HomeMy WebLinkAboutReso 18-2019 (19-77)City of South San Francisco P.O. Box 711 (City Hall,
400 Grand Avenue)
South San Francisco, CA
City Council
Resolution: RES 18-2019
File Number: 19-77 Enactment Number: RES 18-2019
RESOLUTION ACKNOWLEDGING RECEIPT OF THE FISCAL
YEAR 2017-18 AUDITED FINANCIAL STATEMENTS, INCLUDING
THE COMPREHENSIVE ANNUAL FINANCIAL REPORT.
WHEREAS, the Budget Standing Committee accepted the Fiscal Year ("FY") 2017-18 year-end
financial results on November 5, 2018; and
WHEREAS, the City Council accepted the FY 2017-18 year-end financial results on November 15,
2018; 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 2017-18 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 2017-18 audited financial statements, attached herein as Exhibits A, B, C, and D.
At a meeting of the City Council on 2/13/2019, a motion was made by Richard Garbarino, seconded by
Buenaflor Nicolas, that this Resolution be approved. The motion passed.
Yes: 4 Mayor Matsumoto, Vice Mayor Garbarino, Boardmember Nagales, and
Boardmember Nicolas
Absent: 1 Boardmember Addiego
Attest by µti
osa Govea Acosta
City of South San Francisco Page 1
COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF SOUTH
SAN FRc1NCISCO,
CALIFORNIA
i YEAR ENDED JUNE 30, 2018
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CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2018
Prepared by:
Department of Finance
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CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Ended June 30, 2018
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 ........................................................................................................................ 1
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 .................................................................................................................................. 32
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 ......................................................................................................................... 39
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, 2018
Table of Contents
I FINANCIAL SECTION (Continued) !
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 Pension Liability and Related Ratios-
Miscellaneous Plan ................................................................................................................ 98
Schedule of Contributions -Miscellaneous Plan ........................................................................... 99
Schedule of Changes in Net Pension Liability and Related Ratios -Safety Plan ....................... 100
Schedule of Contributions -Safety Plan ...................................................................................... 101
Schedule of Changes in the Net OPEB Liability and Related Ratios .......................................... 102
Schedule of Contributions -OPEB Plan ...................................................................................... 103
Notes to Schedule of Employer Contributions ............................................................................. 103
Supplementary Information:
General Fund:
Combining Balance Sheet. ................................................................................................................ 108
Combining Schedule of Revenues, Expenditures, and Changes
in Fund Balances ....................................................................................................................... 109
Combining Schedule of Revenues, Expenditures, and Changes
in Fund Balance Budget and Actual -(Non GAPP Legal Basis) ............................................ 110
Major Governmental Funds Other Than the General Fund and Special Revenue Funds:
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual:
Capital Improvement Capital Projects Fund (Non GAAP Legal Basis) ..................................... 114
East of 101 Sewer Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ................. 115
East of 101 Traffic Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ............... 116
Child Care Impact Fees Capital Projects Fund (Non GAAP Legal Basis) ............................. 117
II
CITY OF soum SAN FRANCISCO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Ended June 30, 2018
Table of Contents
I FINANCIAL SECTION (Continued)
Developer Deposits Capital Projects Fund (Non GAAP Legal Basis) ................................... 118
Capital Infrastructure Reserve Fund (Non GAAP Legal Basis) ............................................. 119
Non-major Governmental Funds:
Combining Balance Sheet. ................................................................................................................ 124
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances ....................................................................................................................... 128
Budgeted Non-major Government Funds:
Combining Schedule of Revenues, Expenditures, and Changes
in Fund Balances -Budget and Actual .................................................................................... 132
Internal Service Funds:
Combining Statement of Net Position .............................................................................................. 142
Combining Statement of Revenues, Expenses and Changes in Fund Net Position ........................ 143
Combining Statement of Cash Flows ............................................................................................... 144
Fiduciary Funds:
Statement of Changes in Assets and Liabilities -Agency Fund ................................................... 146
I STATISTICAL SECTION I
Net Position by Component -Last Ten Fiscal Years .................................................................... 149
Changes in Net Position-Last Ten Fiscal Years ........................................................................... 150
Fund Balances of Governmental Funds -Last Ten Fiscal Years .................................................. 152
Changes in Fund Balance of Governmental Funds-Last Ten Fiscal Years ................................ 156
Assessed Value of Taxable Property-Last Ten Fiscal Years ....................................................... 158
Direct and Overlapping Governments -Property Tax Rates
Last Ten Fiscal Years ................................................................................................................ 159
Principal Property Taxpayers -Current Year and Nine Years Ago .............................................. 160
Twenty Largest Taxable Property Owners for Merged RDA Project Area .................................. 161
Property Tax Levies and Collections-Last Ten Fiscal Years ...................................................... 162
Ill
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Ended June 30, 2018
Table of Contents
I STATISTICAL SECTION (Continued) I
Ratio of Outstanding Debt by Type -Last Ten Fiscal Years ........................................................ 163
Computation of Direct and Overlapping Debt ............................................................................... 164
Computation of Legal Bonded Debt Margin .................................................................................. 165
Revenue Bond Coverage Sewer Rental Enterprise Fund -Last Ten Fiscal Years ....................... 166
Sewer Debt Service Coverage Sewer Rental Enterprise Fund-Last Five Fiscal Years .............. 167
Redevelopment Pledged Revenue Coverage -Last Seven Fiscal Years ...................................... 168
Demographic and Economic Statistics -Last Ten Fiscal Years ................................................... 169
Principal Employers -Current Year and Nine Fiscal Years Ago ................................................. 170
Full-Time Equivalent City Governmental Employees by Function -Last Ten Fiscal Years ...... 171
Operating Indicators by Function/Program -Last Five Fiscal Years ........................................... 172
Capital Asset Statistics by Function/Program -Last Ten Fiscal Years ........................................ 173
Miscellaneous Information -Last Three Fiscal Years .................................................................. 17 4
IV
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.
Vl
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.
At a high level, there are two notable changes to the financial condition of the
City compared to the prior fiscal year. The first is due to implementation of GASB
75, which recognized the full liability for other post-employment benefits (OPEB).
GASB 75 supplanted GASB 45, which only recognized the amortized OPEB
obligation. As such, the OPEB liability increased from $26 million to $59 million.
In addition, the City's pension liability, pursuant to GASB 68, increased from
$152 million to $183 million, principally due to interest on the total pension
liability.
The second notable change is in the City's cash balance, which increased from
$138 million to $170 million. The change is a manifestation of two factors. The
first is the pace of development in South San Francisco, primarily high density
residential development in the downtown area, and research and development
facilities in the East of 101 area. During FY 2017-18, the City had over 1,100 high
density residential units under construction, with another 2,000 units under
consideration, which is a reflection of the extreme demand for housing in the San
Francisco Bay Area. The City also has over five million square feet of non-
residential development that is either entitled, permitted, or under construction in
the East of 101 area, which affirms the City's heritage as not only the Birthplace
of Biotech, but also its status as the Biotech Capital of the world.
There are two financial policies that had a significant impact on the current
period's financial statement. The first is the City's Reserves Policy, which is
aligned with the Government Finance Officers Association (GFOA) best practices
recommendation for reserves, setting aside 15-20 percent of operating revenues.
The City's revenue base continues to expand through residential and non-
residential development. The palette and depth of taxes were broadened as
approved by South San Francisco voters in the November 2018 election via
Measure FF and Measure LL, which will increase Transient Occupancy Tax and
establish a cannabis business license tax, respectively. As such, the City's
General Fund unassigned fund balance will continue to grow commensurately.
The second policy that had a significant impact reflected the City Council's
alignment with best practices to complete a comprehensive review and update of
its fees via a cost allocation plan (CAP) and fee study every five to seven years.
The results of the fee study indicated that the City was only recovering 57
percent of its costs through fees due the period of time that had lapsed since the
last CAP was completed. The City Council further supported a cost recovery rate
of at least 80 percent. As such, the policy, coupled with the record-breaking
development climate, increased permit and developer impact fee revenues to an
unheralded level.
vii
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of South San Francisco
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2017
Executive Director/CEO
IX
Citizens of South San Francisco
City Council
City Clerk
LIZA NORMANDY, Mayor
-KARYL MATSUMOTO, Mayor Pro Tempore City Treasurer
Krista Martinelli MARK ADDIEGO, Councilman Frank Risso
RICHARD A. GARBARINO, Councilman
PRADEEP GUPTA, Councilman
City Attorney
Jason Rosenberg
Assistant City Manager/ 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 Eunejune Kim
Human Resources Director Library Director Fire Chief ---Leah Lockhart Valerie Sommer Jess Magallanes
Parks and Recreation Directo1 Chief of Police --Sharon Ranals Jeff Azzopardi
X
City Council & Directory of Officials
City Council
Liza Normandy
Karyl Matsumoto
Mark N. Addiego
Richard A. Garbarino
Pradeep Gupta, Ph.D.
Elected Officials
Krista Martinelli
Frank Risso
Appointed Officials
Mike Futrell
Marian Lee
Leslie Arroyo
Richard Lee
Leah Lockhart
Tony Barrera
Alex Greenwood
Jess Magallanes
Jeff Azzopardi
Valerie Sommer
Eunejune Kim
Sharon Ranals
Budget Subcommittee
Pradeep Gupta, Ph.D.
Liza Normandy
Mayor
Mayor Pro Tempore
Councilmember
Councilmember
Council member
City Clerk
City Treasurer
City Manager
Assistant City Manager/ Chief Sustainability Officer
Communication Director
Finance Director
Human Resources Director
Chief Innovation Officer
Economic & Community Development Director
Fire Chief
Chief of 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
Rep ort 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, 2018, 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%, respectively, of the assets, net position, and revenue
of the primary government.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of the
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. The fmancial statements
of the Authority were audited by other auditors, whose report has been furnished to us and our opinion, insofar as it
relates to the amounts included for the Authority, is based solely on the report of the other auditors. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to fmancial 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 fmancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
fmancial statements. The procedures selected depend on the auditor's judgment, including the assessment of the
risks of material misstatement of the fmancial 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
fmancial 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 fmancial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Plea sant Hill , CA 94523
T 925 .930.0902
F 925 ,930 .0135
E maze@mazeassociates .com
w mazeassociates.com
Opinions
In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above
present fairly, in all material respects, the respective financial position of the governmental activities, the
business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate
remaining information of the City as of June 30, 2018, and the respective changes in financial position and,
where applicable, cash flows thereof and the respective budgetary comparisons listed in the Table of Contents as
part of the basic financial statements for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Change in Accounting Principles
Management adopted the provisions of Governmental Accounting Standards Board Statement No. 75,
Accounting and Financial Reporting/or Postemployment Benefits Other than Pensions, which became effective
during the year ended June 30, 2018 and required a prior period adjustment to the financial statements and
required the restatement of net position as discussed in Note lS.
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.
2
The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the audit
of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on
them .
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 13, 2018
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.
~ ~ci. j J\/J()o~
Pleasant Hill, California
December 13, 2018
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) 2017-18 FINANCIAL HIGHLIGHTS
Summary:
The outcome of Fiscal Year 2017-18 largely reflected the robust economic and development
climate in South San Francisco. The General Fund, excluding transfers, generated an operating
surplus of $26.2 million. 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 to 20 percent of operating revenues. After meeting the City's reserves requirement,
the City Council authorized transfer of $10.0 million to the Capital Infrastructure Fund to
proactively position the City to address future infrastructure funding needs, and $1.0 million to the
CalPERS Stabilization Reserve to address escalating pension costs and pension liabilities.
General Fund revenues (excluding operating transfers in and $20.6 million in property held for
redevelopment from FY 2016-17) increased by $17. 9 million, or 17 .1 percent compared to the
prior year. The primary drivers of the year-over-year increase were sales tax and permit revenues.
FY 2017-18 represents the second full fiscal year of Measure W, the City's half-cent transactions
and use tax. Coupled with growth in nearly every business category, sales and use tax revenues
increased $4.3 million, or 17.4 percent compared to the prior year. Permit revenues increased $6.9
million compared to FY 2016-17. The principal contributing factors were the demand for
residential and non-residential development in South San Francisco, primarily in the downtown
and East of 101 areas, and the City Council's approval of a comprehensive fee study, which
improved the City's cost recovery rate from 57 to 81 percent.
City-wide financial highlights of the year include the following:
• Total Net Position for Governmental Activities in FY 2017-18 remained largely static,
decreasing nominally from $222.0 million to $221.1 million. Total assets, driven by a
significant increase in cash and investments, increased by $33.7 million. However, total
citywide liabilities increased by $53.5 million, largely driven by implementation of
Government Accounting Standards Board (GASB) 75, which shifted from an amortized value
for the City's Other Post-Employment Benefits (OPEB) obligation, valued at $26.2 million in
FY 2016-17 pursuant to GASB 45, to the full OPEB liability of $59.3 million in FY 2017-18
pursuant to GASB 75.
• Net pension liability increased from $152.8 million to $182.9 million. The change was largely
driven by interest on the Total Pension Liability and changes in actuarial assumptions.
• Cash and investments increased and Net Expenses decreased for Governmental Activities
significantly compared to the prior year, reflecting a record-breaking development climate in
South San Francisco. Cash and investments increased from $116.9 million to $146.6 million,
while Net Expenses decreased from $71.2 million to $63.9 million.
5
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
• The City purchased land from the Successor Agency to the Former Redevelopment Agency to
serve as the site of the future community civic campus in the amount of $7 .1 million, which
increased General Fund expenditures.
• Sales tax revenues increased from $24.5 million to $28.7 million, an increase of 17.4 percent,
reflecting the diversity and breadth of the City's economy.
• Revenue from licenses and permits for Governmental Funds increased from $7.8 million to
$14.7 million, which was a manifestation of the active development environment in South San
Francisco, primarily non-residential development in the East of 101 area, and high density
residential in the downtown area.
• Intergovernmental revenues for Governmental Funds increased from $4.0 million to $8.4
million, largely due to the South Airport Bridge project, which the City received federal grant
funds through the State of California's Local Highway Bridge Program (HBP). The City also
received grant revenue from the County of San Mateo for the US-101 Produce A venue
Interchange. The South San Francisco Fire Department responded to a number of mutual aid
events throughout the State of California due to a particularly severe fire season. As such, the
California Office of Emergency Services (CalOES) reimbursed the City $0.9 million for
employee and equipment costs.
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.
6
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
The City-wide Financial Statements provide a longer-term view of the City's activities as a whole,
and consist of the Statement of Net Position and the Statement of Activities. The Statement of
Net Position provides information about the financial position of the City as a whole, including all
its capital assets and long-term liabilities on the full accrual basis, similar to the basis used by
corporations. The Statement of Activities provides information about all the City's revenues and
all its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or
expenses of each the City's programs. The Statement of Activities provides a detailed explanation
of the change in net position for the year.
All the amounts in the Statement of Net Position and the Statement of Activities are separated into
Governmental Activities and Business-type Activities in order to provide a summary of these two
activities of the City as a whole.
The Fund Financial Statements report the City's operations in more detail than the government-
wide statements and focus primarily on the short-term activities of the City's General Fund and
other Major Funds. The Fund Financial Statements measure only current revenues, expenditures,
and fund balances; they exclude capital assets, long-term debt and other long-term amounts.
Major Funds account for the major financial activities of the City and are presented individually,
while the activities of Non-major funds are presented in summary, with subordinate schedules
presenting the detail for each of these other funds. Major Funds are explained below.
The fiduciary statements provide financial information about the activities of Non-Obligated
Assessment Districts, for which the City acts solely as agent.
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.
7
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
• Component Unit -The City of South San Francisco Conference Center Authority comprises
the component unit. The Authority serves the City and other interests and it has a governing
body separate from the City Council.
Citywide financial statements are prepared on the accrual basis, which means they measure the
flow of all economic resources of the City as a whole.
Fund Financial Statements
The Fund Financial Statements provide detailed information about each of the City's most
significant funds, called Major Funds. The concept of major funds, and the determination of which
are major funds, was established by GASB Statement 34 and replaces the concept of combining
like funds and presenting them in total. Instead, each Major Fund is presented individually, with
all Non-major Funds summarized and presented only in a single column. Subordinate schedules
present the detail of these Non-major funds. Major Funds present the major activities of the City
for the year, and may change from year to year as a result of changes in the pattern of City's
activities. Fund Financial Statements include governmental, enterprise and internal service funds
as discussed below.
Governmental Fund Financial Statements are prepared on the modified accrual basis, which mean
they measure only current financial resources and uses. Capital assets and other long-lived assets,
along with long-term liabilities, are not presented in the Governmental Fund Financial Statements.
Enterprise and Internal Service Fund financial statements are prepared on the full accrual basis, as
in the past, and include all their assets and liabilities, current and long-term.
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.
8
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 2017-18 and 2016-17.
Governmental Activities
Governmental Net Position
Table 1
Governmental Net Position at June 30
(In Millions)
2018 2017
Cash and investments
Other assets
Capital assets
Total assets
Total outflows of resources
Total outflow of resources
Long-term debt outstanding
Other liabilities
Total liabilities
Deferred inflows of resources
Total deferred inflow of resources
Net position:
Net investment in capital assets
Restricted
Unrestricted
Total net position
$ 146.6
35.9
255.7
438.2
44.0
44.0
9.1
250.0
259.1
2.0
2.0
254.6
96.3
(129.8)
$ 221.1
$ 117.0
31.5
256.0
404.5
28.3
28.3
11.8
193.8
205.6
5.2
5.2
254.3
54.5
(86.8)
$ 222.0
The total net position for Governmental Activities nominally decreased by $0.9 million in FY
2017-18 compared to the prior year, reflecting significant increases in assets, primarily in cash and
investments, offset by increases in liabilities due to increases in pension and OPEB liabilities.
9
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
The increase in assets was largely within cash and investments, and was due to the robust
development in South San Francisco, which generated record-breaking permit revenues and over
$18 million in developer impact fees. Pursuant to GASB 75, the City recognized the full OPEB
liability of $59.3 million in FY 2017-18. The City's net pension liability also increased from
$152.8 million to $182.9 million, an increase of $30.1 million, or 19.7 percent.
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
10
2017-18
$12.5
30.3
30.7
18.4
17.2
5.9
10.1
$125.1
$52.9
5.8
2.5
$61.2
$29.6
28.4
14.0
10.3
6.4
1.1
5.2
(7.2)
$87.8
$149.0
$23.9
(2.0)
21.9
199.2
$221.1
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
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Table 3
Net (Expense) Revenue from Services
Governmental Activities
(In Millions)
2017-18 2016-17
General government
Fire department
Police department
Public works department
Recreation and community services
Library
Economic and community development
Interest on long-term debt
Total
12
$
$
(9.4) $ (7.7)
(24.0) (21.5)
(27.8) (23.1)
10.8 1.1
(11.9) (10.7)
(5.4) (4.7)
3.8 (4.6)
{63.9) $ (71.2)
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)
Cash and Investments
Other assets
Ca pita I assets
Total assets
Deferred outflows related to pension
Total Deferred outflow of resources
Long-term liabilities outstanding
Other liabilities
Total liabilities
Deferred inflows related to pension
Total deferred inflow of resources
Net position:
Net investment in capital assets
Restricted
Unrestricted
Total net position
2018 2017
$ 24.3 $ 21.8
0.5 0.2
124.1 124.9
148.9 146.9
4.9 3.1
4.9 3.1
29.3 34.0
31.0 22.1
60.3 56.1
0.2 0.6
0.2 0.6
90.1 86.2
3.2 7.2
$ 93.3 $ 93.4
The total net position for business-type activities decreased slightly by $0.1 million compared to
the prior year. Total assets increased by $2.0 million, or 1.4 percent, reflecting the rate increase
for sewer service, as manifest through the increase in cash and investments. However, total
liabilities increased by $4.2 million as a result of the implementation of GASB 75, which
accounted for the full OPEB liability.
13
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Table 5
Change in Business-type Net Position
(In Millions)
2017-18 2016-17
Expenses
Sewer Enterprise $ 24.4 $ 22.7
Parking District 1.2 0.9
Storm Water 1.0 1.3
Total expenses 26.6 24.9
Revenues
Program Revenues
Charges for Services 24.2 21.2
Operating grants and contributions 5.8 5.8
Total program revenues 30.0 27.0
General revenues
Investment earnings 0.0 0.0
Total general revenues 0.0 0.0
Excess (deficiency) before transfers 3.4 2.1
Transfers 2.0 1.1
Change in net position 5.4 3.2
Net position -beginning (as adjusted) 87.9 90.2
Net position -ending $ 93.3 $ 93.4
Business activity expenses increased $1. 7 million compared to the prior year, particular I y in Sewer
Enterprise activities, largely due to the increase in the Sewer Fund's share of the net OPEB liability.
The Business-type Activities' share of the Net OPEB liability, in compliance with GASB 75, was
$5.9 million. Business activity revenues increased by $3.0 million, reflecting a sanitary sewer
service fee rate increase.
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
Governmental Funds
Governmental funds highlight the City's near-term inflows, outflows, and balances of spendable
resources. Such information can be helpful in determining the City's financial status. Unrestricted
fund balance is a major indicator of designated and uncommitted resources available for spending
in future fiscal years.
At June 30, 2018, the City's governmental funds reported combined fund balances of $139.9
million, an increase of $28.5 million, or 25.6 percent compared to the prior year.
14
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
The General Fund ending fund balance was $61.3 million, reflecting an increase of $5.0 million,
or 8.9 percent. The change in fund balance was largely attributable to the robust development
climate in South San Francisco.
Total governmental fund revenues increased by $38.1 million, from $118.0 million to $156.1
million, primarily due to increases in sales tax and charges for services, which were indicative of
the vitality of the local economy and development environment.
Total governmental fund expenditures increased by $17.6 million, from $102.5 million to $120.1,
or 17 .2 percent, largely due to the purchase of land from the Successor Agency for the site of the
future community civic campus in the amount of $7.1 million. In addition, the City's personnel
costs for salaries and pensions increased in accordance with negotiated increases and increases in
the cost for various benefits, primarily pensions and healthcare.
Comparison of Final Budgets to Original Adopted Budget
The budget is initially adopted by the City Council in June, based on revenue projections that are
up to date through May. Between May and the end of the fiscal year, there can be major
fluctuations in revenues depending on the economy and/or actions by the State of California. There
can also be significant changes to departmental expenditure budgets to the extent unforeseen
expenses occur. In the Fund Financial Statements, the page titled "Statement of Revenues,
Expenditures, and Changes in Fund Balances Budget and Actual" later in this document shows
the initial adopted and final budgets for the General Fund. Significant changes between the adopted
and final budgets are described below:
15
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Table 6
Comparison of Final Budgets to Original Adopted Budget (in Thousands)
Original Final Pct Discussion:
Revenues Budget Bu~et Cha~e Cha~e (Items of more than 5% and $100,000 variance}
Property taxes $ 26,878 $ 33,761 $ 6,883 25.6% Reflects reclassification of Property Tax In Lieu of VLF
from Intergovernmental category
Sales taxes 25,448 25,448
Transient occupancy 14,800 14,800 taxes
Account for prevalence of transportation network
Other taxes 6,043 5,343 (700) -11.6% companies, such as Uber and Lyft, and their impact on the
City's commercial parking tax revenues.
Franchise Fee 4,000 4,000
Reflects reclassification of Property Tax In Lieu of VLF to
Intergovernmental 7,025 2,021 (5,004) -71.2% Property Taxes category offset by cost reimbursement
from California Office of Emergency Services (CalOES)
for mutual aid provided by the Fire Department
Interest and rentals 6,481 7,001 520 8.0%
Amended budget to account for sale of a City-owned
property.
Licenses and permits 9,232 10,232 1,000 10.8% Increased permit revenue due to robust development.
Charges for services 8,934 9,329 395 4.4%
16
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 Budget Budget Cha~e Change (Items of more than 5% and $100,000 variance!
City Council $ 247 $ 247 $
City Clerk 643 667 24 3.7%
City Treasurer 131 136 5 3.8%
City Attorney 913 1,038 125 13.7%
The robuc;t pace ofbuc;iness required the City Attorney to
invest a significant m.unber ofbillable hours to meet demand.
City Manager 1,961 3,167 1,206 61.5%
Accounts fur carryover purchase orders fur proressional
services primarily related to the Oyster Point development.
Finance Accounts fur carryover purchase orders fur implementation
2,596 3,424 828 31.9% of the new Human Capital Management System (HCMS).
Non-Departmental 1,081 1,108 27 2.5%
Human Resources 1,625 1,699 74 4.6%
Fire 28,814 29,348 534 1.9%
Police 27,865 27,204 (661) -2.4%
PublicWotks 4,315 5,340 1,025 23.8% Carryover purchase orders from prior year fur operation of
South City Shuttle.
Parks and Recreation 15,553 15,929 376 2.4%
Library 5,361 5,575 214 4.0%
Economic and 7,216 10,773 3,557 49.3% Accounts fur carryover purchase orders from prior year fur
Commmity Development plan review and building inspection proressional services.
Total $ 98,321 $105,655 $ 7,334 7.5%
17
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
Analysis of Major Governmental Funds
General Fund
In FY 2017-18, total General Fund revenues, excluding transfers in, were $122.9 million, which
was $10. 6 million, or 9 .4 percent over the final amended budget. Total General Fund expenditures,
excluding transfers out, ended FY 2017-18 at $96.7 million, which was $1.8 million, or 1.7 percent
under budget. Overall, including transfers, the General Fund ended FY 2017-18 with a surplus of
$5.0 million, predominantly due to the items discussed below.
Sales tax revenues, including Measure W, was $3.3 million over budget, which was indicative of
the strong economic base in South San Francisco, where each nearly every business category
increased its taxable sales on a year-over-year basis.
Permit revenues were $4.4 million over budget, setting an all-time record for a fiscal year, largely
attributable to non-residential development in the East of 101 area and high density residential
development in the downtown area. The increase in revenue also reflected the City Council's
approval of a comprehensive fee study that improved the cost recovery rate from 57 to 81 percent.
Intergovernmental revenue was $590 thousand over budget largely due to the South San Francisco
Fire Department's participation in mutual aid activities during a particularly active fire season.
Charges for services was $1.6 million over budget, reflecting the Fire Department's efforts to
refine its ambulance billing practices, which generated $3 .2 million in revenue, compared to the
$2.2 million in budget.
General Fund expenditures, excluding transfers out, were $1.8 million under budget, largely
reflecting salary savings due to staff vacancies in the Police Department and Economic and
Community Development Department. Compared to the prior year, General Fund expenditures
increased from $92.4 million to $103.8 million. However, the latter figure includes the purchase
of land from the Successor Agency to the Former Redevelopment Agency in the amount of $7.1
million for the future location of the City's community civic campus. Excluding the latter, General
Fund expenditures increased by $4.3 million, or 4.7 percent, largely due to increases in employee
salary and benefits.
As of June 30, 2018, the General Fund total fund balance was $61.3 million, which included $16.7
million in committed reserves, $20.6 million in restricted reserves, and $19 .6 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.
18
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
City Housing Fund
Up until Redevelopment Agencies were abolished in FY 2011-12 by the State of California under
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 2017-18, the City Housing Fund received for $1.2 million in revenues, which included $171
thousand in rent, $53 thousand in interest income, and $408 thousand in loan repayments.
Excluding a year-end entry to account for repayment of a loan that was written off in a prior fiscal
year, the fund had $90 thousand in expenses, the majority of which was for administrative staff
costs to support the City's Housing Division.
Capital Improvement Fund
The City consolidates and reports its governmental fund-type capital project expenditures in this
fund. Resources consist of transfers from the General Fund, major and non-major funds, developer
impact fees, and gasoline taxes and transportation sales taxes from non-major governmental funds.
Resources also come from federal, state, and local grants, contributions from other cities, utilities
and private developers. Entire capital projects are appropriated in one-year, but expended over
multiple years, with unspent appropriations carried forward year-to-year until completion.
Developer Impact Fees
In FY 2017-18, commensurate with the robust development climate in South San Francisco, and
to ensure that new development pays its fair share of the impact on the City's capital and
infrastructure, the City accounted for over $18 million in developer impact fees, including $2.3
million in East of 101 Sewer Impact Fees, $5.7 million in East of 101 Traffic Impact Fees, $1.3
million in Child Care Impact Fees, and $2.4 million in Oyster Point Interchange Impact Fees.
19
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. 8 million in FY 2017-18. Operating revenues increased from $25. 7
million to $28.3 million, an increase of 10.1 percent, which reflected the increase in sewer service
fees needed to support significant capital improvements, including wet weather capacity and
digester replacement. Operating expenses increased from $21. 5 million to $23. 5 million, primarily
within personnel expenses, which increased by $1.8 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 2017-18, operating revenues increased from $917 thousand to $1.1 million principally due
to additional revenues from parking meters, reflecting the City's investment in smart meter
technology. Operating expenses increased from $937 thousand to $1 .3 million due to the purchase
and implementation of smart meters. Net position decreased slightly by $115 thousand to $13.8
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 $406 thousand, primarily
from a levy on property owners. Transfers in totaled $2.0 million, which came from the Gas Tax
Fund in the amount of $670 thousand, $1.2 million from the General Fund, and $161 thousand
from the Solid Waste Fund. Expenses totaled $1.0 million, which was largely static compared to
the prior fiscal year. Net position increased from $1.4 million to $3.0 million, an increase of $1.6
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.
20
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
The City reports the depreciated book value of other types of capital assets such as buildings,
land, equipment and furniture, on the City-wide Statement of Net Assets. Such information is
summarized below and is more completely detailed in Note 3 to the Basic Financial Statements.
The City depreciates all its capital assets, except land and construction in progress.
At June 30, 2018, the City had $379.9 million in capital assets, net of depreciation, representing a
slight decrease of $ 1. 0 million from the prior year, as the depreciation recorded in FY 2017-18
was greater than the capital additions.
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
2018 2017
Governmental Activities:
Land $ 67.2 $ 70.2
Buildings and improvements 94.9 91.5
Equipment and vehicles 21.9 21.6
Furniture and fixtures 2.6 2.6
Infrastructure -streets* 195.0 195.0
Infrastructure -traffic control devices* 10.1 9.5
Infrastructure -storm drains* 8.9 8.9
Construction in progress 18.0 10.8
Less accumulated depreciation (162.9) (154.1)
Totals $ 255.7 $ 256.0
* Additions during the fiscal year only
Business-type Activities
Land $ 0.8 $ 1.4
Buildings and improvements 66.9 66.7
Clean water facilities and transmission line 75.5 75.5
Infrastructure -storm drains 4.8 4.8
Infrastructure -streets 7.4 7.4
Equipment and vehicles 18.5 18.5
Construction in progress 11.2 6.9
Less accumulated depreciation (61.0) (56.3)
Totals $ 124.1 $ 124.9
Total City $ 379.8 $ 380.9
21
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
Table 8
Outstanding Debt
(In Millions) at June 30
Loan payable to Successor Agency
Capital leases
Total Governmental Activities Outstanding Debt
Business-type Activities
State Water Resources Board loans
2005 Sewer Bonds
Total Business-type Activities Outstanding Debt
$
$
$
$
2018 2017
8.3 $ 10.7
1.1 1.7
9.4 $ 12.4
30.8 $ 35.1
3.2 3.6
34.0 $ 38.7
The decline in Business-type Activities outstanding debt of $4. 7 million is the result of scheduled
repayments.
The largest remaining debt obligations are the following:
-Three loans to the City's Sewer Enterprise Fund from the State Water Resources
Control Board to finance the expansion of the City's water quality control plant and
pay for Wet Weather improvements which will improve environmental impacts on
the Bay. Principal and interest repayments commence on the loans upon completion
of the project related to each loan package. The three current loans outstanding have
fixed interest of 2.6%, 2.5% and 2.4% are due in 2022, 2026 and 2028. Because of
the regional benefits and equity interest in these projects, the City of San Bruno shares
in the loan repayments for the first two of the three current loans.
ECONOMIC OUTLOOK AND MAJOR ACCOMPLISHMENTS
The economic outlook and major accomplishments of the City are discussed in the accompanying
Transmittal Letter.
22
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT'S DISCUSSION AND ANALYSIS
Required Supplementary Information
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This Comprehensive Annual Financial Report is intended to provide readers with a general
overview of the City's finances. Questions about this report or requests for additional financial
information should be directed to the City of South San Francisco Finance Department, P .O. Box
711 , South San Francisco , CA 94083 , and phone (650) 877-8512. The City's website is at
www.ssf.net.
23
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This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
STATEMENT OF NET POSffiON
JUNE 30, 2018
Component Unit
Primary Government South San Francisco
Governmental Business-Type Conference
Activities Activities Total Center
ASSETS
Cash and investments (Note 2) $146,586,423 $24,340,291 $170,926,714 $3,844,563
Receivables:
Accounts 10,131,428 402,726 10,534,154 315,398
Accrued interest 672,965 95,268 768,233
Loans 1,937,912 1,937,912
Deposit 203,510 203,510 7,397
Inventory 106 106
Other
Restricted cash and investments (Note 2) 449,017 40 449,057 482,596
Internal balances (Note 4A) 17,670 (17,670)
Properties held for redevelopment (Note lN) 22,482,335 22,482,335
Capital assets (Note 3):
Nondepreciable 85,260,542 11,957,484 97,218,026 43,289
Depreciable, net accumulated depreciation 170,444,603 112,185,925 2822630,528 3,534,888
Total Assets 438,186,511 148,964,064 587,150,575 8,228,131
DEFERRED OUTFLOW OF RESOURCES
Related to pension (Note 7) 40,301,062 4,477,896 44,778,958
Related to OPEB (Note 9) 3,714,780 412,753 4,127,533
Total Deferred Outflow of Resources 44,015,842 4,890,649 48,906,491
LIABILITIES
Accounts payable 3,527,973 691,010 4,218,983 432,698
Accrued salaries and benefits 3,027,256 3,027,256 72,949
Accrued interest payable 572,643 572,643
Other payable 3,220,009 212,419 3,432,428
Deposits 1,721,453 7,500 1,728,953 422,999
Unearned revenue 855,541 855,541
Accrued insurance losses (Note 11 ):
Due within one year 660,356 660,356
Due in more than one year 12,133,000 12,133,000
Compensated absences obligation (Note IL}:
Due within one year 4,113,425 462,143 4,575,568
Due in more than one year 2,459,623 95,304 2,554,927
Debt and capital lease obligations (Note 5):
Due within one year 381,482 4,782,037 5,163,519 460,000
Due in more than one year 9,062,771 29,263,465 38,326,236
Net OPEB Liability• due in more than one year (Note 9) 53,361,000 5,929,000 59,290,000
Net pension liability• due in more than one year (Note 7) 164,584,728 18,287,192 182,871,920
Total Liabilities 259,108,617 60,302,713 319,411,330 1,388,646
DEFERRED INFLOW OF RESOURCES
Related to pension (Note 7) 1,610,985 178,998 1,789,983
Related to OPEB (Note 9) 429 300 47,700 477,000
Total Deferred Inflow of Resources 2,040,285 226,698 2,266,983
NET POSmON (Note 6)
Net investment in capital assets 254,570,044 90,097,907 344,667,951 3,118,177
Restricted for:
Debt service 482,596
Special revenue projects 26,536,005 26,536,005
Capital projects 49,198,648 49,198,648
Redevelopment and community development activities 20,582,335 20,582,335
Total Restricted Net Position 96,316,988 96,316,988 482,596
Unrestricted {129,833,581} 3,227,395 {126,606,186} 3,238,712
Total Net Position $221,053,451 $93,325,302 $314,378,753 $6,839,485
See accompanying notes to financial statements
27
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, 2018
Expenses
$12,506,188
30,352,387
30,732,288
18,379,278
17,162,377
Charges for
Services
Program Revenues
Operating
Grants and
Contributions
$1,121,145
8,748
712,190
Economic and Community Development
5,910,406
10,094,626
$1,966,755
6,327,921
2,230,824
24,727,897
4,489,665
102,124
13,052,441
1,925,278
802,098
438,966
818,724
Total Governmental Activities
Business-type Activities
Sewer
Parking District
Storm Water
Total Business-type Activities
Total Primary Government
Component Unit
Conference Center
125,137,550
24,397,607
1,202,319
1,026,948
26,626,874
$151,764,424
$3,690,910
General revenues:
Taxes:
Property taxes
Sales taxes
52,897,627
22,417,156
1,084,472
656,315
24,157,943
$77,055,570
$2,146,762
Transient occupancy taxes
Franchise Fees
Other taxes
Motor vehicle in lieu, unrestricted
Property taxes in lieu of vehicle license fees
Investment earnings
Miscellaneous
Special Item:
5,827,149
5,834,455
5,834,455
$11,661,604
Remittance of land sale proceeds to taxing entities
Transfers (Note 4)
Total general revenues, special item and transfers
Change in Net Position
Net Position -Beginning, as adjusted (Note 1 S)
Net Position -Ending
See accompanying notes to financial statements
28
Capital
Grants and
Contributions
$2,515,868
2,515,868
$2,515,868
Net (Expenses) Revenues and Changes in Net Position
Primary Government Component Unit
South
San Francisco
Governmental Business-Type Conference
Activities Activities Total Center
($9,418,288) ($9,418,288)
(24,015,718) (24,015,718)
(27,789,274) (27,789,274)
10,789,765 10,789,765
(11,870,614) (11,870,614)
(5,369,316) (5,369,316)
3,776,539 3,776,539
(63,896,906) (63,896,906)
$3,854,004 3,854,004
(117,847) (117,847)
(370,633) (370,633)
3,365,524 3,365,524
(63,896,906) 3,365,524 (60,531,382)
($1,544,148)
29,551,445 29,551,445
28,340,393 28,340,393
13,978,533 13,978,533 2,150,818
4,403,493 4,403,493
5,871,096 5,871,096
34,452 34,452
6,438,199 6,438,199
1,097,916 37,072 1,134,988 27,795
5,180,288 5,180,288
(7,154,626) (7,154,626)
(1,997,377) 1,997,377
85,743,812 2,034,449 87,778,261 2,178,613
21,846,906 5,399,973 27,246,879 634,465
199,206,545 87,925,329 287,131,874 6,205,020
$221,053,451 $93,325,302 $314,378,753 $6,839,485
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 2018. fudividual
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
Loans
Due from other funds (Note 4B)
Inventory
Restricted cash and investments (Note 2)
Properties held for redevelopment (Note lN)
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, 2018
Low and Moderate
General Income
Fund Housing Assets
$37,648,050 $4,730,196
7,734,046 6,989
213,239 20,905
1,020,193
70,000
106
200,000
20,582,335
$66,447,776 $5,778,283
$1,307,966 $34
3,027,256
290,552
411,025
124,085
5,160,884 34
106
20,582,335 5,778,249
16,725,897
4,334,322
19,644,232
61,286,892 5,778,249
$66,447,776 $5,778,283
See accompanying notes to basic financial statements
32
CaJ:!ital Projects Funds
East oflOl
Capital Sewer
Improvement Im2act Fees
$1,759,943 $2,824,513
1,943,123
14,389
$3,703,066 $2,838,902
$1,649,802
1,855,848
3,505,650
$2,838,902
197,416
197,416 2,838,902
$3,703,066 $2,838,902
East of 101
Traffic
Impact Fees
$12,404,652
55,153
$12,459,805
$12,459,805
12,459,805
$12,459,805
Capital Projects Funds
Child Care
Impact Fees
$4,670,804
21,607
$4,692,411
$4,692,411
4,692,411
$4,692,411
Developer
Deposit
$241
4,004
$4,245
$1,000
1,000
3,245
3,245
$4,245
33
Capital
Infrastructure
Reserve Fund
$21,517,290
68,196
$21,585,486
$21,585,486
21,585,486
$21,585,486
Other
Governmental
Funds
$30,837,598
447,270
140,149
917,719
249,017
1,900,000
$34,491,753
$345,271
998,819
1,310,428
731,456
69,000
3,454,974
31,245,268
(208,489}
31,036,779
$34,491,753
Total
Governmental
Funds
$116,393,287
10,131,428
537,642
1,937,912
70,000
106
449,017
22,482,335
$152,001,727
$3,303,073
3,027,256
3,145,219
1,721,453
855,541
70,000
12,122,542
106
99,185,701
16,725,897
4,334,322
19,633,159
139,879,185
$152,001,727
CITY OF SOUTH SAN FRANCISCO
GOVERNMENTAL FUNDS
BALANCE SHEET -RECONCILIATION OF GOVERNMENTAL
FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTMTIES
JUNE 30, 2018
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 service funds are used by management to charge the cost of management of
communication, telephone, building, fleet maintenance, equipment replacement, workers'
compensation, employee benefits, insurance, and post-retirement healthcare benefits to
individual funds. The assets and liabilities are included in Governmental Activities in the
Statement of Net Position.
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
Deferred outflows related to OPEB
Net OPEB liability
Net pension liability
Deferred inflows related to OPEB
Deferred inflows related to pension
Non-current portion of compensated absences
Net position of governmental activities
See accompanying notes to financial statements
34
$139,879,185
250,261,241
20,230,623
(8,309,152)
40,301,062
3,714,780
(53,361,000)
(164,584,728)
(429,300)
(1,610,985)
(5,038,275)
$221,053,451
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, 2018
CaJ!ital Projects Funds
Low and Moderate East ofl0l
General Income Capital Sewer
Fund Housing Assets Iml!rovement Iml!act Fees
REVENUES
Property taxes $34,143,627
Sales taxes 28,728,427
Transient occupancy taxes 13,978,533
Franchise Fees 4,403,493
Other taxes 5,871,096
Intergovernmental 2,610,233 $3,079,247
Interest and rentals 2,846,967 $585,166 $2,654
Licenses and permits 14,674,809
Charges for services 10,924,668 2,262,536
Fines and forfeitures 423,604
Other 266,872 625,000
Total Revenues 118,872,329 1,210,166 3,079,247 2,265,190
EXPENDITURES
Current:
City Council 239,264
City Clerk 660,306
City Treasurer 135,218
City Attorney 996,380
City Manager 2,691,066
Finance 3,080,769
Non-departmental 1,049,187 2,575
Human Resources 1,541,524
Fire 26,059,072
Police 26,639,009
Public Works 5,014,343 13,010,889
Parks and Recreation 15,468,370
Library 5,379,836
Economic and Community Development 7,722,689 90,095
Other
Debt service:
Principal repayments
Total Expenditures 96,677,033 90,095 13,010,889 2,575
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 22,195,296 1,120,071 {9,931,642} 2,262,615
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 3,990,605
Transfers in (Note 4C) 6,269,262 10,217,389
Transfers out (Note 4C) {20,317,868) {111,936)
Total Other Financing Sources (Uses) {10,058,001) 10,217,389 {111,936}
Net Change in Fund Balances before special items 12,137,295 1,120,071 285,747 2,150,679
SPECIAL ITEMS
Remittance ofland sale proceeds {7,154,626}
Net Change in Fund Balances 4,982,669 1,120,071 285,747 2,150,679
Fund balances (deficits) -July 1 56,304,223 4,658,178 (88,331) 688,223
Fund balances (deficits) -June 30 $61,286,892 $5,778,249 $197,416 $2,838,902
See accompanying notes to financial statements
36
Capital Projects Funds
East oflOl Capital Other Total
Traffic Child Care Developer Infrastructure Governmental Governmental
Impact Fees Impact Fees Deposit Reserve Fund Funds Funds
$1,846,017 $35,989,644
28,728,427
13,978,533
4,403,493
1,615,723 7,486,819
2,743,760 8,433,240
$17,423 $5,928 $14,864 51,725 3,524,727
14,674,809
5,698,649 1,289,382 11,786,184 31,961,419
423,604
5,562,588 6,454,460
5,716,072 1,295,310 14,864 23,605,997 156,059,175
239,264
660,306
135,218
996,380
2,691,066
3,080,769
2,575 4,585 1,058,922
1,541,524
26,059,072
331,845 26,970,854
2,575 12 $69,639 5,761,941 23,859,399
15,468,370
5,379,836
1,526,009 9,338,793
256,298 256,298
2,382,000 2,382,000
2,575 2,587 69,639 10,262,678 120,118,071
5,713,497 1,292,723 (69,639) 14,864 13,343,319 35,941,104
3,990,605
10,000,000 26,486,651
(299,685) (2,954,823) (7,111,629) {30,795,941)
(299,685) 7,045,177 F,111,629) (318,685)
5,413,812 1,292,723 (69,639) 7,060,041 6,231,690 35,622,419
(7,154,626)
5,413,812 1,292,723 (69,639) 7,060,041 6,231,690 28,467,793
7,045,993 3,399,688 72,884 14,525,445 24,805,089 111,411,392
$12,459,805 $4,692,411 $3,245 $21,585,486 $31,036,779 $139,879,185
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, 2018
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
Long-Term Debt Payments
Repayment of principal is an expenditure in the governmental funds, but
in the Statement of Net Position the repayment reduces long-term liabilities.
Repayment of principal is added back to fund balance
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, deferred outflows and inflows ofresources
Net OPEB liability, 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 ACTMTIES
See accompanying notes to financial statements
38
$28,467,793
12,294,753
(3,623,353)
(8,636,132)
2,382,000
(26,863)
(11,500,500)
(1,094,820)
3,584,028
$21,846,906
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-departmental
Human Resources
Fire
Police
Public Works
Parks and Recreation
Library
Economic and Community Development
Total charges to appropriations
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets
Transfers in (Note 4C)
Transfers out (Note 4C)
Total Other Financing Sources (Uses)
FOR THE YEAR ENDED JUNE 30, 2018
Budgeted Amounts
Original
$26,877,714
25,448,309
14,800,000
4,000,000
6,043,065
7,024,542
3,010,263
9,232,477
8,934,001
818,500
174,991
106,363,862
246,918
642,681
130,861
913,092
1,960,599
2,595,665
1,080,967
1,625,221
28,814,471
27,864,737
4,315,409
15,553,369
5,361,133
7,216,002
98,321,125
3,470,600
1,772,505
(12,089,033)
(6,845,928)
Final
$33,760,827
25,448,309
14,800,000
4,000,000
5,343,065
2,020,600
3,010,263
10,232,477
9,329,002
163,500
174,991
108,283,034
246,917
666,810
135,861
1,038,092
3,167,257
3,423,768
1,108,503
1,699,257
29,347,734
27,204,237
5,339,637
15,929,220
5,575,195
10,772,828
105,655,316
3,990,600
1,800,705
(20,493,106)
(14,701,801)
NET CHANGE IN FUND BALANCES BEFORE SPECIAL ITEMS 1,196,809 (12,074,083)
Special Item (Note 13G)
NET CHANGE IN FUND BALANCE
Fund Balance -July 1
Adjustment to budgetary basis:
Encumbrance adjustments
Fund Balance -June 30
(7,154,626)
$1,196,809 ($19,228,709)
See accompanying notes to financial statements
39
Actual
Amount
$34,143,627
28,728,427
13,978,533
4,403,493
5,871,096
2,610,233
2,846,967
14,674,809
10,924,668
423,604
266,872
118,872,329
239,264
660,306
135,218
996,380
2,937,733
3,423,017
1,107,187
1,698,958
26,763,505
26,639,009
5,339,181
15,649,568
5,394,725
10,027,304
101,011,355
3,990,605
6,269,262
(20,317,868)
(10,058,001)
7,802,973
(7,154,626)
648,347
56,304,223
4,334,322
$61,286,892
Variance with
Final Budget
Positive
(Negative)
$382,800
3,280,118
(821,467)
403,493
528,031
589,633
(163,296)
4,442,332
1,595,666
260,104
91,881
10,589,295
7,653
6,504
643
41,712
229,524
751
1,316
299
2,584,229
565,228
456
279,652
180,470
745,524
4,643,961
5
4,468,557
175,238
4,643,800
19,877,056
$19,877,056
CITY OF SOUTH SAN FRANCISCO
LOW AND MODERATE INCOME HOUSING ASSETS
SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2018
REVENUES:
Interest and rental
Other
Total Revenues
EXPENDITURES:
Current:
Economic and Community Development
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
NET CHANGE IN FUND BALANCE
Fund balance -July 1
Fund balance -June 30
Budget
$167,000
140,000
307,000
543,597
543,597
(236,597)
($236,597)
See accompanying notes to financial statements
40
Actual Amounts
$585,166
625,000
1,210,166
90,095
90,095
1,120,071
1,120,071
4,658,178
$5,778,249
Variance with
Final Budget
Positive
(Negative)
$418,166
485,000
903,166
453,502
453,502
1,356,668
$1,356,668
MAJOR PROPRIETARY FUNDS
Proprietary funds account for City operations financed and operated in a manner similar to a private
business enterprise. The intent of the City is that the cost of providing goods and services be financed
primarily through user charges.
SEWER ENTERPRISE FUND
This fund accounts for user charges and debt proceeds supporting the operation, maintenance, and capital
expansion of the wastewater collection and treatment system.
PARKING DISTRICT FUND
This fund accounts for meter and parking permit fees used to acquire and maintain parking facilities.
STORM WATER FUND
This fund accounts for user charges sustaining the Storm Water Management Program mandated by state
and federal authorities.
41
CITY OF SOUTH SAN FRANCISCO
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2018
Governmental
Business•!l'.l!e Activities -Ente!}!rise Funds Activities
Sewer Parking Storm Internal
Ente!}!rise District Water Total Service Funds
ASSETS
Current assets:
Cash and investments (Note 2) $20,364,113 $2,906,567 $1,069,611 $24,340,291 $30,193,136
Receivables:
Accounts 180,476 222,250 402,726
Accrued interest 77,379 12,295 5,594 95,268 135,323
Deposit 203,510
Restricted cash and investments (Note 2) 40 40
Total current assets 20,622,008 2,918,862 1,297,455 24,838,325 30,531,969
Noncurrent assets:
Capital assets (Note 3):
Nondepreciable 9,950,018 421,149 1,586,317 11,957,484
Depreciable, net accumulated depreciation 101,379,368 10,525,499 281,058 112,185,925 5,443,904
Total non-current assets 111,329,386 10,946,648 1,867,375 124,143,409 5,443,904
Total Assets 131,951,394 13,865,510 3,164,830 148,981,734 35,975,873
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 7) 4,477,896 4,477,896
Related to OPEB (Note 9) 412,753 412,753
Total Deferred Outflows of Resources 4,890,649 4,890,649
LIABILITIES
Current liabilities:
Accounts payable 548,848 40,799 101,363 691,010 224,900
Other payable 139,325 12,595 60,499 212,419 74,790
Accrued interest payable 572,643 572,643
Deposits payable 7,500 7,500
Accrued insurance loss (Note 11) 660,356
Compensated absences obligation (Note IL) 442,017 3,852 16,274 462,143 782,399
Current portion oflong-term debt (Note 5) 4,782,037 4,782,037 381,482
Total current liabilities 6,492,370 57,246 178,136 6,727,752 2,123,927
Noncurrent liabilities:
Accrued insurance losses (Note 11) 12,133,000
Compensated absences obligation (Note IL) 76,860 14,252 4,192 95,304 752,374
Noncurrent portion oflong-term debt (Note 5) 29,263,465 29,263,465 753,619
Net OPEB liability (Note 9) 5,929,000 5,929,000
Net pension liability (Note 7) 18,287,192 18,287,192
Total noncurrent liabilities 53,556,517 14,252 4,192 53,574,961 13,638,993
Total Liabilities 60,048,887 71,498 182,328 60,302,713 15,762,920
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 7) 178,998 178,998
Related to OPEB (Note 9) 47,700 47,700
Total Deferred Inflows ofresources 226,698 226,698
NET POSITION:
Net investment in capital assets 77,283,884 10,946,648 1,867,375 90,097,907 4,308,803
Unrestricted (deficit) (717,4262 2,847,364 1,115,127 3,245,065 15,904,150
Total Net Position $76,566,458 $13,794,012 $2,982,502 93,342,972 $20,212,953
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 (17,6702
$93,325,302
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, 2018
OPERATING REVENUES
Charges for services
Other cities' participation
Permit fees
Parking fees
Total Operating Revenues
OPERATING EXPENSES
Personnel expenses
Professional services
OPEB Expenses
Program supplies
Insurance
Self-insurance and claims
Repair and maintenance
Rents and leases
Utilities
Administration
Depreciation
Other
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
Interest income
Gain on dispositions of capital assets
Interest expense
Other
Total Nonoperating Revenues (Expenses)
Income Ooss) before transfers
TRANSFERS
Transfers in (Note 4C)
Transfers out (Note 4C)
Change in Net Position
Net Position (Deficits) -July 1, as adjusted (Note lS)
Net Position (Deficits) -June 30
Business-type Activities -Enterprise Funds
Sewer Parking Storm
Enterprise District Water
$22,188,154 $406,064
5,834,455
229,002
$1,084,472
28,251,611 1,084,472 406,064
9,994,530 312,306 738,170
1,402,393 545,367 104,526
535,039
1,279,487 34,038 97,758
187,983 3,297
1,266,432
1,639,863
1,369,865 52,317 11,025
1,344,292 103,927 65,422
4,414,042 253,826 14,779
54,056 175
23,487,982 1,301,781 1,035,152
4,763,629 (217,309) (629,088)
31,058 4,071 1,943
4,816 97,829
(964,352)
250,251
~928,478) 101,900 252,194
3,835,151 (115,409) (376,894)
111,936 2,023,518
(54,549) (83,528)
3,892,538 (115,409) 1,563,096
72,673,920 13,909,421 1,419,406
$76,566,458 $13,794,012 $2,982,502
Change in Net Position
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
Change in Net Position of Business-Type Activities
See accompanying notes to financial statements
43
Total
$22,594,218
5,834,455
229,002
1,084,472
29,742,147
11,045,006
2,052,286
535,039
1,411,283
191,280
1,266,432
1,639,863
1,433,207
1,513,641
4,682,647
54,231
25,824,915
3,917,232
37,072
102,645
(964,352)
250,251
(574,384)
3,342,848
2,135,454
(138,077)
5,340,225
88,002,747
$93,342,972
$5,340,225
59,748
$5,399,973
Governmental
Activities
Internal
Service Funds
$24,202,306
24,202,306
16,276,600
834,441
1,122,727
1,594,759
1,486,551
424,366
29,271
838,208
351,645
22,958,568
1,243,738
34,256
43,028
(47,430)
58,271
88,125
1,331,863
2,496,000
(184,087)
3,643,776
16,569,177
$20,212,953
CITY OF SOUTH SAN FRANCISCO
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2018
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 $28,330,736 $1,084,472 $434,065 $29,849,273
Cash payment to suppliers for goods and services (9,281,263) (101,100) (160,632) (9,542,995) ($4,738,364)
Cash payment to employees for services (8,531,421) (313,852) (731,323) (9,576,596) (16,130,836)
Cash received from interfund service provided 24,270,705
Cash payment for judgments and claims (1,666,137)
Net Cash Provided by (Used in) Operating Activities 10,518,052 669,520 (457,890) 10,729,682 1,735,368
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in 111,936 2,023,518 2,135,454 2,496,000
Transfers out (54,549) (83,528) (138,077) (184,087)
Net Cash Provided by Noncapital Financing Activities 57,387 1,939,990 1,997,377 2,311,913
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Principal paid on Jong-term debt (4,660,530) (4,660,530) (538,422)
Interest paid on Jong-term debt (1,048,997) (1,048,997) (47,430)
Acquisition of capital assets, net (3,162,193) (1,392,298) (4,554,491) (493,263)
Proceeds from the sale of capital assets 4,816 97,829 102,645 46,283
Net Cash Used in Capital and Related Financing Activities (8,866,904) 97,829 (1,392,298) (10,161,373) (1,032,832)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 180,692 26,873 12,720 220,285 292,956
Changes in market value of investments (174,303) (27,695) (12,600) (214,598) (304,825)
Net Cash Provided by Investing Activities 6,389 (822) 120 5,687 (11,869)
Net Increase (Decrease) in cash and cash equivalents 1,714,924 766,527 89,922 2,571,373 3,002,580
Cash and cash equivalents, beginning 18,649,229 2,140,040 979,689 21,768,958 27,190,556
Cash and cash equivalents, ending $20,364,153 $2,906,567 $1,069,611 $24,340,331 $30,193,136
Reconciliation ofoperating income (loss) to net cash
provided by operating activities:
Operating income (loss) $4,763,629 ($217,309) ($629,088) $3,917,232 $1,243,738
Adjustments to reconcile operating income (loss)
to cash flows from operating activities:
Depreciation 4,414,042 253,826 14,779 4,682,647 838,208
Other non-operating revenue (expenses) 250,251 250,251 58,271
Net change in assets and liabilities:
Accounts and lease receivables 79,125 (222,250) (143,125) 10,128
Accounts payable (160,757) 627,428 61,072 527,743 35,417
Other payable (41,096) 7,121 60,499 26,524 (302,688)
Accrued insurance losses (179,586)
(Decrease) increase due to OPEB 121,647 121,647
Compensated absence obligations 63,629 (1,546) 6,847 68,930 31,880
(Decrease) increase due to retirement system 1,277,833 1,277,833
Net Cash Provided by (Used in) Operating Activities $10,518,052 $669,520 ($457,890) $10,729,682 $1,735,368
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, 2018
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
Total Liabilities
NET POSITION
Held in trust for other purposes
Successor
Agency
Private Purpose
Trust Fund
$4,334,021
2,943
24,201
8,309,152
189,167
37,087,907
940,534
264,723
$51,152,648
$8,990
4,750
37,519
537,000
285,000
873,259
$50,279,389
See accompanying notes to financial statements
46
Agency Fund
SSF Employee
Def Comp
Trust
Oversight
$82,265
400
$82,665
$2,602
80,063
$82,665
CITY OF SOUTH SAN FRANCISCO
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2018
ADDITIONS
Intergovernmental
Interest and rentals
Total Additions
DEDUCTIONS
Economic and Community Development
Interest expense
Depreciation
Total Deductions
SPECIAL ITEMS
Loss from conveyance of property to County (Note 13C)
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
$9,966,945
660,489
10,627,434
3,868,549
18,412
27,408
3,914,369
1,809,008
1,809,008
4,904,057
45,375,332
$50,279,389
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
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 soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
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
fmanced 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 fmancial 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
fmancial 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
Maj or funds are defmed as funds that have either assets, liabilities, revenues or
expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand
total. The General Fund is always a major fund. The City may also select other funds it believes
should be presented as major funds.
The City reported the following major governmental funds in the accompanying fmancial
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 soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
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, 2018
J 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 fmancial
statements.
F. Basis of Accounting
The government-wide, proprietary, private-purpose trust fund, and discretely presented
component unit fmancial 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, fmes 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 fmance 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, fmes, forfeitures, licenses, permits,
charges for services, and program grants as program revenues.
52
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
!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, 2018.
Encumbrance accounting, under which, purchase orders, contracts and other commitments for the
expenditure of funds are recorded in order to reserve that portion of the applicable appropriation,
is employed as an extension of the budgetary process. Encumbrances outstanding at year-end are
reported as reservations of fund balances since they do not constitute expenditures or liabilities.
Encumbrances are reappropriated in the following year.
The budgetary comparison statements present comparisons of the legally adopted budget with
actual charges to appropriations on a budgetary basis. In order to provide a meaningful
comparison, the actual charges on a budgetary basis include encumbrances, which is a basis that
differs significantly from those used to present financial statements in conformity with generally
accepted accounting principles.
Certain indirect costs are included in program expenses reported for individual functions and
activities.
H. Cash Equivalents -For purposes of the statement of cash flows, the City considers all highly
liquid investments (including all restricted assets) with maturity of three months or less when
purchased to be cash equivalents. The City maintains a cash and investment pool that is available
for use by all funds. As the proprietary funds' share of this pool is readily available when needed,
such share is also considered to be cash equivalent. Deposit assets in the proprietary funds are
related to insurance and benefits and are not considered cash equivalents for purposes of the
statement of cash flows.
53
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
!NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
L Inventory and Prepaid Items -consist of consumable supplies. Inventory is stated at cost (first-
in, first-out method). The costs are recorded as expenditures at the time the individual inventory
or prepaid item is consumed. Reported inventory and prepaid items are equally offset by a fund
balance reservation, which indicates that they do not constitute "available spendable resources"
even though they are a component of net current assets.
J. Capital Assets -Donated capital assets, donated works of art and similar items, and capital assets
received in a service concession arrangement are valued at acquisition value. All other capital
assets are valued at historical cost or estimated historical cost if actual historical cost is not
available.
The purpose of depreciation is to spread the cost of capital assets equitably among all users over
the life of these assets. The amount charged to depreciation expense each year represents that
year's pro rata share of the cost of capital assets.
Depreciation is provided using the straight line method which means the cost of the asset is
divided by its expected useful life in years and the result is charged to expense each year until the
asset is fully depreciated. The City has assigned the useful lives listed below to capital assets:
Buildings
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.
K. Vacation and Sick Pay -are accrued as earned. Upon termination, employees are paid for all
unused vacation at their current hourly rates. After five to twenty years of employment, one half
of accumulated sick leave becomes vested, up to a maximum amount as specified under labor
contract provisions. The vested portion is available for current use or, if unused, is payable at
termination or retirement.
The long-term portion of the liability for compensated absences for governmental fund type
operations is recorded as compensated absences in the government-wide financial statements.
The portion expected to be permanently liquidated is recorded in the Health and Retirement
Benefits Internal Service Fund. Proprietary fund liabilities are recorded within their respective
funds.
54
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
The changes of the compensated absences were as follows:
Governmental Business-Type
Activities Activities Total
Beginning Balance $6,514,305 $488,517 $7,002,822
Additions 4,721,179 554,826 5,276,005
Payments (4,662,436) (485,896) (5,148,332)
Ending Balance $6,573,048 $557,447 $7,130,495
Current Portion $4,113,425 $462,143 $4,575,568
Compensated absences are liquidated by the fund that has recorded the liability. The long-term
portion of governmental activities compensated absences is liquidated primarily by the Health
and Retirement Benefits Internal Service Fund.
L. Property Tax Levy, Collection and Maximum Rates -State of California Constitution Article
XIII A provides that the combined maximum property tax rate on any given property may not
exceed 1 % of its assessed value unless an additional amount for general obligation debt has been
approved by voters. Assessed value is calculated at 100% of market value as defined by Article
XIII A and may be adjusted by no more than 2% per year unless the property is sold, transferred,
or substantially improved. The State Legislature has determined the method of distribution of
receipts from a 1 % tax levy among the counties, cities, school districts and other districts. The
County of San Mateo assesses properties, bills for and collects property taxes on the schedule that
follows:
Valuation/lien dates
Levy dates
Due dates ( delinquent as of)
Secured
January 1
July 1
50% on November 1 (December 10)
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.
M. Properties held for redevelopment -is stated at the lower of historical cost or net realizable value
( equal to agreed upon sales price if a disposition and development agreement has been reached
with a developer).
N. Unbilled Services -for the Sewer Rental Enterprise Fund are accrued at year-end.
55
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
0. Use of Estimates -The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the
dates of the financial statements and the reported amounts of revenues and expenditures/expenses
during the reporting periods. Actual results could differ •from those estimates.
P. Deferred Outflows/Inflows of Resources -In addition to assets, the statement of financial
position or balance sheet reports a separate section for deferred outflows of resources. This
separate financial statement element, deferred outflows of resources, represents a consumption of
net position or fund balance that applies to a future period(s) and so will not be recognized as an
outflow of resources (expense/expenditure) until then. In addition to liabilities, the statement of
financial position or balance sheet reports a separate section for deferred inflows of resources.
This separate financial statement element, deferred inflows of resources, represents an acquisition
of net position or fund balance that applies to a future period(s) and so will not be recognized as
an inflow of resources (revenue) until that time.
Q. New Accounting Pronouncements
Governmental Accounting Standards Board (GASB) Statement No. 75 -Accounting and
Financial Reporting for Post-employment Benefits Other than Pensions. The primary objective of
this Statement is to improve accounting and financial reporting by state and local governments for
post-employment benefits other than pensions ( other post-employment benefits or OPEB). It also
improves information provided by state and local governmental employers about financial
support for OPEB that is provided by other entities. This Statement replaces the requirements of
Statements No. 45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions, as amended, and No. 57, OPEB Measurements by Agent
Employers and Agent Multiple-Employer Plans, for OPEB. Statement No. 74, Financial
Reporting for Postemployment Benefit Plans Other Than Pension Plans, establishes new
accounting and financial reporting requirements for OPEB plans. This statement is effective for
the 2017-2018 fiscal year. The City has implemented this statement. See Notes 1 S and 9 for
additional information.
Governmental Accounting Standards Board (GASB) Statement No. 81 -Irrevocable Split-
Interest Agreements. This statement requires that a government that receives resources pursuant
to an irrevocable split-interest agreement recognize assets, liabilities and deferred inflows of
resources at the inception of the agreement. Furthermore, this statement requires that a
government recognize assets representing its beneficial interests in irrevocable split-interest
agreements that are administered by a third party, if the government controls the present service
capacity of the beneficial interests. This statement requires that a government recognize revenue
when the resources become applicable to the reporting period. This statement is effective for the
2017-2018 fiscal year and had no effect on the City's financial statements.
Governmental Accounting Standards Board (GASB) Statement No. 85 -Omnibus 2017. The
objective of this Statement is to address practice issues that have been identified during
implementation and application of certain GASB Statements. This Statement addresses a variety
of topics including issues related to blending component units, goodwill, fair value measurement
and application, and postemployment benefits (pensions and other postemployment benefits
[OPEB]). This statement is effective for the 2017-2018 fiscal year. The City has implemented
this statement. See Notes 7 and 9 for additional information.
56
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I
Governmental Accounting Standards Board (GASB) Statement No. 86 -Certain Debt
Extinguishment Issues. The primary objective of this Statement is to improve consistency in
accounting and financial reporting for in-substance defeasance of debt by providing guidance for
transactions in which cash and other monetary assets acquired with only existing resources-
resources other than the proceeds of refunding debt-are placed in an irrevocable trust for the
sole purpose of extinguishing debt. This Statement also improves accounting and financial
reporting for prepaid insurance on debt that is extinguished and notes to financial statements for
debt that is defeased in substance. This statement is effective for the 2017-2018 fiscal year and
had no effect on the City's financial statements.
R. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The City
categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation
techniques used to measure fair value into three levels based on the extent to which inputs used in
measuring fair value are observable in the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs -other than quoted prices included within level I -that are observable
for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the
fair value hierarchy, the measurement is considered to be based on the lowest priority level input
that is significant to the entire measurement.
S. Prior Period Adjustment
The implementation of GASB Statement No. 75 required the City to make prior period
adjustments. In addition, the City also determined that as of July 1, 2017, OPEB liability will no
longer be reported in the Health and Retirement Benefits Internal Service Fund. As a result, as of
July 1, 2017, the beginning net position of the Health and Retirement Benefits Internal Service
Fund was increased by $26,173,032, the beginning net position of the Governmental Activities
was reduced by $22,807,668, the beginning net positions of the Business-type Activities and
Sewer Enterprise Fund were both reduced by $5,442,300. See additional information in Note 9.
T. OPEB Liabilities, OPEB Expenses, and Deferred Outflows/Inflows of Resources Related to
OPEB
For purposes of measure the net OPEB liability, deferred outflows of resources and deferred
inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net
position of the City's OPEB Plan and additions to/deductions from the OPEB Plan's fiduciary net
position have been determined on the same basis as they are reported by the California
Employers' Retiree Benefit Trust (CERBT). For this purpose, benefit payments are recognized
when currently due and payable in accordance with the benefit terms. Investments are reported at
fair value.
57
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
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, 2018 are classified in the financial statements as shown
below, based on whether or not their use is restricted under the terms of City debt instruments or
agency agreements.
Financial Statement Presentation:
Statement of Net Position:
City of South San Francisco:
Cash and investments available for operations
Restricted cash and investments
Total Primary Government cash and investments
Statement of Fiduciary 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
58
$170,926,714
449,057
171,375,771
4,416,286
37,087,907
41,504,193
3,844,563
482 596
4,327,159
$217,207,123
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
J 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:
Minimum Maximum Maximum
Maximum Credit Percentage Investment
Authorized Investment TyPe Maturity Quality (A) of Portfolio in One Issuer
U.S. Treasury Obligations 5 years NIA No Limit No Limit
U.S. Agency Securities 5 years NIA No Limit 25%
Asset-Backed Securities 5 years AA 20% 5%
Commercial Paper 270 days Al,Pl 25% 5%
Negotiable Certificates of Deposit 5 years A-1 or A 30% 5%
Repurchase Agreements NIA AA No Limit No Limit
Local Agency Investment Fund (LAIF) Upon Demand NIA $65 million No Limit
Money Market Mutual Funds NIA Aaa 20% 10%
Corporate Medium-Term Notes 5 years A 30% 5%
Supranational Obligations 5 years AA 30% 10%
(A) The City's Investment Policy includes credit ratings provided by Standard and Poor's Investment
Rating System, or its equivalent.
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.
59
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 2 -CASH AND INVESTMENTS (Continued)
D. Investments Authorized by Debt Agreements
The Successor Agency to the former Redevelopment Agency must maintain required amounts of
cash and investments with trustees or fiscal agents under the terms of certain debt issues. These
funds are unexpended bond proceeds or are pledged as reserves to be used if the City fails to meet
its obligations under these debt issues. The California Government Code requires these funds to
be invested in accordance with City ordinance bond indentures or State statute. The table below
identifies the investment types that are authorized for investments held by fiscal agents. The table
also identifies certain provisions of these debt agreements:
Authorized Investment Type
U.S. Treasury Obligations
U.S. Agency Securities
Connnercial 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.
60
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
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
Less than One to Five
1 :rear Years
City and Fiduciary:
U.S. Agency Securities
Non-callable $23,963,841
U.S. Treasury Notes 21,446,719
Local Agency Investment Fund $54,780,939
Money Market Funds 33,898,582
Guaranteed Investment Agreements 276,872
Corporate Notes 6,728,488 24,240,569
Commercial Paper 5,978,334
Negotiable Certificates of Deposit 7,079,925
Asset-Backed Securities 69,264 12,580,059
Supranational Obligations 1,759,841 6,621,501
South San Francisco Conference Center:
Local Agency Investment Fund 3,167,864
Money Market Funds 482,596
Total Investments $113,9452833 $8921292561
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
Total
$23,963,841
21,446,719
54,780,939
33,898,582
276,872
30,969,057
5,978,334
7,079,925
12,649,323
8,381,342
3,167,864
4822596
203,075,394
13,455,030
676,699
$217,207,123
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, 2018, these investments have an
average maturity of 193 days.
Money market funds are available for withdrawal on demand and as of June 30, 2018 have an
average maturity of 24 days.
62
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 2 -CASH AND INVESTMENTS (Continued) I
F. Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized
statistical rating organization. Presented below is the actual rating as of June 30, 2017, for each
of the Primary Government's investment types as provided by Moody's investment rating system,
except as noted:
Investment Type Aaa
City and Fiduciary:
U.S. Agency Securities
Non-callable $23,963,841
Money Market Funds
Corporate Notes 2,090,329
Commercial Paper
Negotiable Certificates of Deposit
Asset-Backed Securities 9,112,578
Supranational Obligations 7,902,503
South San Francisco Conference Center:
Money Market Funds
Totals
City and Fiduciary:
Not rated:
Guaranteed Investment Agreements
Asset Backed Securities
Supranational Obligations
Local Agency Investment Fund
Exempt from credit rate disclosure:
U.S. Treasury Notes
$43,069,251
South San Francisco Conference Center:
Not rated:
Local Agency Investment Fund
Total Investments
G. Concentration of Credit Risk
Aaa-mf Aal-Aa3 Al-A3
$33,898,582
$3,994,168 $24,884,560
482 596
$34,381,178 $3,994,168 $24,884,560
P-1
$5,978,334
7,079,925
$13,058,259
Total
$23,963,841
33,898,582
30,969,057
5,978,334
7,079,925
9,112,578
7,902,503
482 596
119,387,416
276,872
3,536,745
478,839
54,780,939
21,446,719
3 167 864
$203,075,394
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, 2018:
Issuer
Federal National Mortgage Association
63
Investment
Type
U.S. Agency Securities
Amount
$11,182,875
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
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, 2018:
Investments by Fair Value Level:
City and Fiduciary:
U.S. Agency Securities
Non-callable
U.S. Treasury Notes
Corporate Notes
Commercial Paper
Negotiable Certificates of Deposit
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
Level2
$23,963,841
21,446,719
30,969,057
5,978,334
7,079,925
12,649,323
8,381,342
$110,468,541
Investments Exempt from Fair Value Hierarchy:
City and Fiduciary:
Local Agency Investment Fund
South San Francisco Conference Center:
Local Agency Investment Fund
Total Investments
Total
$23,963,841
21,446,719
30,969,057
5,978,334
7,079,925
12,649,323
8,381,342
110,468,541
276,872
33,898,582
482,596
54,780,939
3,167,864
$203,075,394
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.
64
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
NOTE 3 -CAPITAL ASSETS
A. Capital Asset Changes -Changes in capital assets during the fiscal year consist of:
Retirements and
Balance 6/30/2017 Additions Adjustments Transfers Balance 6/30/2018
Governmental activities
Capital assets not being depreciated:
Land $70,235,985 $22,500 ($3,085,484) $67,173,001
Construction in Progress 10,660,336 12,244,942 (213,316) ($4,604,421) 18,087,541
Total capital assets not being depreciated 80,896,321 12,267,442 (3,298,800) (4,604,421) 85,260,542
Capital assets being depreciated:
Buildings and Improvements 91,451,509 (543,081) 3,950,732 94,859,160
Infrastructure -Streets 194,928,165 194,928,165
Infrastructure -Storm Drains 8,927,492 8,927,492
Infrastructure -Traffic Control Devices 9,541,649 653,689 10,195,338
Equipment and Vehicle 6,665,053 27,311 (38,043) 6,654,321
Furniture and Fixtures 2,614,215 2,614,215
Total capital assets being depreciated 314,128,083 27,311 (581,124) 4,604,421 318,178,691
Less accumulated depreciation for:
Buildings and Improvements (35,174,437) (2,411,933) 255,694 (37,330,676)
Infrastructure -Streets (96,012,555) (5,346,412) (101,358,967)
Infrastructure -Storm Drains (3,162,061) (204,500) (3,366,561)
Infrastructure -Traffic Control Devices (2,879,609) (414,270) (3,293,879)
Equipment and Vehicle (6,060,430) (163,231) 877 (6,222,784)
Furniture and Fixtures (1,509,339) (95,786) (1,605,125)
Total accumulated depreciation (144,798,431) (8,636,132) 256,571 (153,177,992)
Net Governmental Fund
Capital Assets Being Depreciated 169,329,652 (8,608,821) (324,553) 4,604,421 165,000,699
Internal Service Fund Capital Assets
Capital assets not being depreciated:
Construction in Progress 162,140 (162,140)
Total capital assets not being depreciated 162,140 (162,140)
Capital assets being depreciated:
Equipment and Vehicle 14,887,438 493,263 (363,652) 162,140 15,179,189
Accumulated depreciation (9,257,474) (838,208) 360,397 (9,735,285)
Net Internal Service Fund Capital Assets
Being Depreciated 5,629,964 (344,945) (3,255) 162,140 5,443,904
Governmental activity capital assets, net $256,018,077 $3,313,676 ($3,626,608) $255,705,145
65
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 3 -CAPITAL ASSETS (Continued) I
Balance
June 30, 2017 Additions Retirements Transfers
Business--type activities
Capital assets, not being depreciated:
Land
Construction in Progress
Total capital assets not being depreciated
Capital assets being depreciated:
Buildings and Improvements
Clean Water Facilities and Lines
Infrastructure -Storm Drains
Infrastructure -Streets
Equipment and Vehicle
Furniture and Fixtures
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings and Improvements
Clean Water Facilities and Lines
Infrastructure -Storm Drains
Infrastructure -Streets
Equipment and Vehicle
Furniture and Fixtures
Total accumulated depreciation
Net capital assets being depreciated
Business-type activity capital assets, net
Component Unit:
$1,396,758
6,848,544
8,245,302
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)
$4,554,491
4,554,491
(1,606,327)
(1,888,069)
(159,132)
(209,570)
(819,549)
__ __,(3:;.;1:.r.;,1.;;.54.) ---
(56,307,658) --~;;,;; (4,682,647)
116,628,434 (4,682,647)
$124,873,736 ($128,156)
Balance
June30,2017
South San Francisco Conference Center
Construction in Progress
Buildings and Improvements $10,822,457
Furniture and Fixtures 781,465
Machinery and equipment 237,557
Total: 11,841,479
Less accumulated depreciation (8,221,906)
Component unit, net $3,619,573
($602,171)
($240,138)
(602,171) (240,138)
240,138
(9,496)
(9,496) 240,138
9,496
9,496
240 138
($602,171)
Additions Retirements
$43,289
325,808
98,703
29,594
497,394
(538,790)
($41,396)
Balance
June 30, 2018
$794,587
11,162,897
11,957,484
66,955,777
75,522,774
4,773,977
7,377,546
18,505,506
31154
173,166,734
(17,762,000)
(29,165,952)
(1,034,358)
(1,840,691)
(11,146,654)
(31,154)
(60,980,809)
112,185,925
$124,143,409
Balance
June 30, 2018
$43,289
11,148,265
880,168
267,151
12,338,873
(8,760,696)
$3,578,177
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.
66
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
!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
$656,598
378,897
88,310
6,913,360
470,932
60,001
68,034
8,636,132
838,208
$9,474,340
$4,414,042
253,826
14,779
$4,682,647
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
Developer Deposit
Capital Projects Fund
Non-major Governmental Funds
67
Amount
$1,000
69,000
$70,000
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
NOTE 4 -INTER-FUND TRANSACTIONS (Continued)
C. Transfers
Transfers between funds during the fiscal year ended June 30, 2018 were as follows:
FROM FUND (OUT)
General Fund
East of 101 Sewer Impact Fees Capital Project Fund
East of 101 Traffic Impact Fees Capital Project Fund
Capital Infrastructure Reserve Capital Projects Fund
Sewer Rental Enterprise Fund
Storm Water Enterprise Fund
Non-major Governmental Funds
Internal Service Funds
TOFUND(IN)
Capital Improvement Capital Projects Fund
Capital Infrastructure Reserve Capital Projects Fund
Storm Water Enterprise Fund
Internal Service Funds
Sewer Enterprise Fund
Capital Improvement Capital Projects Fund
General Fund
Capital Improvement Capital Projects Fund
Capital Improvement Capital Projects Fund
Capital Improvement Capital Projects Fund
General Fund
Capital Improvement Capital Projects Fund
Storm Water Enterprise Fund
Internal Service funds
Capital Improvement Capital Projects Fund
Total
68
AMOUNT
$7,400,855
10,000,000
1,192,213
1,724,800
111,936
299,685
2,502,915
451,908
54,549
83,528
3,766,347
1,742,777
831,305
771,200
184,087
$31,118,105
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
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, 2018 follows:
Authorized
and Balance at Balance at Current
Issued June 30, 2017 Retirement June 301 2018 Portion
Governmental Activities:
2007 Loans Payable to the Successor Agency (1) $10,691,152 $2,382,000 $8,309,152
Total Governmental Activities Debt 10,691,152 2,382,000 8,309,152
Capital Leases (2):
2008 Two Fire Trucks 159,172 105,061 54,111 $54,111
2010 Two Ambulances 44,769 44,769
2010 Two Fire Trucks 442,659 120,353 322,306 125,154
2013 Fire Truck 813,559 126,860 686,699 130,232
2014 Sweeper 213,364 141379 71985 71985
Total Capital Leases 1,673,523 538,422 1,135,101 381,482
Net Governmental Long-Term Debt $12,364,675 $2,920,422 $9,444,253 $381,482
Business-Type Activities:
1999 State Water Resources Loan, 2.6%, due 8/1/22 (3) $47,721,252 $17,970,264 $2,806,194 $15,164,070 $2,879,155
2004 State Water Resources Loan, 2.5%, due 1/1/27 (3) 21,258,529 11,175,566 1,122,663 10,052,903 1,150,729
2008 State Water Resources Loan, 2.4%, (4) 9,164,505 5,990,202 436,673 5,553,529 447,153
2005 Water and Wastewater Revenue Bonds, 2.75 to 4.75%, due 04/30/26 (5) 6 000 000 3 570 000 295 000 3,275,000 305 000
Total Enterprise Fund Long-Term Debt $84,144,286 $38,706,032 $4,660,530 $34,045,502 $4,782,037
Component Unit -Conference Center:
2003 Revenue Bonds, 2.25% to 4.0%, due 9/1/18 (6) $5,865,000 $905,000 $445,000 $460,000 $460,000
Unamortized refunding loss on 2003 bonds (24,304) (24,304)
Total Conference Center $5,865,000 $880,696 $420,696 $460,000 $460,000
69
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 5 -LONG-TERM DEBT (Continued) I
(1) As of June 30, 2018, 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 $8,309,152 for the Flyover and Hookramps Projects that were completed in prior years.
The outstanding balance will be paid off from the future developer fees. With the dissolution of the
Agency effective January 31, 2012, the Successor Agency assumed the asset which the City is to
repay. This payable is recorded as a long-term obligation (see also Note 13). Prior to the
dissolution of all Redevelopment Agencies in California by the State, the former Redevelopment
Agency (Agency) advanced $12,176,207 to the Oyster Point Improvement Impact Fee Capital
Projects Fund (the Oyster Point Fund). The impact fees are collected according to a fee
methodology adopted under the terms of AB 1600. The fees are assessed against commercial
development in a specific geographic area that is primarily east of Highway 101 to repay the former
Agency for the funds it advanced to the Oyster Point Fund to pay for freeway interchange
improvements at Highway 101 and Oyster Point Blvd, and are assessed per an adopted Engineering
report's formula that measures each new development's impact on the area's trip traffic. While the
former Agency advanced the funds, the impact fee was put in place specifically to charge future
developers for their share of traffic trips generated prior to the construction of the improvements.
When the Agency was dissolved, the Successor Agency, and therefore, all local taxing entities, are
entitled to receive future Oyster Point Impact fees collected by the City from developers. Future
developers, not the City of South San Francisco, are legally obligated to pay the future fees until the
liability owed to the Successor Agency is paid off as long as the fee continues to be levied and is in
place. The repayment has significantly slowed since 2007, as development has subsided and fees
assessed have therefore dropped. Management believes it may take 10-30 years or more before the
Successor Agency is fully paid back.
(2) The City has entered into long-term capital leases with various financing agencies. Under
these capital leases, all leased assets shall be distributed to the City at the end of the lease terms
and shall thereafter remain the sole property of the City. Therefore, these capital leases have been
recorded at the present value of the future minimum lease payments at the date of inception of the
lease, and the corresponding assets have been included in the Statement of Net Position as
appropriate. Capital lease payments are made from revenues of the Equipment Replacement Internal
Service Fund and the General Fund.
(3) The two loans were authorized by the State Water Resources Control Board to improve and
expand the City's wastewater treatment plant. Loan proceeds were issued as the projects
progressed and debt service payments commenced one year after project completion.
(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. The loan is secured by a pledge of sewer service
charge revenues of the City's Sewer Enterprise Fund. Sewer service charge revenues available for
debt service amounted to $22.2 million which represented coverage of 42.63 over the $520,536 in
debt service.
70
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
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 ranging from the
rates of 2.75% to 4.75% is payable semi-annually each April 1 and October 1.
The 1999 and 2004 State Water Resources Loans and the 2005 Water and Wastewater Revenue
Bonds are secured by a pledge of net revenues of the City's Enterprise system. Net Revenues
available for debt service amounted to $9.3 million which represented coverage of 1.8 over the
$5,129,089 in total debt service.
(6) On June 1, 2003, the City of South San Francisco Capital Improvement Financing Authority
(CIFA) issued $5,865,000 of 2003 Revenue Bonds. The CIFA was created through a joint
exercise of powers agreement between the City and the City of South San Francisco Financing
Authority for the purpose of obtaining financing for capital improvements. The 2003 Revenue
Bonds are obligations of the 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.
71
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 5 -LONG-TERM DEBT (Continued) I
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, 2018, were as follows:
Component Unit
For the Year Governmental Activities Business-Type Activities Conference Center Authori!l
Ended June 30 PrinciEal Interest PrinciEal Interest PrinciEal Interest
2019 $381,483 $30,743 $4,782,037 $475,688 $460,000 $18,400
2020 263,839 20,330 4,906,394 822,328
2021 204,251 11,582 5,038,676 698,146
2022 140,892 6,614 5,173,954 570,292
2023 144,636 2,870 5,312,309 437,457
2024-2028 8,265,301 604,174
2026-2029 566,831 7,936
Totals $1,135,101 $72,139 $34,045,502 $3,616,021 $460,000 $18,400
Certificates of Participation and Capital Leases are issued for the purpose of fmancing the
construction or acquisition of projects defmed 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
72
Original
Cost
$5,860,216
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
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.
73
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
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, 2018, are below:
Cal!ital Project Funds
Low and Moderate Eastof101
General Income Housing Capital Sewer
Fund Balance Classifications Fund Assets lml!rovement lml!act Fees
Nonspendables:
Items not in spendable form:
Inventory and prepaid items $106
Total Nonspendable Fund Balances 106
Restricted for:
Sewer Impact Fees $2,838,902
Low and moderate housing projects $5,778,249
Redevelopment and community development activities 20,582,335
Total Restricted Fund Balances 20,582,335 5,778 249 2,838,902
Committed for:
Capital projects 2,934,541
Local services 13,791,356
Total Committed Fund Balances 16,725,897
Assigned to:
Capital projects 4,334,322
Total Assigned Fund Balances 4,334,322
Unassigned:
General fund 19,644,232
Capital Improvement Fund $197 416
Total Unassigned Fund Balances 19,644,232 197,416
Total Fund Balances $61,286,892 $5,778,249 $197,416 $2,838,902
( Continued)
74
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 6 -NET POSITION AND FUND BALANCE (Continued)
C.
Caeital Project Funds
EastoflOl Capital Other
Traffic Child Care Developer Infrastructure Governmental
Fund Balance Classifications (continued) ImeactFees ImeactFees Deeosit Reserve Fund Funds
Restricted for:
Traffic impact fees projects $12,459,805
Child Care impact fees projects $4,692,411
Developer deposit fees projects $3,245
Capital infrastructure projects $21,585,486
Gas Tax projects $527,222
Developer contributions projects 6,329,063
Community Development Block Grant projects 269,352
Maintenance districts projects 3,142,104
Transportation sales tax projects 2,965,930
City programs projects 1,375,041
Other Special Revenues projects 6,149,044
Capital projects activities 10,487,512
Total Restricted Fund Balances 12,459,805 4,692 411 3,245 21,585,486 31,245,268
Unassigned:
Capital projects activities (208,489)
Total Unassigned Fund Balances (208,489)
Total Fund Balances $12,459,805 $4,692,411 $3,245 $21,585,486 $31,036,779
Net Deficit
The Oyster Point Development Impact Fees Capital Projects Fund had net deficit in the amount
of $208,489. Future revenues are expected to offset the deficit.
D. Encumbrances
The City uses an encumbrance system as an extension of normal budgetary accounting for
governmental funds. Under this system, purchase orders, contracts, and other commitments for
the expenditure of monies are recorded in order to reserve that portion of applicable
appropriations. Encumbrances outstanding at year-end are recorded as restricted, committed or
assigned fund balance, depending on the classification of the resources to be used to liquidate the
encumbrance, since they do not constitute expenditures or liabilities. Unexpended appropriations
lapse at year-end and must be reappropriated in the following year. Encumbrances outstanding in
governmental funds as of June 30, 2018, were as listed below:
Governmental funds:
General Fund
Capital Improvement Capital Projects Fund
Other Governmental Funds
Total
75
Aroount
$4,334,322
14,197,099
1,876,951
$20,408,372
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
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.
76
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 7 -PENSION PLAN (Continued) !
The Plans' provisions and benefits in effect at June 30, 2018, are summarized as follows:
Hire date
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a% of eligible compensation
Required employee contribution rates
Required employer contribution rates
Hire date
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a% of eligible compensation
Required employee contribution rates
Required employer contribution rates
Classic Plan
Prior to
April 25, 2010
2.7%@55
5 years service
monthly for life
50-55
2.0%to2.7%
8%
29.191%
Classic Plan
Prior to
April 25, 2010
3%@50
5 years service
monthly for life
50
3%
9%
45.051%
Miscellaneous
Classic Plan PEPRAPlan
After Onor after
April 25, 2010 January 1,2013
2%@60 2%@62
5 years service 5 years service
monthly for life monthly for life
50-67 52-67
1.092% to 2.418% 1.0%to2.5%
7% 6.5%
29.191% 6.5%
Safety
Classic Plan PEPRAPlan
After On or after
April 25, 2010 January 1, 2013
3%@55 2.7%@57
5 years service 5 years service
monthly for life monthly for life
50-55 50-57
2.4%to 3.0% 2.0%to2.7%
9% 11.5%
45.051% 11.5%
Employees Covered -As of the June 30, 2016 actuarial valuation date and the June 30, 2017
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
422
325
277
1,024
Safety
276
109
153
538
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.
77
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 7 -PENSION PLAN (Continued) I
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, 2017, using an annual actuarial valuation as of June 30, 2016 rolled forward to
June 30, 2017 using standard update procedures. A summary of principal assumptions and
methods used to determine the net pension liability is shown below.
Actuarial Assumptions -For the measurement period ended June 30, 2017, the total pension
liabilities were determined by rolling forward the June 30, 2016 total pension liability. The June
30, 2017 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 of Return
Post Retirement Benefit Increase
Mortality
Miscellaneous and Safety
June 30, 2016
June 30, 2017
Entry-Age Normal Cost Method
7.15%
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, 2016 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.
78
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 7 -PENSION PLAN (Continued) I
Change of Assumptions -For the measurement date of June 3 0, 2017, the accounting discount
rate reduced from 7.65 percent to 7.15 percent.
Discount Rate -The discount rate used to measure the total pension liability was 7.15% 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 .15% discount rate is
adequate and the use of the municipal bond rate calculation is not necessary. The long term
expected discount rate of 7.15% 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.
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.
79
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 7 -PENSION PLAN (Continued) I
The table below reflects the long-term expected real rate of return by asset class. The rate of
return was calculated using the capital market assumptions applied to determine the discount
rate and asset allocation. These rates of return are net of administrative expenses.
New
Strategic Real Return RealRetum
Asset Class Allocation Years 1 -lO(a) Years 11-+{b)
Global Equity 47.0%
Global Fixed Income 19.0%
Inflation Sensitive 6.00/o
Private Equity 12.00/o
Real&tate 11.00/o
Infrastructure and Forestland 3.00/o
Liquidity 2.0%
Total 1000/o
(a) An expected inflation of2.5% used for this period.
(b) An expected inflation of3.00/o used for this period.
C. Changes in the Net Pension Liability
4.90%
0.800/o
0.60%
6.600/o
2.800/o
3.900/o
-0.400/o
The changes in the Net Pension Liability for each Plan are as follows:
Miscellaneous Plan:
Balance at June 30, 2016
Changes in the year:
Service cost
Interest on the total pension liability
Changes ofbenefit terms
Chases of assumptions
Differences between actual and expected experience
Plan to plan resource movement
Contribution -employer
Contnbution -employees
Net investment income
Benefit payments, including refunds of employee
contributions
Administrative expenses
Net changes
Balance at June 30, 2017
80
Increase (Decrease)
Total Pension Plan Fiduciary
Liability Net Position
$205,260,076 $139,167,698
3,922,518
15,430,998
12,421,358
1,958,164
5,228,454
1,720,600
15,616,363
(11,565,392) (11,565,392)
(205,472)
22,167,646 10,794,553
$227,427,722 $149,962,251
5.38%
2.27%
1.39%
6.63%
5.21%
5.36%
0.90%
Net Pension
Llability/(Asset)
$66,092,378
3,922,518
15,430,998
1,958,164
(5,228,454)
(1,720,600)
(15,616,363)
205,472
11,373,093
$77,465,471
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 7 -PENSION PLAN (Continued) !
Safety Plan:
Increase (Decrease)
Total Pension Plan Fiduciary
Liabili:U: Net Position
Balance at June 30, 2016 $278,764,324 $192,070,665
Changes in the year:
Service cost 6,264,307
Interest on the total pension liability 21,238,842
Changes of benefit terms
Chases of assumptions 18,010,606
Differences between actual and expected experience 4,520,149
Plan to plan resource movement
Contribution -employer 8,071,060
Contribution -employees 1,980,507
Net investment income 21,553,126
Benefit payments, including refunds of employee
contributions (14,760,979) (14,760,979)
Administrative expenses (283,579)
Net changes 35,272,925 16,560,135
Balance at June 30, 2017 $314,037,249 $208,630,800
Grand Total
Net Pension
Liabili!Yf(Asset)
$86,693,659
6,264,307
21,238,842
18,010,606
4,520,149
(8,071,060)
(1,980,507)
(21,553,126)
283,579
18,712,790
$105,406,449
$182,871,920
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 6.15% 6.15%
Net Pension Liability $107,218,047 $149,176,559
Current Dis count Rate 7.15% 7.15%
Net Pension Liability $77,465,471 $105,406,449
1% Increase 8.15% 8.15%
Net Pension Liability $52,885,704 $69,609,717
Pension Plan Fiduciary Net Position -Detailed information about each pension plan's fiduciary net
position is available in the separately issued CalPERS financial reports.
81
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 8 -DEFERRED COMPENSATION PLAN I
A. Defe"ed 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 -OmER POST-EMPLOYMENT BENEFITS I
A. General Information about the City's Other Post Employment Benefit (OPEB) Plan
The City provides certain health care benefits for all employees who retire after attaining age 50
with at least five years of service or disability at any age. The City provides certain health care
benefits for those employees hired prior to April 25, 2010. In order to reduce the City's OPEB
obligations over time, the City changed to a defined contribution post-retirement health plan for
employees hired as of April 25, 2010 or after. For those new hires, the City is now providing a
medical after retirement health plan (MARA), and contributes 1.5% of salary for those plans.
Plan Description -The City's Post Employment Benefit Plan is an agent multiple-employer
defined benefit OPEB plan.
83
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 9 -OTHER POST-EMPLOYMENT BENEFITS (continued)
Benefits provided-The following is a summary of Plan benefits by employee group as of June 30,
2018:
Eligibility •Hired< 4/25/20101
• Retire directly from City and elect coverage:
• Age 50 and 5 years City service or
• Disability retirement with 5 years City service
Benefit • City pays single premium up to largest HMO single premium
Cap for 2017/18:
-$1,184.63/month pre-65 (Blue Shield)
-$649.97/month post-65 Medical eligible (Blue Shield)
-$1,746.70/ month post-65 not Medicare eligible (Kaiser)
• Medicare ineligible retirees allowed to stay in their pre-
Medicare premium plans after age 65
Surviving Spouse • Participation with premium payment
Benefit • AFSCME, Local 1569, Mid-Management, IAFF
• surviving spouses covered 2 months following death of
retiree
OtherOPEB • City also reimburses Medicare Part B
• No City-paid contribution for dental, vision, or life
For the year ended June 30, 2018, the City's contributions to the Plan were $4,127,553.
Employees Covered by Benefit Terms -Membership in the plan consisted of the following at the
measurement date of June 30, 2017:
Active employees
Inactive employees or beneficiaries currently
receiving benefrt payments
Total
84
240
348
588
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
!NOTE 9-OTHERPOST-EMPLOYMENT BENEFITS (continued) I
B. Net OPEB Liability
Actuarial Methods and Assumptions -The City's net OPEB liability was measured as of June 30,
2017 and the total OPEB liability used to calculate the net OPEB liability was determined by an
actuarial valuation dated June 30, 2017, based on the following actuarial methods and assumptions:
Valuation Date
Contribution Policy
Actuarial Cost Method
Amortization Method
Amortization Period
Discount Rate and Long-Term Expected
Rate ofRetum on Assets
Inflation
Salary Increases
Healthcare/Medical Trend
Mortality, Retirem::nt, Disability, Termination
Mortality Improvem::nt
Healthcare participation for future retirees
Actuarial Assumptions
• June 30, 2017 Measurem::nt Date
• City contributes $802,000 per year into trust
• Entry Age Normal, Level Percentage of Payroll
• Level dollar
• Average of22.5 years remaining for 2017/18
• 6.75% at June 30, 2017
• 6.75% at June 30, 2016
• Expected City contnbutions projected to keep sufficient plan assets to pay
all benefits from trust.
• 2.75% per annum
• Aggregate -3%
• Merit -CalPERS 1997-2015 Experience Study
• Non-Medicare -7.5% for 2019, decreasing to an ultimate rate of 4.00/o in
2076 and later years
• Medicare -6.5% for 2019, decreasing to an ultimate rate of 4.00/o in 2076 and
later years
• CalPERS 1997-2011 Experience Study
• Pre-retirem::nt mortality: projected 15-year static with 900/o ofMP-2016
• Post-retirem::nt mortality: projected fully generational with Scale MP-2017
• 1000/o if covered, 95% if waived
85
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 9-OTHER POST-EMPLOYMENT BENEFITS (continued) I
The long-term expected rate of return on OPEB plan investments was determined using a building-
block method in which expected future real rates of return ( expected returns, net of OPEB plan
investment expense and inflation) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real
rates of return by the target asset allocation percentage and by adding expected inflation. The target
allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
Long-Tenn
Target Expected Real
Asset Class Allocation Rate ofRetum
Global equity 57.0%, 4.9%,
Fixed income 27.00/o 1.5%
TIPS 5.00/o 1.3%
Commodities 3.0% 0.8%
REITs 8.00/o 3.8%
Total 100.00/o
Discount Rate -The discount rate used to measure the total OPEB liability was 6.75%. The
projection of cash flows used to determine the discount rate assumed that City contributions will be
made at rates equal to actuarially determined contribution rates. Based on those assumptions, the
OPEB plan's fiduciary net position was projected to be available to make all projected OPEB
payments for current active and inactive employees and beneficiaries. Therefore, the long-term
expected rate of return on OPEB plan investments was applied to all periods of projected benefit
payments to determine the total OPEB liability.
C. Changes in Net OPEB Liability
The changes in the net OPEB liability follows:
Balance at June 30, 2016 Measurement Date
Changes Recognized for the Measurement Period:
Service Cost
Interest on the total OPEB liability
Changes in benefit terms
Differences between expected and actual experience
Changes of assumptions
Contnbutions from the employer
Net investment income
Benefit payments
Administrative expenses
Net changes
Balance at June 20, 2017 Measurement Date
Increase (Decrease) Amounts in 000's
Total OPEB Plan Fiduciary Net OPEB
liatility Net Position liatility/(Asset)
00 @ 00·@
$75,240
1,574
5,087
(2,901)
3,760
$79,000
$17,114
3,703
1,803
(2,901)
{92
2,596
$19,710
$58,126
1,574
5,087
(3,703)
(1,803)
9
1,164
$59,290
The Plan does not issue separate financial statements.
86
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 9 -OTHER POST-EMPLOYMENT BENEFITS (continued) I
D. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost
Trend Rates
The following presents the net OPEB liability of the City, as well as what the City's net OPEB
liability would be if it were calculated using a discount rate that is I-percentage-point lower ( 5. 7 5%)
or I-percentage-point higher (7.75%) than the current discount rate:
Net OPEB Liability/(Asset) (Amounts in 0OO's)
Discount Rate -1 %
(5.75%)
Current Discount Rate
(6.75%)
Discount Rate +1 %
(7.75%)
$70,593 $59,290 $50,047
The following presents the net OPEB liability of the City, as well as what the City's net OPEB
liability would be if it were calculated using healthcare cost trend rates that are I-percentage-point
lower or I-percentage-point higher than the current healthcare cost trend rates as discussed in the
assumptions above:
Net OPEB Llability/(Asset) (Amounts in 000's)
1% Decrease
Current Healthcare Cost
Trend Rates 1% Increase
$49,237 $59,290 $71,711
E. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 2018, the City recognized OPEB expense of $5,322,668. At June 30,
2018, the City reported deferred outflows and inflows of resources related to OPEB from the
following sources:
Employer contributions made subsequent to the measurement date
Differences between actual and expected experience
Changes ofassumptions
Net differences between projected and actual earnings on
plan investments
Total
87
Deferred Outflows
ofResources
$4,127,533
$4,127,533
Deferred Inflows
of Resources
$477,000
$477,000
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 9 -OTHER POST-EMPLOYMENT BENEFITS (continued) I
$4,127,553 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the OPEB liability in the year ended June 30,
2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to OPEB will be recognized as part of OPEB expense as follows:
Year
Ended June 30
2019
2020
2021
2022
INOTE 10-JOINTLY GOVERNED ORGANIZATIONS I
Annual
Amortization
($119,000)
(119,000)
(119,000)
(120,000)
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 fmancial
information may be obtained from San Mateo County Harbor District, #1 Johnson Pier, Half
Moon Bay, CA 94019.
88
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
!NOTE 10-JOINTLY GOVERNED ORGANIZATIONS (continued)
B. Peninsula Traffic Congestion Relief Alliance
(PTCRA) was formed from the merger of The Inter City Transportation Systems Management
Agency and Multi-City Transportation Systems Management Agency (MCTSMA) in 2000. The
members are Cities of South San Francisco, Brisbane, Colma, Daly City, Half Moon Bay,
Millbrae, Pacifica and San Bruno and seven other members for the purpose of mitigating traffic
congestion. The governing board consists of one council member from each member city. The
fmance 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 fmancial information may be obtained
from the City of San Carlos Finance Department, 666 Elm Street, San Carlos, CA 94070.
C City/County Association of Governments
(C/CAG) was established in 1990 by the County of San Mateo and the Cities of San Mateo
County for preparation, adoption, monitoring and enforcing of Countywide state mandated plans.
A Board of Directors consisting of one council member from each member city and one member
from the County Board of Supervisors governs C/CAG. The city treasurer of San Carlos acts as
the treasurer of C/CAG. The individual cities and the County are not liable for the debts,
liabilities, or obligations of C/CAG. Condensed unaudited cash basis fmancial information may
be obtained from the City of San Carlos Finance Department, 666 Elm Street, San Carlos, CA
94070.
INOTE 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, 2018, the City
paid ABAG Plan $1,191,434 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.
89
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
!NOTE 11 -RISK MANAGEMENT (Continued)
B. Liability for Uninsured Claims
The City provides for the uninsured portion of claims and judgments in the Self Insurance
Internal Service Fund. Claims and judgments, including a provision for claims incurred but not
reported, are recorded when a loss is deemed probable of assertion and the amount of the loss is
reasonably determinable. As discussed above, the City has coverage for such claims, but it has
retained the risk for the deductible or uninsured portion of these claims.
The City's liability for uninsured claims is limited to workers' compensation and general liability
claims, as discussed above, and was estimated by management based on-prior year's claims
experience as follows:
June 30, 2018 Fiscal Year
Workers' General 2016-2017
Compensation Liability Total Total
Balance, beginningofyear $12,695,000 $277,942 $12,972,942 $11,400,947
Current year claims and changes in
estimates of prior years claims 1,660,181 190,940 1,851,121 3,563,911
Claims Paid (1,660,181) (370,526) (2,030,707) (1,991,916)
Balance, end of year $12,695,000 $98,356 $12,793,356 $12,972,942
Current portion $562,000 $98,356 $660,356 $712,000
j 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.
90
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 12 -COMMITMENTS AND CONTINGENCIES (Continued)
A. Rental Revenues From Use of City Property
The Conference Center Authority, a discrete component unit, leases land from the City under an
operating lease commencing on January 1, 1999, with a 30-year term from February 1, 1999, to
January 31, 2029. The rent amount is subject to re-negotiation at the option of either party
between January 1 and February 28, 2009 and 2019. These leases are considered for accounting
purposes to be operating leases. Property lease revenue from the Conference Center Authority
during the year fiscal year ended June 30, 2018, 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
2019
2020
2021
2022
2023
2024-2028
2029
Total
Component Unit
Conference Center
$420,000
420,000
420,000
420,000
420,000
2,100,000
150,000
$4,350,000
Price Club Associates leases the land for the Costco store on South Airport Boulevard from the
City. Lease payments are based on a percentage of Costco's gross annual sales, with minimum
annual rent set at $400,000, payable in monthly installments of $33,333. In fiscal 2014, Costco
exercised the option to extend the lease through fiscal year 2029, with an option for a 6 year
extension through fiscal year 2035. In fiscal 2018 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 2018 lease payments were $51,800.
91
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
I NOTE 12 -COMMITMENTS AND CONTINGENCIES (Continued) I
Future minimum lease revenues for the Costco and Magnolia Plaza leases are as follows:
Year ending June 30: Costco Magnolia Plaza Total
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 400,000 51,800 451,800
2024-2028 2,000,000 259,000 2,259,000
2029-2033 2,000,000 259,000 2,259,000
2034-2038 400,000 259,000 659,000
2039-2043 259,000 259,000
2044-2048 259,000 259,000
2049-2053 259,000 259,000
2054-2058 259,000 259,000
2059-2062 207,200 207,200
$6,400,000 $2,279,200 $8,679,200
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, 2018 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, 2018.
92
CITY OF soum SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
NOTE 13 -FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTIVITIES (Continued)
B. Loans Receivable
The Successor Agency assumed the non-housing loans receivable of the former Redevelopment
Agency as of February 1, 2012. The former Redevelopment Agency engaged in programs
designed to encourage construction of or improvement to low-to-moderate income housing.
Under these programs, grants or loans were provided to homeowners or developers who agreed to
expend these funds in accordance with the Agency's terms.
C. Capital Assets
The Successor Agency assumed the capital assets of the former Redevelopment Agency as of
February 1, 2012. All capital assets are valued at historical cost or estimated historical cost if
actual historical cost is not available. Contributed capital assets are valued at their acquisition
value. The Successor Agency's policy is to capitalize all assets with costs exceeding certain
minimum thresholds and with useful lives exceeding two years.
All capital assets with limited useful lives are depreciated over their estimated useful lives. The
purpose of depreciation is to spread the cost of capital assets equitably among all users over the
life of these assets. The amount charged to depreciation expense each year represents that year's
pro rata share of the cost of capital assets.
Depreciation of all capital assets is charged as an expense against operations each year and the
total amount of depreciation taken over the years, called accumulated depreciation, is reported on
the balance sheet as a reduction in the book value of capital assets.
Depreciation is provided using the straight line method which means the cost of the asset is
divided by its expected useful life in years and the result is charged to expense each year until the
asset is fully depreciated. The Successor Agency has assigned the useful lives listed below to
capital assets:
Buildings
Improvements
Machinery and equipment
Furniture and fixtures
50 years
30 years
5-20 years
12 years
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase is reflected in the capitalized value of the asset
constructed, net of interest earned on the invested proceeds over the same period. The
capitalization level is $20,000 for vehicles, and $100,000 for all else, including all other
equipment that is not a vehicle.
93
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
NOTE 13 -FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTMTIES (Continued)
Capital assets recorded at June 30 are comprised of:
Fiduciary activities
Capital assets not being depreciated:
Land
Total capital assets not
being depreciated
Capital assets being depreciated:
Buildings and hnprovements
Equipment and Vehicle
Furniture and Fixtures
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings and hnprovements
Equipment and Vehicle
Furniture and Fixtures
Total accumulated depreciation
Net capital assets being depreciated
Fiduciary activity capital assets, net
Balance
June 30, 2017
$2,520,264
2,520,264
927,790
242,190
21,506
1,191,486
(407,484)
(241,088)
(21,505)
(670,077)
521,409
$3,041,673
Additions Retirements
($1,579,730)
(1,579,730)
(598,119)
(598,119)
($26,531) 368,741
(877)
(27,408) 368,741
(27,408) (229,378)
($27,408) ($1,809,108)
Balance
June 30, 2018
$940,534
940,534
329,671
242,190
21,506
593,367
(65,274)
(241,965)
(21,505)
(328,744)
264,623
$1,205,157
Current year retirements represent properties transferred to the County of San Mateo, 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:
Type of Obligation
1999 Revenue Bonds, 3.3 to 5.0%, due 9/1/18 (1)
Total Successor Agency
94
Balance
June 30, 2017
$560,000
$560,000
Balance
Retirements June 30, 2018
($275,000) $285,000
($275,000) $285,000
Current
Portion
$285,000
$285,000
NOTE 13
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTIVITIES (Continued)
Debt Service Requirements
Debt service requirements are shown below for all long-term debt.
For the Year
Ended June 30
2019
Totals
Successor Agency Activities
Principal Interest
$285,000 $7,125
$285,000 $7,125
(1) On February 1, 1999, the City of South San Francisco Capital Improvements Financing
Authority (CIFA) issued $31,720,000 of 1999 Revenue Bonds to provide funds to pay loans
(Homart Development), to fmance redevelopment and housing activities and to refund the 1993
Gateway tax allocation bonds, which were due in 2018. The 1999 revenue bonds are obligations
of the CIF A although the Redevelopment Agency is required to make bond principal and interest
payments from the Gateway increment tax and housing set-aside revenues. The 1999 Revenue
Bonds are, in substance, obligations of the Redevelopment Agency, and have therefore been
recorded as such in these fmancial statements. On April 16, 2006, the Gateway principal portion
of the $23,860,000 was refunded as discussed in (1) above. The housing bonds are now
obligations of the Redevelopment Successor Agency. The 1999 Revenue Bonds were issued and
net proceeds of $9,614,978 plus an additional $956,470 of 1993 bond reserve funds were used to
purchase U.S. government securities. Those securities were deposited in an irrevocable trust with
an escrow agent to provide for all future debt service payments on the 1993 bonds. As a result,
the 1993 bonds are considered to be defeased and the liability for those bonds has been removed.
Pledged Revenues
With the dissolution of the former Redevelopment Agency discussed above, Tax Increment is no
longer distributed, and instead the Successor Agency receives payments from the County's
Redevelopment Property Tax Trust Fund (RPTTF) that are to be used to fund debt service on the
Bonds, with no distinction between housing and non-housing revenues.
95
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2018
NOTE 13 -FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTIVITIES (Continued)
E. POLLUTION REMEDIATION
In fiscal 2010, the former Redevelopment Agency purchased an unimproved parcel adjacent to
the Caltrain Commuter Rail station from the State of California. The current rail station is among
the oldest on the peninsula, is under the freeway, is small, has limited parking, and is not adjacent
to the Downtown due to the freeway. The Successor Agency will contribute that site to the
County Transportation Agency for the future reconfiguration of that rail station after the County
secures necessary funding from other sources. The Successor Agency's contribution will include
use of the purchased parcel in order to make the station safer, more visually pleasing, more usable
to commuters and business shuttles, and to make the Downtown accessible to pedestrians to and
from the train station. As part of that land purchase, the price paid by the former Agency to the
State was discounted to give the former Agency credit in the amount of $537,000 against known
pollution remediation costs on the site. If the funding from the County for the station
reconfiguration does not materialize, and if construction does not occur on that site, the pollution
mitigation costs will be much less.
F. COMMITMENTS AND CONTINGENCIES
State Approval of Enforceable Obligations
The Successor Agency prepares a Recognized Obligation Payment Schedule (ROPS) semi-
annually that contains all proposed expenditures for the subsequent six-month period. The ROPS
is subject to the review and approval of the Oversight Board as well as the State Department of
Finance. Although the State Department of Finance may not question items included on the
ROPS in one period, they may question the same items in a future period and disallow associated
activities. The amount, if any, of current obligations that may be denied by the State Department
of Finance cannot be determined at this time. The City expects such amounts, if any, to be
immaterial.
State Asset Transfer Review
The activities of the former Redevelopment Agency and the Successor Agency are subject to
further examination by the State of California and the amount, if any, of expenditures which may
be disallowed by the State cannot be determined at this time. In addition, the State Controller's
Office will be conducting a review of the propriety of asset transfers between the former
Redevelopment Agency or the Successor Agency and any public agency that occurred on or after
January 1, 2011 and the amount, if any, of assets that may be required to be returned to the
Successor Agency cannot be determined at this time. The City expects such amounts, if any, to
be immaterial.
96
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2018
Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plans
Last 10 Years*
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Measurement Date 6/30/2014 6/30/2015 6/30/2016
Total Pension Liability
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 of benefit terms
Changes of assumptions (3,374,655)
Difference between expected and actual experience (1,567,798) (476,337)
Benefit payments, including refunds of employee
contributions {9 ,287,97 52 {10,407,243} {11,085,829}
Net change in total pension liability 8,092,542 2,119,130 6,388,816
Total pens ion liability -beginning 188,659,588 196,752,130 198,871,260
Total pension liability-ending (a) $196,752,130 $198,871,260 $205,260,076
Plan fiduciary net position
Contributions -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
contributions (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 p.an fiduciary net position 18,125,995 (1,438,258) (3,135,032)
Plan fiduciary net position -begi_nning 125,614,993 143,740,988 142,302,730
Plan fiduciary net position -ending (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 pens ion liability 73.06% 71.56% 67.80%
Covered payroll $17,725,581 $17,798,104 $21,409,193
Net pension liability as percentage of covered-
employee payroll 299.07% 317.83% 308.71%
Notes to Schedule:
Benefit chani: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 for voluntary benefit changes as well as any offers
ofTwo Years Additional Service Credit (a.ka. Golden Handshakes).
Chani:es in assumption, In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016,
there were no changes. In 2015, amounts reported reflect an adjustment ofthe discount rate from 7.5 percent (net
of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014,
amounts reported were based on the 7.5 percent discount rate. All other assumptions for the June 30, 2014
measurement date were the same as those used for the June 30, 2015 and 2016 measurement dates.
*Fiscal year 2015 was the 1st year of implementation.
98
6/30/2017
$3,922,518
15,430,998
12,421,358
1,958,164
{11,565,392}
22,167,646
205,260,076
$227,427,722
$5,228,454
1,720,600
15,616,363
(11,565,392)
{205,472}
10,794,553
139,167,698
$149,962,251
$77,465,471
65.94%
$29,390,370
263.57%
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2018
Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plans
Last 10 Years*
SCHEDULE OF CONTRIBUTIONS
Fiscal Year EndedJune 30 2015 2016
Actuarially determined contnbution $4,210,973 $5,399,856
Contnbutions in relation to the actuarially
determined contnbutions 4,210,973 5,399,856
Contnbution deficiency (excess) $0 $0
Covered payroll $17,798,104 $21,409,193
Contnbutions as a percentage of covered-
employee payroll 23.66% 25.22%
Notes to Schedule
Valuation date: 6/30/2012 6/30/2013
Methods and assumptions used to determine contribution rates:
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Inflation
Salary increases
Investment rate ofretum
Retirement age
Mortality
Entry age
Level percentage of payroll
24 years as of the Valuation Date
15-year smoothed market
2.75%
Varies by entry age and service
7.500/o net ofadministrative expenses
The probabilities ofRetirement are
based on the 2010 CalPERS Experience
Study for the period from 1997 to 2007
The probabilities of mortality are based
on the 2014 CalPERS Experience Study
for the period from 1997 to 2007. Pre-
retirement and Post-retirement mortality
rates include 20 years of projected
mortality improvement using Scale AA
published by the Society of Actuaries
*Fiscal year 2015 was the 1st year of implementation
99
2017
$5,228,454
52228,454
$0
$29,390,370
17.79%
6/30/2014
2018
$6,166,024
6,166,024
$0
$23,630,354
26.09%
6/30/2015
CITY OF soum SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2018
Safety Agent Multiple-Fmployer Defined Benefit Pension Plans
Lastl0Years•
SCHEDULE OF CHANGES IN THENEf PENSION LIABILITY AND RELATED RATIOS
Measurement Date 6/30/2014 6/30/2015 6/30/2016
Total Pension lialility
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 teIIDS
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 lialility 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
Contnbutions • employer $6,535,399 $7,191,715 $8,535,737
Contnbutions -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
pension 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"/o
Notes to Schedule:
6/30/2017
$6,264,307
21,238,842
18,010,606
4,520,149
(14,760,979)
35,272,925
278,764,324
$314,037~49
$8,071,060
1,980,507
21,553,126
(14,760,979)
(283,579)
16,560,135
192,070,665
$208,630,800
$105,406,449
66.44%
$19,563,549
538.79%
Benefit changes, The figures above do not include any liability impact that may have resulted from plan changes which occurred after
the actuarial valuation date. This applies or voluntary benefit changes as well as any offers ofTwo Years Additional Service Credit (a.ka.
G:llden Handshakes).
Changes jn assumption. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes.
In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent
(without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate. All
other assumptions for the June 30, 2014 measurement date were the same as those used for the June 30, 2015 and 2016 measurement
dates.
*Fiscal year 2015 was the 1st year of implementation.
100
CITY OF soum SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2018
Safety Agent Multiple-Employer Defined Benefit Pension Plans
last 10 Years*
SCHEDULE OF CON1RIBUTIONS
Fiscal Year Ended June 30 2015 2016
Actuarially detennined contnbution $7,191,715 $8,538,138
Contributions in relation to the actuarially
detennined contnbutions 7191 715 8,538,138
Contribution deficiency (eliCess) $0 $0
2017
$8,071,060
8,071,060
$0
Covered payroll $16,679,857 $18,986,895 $19,563,549
Contributions as a percentage of covered-
employee payroll 43.12% 44.97%
Notes to Schedule
Valuation date: 6/30/2012 6/30/2013
Methods and assumptions used to detennine contribution rates:
Actuarial cost method
A1IKJrtization method
Remaining a1IKJrtization 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 s1IKJothed market
2.75%
Varies by entry age and service
7.50% net ofadministrative eiq:,enses
The probabilities of Retirement are based
on the 2010 CalPERS Experience Study
The probabilities of mortality are based
on the 2014 CalPERS Experience Study
for the period from 1997 to 2007. Pre-
retirement and Post-retirement mortality
rates include 20years of projected
mortality improvement using Scale AA
published by the Society of Actuaries
*Fiscal year 2015 was the 1st year of implementation
101
41.26%
6/30/2014
2018
$9,322,781
9,322,781
$0
$21,932,480
42.51%
6/30/2015
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2018
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
Retiree Healthcare OPEB Plan -Agent Multiple Employer
Last 10 fiscal years*
(Amounts in 000's)
Measurement Date
Total OPEB Liability
Service Cost
Interest
Changes in benefit terms
Differences between expected and actual experience
Changes of assumptions
Benefit payments
Net change in total OPEB liability
Total OPEB liability -beginning
Total OPEB liability -ending (a)
Plan fiduciary net position
Contributions -employer
Contributions -employee
Net investment income
Administrative expense
Benefit payments
Net change in plan fiduciary net position
Plan fiduciary net position -beginning
Plan fiduciary net position -ending (b)
Net OPEB liability-ending (a)-(b)
Plan fiduciary net position as a percentage of the total OPEB liability
Covered-employee payroll
Net OPEB liability as a percentage of covered-employee payroll
* Fiscal year 2018 was the first year of implementation.
102
6/30/17
$1,574
5,087
(2,901)
3,760
75,240
$79,000
$3,703
1,803
(9)
(2,901)
2,596
17,114
$19,710
$59 290
24.95%
$26,539,044
0.22%
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2018
SCHFDULEOFCONTRIBUTIONS
Retiree Healthcare OPEB Plan -Agent Multiple Employer
Last 10 fiscal years*
(Amounts in 000's)
Fiscal Year Ended June 30,
Actuarially detennined contribution
Contributions in relation to the
actuarially detennined contnbution
2018
$6,279
4,128
$2,151 Contribution deficiency (excess)
Covered-employee payroll
Contributions as a percentage of
covered-employee payroll
$26,986,309
0.01%
* Fiscal year 2018 was the first year of implementation.
NOTES TO SCHEDULEOFEMPWYER CONTRIBUTION
Retiree Healthcare OPEB Plan -Agent Multiple Employer
Methods and Assumptions for Actuarially Determined Contribution
Valuation Date
Actuarial Cost Method
Amortization Method
Amortization Period
Asset Valuation Method
Discount Rate
General Inflation
Medical Trend
Mortality, Retirement,
Disability, Tennination
Mortality Improvement
June 30, 2017
Entry Age Normal, level Percentage of Payroll
level dollar
Average of22.5 years remaining for 2017/18
Investment gains and losses spread over 5-year rolling period
Select and Ultimate: 5.22% FYE phasing into 7.25% FYE 2028
2.75%
• Non-Medicare -7.5% for 2018, decreasing to an ultimate rate of
5.()0/o in 2021 and later years
• Medicare -6.7% for 2018, decreasing to an ultimate rate of
5.0% in 2021 and later years
• CalPERS 1997-2011 Experience Study
• Mortality projected fully generational with Scale MP-2014,
modified to converge to ultimate rates in 2022
103
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SUPPLEMENTARY INFORMATION
This Page Left Intentionally Blank
GENERAL FUND
The General Fund is the City's primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund. The General Fund is comprised of
the following:
GENERAL PURPOSE FUND
This fund accounts for resources traditionally associated with government, such as administration, public
safety, library, parks maintenance, and recreation, outside of those accounted for in other funds.
MEASURE W FUND
This fund accounts for revenue as the result of the voter-approved one-half percent sales and use tax that
was passed on November 3, 2015. The tax went into effect April 1, 2016 and will last for 30 years until
March 31, 2046. Revenues are committed for maintenance and enhancement of local services.
107
ASSETS
Cash and investments
Receivables:
Accounts
Accrued interest
Due from other funds
Inventory
Restricted cash and investments
Properties held for redevelopment
Total Assets
LIABILITIES
Accounts payable
Accrued salaries and benefits
Other payable
Deposits
Unearned revenue
Total Liabilities
FUND BALANCES
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total Fund Balances
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
COMBINING BALANCE SHEETS
JUNE 30, 2018
General Purpose
$25,762,213
5,774,877
213,239
70,000
106
200,000
20,582;335
$52,602,770
$1,307,966
3,027,256
290,552
411,025
124,085
5,160,884
106
20,582,335
2,934,541
4,280,672
19,644,232
47,441,886
Total Liabilities and Fund Balances $52,602,770
108
Measure W Total
$11,885,837 $37,648,050
1,959,169 7,734,046
213,239
70,000
106
200,000
20,582,335
$13,845,006 $66,447,776
$1,307,966
3,027,256
290,552
411,025
124,085
5,160,884
106
20,582,335
$13,791,356 16,725,897
53,650 4,334,322
19,644,232
13,845,006 61,286,892
$13,845,006 $66,447,776
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2018
REVENUES
Property taxes
Sales taxes
Transient occupancy taxes
Franchise Fees
Other taxes
Intergovernmental
Interest and rentals
Licenses and permits
Charges for services
Fines and forfeitures
Other
Total Revenues
EXPENDITURES
Current:
City Council
City Clerk
City Treasurer
City Attorney
City Manager
Finance
Non-departmental
Human Resources
Fire
Police
Public Works
Parks and Recreation
Library
Economic and Community Development
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances before special items
Special Item
Net Change in Fund Balances
Fund balances (deficits) -July 1
Fund balances (deficits) -June 30
General Purpose
$34,143,627
17,566,189
13,978,533
4,403,493
5,871,096
2,610,233
2,846,967
14,674,809
10,924,668
423,604
266,872
107,710,091
239,264
660,306
135,218
996,380
2,668,715
3,080,769
1,049,187
1,541,524
26,059,072
26,639,009
5,014,343
15,468,370
5,379,836
7,722,689
96,654,682
11,055,409
3,990,605
6,269,262
(13,732,838)
(3,472,971)
7,582,438
(7,154,626)
427,812
47,014,074
$47,441,886
109
MeasureW
$11,162,238
11,162,238
22,351
22,351
11,139,887
(6,585,030)
(6,585,030)
4,554,857
9,290,149
$13,845,006
Intra-Fund
Transactions
Elimination
(2,440,861)
2,440,861
Total
$34,143,627
28,728,427
13,978,533
4,403,493
5,871,096
2,610,233
2,846,967
14,674,809
10,924,668
423,604
266,872
118,872,329
239,264
660,306
135,218
996,380
2,691,066
3,080,769
1,049,187
1,541,524
26,059,072
26,639,009
5,014,343
15,468,370
5,379,836
7,722,689
96,677,033
22,195,296
3,990,605
3,828,401
(17,877,007)
(10,058,001)
12,137,295
(7,154,626)
4,982,669
56,304,223
$61,286,892
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, 2018
General Purpose
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-departmental
Human Resources
Fire
Police
Public Works
Parks and Recreation
Library
Economic and Community Development
Total charges to appropriations
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets
Transfers in
Transfers out
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
BEFORE SPECIAL ITEMS
Special Item
Net Change in Fund Balances
Fund Balance -July 1
Adjustment to budgetary basis:
Encumbrance adjustments
Fund Balance -June 30
Budgeted Amounts
Actual
Original Final Amount
$26,877,714 $33,760,827 $34,143,627
16,279,876 16,279,876 17,566,189
14,800,000 14,800,000 13,978,533
4,000,000 4,000,000 4,403,493
6,043,065 5,343,065 5,871,096
7,024,542 2,020,600 2,610,233
3,010,263 3,010,263 2,846,967
9,232,477 10,232,477 14,674,809
8,934,001 9,329,002 10,924,668
818,500 163,500 423,604
174,991 174,991 266,872
97,195,429 99,114,601 107,710,091
246,918 246,917 239,264
642,681 666,810 660,306
130,861 135,861 135,218
913,092 1,038,092 996,380
1,960,599 3,091,257 2,861,732
2,595,665 3,423,768 3,423,017
1,080,967 1,108,503 1,107,187
1,625,221 1,699,257 1,698,958
26,373,610 26,906,873 26,763,505
27,864,737 27,204,237 26,639,009
4,315,409 5,339,637 5,339,181
15,553,369 15,929,220 15,649,568
5,361,133 5,575,195 5,394,725
7,216,002 10,772,828 10,027,304
95,880,264 103,138,455 100,935,354
3,470,600 3,990,600 3,990,605
1,772,505 1,800,705 6,269,262
(2,920,600) (6,592,401) (13,732,838)
2,322,505 (801,096) (3,472,971)
3,637,670 (4,824,950) 3,301,766
(7,154,626)
$3,637,670 ($4,824,950) (3,852,860)
47,014,074
4,280,672
$47,441,886
110
Variance with
Final Budget
Positive
(Negative)
$382,800
1,286,313
(821,467)
403,493
528,031
589,633
(163,296)
4,442,332
1,595,666
260,104
91,881
8,595,490
7,653
6,504
643
41,712
229,525
751
1,316
299
143,368
565,228
456
279,652
180,470
745,524
2,203,101
5
4,468,557
(7,140,437)
(2,671,875)
8,126,716
(7,154,626)
$972,090
(Continued)
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, 2018
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-departmental
Human Resources
Fire
Police
Public Works
Parks and Recreation
Library
Economic and Community Development
Total charges to appropriations
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets
Transfers in
Transfers out
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
BEFORE SPECIAL ITEMS
Special Item
Net Change in Fund Balances
Fund Balance -July 1
Adjustment to budgetary basis:
Encumbrance adjustments
Fund Balance -June 30
MeasureW
Budgeted Amounts
Original Final
$9,168,433 $9,168,433
9,168,433 9,168,433
76,000
2,440,861 2,440,861
2,440,861 2,516,861
(9,168,433) (13,900,705)
(9,168,433) (13,900,705)
(2,440,861) (7,249,133)
($2,440,861) ($7,249,133)
111
Actual
Amount
$11,162,238
11,162,238
76,001
76,001
(6,585,030)
(6,585,030)
4,501,207
4,501,207
9,290,149
53,650
$13,845,006
Variance with
Final Budget
Positive
(Negative)
$1,993,805
1,993,805
(1)
2,440,861
2,440,860
7,315,675
7,315,675
11,750,340
$11,750,340
(Continued)
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, 2018
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-departmental
Human Resources
Fire
Police
Public Works
Parks and Recreation
Library
Economic and Community Development
Total charges to appropriations
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets
Transfers in
Transfers out
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
BEFORE SPECIAL ITEMS
Special Item
Net Change in Fund Balances
Fund Balance -July 1
Adjustment to budgetary basis:
Encumbrance adjustments
Fund Balance -June 30
Total
Budgeted Amounts
Original Final
$26,877,714 $33,760,827
25,448,309 25,448,309
14,800,000 14,800,000
4,000,000 4,000,000
6,043,065 5,343,065
7,024,542 2,020,600
3,010,263 3,010,263
9,232,477 10,232,477
8,934,001 9,329,002
818,500 163,500
174,991 174,991
106,363,862 I 08,283,034
246,918 246,917
642,681 666,810
130,861 135,861
913,092 1,038,092
1,960,599 3,167,257
2,595,665 3,423,768
1,080,967 1,108,503
1,625,221 1,699,257
28,814,471 29,347,734
27,864,737 27,204,237
4,315,409 5,339,637
15,553,369 15,929,220
5,361,133 5,575,195
7,216,002 10,772,828
98,321,125 105,655,316
3,470,600 3,990,600
1,772,505 1,800,705
(12,089,033) (20,493,106)
(6,845,928) (14,701,801)
1,196,809 (12,074,083)
$1,196,809 ($12,074,083)
112
Actual
Amount
$34,143,627
28,728,427
13,978,533
4,403,493
5,871,096
2,610,233
2,846,967
14,674,809
10,924,668
423,604
266,872
118,872,329
239,264
660,306
135,218
996,380
2,937,733
3,423,017
1,107,187
1,698,958
26,763,505
26,639,009
5,339,181
15,649,568
5,394,725
10,027,304
101,011,355
3,990,605
6,269,262
(20,317,868)
(10,058,001)
7,802,973
(7,154,626)
648,347
56,304,223
4,334,322
$61,286,892
Variance with
Final Budget
Positive
(Negative)
$382,800
3,280,118
(821,467)
403,493
528,031
589,633
(163,296)
4,442,332
1,595,666
260,104
91,881
10,589,295
7,653
6,504
643
41,712
229,524
751
1,316
299
2,584,229
565,228
456
279,652
180,470
745,524
4,643,961
5
4,468,557
175,238
4,643,800
19,877,056
(7,154,626)
$12,722,430
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 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 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).
113
CITY OF SOUTH SAN FRANCISCO
CAPITAL IMPROVEMENT CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2018
REVENUES:
Intergovernmental
Other
Total Revenues
EXPENDITURES:
Current:
Public works
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
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
Budget
$13,837,689
474,991
14,312,680
52,687,832
52,687,832
(38,375,152)
37,866,546
37,866,546
($508,606)
114
Variance with
Final Budget
Positive
Actual Amounts (Negative)
$3,079,247 ($10,758,442)
(474,991)
3,079,247 (11,233,433}
27,207,988 25,479,844
27,207,988 25,479,844
(24,128,741) 14,246,411
10,217,389 (27,649,157)
10,217,389 (27,649,157)
(13,911,352) ($13,402,746)
(88,331)
14,197,099
$197,416
CITY OF SOUTH SAN FRANCISCO
EAST OF 101 SEWER IMPACT FEES CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
REVENUES:
Interest and rental
Charges for services
Total Revenues
EXPENDITURES:
Current:
Non-departmental
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
Fund balance (deficit) -July 1
Fund balance (deficit) -June 30
FOR THE YEAR ENDED JUNE 30, 2018
Budget
$2,265,000
2,265,000
2,575
2,575
2,262,425
(339,331)
(339,331)
$1,923,094
115
Actual Amounts
$2,654
2,262,536
2,265,190
2,575
2,575
2,262,615
(111,936)
(111,936)
2,150,679
688,223
$2,838,902
Variance with
Final Budget
Positive
(Negative)
$2,654
(2,464)
190
190
227,395
227,395
$227,585
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, 2018
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
$5,716,000
5,716,000
2,575
2,575
5,713,425
(3,539,503)
(3,539,503)
$2,173,922
116
Variance with
Final Budget
Positive
Actual Amounts (Negative)
$17,423 $17,423
5,698,649 (17,351)
5,716,072 72
2,575
2,575
5,713,497 72
(299,685) 3,239,818
(299,685) 3,239,818
5,413,812 $3,239,890
7,045,993
$12,459,805
CITY OF SOUTH SAN FRANCISCO
CHILD CARE IMPACT FEES CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
REVENUES:
Interest and rental
Charges for services
Total Revenues
EXPENDITIJRES:
Current:
Non-departmental
Public Works
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITIJRES
NET CHANGE IN FUND BALANCE
Fund balance -July 1
Fund balance -June 30
FOR THE YEAR ENDED JUNE 30, 2018
Budget
$1,167,000
1,167,000
2,575
100,000
102,575
1,064,425
$1,064,425
117
Actual Amounts
$5,928
1,289,382
1,295,310
2,575
12
2,587
1,292,723
1,292,723
3,399,688
$4,692,411
Variance with
Final Budget
Positive
(Negative)
$5,928
122,382
128,310
(99,988)
(99,988)
228,298
$228,298
CITY OF SOUTH SAN FRANCISCO
DEVELOPER DEPOSIT CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2018
EXPENDITURES
Current:
Public works
Total Revenues
OTHER FINANCING SOURCES (USES)
Transfers (out)
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
Fund balance -July 1
Fund balance -June 30
I 18
Final
Budget
$69,000
69,000
(1,525,129)
(1,525,129)
$1,594,129
Actual Amounts
$69,639
69,639
(69,639)
72,884
$3,245
Variance with
Final Budget
Positive
(Negative)
($639)
(639)
1,525,129
1,525,129
$1,524,490
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, 2018
REVENUES:
Interest and rental
Total Revenues
EXPENDITURES
Current:
Public Works
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
Fund balance -July 1
Fund balance -June 30
Final
Budget
$14,800
14,800
3,502,915
3,502,915
(3,488,115)
1,220,600
(4,200,015)
(2,979,415)
($6,467,530)
119
Variance with
Final Budget
Positive
Actual Amounts (Negative)
$14,864 $64
14,864 64
3,502,915
3,502,915
14,864 3,502,979
10,000,000 8,779,400
(2,954,823) 1,245,192
7,045,177 10,024,592
7,060,041 $13,527,571
14,525,445
$21,585,486
This Page Left Intentionally Blank
NON-MAJOR GOVERNMENTAL FUNDS
Special revenue funds are used to account for revenue sources that are restricted by law or administrative
action to expenditures for specified purposes. Special revenue funds used by the City of South San
Francisco include:
Gas Tax -Accounts for State monies received and expended for street improvements, repairs,
engineering, and administration under Streets and Highway Code Sections 2105, 2106, 2107, and
2107.5. Includes sales taxes on gasoline received from the State's Traffic Congestion Relief Fund.
Developer Contributions -Accounts for fees deposited for planning and engineering reviews or
for future project development.
Federal Aviation Grant -This fund accounts for federal monies received for insulating
structures against airport noise.
Community Development Block Grant -Accounts for Federal monies received to be expended
for development of jobs and suitable housing for low-income residents.
Maintenance District -Accounts for a portion of property tax dedicated to provide for the
maintenance of landscaped areas within housing developments.
Transportation Sales Tax -Accounts for the sales tax that provides resources for street
improvements and repairs.
Solid Waste Reduction -Accounts for revenues and expenditures associated with the waste
reduction, recycling, composting and household hazardous waste programs for residents and
businesses.
Supplemental Law Enforcement Services -Accounts for State monies provided for designated
Police department services.
City Programs -Organizations and individuals provide revenues that fund certain programs and
services.
Affordable Housing Trust -The inclusionary housing requirement in the City provides that 20%
of new residential housing units (for projects of 4 or more units) be affordable. These in-lieu fees
(in-lieu of production of affordable housing units by the developer) provide new residential
development's share of affordable housing units.
PEG Equipment and Access -Accounts for the one percent of money set-aside from cable
franchise fees that are used to support public, educational and governmental (PEG) channels.
Transit Station Enhancement in-Lieu Fee -Accounts for revenues that are collected as a
negotiated community benefit.
Road Maintenance and Rehabilitation -Accounts for State monies received and expended for
road maintenance and rehabilitation pursuant to Senate Bill 1, approved in 2017.
121
NON-MAJOR GOVERNMENTAL FUNDS (Continued)
Capital projects funds are used to account for resources used for the acquisition and construction of
capital facilities or major capital equipment, except for capital improvements financed by proprietary
funds. Capital projects funds used at the City of South San Francisco include:
Non-obligated Capital Projects -Accounts for the construction of assets financed by non-
obligated debt.
Public Safety Impact Fee -These fees are to provide new development's share of funding for
the replacement of public safety capital equipment, vehicles and facilities.
Oyster Point Improvements Impact Fees -These fees provide new development's share of
funding for the Oyster Point at Highway 101 interchange improvements.
Sewer Capacity Charges -Accounts for cost recovery charged to new development based on
proportional benefit, associated with providing sewer collection and treatment capacity to new
development, both through existing infrastructure provided, and through future capital projects
not funded by other sources.
Oyster Point Development Impact Fees -Accounts for expenditures associated with the
acquisition, construction, or improvement related to Oyster Point Development.
Park Land Acquisition Fee -Accounts for monies received and expended pursuant to SSFMC
Chapter 8.67 and Mitigation Fee Act for park land acquisition.
Park Construction Fee -Accounts for monies received and expended pursuant to SSFMC
Chapter 8.67 and Mitigation Fee Act for park construction.
Bicycle and Pedestrian Impact Fee -Accounts for monies received and expended pursuant to
SSFMC Chapter 8.68 for mitigation of impacts of new development on bicycle and pedestrian
improvements in the City.
122
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
Unassigned
Total Fund Balances
Total Liabilities and Fund Balances
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2018
SPECIAL REVENUE FUNDS
Federal
Developer Aviation
Gas Tax Contributions Grant
$403,847 $7,668,406 $727,752
119,577
3,798 36,990 3,704
$527,222 $7,705,396 $731,456
$36,059
29,846
1,310,428
$731,456
1,376,333 731,456
$527,222 6,329,063
527,222 6,329,063
$527,222 $7,705,396 $731,456
124
Community
Development Maintenance
Block Grant Districts
$3,154,914
$159,349
898,485
249,017
$1,306,851 $3,154,914
$82,293 $12,810
955,206
1,037,499 12,810
269,352 3,142,104
269,352 3,142,104
$1,306,851 $3,154,914
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
$2,951,683 $422,869 $715 $1,382,014 $1,723,006 $1,089,639 $656,611
16,255 328 47,588
14,247 388 18,486 8,531 5,014 2,919
19,234
1,900,000
$2,965,930 $439,124 $1,103 $1,400,500 $3,651,099 $1,142,241 $659,530
$34 $25,330 $330
$13,638 129
$1,000
13,672 1,000 25,459 330
$2,965,930 425,452 103 1,375,041 $3,651,099 $1,141,911 $659,530
2,965,930 425,452 103 1,375,041 3,651,099 1,141,911 659,530
$2,965,930 $439,124 $1,103 $1,400,500 $3,651,099 $1,142,241 $659,530
(Continued)
125
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
Unassigned
Total Fund Balances
Total Liabilities and Fund Balances
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2018
SPECIAL
REVENUE FUND CAPITAL PROJECTS FUNDS
Road Non-obligated Public Oyster Point
Maintenance Capital Safety Improvement
and Rehabilitation Projects Iml!actFee Iml!act Fees
$213,494 $41,857 $831,131 $22,138
56,915
540 4,907 7,673
$270,949 $41,857 $836,038 $29,811
$270,949 $41,857 $836,038 $29,811
270,949 41,857 836,038 29,811
$270,949 $41,857 $836,038 $29,811
126
Sewer
Capacity
Cha!!es
$9,473,922
32,675
$9,506,597
$9,506,597
9,506,597
$9,506,597
CAPITAL PROJECTS FUNDS
Total
Oyster Point Park Land Park Bicycle and Nonmajor
Development Acquisition Construction Pedestrian Governmental
ImeactFees Fee Fee ImeactFee Funds
$668 $54,466 $17,543 $923 $30,837,598
47,258 447,270
198 76 3 140,149
917,719
249,017
1,900,000
$47,926 $54,664 $17,619 $926 $34,491,753
$188,415 $345,271
998,819
1,310,428
68,000 69,000
731,456
256,415 3,454,974
$54,664 $17,619 $926 31,245,268
(208,489) (208,489)
(208,489) 54,664 17,619 926 31,036,779
$47,926 $54,664 $17,619 $926 $34,491,753
127
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2018
SPECIAL REVENUE FUNDS
Federal Community
Developer Aviation Development
Gas Tax Contributions Grants Block Grant
REVENUES
Property taxes
Other taxes
Intergovernmental $1,531,782 $5,345 $818,724
Interest and rentals 547 $10,347 880 22,133
Charges for services 2,474,089
Other 32,911
Total Revenues 1,532,329 2,517,347 6,225 840,857
EXPENDITURES
Current:
Economic and community development 382,193 6,225 1,050,395
Public works
Non-departmental
Police
Other
Debt service:
Principal repayments
Total Expenditures 382,193 6,225 1,050,395
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 1,532,329 2,135,154 (209,538)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out (1,936,652) (683,959)
Total Other Financing Sources (Uses) (1,936,652) (683,959)
Net Change in Fund Balances (404,323) 1,451,195 (209,538)
Fund balance -July 1 931,545 4,877,868 478,890
Fund balance -June 30 $527,222 $6,329,063 $269,352
128
Maintenance
Districts
$1,846,017
1,846,017
1,266,282
1,266,282
579,735
579,735
2,562,369
$3,142,104
Solid
Transportation Waste
Sales Tax Reduction
$1,476,167
4,544
$195,059
1,480,711 195,059
87,196
87,196
1,480,711 107,863
(704,199) (225,408)
(704,199) (225,408)
776,512 (117,545)
2,189,418 542,997
$2,965,930 $425,452
SPECIAL REVENUE FUNDS
Supplemental
Law Enforce-
ment Services
$139,556
231
139,787
139,787
139,787
103
$103
City
Programs
$3,251
780,230
783,481
192,058
255,671
447,729
335,752
(3,096,156)
(3,096,156)
(2,760,404)
4,135,445
$1,375,041
129
Affordable
Housing
Trnst
$3,372
3,372
3,372
3,372
3,647,727
$3,651,099
PEG Transit Station
Equipment and Enhancement
Access In-Lien Fee
$1,351 $903
599,718
173,849
175,200 600,621
4,585
4,585
170,615 600,621
(72)
(72)
170,615 600,549
971,296 58,981
$1,141,911 $659,530
(Continued)
CAPITAL PROJECTS FUNDS
Oyster Point Park Land Park
Development Acquisition Construction
Impact Fees Fee Fee
$503,827 $54,664 $25,169
3,707,728
4,211,555 54,664 25,169
4,420,044
4,420,044
Bicycle and
Pedestrian
Impact Fee
$926
926
Total
Nonmajor
Governmental
Funds
$1,846,017
1,615,723
2,743,760
51,725
11,786,184
5,562,588
23,605,997
1,526,009
5,761,941
4,585
331,845
256,298
2,382,000
10,262,678
---~(2_0~8,_48_9~) ____ 5~4,~6_64 ______ 2~5,_16_9 ______ ..;_9_26'--____ 13..,_,3_4-'-"3':..;.3....;19_
(7,550) (7,111,629)
(7,550) (7,111,629)
(208,489) 54,664 17,619 926 6,231,690
24,805,089
($208,489) $54,664 $17,619 $926 $31,036,779
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, 2018
GASTAX DEVELOPER CONTRIBUTIONS
Variance Variance
Final Positive Final Positive
Budget Actual (Negative} Budget Actual (Negative}
REVENUES
Property taxes
Other taxes
Intergovernmental $1,674,827 $1,531,782 ($143,045)
Interest and rentals 15,000 547 (14,453) $10,347 $10,347
Charges for services $2,517,000 2,474,089 (42,911)
Other 32,911 32,911
Total Revenues 1,689,827 1,532,329 {157,498} 2,517,000 2,517,347 347
EXPENDITURES
Current:
City Council
Economic and community development 118,697 479,863 (361,166)
Public works
Non-departmental
Fire
Police
Other
Debt service:
Principal repayments
Total Expenditures 118,697 479,863 {361,166}
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 1,689,827 1,5321329 {157,498} 2,398,303 2,037,484 {360,819}
OTHER FINANCING SOURCES (USES)
Transfers in 50,294 (50,294)
Transfers out {3,086,620} {1,936,652} 1,1491968 {4,278,501} {683,959} 3,594,542
Total Other Financing Sources (Uses) {3,036,326} {1,936,652} 1,099,674 {4,278,501} {683,959} 3,594,542
NET CHANGE IN FUND BALANCES ($1,346,499} (404,323) $942,176 {$1,880,198) 1,353,525 $3,233,723
Adjustment to budgetary basis:
Encumbrance adjustments 97,670
Fund balance -July 1 931,545 4,877,868
Fund balance -June 30 $527,222 $6,329,063
132
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)
$1,558,558 $1,846,017 $287,459
$5,345 $5,345 $415,000 $818,724 $403,724
$500 880 380 80,000 22,133 (57,867)
11,437 (11,437)
500 6,225 5,725 506 437 840 857 334,420 1,558,558 1,846,017 287,459
10,000 6,225 3,775 658,791 1,363,940 (705,149)
1,526,693 1,266,282 260,411
10,000 6,225 3,775 658 791 1,363,940 {705,149) 1,526,693 1,266,282 260,411
(9,500) 9 500 {152,354) (523,083) (370,729) ___ 3_.1, __ 86_5 ____ 5_7_.9, __ 73_5 ____ 5_4_.7, __ 87_0_
(95,330) 95,330 (76,532) 76,532
(95,330) 95,330 (76,532) 76,532
($9,500) $9,500 ($247,684) (523,083) ($275,399) ($44,667) 579,735 $624,402
313,545
478,890 2,562,369
$269,352 $3,142,104
(Continued)
133
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, 2018
TRANSPORTATION SALES TAX SOLID WASTE REDUCTION
Variance Variance
Final Positive Final Positive
Bud~et Actual (Ne~ative2 Bud~et Actual (Ne~ative2
REVENUES
Property taxes
Other taxes $1,468,995 $1,476,167 $7,172
Intergovernmental
Interest and rentals 25,000 4,544 (20,456)
Charges for services $180,000 $195,059 $15,059
Other
Total Revenues 1,493,995 1,480,711 (13,2842 180,000 195,059 15,059
EXPENDITURES
Current:
City Council
Economic and community development 151,563 158,276 (6,713)
Public works
Non-departmental
Fire
Police
Other
Debt service:
Principal repayments
Total Expenditures 151,563 158,276 {6,7132
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 1,493,995 1,480,711 {13,2842 28,437 36,783 8,346
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out {3,623,6242 {704,1992 2,919,425 {391,3382 {225,4082 165,930
Total Other Financing Sources (Uses) {3,623,6242 {704,1992 2,919,425 {391,3382 {225,4082 165,930
NET CHANGE IN FUND BALANCES ($2,129,629) 776,512 $2,906,141 {$362,9012 (188,625) $174,276
Adjustment to budgetary basis:
Encumbrance adjustments 71,080
Fund balance -July 1 2,189,418 542,997
Fund balance -June 30 $2,965,930 $425,452
134
SUPPLEMENTAL LAW
ENFORCEMENT SERVICES
Variance
Final Positive
Budget Actual (Negative)
$100,000 $139,556 $39,556
231 231
100,000 139,787 39,787
139,787 (139,787)
139,787 (139,787)
100,000 (100,000)
000,000) _____ _.;..10_0._,o_oo_
000,000) ______ 10_0._,o_oo_
103
$103
CITY PROGRAMS
Final
Budget
$1,000,000
1,000,000
13,000
2,365,425
2,378,425
(1,378,425)
(1,597,106)
(1,597,106)
($2,975,531)
Actual
$3,251
780,230
783,481
192,058
255,671
447,729
335,752
(3,096,156)
(3,096,156)
(2,760,404)
4,135,445
$1,375,041
135
Variance
Positive
(Negative)
$3,251
(219,770)
(216,519)
2,173,367
(255,671)
2,173,367
1,714,177
AFFORDABLE HOUSING TRUST
Variance
Final Positive
Budget Actual (Negative)
$3,372 $3,372
3,372 3,372
3,372 3,372
(1,499,050) ------------
(1,499,050) ------------
$215,127 3,372
3,647,727
$3,651,099
$3,372
(Continued)
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2018
PEG TRANSIT ENHANCEMENT
EQUIPMENT AND ACCESS IN-LIEU FEE
Variance Variance
Final Positive Final Positive
Bud~et Actual (Ne~ative2 Bud~et Actual (Ne~ative2
REVENUES
Property taxes
Other taxes
Intergovernmental
Interest and rentals $5,000 $1,351 ($3,649) $903 $903
Charges for services $600,000 599,718 (282)
Other 1252000 173,849 48,849
Total Revenues 130,000 175,200 45,200 600,000 600,621 621
EXPENDITURES
Current:
City Council
Economic and community development
Public works
Non-departmental 111,500 73,476 38,024
Fire
Police
Other
Debt service:
Principal repayments
Total Expenditures 111,500 73,476 38,024
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 18,500 101,724 83,224 600,000 600,621 621
OTHER FINANCJNG SOURCES (USES)
Transfers in
Transfers out {495,0002 {722 494,928
Total Other Financing Sources (Uses) {495,0002 {722 494,928
NET CHANGE IN FUND BALANCES $18,500 101,724 $83,224 $105,000 600,549 $495,549
Adjustment to budgetary basis:
Encumbrance adjustments 68,891
Fund balance -July I 971,296 58,981
Fund balance -June 30 $1,141,911 $659,530
136
ROAD MAINTENANCE NONOBLIGATED PUBLIC SAFETY
AND REHABILITATION CAPITAL PROJECTS IMPACT FEE
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative)
$372,444 $301,706 ($70,738)
$1,537 $1,537
$869,000 867,870 (1,130)
372,444 301,706 (70,738) ______________ 86_9.._,o_oo ____ 86_9.._,4_07 _____ 4_07_
6,167 6,167
627 (627)
627 (627) 6,167 (6,167)
372 444 301,079 (71,365) 862,833 869,407 6,574
(30,130) (30,130) (505,224) (427,503) 77,721
p0,130) (30,130) (505,224) (427,503) 77,721
$372,444 270,949 ($101,495) $357,609 441,904 $84,295
$41,857 394,134
$270,949 $41,857 $836,038
(Continued)
137
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2018
OYSTER POINT SEWER
IMPROVEMENT IMPACT FEES CAPACITY CHARGES
Variance Variance
Final Positive Final Positive
Bud!let Actual (Ne!lative 2 Bud!let Actual (Ne!lative2
REVENUES
Property taxes
Other taxes
Intergovernmental $86,203 $86,203
Interest and rentals $2,629 $2,629
Charges for services $2,380,000 2,379,998 (2) $5,600,000 5,552,734 (47,266)
Other
Total Revenues 2,380,000 2,382,627 2,627 5,600,000 5,638,937 38,937
EXPENDITURES
Current:
City Council
Economic and community development
Public works 52,561 52,561 2,575 75,615 (73,040)
Non-departmental
Fire
Police
Other
Debt service:
Principal repayments 21382,000 2,382,000
Total Expenditures 2,434,561 2,382,000 52,561 2,575 75,615 (73,0402
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (54,5612 627 55,188 5,597,425 5,563,322 p4,1032
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES ($54,5612 627 $55,188 $5,597,425 5,563,322 ($34,1032
Adjustment to budgetary basis:
Encumbrance adjustments
Fund balance -July 1 29,184 3,943,275
Fund balance -June 30 $29,811 $9,506,597
138
OYSTER POINT
DEVELOPMENT IMPACT FEES
Final
Budget
$80,500
3,707,000
3,787,500
4,420,000
Actual
$503,827
3,707,728
4,211,555
4,666,418
Variance
Positive
(Negative)
$423,327
728
424,055
(246,418)
PARKLAND
ACQUISITION FEE
Final
Budget
$54,000
54,000
Actual
$54,664
54,664
Variance
Positive
(Negative)
$664
664
PARK
CONSTRUCTION FEE
Final
Budget
$25,000
25,000
Actual
$25,169
25,169
Variance
Positive
(Negative)
$169
169
4,420,000 4,666,418 (246,418) ------------------------------
(632,500) (454,863) 177,637 54,000 54,664 664 25,000 25,169 169
(7,550) (7,550)
(7,550) (7,550)
($632,500) (454,863) $177,637 $54,000 54,664 $664 $25,000 17,619 ($7,381)
246,374
($208,489) $54,664 $17,619
(Continued)
139
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, 2018
REVENUES
Property taxes
Other taxes
Intergovernmental
Interest and rentals
Charges for services
Other
Total Revenues
EXPENDITURES
Current:
City Council
Economic and co=unity development
Public works
Non-departmental
Fire
Police
Other
Debt service:
Principal repayments
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
Adjustment to budgetary basis:
Encumbrance adjustments
Fund balance -July 1
Fund balance -June 30
BICYCLE AND
PEDESTRIAN IMPACT FEE
Final
Budget Actual
$926
926
926
926
$926
140
Variance
Positive
(Negative)
$926
926
926
$926
INTERNAL SERVICE FUNDS
Internal service funds account for department services and fmancing 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 fmancing 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.
141
ASSETS
Current assets:
Cash and investments
Receivables:
Accounts
Accrued interest
Deposit
Total current assets
Noncurrent assets:
Capital assets:
CITY OF SOUTH SAN FRANCISCO
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
JUNE 30, 2018
Health and
Self Retirement
City Service Insurance Benefits
$1,773,110 $13,377,450 $10,985,626
7,876 65,253 50,210
157,500 46,010
1,780,986 13,600,203 11,081,846
Depreciable, net of accumulated depreciation 291
Total Assets 1,781,277 13,600,203 11,081,846
LIABILITIES
Current liabilities:
Accounts payable 114,658 109,836 406
Other payable 35,772 12,733
Current portion of accrued insurance loss 660,356
Current portion of compensated absences 88,958 693,441
Current portion of long-term debt
Total current liabilities 239,388 782,925 693,847
Noncurrent liabilities:
Accrued insurance loss 12,133,000
Compensated absences obligation 112,686 639,688
Noncurrent portion oflong-term debt
Total noncurrent liabilities 112,686 12,133,000 639,688
Total Liabilities 352,074 12,915,925 1,333,535
NET POSffiON:
Net investment in capital assets 291
Unrestricted 1,428,912 684,278 9,748,311
Total Net Position $1,429,203 $684,278 $9,748,311
142
Equipment
Replacement Total
$4,056,950 $30,193,136
11,984 135,323
203,510
4,068,934 30,531,969
5,443,613 5,443,904
9,512,547 35,975,873
224,900
26,285 74,790
660,356
782,399
381,482 381,482
407,767 2,123,927
12,133,000
752,374
753,619 753,619
753,619 13,638,993
1,161,386 15,762,920
4,308,512 4,308,803
4,042,649 15,904,150
$8,351,161 $20,212,953
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, 2018
Health and
Self Retirement Equipment
City Service Insurance Benefits Re2Iacement Total
OPERATING REVENUES
Charges for services $4,290,790 $4,206,526 $13,690,768 $2,014,222 $24,202,306
Total Operating Revenues 4,290,790 4,206,526 13,690,768 2,014,222 24,202,306
OPERATING EXPENSES
Personnel expenses 1,812,572 1,087,130 13,376,898 16,276,600
Professional services 501,259 332,776 406 834,441
Program supplies 1,037,360 40,000 1,278 44,089 1,122,727
Insurance 11,578 1,583,181 1,594,759
Self-insurance and claims 1,486,551 1,486,551
Repair and maintenance 424,366 424,366
Utilities 29,271 29,271
Depreciation 580 837,628 838,208
Other 10,203 341,442 351,645
Total Operating Expenses 3,827,189 4,529,638 13,720,024 881,717 22,958,568
Operating Income (Loss) 463,601 (323,112~ (29,256~ 1,132,505 1,243,738
NONOPERATING
REVENUES (EXPENSES)
Interest income 2,368 16,054 12,648 3,186 34,256
Interest expense (47,430) (47,430)
Gain from disposal of capital assets 43,028 43,028
Other 58,271 58,271
Total Nonoperating
Revenues (Expenses) 2,368 74,325 12,648 (1,216) 88,125
Net income (loss) before transfers 465,969 (248,787) (16,608) 1,131,289 1,331,863
TRANSFERS
Transfers in 1,296,000 1,200,000 2,496,000
Transfers out (184,087) (184,087)
Change in Net Position 465,969 (248,787) 1,279,392 2,147,202 3,643,776
Net Position -(deficits) July 1, as adjusted 963,234 933,065 8,468,919 6,203,959 16,569,177
Net Position -(deficits) June 30 $1,429,203 $684,278 $9,748,311 $8,351,161 $20,212,953
143
CITY OF SOUTH SAN FRANCISCO
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2018
Health and
Self Retirement
City Service Insurance Benefits
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from interfund service provided $4,300,918 $4,264,797 $13,690,768
Cash payment to suppliers for goods and services (2,014,037) (1,943,224) (343,126)
Cash payment to employees for services (1,749,903) (992,317) (13,388,616)
Cash payment for judgments and claims (1,666,137)
Net Cash Provided by Operating Activities 536,978 (336,881) (40,974)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in 1,296,000
Transfers out
Net Cash Provided by Noncapital Financing Activities 1,296,000
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 16,597 140,682 107,667
Changes in market values of investments (17,742) (146,988) (113,101)
Net Cash Provided by Investing Activities (1,145) (6,306) (5,434)
Net Increase (Decrease) in cash and cash equivalents 535,833 (343,187) 1,249,592
Cash and cash equivalents, beginning 1,237,277 13,720,637 9,736,034
Cash and cash equivalents, ending $1,773,110 $13,377,450 $10,985,626
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss) $463,601 ($323,112) ($29,256)
Adjustments to reconcile operating income (loss)
to cash flows from operating activities:
Depreciation 580
Other non-operating revenue (expenses) 58,271
Net change in assets and liabilities:
Accounts and lease receivables 10,128
Accounts payable 37,896 94,813 (18,825)
Other payable 12,733
Accrued insurance losses (179,586)
Compensated absence obligations 24,773 7,107
Net Cash Provided by (Used in) Operating Activities $536,978 ($336,881) ($40,974)
144
Equipment
Re~lacement Total
$2,014,222 $24,270,705
(437,977) (4,738,364)
(16,130,836)
(1,666,137)
1,576,245 1,735,368
1,200,000 2,496,000
(184,087) (184,087)
1,015,913 2,311,913
(538,422) (538,422)
(47,430) (47,430)
(493,263) (493,263)
46,283 46,283
(1,032,832) (1,032,832)
28,010 292,956
(26,994) (304,825)
1,016 (11,869)
1,560,342 3,002,580
2,496,608 27,190,556
$4,056,950 $30,193,136
$1,132,505 $1,243,738
837,628 838,208
58,271
10,128
(78,467) 35,417
(315,421) (302,688)
(179,586)
31,880
$1,576,245 $1,735,368
AGENCYFUND
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.
145
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, 2018
SSF Employee Deferred Comp Trust Oversight
Balance Balance
June 30, 2017 Additions Deductions June 30, 2018
$105,663 $82,265 $105,663 $82,265
318 400 318 400
$105,981 $82,665 $105,981 $82,665
$24,492 $2,602 $24,492 $2,602
81,489 80,063 81,489 80,063
$105,981 $82,665 $105,981 $82,665
146
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
147
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.
148
Expenses
Governmental Activities:
General Government
Fire Department
Police Department
Public Works
Park, Recreation and Maintenance Services
Library
Economic and Community Development
Interest on Long -Term Debt
Total Governmental Activities Expenses
Business-Type Activities:
Sewer Rental
Parking District
Storm Water
Total Business-Type Activities Expenses
Total Primary Government Expenses
Program Revenues
Governmental Activities:
Charges for Services:
General Government
Fire Department
Police Department
Public Works
Park, Recreation and Maintenance Services
Library
Economic and Community Development
Operating Grants and Contributions
Capital Grants and Contributions
Total Government Activities Program Revenues
Business-Type Activities:
Charges for Services:
Sewer Rental
Parking District
Storm Water
Operating Grants and Contributions
Capital Grants and Contributions
Total Business-Type Activities Program Revenue
Total Primary Government Program Revenues
Net (Expense)/Revenue
Governmental Activities
Business-Type Activities
Total Primary Government Net Expense
CITY OF SOUTH SAN FRANCISCO
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2009 2010
$7,140,676 $6,538,052
19,047,877 17,868,050
21,051,263 20,352,570
20,924,132 15,873,783
11,574,808 10,411,821
4,959,138 4,616,658
15,886,834 23,147,877
5,289,818 5,035,780
105,874,546 103,844,591
17,549,690 18,944,267
341,100 338,995
746,316 722,232
18,637,106 20,005,494
$124,511,652 $123,850,085
$2,689,370 $2,539,316
2,415,617 2,851,984
1,650,620 1,479,104
2,462,538 4,412,581
4,872,718 3,032,399
240,542 187,380
4,868,445 4,652,031
13,388,016 5,786,227
182,462 217,877
32,770,328 25,158,899
15,770,470 17,486,418
606,847 616,578
419,446 422,467
10,392,219 5,679,902
162,599 24,720
27,351,581 24,230,085
$60,121,909 $49,388,984
($73,104,218) ($78,685,692)
8,714,475 4,224,591
{$64,389,743} {$74,461,101}
150
2011 2012 2013
$7,711,156 $7,801,328 $8,360,945
20,032,141 20,749,323 22,746,291
22,429,782 23,330,208 24,756,958
17,127,086 21,269,281 15,773,710
10,866,568 11,641,892 12,570,236
4,664,490 4,754,760 4,615,967
15,018,495 8,702,949 16,126,427
4,249,454 3,328,244 52,139
102,099,172 101,577,985 105,002,673
19,277,959 19,446,739 20,870,522
571,261 769,117 792,609
710,903 1,010,093 1,655,950
20,560,123 21,225,949 23,319,081
$122,659,295 $122,803,934 $128,321,754
$2,688,990 $2,032,292 $1,951,016
3,221,837 3,697,665 2,987,956
1,815,405 2,599,149 2,640,146
3,805,824 3,607,224 2,926,227
3,004,435 3,178,276 3,433,567
168,505 143,971 125,416
4,944,328 4,968,383 3,457,020
5,549,711 5,650,685 5,455,010
2,728,543 1,471,416 4,036,786
27,927,578 27,349,061 27,013,144
18,087,695 19,310,286 19,338,107
722,807 760,248 732,932
406,589 409,498 427,291
5,509,874 5,936,527 6,137,401
31,670
24,758,635 26,416,559 26,635,731
$52,686,213 $53,765,620 $53,648,875
($74,171,594) ($74,228,924) ($77,989,529)
4,198,512 5,190,610 3,316,650
{$69,973,082} {$69,038,314} {$74,672,879}
2014 2015 2016 2017 2018
$7,155,035 $8,421,857 $9,044,518 $10,253,403 $12,506,188
21,200,903 22,005,883 22,488,964 25,750,126 30,352,387
24,376,379 23,910,436 23,158,168 25,838,242 30,732,288
14,980,417 14,493,039 11,916,572 12,396,998 18,379,278
12,658,309 12,383,880 12,901,657 15,217,677 17,162,377
4,310,550 4,300,885 4,442,577 5,184,282 5,910,406
5,525,541 5,928,316 7,603,275 8,927,162 10,094,626
90,207,134 91,444,296 91,555,731 103,567,890 125,137,550
19,301,103 23,969,579 18,273,580 22,661,768 24,397,607
943,859 503,014 894,769 940,181 1,202,319
1,078,868 1,234,616 1,289,465 1,333,409 1,026,948
21,323,830 25,707,209 20,457,814 24,935,358 26,626,874
$111,530,964 $117,151,505 $112,013,545 $128,503,248 $151,764,424
$5,785,598 $3,946,302 $4,194,563 $2,225,049 $1,966,755
3,304,952 3,520,275 3,450,524 4,242,940 6,327,921
2,805,640 2,370,736 2,076,837 2,146,909 2,230,824
4,734,813 5,071,729 10,361,525 10,869,608 24,727,897
3,571,947 3,708,272 3,744,137 3,756,369 4,489,665
138,827 120,850 164,271 96,987 102,124
5,800,849 5,337,177 6,131,463 3,911,597 13,052,441
5,601,916 5,753,845 5,581,492 4,533,539 5,827,149
1,538,225 632,735 1,147,337 577 995 2,515,868
33,282,767 30,461,921 36,852,149 32,360,993 61,240,644
19,155,467 19,798,033 19,569,341 19,897,769 22,417,156
785,586 819,051 843,199 916,687 1,084,472
409,458 407,640 412,105 418,840 656,315
7,619,601 6,242,687 5,802,788 5,763,645 5,834,455
27,970,112 27,267,411 26,627,433 26,996,941 29,992,398
$61,252,879 $57,729,332 $63,479,582 $59,357,934 $91,233,042
($56,924,367) ($60,982,375) ($54,703,582) ($71,206,897) ($63,896,906)
6,646,282 1,560,202 6,169,619 2,061,583 3,365,524
($50,278,085) ($59,422,173) ($48,533,963) ($69,145,314) ($60,531,382)
151
General Revenues and Other Changes in Net Position
Governmental Activities:
Taxes:
Property Taxes
Sales Taxes
Transient Occupancy Tax
Franchise fees
Other Taxes
Motor Vehicle In-Lieu
Property taxes in lieu of vehicle license fees
Interest Earnings
Other
Extraordinary Item
Transfers
Special item
Total Government Activities
Business-Type Activities:
Interest Earnings
Transfers
Total Business-Type Activities
Total Primary Government
Change in Net Position
Governmental Activities
Business-Type Activities
Total Primary Government
CITY OF SOUTH SAN FRANCISCO
Changes in Net Position
( continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2009 2010
$59,369,550 $55,014,367
11,752,776 9,146,620
6,178,391 5,820,675
6,870,791 6,768,753
183,193 192,035
5,563,165 5,224,547
4,760,345 5,127,255
1,925,666 1,496,744
(423,012) (1,459,296)
96,180,865 87,331,700
244,887 175,188
423,012 1,459,296
667,899 1,634,484
$96,848,764 $88,966,184
$23,076,647 $8,646,008
9,382,374 5,859,075
$32,459,021 $14,505,083
152
2011 2012 2013
$54,323,420 $37,379,175 $26,420,861
11,199,175 11,691,564 12,931,805
7,191,938 8,619,170 9,659,281
7,071,446 7,089,687 7,588,471
211,503 168,214 33,767
5,086,144 5,153,384 4,955,873
3,944,785 2,384,207 809,721
1,891,421 9,300,137 1,965,744
(107,717,428)
(11,769,393) (785,309) (906,857)
11,873,226
79,150,439 {26,717,199} 75,331,892
122,283 149,242 95,177
11,769,393 785,309 906 857
11,891,676 934,551 1,002,034
$91,042,115 {$25,782,648} $76,333,926
$4,978,845 ($100,946,123) ($2,657,637)
16,090,188 6,125,161 4,318,684
$21,069,033 {$94,820,962} $1,661,047
2014 2015 2016 2017 2018
$22,890,828 $24,650,648 $24,650,648 $29,023,618 $29,551,445
12,725,141 13,932,125 13,932,125 24,087,776 28,340,393
11,174,017 12,947,473 12,947,473 13,631,507 13,978,533
4,090,073 4,403,493
8,141,010 8,650,056 8,650,056 5,708,187 5,871,096
40,074 26,995 26,995 28,933 34,452
5,319,154 5,551,651 5,551,651 6,133,230 6,438,199
1,108,177 629,036 629,036 622,518 1,097,916
2,012,444 4,577,239 4,577,239 2,365,820 5,180,288
(1,041,120) (1,429,308) (1,429,308) (1,105,038) (1,997,377)
45,205,422 {7,154,626}
62,369,725 69,535,915 69,535,915 129,792,046 85,743,812
153,353 126,874 126,874 27,710 37,072
1,041,120 1,429,308 1,429,308 1,105,038 1 997,377
1194,473 1,556,182 1,556,182 1,132,748 2,034,449
$63,564,198 $71,092,097 $71,092,097 $130,924,794 $87,778,261
$5,445,358 $8,553,540 $8,553,540 $58,585,149 $21,846,906
7,840,755 3,116,384 3,116,384 3,194,331 5,399,973
$13,286,113 $11,669,924 $11,669,924 $61,779,480 $27,246,879
153
Th ou san ds
$180,000
$1 60,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
v-
v >---
_,t--
_,t--
,,-
v -
--
-•
F --
>---
>---
>---
--
--
--
--
C ITY OF SOUTH SAN FRANCISCO
F und Bal anc es of Governm ental F unds
Last Ten F isca l Years
(Mo difi ed Accrua l Basis of A ccounting)
• -,. ""
~ • ---->---
->---
I
-
2009 2010 20 11 2012 2013 20 14 2015 2016
2009 2010 2011 201 2 2013 201 4
General Fund
Reserved $554,692 $889,186
Unreserved 17,509,823 14,84 1,958
Nonspendable $67,129 $90,167 $805,677 $14,163
Restricted
Committed 40 1,797 208,054 1,406,430 3,879,45 1
Assigned 771 ,849 840,365 566,104 743,74 6
Unassigned 15,049,168 17,34 7,445 23 ,498,194 15 ,891,899
T otal General Fund $18,064,515 $15,731 ,144 $16,289,943 $18,486,031 $26,276,405 $20,529,259
All Other Governmental Fu nds
Reserved $65 ,1 17,971 $64,163 ,373
Unreserved, reported in:
Special revenue funds 23 ,826,184 11,079,390
Debt service funds 121 ,764 3,198,600
Capital project funds 5 1,589,538 69,286,2 1 1
Restri cted $163,727,096 $43 ,364,540 $30 ,539,396 $42,392,238
Assigned 2,390,904 2,076,065 1,105,320 0
Unassigned (14,353,252) (1,388,956) (1,379,895) (52 1,604)
Total all other governmental funds $140,655,457 $147,727,574 $15 1,764,748 $44,05 1,649 $30 ,264,82 1 $4 1,870,634
(a) The change in total fu nd balance for the General Fund and other governmental funds is explained in Management's Discussion and Analysis.
(b) In fiscal year 2011, the City implemented GASB 54, Fund Balance Reporting and Governmental Fund T ype D efi nitions,
which requires the City to classify its fun d balances based on spending constraints imposed on th e use of resources.
154
•Tot:tl Committed
C Total Unassig ned
•Tot:tl Assigned -
I •Total Rest ri cted
•Total Nonspendablc --•Total Unreserved
•Total Reserved -• ---
->---
->---
2017 2018
2015 201 6 201 7 201 8
$1,134 $33,580 $474 $106
$20,582,335
2,536,790 3,654,283 11,780,724 16,725,897
1,458 ,029 1,578,153 5,244,279 4,334,322
17,285,422 17 ,75 1,169 39,278,746 19,644,232
$21 ,281 ,375 $23 ,017,185 $56,304,223 (a) $6 1,286,892
$43,437,361 $52,938,897 $55,195 ,500 $78,603,366
6,188,554 367,023 0 0
(40,459) 0 (88,33 1) {11 ,073)
$4 9,585,456 $53 ,305 ,920 $55,107,1 69 $78 ,592,293
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 Sources (Uses)
Transfers in
Transfers ( out)
Tax allocation bonds issued
Premium on bonds
Payments to refunded bond escrow
Other debt proceeds
Sale of capital assets
Total other financing sources (uses)
Net Change in fund balances
before extraordinary 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,
2009 2010 2011 2012
$59,369,550 $54,718,916 $54,128,998 $38,174,655
22,755,561 19,771,310 23,412,992 28,866,546
15,088,171 10,609,605 11,860,658 11,580,530
7,625,428 7,680,293 7,612,223 4,955,223
5,957,815 7,270,081 7,004,603 3,056,507
13,644,314 9,986,352 10,010,541 10,088,070
1,013,434 1,054,549 2,133,677 2,184,234
3,722,979 2,542,492 2,261,247 3,000,563
129,177,252 113,633,598 118,424,939 101,906,328
5,752,948 5,916,364 6,407,094 6,485,219
17,724,990 16,790,834 18,140,954 18,812,861
19,989,136 19,359,770 20,272,684 21,217,818
12,360,989 8,416,242 9,856,201 14,253,609
10,700,332 9,960,090 10,168,425 10,101,408
4,679,270 4,342,662 4,231,762 4,272,701
19,554,780 26,279,406 19,894,692 8,184,334
474,805
4,247,021 6,724,022 6,969,052 8,894,514
1,755,426 1,887,434 1,842,000 1,752,000
4,571,150 4,255,050 4,274,170 1,817,764
101,810,847 103,931,874 102,057,034 95,792,228
27,366,405 9,701,724 16,367,905 6,114,100
18,754,214 18,047,351 88,175,882 108,413,018
(19,330,934) (22,175,268) (99,947,814) (109,646,766)
13,784
(562,936) (4,127,917) (11,771,932) (1,233,748)
26,803,469 5,573,807 4,595,973 4,880,352
(110,397,363)
$26,803,469 $5,573,807 $4,595,973 ($105,517,011)
6.8% 6.6% 6.7% 4.2%
156
2013
$27,077,697
31,894,811
13,054,594
3,238,089
3,054,451
9,275,724
1,753,682
1,837,675
91,186,723
6,658,532
20,877,917
22,542,135
9,186,493
10,927,433
4,112,570
20,512,545
52,139
94,869,764
(3,683,041)
4,467,530
(6,780,943)
(2,313,413)
(5,996,454)
($5,996,454)
0.1%
For The Fiscal Year Ended June 30,
2014 2015 2016 2017 2018
$23,010,136 $24,650,648 $26,438,620 $35,156,848 $35,989,644
33,931,446 38,275,478 $41,811,097 $49,608,385 54,597,272
10,757,440 10,453,071 12,360,354 4,019,771 8,433,240
3,632,693 3,531,966 4,207,453 3,100,692 3,524,727
4,366,271 4,795,158 6,896,897 7,823,403 14,674,809
16,864,409 13,387,712 15,386,358 14,485,367 31,961,419
1,528,319 1,221,413 791,756 899,118 423,604
2,249,728 4,660,668 2,439,579 2,906,625 6,454,460
96,340,442 100,976,114 110,332,114 118,000,209 156,059,175
5,970,429 7,167,969 8,469,924 9,399,930 10,403,449
20,163,759 21,247,989 24,175,340 25,632,366 26,059,072
23,309,568 23,611,743 25,458,986 25,998,097 26,970,854
16,791,894 15,923,071 14,846,346 12,143,965 23,859,399
11,552,502 11,826,407 13,234,028 14,897,157 15,468,370
3,987,928 4,247,650 4,681,188 5,157,355 5,379,836
5,972,966 5,917,508 7,907,655 8,943,111 9,338,793
480,290 395,749 274,183 256,298
453,381 352,674 656,000 23,000 2,382,000
88,202,427 90,775,301 99,825,216 102,469,164 120,118,071
8,138,015 10,200,813 10,506,898 15,531,045 35,941,104
21,870,234 17,983,227 8,143,075 14,327,130 26,486,651
(24,149,582) (19,717,102) (13,193,699) (16,368,499) (30,795,941)
1,016,276 3,990,605
(2,279,348) (1,733,875) (5,050,624) (1,025,093) (318,685)
5,858,667 8,466,938 5,456,274 14,505,952 35,622,419
20,582,335 (7,154,626)
$5,858,667 $8,466,938 $5,456,274 $35,088,287 $28,467,793
0.6% 0.4% 0.7% 0.0% 2.0%
157
$20,000
$18,000
$16 ,000
$14 ,000
"' $12 ,000 " a
:§ $10 ,000
$8,000
$6,000
$4 ,000
$2 ,000
$0
Fiscal Residential
Year Proeerty
2009 $5,790,070 ,116
2010 5,467 ,563 ,992
2011 5,547 ,292 ,029
2012 5,579 ,044 ,758
2013 5,606,400 ,603
2014 5,900,441 ,192
2015 6,313 ,393 ,048
2016 6,716 ,642 ,000
2017 7,087 ,550 ,257
2018 7,458 ,269 ,085
-=---,. ••
.....
---
2009 2010 2011
CITY OF SOUTH SAN FRANCISCO
ASSESSED VALUE
-·
OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
• • [1
- -----
•
--
2012 2013 2014 2015
---Unsecured • Secured I
Real Proeerty Net Taxable value Total Real
Commercial Industrial Secured Unsecured
Proeerty Proeerty Other Proeerty Proeerty
$1 ,368 ,274 ,141 $4,871,255 ,093 $523 ,110,471 $12 ,552 ,709,821 $2 ,373 ,808 ,05 3
1,429 ,401 ,205 5,197 ,739,403 498 ,656 ,817 12,593 ,361 ,417 1,424 ,610 ,941
1,509 ,554 ,164 4,922 ,422 ,763 387,673,530 12,366,942,486 1,279,681 ,193
1,581 ,852 ,456 4,967,158,758 403 ,895,l 19 12 ,531,951 ,091 1,295,085 ,027
1,628 ,754 ,902 5,050,279,321 418 ,927,733 12,704,362 ,559 1,288,434 ,392
1,713 ,575 ,060 4,273,694,531 1,204 ,288 ,116 13,091,998,899 1,212 ,353 ,871
2,402 ,335 ,027 4,588,967 ,014 345,957,716 13,650,652,805 1,244 ,971,467
2,000 ,204 ,271 5,189 ,813 ,366 376 ,874 ,603 14 ,283,534 ,2 40 1,197 ,263 ,526
2,160 ,377 ,671 5,414,028 ,340 412 ,344,220 15 ,074 ,300 ,488 1,381 ,715 ,511
2,171 ,084 ,856 5,838 ,028 ,479 383,589,586 15 ,850,972,006 1,423 ,348 ,02 2
Sourc e: HdL Coren & Cone, San Mateo County Assessor 20 08/09-2017/18 Combin ed Tax Rolls .
•
--• I
• --I
I
------
2016 2017 2018
Total
Total Estimated Direct
Assessed (a) Full Market (a) Tax Rate (b)
$14,926,517,874 $14 ,926,517 ,874 0.34939%
14,017,972,358 14 ,017 ,972,358 0.36462%
13 ,646 ,623 ,679 13,646 ,623 ,679 0.36933%
13,827,036,118 13 ,827,036 ,118 0.37860%
13,992,796 ,951 13 ,992 ,796 ,951 0.42174%
14,304,352 ,770 14 ,304,352,770 0.13474%
14 ,895 ,624 ,2 72 14 ,895,624 ,272 0.13804%
15 ,480 ,797 ,766 15,480,797 ,766 0 .13634%
16,456,015 ,999 16,456 ,015 ,999 0 .13632%
17 ,274 ,320 ,028 17 ,274 ,320,028 0.1 3631%
(a) The State Constitution requires property to be assessed at one hundred percent of the mo st recent purchase price, plus an increment ofno more than two percent annually, plus any local
over-ride s. These values are considered to be full market value s .
(b) California cities do not set their own direct tax rate . The state cons titution establishes the rate at I % and allocates a portion of that amount, by an annual calculation , to all the taxing
entities within a tax rate area.
158
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
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)
2018 1.000 0.1642 1.1642 (l,24)
Notes:
(1) Like other cities, South San Francisco includes several property tax rate areas with different rates . A mean average is indicated.
(15) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0327 percent, which includes South San francisco Unified School District bonds
and San Mateo Jr. College bond. 2 have the rate of 1.0719 and one has a rate of 1.0689, which includes Jefferson Union School bonds and
Brisbane ESD bonds, and one has a rate of 1.0710 which includes San BrunoPark Elementary.
(16) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0377 percent, which includes South San francisco Unified School District bonds
and San Mateo Jr. College bond. 3 have the rate of 1.0783 and one has a rate of 1.0748, which includes Jefferson Union School bonds, and
Brisbane ESD bonds, and one has a rate of 1.0804 which includes San BrunoPark Elementary.
(17) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0389 percent, which includes SSFUSD bonds and San mateo Jr College bond. 3
has a rate of 1.0870 percent and one at 1.0832 percent which includes Jefferson Union School bonds and Brisbane ESD bonds . One has a rate of
1.0834 percent which includes San Bruno Park Elementary.
(18) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0420 percent, which includes SSFUSD bonds and San mateo Jr College bond. 3
has a rate of 1.0893 percent and one at 1.0854 percent which includes Jefferson Union School bond, Brisbane ESD bonds & San Mateo JR
College bonds and one has a rate of 1.0909 percent which includes San Bruno Park Elementary.
(19) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0521 percent, which includes SSFUSD bonds, San Mateo Jr College bond, and
San Mateo Comm College . 4 has a rate of 1.0921 percent which includes Brisbane ESD Bond, Jefferson High bonds, SM Jr College bond and
San Mateo Comm College. 1 has a rate of 1.0905 percent, which includes San Bruno Pk Elem bond, SM Union High , SM Jr College bond and
San Mateo Comm Coll bond.
(20) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0522 percent, which includes SSFUSD bonds, San Mateo Jr College bond, and
San Mateo Comm College. 4 has a rate of 1.1048 percent which includes Brisbane ESD Bond, Jefferson High bonds, SM Jr College bond and
San Mateo Comm College. 1 has a rate of 1.0864 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, and San Mateo
Comm College . 1 has a rate of 1.0864 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond and
San Mateo Comm Coll bond.
(21) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0703 percent, which includes SSFUSD bonds, San Mateo Jr College bond, and
San Mateo Comm College. 4 has a rate of 1.0991 percent which includes Brisbane ESD Bond, Jefferson High bonds, SM Jr College bond and
San Mateo Comm College. 1 has a rate of 1.0983 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High,SM Jr College
bond and San Mateo Comm Coll bond.
(22) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0707 percent, which includes SSFUSD bonds, San Mateo Jr College bond, and
San Mateo Comm College. 3 has a rate of 1.1080 percent and 1 with 1.1068 percent rate which includes College bond Brisbane ESD Bond,
Jefferson High bonds, SM Jr and San Mateo Comm College. 1 has a rate of 1.0929 percent, which includes San Bruno Pk Elem bond, SM
Union High, SM High, SM Jr College bond and San Mateo Comm Coll bond.
(23) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0714 percent, which includes SSFUSD bonds & San Mateo Jr College bond. 4
has a rate of 1.1282 percent which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD, SM Jr College bonds. 1 has a rate of
1.0910 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond and San Mateo Comm Coll bond.
(24) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0601 percent, which includes SSFUSD bonds & San Mateo Jr College bond. 4
has a rate of 1.1276 percent which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD, SM Jr College bonds . 1 has a rate of
1.0900 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond and San Mateo Comm Coll bond.
Source: HDL, Coren & Cone (San mateo County Assessor 2008/09-2017/18 Tax Rate Table).
159
-°'
Property Tax Payer
Gen en tech
Slough SSF LLC DE
Britannia Pointe Grand LP
ARE San Francisco LLC
BMR 180 Oyster Point LLC
Gateway Center LLC DE
ASN Solaire LLC
HCP Inc
Costco Wholesale Corp
Amgen SFLLC
HPTMI II Properties Trust
Gateway Boulevard LLC
PR 701 Gateway LLC
BP Gateway Center LLC
Blue Line Transfer Inc.
Felcor CMB SSF Holdings LP
Areus Inc
CRP 6000 Shoreline LLC
Theravance Biopharma
OCI San Francisco LLC
Total ToE Twen~
Percent of AV
CITY OF SOUTH SAN FRANCISCO
Twenty Largest Taxable Property Owners for Merged RDA Project Area
June 30, 2018
Secured
$641 ,198,159
683 ,563,157
446 ,937,794
233,684,862
217,408 ,355
146,404 ,145
113 ,178,085
101,628 ,279
42,344 ,580
67 ,514 ,607
62 ,372,093
60,114,250
60,446 ,565
47,956 ,558
40,259 ,080
35,946,914
34,105 ,000
29 ,392 ,581
3 ,064,455 ,064
91.7%
Unsecured
$102,646 ,681
41 ,633 ,076
72,829 ,868
362,729
32,362,536
26,780,291
276 ,615 ,181
8.3%
Total
Assessed
Value
$743 ,844,840
683 ,563,157
446,937,794
233 ,684 ,862
217,408 ,355
146,404,145
113,178,085
101,628,279
83 ,977 ,656
72,829,868
67 ,514,607
62 ,372,093
60 ,476,979
60,446,565
47 ,956 ,558
40,259,080
35 ,946 ,914
34,105 ,000
32,362 ,536
56,172 ,872
3 ,341 ,070 ,245
% of Total
AV in Project
Area Land Use
16 .02% Industrial, Office , R&D
14 .72% Industrial
9.63% Industrial
5.03% Industrial, Commercial
4.68% Commercial
3 .15% Commercial
2.44% Residential
2.19% Unknown
1.81% Commercial
1.57% Industrial
1.45% Residential , Hotels , Motels
1.34% Industrial
1.30% Commercial
1.30% Commercial, Office , 2+ stories
1.03% Industrial
0.87% Residential, Hotels , Motels
0 .77% Commercial , Office , 2+ stories
0.73% Commercial, Office , 2+ stories
0 .70% Industrial , Office , R&D
0.63% Residential, Hotels , Motels
71.36 %
(1) Given the nature of the re search performed at Genentech , a s ignificant portion of the total assessed value of the Genentech Property is likel y equipment. It would appear on the secured roll as that contains
the value of personal property/improvements
Source: San Mateo County Asses sor , RDA Secured & Unsecured SSF 2017 Tax Roll s
Source: Muni Service s
NOTE: (a)
Fiscal
Year
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
CITY OF SOUTH SAN FRANCISCO
COMPUTATION OF LEGAL BONDED DEBT MARGIN
JUNE 30, 2018
ASSESSED VALUATION:
BONDED DEBT LIMIT (3 .75% OF ASSESSED VALUE) (a)
LESS AMOUNT OF DEBT SUBJECT TO LIMIT:
LEGAL BONDED DEBT MARGIN
Total Net Debt Legal
Debt Applicable to Debt
Limit Limit Margin
$559,744,420 0 $559,744,420
525,673,963 0 525 ,673 ,963
511 ,748 ,388 0 511,748,388
518 ,513 ,854 0 518,513,854
524,729,886 0 524,729 ,886
536 ,413,229 0 536,413 ,229
558 ,585 ,910 0 558 ,585,910
580,561,386 0 580,561,386
617 ,102 ,145 0 617,102,145
647 ,787 ,001 0 647,787,001
$17,274,320,028
647 ,787,001
0
$647 ,787 ,001
Total net debt
applicable to the limit
as a percentage
of debt limit
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted prior to the change in basing
assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is one-fourth the limit to
account for the adjustment of showing assessed valuation at full cash value.
Source: HDL Coren & Cone, San Mateo County Assessor -Combined Tax Rolls
165
CITY OF SOUTH SAN FRANCISCO
SEWER DEBT SERVICE COVERAGE
SEWER RENTAL ENTERPRISE FUND
LAST FIVE FISCAL YEARS
Fiscal Year
2014 2015 2016 2017 2018
Revenues
Service Charges $19,129,475 $19,758,128 $19,515,093 $19,750,636 $22,188,154
Connection and Other Fees 25,992 122,640 104,283 147,134 229,002
Interest Income 133,248 106,830 238,389 23,552 31,058
Developer Fees
Other Cities' Participation (I) 7,619,601 6,159,937 5,752,765 5,763,644 5,834,455
Total Revenues $26,908,316 $26,147,535 $25,610,530 $25,684,966 $28,282,669
Operating Expenses (2) $14,904,225 $18,759,650 $13,514,718 $17,357,276 $19,073,943
Wastewater System Net Revenues $12,004,091 $7,387,885 $12,095,812 $8,327,690 $9,208,726
Parity Debt Service (3)
State Water Resources Control Board Loans $6,022,799 $5,445,162 $5,449,692 $5,454,747 $5,469,175
CSCDA Series 2005D Revenue Bonds 197,630 188,148 178,036 167,284 155,706
Total Parity Debt $6,220,429 $5,633,310 $5,627,728 $5,622,031 $5,624,881
Total Parity Debt Service Coverage 1.93 1.31 2.15 1.48 1.64
(I) 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 I, 2004 and
an adopted increase in rates for Fiscal Year 2005-06 of 9% per Resolution No. 68-2005, adopted by the City Council on June 22, 2005 and effective on and after June 22, 2005.
167
CITY OF SOUTH SAN FRANCISCO
Principal Employers
Current Year and Nine Years Ago
2017-18 2008-09
Percentage Percentage
Number of of Total City Number of of Total City
Employer Employees Rank Employment Employees Rank Employment
Genentech Inc. 8,637 1 13.2% 8,289 1 13.3%
Costco Wholesale (3 stores) 834 2 1.3% 565 5 0.9%
Goodwill Industries of SF (3 locations) 701 3 1.1%
Life Technologies Corporation 622 4 1.0%
Amgen San Francisco LLC 500 5 0.8% 472 7 0.8%
Successfactors, Inc. 352 6 0.5%
SBM Site Services, LLC 309 7 0.5%
ZS Associates, Inc 252 8 0.4%
Tobi.com, LLC 227 9 0.3%
Holiday Inn 224 10 0.3%
Kaiser 2,125 2 3.4%
SSF School District 930 3 1.5%
Exelixis 610 4 1.0%
Astound Broadband, LLC 560 6 0.9%
Tularik, Inc. 426 8 0.7%
American ETC Inc/Royal Laundry 307 9 0.5%
Sugen, Inc 300 10 0.5%
Subtotal 12,658 19.3% 14,584 23.3%
Total City Population 65,451 62,502
Source:
SSF Business License Database-Business licenses expiring 12/31/18.
CAFR 2008-09
170
CITY OF SOUTH SA N FRANCISCO
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
2009 2010 2011 2012 20 13 2014 201 5 20 16 2017 2018
Function/Program
Public safety:
Fire stations 5 5 5 5 5 5 5 5 5 5
Police stations 1 1 1 (6) I (6) I I I I I I
Police Fleet (2 ) 48 (2) 48 52 51 51 (8) 50 53 53 52 (10) 59
Public works
Miles of streets 127 12 7 127 127 127 127 127 127 127 12 7
Street lights 3,779 4,156 4 ,160 4 ,160 (7 ) 4 ,505 4,505 4 ,505 4 ,505 4 ,505 4 ,531
Parking District lights 20 20 20 20 20 20 20 20 (9) 16 16
Traffic Signals 70 73 74 74 74 74 74 76 76 76
Culture and recreation:
Community services:
City parks 28 28 28 28 28 28 28 28 28 28
City parks acreage 190 190 190 190 190 190 190 190 190 190
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 I I I I I I I I I I
Community centers 4 4 4 4 4 4 4 4 4 4
Senior centers 2 2 (4) I I I I I I I I
Skate Park (3) I 1 I I I I I I I
Dog park (3) I I I I I I I I I
Swimming pools 1 1 1 1 I 1 I 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 II 11 II 11 11 11 11 II
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 plants 1 1 1 1 I I I 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 Learning Center not included on count as it is only a homework center not a library.
( 6) Police substation located behind Miller parking garage not included.
(7) Includes all lights in SSF billed as LS-2 from PG&E
(8) One less motorcycle from last year.
(9) Lot 6 sold for Rotary Plaza development.
(10) 3 Trailers included on the fleet count.
173
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 Measure I*
2016 2017 2018
Transient Occupancy Tax Detail
9% TOT collected 12 ,054,093 12 ,256 ,007 12 ,580,680
I% Measure I Special Tax 1,339,344 1,361 ,779 1,397,853
Total TOT Collection 13 ,393 ,436 13 ,617,786 13 ,978 ,533
I% Measure I Special Tax Use
Police 267 ,869 272 ,356 279 ,57 1
Fire 267 ,869 272,356 279,571
Library 267 ,869 272 ,356 279,571
Parks 267,869 2 72 ,356 279,571
Recreation 267,869 272,356 279 ,57 1
Total I% Measure I Special Tax 1,339 ,344 1,361 ,779 1,397,853
* 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 I , 2005 . Special tax was earmarked for use to supplement Police, Fire, Library, and Parks and Recreation expenditures.
174
CITY OF SOUTH SAN FRANCISCO
MEASURE A FUNDS
Report 011 Compliance with the
Agreement for Distribution of San Mateo County
Measure A Funds for Local Transportation Purposes
For the Year Ended June 30, 2018
CITY OF SOUTH SAN FRANCISCO
MEASURE A COMPLIANCE
For the Year Ended June 30, 2018
Table of Contents
Independent Auditor's Report on Management's Assertion ............................................................ 1
Financial Statements:
Ba lance Sheet .................................................................................................................................... 2
Schedule of Reven ues, Expenditures and Changes in Measure A Fund Balance .......................... 3
Notes to the Financial Statements .................................................................................................... 4
Management's Report on Compliance With The
Agreement For Distribution of San Mateo County
Measure A Funds for Local Transportation Purposes .................................................................. 5
M MAZE
,&ASSOCIATES
INDEPENDENT AUDITOR'S REPORT ON MANAGEMENT'S ASSERTION
Honorable Mayor and Members of City Council of the
City of South San Francisco, California
We have examined management's assertion, included in accompanying Management's Report on Compliance
with the Agreement for Distribution of San Mateo County Measure A Funds for Local Transportation Purposes
(th e Agreement) between the City and the San Mateo County Transportation Authority dated March 5, 2009 ,
that the City of South San Francisco complied with the requirements of the Agreement during the year ended
June 30, 2018. Management is responsible for the City's compliance with those requirements. Our
responsibility is to express an opinion on management's assertion about the City's compliance based upon our
examination.
Our examination was conducted in accordance with the attestation standards established by the American
Institute of Certified Public Accountants and accordingly, included examining, on a test basis, evidence about
the City's compliance with those requirements and performing such other procedures as considered necessary
in the circumstances . We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide legal determination of the City's compliance with specified requirements .
In our opinion, the City complied, in all material respects, with the aforementioned requirements for the year
ended June 30, 2018 .
This communication is intended solely for the information and use of the City Council, management and the
San Mateo County Transportation Authority Board and Management, and is not intended to be and should not
be used by anyone other than these specified parties; however, this restriction is not intended to limit the
distribution of this report, which is a m~tter of public record.
Pleasant Hill, Californi a
December 10, 2018
Accountancy Corporation
3478 Bus kirk Ave nue , Suite 2 15
Pl easa nt Hill , CA 94523
1
T 925.930.0902
F 925 .930.0135
E maze@ mazea ss ociates.com
w mazeassociates.com
ASSETS:
CITY OF SOUTH SAN FRANCISCO
MEASURE A FUND
BALANCE SHEET
JUNE 30, 2018
Cash and investments
Accrued interest receivable
TOTAL ASSETS
FUND BALANCE:
Restricted for Measure A capital projects and maintenance
TOT AL FUND BALANCE
See accompanying notes to the financial statements .
2
$2,951,683
14,247
$2,965,930
$2,965,930
$2,965,930
CITY OF SOUTH SAN FRANCISCO
MEASURE A FUND
SCHEDULE OF REVENUES , EXPENDITURES AND
CHANGES IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 2018
REVENUES
Sales tax from the County of San Mateo
Interest and investment income
Total Revenues
TRANSFERS OUT
Capital Improvements Projects:
Dubuque Ave & E Grand Ave Improvement
South Airport Blvd Bridge Replacement
Sidewalk Gap Closure Project
Grand Blvd Project -Chestnut to Alrnyo
Grand Blvd Project -Kaiser Way to Bart
Linden Ave Complete Streets Cal-Aspen
Linden Ave Complete Streets Aspen-Miller
E 101 Public Amenities & Row Study
Evergreen/Mission Traffic Control
Downtown Truck Restriction Project
Grand Ave/Magnolia Ave Traffic Signal
W Orange/Centennial Way Pedestrian Beacon
Junipero Serra/King Dr Intersection
SSF Caltrain Station Ped/Bike Underpass
Sunshine Gardens Traffic Safety Improvement
Total Transfers
Net Change in Fund Balance
Fund Balance, July I
Fund Balance, June 30
See accompanying notes to the financial statements.
3
$1 ,476,167
4,544
1,480,711
9,190
156,472
32,248
8,2 94
90,144
11,288
18,155
74,056
61,035
10,107
54,929
1,291
154,452
2,111
20,427
704,199
776,512
2,189,418
$2,965,930
CITY OF SOUTH SAN FRANCISCO
MEASURE A FUNDS
Notes to Financial Statements
For the Year Ended June 30, 2018
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A . Reporting Entity
At the General Election of June 7, 1988, the voters of City of San Mateo County approved
Measure A, which is an ordinance providing for the creation of the San Mateo County
Transp01tation Authority for the imposition of a one-half of one percent sales transaction and
use tax. Twenty percent of the aforementioned tax is to be a llocated to the cities of San Mateo
County and to t he County of San Mateo for the improvement of local transpo1tation, including
streets and roads in accordance with Measure A requirements.
B . Basis of Accounting
The Schedu le of Measure A Funds (Transpo1tation Sales Tax), a special revenue fund of the
City of South San Francisco, California, have been prepared in conformity with accounting
principles generally accepted in the United States of America as app lied to governmental units.
The Governmental Accounting Standards Board is the accepted standard-setting body for
estab lishing governmental accounting and financial reporting principles .
The Measure A Funds are accounted for using the modified accrual basis of accounting. Under
this basis, revenues are recognized when they become both measurable and available to finance
expenditures of the fisca l period . Expenditures are recognized when the liability is incurred.
4
FINANCE DEPARTMENT
650-877-8507
December 10, 2018
San Mateo County Transportation Authority
1250 San Carlos Avenue
San Carlos, California 94070
Management's Report on Compliance with the Agreement for Distribution of San Mateo County
Measure A Funds for Local Transportation Purposes
The City of South San Francisco is responsible for complying with the Agreement for Distribution of San
Mateo County Measure A Funds far Local Transportation Purposes (the Agreement) between the City and
the San Mateo County Transportation Authority effective on March 5, 2009 . The Agreement states that in
return for receiving an annual allocation of a specified portion of the retail transactions and use tax approved
by Measure A -San Mateo County Transportation Expenditure Plan (the Measure), the City agrees that
funds, "shall not be used to replace funds previously provided by property tax or other local revenues for
public transportation purposes, and that City will limit the use of funds provided pursuant to this agreement
to the improvement and maintenance of local transportation, including streets and road improvements."
With respect to compliance with the Agreement, management attests to the following for the year ended
June 30, 2018:
• Management is responsible for establishing and maintaining an effective internal control
structure with respect to compliance with the Agreement;
• Management is responsible for complying with the Agreement;
• Management has evaluated the City's compliance with the requirements of the Agreement;
• All Transactions, as summarized in the preceding Balance Sheet and Statement of Revenues,
Expenditures and Changes in Fund Balance for the Year Ended June 30, 2018, are in
compliance with the Agreement.
Richard Lee
Director of Finance
400 GRAND AVENUE • P .O . 1;30X 7 1 1 • SOUTH SAN F RANCISCO, CA 9 4 083
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT
ACT ARTICLE III FUND
BASIC FINANCIAL STATEMENTS
FOR THE YEARS ENDED
JUNE 30, 2018 AND 2017
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, 2018 and 2017
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 the 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
&ASSOCIATES
We have audited the accompanying financial statements of the City of South San Francisco Transportation
Development Act A1ticle III Fund (TOA 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, 2018 and 2017, 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 perfonn the audits to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves perfonning 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 TOA 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 TOA 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 .
Accountancy Corporation
3478 Buskirk Ave nu e, Suite 215
Pleasant Hill, CA 94523
T 925.930 .0902
F 925.930.0 135
E maze@mazeassociates.com
w ma zeassociates.com
Opinions
In our opinion , the fin a nci a l statements referred to a bove present fairly , in all mat erial respects , the
respective financial positions of the TDA Fund as of June 30, 2018 and 2017, and the respective changes
in financial positions for the years then ended in confo1mity 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 , 2018 and 2017 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 December 10,
2018 on our consideration of the TDA Fund 's internal control over financial repo1iing and on our tests of
its compliance with ce1iain provisions of laws , regulations , contracts, and grant agreements and other
matters. The purpose of that repo1i is to describe the scope of our testing of internal control over financial
rep01iing and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That repo1i is an integral part of an audit performed in
accordance with Governm ent Auditing Standards in considering the TDA Fund 's internal control over
financial repo1ting and compliance.
tW\,C\\1:-i~(j()o~
Pleasant Hill , California
December 10, 2018
2
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
COMPARATIVE BALANCE SHEETS
JUNE 30 , 2018 AND 2017
2018
Allocation
Instruction
Number
18001094 2017
ASSETS
Due from Metropolitan Transportation Commission $17,306 $39 ,669
Total Assets $17 ,306 $39 ,669
LIABILITIES
Due to the City $17,306 $39,669
Total Li abilities 17 ,306 39 ,669
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue 17 ,306
Total Deferred Inflows of Resources 17 ,306
FUND BALANCE (17,306)
Total Fund Balance (17 ,306)
Total Liabilities, Deferred Inflows of Resources and Fund Balance $17,306 $39 ,669
See accompanying note s 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, 2018 AND 2017
REVENUES
TDA Article 3.0 (Note 2)
Total Revenues
EXPENDITURES
Linden Ave . Complete Streets Safety Project
Total Expenditures
Net change in fund balance
Fund balance at beginning of year
Fund balance at end of year
2018
Allocation
Instruction
Number
18001094 2017
$37,453 $39,699
37,453 39,699
54,759 39,699
54,759 39,699
(17,306)
($17,306)
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, 2018
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of South San Francisco, California (City), Transpo1tation Development Act A1ticle III Fund
(TDA Fund) includes the financial activities associated with the State of California Transp01tation
Development Act. The State of California created a local tran spo1tat ion fund for each County
funded by a p01tion of the State sales tax .
The TDA Fund is distributed through the Metropolitan Transp01tation 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
Repo1t 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 reco gnized . The TDA Fund is
accounted for in a governmental fund type and the modified accrual basis of accounting is used .
Under the modified accrual basis, revenues are recognized when they become measurable and
available as net cu1Tent assets. TDA A1ticle 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 years ended June 30, 2018 and 2017 the City received allocation instructions from the
Metropolitan Transpo1tation Commission for the following projects:
Revenue
In struction Number Project Name Grant Award 20 18 2017
18001094 Linden Ave Complete Streets Safety Projec t $363 ,300 $37 ,453
16001070 Linden Ave Complete Streets Safety Project $400 ,000 $39,699
$37,453 $39,699
5
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
Notes to the Financial Statements
For the Years Ended June 30, 2018
J NOTE 3 -COMMITMENTS AND CONTINGENCIES
The City pa1ticipates 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 detennined 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
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 ge nerally 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 Transpo1tation
Development Act A1ticle III Fund (the TDA Fund) of the City of South San Francisco (City), California, as
of and for the year ended June 30 , 2018, and the related notes to the financial statements, and have issued
our report thereon dated December 10 , 2018 . Our repo1t included an emphasis of a matter paragraph
disclosing the implementation of new accounting principles.
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 repo1ting (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 impo1tant 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
34 78 Buskirk Avenue, Suite 2 15
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 Transp01iation Development Act and the Allocation Instructions and
Resolutions of the Metropolitan Transpo1iation 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 repo1ied under Government Auditing Standards.
We have also issued a separate Memorandum on Internal Control dated December 10, 2018 which is an
integral paii of our audit and should be read in conjunction with this rep01i.
Purpose of this Report
The purpose of this repo1i 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 repo1i 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 repo1i 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 rep01i, which is a matter of public record.
Pleasant Hill, California
December 10, 2018
8
CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
FOR THE YEAR ENDED
JUNE 30, 2018
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
For the Year Ended June 30, 2018
Table of Contents
Page
Memorandum on Internal Control.................................................................................................................... l
Scheduleof Other Matters........................................................................................................................ 3
This Page Left Intentionally Blank
N' MAZE
&ASSOCIATES
��TI�����i77�►�il►i [���i ICY 1� �;���� �K��►`Y Y:Z�711
To the City Council of
The City of South San Francisco, California
We have audited the basic financial statements of the City of South San Francisco for the year ended June
30, 2018, and have issued our report thereon dated December 13, 2018. Our opinions on the basic
financial statements and this report, insofar as they relate to the South San Francisco Conference Center
Authority, are based solely on the report of other auditors. In planning and performing our audit of the
basic financial statements of the City of South San Francisco as of and for the year ended June 30, 2018,
in accordance with auditing standards generally accepted in the United States of America, we considered
the City's internal control over financial reporting (internal control) as a basis for designing our audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's
internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal
control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the City's financial statements will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control was for the limited purpose described in the first paragraph and was
not designed to identify all deficiencies in internal control that might be material weaknesses. In addition,
because of inherent limitations in internal control, including the possibility of management override of
controls, misstatements due to error or fraud may occur and not be detected by such controls. Given these
limitations, during our audit we did not identify any deficiencies in internal control that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified.
Included in the Schedule of Other Matters are recommendations not meeting the above definitions that we
believe to be of potential benefit to the City.
This communication is intended solely for the information and use of management, City Council, others
within the organization, and agencies and pass-through entities requiring compliance with Government
Auditing Standards and is not intended to be and should not be used by anyone other than these specified
parties.
163 Q, 1 J L�,I�✓ �"
Pleasant Hill, California
December 13, 2018
T 925.930.0902
Accountancy Corporation 1 r 925.930.0135
3478 Buskirk Avenue, Suite 215 E maze@mazeassociates.com
Pleasant Hill, CA 94523 w mazeassociates.com
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
New GASB Pronouncements Not Yet Effective
The following comment represents new pronouncements taking effect in the next few years. We have
cited them here to keep you abreast of developments:
Effective in fiscal year 2018-19:
GASB 83 -- Certain Asset Retirement Obligations
This Statement addresses accounting and financial reporting for certain asset retirement obligations
(AROs). An ARO is a legally enforceable liability associated with the retirement of a tangible capital
asset. A government that has legal obligations to perform future asset retirement activities related to its
tangible capital assets should recognize a liability based on the guidance in this Statement.
GASB 88 – Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements
This Statement defines debt for purposes of disclosure in notes to financial statements as a liability that
arises from a contractual obligation to pay cash (or other assets that may be used in lieu of cash) in one or
more payments to settle an amount that is fixed at the date the contractual obligation is established. This
Statement requires that additional essential information related to debt be disclosed in notes to financial
statements, including unused lines of credit; assets pledged as collateral for the debt; and terms specified
in debt agreements related to significant events of default with fmance-related consequences, significant
termination events with finance -related consequences, and significant subjective acceleration clauses.
Effective in fiscal year 2019-20:
GASB 84 –.Fiduciary Activities
This Statement establishes criteria for identifying fiduciary activities of all state and local governments.
The focus of the criteria generally is on (1) whether a government is controlling the assets of the fiduciary
activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included
to identify fiduciary component units and postemployment benefit arrangements that are fiduciary
activities.
GASB 90 - Ma'ori , Equkv Interests—an amendment of GASB Statements No. 14 and No. 611
This Statement defines a majority equity interest and specifies that a majority equity interest in a legally
separate organization should be reported as an investment if a government's holding of the equity interest
meets the definition of an investment. A majority equity interest that meets the definition of an investment
should be measured using the equity method, unless it is held by a special-purpose government engaged
only in fiduciary activities, a fiduciary fund, or an endowment (including permanent and term
endowments) or permanent fund. Those governments and funds should measure the majority equity
interest at fair value. For all other holdings of a majority equity interest in a legally separate organization,
a government should report the legally separate organization as a component unit, and the government or
fund that holds the equity interest should report an asset related to the majority equity interest using the
equity method. This Statement establishes that ownership of a majority equity interest in a legally
separate organization results in the government being financially accountable for the legally separate
organization and, therefore, the government should report that organization as a component unit.
CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
Effective in fiscal year 2020-21:
GASB 87 — Leases
This Statement will increase the usefulness of governments' financial statements by requiring reporting of
certain lease liabilities that currently are not reported. It will enhance comparability of financial
statements among governments by requiring lessees and lessors to report leases under a single model.
This Statement also will enhance the decision -usefulness of the information provided to financial
statement users by requiring notes to financial statements related to the timing, significance, and purpose
of a government's leasing arrangements.
GASB 89 - Accountinm for Interest Cost Incurred before the End of a Construction Period
This Statement establishes accounting requirements for interest cost incurred before the end of a
construction period. Such interest cost includes all interest that previously was accounted for in
accordance with the requirements of paragraphs 5-22 of Statement No. 62, Codification of Accounting
and Financial Reporting Guidance Contained in Pre -November 30, 1989 FASB and AICPA
Pronouncements, which are superseded by this Statement. This Statement requires that interest cost
incurred before the end of a construction period be recognized as an expense in the period in which the
cost is incurred for financial statements prepared using the economic resources measurement focus. As a
result, interest cost incurred before the end of a construction period will not be included in the historical
cost of a capital asset reported in a business -type activity or enterprise fund. This Statement also
reiterates that in financial statements prepared using the current financial resources measurement focus,
interest cost incurred before the end of a construction period should be recognized as an expenditure on a
basis consistent with governmental fund accounting principles.
4
CITY OF SOUTH SAN FRANCISCO
REQUIRED COMMUNICATIONS
FOR THE YEAR ENDED
JUNE 30, 2018
This Page Left Intentionally Blank
N® MAZE
REQUIRED COMMUNICATIONS
To the City Council of
the City of South San Francisco, California
We have audited the basic financial statements of the City of South San Francisco for the year ended June
30, 2018. We have audited the basic financial statements of the City of South San Francisco for the year
ended June 30, 2018. We did not audit the financial statements of the South San Francisco Conference
Center Authority as of and for the year ended June 30, 2018, which represent 1%, 2%, and 2% of the
assets, net position and revenues, respectively, of the entity -wide reporting entity. These component unit
financial statements were audited by another auditor, whose report thereon has been furnished to us, and
our opinion, insofar as it relates to the amounts included for this entity, is based solely on the report of the
other auditor.
Professional standards require that we communicate to you the following information related to our audit
under generally accepted auditing standards and Government Auditing Standards and the Uniform
Guidance.
Significant Audit Findings
Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City of South San Francisco are described in Note 1 to the financial
statements. No new accounting policies were adopted and the application of existing policies was not
changed during the year, except as follows:
GASB 75 — Accounting and Financial Roorting for Post-emploment Benefits Other
Than Pensions
The primary objective of this Statement is to improve accounting and financial reporting by state
and local governments for post -employment benefits other than pensions (other post -employment
benefits or OPEB). It also improves information provided by state and local governmental
employers about financial support for OPEB that is provided by other entities. This Statement
results from a comprehensive review of the effectiveness of existing standards of accounting and
financial reporting for all post -employment benefits (pensions and OPEB) with regard to
providing decision -useful information, supporting assessments of accountability and inter -period
equity, and creating additional transparency.
This Statement replaces the requirements of Statements No. 45, Accounting and Financial
Reporting by Employers for Postemployment Benefits Other Than Pensions, as amended, and
No. 57, OPEB Measurements by Agent Employers and Agent Multiple -Employer Plans, for
OPEB. Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans, establishes new accounting and financial reporting requirements for OPEB plans.
The pronouncement became effective, and as disclosed in Note 1(q) to the financial statements
required a prior period restatement for the cumulative effect on the financial statements.
T 925.930.0902
Accountancy Corporation 1 F 925.930.0135
3478 Buskirk Avenue, Suite 215 a maze@mazeassociates.com
Pleasant Hill, CA 94523 w mazeassociates.com
The following pronouncements became effective, but did not have a material effect on the financial
statements:
GASB 81- Irrevocable Split Interest Agreements
GASB 85 - Omnibus 2017
GASB 86 - Certain Debt Extin z uishment Issues
Unusual Transactions, Controversial or Emerging Areas
We noted no transactions entered into by the City during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's knowledge and experience about past and current events and assumptions about
future events. Certain accounting estimates are particularly sensitive because of their significance to the
financial statements and because of the possibility that future events affecting them may differ
significantly from those expected. The most sensitive estimates affecting the City's financial statements
were:
Estimated Fair Value of Investments: As of June 30, 2018, the City held approximately $217
million of cash and investments as measured by fair value as disclosed in Note 2 to the financial
statements. Fair value is essentially market pricing in effect as of June 30, 2018. These fair
values are not required to be adjusted for changes in general market conditions occurring
subsequent to June 30, 2018.
Estimate of Depreciation: Management's estimate of the depreciation is based on useful lives
determined by management. These lives have been determined by management based on the
expected useful life of assets as disclosed in Note lK to the financial statements. We evaluated
the key factors and assumptions used to develop the depreciation estimate and determined that it
is reasonable in relation to the basic financial statements taken as a whole.
Estimated Net Pension Assets and Liabilities and Pension -Related Deferred Outflows and Inflows
of Resources: Management's estimate of the net pension assets and liabilities and deferred
outflows/inflows of resources are disclosed in Note 7 to the financial statements and are based on
actuarial studies determined by a consultant, which are based on the experience of the City. We
evaluated the key factors and assumptions used to develop the estimate and determined that it is
reasonable in relation to the basic financial statements taken as a whole.
Estimated Net OPEB Liabilities and OPEB-Related Deferred Outflows and Inflows of Resources:
Management's estimate of the net OPEB liabilities and deferred outflows/inflows of resources are
disclosed in Note 9 to the financial statements and are based on actuarial studies determined by a
consultant, which are based on the experience of the City. We evaluated the key factors and
assumptions used to develop the estimate and determined that it is reasonable in relation to the
basic financial statements taken as a whole.
Disclosures
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are clearly trivial, and communicate them to the appropriate level of
management. Management has corrected all such misstatements. In addition, none of the misstatements
detected as a result of audit procedures and corrected by management were material, either individually or
in the aggregate, to each opinion unit's financial statements taken as a whole.
Professional standards require us to accumulate all known and likely uncorrected misstatements identified
during the audit, other than those that are trivial, and communicate them to the appropriate level of
management. We have no such misstatements to report to the City Council.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor's report. We are pleased to report that no such disagreements arose during the
course of our audit.
Management Representations
We have requested certain representations from management that are included in a management
representation letter dated December 13, 2018.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves
application of an accounting principle to the City's financial statements or a determination of the type of
auditor's opinion that may be expressed on those statements, our professional standards require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our
knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City's auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a
condition to our retention.
Other Information Accompanying the Financial Statements
We applied certain limited procedures to the required supplementary information that accompanies and
supplements the basic financial statements. Our procedures consisted of inquiries of management
regarding the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We did not audit the required supplementary information
and do not express an opinion or provide any assurance on the required supplementary information.
We were engaged to report on the supplementary information which accompany the financial statements,
but are not required supplementary information. With respect to this supplementary information, we made
certain inquiries of management and evaluated the form, content, and methods of preparing the
information to determine that the information complies with accounting principles generally accepted in
the United States of America, the method of preparing it has not changed from the prior period, and the
information is appropriate and complete in relation to our audit of the financial statements. We compared
and reconciled the supplementary information to the underlying accounting records used to prepare the
financial statements or to the financial statements themselves.
We were not engaged to report on the Introductory and Statistical Sections which accompany the financial
statements, but are not required supplementary information. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express
an opinion or provide any assurance on them.
This information is intended solely for the use of City Council and management and is not intended to be,
and should not be, used by anyone other than these specified parties.
44a 7� " S"<ka
Pleasant Hill, California
December 13, 2018