,283
$58,585,149
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
Resources (inflows):
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
Amounts available for appropriation
Charges to appropriations (outflows)
City Council
City Clerk
City Treasurer
City Attorney
City Manager
Finance
Non-depanmental
Human Resources
Fire
Police
Public Works
Parks and Recreation
Library
Economic and Community Development
Total charges to appropriations
OTHER FINANCING SOURCES (USES)
Transfe~ in (Note 4C)
Transfers out (Note 4C)
Total Other Financing Sources (Uses)
FOR THE YEAR ENDED JUNE 30, 2017
Budgeted Amounts
Original
$25,486,789
23,105,336
13,100,000
4,060,000
5,083,400
6,794,956
3,071,500
8,411,713
8,601,108
838,500
165,430
98,718,732
204,499
647,864
123,340
802,002
1,926,245
2,477,795
473,973
1,458,009
25,689,589
27,104,498
4,975,860
14,553,266
5,051,647
10,331,488
95,820,075
6,089,393
(7, 168,980)
(1,079,587)
Final
$32,549,949
23,105,336
13,500,000
4,060,000
5,483,400
2,504,369
3,071,500
8,411,713
8,681,908
838,500
185,930
102,392,605
207,500
703,244
123,340
1,188,002
2,632,838
3,045,461
1,212,102
1,622,360
26,121,215
26,319,956
5,405,341
15,361,255
5,372,318
11,115,411
100,430,343
6,208,393
(11,984,937)
(5,776,544)
NET CHANGE 1N FUND BALANCES BEFORE SPECIAL ITEMS 1,819,070 (3,814,282)
Special Item (Note 13G) 20,582,335
NET CHANGE 1N FUND BALANCE $1,819,070 $16,768,053
Fund Balance -July 1
Adjustment to budgetary basis:
Encumbrance adjustments
Fund Balance -June 30
See accompanying notes to financial statements
39
Actual
Amount
$33,405,829
24,479,476
13,631,507
4,090,073
5,708,187
1,593,508
2,784,072
7,823,403
9,451,835
899,118
1,092,691
104,959,699
206,950
631,225
110,559
1,187,716
2,632,068
3,045,450
1,211,362
1,621,682
25,582,889
25,539,781
5,173,685
15,002,999
5,157,355
10,507,771
97,611,492
6,021,853
(5,909,636)
112,217
7,460,424
20,582,335
28,042,759
23,017,185
5,244,279
$56,304,223
Variance with
Final Budget
Positive
(Negative)
$855,880
1,374,140
131,507
30,073
224,787
(910,861)
(287,428)
(588,310)
769,927
60,618
906,761
2,567,094
550
72,019
12,781
286
770
11
740
678
538,326
780,175
231,656
358,256
214,963
607,640
2,818,851
(186,540)
6,075,301
5,888,761
11,274,706
$11,274,706
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
REVENUES:
Interest and rental
Other
Total Revenues
EXPENDITURES:
Current:
FOR THE YEAR ENDED JUNE 30, 2017
Budget
$167,000
140,000
307,000
Economic and Community Development 977,800
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets
Transfers out
Total other financing sources (uses)
NETCHANGEINFUNDBALANCE
Fund balance -July 1
Fund balance -June 30
977,800
(670,800)
(230)
(230)
($671,030)
See accompanying notes to financial statements
40
Actual Amounts
$193,162
469,014
662,176
482,081
482,081
180,095
1,016,276
1,016,276
1,196,371
3,461,807
$4,658,178
Variance with
Final Budget
Positive
(Negative)
$26,162
329,014
355,176
495,719
495,719
850,895
1,016,276
230
1,016,506
$1,867,401
MAJOR PROPRIETARY FUNDS
Proprietary funds account for City operations financed and operated in a manner similar to a private
business enterprise. The intent of the City is that the cost of providing goods and services be financed
primarily through user charges.
The concept of major funds established by GASB Statement 34 extends to Proprietary Funds. The City
reported all enterprise funds as major proprietary funds.
GASB 34 does not provide for the disclosure of budget versus actual comparisons regarding proprietary
funds that are major funds.
SEWER ENTERPRISE FUND
This fund accounts for user charges and debt proceeds supporting the operation, maintenance, and capital
expansion of the wastewater collection and treatment system.
PARKING DISTRICT FUND
This fund accounts for meter and parking permit fees used to acquire and maintain parking facilities.
STORM WATER FUND
This fund accounts for user charges sustaining the Storm Water Management Program mandated by state
and federal authorities.
41
CITY OF SOUTH SAN FRANCISCO
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE30,2017
Governmental
Business-~l!e Activities -Enterl!rise Funds Activities
Sewer Parking Storm Internal
Enterl!rise District Water Total Service Funds
ASSETS
Current assets:
Cash and investments (Note 2) $18,649,214 $2,140,040 $979,689 $21, 768,943 $27,190,556
Receivables:
Accounts 259,601 259,601 10,128
Accrued interest 52,710 7,402 3,771 63,883 89,198
Deposit 203,510
Restricted cash and investments (Note 2) 15 15
Total current assets 18,961,540 2,147,442 983,460 22,092,442 27,493,392
Noncurrent assets:
Capital assets (Note 3):
Nondepreciable 6,787,825 1,023,320 434,157 8,245,302 162,140
Depreciable, net accumulated depreciation 105,793,410 10,779,325 55,699 116,628,434 5,629,964
Total non-current assets 112,581,235 11,802,645 489,856 124,873,736 5,792,104
Total Assets 131,542,775 13,950,087 1,473,316 146,966, 178 33,285,496
DEFERRED OUTFLOW
Related to pension (Note 7) 3,148,054 3,148,054
LIABILITIES
Current liabilities:
Accounts payable 709,605 15,542 40,291 765,438 214,275
Other payable 180,421 5,474 185,895 352,686
Accrued interest payable 657,288 657,288
Deposits payable 7,500 7,500
Accrued insurance loss (Note 11) 712,000
Compensated absences obligation (Note 11) 381,085 1,987 13,619 396,691 694,191
Current portion oflong-term debt (Note 5) 4,660,529 4,660,529 538,421
Total current liabilities 6,596,428 23,003 53,910 6,673,341 2,511,573
Noncurrent liabilities:
Accrued insurance losses (Note 11) 12,260,942
Compensated absences obligation (Note 11) 74,163 17,663 91,826 808,702
Net OPEB obligation (Note 9) 26,173,032
Noncurrent portion oflong-term debt (Note 5) 34,045,503 34,045,503 1,135,102
Net pension liability (Note 7) 15,278,604 15,278,604
Total noncurrent liabilities 49,398,270 17,663 49,415,933 40,377,778
Total Liabilities 55,994,698 40,666 53,910 56,089,274 42,889,351
DEFERRED INFLOW
Related to pension (Note 7) 579,911 579,911
NET POSITION:
Net investment in capital assets 73,875,203 11,802,645 489,856 86,167,704 4,118,581
Unrestricted (deficit) 4,241,017 2,106,776 929,550 7,277,343 (13,722,4362
Total Net Position $78,116,220 $13,909,421 $1,419,406 93,445,047 ($9,603,8552
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 ~77,4182
$93,367,629
See accompanying notes to financial statements
42
CITY OF SOUTH SAN FRANCISCO
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2017
Business-typeActivities -Enterprise Funds
Sewer Parking Storm
Enterprise District Water Total
OPERATING REVEl\'lJES
Charges for services $19,795,480 $404,456 $20,199,936
Other cities' participation 5,763,645 5,763,645
Permit fees 102,289 102,289
Parking fees $916,687 916,687
Total Operating Revenues 25,661,414 916,687 404,456 26,982,557
OPERATING EXPENSES
Personnel expenses 8,210,747 358,258 1,144,188 9,713,193
Professional services 1,358,364 153,402 32,521 1,544,287
OPEB expenses 535,039 535,039
Program supplies 1,345,831 18,981 32,968 1,397,780
Insurance 187,983 3,297 191,280
Self-insurance and claims
Repair and maintenance 1,276,158 22,788 1,298,946
Rents and leases 1,592,100 1,592,100
Utilities 1,481,736 51,219 12,602 1,545,557
Administration 1,290,069 100,900 64,156 1,455,125
Depreciation 4,104,622 255,014 12,378 4,372,014
Other 79,246 216 79,462
Total Operating Expenses 21,461,895 937,774 1,325,114 23,724,783
Operating Income (Loss) 4,199,519 (21,087) (920,658) 3,257,774
NONOPERATING REVEl\'lJES (EXPENSES)
Interest income 23,552 2,795 1,363 27,710
Gain on dispositions of capital assets
Interest expense (1,085,231) (1,085,231)
Other 14,384 14,384
Total Nonoperating Revenues (Expenses) (1,061,679) 2,795 15,747 (1,043, 137)
Income (loss) before transfers 3,137,840 (18,292) (904,911) 2,214,637
TRANSFERS
Transfers in (Note 4C) 1,860 1,103,178 1,105,038
Transfers out (Note 4C)
Change in Net Position 3,139,700 (18,292) 198,267 3,319,675
Net Position (Deficits) -July 1 74,976,520 13,927,713 1,221,139 90,125,372
Net Position (Deficits) -June 30 $78,116,220 $13,909,421 $1,419,406 $93,445,047
Change in Net Position $3,319,675
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 (125,344)
Change in Net Position of Business-Type Activities $3,194,331
See accompanying notes to financial statements
43
Governmental
Activities
Internal
Service Funds
$25,016,836
25,016,836
14,544,617
639,502
2,070,095
1,394,756
1,362,542
3,253,303
1,009,266
29,478
760,921
315,537
25,380,017
(363,181)
32,800
19,646
(65,943)
92,286
78,789
(284,392)
1,032,576
(96,245)
651,939
(10,255,794)
($9,603,855)
CITY OF SOUTH SAN FRANCISCO
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2017
Governmental
Business-type Activities -Enterprise Funds Activities
Sewer Parking Storm Internal
Enterprise District Water Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $25,981,757 $916,687 $425,377 $27,323,821
Cash payment to suppliers for goods and services (7,858,907) (313,930) (141,010) (8,313,847) ($5,630,718)
Cash payment to employees for services (8,393,871) (355,067) (1,169,732) (9,918,670) (14,415,344)
Cash received from interfund service provided 25,105,855
Cash payment for judgments and claims (1,681,308)
Other receipts 409,917
Net Cash Provided by (Used in) Operating Activities 9,728,979 247,690 (885,365) 9,091,304 3,788,402
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in 1,860 1,103,178 1,105,038 1,032,576
Transfers out (96,2452
Net Cash Provided by Noncapital Financing Activities 1,860 1,103,178 1,105,038 936,331
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Principal paid on long-term debt ( 4,536,800) ( 4,536,800) (565,475)
Interest paid on long-term debt (1,169,086) (1,169,086) (65,943)
Acquisition of capital assets, net (2,588,459) (261,161) (2,849,620) (1,629,268)
Proceeds from the sale of capital assets 19,646
Net Cash Used in Capital and Related Financing Activities (8,294,345) (261,1612 (8,555,506) (2,241,040)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 6,052 187 421 6,660 (7,901)
Net Cash Provided by Investing Activities 6,052 187 421 6,660 (7,901)
Net Increase (Decrease) in cash and cash equivalents 1,442,546 247,877 (42,927) 1,647,496 2,475,792
Cash and cash equivalents, beginning 17,206,683 1,892,163 1,022,616 20,121,462 24,714,764
Cash and cash equivalents, ending $18,649,229 $2,140,040 $979,689 $21,768,958 $27,190,556
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss) $4,199,519 ($21,087) ($920,658) $3,257,774 ($363,181)
Adjustments to reconcile operating income (loss)
to cash flows from operating activities:
Depreciation 4,104,622 255,014 12,378 4,372,014 760,921
Other non-operating revenue (expenses) 14,384 14,384 92,286
Net change in assets and liabilities:
Accounts and lease receivables 320,343 6,537 326,880 (3,267)
Accounts payable 1,256,128 15,064 27,538 1,298,730 92,859
Other payable 31,491 (4,492) 26,999 263,832
Accrued insurance losses 1,571,995
OPEB obligations 1,268,332
Compensated absence obligations (37,584) 3,191 (25,544) (59,937) 104,625
(Decrease) increase due to retirement system (145,540) (145,540)
Net Cash Provided by (Used in) Operating Activities $9,728,979 $247,690 ($885,3652 $9,091,304 $3,788,402
See accompanying notes to basic financial statements
44
· FIDUCIARY FUND
An agency fund is used to account for assets held by the City acting as an agent for another government
entity. The financial activity of this fund, excluded from the Entity-wide financial statements, is presented
in a separate Fiduciary Fund financial statement.
SUCCESSOR AGENCY PRIVATE PURPOSE TRUST FUND
The Fund is used to account for the activities of the Successor Agency to the former Redevelopment
Agency of the City of South San Francisco.
SSF EMPLOYEE DEFERRED COMP TRUST OVERSIGHT FUND
This fund is used to pay for the administrative costs of monitoring the Deferred Compensation Funds on
behalf of City employees.
45
CITY OF SOUTH SAN FRANCISCO
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2017
ASSETS
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
LIABILITIES
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
$1,390,743
2,941
20,285
10,691,152
218,030
31,158,229
2,520,264
521,409
$46,523,053
$3,869
9,333
37,519
537,000
275,000
285,000
1,147,721
$45,375,332
See accompanying notes to financial statements
46
Agency Fund
SSF Employee
Def Comp
Trust
Oversight
$105,663
318
$105,981
$24,492
81,489
$105,981
CITY OF SOUTH SAN FRANCISCO
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2017
ADDITIONS
Intergovernmental
Interest and rentals
Other
Total Additions
DEDUCTIONS
Economic and Community Development
Interest expense
Depreciation
Total Deductions
SPECIAL ITEMS
Assets transferred to the City of South San Francisco (Note 13G)
Loss on disposal of capital assets
Total Special Items
Change in net position
NET POSITION HELD IN TRUST FOR OTHER PURPOSES
Beginning of the year
End of the year
See accompanying notes to financial statements
47
Successor
Agency
Private Purpose
Trust Fund
$795,840
521,429
23,303
1,340,572
4,223,568
810,400
71,651
5,105,619
45,205,422
3,436,986
48,642,408
(52,407,455)
97,782,787
$45,375,332
This Page Left Intentionally Blank
-CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Description of the Financial Reporting Entity
As required by generally accepted accounting principles, the financial statements present the City
of South San Francisco (the City) as the Primary Government, with its component units for which
the City is considered financially accountable. The component units discussed below are
included in the City's reporting entity because of the significance of their operational and
financial relationships with the City.
B. Description of Blended Component Units
The accompanying basic financial statements include all funds and boards and commissions that
are controlled by the City Council. The basic financial statements include the City's blended
component units, entities for which the City is considered to be financially accountable. A
blended component unit, although a legally separate entity, is in substance, part of the City's
operations and so data from this unit is combined with the City. The City's following blended
component units are described below.
The City of South San Francisco Capital Improvements Financing Authority is a joint
exercise of powers authority created in 1991 between the City and the City of South San
Francisco former Redevelopment Agency. The Financing Authority is authorized to borrow
money through the purchase or issuance of bonds, notes, or other obligations for the purpose of
making loans to the City and other public entities to finance capital improvements. The City
Council members serve as the Board of Directors.
C. Description of Discrete Component Unit
The City of South San Francisco Conference Center Authority was established in 1992 to
manage and operate the South San Francisco Conference Center. The Authority is governed by a
Board of nine commissioners consisting of two Council members and seven representatives from
various businesses appointed by City Council.
The Authority does not meet the criteria of a blended component unit, since the City Council is
not the component unit's governing body and the Authority does not provide services entirely to
the City. However the City is financially accountable and is able to impose its will on the
Authority. The Authority is therefore considered a discrete component unit with its financial data
reported separately from the financial data of the City.
The City of South San Francisco Conference Center Authority financial statements may be
obtained from the Authority at 255 South Airport Boulevard, South San Francisco, CA 94080.
49
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I 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 fmancial 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 fmancing 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 m 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.
50
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I 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.
51
CITY OF· SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fiduciary Funds -An agency fund is used to account for assets held by the City as an agent for
SSF Employee Deferred Comp Trust Oversight Fund. The Successor Agency Private-Purpose
Trust Fund accounts for the accumulation of resources to be used for payments at appropriate
amounts and times in the future. The financial activities of the funds are excluded from the
Government-wide financial statements, but are presented in the separate Fiduciary Fund financial
statements.
F. Basis of Accounting
The government-wide, proprietary, private-purpose trust fund, and discretely presented
component unit financial statements are reported using the economic resources measurement
focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses
are recorded at the time liabilities are incurred, regardless of when the related cash flows take
place.
The agency funds which only report assets and liabilities and do not have a measurement focus.
Governmental funds are reported using the current financial resources measurement focus and
the modified accrual basis of accounting. Under this method, revenues are recognized when
measurable and available. The City considers all revenues reported in the governmental funds to
be available if the revenues are collected within sixty days after year-end. Expenditures are
recorded when the related fund liability is incurred, except for principal and interest on long-term
debt, claims and judgments, and compensated absences, which are recognized as expenditures to
the extent they have matured. General capital asset acquisitions are reported as expenditures in
governmental funds. Proceeds from long-term debt and acquisitions under capital leases are
reported as other financing sources.
Those revenues susceptible to accrual are property and sales taxes, certain intergovernmental
revenues, interest revenue, licenses and permits, charges for services, fines and forfeitures. Sales
taxes collected and held by the state at year end on behalf of the City are also recognized as
revenue. Other receipts and taxes are recognized as revenue when the cash is received.
Non-exchange transactions, in which the City gives or receives value without directly, receiving
or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the
accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or
assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in
which all eligibility requirements have been satisfied. Under the terms of grant agreements, the
City may fund certain programs with a combination of cost-reimbursement grants, categorical
block grants, and general revenue. Thus, both restricted and unrestricted net position may be
made available to finance program expenditures. The City's policy is to first apply restricted
grant resources to such programs, followed by general revenues if necessary.
The City considers restricted shared state revenues such as gasoline taxes and public safety sales
taxes, restricted locally imposed transportation sales taxes, fines, forfeitures, licenses, permits,
charges for services, and program grants as program revenues.
52
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
!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.
53
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
H. Expenditures in Excess of Appropriations -The City had the following General Fund
departments with expenditures in excess of appropriations for the year ended June 30, 2017:
General Fund:
City Council
City Attorney
City Manager
Finance
Non-departmental
Human Resources
Expenditures in
Excess of Budget
(Non GAAP
Legal Basis)
$2,450
3,714
16,230
189,710
556,260
74,322
L Cash Equivalents -For purposes of the statement of cash flows, the City considers all highly
liquid investments (including all restricted assets) with maturity of three months or less when
purchased to be cash equivalents. The City maintains a cash and investment pool that is available
for use by all funds. As the proprietary funds' share of this pool is readily available when needed,
such share is also considered to be cash equivalent. Deposit assets in the proprietary funds are
related to insurance and benefits and are not considered cash equivalents for purposes of the
statement of cash flows.
J. Inventory and Prepaid Items -consist of consumable supplies. Inventory is stated at cost (first-
in, first-out method). The costs are recorded as expenditures at the time the individual inventory
or prepaid item is consumed. Reported inventory and prepaid items are equally offset by a fund
balance reservation, which indicates that they do not constitute "available spendable resources"
even though they are a component of net current assets.
K. Capital Assets -Donated capital assets, donated works of art and similar items, and capital assets
received in a service concession arrangement are valued at acquisition value. All other capital
assets are valued at historical cost or estimated historical cost if actual historical cost is not
available. 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.
54
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
J NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) J
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
Clean water facilities and transmission lines
Improvements
Machinery and equipment
Furniture and fixtures
Infrastructure
50 years
40 years
30 years
5-20 years
12 years
20-40 years
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase is reflected in the capitalized value of the asset
constructed, net of interest earned on the invested proceeds over the same period. The
capitalization level is $20,000 for vehicles, and $100,000 for all else, including all other
equipment that is not a vehicle.
L. Vacation and Sick Pay -are accrued as earned. Upon termination, employees are paid for all
unused vacation at their current hourly rates. After five to twenty years of employment, one half
of accumulated sick leave becomes vested, up to a maximum amount as specified under labor
contract provisions. The vested portion is available for current use or, if unused, is payable at
termination or retirement.
The long-term portion of the liability for compensated absences for governmental fund type
operations is recorded as compensated absences in the government-wide financial statements.
The portion expected to be permanently liquidated is recorded in the Health and Retirement
Benefits Internal Service Fund. Proprietary fund liabilities are recorded within their respective
funds.
The changes of the compensated absences were as follows:
Governmental Business-Type
Activities Activities Total
Beginning Balance $6,027,748 $548,454 $6,576,202
Additions 4,340,262 438,748 4,779,010
Payments (3,853,705) (498,685) (4,352,390)
Ending Balance $6,514,305 $488,517 $7,002,822
Current Portion $3,681,331 $396,691 $4,078,022
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.
55
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
M. Property Tax Levy, Collection and Maximum Rates -State of California Constitution Article
XIII A provides that the combined maximum property tax rate on any given property may not
exceed 1 % of its assessed value unless an additional amount for general obligation debt has been
approved by voters. Assessed value is calculated at 100% of market value as defined by Article
XIII A and may be adjusted by no more than 2% per year unless the property is sold, transferred,
or substantially improved. The State Legislature has determined the method of distribution of
receipts from a 1 % tax levy among the counties, cities, school districts and other districts. The
County of San Mateo assesses properties, bills for and collects property taxes on the schedule that
follows:
Valuation/lien dates
Levy dates
Due dates (delinquent as of)
Secured
January 1
July 1
50% on November 1(December10)
50% on February 1 (April 10)
Unsecured
January 1
July 1
July 1 (August 31)
The term "unsecured" refers to taxes on personal property other than land and buildings. These
taxes are secured by liens on the property being taxed.
Property taxes levied are recorded as revenue and receivables when they are collected during the
fiscal year of levy or within 60 days of year-end.
N. Land held for development -is stated at the lower of historical cost or net realizable value (equal
to agreed upon sales price if a disposition and development agreement has been reached with a
developer).
0. Unbilled Services -for the Sewer Rental Enterprise Fund are accrued at year-end.
P. Use of Estimates -The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the
dates of the financial statements and the reported amounts of revenues and expenditures/expenses
during the reporting periods. Actual results could differ from those estimates.
Q. Deferred Outflows/Inflows of Resources -In addition to assets, the statement of financial
position or balance sheet reports a separate section for deferred outflows of resources. This
separate financial statement element, deferred outflows of resources, represents a consumption of
net position or fund balance that applies to a future period(s) and so will not be recognized as an
outflow of resources (expense/expenditure) until then. In addition to liabilities, the statement of
financial position or balance sheet reports a separate section for deferred inflows of resources.
This separate financial statement element, deferred iliflows 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.
56
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
[ NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
R. New Accounting Pronouncements
Governmental Accounting Standards Board (GASB) Statement No. 73 -Accounting and Financial
Reporting for Pensions and Related Assets that are not within the scope of GASE Statement 68.
This Statement establishes requirements for defined benefit pension 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. The statement is effective for the
2016-2017 fiscal year and had no impact on the City's financial statements.
Governmental Accounting Standards Board (GASB) Statement No. 74 -Financial Reporting for
Postemployment Benefit Plans other than Pension Plans. The objective of this statement is to
improve the usefulness of information about postemployment benefits other than pensions (other
postemployment 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 replaces Statements No. 43, Financial Reporting for Postemployment Benefit Plans
Other Than Pension Plans, as amended, and No. 57, OPEB Measurements by Agent Employers
and Agent Multiple-Employer Plans. It also includes requirements for defined contribution OPEB
plans that replace the requirements for those OPEB plans in Statement No. 25, Financial
Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution
Plans, as amended, Statement 43, and Statement No. 50, Pension Disclosures. The statement is
effective for the 2016-2017 fiscal year and had no impact on the City's financial statements.
Governmental Accounting Standards Board (GASB) Statement No. 77 -Tax Abatement
Disclosures. For financial reporting purposes, this Statement defines a tax abatement as resulting
from an agreement between a government and an individual or entity in which the government
promises to forgo tax revenues and the individual or entity promises to subsequently take a
specific action that contributes to economic development or otheryvise benefits the government or
its citizens. This Statement requires governments that enter into tax abatement agreements to
disclose information about the agreements, including (1) brief descriptive information, such as the
tax being abated, the authority under which tax abatements are provided, eligibility criteria, the
mechanism by which taxes are abated, provisions for recapturing abated taxes, and the types of
commitments made by tax abatement recipients, (2) the gross dollar amount of taxes abated
during the period, and (3) commitments made by a government, other than to abate taxes, as part
of a tax abatement agreement. The statement is effective for the 2016-2017 fiscal year and had no
impact on the City's financial statements.
Governmental Accounting Standards Board (GASB) Statement No. 78 -Pensions Provided
through Certain Multiple-Employer Defined Benefit Pension Plans. The objective of this Statement
is to address a practice issue regarding the scope and applicability of GASB Statement No. 68,
Accounting and Financial Reporting for Pensions-an amendment to GASB Statement No. 27. This
issue is associated with pensions provided through certain multiple-employer defined benefit
pension plans and to State or local governmental employers who employees are provided with such
pensions. The requirements of this Statement are effective for reporting periods beginning after
December 15, 2015. This Statement had no impact on the City's financial statements.
57
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
Governmental Accounting Standards Board Statement (GASB) No. 80 -Blending Requirements
for Certain Component Unit -an amendment to GASB Statement No. 14. The objective of this
Statement is to improve financial reporting by clarifying the financial statement presentation
requirements for certain component units. This Statement amends the blending requirements
established in paragraph 53 of GASB Statement No. 14, The Financial Reporting Entity. 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 GASB Statement No. 39, Determining Whether Certain Organizations Are
Component Units -an amendment to GASB Statement No. 14. The requirements of this
Statement are effective for reporting periods beginning after June 15, 2016 and had no impact on
the City's financial statements
Governmental Accounting Standards Board Statement (GASB) No. 82, -Pension Issues-an
amendment ofGASB 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 GASB Statement No. 67, Financial
Reporting for Pension Plans-an amendment to GASB Statement No. 25, GASB Statement No. 68,
Accounting and Financial Reporting for Pensions-an amendment to GASB Statement No. 27, and
GASB Statement 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. The requirements of this Statement are
effective for reporting periods beginning after June 15, 2016, except for the requirements of this
Statement for the selection of assumptions in a circumstance in which an employer's pension
liability is measured as of a date other than the employer's most recent fiscal year end. In that
circumstance, the requirements for the selection of assumptions are effective for that employer in
the first reporting period in which the measurement date of the pension liability is on or after June
15, 2017. This statement had no significant impact on the City's financial statements.
S. Fair Value Measurements
Fair value is defmed as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The City
categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation
techniques used to measure fair value into three levels based on the extent to which inputs used in
measuring fair value are observable in the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs -other than quoted prices included within level 1 -that are observable
for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable iri.puts 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.
58
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 2 -CASH AND INVESTMENTS I
The City's goal is to invest at the maximum yield, consistent with safety and liquidity, while
individual funds can process payments for expenditures at any time.
A. Policies
The City invests in individual investments and in investment pools. Individual investments are
evidenced by specific identifiable securities instruments, or by an electronic entry registering the
owner in the records of the institution issuing the security, called the book entry system. In order
to increase security, the City employs the Trust Department of a bank as the custodian of certain
City managed investments, regardless of their form.
California Law requires banks and savings and loan institutions to pledge government securities
with a market value of 110% of the City's cash on deposit, or first trust deed mortgage notes with
a market value of 150% of the deposit, as collateral for these deposits. Under California Law this
collateral is held in a separate investment pool by another institution in the City's name and
places the City ahead of general creditors of the institution.
The City's investments are carried at fair value, as required by generally accepted accounting
principles. The City adjusts the carrying value of its investments to reflect their fair value at each
fiscal year end, and it includes the effects of these adjustments in income for that fiscal year.
B. Classification
Cash and investments as of June 30, 2017 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 ofNet Position:
City of South San Francisco:
Cash and investments available for operations
Restricted cash and investments
Total Primary Government cash and investments
Statement ofFiduciary Assets:
Cash and investments available for operations
Restricted cash and investments
Total Fiduciary cash and investments
Conference Center:
Cash and investments available for operations
Restricted cash and investments
Total South San Francisco
Conference Center cash and investments
Total cash and investments
59
$13 8,697, 709
108,392
138,806,101
1,496,406
31,158,229
32,654,635
3,240,137
480,922
3,721,059
$175,181,795
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 2 -CASH AND INVESTMENTS (Continued) I
The City does not allocate investments by fund. Each proprietary fund's portion of Cash and
Investments Available for Operations is in substance a demand deposit available to finance
operations, and is considered a cash equivalent in preparing the statement of cash flows.
C. Investments Authorized by the California Government Code and the City's Investment Policy
The City's investment policy and the California Government Code allow the City to invest in the
following provided the credit ratings of the issuers are acceptable to the City and approved
percentages and maturities are not exceeded. The table below also identifies certain provisions of
the California Government Code, or the City's Investment Policy where it is more restrictive:
Authorized Investment Type
U.S. Treasury Obligations
U.S. Agency Securities
Asset-Backed Securities
Connnercial Paper
Repurchase Agreements
Local Agency fuvestment Fund (LAIF)
Money Market Mutual Funds
Corporate Medium-Term Notes
Supranational Obligations
Maximum
Maturity
5 years
5 years
5 years
270 days
90days
Upon Demand
NIA
5 years
5 years
Minimum
Credit
Quality
NIA
NIA
AA
Al,Pl
AA
NIA
Highest
Rating
Category
A
AA
Maximum
Percentage
of Portfolio
No Limit
25%
20%
25%
No Limit
$65 million
20%
30%
30%
Maximum
Investment
in One Issuer
No Limit
No Limit
No Limit
5%
No Limit
No Limit
10%
5%
10%
The City of South San Francisco Conference Center Authority (Authority) maintains its cash and
investments separately from the City. The investment policy of the Authority contains no
limitations on the amount that can be invested in any one issue beyond that stipulated by the
California Government Code.
60
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
[ NOTE 2 -CASH AND INVESTMENTS (Continued)
D. Investments Authorized by Debt Agreements
The Successor Agency to the former Redevelopment Agency must maintain required amounts off
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:
Authorized Investment TYJIC
U.S. Treasury Obligations
U.S. Agency Securities
Commercial Paper
State and Local Investment Pool
Guaranteed Investment Contracts (fully
collateraliz.ed) (A)
Municipal Obligations
State Obligations
Maximum
Maturity
NIA
NIA
270days
NIA
NIA
NIA
NIA
Minimum
Credit
Quality
NIA
NIA
Highest
Rating
Category
Highest
Rating
Category
AAA
Highest
Rating
Category
Two Highest
Rating
Categories
Maximum
Percentage
of Portfolio
No Limit
No Limit
No Limit
No Limit
No Limit
No Limit
No Limit
(A) Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury Obligations or
U.S. Agency Obligations.
61
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 2 -CASH AND INVESTMENTS (Continued) I
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 ifthe Authority fails to
meet its obligations under these debt issues. The California Government Code requires these
funds to be invested in accordance with the Authority's ordinance, bond indentures or State
statute. The table below identifies the investment types that are authorized for investments held
by fiscal agents. The table also identifies certain provisions of these debt agreements:
Minimum Maximum
Maximum Credit Percentage
Authorized Investment Type Maturi!}: Quali!}'. of Portfolio
U.S. Treasury Obligations NIA NIA No Limit
U.S. Agency Securities NIA NIA 10%
Negotiable Certificates ofDeposit NIA A No Limit
Commercial Paper NIA Aaa No Limit
Corporate Notes NIA A No Limit
Money Market NIA NIA No Limit
Guaranteed Investment Contracts (fully
collateraliz.ed) (A) NIA AAA No Limit
(A) Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury Obligations or
U.S. Agency Obligations.
62
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 2 -CASH AND INVESTMENTS (Continued)
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.
Information about the sensitivity of the fair values of the City's investments (including
investments held by bond trustee) to market interest rate fluctuations is provided by the following
table that shows the distribution of the City's investments by maturity or earliest call date:
Remaining maturity
City and Fiduciary:
U.S. Agency Securities
Non-callable
U.S. Treasury Notes
Local Agency Investment Fund
Money Market Funds
Guaranteed Investment Agreements
Corporate Notes
Commercial Paper
Asset-Backed Securities
Supranational Obligations
South San Francisco Conference Center:
Local Agency Investment Fund
Money Market Funds
Total Investments
Less than
1 year
$61,140,370
23,855,234
3,083,238
2,712,089
480,922
$91,271,853
Cash in Banks and on Hand -City of South San Francisco
Cash in Banks and on Hand -South San Francisco Conference Center
Total Cash and Investments
One to Five
Years
$23,853,192
21,703,495
303,000
19,572,677
8,508,998
6,522,240
$80,463,602
Total
$23,853,192
21,703,495
61,140,370
23,855,234
303,000
19,572,677
3,083,238
8,508,998
6,522,240
2,712,089
480,922
171, 735,455
2,918,292
528,048
$175,181,795
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, 2017, these investments have an
average maturity of 197 days.
Money market funds are available for withdrawal on demand and as of June 30, 2017 have an
average maturity of 36 days.
63
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 2 -CASH AND INVESTMENTS (Continued) I
F. Credit Risk
G.
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, 2017, for each
of the Primary Government's investment types as provided by Moody's investment rating system,
except as noted:
Investment T:t:Ee Aaa Aaa-mf Aal-Aa3 Al-A3 P-1 Total
City and Fiduciary:
U.S. Agency Securities
Non-callable $23,853,192 $23,853,192
Money Maiket Funds $23,855,234 23,855,234
Corporate Notes 2,137,799 $2,458,913 $14,975,965 19,572,677
Commercial Paper $3,083,238 3,083,238
Asset-Backed Securities 5,345,203 5,345,203
Supranational Obligations 6,522,240 6,522,240
South San Francisco Conference Center:
Money Market Funds 480,922 480,922
Totals $37,858,434 $24,336,156 $2,458,913 $14,975,965 $3,083,238 82,712,706
City and Fiduciary:
Not rated:
Guaranteed Investment Agreements 303,000
Asset Backed Securities 3,163,795
Local Agency Investment Fund 61,140,370
Exempt.from credit rate disclosure:
U.S. Treasuiy Notes 21,703,495
South San Francisco Conference Center:
Not rated:
Local Agency Investment Fund 2,712,089
Total Investments $171, 735,455
Concentration of Credit Risk
The City's investment policy contains limitations on the amount that can be invested in any one
issuer beyond that stipulated by the California Government Code. Investments in any one issuer,
other than U. S. Treasury securities, mutual funds, and external investment pools that represent
5% or more of total Entity-wide investments are as follows at June 30, 2017:
Issuer
Federal National Mortgage Association
64
Investment
Type
U.S. Agency Securities
Amount
$11,478,950
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
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 1 inputs are quoted prices in an active market for identical
assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant
unobservable inputs.
The following is a summary of the fair value hierarchy of the fair value of investments of the City
as of June 30, 2017:
Investments by Fair Value Level:
City and Fiduciary:
U.S. Agency Securities
Non-callable
U.S. Treasury Notes
Corporate Notes
Commercial Paper
Asset Backed Securities
Supranational Obligations
Totals
Investments Measured at Amortized Cost:
City and Fiduciary:
Guaranteed Investment Agreements
Money Market Mutual Funds
South San Francisco Conference Center:
Money Market Mutual Funds
Investments Exempt from Fair Value Hierarchy:
City and Fiduciary:
Local Agency Investment Fund
South San Francisco Conference Center:
Local Agency Investment Fund
Total Investments
Level2
$23,853,192
21,703,495
19,572,677
3,083,238
8,508,998
6,522,240
$83,243,840
Total
$23,853, 192
21,703,495
19,572,677
3,083,238
8,508,998
6,522,240
83,243,840
303,000
23,855,234
480,922
61,140,370
2,712,089
$171,735,455
All Investments classified in Level 2 of the fair value hierarchy are valued using various pricing
techniques maintained by Interactive Data Pricing, including benchmark curves, sector groupings
and matrix pricing. These prices are obtained from various pricing sources by the City's
investment manager. Money market funds and guaranteed investment agreements were reported
at amortized cost.
65
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
NOTE 3 -CAPITAL ASSETS
A. Capital Asset Changes -Changes in capital assets during the fiscal year consist of:
Balance Transfers from Balance
June 30, 2016 Additions Retirements Transfers Successor Agency June 30, 2017
Governmental activities
Capital assets not being depreciated:
Land $47,563,435 ($7,481,022) $30,153,572 $70,235,985
Construction in Progress 26,684,122 $5,958,669 (14,051) ($21,968,404) 10,660,336
Total capital assets not being depreciated 74,247,557 5,958,669 (7,495,073) (21,968,404) 30,153,572 80,896,321
Capital assets being depreciated:
Buildings and Improvements 84,955,957 (710,000) 4,939,432 2,266,120 91,451,509
Infrastructure -Streets 183,079,365 11,848,800 194,928, 165
Infrastructure -Storm Drains 8,927,492 8,927,492
Infrastructure -Traffic Control Devices 5,138,138 4,403,511 9,541,649
Equipment and Vehicle 6,387,999 354,343 (77,289) 6,665,053
Furniture and Fixtures 1,837,554 776,661 2,614,215
Total capital assets being depreciated 290,326,505 354,343 (787,289) 21,968,404 2,266,120 314, 128,083
Less acclUTiulated depreciation for:
Buildings and Improvements (32,650,324) (2,235,450) 71,000 (359,663) (35,174,437)
Infrastructure -Streets (90,483,589) (5,528,966) (96,012,555)
Infrastructure -Storm Drains (2,957,561) (204,500) (3,162,061)
Infrastructure -Traffic Control Devices (2,586,321) (293,288) (2,879,609)
Equipment and Vehicle (5,993,033) (144,686) 77,289 (6,060,430)
Furniture and Fixtures (1,445,914) (63,425) (1,509,339)
Total accumulated depreciation (136,116,742) (8,4 70,315) 148,289 (359,663) (144,798,431)
Net Governmental Fund
Capital Assets Being Depreciated 154,209, 763 (8,115,972) (639,000) 21,968,404 1,906,457 169,329,652
Internal Service Fund Capital Assets
Capital assets not being depreciated:
Construction in Progress 103,736 162,140 (103,736) 162,140
Total capital assets not being depreciated 103,736 162,140 (I 03, 736) 162,140
Capital assets being depreciated:
Equipment and Vehicle 13,399,977 1,467,128 (83,403) 103,736 14,887,438
Accumulated depreciation (8,579,956) (760,921) 83,403 (9,257,474)
Net Internal Service Fwtd Capital Assets
Being Depreciated 4,820,021 706,207 103,736 5,629,964
Governmental activity capital assets, net $233,381,077 ($1,288,956) ($8,134,073) $32,060,029 $256,018,077
66
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
!NOTE 3-CAPITAL ASSETS (Continued) I
Balance
June 30, 2016 Additions Retirements Transfers
Business-type activities
Capital assets, not being depreciated:
Land $1,396,758
Balance
June 30, 2017
$1,396,758
Construction in Progress 12,111,583 $2,512,908 ($776,755) ($6,999,192) ____ 6-'-,8_4~8,,_5_44_
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:
13,508,341
66,715,639
75,522,774
4,773,977
7,377,546
11,179,118
31,154
165,600,208
(14,543,959)
(25,389,813)
(716,094)
(1,421,551)
(9,833,073)
(31,154)
(51,935,644)
113,664,564
$127,172,905
South San Francisco Conference Center
Buildings and Improvements
Furniture and Fixtures
Machinery and equipment
Total:
Less accumulated depreciation
Component mit, net
2,512,908
336,692
336,692
(1,611,714)
(1,888,070)
(159,132)
(209,570)
(503,528)
(4,372,014)
(4,035,322)
($1,522,414)
Balance
Jme 30, 2016
$10,654,098
714,158
206,896
11,575,152
(7,871,477)
$3,703,675
(776,755) -~<~6,_99_9~,1_92~) ____ 8~,2_4~5,'-3_02_
6,999,192
6,999,192
6,999,192
($776,755)
Additions Retirements
$280,006 ($111,647)
67,307
43,127 (12,466)
390,440 (124, 113)
(474,542) 124, 113
($84,102)
66,715,639
75,522,774
4,773,977
7,377,546
18,515,002
31,154
172,936,092
(16,155,673)
(27,277,883)
(875,226)
(1,631,121)
(10,336,601)
(31,154)
(56,307,658)
116,628,434
$124,873,736
Balance
Jme 30, 2017
$10,822,457
781,465
237,557
11,841,479
(8,221,906)
$3,619,573
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.
67
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
!NOTE 3 -CAPITAL ASSETS (Continued) I
C. Depreciation Allocation -Depreciation expense is charged to functions and programs based on
their usage of the related assets. The amounts allocated to each function or program are as
follows:
Governmental Activities
Governmental functions
General government
Fire
Police
Public works
Parks and recreation
Library
:Economic and community development
Total Governmental Functions
Internal Service Funds
Total Governmental Activities
Business-Type Activities
Sewer Enterprise
Parking District
Storm Water
Total Business-Type Activities
I NOTE 4 -INTER-FUND TRANSACTIONS
A. Internal Balances
$627,468
385,741
50,479
6,915,857
403,851
60,001
26,918
8,470,315
760,921
$9,231,236
$4,104,621
255,015
12,378
$4,372,014
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-Jund 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
General Fund
Due to Other Fund
Capital Improvement
Capital Projects Fund
Non-major Governmental Funds
68
Amount
$335,000
1,000
$336,000
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
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, 2017 were as follows:
FROMFUND (OUI)
General Fund
Fast oflOl Sewer Impact Fees Capital Project Fund
Fast oflOl Traffic Impact Fees Capital Project Fund
Developer Deposit Capital Projects Funds
Capital Infrastructure Reserve Capital Projects Fund
Non-major Governmental Funds
Internal Service Funds
TOFUND(IN)
Capital Improvement Capital Projects Fund
Capital Infrastructure Reserve Capital Projects Fund
Storm Water Fnterpris e Fund
Internal Service Funds
Sewer Enterprise Fund
Capital Improvement Capital Projects Fund
Capital Improvement Capital Projects Fund
General Fund
Capital Improvement Capital Projects Fund
Non-major Governmental Funds
General Fund
Capital Improvement Capital Projects Fund
Capital Infrastructure Reserve Capital Projects Fund
Storm Water Enterprise Fund
Capital Improvement Capital Projects Fund
Total
69
AMOUNT
$2,335,199
2,266,000
275,861
1,032,576
1,860
284,133
5,103
4,426,952
908,910
459,633
1,594,901
1,550,054
400,000
827,317
96,245
$16,464,744
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 5 -LONG-TERM DEBT I
A. Current Year Transactions and Balances
A summary of governmental and business-type activities transactions for the fiscal year ended
June 30, 2017 follows:
Authorized
and Balance at Balance at Current
Issued June 30, 2016 Retirement June 30, 2017 Portion
Gowrnmental Acti\ities:
2007 Loans Payable to the Successor Agency (1) $10,714,152 $23,000 $10,691,152
Total Gowrnmental Acti\ities Debt 10,714,152 23,000 10,691,152
Capitall.eases (2):
2008 Two Fire Trucks 260,154 100,982 159,172 $105,061
2010 Two Ambulances 131,959 87,190 44,769 44,768
2010 Two Fire Trucks 558,395 115,736 442,659 120,353
2013 Fire Truck 937,135 123,576 813,559 126,860
2014 Sweeper 351,355 137,991 213,364 141,379
Total Capital Leases 2,238,998 565,475 1,673,523 538,421
Net Gowrnmental Long-Term Debt $12,953,150 $588,475 $12,364,675 $538,421
Business-Type Acti\ities:
1999 State Water Resources Loan, 2.6%, due 8/ 1/22 (3) $47, 721,252 $20,705,346 $2,735,082 $17,970,264 $2,806,193
2004 State Water Resources Loan, 2.5%, due 111/27 (3) 21,258,529 12,270,846 1,095,280 11,175,566 1,122,663
2008 State Water Resources Loan, 2.4%, (4) 9,164,505 6,416,640 426,438 5,990,202 436,673
2005 Sewer Revenue Bonds, 2.75 to 5.0%, due 04/30/26 (5) 6,000,000 3,850,000 280,000 3,570,000 295,000
Total Fnterprise Fund Long-Term Debt $84,144,286 $43,242,832 $4,536,800 $38,706,032 $4,660,529
Component Unit-Conference Center:
2003 Revenue Bonds, 2.25% to 4.0%, due 9/1/18 (6) $5,865,000 $1,330,000 $425,000 $905,000 $445,000
Unamortized refunding loss on 2003 bonds (50,819) (26,515) (24,304)
Total Conference Center $5,865,000 $1,279,181 $398,485 $880,696 $445,000
70
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 5 -LONG-TERM DEBT (Continued) I
(1) As of June 30, 2017, 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 $10,691,152 for the Flyover and Hook.ramps 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 10-3 0 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.
71
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 5 -LONG-TERM DEBT (Continued) I
(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 $8.3 million
which represented coverage of 18.5 over the $449,976 in debt service.
(6) On June 1, 2003, the City of South San Francisco Capital Improvement Financing Authority
(CIF A) issued $5,865,000 of 2003 Revenue Bonds. The CIF A 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 CIF A 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.
72
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I 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, 2017, were as follows:
For the Year Governmental Activities
Ended June 30 Principal Interest
2018 $538,422 $47,431
2019 381,483 30,743
2020 263,839 20,330
2021 204,251 11,582
2022 140,892 6,614
2023-2027 144,636 2,870
2026-2029
Totals $1,673,523 $119,570
Business-Type Activities
Principal Interest
$4,660,530 $1,060,207
4,782,037 942,915
4,906,394 822,328
5,038,676 698,146
5,173,954 570,292
13,024,062 1,025,946
1,120,379 23,621
$38,706,032 $5,143,455
Component Unit
Conference Center Authority
Principal Interest
$445,000
460,000
$905,000
$35,644
18,400
$54,044
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:
Leasing Arrangement Fund/ Activity
Capital Leases Governmental Activity
73
Original
Cost
$5,842,799
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 6 -NET POSITION AND FUND BALANCES
A. Net Position
Net Position is the excess of all the City's assets and deferred outflows of resources over all its
liabilities and deferred inflows of resources, regardless of fund. Net Position are divided into
three captions. These captions apply only to Net Position, which is determined only at the
Government-wide level, and are described below:
Net Investment in Capital Assets describes the portion of Net Position which is represented by the
current net book value of the City's capital assets, less the outstanding balance of any debt issued
to finance these assets.
Restricted describes the portion of Net Position which is restricted as to use by the terms and
conditions of agreements with outside parties, governmental regulations, laws, or other
restrictions which the City cannot unilaterally alter.
Unrestricted describes the portion of Net Position which is not restricted to use.
B. Fund Balance
The City's fund balances are classified in accordance with Governmental Accounting Standards
Board Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type
Definitions, which requires the City to classify its fund balances based on spending constraints
imposed on the use of resources.
For programs with multiple funding sources, the City prioritizes and expends funds in the
following order: Restricted, Committed, Assigned, and Unassigned. Each category in the
following hierarchy is ranked according to the degree of spending constraint.
Nonspendables represents balances set aside to indicate items do not represent available,
spendable resources even though they are a component of assets. Fund balances required to be
maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such
as prepaids, notes receivable, and land held for redevelopment are included. However, if
proceeds realized from the sale or collection of nonspendable assets are restricted, committed or
assigned, then Nonspendable amounts are required to be presented as a component of the
applicable category.
Restricted fund balances have external restrictions imposed by creditors, grantors, contributors,
laws, regulations, or enabling legislation which requires the resources to be used only for a
specific purpose. Nonspendable amounts subject to restrictions are included along with spendable
resources.
Committed fund balances have constraints imposed by Council Resolution of the City Council
which may be altered only by Council Resolution of the City Council. Nonspendable amounts
subject to council commitments are included along with spendable resources.
74
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I 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, 2017, are below:
CaP!tal Project Funds
Low and Moderate F.ast of101
General Income Housing Capital Sewer
Fund Balance Classifications Fund Assets lmE!:ovement Im~ctFees
Nonspendables:
Items not in spendable form:
Inventory and prepaid items $474
Total Nonspendable Fund Balances 474
Restricted for:
Sewer Impact Fees $688,223
Low and moderate housing projects $4,658,178
Total Restricted Fund Balances 4,658,178 688,223
Committed for:
Capital projects 2,490,575
Lo cal services 9,290,149
Total Committed Fund Balances 11,780,724
Assigned to:
Capital projects 5,244,279
Total Assigned Fund Balances 5,244,279
Unassigned:
General fund 39,278,746
Capital Improvement Fund ~$88,331}
Total Unassigned Fund Balances 39,278,746 (88,331)
Total Fund Balances $56,304,223 $4,658,178 ($88,331} $688,223
(Continued)
75
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
[ NOTE 6 -NET POSITION AND FUND BALANCE (Continued)
c.
Ca[!ital Project Funds
EastoflOl Capital Other
Traffic Child Care Developer Infrastructure Governmental
FnndBalance Classifications {continued) Im[!!!ct Fees Im[!!!ct Fees Dei!Qsit Reserve Fund Funds
Restricted for:
Traffic impact fees projects $7,045,993
Child Care impact fees projects $3,399,688
Developer deposit fees projects $72,884
Capital infrastructure projects $14,525,445
Gas Tax projects $931,545
Developer contnbutions projects 4,877,868
Community Development Block Grant projects 478,890
Maintenance districts projects 2,562,369
Transportation sales tax projects 2,189,418
City programs projects 4,135,445
Other Special Revenues projects 5,221,104
Capital projects activities 4,408,450
Total Restricted Fund Balances 7,045,993 3,399,688 72,884 14,525,445 24,805,089
Total Fnnd Balances $7,045,993 $3,399,688 $72,884 $14,525,445 $24,805,089
Net Deficit
The Capital Improvement Capital Projects Fund had net deficit in the amount of $88,331. Future
revenues are expected to offset the deficit.
The Health and Retirement Benefits Internal Service Fund had net deficit in the amount of
$17,704,113 at June 30, 2017. This deficit is attributable to the Net OPEB Obligation described in
Note 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 ofJune 30, 2017, were as listed below:
Governmental funds:
General Fund
Capital Improvement Capital Projects Fund
Other Governmental Funds
Total
76
Amount
$5,244,279
3,767,942
220,876
$9,233,097
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 7 -PENSION PLANS I
For purposes of measuring the net pension liability and deferred outflows/inflows of resources
related to pensions, and pension expense, information about the fiduciary net position of the
City's California Public Employees' Retirement System (CalPERS) plans (Plans) and additions
to/deductions from the Plans' fiduciary net position have been determined on the same basis as
they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including
refunds of employee contributions) are recognized when due and payable in accordance with the
benefit terms. Investments are reported at fair value.
A. General Information about the Pension Plans
Plan Descriptions -All qualified permanent and probationary employees are eligible to
participate in the City's separate Safety (police and fire) and Miscellaneous (all other) Plans,
agent multiple-employer defined benefit pension plans administered by the California Public
Employees' Retirement System (CalPERS), which acts as a common investment and
administrative agent for its participating member employers. Benefit provisions under the Plans
are established by State statute and City resolution.
CalPERS issues publicly available reports that include a full description of the pension plans
regarding benefit provisions, assumptions and membership information that can be found on the
CalPERS website.
Benefits Provided -CalPERS provides service retirement and disability benefits, annual cost of
living adjustments and death benefits to plan members, who must be public employees and
beneficiaries. Benefits are based on years of credited service, equal to one year of full time
employment. Members with five years of total service are eligible to retire at age 50 with
statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10
years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957
' Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments
for each plan are applied as specified by the Public Employees' Retirement Law.
The Plans' provisions and benefits in effect at June 30, 2017, are summarized as follows:
Miscellaneous
Classic Plan Classic Plan PEPRAPlan
Hire date Prior to After On or after
April 25, 2010 April 25, 2010 January 1,2013
Benefit formula 2.7%@55 2%@60 2%@62
Benefit vesting schedule 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50-55 50-60 52-62
Monthly benefits, as a% ofeligible compensation 2.0%to2.7% 1.092% to 2.418% l.0%to 2.5%
Required employee contnbution rates 8% 7% 6.5%
Required employer contribution rates 27.822% 27.822% 27.822%
77
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 7 -PENSION PLAN (Continued) I
Hire date
Benefit fornrula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a% of eligible compensation
Required employee contnbution rates
Required employer contnbution rates
Classic Plan
Prior to
April25,2010
3%@50
5 years service
monthly for life
50
3%
9%
43.678%
Safety
Classic Plan
After
April 25, 2010
3%@55
5 years service
monthly for life
50-55
2.4%to 3.0%
9%
43.678%
PEPRAPlan
On or after
January 1, 2013
2.7%@57
5 years service
monthly for life
50-57
2.0%to2.7%
11.5%
43.678%
Employees Covered -As of the June 30, 2015 actuarial valuation date and the June 30, 2016
measurement date, the following employees were covered by the benefit terms for the Plans:
Inactive employees or beneficiaries currently receiving benefits
Inactive employees entitled to but not yet receiving benefits
Active employees
Total
Miscellaneous
413
311
253
977
Safety
271
104
159
534
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, 2016, using an annual actuarial valuation as of June 30, 2015 rolled forward to
June 30, 2016 using standard update procedures. A summary of principal assumptions and
methods used to determine the net pension liability is shown below.
78
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
J NOTE 7 -PENSION PLAN (Continued) I
Actuarial Assumptions -For the measurement period ended June 30, 2016, the total pension
liabilities were determined by rolling forward the June 30, 2015 total pension liability. The June
30, 2015 total pension liabilities were based on the following actuarial methods and assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increase
Investment Rate ofRetum
Post Retirement Benefit Increase
Mortality
Miscellaneous and Safety
June 30, 2015
June 30, 2016
Entry-Age Nonna.I Cost Method
7.65%
2.75%
Varies by Entry Age and Service
7.50% 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 CalPERS 2014 experience study report.
All other actuarial assumptions used in the June 30, 2015 valuation were based on the results of a
January 2015 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.
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.
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.
79
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
J NOTE 7 -PENSION PLAN (Continued) I
In determining the long-term expected rate of return, CalPERS took into account both short-term
and long-term market return expectations as well as the expected pension fund cash flows. Such
cash flows were developed assuming that both members and employers will make their required
contributions on time and as scheduled in all future years. Using historical returns of all the
funds' asset classes, expected compound (geometric) returns were calculated over the short-term
(first 10 years) and the long-term (11-60 years) using a building-block approach. Using the
expected nominal returns for both short-term and long-term, the present value of benefits was
calculated for each fund. The expected rate of return was set by calculating the single equivalent
expected return that arrived at the same present value of benefits for cash flows as the one
calculated using both short-term and long-term returns. The expected rate of return was then set
equivalent to the single equivalent rate calculated above and rounded down to the nearest one
quarter of one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of
return was calculated using the capital market assumptions applied to determine the discount rate
and asset allocation. These geometric rates of return are net of administrative expenses.
New
Strategic Real Return
Asset Class Allocation Years 1 -lO(a)
Global Equity 51.0%
Global Fixed Income 20.0%
Inflation Sensitive 6.0%
Private Equity 10.0%
Real Estate 10.0%
Infrastructure and Forestland 2.0%
Liquidity 1.0%
Total 100%
(a) An expected inflation of2.5% used for this period.
(b) An expected inflation of3.0% used for this period.
80
5.25%
0.99%
0.45%
6.83%
4.50%
4.50%
-0.55%
Real Return
Years 1 l+(b)
5.71%
2.43%
3.36%
6.95%
5.13%
5.09%>
-1.05%
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 7 -PENSION PLAN (Continued) I
C Changes in the Net Pension Liability
The changes in the Net Pension Liability for each Plan are as follows:
Miscellaneous Plan:
Increase (Decrease)
Total Pension Plan Fiduciary
Liabilit~ Net Position
Balance at June 30, 2015 $198,871,260 $142,302, 730
Changes in the year:
Service cost 3,079,994
Interest on the total pension liability 14,870,988
Changes of benefit tenns
Chases of assumptions
Differences between actual and expected experience (476,337)
Plan to plan resource movement 229
Contribution -employer 5,726,981
Contribution -employees 1,622,453
Net investment income 687,860
Benefit payments, including refunds of employee
contributions (11,085,829) (11,085,829)
Administrative expenses (86,726)
Net changes 6,388,816 (3,135,032)
Balance at June 30, 2016 $205,260,076 $139,167,698
Safety Plan:
Increase (Decrease)
Total Pension Plan Fiduciary
Liability Net Position
Balance at June 30, 2015 $268,679,186 $195,205,601
Changes in the year:
Service cost 5,329,842
Interest on the total pension liability 20,134,558
Changes of benefit tenns
Chases of assumptions
Differences between actual and expected experience (915,267)
Plan to plan resource movement (229)
Contribution -employer 8,535,737
Contribution -employees 1,961,907
Net investment income 950,612
Benefit payments, including refunds of employee
contributions (14,463,995) (14,463,995)
Administrative expenses (118,968)
Net changes 10,085,138 (3, 134,936)
Balance at June 30, 2016 $278, 764,324 $192,070,665
81
Net Pension
Liabilit~/(Asset2
$56,568,530
3,079,994
14,870,988
(476,337)
(229)
(5,726,981)
(1,622,453)
(687,860)
0
86,726
9,523,848
$66,092,378
Net Pension
Liability/~Asset2
$73,473,585
5,329,842
20,134,558
(915,267)
229
(8,535, 737)
(1,961,907)
(950,612)
0
118,968
13,220,074
$86,693,659
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 7 -PENSION PLAN (Continued) I
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 I-percentage point lower or I-percentage point higher than the current rate:
Miscellaneous Safety
1% Decrease 6.65% 6.65%
Net Pension Liability $91,969,258 $124,134,164
Current Discount Rate 7.65% 7.65%
Net Pension Liability $66,092,378 $86,693,659
1% Increase 8.65% 8.65%
Net Pension Liability $44,630,768 $55,923,952
Pension Plan Fiduciary Net Position -Detailed information about each pension plan's fiduciary
net position is available in the separately issued CalPERS financial reports.
D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 20I 7, the City recognized negative pension expenses of $986,502 and
$468,896 for the Miscellaneous and Safety Plans, respectively. At June 30, 2017, 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
82
Deferred Outflows Deferred Inflows
of Resources of Resources
$5,228,454
($674,931)
(599,362)
7,536,073
$12,764,527 ($1,274,293)
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 7 -PENSION PLAN (Continued) I
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
of Resources
$8,071,060
10,644,950
$18, 716,010
Deferred Inflows
ofResources
($2,052,483)
(2,472,336)
($4,524, 819)
$13 ,299 ,514 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, 2017. Other amounts reported as deferred outflows ofresources and deferred inflows of
resources related to pensions will be recognized as pension expense as follows:
Miscellaneous Plan:
Year Ended
June 30
2018
2019
2020
2021
Safety Plan:
Year Ended
June 30
2018
2019
2020
2021
83
Annual
Amortization
($165,956)
917,804
3,509,205
2,000,727
Annual
Amortization
($1,316,785)
(28,854)
4,706,291
2,759,479
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
!NOTE 8-DEFERRED COMPENSATION PLAN I
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.
I NOTE 9 -OTHER 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, 2017, approximately 384 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:
Eligibility *Hired< 4/25/2010
* Age 50 and 5 years City service or disability at any age after 5 years
service
Medical Benefit *City pays single premium up to largest HMO single premium.
Cap for 2016/2017:
-$1,097.70/month pre-65 (Blue Shield)
-$575. 70/month post-65 Medical eligible (Blue Shield)
-$1,720.17/ month post-65 not Medicare eligible (Kaiser)
* Medicare ineligible retirees allowed to stay in their
pre-Medicare premium plans after age 65
*City pays premium and reimburses Medicare Part B hired
before 4/25/2010 only
Surviving Spouse *Participation with premium payment
Benefit * AFSCME, Local 1569, Mid-Management, IAFF
-surviving spouses covered 2 months following death of retiree
Dentai Vision, & Life None
84
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 9 -OTHER POST-EMPLOYMENT BENEFITS (Continued)
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 forthe 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.
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.
85
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
J NOTE 9-OTHER POST-EMPLOYMENT BENEFITS (Continued)
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 2017, the City made contribution less
than the ARC as presented below:
Annual required contribution (ARC)
Interest on net OPEB Obligation
Adjustment to annual required contribution
Annual OPEB cost
Contributions made:
Benefits paid
Prefunding contribution to trust
Total contributions
Change in net OPEB Asset I (Obligation)
Net OPEB Asset I (Obligation) at June 30, 2016
Net OPEB Asset I (Obligation) at June 30, 2017
$6,233,000
1,153,000
(2,436,000)
4,950,000
2,879,906
801,762
3,681,668
(1,268,332)
(24,904, 700)
($26, 173,032)
The Plan's annual required contributions and actual contributions for the year ended June 30,
2017 is set forth below (in thousands):
Percentage of
AnnualOPEB Actual AnnualOPEB NetOPEB
Fiscal Year Cost Contribution Contributed Obligation
6/30/2015 $5,884,000 $13,895,000 236% $23,810,700
6/30/2016 5,177,000 4,083,000 79% 24,904,700
6/30/2017 4,950,000 3,681,668 74% 26,173,032
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 ofUAAL to the covered payroll was
235.3%.
The schedule of funding progress presented immediately following the fmancial 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.
86
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
jNOTE 10-JOINTLY GOVERNED ORGANIZATIONS I
The City participates in the jointly governed organizations discussed below through formally
organized and separate entities established under the Joint Exercise of Powers Act of the State of
California. As separate legal entities, these entities exercise full powers and authorities within the
scope of the related Joint Powers Agreements including the preparation of annual budgets,
accountability for all funds, the power to make and execute contracts and the right to sue and be
sued. Each joint organization is governed by a board consisting of representatives from member
municipalities. Each board controls the operations of the respective joint organization, including
selection of management and approval of operating budgets, independent of any influence by
member municipalities beyond their representation on that board. Obligations and liabilities of
this joint organization are not the City's responsibility and the City does not have an equity
interest in the assets of each joint organization except upon dissolution of the joint organization.
A. Oyster Point Marina
(OPM) was established in 1977 by the City and the San Mateo County Harbor District (Harbor
District) for the purpose of expanding, improving and operating the Oyster Point Marina and
Park. The governing board consists of two of the City's council members and two Harbor District
commissioners. The Harbor District operates OPM. Operation of the Marina provides revenues
for the marina's operations. The City retains title to the land; however, the City is not liable for
any obligations of the San Mateo County Harbor District. Condensed unaudited financial
information may be obtained from San Mateo County Harbor District, #1 Johnson Pier, Half
Moon Bay, CA 94019.
B. Peninsula Traffic Congestion Relief Alliance
(PTCRA) was formed from the merger of The Inter City Transportation Systems Management
Agency and Multi-City Transportation Systems Management Agency (MCTSMA) in 2000. The
members are Cities of South San Francisco, Brisbane, Colma, Daly City, Half Moon Bay,
Millbrae, Pacifica and San Bruno and seven other members for the purpose of mitigating traffic
congestion. The governing board consists of one council member from each member city. The
finance director of Daly City acts as the treasurer and controller of PTCRA. The individual cities
are not liable for the debts, liabilities or obligations of PTCRA. Each member city has an equal
interest in PTCRA. Condensed accrual basis unaudited financial information may be obtained
from the City of Daly City Finance Department, 333 90th Street, Daly City, CA 94015.
C. City/County Association of Governments
(C/CAG) was established in 1990 by the County of San Mateo and the Cities of San Mateo
County for preparation, adoption, monitoring and enforcing of Countywide state mandated plans.
A Board of Directors consisting of one council member from each member city and one member
from the County Board of Supervisors governs C/CAG. The city treasurer of San Carlos acts as
the treasurer of C/CAG. The individual cities and the County are not liable for the debts,
liabilities, or obligations of C/CAG. Condensed unaudited cash basis financial information may
be obtained from the City of San Carlos Finance Department, 666 Elm Street, San Carlos, CA
94070.
87
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
jNOTE 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. For the year ended June 30, 2017, the City
paid ABAG Plan $1,018,320 in premiums and did not receive a refund of premiums paid in prior
years. ABAG Plan has not determined the value of the City's interest in its net position.
Financial statements may be obtained from ABAG Services, P.O. Box 2050, Oakland, CA 94694-
2050.
The City has also purchased excess coverage insurance for worker's compensation claims from
CSAC Excess Insurance Authority $500,000 self-insured retention. For the past five fiscal years,
general liability and worker compensation settlements did not exceed insurance coverage.
B. Liability for Uninsured Claims
The City provides for the uninsured portion of claims and judgments in the Self Insurance
Internal Service Fund. Claims and judgments, including a provision for claims incurred but not
reported, are recorded when a loss is deemed probable of assertion and the amount of the loss is
reasonably determinable. As discussed above, the City has coverage for such claims, but it has
retained the risk for the deductible or uninsured portion of these claims.
The City's liability for uninsured claims is limited to workers' compensation and general liability
claims, as discussed above, and was estimated by management based on prior year's claims
experience as follows:
June 30, 2017 Fiscal Year
Workers' General 2015-2016
Compensation Liability Total Total
Balance, beginning of year $11,228,000 $172,947 $11,400,947 $11,344,000
Current year claims and changes in
estimates of prior years claims 3,148,309 415,602 3,563,911 2,869,747
Claims Paid (1,681,309) (310,607) (1,991,916) (2,812,800)
Balance, end of year $12,695,000 $277,942 $12,972,942 $11,400,947
Current portion $562,000 $150,000 $712,000 $712,000
88
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 12 -COMMITMENTS AND CONTINGENCIES I
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, 2017, was $420,000. The cost and carrying amount of
leased land under this lease receivable is $5,040,000. Future minimum lease payments from the
Conference Center Authority land leases are as follows:
Year ending June 30
2018
2019
2020
2021
2022
2023-2027
2028-2029
Total
89
Component Unit
Conference Center
$420,000
420,000
420,000
420,000
420,000
2,100,000
570,000
$4,770,000
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
I NOTE 12 -COMMITMENTS AND CONTINGENCIES (Continued) I
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 2017 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 2017 lease payments were $51,800.
Future minimum lease revenues for the Costco and Magnolia Plaza leases are as follows:
Year ending June 30: Costco Ma~nolia Plaza Total
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 400,000 51,800 451,800
2023-2027 2,000,000 259,000 2,259,000
2028-2032 2,000,000 259,000 2,259,000
2033-2037 800,000 259,000 1,059,000
2038-2042 259,000 259,000
2043-2047 259,000 259,000
2048-2052 259,000 259,000
2053-2057 259,000 259,000
2058-2062 259,000 259,000
$6,800,000 $2,331,000 $9,131,000
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, 2017 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, 2017.
90
NOTE 13
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
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.
91
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2017
NOTE 13 -FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTIVITIES (Continued)
Capital assets recorded at June 30 are comprised of:
Balance Transfer to the City Balance
June 30, 2016 Additions of South San Francisco June 30, 2017
Nduciary activities
Capital assets not being depreciated:
Land $52,769,724 ($50,249,460) $2,520,264
Total capital assets not
being depreciated 52,769,724 (50,249,460) 2,520,264
Capital assets being depreciated:
Buildings and Improvements 3,788,506 (2,860, 716) 927,790
Equipment and Vehicle 242,190 242,190
Furniture and Fixtures 21,506 21,506
Total capital assets being depreciated 4,052,202 (2,860,716) 1,191;486
Less accmnulated depreciation for:
Buildings and Improvements (805,650) ($69,646) 467,812 (407,484)
Equipment and Vehicle (239,083) (2,005) (241,088)
Furniture and Fixtures (21,505) (21,505)
Total accwnulated depreciation (1,066,238) (71,651) 467,812 (670,077)
Net capital assets being depreciated 2,985,964 (71,651) (2,392,904) 521,409
Nduciary activity capital assets, net $55,755,688 ($71,651) ($52,642,364) $3,041,673
Current year transfers to the City of South San Francisco include properties totaling $20,591,173
transferred from capital assets to property held for redevelopment in the General Fund, which has
been reported as a Special Item.
D. Long-Term Debt
All of the long-term debt of the Successor Agency were issued by the former Redevelopment
Agency. Current year transactions were as follows:
Balance Balance Current
Type ofOblig;ition June 30, 2016 Retirements June 30, 2017 Portion
2006 Revenue Bonds, 3.75 to 5.13%, due 9/1/35 (I) $56,775,000 ($56,775,000)
1999 Revenue Bonds, 3.3 to 5.0%, due 9/1/18 (2) 815,000 (255,000) $560,000 $275,000
Total Successor Agency $57,590,000 ($57 ,030,000) $560,000 $275,000
92
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REQUIRED SUPPLEMENTARY INFORMATION
97
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2017
Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plans
Last 10 Years*
SCHEDULE OF CHANGES IN THENEf PENSION UABil.JfY AND RELATED RATIOS
Measurement Date 6/30/2014 6/30/2015 6/30/2016
Total Pension Llali.Iity
Service cost $3,449,973 $3,075,813 $3,079,994
Interest on total pension liability 13,930,544 14,393,013 14,870,988
Changes ofbenefit tenIIS
Changes ofassumptions (3,374,655)
Difference between expected and actual experience (1,567,798) (476,337)
Benefit payments, including refunds of employee
contributions (9,287,975) (10,407,243) (11,085,829)
Net change in total pension liali.Iity 8,092,542 2,119,130 6,388,816
Total pension Iiali.Iity-beginning 188,659,588 196,752,130 198,871,260
Total pension liali.Iity-eming (a) $196,752,130 $198,871,260 $205,260,076
Plan fiduciary net position
Contnbutions -employer $4,235,454 $4,546,984 $5,726,981
Contributions -employee 1,466,176 1,411,273 1,622,453
Net investment income 21,712,340 3,221,551 687,860
Other miscellaneous income
Benefit payments, including refunds of employee
contnbutions (9,287,975) (10,407,243) (11,085,829)
Plan to plan resource movement (50,555) 229
Administrative expense (160,268) (86,726)
Net change in plan fiduciary net position 18,125,995 (1,438,258) (3,135,032)
Plan fiduciary net position -beginning 125,614,993 143,740,988 142,302,730
Plan fiduciary net position -enmng (b) $143,740,988 $142,302,730 $139,167,698
Net pension liability -ending (a)-(b) $53,011,142 $56,568,530 $66,092,378
Plan fiduciary net position as a percentage of the
total pension liability 73.06% 71.56% 67.80%
Covered payroll $17,725,581 $17,798,104 $21,409,193
Net pension liability as percentage ofcovered-
employee payroll 299.07% 317.83% 308.71%
Notes to Schedule:
Benefit chanr:es. The figures above do not include any liability impact that may have resuhed from plan changes
which occurred after the actuarial vaIUation date. This applies for voluntary benefit changes as well as any offers
of Two Years Additional Service Credit (a.k.a. GJlden Handshakes).
98
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2017
Miscellaneous Agent Multiple-Employer Defined Benefit Pens ion Plans
Last 10 Years*
SCHEDULE OF CONTRIBUTIONS
Fiscal Year Ended June 30
Actuarially determined contnbution
Contnbutions in relation to the actuarially
determined contnbutions
Contnbution deficiency ( e:xces s)
Covered payroll
Contnbutions as a percentage of covered-
employee payroll
Notes to Schedule
Valuation date:
2015
$4,210,973
4,210,973
$0
$17,798,104
23.66%
6/30/2012
2016
$5,399,856
5,399,856
$0
$21,409,193
25.22%
6/30/2013
Methods and assumptions used to determine contnbution rates:
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Inflation
Salary increases
Investment rate of return
Retirement age
Mortality
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 Ca!PERS Experience
Study for the period from 1997 to 2007
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
99
2017
$5,228,454
5,228,454
$0
$29,390,370
17.79%
6/30/2014
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2017
Safety Agent l\fultiple-.Employer Defined Benefit Pension Plans
Last 10 Years*
SCHEDULE OF CHANGES IN TIIENEf PENSION LIABILITY AND RELATED RATIOS
Measurement Date 6/30/2014 6/30/2015 6/30/2016
Total Pension Llability
Service cost $5,143,842 $4,968,087 $5,329,842
Interest on total pension liability 18,899,544 19,398,484 20,134,558
Changes ofbenefit terms
Changes ofassumptions ( 4,789,129)
Difference between expected and actual experience ( 4,226,388) (915,267)
Benefit payments, including refunds of employee
contributions (13, 161,296) (13,556,606) (14,463,995)
Net change in total pension liability 10,882,090 1,794,448 10,085,138
Total pension liability-beginning 256,002,648 266,884,738 268,679,186
Total pension liability-ending (a) $266,884,738 $268,679,186 $278,764,324
Plan fiduciary net position
Contributions -employer $6,535,399 $7,191,715 $8,535,737
Contributions -employee 2,151,163 1,714,039 1,961,907
Net investment income 29,348,051 4,264,997 950,612
Other miscellaneous income
Benefit payments, including refunds of employee
contributions (13,161,296) (13,556,606) ( 14,463 ,995)
Plan to plan resource movement (229)
Administrative expense (219,696) (118,968)
Net change in plan fiduciary net position 24,873,317 (605,551) (3,134,936)
Plan fiduciary net position -beginning 170,937,835 195,811,152 195,205,601
Plan fiduciary net position -ending (b) $195,811,152 $195,205,601 $192,070,665
Net pension liability -ending (a)-(b) $71,073,586 $73,473,585 $86,693,659
Plan fiduciary net position as a percentage of the total
pens ion liability 73.37% 72.65% 68.90%
Covered payroll $15,994,412 $16,679,857 $18,986,895
Net pension liability as percentage of covered-
employee payroll 444.37% 440.49% 456.60%
Notes to Schedule:
Benefit chan~es. 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).
100
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2017
Safety Agent Multiple-Employer Defined Benefit Pens ion Plans
Last 10 Years*
SCHEDULE OF CONTRIBUTIONS
Fiscal Year Ended June 30
Actuarially determined contnbution
Contnbutions in relation to the actuarially
determined contributions
Contnbution deficiency (excess)
Covered payroll
Contnbutions as a percentage of covered-
employee payroll
Notes to Schedule
Valuation date:
2015
$7,191,715
7,191,715
$0
$16,679,857
43.12%
6/30/2012
2016
$8,538,138
8,538,138
$0
$18,986,895
44.97%
6/30/2013
Methods and assumptions used to determine contnbution rates:
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Inflation
Salary increases
Investment rate of return
Retirement age
Mortality
Entry age
Level percentage of payroll
24 years as of the Valuation Date
15-year smoothed market
2.75%
3.300/o to 14.20% depending on Age,
Service, and type of employment
7.50% net ofadministrative expenses
The probabilities ofRetirement are based
on the 2010 CalPERS &perience Study
The probabilities of mortality are based
on the 2010 CalPERS &perience 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
101
2017
$8,071,060
8,071,060
$0
$19,563,549
41.26%
6/30/2014
Actuarial
Valuation
Date
6/30/2012
6/30/2013
6/30/2015
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2017
Other Post-Emoloyment Benefits Schedule ofFunding Progress
(fu Thousands)
Overfunded
Fntry Age (Underfunded)
Actuarial Actuarial Actuarial
Value of Accrued Accrued Funded Covered
Assets Liability Liability Ratio Payroll
$0 $71,306 ($71,306) 0% $31,431
0 66,444 (66,444) 0% 29,914
16,175 73,752 (57,577) 21.9% 24,471
102
Overfunded
(Underfunded)
Actuarial
Liability as
Percentage of
Covered Payroll
(226.91'/o)
(222.1%)
(235.3%)
SUPPLEMENTARY INFORMATION
103
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GENERAL FUND
The General Fund is the City's primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund. The General Fund is comprised of
the following:
GENERAL PURPOSE FUND
This fund accounts for resources traditionally associated with government, such as administration, public
safety, library, parks maintenance, and recreation, outside of those accounted for in other funds.
MEASURE W FUND
This fund accounts for revenue as the result of the voter-approved one-half percent sales and use tax.
Revenues are committed for maintenance and enhancement of local services.
105
ASSETS
Cash and investments
Receivables:
Accounts
Accrued interest
Due from Conference Center
Due from other funds
Inventory
Property held for redevelopment
Total Assets
LIABILITIES
Accounts payable
Accrued salaries and benefits
Other payable
Unearned revenue
Total Liabilities
FUND BALANCES
Nonspendable
Committed
Assigned
Unassigned
Total Fund Balances
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
COMBINING BALANCE SHEETS
JUNE 30, 2017
General Purpose
$25,098,149
4,855,369
64,817
43,668
336,000
474
20,582,335
$50,980,812
$2,012,208
1,569,242
278,678
106,610
3,966,738
474
2,490,575
5,244,279
39,278,746
47,014,074
Total Liabilities and Fund Balances $50,980,812
106
Measure W Total
$8,124,449 $33,222,598
1,165,700 6,021,069
64,817
43,668
336,000
474
20,582,335
$9,290,149 $60,270,961
$2,012,208
1,569,242
278,678
106,610
3,966,738
474
$9,290,149 11,780,724
5,244,279
39,278,746
9,290,149 56,304,223
$9,290,149 $60,270,961
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2017
General Pu!:eose MeasureW
REVENUES
Property taxes $33,405,829
Sales taxes 15,593,032 $8,886,444
Transient occupancy taxes 13,631,507
Franchise Fees 4,090,073
Other taxes 5,708,187
Intergovernmental 1,593,508
Interest and rentals 2,784,072
Licenses and permits 7,823,403
Charges for services 9,451,835
Fines and forfeitures 899,118
Other 1,092,691
Total Revenues 96,073,255 8,886,444
EXPENDITURES
Current:
City Council 206,950
City Clerk 607,096
City Treasurer 110,559
City Attorney 1,187,716
City Manager 1,948,911
Finance 2,613,473
Non-departmental 1,145,698
Human Resources 1,571,647
Fire 25,567,548
Police 25,539,781
Public Works 4,654,758
Parks and Recreation 14,897,157
Library 5,157,355
Economic and Community Development 7,158,564
Total Expenditures 92,367,213
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 3,706,042 8,886,444
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets
Transfers in 6,021,853
Transfers out (5,031,908) (877,728)
Total Other Financing Sources (Uses) 989,945 (877,728)
Net Change in Fund Balances before special items 4,695,987 8,008,716
Special Item 20,582,335
Net Change in Fund Balances 25,278,322
Fund balances (deficits) -July 1 21,735,752 1,281,433
Fund balances (deficits) -June 30 $47,014,074 $9,290,149
107
Total
$33,405,829
24,479,476
13,631,507
4,090,073
5,708,187
1,593,508
2,784,072
7,823,403
9,451,835
899,118
1,092,691
104,959,699
206,950
607,096
110,559
1,187,716
1,948,911
2,613,473
1,145,698
1,571,647
25,567,548
25,539,781
4,654,758
14,897,157
5,157,355
7,158,564
92,367,213
12,592,486
6,021,853
(5,909,636)
112,217
12,704,703
20,582,335
33,287,038
23,017,185
$56,304,223
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, 2017
General Purpose
Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amount (Negative)
Resources (inflows):
Property taxes $25,486,789 $32,549 ,949 $33,405,829 $855,880
Sales taxes 16,105,336 16,105,336 15,593,032 (512,304)
Transient occupancy taxes 13,100,000 13,500,000 13,631,507 131,507
Franchise fees 4,060,000 4,060,000 4,090,073 30,073
Other taxes 5,083,400 5,483,400 5,708,187 224,787
Intergovernmental 6,794,956 2,504,369 1,593,508 (910,861)
Interest and rentals 3,071,500 3,071,500 2,784,072 (287,428)
Licenses and permits 8,411,713 8,411,713 7,823,403 (588,310)
Charges for services 8,601,108 8,681,908 9,451,835 769,927
Fines and forfeitures 838,500 838,500 899,118 60,618
Other 165,430 185,930 1,092,691 906,761
Amounts available for appropriation 91,718,732 95,392,605 96,073,255 680,650
Charges to appropriations (outflows)
City Council 204,499 207,500 206,950 550
City Clerk 647,864 703,244 631,225 72,019
City Treasurer 123,340 123,340 110,559 12,781
City Attorney 802,002 1,188,002 1,187,716 286
City Manager 1,926,245 2,632,838 2,632,068 770
Finance 2,477,795 3,045,461 3,045,450 11
Non-departmental 473,973 1,212,102 1,211,362 740
Human Resources 1,458,009 1,622,360 1,621,682 678
Fire 25,689,589 26,121,215 25,582,889 538,326
Police 27,104,498 26,319,956 25,539,781 780,175
Public Works 4,975,860 5,229,163 5,173,685 55,478
Parks and Recreation 14,553,266 15,361,255 15,002,999 358,256
Library 5,051,647 5,372,318 5,157,355 214,963
Economic and Community Development 10,331,488 11,115,411 10,507,771 607,640
Total charges to appropriations 95,820,075 100,254,165 97,611,492 2,642,673
OTHER FINANCING SOURCES (USES)
Transfers in 6,089,393 6,208,393 6,021,853 (186,540)
Transfers out (1,668,980) (6,484,937) (5,031,908) 1,453,029
Total Other Financing Sources (Uses) 4,420,413 (276,544) 989,945 1,266,489
NET CHANGE lN FUND BALANCES BEFORE SPECIAL ITEMS 319,070 (5,138,104) (548,292) 4,589,812
Special Item 20,582,335 20,582,335
Net Change in Fund Balances $319,070 $15,444,231 20,034,043 $4,589,812
Fund Balance -July 1 21,735,752
Adjustment to budgetary basis:
Encumbrance adjustments 5,244,279
Fund Balance -June 30 $47,014,074
108
MeasureW Total
Variance with Variance with
Budgeted Amounts Final Budget Budgeted Amounts Final Budget
Actual Positive Actual Positive
Original Final Amount (Negative) Original Final Amount {Negative)
$25,486,789 $32,549,949 $33,405,829 $855,880
$7,000,000 $7,000,000 $8,886,444 $1,886,444 23,105,336 23,105,336 24,479,476 1,374,140
13,100,000 13,500,000 13,631,507 131,507
4,060,000 4,060,000 4,090,073 30,073
5,083,400 5,483,400 5,708,187 224,787
6,794,956 2,504,369 1,593,508 (910,861)
3,071,500 3,071,500 2,784,072 (287,428)
8,411,713 8,411,713 7,823,403 (588,310)
8,601,108 8,681,908 9,451,835 769,927
838,500 838,500 899,118 60,618
165,430 185,930 1,092,691 906,761
7,000,000 7,000,000 8,886,444 1,886,444 98,718,732 102,392,605 104,959,699 2,567,094
204,499 207,500 206,950 550
647,864 703,244 631,225 72,019
123,340 123,340 110,559 12,781
802,002 1,188,002 1,187,716 286
1,926,245 2,632,838 2,632,068 770
2,477,795 3,045,461 3,045,450 11
473,973 1,212,102 1,211,362 740
1,458,009 1,622,360 1,621,682 678
25,689,589 26,121,215 25,582,889 538,326
27,104,498 26,319,956 25,539,781 780,175
176,178 176,178 4,975,860 5,405,341 5,173,685 231,656
14,553,266 15,361,255 15,002,999 358,256
5,051,647 5,372,318 5,157,355 214,963
10,331,488 11,115,411 10,507,771 607,640
176,178 176,178 95,820,075 100,430,343 97,611,492 2,818,851
6,089,393 6,208,393 6,021,853 (186,540)
(5,500,000) (5,500,000) (877,728) 4,622,272 (7, 168,980) (11,984,937) (5,909,636) 6,075,301
(5,500,000) (5,500,000) (877,728) 4,622,272 (1,079,587) (5,776,544) 112,217 5,888,761
1,500,000 1,323,822 8,008,716 6,684,894 1,819,070 (3,814,282) 7,460,424 11,274,706
20,582,335 20,582,335
$1,500,000 $1,323,822 8,008,716 $6,684,894 $1,819,070 $16,768,053 28,042,759 $11,274,706
1,281,433 23,017,185
5,244,279
$9,290,149 $56,304,223
109
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MAJORGOVERNMENTALFUNDSOTHERTHAN
GENERAL FUND AND SPECIAL REVENUE FUNDS
CAPITAL IMPROVEMENT FUND
To account for expenditures associated with the acquisition, construction, or improvement of City owned
facilities and infrastructure. Funding comes from the general fund, special revenue funds, grants and fees.
EAST OF 101 SEWER IMP ACT 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 IMP ACT 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 IMP ACT FEES CAPITAL PROJECTS FUND
These citywide fees provide new development's share of new and expanded childcare facilities to serve the
City.
DEVELOPER DEPOSIT CAPITAL PROJECTS FUND
These fees provide new development's share of funding for the Oyster Point at Highway 101 interchange
improvements.
CAPITAL INFRASTRUCTURE RESERVE FUND
Replacement, upgrade, and maintenance of the City's infrastructure are backlogged, constituting a
significant liability. Funds are set aside in this fund as part of the budget process and as part of the City's
reserve policy to address the replacement and/or upgrade of the city infrastructure (such as parks,
buildings, facilities, streets, sidewalks, and storm water facilities).
111
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, 2017
REVENUES:
Intergovernmental
Other
Total Revenues
EXPENDITURES:
Current:
Public works
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTIIBR 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
112
Budget
$7,642,594
250,000
7,892,594
33,095,750
33,095,750
(25,203,156)
218,917
24,597,480
24,816,397
($386,759)
Actual Amounts
$505,664
110,019
615,683
10,018,623
10,018,623
(9,402,940)
5,179,644
5,179,644
( 4,223,296)
367,023
3,767,942
($88,331)
Variance with
Final Budget
Positive
(Negative)
($7, 136,930)
(139,981)
(7,276,911)
23,077,127
23,077,127
15,800,216
(218,917)
(19,417,836)
(19,636,753)
($3,836,537)
CITY OF SOUTH SAN FRANCISCO
EAST OF 101 SEWER IMP ACT FEES CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
REVENUES:
Interest and rental
Charges for services
Total Revenues
EXPENDITURES:
Current:
N"on-depar1:nlental
Total Expenditures
EXCESS (DEFICIEN"CY) OF REVENUES
OVER EXPENDITURES
OTHER FIN"ANCIN"G SOURCES (USES)
Transfers out
Total other financing sources (uses)
N"ET CHANGE rn FUND BALANCE
Fund balance (deficit) -July 1
Fund balance (deficit) -June 30
FOR THE YEAR ENDED JUNE 30, 2017
Budget
$185,000
185,000
2,500
2,500
182,500
(342,101)
(342,101)
($159,601)
113
Actual Amounts
$3,065
185,752
188,817
2,500
2,500
186,317
(1,860)
(l,860)
184,457
503,766
$688,223
Variance with
Final Budget
Positive
(Negative)
$3,065
752
3,817
3,817
340,241
340,241
$344,058
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, 2017
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
Budget
$109,000
109,000
2,500
2,500
106,500
(3,533,636)
(3,533,636)
($3,427, 136)
114
Variance with
Final Budget
Positive
Actual Amounts (Negative)
$9,506 $9,506
109,867 867
119,373 10,373
2,500
2,500
116,873 10,373
(284,133) 3,249,503
(284,133) 3,249,503
(167,260) $3,259,876
7,213,253
$7,045,993
CITY OF SOUTH SAN FRANCISCO
CAPITAL INFRASTRUCTURE RESERVE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2017
Variance with
Final Budget
Final Positive
Budget Actual Amounts (Negative)
REVENUES:
Interest and rental $16,555 $16,555
Total Revenues 16,555 16,555
OTHER FINANCING SOURCES (USES)
Transfers in 2,666,000 2,666,000
Transfers out (6,550,040) (5, 795,495) 754,545
Total other financing sources. (uses) (3,884,040) (3, 129,495) 754,545
NET CHANGE IN FUND BALANCE ($3,867,485) (3,112,940) $754,545
Fund balance -July 1 17,638,385
Fund balance -June 30 $14,525,445
117
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NON-MAJOR GOVERNMENTAL FUNDS
Special revenue funds are used to account for revenue sources that are restricted by law or administrative
action to expenditures for specified purposes. Special revenue funds used by the City of South San
Francisco include:
Gas Tax -Accounts for State monies received and expended for street improvements, repairs,
engineering, and administration under Streets and Highway Code Sections 2105, 2106, 2107, and
2107.5. Includes sales taxes on gasoline received from the State's Traffic Congestion Relief Fund.
Developer Contributions -Accounts for fees deposited for planning and engineering reviews or
for future project development.
Federal Aviation Grant -This fund accounts for federal monies received for insulating
structures against airport noise.
Community Development Block Grant -Accounts for Federal monies received to be expended
for development of jobs and suitable housing for low-income residents.
Maintenance District -Accounts for a portion of property tax dedicated to provide for the
maintenance of landscaped areas within housing developments.
Transportation Sales Tax -Accounts for the sales tax that provides resources for street
improvements and repairs.
Solid Waste Reduction -Accounts for revenues and expenditures associated with the waste
reduction, recycling, composting and household hazardous waste programs for residents and
businesses.
Supplemental Law Enforcement Services -Accounts for State monies provided for designated
Police department services.
City Programs -Organizations and individuals provide revenues that fund certain programs and
services.
Affordable Housing Trust -The inclusionary housing requirement in the City provides that 20%
of new residential housing units (for projects of 4 or more units) be affordable. These in-lieu fees
(in-lieu of production of affordable housing units by the developer) provide new residential
development's share of affordable housing units.
PEG Equipment and Access -Accounts for the one percent of money set-aside from cable
franchise fees that are used to support public, educational and governmental (PEG) channels.
Transit Station Enhancement in-Lieu Fee -Accounts for revenues that are collected as a
negotiated community benefit.
119
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.
120
This Page Left Intentionally Blank
ASSETS
Cash and investments
Receivables:
Accounts
Accrued interest
Loans
Restricted cash and investments
Land held for resale
Total Assets
LIABILITIES
Liabilities:
Accounts payable
Other payable
Deposits
Due to other funds
Unearned revenue
Total Liabilities
Fund Balances:
Restricted
Total Fund Balances
Total Liabilities and Fund Balances
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2017
SPECIAL REVENUE FUNDS
Federal
Developer Aviation
Gas Tax Contributions Grant
$927,786 $6,580,266 $734,127
3,759 19,047 2,729
$931,545 $6,599,313 $736,856
$49,693 $55
1,671,752
736,801
1,721,445 736,856
$931,545 4,877,868
931,545 4,877,868
$931,545 $6,599,313 $736,856
122
Community
Development Maintenance
Block Grant Districts
$2,562,671
$91,856
349,331
108,377
$549,564 $2,562,671
$68,129 $302
2,545
70,674 302
478,890 2,562,369
478,890 2,562,369
$549,564 $2,562,671
SPECIAL REVENUE FUNDS
Solid Supplemental Affordable PEG Transit Station
Transportation Waste Law Enforce-City Housing Equipment and Enhancement
Sales Tax Reduction ment Services Programs Trust Access In-Lieu Fee
$2,182,696 $527,314 $859 $4,169,031 $1,721,045 $924,056 $57,563
15,840 330 44,188
6,722 244 15,460 6,146 3,052 1,418
20,206
1,900,000
$2,189,418 $543,154 $1,103 $4,184,491 $3,647,727 $971,296 $58,981
$49,046
$157
$1,000
157 1,000 49,046
$2,189,418 542,997 103 4,135,445 $3,647,727 $971,296 $58,981
2,189,418 542,997 103 4,135,445 3,647,727 971,296 58,981
$2,189,418 $543,154 $1,103 $4,184,491 $3,647,727 $971,296 $58,981
(Continued)
123
ASSETS
Cash and investments
Receivables:
Accounts
Accrued interest
Loans
Restricted cash and investments
Land held for resale
Total Assets
LIABILITIES
Liabilities:
Accounts payable
Other payable
Deposits
Due to other funds
Unearned revenue
Total Liabilities
Fund Balances:
Restricted
Total Fund Balances
Total Liabilities and Fund Balances
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2017
CAPITAL PROJECTS FUNDS
Non-obligated Public Oyster Point
Capital Safety Improvement
Projects Imeact Fee Imeact Fees
$41,857 $392,544 $29,168
1,590 16
$41,857 $394,134 $29,184
$41,857 $394,134 $29,184
41,857 394,134 29,184
$41,857 $394,134 $29,184
124
Total
Sewer Nonmajor
Capacity Governmental
Char&es Funds
$3,931,801 $24, 782, 784
152,214
11,474 71,657
369,537
108,377
1,900,000
$3,943,275 $27,384,569
$167,225
2,702
1,671,752
1,000
736,801
2,579,480
$3,943,275 24,805,089
3,943,275 24,805,089
$3,943,275 $27,384,569
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
NONMAJORGOVERNMENTALFUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2017
SPECIAL REVENUE FUNDS
Federal Community
Developer Aviation Development
Gas Tax Contributions Grants Block Grant
REVENUES
Property taxes
Other taxes
Intergovernmental $1,507,105 $377,470
Interest and rentals 1,216 $8,047 $995 44,349
Charges for services 2,365,609
Other 10,694
Total Revenues 1,508,321 2,373,656 995 432,513
EXPENDITURES
Current:
Economic and community development 319,643 995 851,305
Public works
:Non-departmental
Fire
Police
Other
Debt service:
Principal repayments
Total Expenditures 319,643 995 851,305
EXCESS (DEFICIE:NCY) OF REVENUES
OVER (UNDER) EXPE:NDITURES 1,508,321 2,054,013 (418,792)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out (1,854,509) (57,200~
Total Other Financing Sources (Uses) (1,854,509) (57,200)
:Net Change in Fund Balances (346,188) 1,996,813 (418,792)
Fund balance -July 1 1,277,733 2,881,055 897,682
Fund balance -June 30 $931,545 $4,877,868 $478,890
126
Maintenance
Districts
$1,751,019
1,751,019
1,199,741
1,199,741
551,278
(141,990)
(141,990)
409,288
2,153,081
$2,562,369
Transportation
Sales Tax
$1,568,013
2,755
1,570,768
1,570,768
(657,956)
(657,956)
912,812
1,276,606
$2,189,418
Solid
Waste
Reduction
$190,078
190,078
130,523
130,523
59,555
(282,201)
(282,201)
(222,646)
765,643
$542,997
SPECIAL REVENUE FUNDS
Supplemental
Law Enforce-
ment Services
$131,129
139
131,268
131,268
131,268
103
$103
City
Programs
$5,414
909,264
914,678
203,451
270,338
473,789
440,889
(500,000)
(500,000)
(59,111)
4,194,556
$4,135,445
127
Affordable
Housing
Trust
$22,008
22,008
22,008
22,008
3,625,719
$3,647,727
PEG Transit Station
Equipment and Enhancement
Access In-Lieu Fee
$1,177 $3,193
182,289
183,466 3,193
2,880
3,845
2,880 3,845
180,586 (652)
459,633
(400,000)
59,633
180,586 58,981
790,710
$971,296 $58,981
(Continued)
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2017
CAPITAL PROJECTS FUNDS
Non-obligated Public Oyster Point Sewer
Capital Safety Improvement Capacity
Projects lmJ.!act Fee lmJ.!act Fees Chaq~es
REVENUES
Property taxes
Other taxes
Intergovernmental $36,024
Interest and rentals $545 $5
Charges for services 23,650 1,630,615
Other 132,654
Total Revenues 133,199 23,655 1,666,639
EXPENDITURES
Current:
Economic and community development
Public works 36,285
Non-departmental
Fire 64,818
Police 123,597
Other
Debt service:
Principal repayments 23,000
Total Expenditures 188,415 23,000 36,285
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (55,216) 655 1,630,354
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out ($475,220) (3,196)
Total Other Financing Sources (Uses) (475,220) (3,196)
Net Change in Fund Balances (475,220) (58,412) 655 1,630,354
Fund balance -July 1 517,077 452,546 28,529 2,312,921
Fund balance -June 30 $41,857 $394,134 $29,184 $3,943,275
128
Total
Nonmajor
Governmental
Funds
$1,751,019
1,699,142
1,920,599
89,843
4,209,952
1,234,901
10,905,456
1,302,466
1,236,026
2,880
64,818
458,316
274,183
23,000
3,361,689
7,543,767
459,633
(4,372,272)
(3,912,639)
3,631,128
21,173,961
$24,805,089
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, 2017
GAS TAX DEVELOPER CONTRIBUTIONS
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Property taxes
Other taxes
Intergovernmental $1,600,736 $1,507,105 ($93,631)
Interest and rentals 15,000 1,216 (13,784) $8,047 $8,047
Charges for services $1,702,000 2,365,609 663,609
Other
Total Revenues 1,615,736 1,508,321 (107,415) 1,702,000 2,373,656 671,656
EXPENDITURES
Current:
Economic and community development 438,650 438,341 309
Public works
Non-departmental
Fire
Other
Police
Debt service:
Principal repayments
Total Expenditures 438,650 438,341 309
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 1,615,736 1,508,321 (107,415) 1,263,350 1,935,315 671,965
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out (2,927,493) (1,854,509) 1,072,984 (643,512) (57,200) 586,312
Total Other Financing Sources (Uses) (2,927,493) (1,854,509) 1,072,984 (643,512) (57,200) 586,312
NET CHANGE IN FUND BALANCES ($1,311,757) (346, 188) $965,569 $619,838 1,878, 115 $1,258,277
Adjustment to budgetary basis:
Encumbrance adjustments 118,698
Fund balance -July 1 1,277,733 2,881,055
Fund balance -June 30 $931,545 $4,877,868
130
FEDERAL AVIATION COMMUNITY DEVELOPMENT
GRANT BLOCK GRANT MAINTENANCE DISTRICTS
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative)
$1,389,805 $1,751,019 $361,214
$647,321 $377,470 ($269,851)
$4,000 $995 ($3,005) 44,349 44,349
11,437 10,694 ~7432
4,000 995 (3,005) 658,758 432,513 (226,2452 1,389,805 1,751,019 361,214
500 995 (495) 833,076 931,612 (98,536)
1,559,251 1,199,741 359,510
___ 5o_o _____ 99_5 ____ (_49_5~) __ 8_3~3,_07_6_ 931,612 (98,5362 1,559,251 1,199,741 359,510
3,500 (3,500) (174,318) (499,099) (324,781) (169,446) __ 55_1.._,2_78 ____ 72_0.._,7_24_
(95,330) 95,330 (218,5212 (141,9902 76,531
(95,3302 95,330 (218,5212 (141,990) 76,531
$3,500 ($3,500) ($269,6482 (499,099) ($229,4512 ($387,9672 409,288 $797,255
80,307
897,682 2,153,081
$478,890 $2,562,369
131
CITY OF SOUTH SAN FRANCISCO
NONMAJORGOVERNMENTALFUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2017
TRANSPORTATION SALES TAX SOLID WASTE REDUCTION
Variance Variance
Final Positive Final Positive
Budliiet Actual (Neliiative2 Budget Actual (Negative)
REVENUES
Property taxes
Other taxes $1,468,995 $1,568,013 $99,018
Intergovernmental
Interest and rentals 25,000 2,755 (22,245)
Charges for services $180,000 $190,078 $10,078
Other
Total Revenues 1,493,995 1,570,768 76,773 180,000 190,078 10,078
EXPENDITURES
Current:
Economic and community development 157,697 151,747 5,950
Public works
Non-departmental
Fire
Other
Police
Debt service:
Principal repayments
Total Expenditures 157,697 151,747 5,950
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPEN"DITURES 1,493,995 1,570,768 76,773 22,303 38,331 16,028
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out (2,581,163) (657,956) 1,923,207 (766,8702 (282,2012 484,669
Total Other Financing Sources (Uses) (2,581,163) (657,9562 1,923,207 (766,8702 (282,201) 484,669
N"ET CHANGE IN FUN"D BALANCES ($1,087,168) 912,812 $1,999,980 ($744,5672 (243,870) $500,697
Adjustment to budgetary basis:
Encumbrance adjustments 21,224
Fund balance -July 1 1,276,606 765,643
Fund balance -June 30 $2,189,418 $542,997
132
SUPPLEMENTAL LAW
ENFORCEMENT SERVICES
Variance
Final Positive
Budget Actual (Negative)
$100,000 $131,129 $31,129
139 139
100,000 131,268 31,268
100,000 131,268 (31,268)
100,000 131,268 (31,268)
103
$103
CITY PROGRAMS
Final
Budget
$909,000
909,000
270,000
226,423
496,423
412,577
(1,622,982)
(l,622,982)
($1,210,405)
Actual
$5,414
909,264
914,678
270,338
203,451
473,789
440,889
(500,000)
(500,000)
Variance
Positive
(Negative)
$5,414
264
5,678
(338)
22,972
22,634
28,312
1,122,982
1,122,982
(59,111) $1,151,294
4,194,556
$4,135,445
133
(Continued)
AFFORDABLE HOUSING TRUST
Final
Budget
$22,000
22,000
22,000
$22,000
Actual
$22,008
22,008
22,008
22,008
3,625,719
$3,647,727
Variance
Positive
(Negative)
$8
8
8
$8
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, 2017
PEG TRANSIT ENHANCEMENT
EQUIPMENT AND ACCESS IN-LIEU FEE
Variance Variance
Final Positive Final Positive
Budll;et Actual (Negative) Budll;et Actual (Negative)
REVENUES
Property taxes
Other taxes
Intergovernmental
Interest and rentals $5,000 $1,177 ($3,823) $3,193 $3,193
Charges for services
Other 125,000 182,289 57,289
Total Revenues 130,000 183,466 53,466 3,193 3,193
EXPENDITURES
Current:
Economic and community development
Public works
Non-departmental 209,117 49,380 159,737
Fire
Other 3,845 3,845
Police
Debt service:
Principal repayments
Total Expenditures 209,117 49,380 159,737 3,845 3,845
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (79,117) 134,086 213,203 (652) (652)
OTHER FINANCING SOURCES (USES)
Transfers in $460,000 459,633 (367)
Transfers out (400,000) (400,000)
Total Other Financing Sources (Uses) 60,000 59,633 (367)
NET CHANGE IN FUND BALANCES ($79,117) 134,086 $213,203 $60,000 58,981 ($1,019)
Adjustment to budgetary basis:
Encumbrance adjustments 46,500
Fund balance -July 1 790,710
Fund balance -June 30 $971,296 $58,981
134
NONOBLIGATED
CAPITAL PROJECTS
Variance
Final Positive
Budget Actual (Negative)
($475,220) ($475,220) ----
(475,220) (475,220) ----
($475,220) (475,220) ====
517,077
$41,857
PUBLIC SAFETY
Final
Budget
$132,000
132,000
70,294
118,323
188,617
(56,617)
IMPACT FEE
Actual
$545
132,654
133,199
64,818
123,597
188,415
(55,216)
Variance
Positive
(Negative2
$545
654
1,199
5,476
5,274
(2022
1,401
OYSTER POINT
IMPROVEMENT IMPACT FEES
Variance
Final Positive
Budget Actual (Negative2
$5 $5
$23,650 23,650
23,650 23,655 5
52,561 52,561
23,000 (23,000)
52,561 23,000 29,561
(28,9112 655 29,566
(137,220) __ (._.3, ...... 19_6~) __ 13_4._,0_24_ ---------------
(137,220) (3,196) __ 13_4._,0_24_ ---------------
($193,8372 (58,412) $135,425 ($28,9112 655 $29,566
452,546 28,529
$394,134 $29,184
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
SEWER
CAP A CITY CHARGES
Variance
Final Positive
Budget Actual (Negative)
REVENUES
Property taxes
Other taxes
Intergovernmental $36,024 $36,024
Interest and rentals
Charges for services $1,630,000 1,630,615 615
Other
Total Revenues 1,630,000 1,666,639 36,639
EXPENDITURES
Current:
Economic and community development
Public works 2,500 36,285 (33,785)
Non-departmental
Fire
Other
Police
Debt service:
Principal repayments
Total Expenditures 2,500 36,285 (33,785)
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 1,627,500 1,630,354 2,854
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
I Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES $1,627,500 1,630,354 $2,854
Adjustment to budgetary basis:
Encumbrance adjustments
Fund balance -July 1 2,312,921
Fund balance -June 30 $3,943,275
136
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.
137
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ASSETS
Current assets:
Cash and investments
Receivables:
Accounts
Accrued interest
Deposit
Total current assets
Noncurrent assets:
Capital assets:
Nondepreciable
CITY OF SOUTH SAN FRANCISCO
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
JUNE 30, 2017
Health and
Self Retirement
City Service Insurance Benefits
$1,237,277 $13,720,637 $9,736,034
10,128
4,363 42,893 32,128
157,500 46,010
1,251,768 13,921,030 9,814,172
Depreciable, net of accumulated depreciation 871
Total Assets 1,252,639 13,921,030 9,814,172
LIABILITIES
Current liabilities:
Accounts payable 101,554 15,023 19,231
Other payable 10,980
Current portion of accrued insurance loss 712,000
Current portion of compensated absences 86,550 607,641
Current portion oflong-terrn debt
Total current liabilities 199,084 727,023 626,872
Noncurrent liabilities:
Accrued insurance loss 12,260,942
Compensated absences obligation 90,321 718,381
Net OPEB obligation 26,173,032
Noncurrent portion oflong-terrn debt
Total noncurrent liabilities 90,321 12,260,942 26,891,413
Total Liabilities 289,405 12,987,965 27,518,285
NET POSITION:
Net investment in capital assets 871
Unrestricted 962,363 933,065 (17,704,113)
Total Net Position $963,234 $933,065 ($17,704,113)
139
Equipment
Replacement Total
$2,496,608 $27,190,556
10,128
9,814 89,198
203,510
2,506,422 27,493,392
162,140 162,140
5,629,093 5,629,964
8,297,655 33,285,496
78,467 214,275
341,706 352,686
712,000
694,191
538,421 538,421
958,594 2,511,573
12,260,942
808,702
26,173,032
1,135,102 1,135,102
1,135,102 40,377,778
2,093,696 42,889,351
4,117,710 4,118,581
2,086,249 (13, 722,436)
$6,203,959 ($9,603,855)
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, 2017
Health and
Self Retirement Equipment
City Service Insurance Benefits Replacement Total
OPERATING REVENUES
Charges for services $3,893,005 $5,899,659 $13,470,017 $1,754,155 $25,016,836
Total Operating Revenues 3,893,005 5,899,659 13,470,017 1,754,155 25,016,836
OPERATING EXPENSES
Personnel expenses 1,792,496 1,366,584 11,385,537 14,544,617
OPEB expenses 2,070,095 2,070,095
Professional services 401,187 217,802 20,513 639,502
Program supplies 1,164,607 92,806 3,080 134,263 1,394,756
Insurance 11,578 1,350,964 1,362,542
Self-insurance and claims 3,253,303 3,253,303
Repair and maintenance 395,772 613,494 1,009,266
Utilities 29,478 29,478
Depreciation 580 760,341 760,921
Other 8,693 306,844 315,537
Total Operating Expenses 3,804,391 6,281,459 13,786,069 1,508,098 25,380,017
Operating Income (Loss) 88,614 (381,800) (316,052) 246,057 (363,181)
NON OPERATING
REVENUES (EXPENSES)
Interest income 1,685 16,042 12,193 2,880 32,800
Interest expense (65,943) (65,943)
Gain from disposal of capital assets 19,646 19,646
Other 92,286 92,286
Total Nonoperating
Revenues (Expenses) 1,685 108,328 12,193 (43,417) 78,789
Net income (loss) before transfers 90,299 (273,472) (303,859) 202,640 (284,392)
TRANSFERS
Transfers in 273,472 759,104 1,032,576
Transfers out (96,245) (96,245)
Change in Net Position 90,299 455,245 106,395 651,939
Net Position -(deficits) July 1 872,935 933,065 (18,159,358) 6,097,564 (10,255, 794)
Net Position -(deficits) June 30 $963,234 $933,065 ($17,704,113) $6,203,959 ($9,603,855)
140
CITY OF SOUTH SAN FRANCISCO
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2017
Health and
Self Retirement
City Service Insurance Benefits
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from interfund service provided $3,889,738 $5,991,945 $13,470,017
Cash payment to suppliers for goods and services (2,011,315) (1,739,446) (1,132,200)
Cash payment to employees for services (1,797,423) (1,352,661) (11,265,260)
Cash payment for judgments and claims (1,681,308)
Other receipts
Net Cash Provided by Operating Activities 81,000 1,218,530 1,072,557
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in 273,472 759,104
Transfers out
Net Cash Provided by Noncapital Financing Activities 273,472 759,104
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 (14) 3,761 (13,161)
Net Cash Provided by Investing Activities (14) 3,761 (13,161)
Net Increase (Decrease) in cash and cash equivalents 80,986 1,495,763 1,818,500
Cash and cash equivalents, beginning 1,156,291 12,224,874 7,917,534
Cash and cash equivalents, ending $1,237,277 $13,720,637 $9,736,034
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss) $88,614 ($381,800) ($316,052)
Adjustments to reconcile operating income (loss)
to cash flows from operating activities:
Depreciation 580
Other non-operating revenue (expenses) 92,286
Net change in assets and liabilities:
Accounts and lease receivables (3,267)
Accounts payable (8,493) 13,923 19,218
Other payable (77,874)
Accrued insurance losses 1,571,995
OPEB obligations 1,268,332
Compensated absence obligations 3,566 101,059
Net Cash Provided by (Used in) Operating Activities $81,000 $1,218,530 $1,072,557
141
Equipment
Replacement Total
$1,754,155 $25,105,855
(747,757) (5,630,718)
(14,415,344)
(1,681,308)
409,917 409,917
1,416,315 3,788,402
1,032,576
(96,245) (96,245)
(96,245) 936,331
(565,475) (565,475)
(65,943) (65,943)
(1,629,268) (1,629,268)
19,646 19,646
(2,241,040) (2,241,040)
1,513 (7,901)
1,513 (7,901)
(919,457) 2,475,792
3,416,065 24,714,764
$2,496,608 $27,190,556
$246,057 ($363,181)
760,341 760,921
92,286
(3,267)
68,211 92,859
341,706 263,832
1,571,995
1,268,332
104,625
$1,416,315 $3,788,402
This Page Left Intentionally Blank
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
ASSETS
Cash and investments
Interest receivable
Total Assets
LIABILITIES
Accounts payable
Other accrued liabilities
Total Liabilities
CITY OF SOUTH SAN FRANCISCO
AGENCY FUND
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED JUNE 30, 2017
SSF Employee Deferred Comp Trust Oversight
Balance Balance
June 30, 2016 Additions Deductions June 30, 2017
$62,944 $105,663 $62,944 $105,663
158 318 158 318
$63,102 $105,981 $63,102 $105,981
$12,500 $24,492 $12,500 $24,492
50,602 81,489 50,602 81,489
$63,102 $105,981 $63,102 $105,981
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
Thousan ds
$180,000
$160,000
$140,000
$120,000
"" ~
$100,000
,____
$80,000
$60,000
$40,000
$20,000
$0
2008
2008
General F und
Reserved $283,435
Unreserved 14,503,263
Nonspendable
Committed
Assigned
Unassigned
Total General F und $14,786,698
AJI Other Gove rn menta l Funds
Reserved $70,194,663
Unreseived, reported in:
Special revenue fun ds 21,286,431
Deb t service fu nds 11 9,525
Capital proj ect funds 3,578,595
Restricted
Assigned
Unassigned
Total all other governmenta l fu nds $95,179,2 14
-
""
~
>---
--
1---1---
CITY O F SOUT H SAN FRANCISCO
F und Bala nces of G overnmental Fu nds
L ast Ten Fisca l Yea rs
(M odified Ac crual Basis of Account in g)
•
1---
>---
-
>---
..
..
>--->--->--->--->---
Ill
..
2009 2010 201 1 20 12 2013 20 14 20 15
(b
2009 2010 2011 2012 2013
$554 ,692 $889,186
17,509,823 14,84 1,958
67,129 $90,167 $805,677
40 1,797 208 ,054 1,406,430
77 1,849 840,365 566,104
15,049 ,168 17,347,445 23 ,498,194
$18,064,515 $15,73 1,144 $16,289,943 $18,486,03 1 $26,276,405
$65,11 7,97 1 $64 ,163 ,373
23,826,184 11 ,079,390
12 1,764 3,198,6 00
51,589,538 69,286,2 11
$163,727,096 $43,364,540 $30,539,396
2,390,904 2,076,065 1,105 ,320
(14,353,252) (1,388,956) (1,379,895)
$140,655 ,457 $147,727,574 $15 1,764,748 $44,051,649 $30,264,82 1
•
'--• >---.. •
L---'--
L--->---~
2016 2017
2014 2 015
$14,163 $1 ,134
3,879,45 1 2,536,790
743 ,746 1,458,029
15,89 1,899 17,285,422
$20,529,259 $21,281,375
$42,392,238 $43 ,437,36 1
0 6,188,554
(52 1,604) (40,459)
$4 1,870,634 $49,585,4 56
(a) T he change in total fund ba lance for the Ge neral Fund and oth er governmental funds is explained in M anagement's Discussion a nd Analysis.
(b ) In fisca l year 20 11 , the C ity implemented GASB 54, Fund B alance R eporting and Governmental Fu nd Type Defi nitions,
wh ich requires the C ity to classify its fund balances based on spending constraints im posed on the use of resou rces.
150
•To tal Committed
C TotttlUn:issigned
•Total Assigned
C Totnl Restricted
C Total Nonspe ndable
a Total UnreserYcd
11To1.:1!Rescrved
2016 2017
$33,580 $474
3,654,283 11 ,780,724
1,578,153 5,244,279
17,751,169 39,278,746
$23,017,185 (a) $56,304,223
$52,938,897 $55,195 ,500
367,023 0
0 (88,33 1)
$53,305,920 $55,107,169
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) ofrevenues over
(under) expenditures
Other Financing Sonrces (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 and special items
Extraordinary item
Special 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,
2008 2009 2010
$44,165,490 $59,369,550 $54,718,916
24,313,543 22,755,561 19,771,310
13,219,053 15,088,171 10,609,605
12,318,594 7,625,428 7,680,293
5,716,017 5,957,815 7,270,081
10,792,043 13,644,314 9,986,352
1,073,603 1,013,434 1,054,549
1,091,514 3,722,979 2,542,492
112,689,857 129,177,252 113,633,598
5,897,066 5,752,948 5,916,364
16,875,311 17,724,990 16,790,834
18,757,394 19,989,136 19,359,770
14,910,401 12,360,989 8,416,242
10,826,041 10,700,332 9,960,090
4,766,821 4,679,270 4,342,662
13,848,049 19,554,780 26,279,406
1,023,435 474,805
36,544,741 4,247,021 6,724,022
1,692,296 1,755,426 1,887,434
5,441,036 4,571,150 4,255,050
130,582,591 101,810,847 103,931,874
(17,892,734) 27,366,405 9,701,724
20,182,014 18,754,214 18,047,351
(24,253,621) (19,330,934) (22, 175,268)
13,750 13,784
( 4,057,857) (562,936) (4,127,917)
(21,950,591) 26,803,469 5,573,807
($21,950,591) $26,803,469 $5,573,807
8.9% 6.8% 6.6%
152
2011 2012
$54,128,998 $38,174,655
23,412,992 28,866,546
11,860,658 11,580,530
7,612,223 4,955,223
7,004,603 3,056,507
10,010,541 10,088,070
2,133,677 2,184,234
2,261,247 3,000,563
118,424,939 101,906,328
6,407,094 6,485,219
18,140,954 18,812,861
20,272,684 21,217,818
9,856,201 14,253,609
10,168,425 10,101,408
4,231,762 4,272,701
19,894,692 8,184,334
6,969,052 8,894,514
1,842,000 1,752,000
4,274,170 1,817,764
102,057,034 95,792,228
16,367,905 6,114,100
88,175,882 108,413,018
(99,947,814) (109,646,766)
11,771,932 (1,233,748)
4,595,973 4,880,352
(110,397 ,363)
$4,595,973 ($105,517,011)
6.7% 4.2%
For The Fiscal Year Ended June 30,
2013 2014 2015 2016 2017
$27,077,697 $23,010,136 $24,650,648 $26,438,620 $35,156,848
31,894,811 33,931,446 38,275,478 $41,811,097 49,608,385
13,054,594 10,757,440 10,453,071 12,360,354 4,019,771
3,238,089 3,632,693 3,531,966 4,207,453 3,100,692
3,054,451 4,366,271 4,795,158 6,896,897 7,823,403
9,275,724 16,864,409 13,387,712 15,386,358 14,485,367
1,753,682 1,528,319 1,221,413 791,756 899,118
1,837,675 2,249,728 4,660,668 2,439,579 2,906,625
91,186,723 96,340,442 100,976,114 110,332,114 118,000,209
6,658,532 5,970,429 7,167,969 8,469,924 9,399,930
20,877,917 20,163,759 21,247,989 24,175,340 25,632,366
22,542,135 23,309,568 23,611,743 25,458,986 25,998,097
9,186,493 16,791,894 15,923,071 14,846,346 12,143,965
10,927,433 11,552,502 11,826,407 13,234,028 14,897,157
4,112,570 3,987,928 4,247,650 4,681,188 5,157,355
20,512,545 5,972,966 5,917,508 7,907,655 8,943,111
480,290 395,749 274,183
453,381 352,674 656,000 23,000
52,139
94,869,764 88,202,427 90,775,301 99,825,216 102,469,164
(3,683,041) 8,138,015 10,200,813 10,506,898 15,531,045
4,467,530 21,870,234 17,983,227 8,143,075 14,327,130
(6,780,943) (24,149,582) (19,717,102) (13,193,699) (16,368,499)
1,016,276
(2,313,413) (2,279,348) (1,733,875) (5,050,624) (1,025,093)
(5,966,454) 5,858,667 8,466,938 5,456,274 14,505,952
20,582,335
($5,966,454) $5,858,667 $8,466,938 $5,456,274 $35,088,287
0.1% 0.6% 0.4% 0.7% 0.0%
153
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
2008 1.000 0.1370 1.1370 (1,14)
2009 1.000 0.1426 1.1426 ( 1, 15)
2010 1.000 0.1600 1.1600 (1, 16)
2011 1.000 0.1707 1.1707 (1 ,17)
2012 1.000 0.1824 1.1824 (1, 18)
2013 1.000 0.1959 1.1959 ( 1, 19)
2014 1.000 0.2046 1.2046 (1 ,20)
2015 1.000 0.1822 1.1822 (1 ,21)
2016 1.000 0.1750 1.1750 (1 ,22)
2017 1.000 0.1749 1.1749 (1 ,23)
Notes:
(1) Like other cities, South San Francisco includes several property tax rate areas with different rates. A mean average is indicated.
(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 District bonds
and San Mateo Jr. College bond, 3 have the rate of 1.0756, which includes Jefferson Un ion 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 1.0596 percent, for Brisbane ES D 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 D istrict bonds
and San Mateo Jr. College bond. 2 have the rate of 1.0719 and one has a rate of 1.0689, which includes Jefferso n Union School bonds and
Brisbane ESD bonds, and one has a rate of 1.0710 which includes San Bruno Park Elementary.
(16) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.03 77 percent, which includes South San Francisco Unified School Di strict 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 w hich includes San Bruno Park Elementary.
(17) Of the 68 tax rate areas in the City, 63 hav e 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 SS FU SD bonds and San Mateo Jr College bond. 3
has a rate of 1.0893 percent and one at 1.0854 percent which includes Jefferso n Union School bond, Brisbane E SD 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, whi ch includes SSFUSD bonds, San Mateo Jr College bond, and
San Mateo Comm College. 4 has a rate of 1.092 1 percent which includes Brisbane E SD Bond, Jefferson H ig h bonds, SM Jr Coll ege bond a nd
San Mateo Comm Coll ege. 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 a reas 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 Colleg e. 4 has a rate of 1.1048 percent which includes Bri sbane ESD Bond, Jefferson High bonds, SM Jr College bond and
San Mateo Comm College. 1 has a rate of 1.0864 percent, w hi ch includes San Bruno Pk Elem bond, SM Union High, SM High, and San Mateo
Comm College . 1 has a rate of 1.0864 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond and
San Mateo Comm Coll bond.
(21) Of the 68 tax rate areas in the City , 63 have a tax rate of 1.0703 percent, which includes SSFUSD bonds, San Mateo Jr College bond, and
San Mateo Comm College. 4 has a rate of 1.0991 percent which includes Brisbane ESD Bond, Jefferson Hi g h bonds, SM Jr College bond and
San Mateo Comm College. 1 has a rate of 1.0983 percent, which includes San Bruno Pk E lem 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 C ity, 63 have a tax rate of 1.0707 percent, which in cludes SSFUSD bond s, San Mateo Jr College bond, and
San Mateo Comm Coll ege. 3 has a rate of 1.1080 perce nt and 1 with 1.10 68 percent rate which includes College bond Brisbane ES D Bond,
Jefferson High bonds, SM Jr and San Mateo Co mm Coll eg e. 1 has a rate of 1.0929 percent, which in cludes San Bruno Pk E lem bond, SM Uni on
High, SM High, SM Jr Coll ege bond and San Mateo Comm Coll bond.
(23) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0714 percent, which includes SSFUSD bonds & San Mateo Jr College bond . 4 has
a rate of 1.1 282 percent which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD , SM Jr College bonds. 1 has a rate of 1.0910
percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr Co llege bond and Sa n Mateo Comm Coll bond .
Source: HDL, Coren & Cone (San M ateo County Assessor 2007/08-2016/1 7 Tax Rate Table).
155
Vi
-.)
Property Tax Payer
Slough
Genentech
Britannia Pointe Grand LP
ARE San Francisco Exch LLC
BMR 1000 Gateway LP N A
Gateway Boulevard LLC
Gateway Center LLC
ASN Solaire LLC
HCP Inc
Costco Wholesale Corp
HPTMI II Properties Trust
BP Gateway Center LLC
PR 701 Gateway LLC
Amgen SFLLC
Blue Line Transfer Inc.
OIK Sierra Point LLC
Felcor CMB SSF Holdings LP
Areus Inc
Prologis Uslv Newca 2 LLC
Theravance Inc.
Total Top Twenty
Percent of AV
CITY OF SOUTH SAN FRANCISCO
Twenty Largest Taxable Property Owners for Merged RDA Project Area
June 30, 2017
Total % of Total
Assessed AV in Project
Secured Unsecured Value Area Land Use
$965,586,473 $965,586,473 21.78% Industrial
241,489,807 170,679,681 $412, 169,488 9.30% Industrial, Office, R&D
297,590,141 $297,590,141 6.71% Industrial
$229,102,810 $229,102,810 5.17% Industrial, Commercial
213,145,455 $213,145,455 4.81% Commercial
201,733,291 $201,733,291 4 .55% Industrial
143,533,477 0 $143,533 ,477 3.24% Commercial
110,934, 105 $110,934, 105 2.50% Residential
98,463,117 $98,463, 117 2.22% Unknown
41,669,548 38 ,231,010 $79 ,900,558 1.80% Commercial
66,190,793 $66,190,793 1.49% Residential, Hotels, Motels
59,261,340 $59,261,340 1.34% Commercial, Office, 2+ stories
58,579,924 $58,579,924 1.32% Commercial
57,824,838 $57,824,838 1.30% Industrial
49,075,135 $49,075, 135 1.11% Industrial
43,856,270 $43,856,270 0 .99% Commercial, Office, 2+ stories
39,708,919 $39,708,919 0.90% Residential, Hotels, Motels
35,242,075 $35,242,075 0.79% Commercial, Office, 2+ stories
29,493,009 $29,493 ,009 0 .67% Commercial, Office, 2+ stories
26,780,291 $26,780,291 0.60% Industrial, Office, R&D
2 ,924 ,655 ,689 293 ,515 ,820 3 ,218 ,17 1,509 72 .59 %
90.9% 9.1%
(1) Given the nature of the research performed at Genentech, a significant portion of the total assessed value of the Genentech Property is likely equipment. It would appear on the secured roll as that contains
the value of personal property/improvements
Source: San Mateo County Assessor, RDA Secured & Unsecured SSF 2017 Tax Rolls
Source: Muni Services
CITY OF SOUTH SAN FRANCISCO
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
JUNE 30, 2017
2016-17 Assessed Valuation:
Redevelopment Incremental Valuation:
Adjusted Assessed Valuation:
OVERLAPPING TAX AND ASSESSMENT DEBT:
San Mateo Community College Di strict
Jefferson Union High School Di strict
South San Franci sco Unified School Di strict
Brisbane School Di strict
TOT AL OVERLAPPING TAX AND ASSESSMENT DEBT
Ratio to 2015-16 Assesse d Valuation:
Total Overlapping Tax and Assessment Debt ......... 1.30%
OVERLAPPING FUND DEBT :
San Mateo County General Fund Obligation s
San Mateo County Board of Education Certificate s of Participation
San Mateo County Flood Control Di strict Certificates of Participation
South San Franc isco Unified School District Certificates of Participation
Jefferson Union Hi gh School Di strict Certificates of Participation
City of South San Francisco Loans Payable
City of South San Franci sc o Capital Leases
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT:
OVERLAPPING TAX INCREMENT DEBT (Successor Agency):
TOTAL DIRECT DEBT
Total Overlapping Debt
COMBINED TOTAL DEBT
$16 ,456 ,057 ,191
$16 ,456 ,057 ,191
Total Debt
6/30/2017
$611 ,812 ,998
180,406,091
175 ,812 ,3 64
5,820,437
$399 ,3 89 ,816
9,3 30,000
18 ,095,000
4,3 60,746
1,279,477
10 ,691,152
1,673 ,52 3
$560,000
(1) Percentage of overlapping agency's assessed valuation lo cated with in boundaries of the city .
% Applicable (1)
8 .577%
1.964
89.46 7
13 .858
8 .577%
8.577
60.402%
89.467
1.964
100.000
100
100.000%
City's Share of
Debt 6130/17
$52 ,475,201
3,543, 176
157 ,294,048
806,596
$2 14 ,119 ,021
$34 ,2 55 ,665
800 ,234
10 ,929 ,742
3,901 ,429
$25 ,129
10 ,691,152
1,673 ,522
$62,276,873
$560,000
12 ,364,674
$264,591,220
$276,955,895
(2) Excludes tax and revenue anticipation notes, enterprise revenu e, mortgage revenue, tax allocation bonds, and Successor Agency Debt.
Ratios to Adjusted Assessed Valuation:
Total Overlapping Tax and Assessment Debt
Total Direct Debt
Combined Total Debt
Ratios to Redevelopment Successor Agency Incremental Valuation ($4,099 ,895 ,614):
Total Overlapping Tax Increment Deb t
Source : California Municipal Statistics, Inc . and City of South San Francisco
510-658-2640 Austin Busch
160
1.30%
0.08%
1.68%
0.01%
(2)
NOTE: (a)
Fiscal
Year
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
CITY OF SOUTH SAN FRANCISCO
COMPUTATION OF LEGAL BONDED DEBT MARGIN
JUNE 30, 2017
ASSESSED VALUATION: $16,456,057,191
BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a) 617 ,102 ,145
LESS AMOUNT OF DEBT SUBJECT TO LIMIT: 0
LE GAL BONDED DEBT MARGIN $6 17, 102 , 145
Total net debt
Total Net Debt Legal applicable to the limit
Debt Applicable to Debt as a percentage
Limit Limit Margin of debt limit
$469,575,123 0 $469,575,123 0.00%
559 ,744 ,420 0 559,744,420 0 .00%
525 ,673,963 0 525 ,673,963 0.00%
511 ,748 ,388 0 511 ,748,388 0.00%
518,513 ,854 0 518 ,513,854 0.00%
524,729 ,886 0 524, 729 ,886 0.00%
536 ,413 ,229 0 536,413 ,229 0.00%
558,585 ,910 0 558,585 ,910 0.00%
580 ,561,386 0 580,561 ,386 0.00%
617 ,102 ,145 0 617,102,145 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 valu ation at full cash value.
Source: HDL Coren & Cone, San Mateo County Assessor -Combined Tax Rolls
161
CITY OF SOUTH SAN FRANCISCO
SEWER DEBT SERVICE COVERAGE
SEWER RENTAL ENTERPRISE FUND
LAST FIVE FISCAL YEARS
Fiscal Year
2013 2014 2015 2016 2017
Revenues
Service Charges $19,310,559 $19,129,475 $19,758,128 $19,515,093 $19,750,636
Connection and Other Fees 27,548 25,992 122,640 104,283 147,133
Interest Income 80,692 133,248 106,830 238,389 23,552
Developer Fees
Other Cities' Participation (1) 6,137,401 7,619,601 6,159,937 5,752,765 5,763,645
Total Revenues $25,556,200 $26,908,316 $26,147,535 $25,610,530 $25,684,966
Operating Expenses (2) $15,151,968 $14,904,225 $18,759,650 $13,514,718 $17,357,273
Wastewater System Net Revenues $10,404,232 $12,004,091 $7,387,885 $12,095,812 $8,327,693
Parity Debt Service (3)
State Water Resources Control Board Loans $6,012,716 $6,022,799 $5,445,162 $5,449,692 $5,454,747
CSCDA Series 2005D Revenue Bonds 206,405 197,630 188,148 178,036 167,284
Total Parity Debt $6,219,121 $6,220,429 $5,633,310 $5,627,728 $5,622,031
Total Parity Debt Service Coverage 1.67 1.93 1.31 2.15 1.48
(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 of25% 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 of9% per Resolution No. 68-2005, adopted by the City Council on June 22, 2005 and effective on and after June 22,
2005.
163
CITY OF SOUTH SAN FRANCISCO
Principal Employers
Current Year and Nine Years Ago
2016-17
Percentage
Number of of Total City
Employer Employees Rank Employment
Genentech Inc. 8,637 13.2%
Costco Wholesale (3 stores) 834 2 1.3%
Life Technologies Corporation 622 3 1.0%
Amgen San Francisco LLC 500 4 0.8%
Successfactors, Inc. 352 5 0.5%
ZS Associates, Inc. 252 6 0.4%
American ETC Inc/Royal Laundry 249 7 0.4%
SBM Site Services LLC 245 8 0.4%
Tobi.com, LLC 227 9 0.3%
Holiday Inn 224 10 0.3%
United Airlines
Kaiser
SSF School District
United Parcel Service
Amgen
Exelixis
Cell Genesys
Actuate
Subtotal 12,142 18.6%
Total City Population 65,451
Source:
SSF Business License Database-Business licenses expiring 12/31/17.
CAFR 2007-08
166
Number of
Employees
9,000
798
9,000
1,100
950
732
676
545
377
350
23,528
63,744
2007-08
Percentage
of Total City
Rank Employment
2 14.1%
5 1.3%
14.1%
3 1.7%
4 1.5%
6 1.1%
7 1.1%
8 0.9%
9 0.6%
10
36.9%
CITY OF SOUTH SAN FRANCISCO
Operating Indicators by Function/Program
Last Five Fiscal Years
2013 2014 2015
Function/Program
Public safety:
Fire :
Inspections conducted 2 ,369 2,574 1,817
Police :
Police calls for service 33,657 29 ,359 31,532
Law violations:
Part I crimes 1,874 1,780 1,874
Physical arrests (adult and juvenile) 2,081 2,158 1,933
Traffic violations 3,632 4 ,175 3,828
Parking violations 14,648 16 ,597 13 ,378
Public works
Street resurfacing (miles) (Eng Div) 3 22 (2) 0
Potholes repaired (square miles) 0 .13 0.20 0.11
Asphalt used for street repairs (tons) 287 435 250
Culture and recreation :
Recreation class participants 27,184 26 ,694 26 ,879
Library:
Total items borrowed 701,721 686 ,491 (1 ) 643 ,630
Items in collection 188 ,394 185 ,482 (1) 130, 106
Wastewater
Residential connections 16,466 16,482 16 ,470
Commercial connections 1,566 1,562 1,560
Other connections 127 128 128
Average daily sewage treatment (millions of gallons 9 .27 8.28 8.89
Note : NI A denotes information not available .
2016 2017
2 ,563 3 ,426
32,477 33 ,313
2 ,126 2 ,103
2 ,071 1,870
4 ,211 3 ,785
12 ,006 15,291
2 8
2 0
151 94
(3) 23,399 23 ,939
565,806 558,106
(4) 208 ,400 209 ,895
16 ,491 16 ,488
1,561 1,562
131 140
7.92 8.41
(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
CITY OF SOUTH SAN FRANCISCO
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Function/Program
Public safety:
Fire stati ODS 5 5 5 5 5 5 5 5 5 5
Police stations I 1 1 I (6) 1 (6) I 1 1 1 1
Police Fleet (I ) 45 (2) 48 (2) 48 52 51 5 1 (8) 50 53 53 52
Public works
Miles of streets 12 7 127 12 7 127 127 127 127 127 127 127
Street lights 3 ,779 3 ,779 4,156 4 ,160 4,160 (7) 4,505 4,505 4 ,505 4,505 4 ,505
Parking District lights 20 20 20 20 20 20 20 20 20 (9) 16
Traffic Signals 7 0 70 73 74 74 74 74 74 76 76
Culture and recreation:
Community services:
City parks 28 28 28 28 2 8 28 28 28 28 28
City parks acreage 190 190 19 0 190 190 190 190 190 190 190
Playgrounds 24 24 24 24 24 24 24 24 24 24
City trails 6 6 6 6 6 6 6 6 6 6
Community gardens 1 I I 1 I I I 1 I I
Community centers 4 4 4 4 4 4 4 4 4 4
Senior centers 2 2 2 (4) 1 I I I I I I
Skate Park (3) I I I 1 I I I I
Dog park (3) I I I I I I I I
Swimming pools I I I I I I 1 I 1 I
Tennis courts 7 7 7 7 7 7 7 7 7 7
Basketball Courts 12 12 12 12 12 12 12 12 12 12
Baseball/softball diamonds 11 11 11 11 11 11 11 11 11 11
Soccer/football fields 5 5 5 5 5 5 5 5 5 5
Library:
City Libraries (6) 2 2 2 2 2 2 2 2 2 2
Wastewater
Miles of sanitary sewers 164 164 164 164 164 164 164 164 164 164
Miles of storm sewers 125 125 125 125 125 125 125 125 125 125
Number of treatment plant~ 1 1 1 1 1 1 1 1 1 1
Source: ssf.net/depts/rcs ; Director of Rec & Comm Services ; Superintendent of parks & Maintenance
(1) Police patrol units consists of35 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 Leaming Center not included on count as it is only a homework center not a library.
(6) Police sub station 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.
169
CITY OF SOUTH SAN FRANCISCO
Miscellaneous Information
Last Three Fiscal Years
Collection and Use of 1 % Special Transient Occupancy Tax (TOT) Approved by Voters as
2015 2016 2017
Transient Occupancy Tax Detail
9% TOT collected 11,652,726 12 ,054,093 12 ,256,007
1 % Measure I Special Tax 1,294,747 1,339 ,344 1,361 ,779
Total TOT Co llection 12 ,947 ,474 13 ,393 ,436 13 ,617,786
1 % Measure I Special Tax Use
Police 258,949 267,869 272 ,356
Fire 258,949 267 ,869 272 ,356
Library 258,949 267 ,869 272 ,356
Parks 258 ,949 267 ,869 272 ,356
Recreation 258 ,949 267 ,869 272 ,356
Total 1 % Measure I Special Tax 1,294,747 1,339,344 1,361 ,779
*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 Po lice, Fire, Library, and Parks and Recreation expenditures.
170
EX
H
I
B
I
T
B
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT
ACT ARTICLE III FUND
BASIC FINANCIAL STATEMENTS
FOR THE YEARS ENDED
JUNE 30, 2017 AND 2016
EXHIBIT C
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, 2017 and 2016
Table of Contents
Independent Auditor's Report ......................................................................................................................... 1
Fund Financial Statements:
Comparative Balance Sheets .................................................................................................................... 3
Comparative Statements of Revenues, Expenditures and Changes in Fund Balance ............................ 4
Notes to 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
Report on Financial Statements
M MAZE
&A SS OCIATES
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, 2017 and 2016, and related
notes to the 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.
Accou ntancy Corporation
347 8 Bu skirk Ave nu e, Suite 2 15
Pl easant Hill , CA 94523
T 925.930.0902
F 925.930 .01 35
E maze@maze assoc iates .com
w mazeassociates.com
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, 2017 and 2016, 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, 2017 and 2016 or the changes in its
financial positions 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 November 28,
2017 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.
m't ~vz-1. )1./!£40 c.-'lq.. 4{-ea
Pleasant Hill, California
November 28, 2017
2
ASSETS
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
COMPARATIVE BALANCE SHEETS
JUNE 30, 2017 AND 2016
2017
Allocation
Instruction
Number
16001070 2016
Due from Metropolitan Transportation Commission $39,669 $163,318
Total Assets $39,669 $163,318
LIABILITIES
Due to the City $39,669 $163,318
Total Liabilities 39,669 163,318
FUND BALANCE
Total Fund Balance and Liability $39,669 $163,318
See accompanying notes to financial statements
3
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
FOR THE YEARS ENDED JUNE 30, 2017 AND 2016
REVENUES
TDA Article 3.0 (Note 2)
Total Revenues
EXPENDITURES
Linden Ave. Complete Streets Safety Project
Oyster Point Bike Lanes Improvement
Total Expenditures
Net change in fund balance
Fund balance at beginning of year
Fund balance at end of year
2017
Allocation
Instruction
Number
16001070 2016
$39,699 $163,318
39,699 163,318
39,699
163,318
39,699 163,318
See accompanying notes to financial statements
4
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
Notes to the Financial Statements
For the Years Ended June 30, 2017
I 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
availabie 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.
I NOTE 2 -TDA ARTICLE 3.0 REVENUE
As of the year ended June 30, 2017 and 2016 the City received allocation instructions from the
Metropolitan Transportation Commission for the following projects:
Revenue
Instruction N wnber Project Name Grant Award 2017 2016
16001070 Linden Ave Complete Streets Safety Project $400,000 $39,699
14001100 Oyster Point Blvd. Bike Lanes Improvement 182,100 $163,318
$39,699 $163,318
5
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
Notes to the Financial Statements
For the Years Ended June 30, 2017
I 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.
6
MAZE
&ASSOCIATES
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
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 financial statements of the Transportation
Development Act Article III Fund (the TDA Fund) of the City of South San Francisco (City), California, as
of and for the year ended June 30, 2017, and the related notes to the financial statements, and have issued
our report thereon dated November 28, 2017
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.
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
7
T 925 .930.0902
F 925 .930.0135
E maze@mazeassociates.com
w mazeassociates.com
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 November 28, 2017 which is an
integral part of our audit and should be read in conjunction with this report.
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.
This report is intended solely for the information and use of the Metropolitan Transportation Commission,
management, City Council, others within the City, and federal awarding agencies and pass-through entities
and is not intended to be and should not be used by anyone other than these specified parties; however, this
restriction is not intended to limit the distribution of this report, which is a matter of public record.
'lYl~e, i~o~
Pleasant Hill, California
November 28, 2017
8
EXHIBIT D