HomeMy WebLinkAboutReso 25-2023 (23-105)ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
CITY OF SOUTH SAN FRANCISCO
CALIFORNIA
Attachment 1
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2022
Prepared by:
Department of Finance
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Table of Contents
Page
INTRODUCTORY SECTION
Table of Contents ............................................................................................................................................... i
Letter of Transmittal ......................................................................................................................................... v
Certificate of Achievement for Excellence in Financial Reporting ............................................................... xii
Organization Chart ......................................................................................................................................... xiii
City Council and Directory of City Officials ................................................................................................ xiv
FINANCIAL SECTION
Independent Auditor's Report ...................................................................................................................... 1
Management’s Discussion and Analysis ....................................................................................................... 5
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position .................................................................................................................. 29
Statement of Activities ...................................................................................................................... 30
Fund Financial Statements:
Major Governmental Funds:
Balance Sheet ................................................................................................................................ 36
Reconciliation of Governmental Fund Balances to Net Position of Governmental Activities .... 38
Statement of Revenues, Expenditures, and Changes in Fund Balances ....................................... 40
Reconciliation of the Net Change in Fund Balances Total Governmental Funds with
the Statement of Activities ........................................................................................................ 42
Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual –
Budgetary Basis:
General Fund ....................................................................................................................... 43
Low and Moderate Income Housing Assets ....................................................................... 44
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CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Table of Contents
Page
FINANCIAL SECTION (Continued)
Major Proprietary Funds:
Statement of Net Position .............................................................................................................. 46
Statement of Revenues, Expenses, and Changes in Fund Net Position ........................................ 47
Statement of Cash Flows ............................................................................................................... 48
Fiduciary Funds:
Statement of Fiduciary Net Position ............................................................................................. 50
Statement of Changes in Fiduciary Net Position .......................................................................... 51
Notes to Basic Financial Statements ...................................................................................................... 53
Required Supplementary Information:
Schedule of Changes in Net Pension Liability and Related Ratios –
Miscellaneous Plan ............................................................................................................ 106
Schedule of Contributions – Miscellaneous Plan ........................................................................ 107
Schedule of Changes in Net Pension Liability and Related Ratios – Safety Plan ...................... 108
Schedule of Contributions – Safety Plan ..................................................................................... 109
Schedule of Changes in the Net OPEB Liability and Related Ratios ......................................... 110
Schedule of Contributions – Retiree Healthcare OPEB Plan ...................................................... 111
Notes to Schedule of Employer Contributions ............................................................................ 111
Supplementary Information:
General Fund:
Combining Balance Sheets ............................................................................................................. 116
Combining Schedule of Revenues, Expenditures, and Changes
in Fund Balances ..................................................................................................................... 117
Combining Schedule of Revenues, Expenditures, and Changes
in Fund Balance Budget and Actual - (Non GAAP Legal Basis) ........................................... 118
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CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Table of Contents
Page
FINANCIAL SECTION (Continued)
Non-major Governmental Funds:
Combining Balance Sheet ............................................................................................................... 124
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances ..................................................................................................................... 128
Budgeted Non-major Government Funds:
Combining Schedule of Revenues, Expenditures, and Changes
in Fund Balances – Budget and Actual ................................................................................... 132
Internal Service Funds:
Combining Statement of Net Position ............................................................................................ 138
Combining Statement of Revenues, Expenses and Changes in Fund Net Position ....................... 139
Combining Statement of Cash Flows ............................................................................................. 140
Custodial Funds:
Combining Statement of Net Position ............................................................................................ 142
Combining Statement of Changes in Net Position ......................................................................... 143
STATISTICAL SECTION
Net Position by Component – Last Ten Fiscal Years .................................................................... 147
Changes in Net Position – Last Ten Fiscal Years .......................................................................... 148
Fund Balances of Governmental Funds – Last Ten Fiscal Years .................................................. 152
Changes in Fund Balance of Governmental Funds – Last Ten Fiscal Years ................................ 154
Assessed Value of Taxable Property – Last Ten Fiscal Years ...................................................... 156
Direct and Overlapping Governments – Property Tax Rates
Last Ten Fiscal Years ................................................................................................................ 157
Principal Property Taxpayers – Current Year and Nine Years Ago .............................................. 159
Property Tax Levies and Collections – Last Ten Fiscal Years ...................................................... 160
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CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Table of Contents
Page
STATISTICAL SECTION (Continued)
Ratio of Outstanding Debt by Type – Last Ten Fiscal Years ........................................................ 161
Computation of Direct and Overlapping Debt ............................................................................... 162
Computation of Legal Bonded Debt Margin ................................................................................. 163
Revenue Bond Coverage Sewer Rental Enterprise Fund – Last Ten Fiscal Years ....................... 164
Sewer Debt Service Coverage Sewer Rental Enterprise Fund – Last Seven Fiscal Years............ 165
Redevelopment Pledged Revenue Coverage – Last Nine Fiscal Years ......................................... 166
Demographic and Economic Statistics – Last Ten Fiscal Years ................................................... 167
Principal Employers – Current Year and Nine Years Ago ............................................................ 168
Full-Time Equivalent City Governmental Employees by Function – Last Ten Fiscal Years ....... 169
Operating Indicators by Function/Program – Last Eight Fiscal Years .......................................... 170
Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ......................................... 171
Miscellaneous Information – Last Four Fiscal Years .................................................................... 172
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December 28, 2022
Honorable Mayor and Members
of the City Council
City of South San Francisco
South San Francisco, California
We are pleased to submit the Annual Comprehensive Financial Report (ACFR) for
the City of South San Francisco (the City) for the fiscal year (FY) ended June 30,
2022. The City of South San Francisco is required to publish a complete set of
financial statements presented in conformance with generally accepted accounting
principles (GAAP) and audited by an independent, certified public accounting firm.
This report is published to fulfill this requirement for the fiscal year ending June 30,
2022.
The report presents the finances of the City of South San Francisco. Management
assumes full responsibility for the completeness and fairness of the information
presented in this report. To the best of our knowledge and belief, the enclosed data
is accurate in all material respects and is reported in a manner designed to present
fairly the financial position and results of operations of the various funds of the City.
All disclosures necessary to enable the reader to gain an understanding of the
City’s financial activities have been included.
This report consists of management’s representations concerning the finances of
the City. To provide a reasonable basis for making these representations,
management established a comprehensive internal control framework designed to
both protect the City’s assets from loss, theft, or misuse, compiled sufficient
reliable information for the preparation of the City’s financial statements in
conformity with the Generally Accepted Accounting Principles (GAAP), and
complied with applicable laws and regulations.
CITY COUNCIL 2022
FLOR NICOLAS, MAYOR (DIST. 3)
MARK NAGALES, VICE MAYOR (DIST. 2)
MARK ADDIEGO, MEMBER (DIST. 1)
JAMES COLEMAN, MEMBER (DIST. 4)
EDDIE FLORES, MEMBER (DIST. 5)
MIKE FUTRELL, CITY MANAGER
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The City contracted with Maze & Associates (Maze), a public accounting firm
licensed to perform local government audits in California, to complete the annual
audit. Maze concluded that the financial statements present fairly the respective
financial position of the government activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City, and the
respective changes in financial position, and where applicable, cash flows for the
year ended June 30, 2022, in accordance with GAAP. This is a favorable
conclusion and is commonly referred to as an unmodified opinion.
The independent audit of the City’s financial statements is part of a broader,
federally mandated “Single Audit” designed to meet the needs of federal grantor
agencies. The standards governing Single Audit engagements require the
independent auditor to report not only on the fair presentation of the City’s financial
statements, but also on the City’s internal controls and compliance with legal
requirements, with special emphasis on internal controls and legal requirements
involving the administration of federal awards. Maze will issue the Single Audit in
March of 2023.
GAAP requires that management provide a narrative introduction, overview, and
analysis to accompany the basic financial statement in the form of the
Management’s Discussion & Analysis (MD&A). This letter of transmittal is
designed to complement the MD&A and should be read in conjunction with it. The
MD&A is located immediately following the report of the independent auditor in the
financial section.
CITY PROFILE
The City of South San Francisco proudly remains the Industrial City, a reflection of
its steel mill and shipbuilding past, redefined to reflect the innovative,
entrepreneurial, and industrious spirit which has made South San Francisco the
Biotech Capital of the World, with over 250 active biotech companies and growing.
The City of South San Francisco encompasses approximately 9.5 square miles
and has a population of 66,105. The City employs approximately 500 full-time
regular employees and 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.
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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. Each Councilmember serves a term of four years, with a rotating
Mayor chosen by majority vote of the Council, for a term of one year. The Council
appoints the City Manager and City Attorney. The City Manager is responsible for
carrying out the policies and ordinances of the City Council, for overseeing the
day-to-day operations of the City and appointing department directors.
The offices of City Clerk and City Treasurer are elected and will remain at-large.
The incumbent City Clerk, Rosa Govea Acosta, and City Treasurer, Frank Risso,
were elected for another term in the November 2022 election.
This report includes all financial activities of the City of South San Francisco,
including financial information for the City, as the primary government, and for its
component units, for which the City is considered financially accountable. The
blended component units include the City of South San Francisco Capital
Improvements Financing Authority, the Parking Authority of the City of South San
Francisco, and the City of South San Francisco Public Facilities Financing
Authority. The South San Francisco Conference Center is a discretely presented
component unit and is included because of the significance of its governing,
operational, and/or financial relationships with the City. The Successor Agency that
was created due to the Redevelopment Agency dissolution is also included in this
report.
ASSESSING THE CITY’S ECONOMIC CONDITION
The City of South San Francisco continued to demonstrate its resilience and
strength during Fiscal Year (FY) 2021-22 following a particularly challenging prior
year in which the COVID-19 pandemic took hold and impacted all sectors of
society and the economy at the national, state and local levels. Restrictions on
travel continued to be loosened as FY2021-22 began, bringing about a substantial
recovery in the year in Transient Occupancy Tax (TOT) to above 70% of pre-
pandemic levels, up from 39% in the prior year, as well as Commercial Parking
Tax collected from San Francisco airport and the surrounding hotels. The upward
trend in TOT went hand-in-hand with a strong recovery in sales tax revenue as
shopping and spending patterns also continued to return to normal. This recovery
and various revenue streams enabled the City to re-open and expand classes and
services to residents and subsequently unfreeze employee vacancies, thereby
driving an increase in expenditures.
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The resilience of local businesses and residents was bolstered by assistance
programs provided by the City during the COVID-19 pandemic. These continued
into FY2021-22, with new ones beginning during the year, and included the
Guaranteed Basic Income pilot program (utilizing American Rescue Plan Act
funding) whereby 160 City residents received $500 per month for a year, the
Rental Assistance program for residential tenants facing pandemic-related
economic hardship, the opening of the Economic Advancement Center on Grand
Avenue to assist individuals with job placement, training and business start-up,
and creation of the Business Façade and Tenant Improvement program to help
local businesses improve storefronts and American Disabilities Act (ADA)
compliance.
Development within the City continued apace during FY2021-22 with multiple new
housing units coming online and new developments added to the pipeline.
Significant work continued through the year with the biotech development at Oyster
Point, and the Southline project to develop a 28-acre site for office space and
biotech research and development on the City’s southern border gained
considerable traction (target completion in 2024).
The City further demonstrated its strong emergence from the pandemic through its
ambitious Capital Improvement Plan (CIP) with twenty new projects budgeted in
the fiscal year alone including the $78 million bond-funded portion of the
Community Civic Campus construction project, the $24 million bond-funded street
rehabilitation projects and the $2 million bond-funded solar roof at the City’s
Corporation Yard. A capital project to replace the City pool complex was also
included in the CIP plan, the outreach and design of which began during the year.
The bonds to fund the new pool complex were issued in June 2022 in readiness
for the forthcoming construction phase. Also, during FY2021-22, the new Police
Station and new Caltrain Station were both opened and became fully operational,
and work on the Colma Creek Storm Water capture project and the Sports Fields,
both located at Orange Memorial Park, neared completion by year end.
In June 2022, the City issued its third tranche of lease revenue bonds, taking
advantage of a very favorable interest rate environment. The bond proceeds will
fund multiple CIP projects, including the aforementioned city pool complex (Aquatic
Center), and replacement of the sports fields, playground and Colma Creek
bridges at Orange Memorial Park.
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The General Fund is the main fund of the City, accounting for principal revenues
including taxes, licenses and permits, charges for services, grants and interest
income, as well as expenditures related to delivery of public services by City
departments such as Police, Fire, Public Works, Parks and Recreation, Library and
Administrative Services. Performance of this fund is viewed as the main barometer
of the financial health of the City. Compared to the prior year, FY 2021-22 General
Fund revenues (excluding transfers in from other funds and special items)
increased by $17.4 million, or 14.1%. This significant increase is mainly driven by
greater TOT, sales tax, commercial parking tax and charges for service revenues,
all as a result of the City emerging and recovering from the COVID-19 pandemic.
In November 2015, voters in the City passed Measure W, which increased the
sales tax rate within the City by 0.50%. The tax is deposited into the City's General
Fund and will be used to pay for City services. This tax revenue is primarily used
to pay the debt on bonds or other financings to accelerate projects. In February
2020, the City issued $43.9 million of lease revenue bonds to finance the design
and construction of a new Police facility which became fully operational in January
2022. In June 2021, the City issued $86.4 million in lease revenue bonds for the
construction of a new Civic Center Campus, installation of a solar roof at the City’s
Corporation Yard and funding of the City’s Road Rehabilitation program.
Furthermore, in June 2022, the City issued $65.4 million in lease revenue bonds
to fund the construction of a new Aquatic Center and ballfields at Orange Memorial
Park, and the replacement of a playground and two bridges over Colma Creek,
also at Orange Memorial Park.
MAJOR CITY SPONSORED INITIATIVES
The City completed the following major construction projects in FY 2021-22,
improving the City’s infrastructure, facilities and enhanced business processes
with contemporary technology:
•Pavement Management Program – 2020 Surface Seal & Rehab projects
•Pump station #2 Upgrade
•Linden Avenue Street Improvements – Aspen to Miller
•Signalize Commercial and Spruce Intersection
•WQCP Plant-wide Industrial re-coat project
•Orange Memorial Park Storm Water Capture project
•New Police Operations Center
•Caltrain Station
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FINANCIAL INFORMATION
The City Council is required to adopt a final budget by passing a budget resolution
no later than June 30th, following a public hearing process. This annual budget
serves as the foundation for the City’s financial planning and control. The budget
is prepared by fund, function and department. The legal level of budgetary control
is at the fund level. The City Manager is authorized to transfer budgeted amounts
between departments and line items within any fund. Any revisions that alter the
total expenditures of any fund must be approved by the City Council. Transfers
between funds must be approved by the City Council. At the end of the fiscal year,
encumbered appropriations are carried forward and become part of the following
year’s budget while appropriations that have not been encumbered lapse, unless
otherwise authorized by the City Council and the City Manager.
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, approval 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.
In February 2020, S&P Global Ratings assigned an issuer credit rating of triple A
(“AAA”) to the City. AAA is the highest rating possible and is important as higher
ratings generally results in lower borrowing costs and the City was able to benefit
from this in its FY 2020-21 bond issuance. S&P re-affirmed this rating prior to the
FY 2021-22 bond issuance. The AAA rating is a good indicator of the City's strong
financial position, solid executive management, fiscally sound policies and
practices, and responsible budgetary performance.
The City’s Reserve Policy is aligned with the Government Finance Officers
Association (GFOA) best practices recommendation for reserves, setting aside 15-
20 percent of operating revenues.
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OTHER INFORMATION
Award
The City’s ACFR for the fiscal year ended June 30, 2021, received a Certificate of
Achievement for Excellence in Financial Reporting from the Government Finance
Officers Association. The award signified the report’s attainment of easily readable
and efficiently organized content and satisfaction of generally accepted accounting
principles and legal requirements. The award is valid for a period of one year only.
However, the City believes that this current report continues to conform to program
eligibility requirements.
Acknowledgments
The preparation of the ACFR was made possible by the dedicated services of the
entire staff of the Finance Department and our auditors. Each member of the
department has our sincere appreciation for the contributions made in the
preparation of this report. Special thanks are extended to Finance Services
Managers, Paul Harris and Jennifer Clemente, and Senior Accountant Steven Lew
for their commitment and diligence in the preparation of this document.
Furthermore, we would like to thank the City Council for its leadership and
commitment to ensuring the long-term fiscal health of the City.
Respectfully submitted,
____________________________ __________________________
Karen Chang Mike Futrell
Director of Finance City Manager
obo
xi
I, DocuSigned by:
~CB~
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of South San Francisco
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
xii
Citizens of South San Francisco
City Council
City Clerk
Rosa Govea Acosta
City Treasurer
Frank Risso
City Manager
Mike Futrell
City Attorney
Sky Woodruff
Assistant to the City
Manager
Christina Fernandez
Administrative Departments Operating Departments
Fire Chief
Jess Magallanes
Public Works Director
Eunejune Kim
Library Director
Valerie Sommer
Econ. & Comm. Development
Director
Nell Selander
Chief of Police
Scott Campbell
Human Resources Director
Leah Lockhart
Finance Director
Karen Chang
Assistant City Manager/Chief
Sustainability Officer
Sharon Ranals
Communications Director
Leslie Arroyo
Mark Nagales (District 2), Mayor
Buenaflor Nicolas (AT LARGE), Vice Mayor
Mark Addiego (AT LARGE), Member
James Coleman (District 4), Member
Eddie Flores (AT LARGE), Member
Information Technology
Director
Tony Barrera
Capital Projects Director
Jacob Gilchrist
Dep. Capital Projects Director
Philip Vitale Parks and Recreation
Director
Greg Mediati
xiii
City Council & Directory of Officials*
City Council
Mark Nagales (District 2) Mayor
Buenaflor Nicolas (AT LARGE) Vice Mayor
Mark Addiego (AT LARGE) Councilmember
James Coleman (District 4) Councilmember
Eddie Flores (AT LARGE) Councilmember
Elected Officials
Rosa Govea Acosta City Clerk
Frank Risso City Treasurer
Appointed Officials
Mike Futrell City Manager
Sharon Ranals Assistant City Manager
Karen Chang Finance Director
Leslie Arroyo Communications Director
Scott Campbell Chief of Police
Tony Barrera Information Technology Director
Jacob Gilchrist Capital Projects Director
Nell Selander Deputy Economic & Community Development Director
Leah Lockhart Human Resources Director
Jess Magallanes Fire Chief
Eunejune Kim Public Works Director
Valerie Sommer Library Director
Greg Mediati Parks & Recreation Director
Budget Subcommittee
Mark Addiego
Buenaflor Nicolas
*As of October 31, 2022
xiv
INDEPENDENT AUDITOR’S REPORT
Honorable Members of the City Council
City of South San Francisco, California
Report on the Audit of the Financial Statements
Opinions
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, 2022, 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 discretely presented component unit financial statements of the South San Francisco
Conference Center Authority (Authority), which represents 0.64%, 0.82%, and 1.08%, respectively, of the
assets, net position, and revenue of the primary government. Those financial statements were audited by
other auditors, whose report thereon has been furnished to us and our opinion, insofar as it relates to the
amounts included for the Authority, is based solely on the report of the other auditors.
In our opinion, based on our audit and 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 discretely presented component unit, each major fund, and the aggregate
remaining fund information of the City as of June 30, 2022, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. We are required to be independent of the City and to meet our other ethical responsibilities, in
accordance with the relevant ethical requirement relating to our audit. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management 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, and for 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.
1
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a
going concern for twelve months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing
standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control. Misstatements are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the judgment made by a reasonable user based on the
financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government
Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements.
• Obtain an understanding of internal control relevant to the audit 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, no such opinion is
expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable
period of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control-related
matters that we identified during the audit.
Change in Accounting Principles
Management adopted the provisions of Governmental Accounting Standards Board Statement No. 87,
Leases, which became effective during the year ended June 30, 2022 and had material effects on the
financial statements as discussed in Note 1T to the financial statements.
The emphasis of this matter does not constitute a modification to our opinions.
2
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the 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 is the responsibility of
management and, 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.
Supplementary 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 accompanying Supplementary Information, as listed in
the Table of Contents, is presented for purposes of additional analysis and is not a required part of the basic
financial statements. Such 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 Supplementary Information is fairly
stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information
comprises the Introductory Section and Statistical Section listed in the Table of Contents, but does not
include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial
statements do not cover the other information, and we do not express an opinion or any form of assurance
thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the
basic financial statements, or the other information otherwise appears to be materially misstated. If, based
on the work performed, we conclude that an uncorrected material misstatement of the other information
exists, we are required to describe it in our report.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 27,
2022, 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 solely 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 the
effectiveness of the City’s internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering the
City’s internal control over financial reporting and compliance.
Pleasant Hill, California
December 27, 2022
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CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
The Management’s Discussion and Analysis (MD&A) provides an overview of City of South San
Francisco’s financial activities and fiscal performance for the year ended June 30, 2022. Please read
this in conjunction with the accompanying Transmittal Letter and Basic Financial Statements to
obtain a complete picture of the City’s financial condition.
FINANCIAL HIGHLIGHTS
Total Net Position for Governmental activities in FY 2021-22 increased by $64.7 million, or
19.5%, from $332.1 million in the prior year, to $396.8 million. The increase is primarily due to
further investment in City assets through bond issuance, an increase in cash and investments due
to stronger revenues in the year, as well as a greater restricted cash balance due to the 2022A
bond issuance prior to year-end. The growth in assets of $146.5 million is partially offset by a
$66.3 million increase in long-term debt liabilities but this offset is reduced by lower “other
liabilities” ($47.6 million lower than prior year) due to a significant drop in the net pension
liability at year-end.
Total Net Position for Business-Type activities in FY 2021-22 increased by $7.1 million, or
5.4%, from $130.8 million in the prior year, to $137.9 million. The growth in Net Position is
due to a $10 million increase in capital assets due to construction work underway at the City’s
Water Quality Control Plant (WQCP), lower accounts payable at year-end and a drop in the net
pension liability. This is partially offset by lower cash and investments, and accounts receivable
balances at year-end.
City-wide Net Pension Liability to CalPERS for FY 2021-22 decreased by $60.9 million, or
29.7%, from $205.3 million in the prior year to $144.4 million. This significant decrease in
liability was driven by revised actuarial valuations from CalPERS taking into account member
contributions and strong investment earnings in FY2020-21.
City-wide cash and investments at year end increased $5.5 million, or 2.1%, from $259.3 million
in the prior year to $264.8 million. This reflects the underlying strength in the local economy as
the City continued to rebound from the impacts of the COVID-19 pandemic.
Revenues from Governmental Activities (excluding transfers and special items) increased by
$37.7 million, or 22.7%, to $203.9 million in FY 2021-22 from $166.2 million in the prior year.
Revenues from Business-Type Activities (excluding transfers and special items) partially offset
this with a decrease of $5.4 million, or 13.3%, to $35.2 million in FY2021-22 from $40.6 million
in the prior year.
Expenses from Governmental Activities (excluding transfers and special items) increased by
$2.4 million, or 1.8%, to $134.8 million in FY2021-22 from $132.4 million in the prior year due
to a greater amount of interest paid on debt (due to additional bonds having been issued in the
prior year). Expenses from Business-Type Activities decreased slightly by $0.2 million, or 0.7%,
to $28.7 million compared to $28.9 million in the prior year.
5
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
Property tax revenues categorized under Governmental Activities dropped in FY 2021-22 by
$1.6 million, or 3.8%, to $40 million from $41.6 million in the prior year. This was primarily
due to a reduction in the amount of tax received from the Educational Revenue Augmentation
Fund (ERAF) which has historically been a volatile revenue source related to the split of basic
and non-basic aid schools in the county of San Mateo.
Sales tax increased by $5.1 million, or 15.5% to $38.1 million in FY 2021-22 from $33.0 million
in the prior year. This represents the return to normal spending patterns for the local population
as the City continued its recovery during the FY 2021-22 from the COVID-19 pandemic.
Transient Occupancy Tax (“TOT”) was the most dramatically impacted revenue category during
the height of the pandemic due to the restrictions on travel and shelter-in-place orders. By the
beginning of FY 2021-22, these had largely been removed allowing this revenue category to
rebound significantly. TOT revenue almost doubled to $12.1 million, an increase of $5.4 million,
or 80.6%, from $6.7 million in the prior year. Total TOT receipts for the year rose to
approximately 70% of pre-pandemic levels indicating there is still some way to go in the
recovery.
Revenue from Property Taxes in Lieu, otherwise known as the California Vehicle Licensing Fee
(VLF), more than doubled to $12.0 million in FY 2021-22 from $4.9 million in the prior year,
an increase of $7.1 million or 144.9%. This is a volatile revenue source that is difficult to predict
and the increase was partially due to a change in the ratio of basic aid to non-basic aid school
districts in San Mateo County which affects the availability of VLF. Part of the variance is due
to the City being allocated $3.7 million in additional VLF in FY2021-22 as a result of a county-
wide reimbursement from the state for a VLF shortfall in the prior year.
Total revenues from the City’s Sewer Enterprise decreased $5.4 million, or 16.0% to $28.4
million from $33.8 million in the prior year. This was largely due to lower sewer charge
revenues which, for FY2021-22, are based on the 2020 calendar year. Commercial water usage
dropped considerably during 2020 as workers remained at home during the pandemic and
reduced water usage means less sewer effluent volume on which commercial businesses are
charged. Water conservation drives by many businesses further led to reduced overall water
usage and resulting sewer effluent volumes. The City’s Parking Enterprise experienced a $0.2
million, or 30.0%, increase in revenues to $1.0 million in FY2021-22 compared to $0.8 million
in the prior year due to a greater level of parking activity as shoppers returned to the City
following removal of pandemic-related restrictions.
6
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
OVERVIEW OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT
This Annual Comprehensive Financial Report (ACFR) 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, custodial funds and other budgetary information;
and
6) The Statistical Section.
Basic Financial Statements
The Basic Financial Statements are comprised of the City-wide Financial Statements and the Fund
Financial Statements. These two sets of financial statements provide two different views of the
City’s financial activities and financial position.
The City-wide Financial Statements provide a longer-term view of the City’s activities as a whole,
and consist of the Statement of Net Position and the Statement of Activities. The Statement of Net
Position provides information about the financial position of the City as a whole, including all its
capital assets and long-term liabilities on the full accrual basis, similar to the basis used by
corporations. The Statement of Activities provides information about all the City’s revenues and all
its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or expenses
of each of 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
distinct activities of the City.
The Fund Financial Statements report the City’s operations in more detail than the government-wide
statements. The Governmental Fund Financial Statements focus primarily on the short-term
activities of the City’s General Fund and other Major Funds and measure only current revenues,
expenditures, and fund balances; they exclude capital assets, long-term debt and other long-term
amounts. The Proprietary Fund Financial Statements focus on the Business-Type “enterprises” of
the City, i.e. activities that are accounted for in a similar way to private sector organizations using
the full accrual basis, thereby including both short-term and long-term elements.
7
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
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.
The Fiduciary Fund Financial 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, 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 and South San Francisco Public Facilities Financing
Authority, as the City Council also governs these entities.
Business-Type Activities - All the City’s enterprise activities are reported here, including
Wastewater treatment (or Sewer), Parking, and Storm Water management. Unlike
Governmental services, user fees fully support most of these services.
Component Unit - The City of South San Francisco Conference Center Authority comprises the
component unit. The Authority serves the City and other interests and it has a governing body
separate from the City Council.
City-wide financial statements are prepared on the accrual basis, which means they measure the
flow of all economic resources of the City as a whole and account for revenues when due and
expenses when incurred.
8
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
Fund Financial Statements
The Fund Financial Statements provide detailed information about each of the City’s most
significant funds, called Major Funds. 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 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 means
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 and
include all their assets, liabilities and deferred outflows/inflows of resources, 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 city-wide 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 Fund Financial Statements
The City is the agent for certain assessment districts, holding amounts collected from property
owners which await transfer to these Districts’ bond trustees. The City’s fiduciary activities are
reported in the separate Statement of Fiduciary Net Position and the Statement of Changes in
Fiduciary Net Position. These activities are excluded from the City’s other financial statements
because the City cannot use these assets to finance its own operations.
FINANCIAL ACTIVITIES OF THE CITY AS A WHOLE
The following analyses focus on the net position and changes in the City’s Governmental Activities
(Tables 1 through 3, and Chart 1) and Business-Type Activities (Tables 4 and 5), which are
presented in the city-wide Statement of Net Position and Statement of Activities. The comparative
results for FY 2021-22 are presented versus FY 2020-21.
9
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
Governmental Activities
Net position may serve over time as a useful indicator of the City’s financial condition. Table 1
below shows that total assets and deferred outflows of resources exceed the total liabilities and
deferred inflows of resources as of June 30, 2022 for Governmental Activities:
Governmental Net Position
Table 1
Governmental Net Position at June 30
(In Millions)
As shown in table 1, the total net position for Governmental Activities increased by $64.7 million
in FY 2021-22 compared to the prior year, reflecting significant increases in assets. Cash and
investments increased by $10.7 million. Other assets, which includes receivables, properties held
for redevelopment, and restricted cash and investments, increased by $53.2 million due to proceeds
received from issuance of an additional bond for construction of a new Aquatic Center and various
other CIP projects at Orange Memorial Park. Capital assets increased by $82.6 million due to a large
increase in Construction-In-Progress related to the new Civic Center Campus and multiple other
Capital Improvement Plan (CIP) projects. Pursuant to GASB 75 and GASB 68 requirements,
respectively, the City, as in prior years, recognized the Net OPEB liability of $52.3 million and Net
Pension Liability of $129.9 million attributable to Governmental Activities.
Increase / (Decrease)
2022 2021 Amount %
Cash and investments 239.8$ 229.1$ 10.7$ 4.7%
Other assets 201.9 148.7 53.2 35.8%
Capital assets 465.7 383.1 82.6 21.6%
Total assets 907.4 760.9 146.5 19.3%
Total outflows of resources 28.8 31.2 (2.4) (7.7%)
Total outflow of resources 28.8 31.2 (2.4) (7.7%)
Long‐term debt outstanding 223.8 157.5 66.3 42.1%
Other liabilities 253.4 301.0 (47.6) (15.8%)
Total liabilities 477.2 458.5 18.7 4.1%
Deferred inflows of resources 62.1 1.6 60.5 3781.3%
Total deferred inflow of resources 62.1 1.6 60.5 3781.3%
Net position:
Net investment in capital assets 452.7 316.1 136.6 43.2%
Restricted 139.0 160.2 (21.2) (13.2%)
Unrestricted (194.9) (144.2) (50.7) 35.2%
Total net position 396.8$ 332.1$ 64.7$ 19.5%
10
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
The following table shows the changes in net position for Governmental Activities:
Table 2
Expense and Program Revenue Comparison in Governmental Activities
(In Millions)
Increase / (Decrease)
2022 2021 Amount %
Revenues
Program revenues:
Charges for services 66.7$ 44.9$ 21.8$ 48.6%
Operating grants and contributions 10.9 8.0 2.9 36.3%
Capital grants and contributions 3.3 5.5 (2.2) (40.0%)
Total program revenues 80.9$ 58.4$ 22.5$ 38.5%
General revenues:
Taxes:
Property taxes 40.0$ 41.6$ (1.6)$ (3.8%)
Sales taxes 38.1 33.0 5.1 15.5%
Transient occupancy taxes 12.1 6.7 5.4 80.6%
Other taxes 11.5 9.1 2.4 26.4%
Property taxes in l ieu 12.0 4.9 7.1 144.9%
Investment earnings (6.7) 0.9 (7.6) (844.4%)
Miscellaneous 16.0 11.6 4.4 37.9%
Total general revenues 123.0$ 107.8$ 15.2$ 14.1%
Total revenues 203.9$ 166.2$ 37.7$ 22.7%
Expenses
General government 20.8$ 19.6$ 1.2$ 6.1%
Fire department 28.5 34.5 (6.0) (17.4%)
Police department 35.7 33.4 2.3 6.9%
Public Works 7.5 7.6 (0.1) (1.3%)
Parks and Recreation 19.5 17.1 2.4 14.0%
Library 6.1 6.3 (0.2) (3.2%)
Economic and Community Development 12.0 11.7 0.3 2.6%
Interest on long‐term debt 4.7 2.2 2.5 113.6%
Total expenses 134.8$ 132.4$ 2.4$ 1.8%
Excess / (deficiency) before transfers 69.1$ 33.8$ 35.3$ 104.4%
Special Item (3.0) (1.4) (1.6) 114.3%
Transfers (1.4) (5.0) 3.6 (72.0%)
Change in net position 64.7 27.4 37.3 136.1%
Net position ‐ beginning 332.1 304.7 27.4 9.0%
Net position ‐ ending 396.8$ 332.1$ 64.7$ 19.5%
11
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
As shown in table 2, total Governmental revenues (excluding transfers and special items) increased
by $37.7 million, or 22.7%, compared to the prior year. A significant increase in Charges for
Services specifically contributed to the greater revenue – this category accounted for $21.8 million
of the increase and largely consists of impact fees such as the Park Land Acquisition Fee, the Park
Construction Fee, the East of 101 Traffic Impact Fee and the Childcare Impact Fee. These are fees
paid by developers on new development projects within the City and revenue levels can vary
depending on the timing of such projects. There was also an increase in revenue, accounted for in
Charges for Services, from facility rentals, and childcare and aquatic programs offered by the City
during the year mainly due to the City’s recovery from the COVID-19 pandemic. The recovery also
gave rise to a $5.4 million increase in TOT and $5.1 million increase in Sales Tax as travel
restrictions were removed, hotel occupancy rates increased and consumer spending patterns
normalized. An increase in revenue was also seen in Property taxes in lieu ($7.1 million), otherwise
known as the California Vehicle Licensing Fee (VLF) due to a change in the ratio of basic aid to
non-basic aid school districts in San Mateo County which affects the availability of VLF, and a $3.7
million allocation from the state (distributed by the County) related to a shortfall in VLF in FY2020-
21. Investment earnings fell by $7.6 million to -$6.7 million, compared to the prior year, due to a
downward trend in the stock and bond markets brought about rising inflation and subsequent rises
in interest rates. The annual mark-to-market adjustment required by Governmental Accounting
Standards Board (GASB) accounting standard #31 results in the recognition of this temporary
change in value of the City’s investments.
Chart 1 shows the distribution of revenues from Governmental Activities by category.
Chart 1
Revenues by Source - Governmental Activities FY 2021-22
12
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
Governmental program expenses increased by $2.4 million, or 1.8%, in comparison to the prior year.
Increases were seen in most departments partially due to higher salary and benefit costs as positions
were unfrozen during the year but also due to increased spending on operational supplies in response
to expanded public services provided as the City continued to recover from the pandemic. Interest
on long-term debt increased to $4.7 million, from $2.2 million in the prior year, due to repayments
beginning on the 2021A bonds which were issued to pay for construction of the new Civic Center
Campus.
Table 3 illustrates the difference between program revenues and program expenses. Program
revenues consist of capital and operating grants and contributions, and fees for services. General
City revenues, such as property taxes, sales taxes, transient occupancy taxes, licenses and permits,
and investment earnings, cover the shortfall between program revenues and program expenses.
Table 3
Net (Expense) / Revenue from Services
Governmental Activities
(In Millions)
In FY 2021-22, the net expense for governmental activities decreased by $20.1 million from $74.0
million to $53.9 million, due to a $2.4 million increase in Governmental program expenses, as
previously discussed, and a $22.5 million increase in program revenues primarily in charges for
services which includes developer impact fees.
Increase / (Decrease)
2022 2021 Amount %
General government (11.2)$ (9.8)$ (1.4)$ 14.3%
Fire department (20.7) (28.3) 7.6 (26.9%)
Police department (32.0) (31.0) (1.0) 3.2%
Public works department 17.3 21.4 (4.1) (19.2%)
Recreation and community services (15.9) (15.3) (0.6) 3.9%
Library (4.4) (2.0) (2.4) 120.0%
Economic and community development 17.7 (6.8) 24.5 (360.3%)
Interest on long‐term debt (4.7) (2.2) (2.5) 113.6%
Total (53.9)$ (74.0)$ 20.1$ (27.2%)
13
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
Business-Type Activities
Table 4 shows that total assets and deferred outflows of resources exceed the total liabilities and
deferred inflows of resources as of June 30, 2022 for Business-Type Activities:
Table 4
Business-type Net Position at June 30 (in Millions)
The total net position for Business-Type Activities increased by $7.1 million, or 5.4%, compared to
the prior year. Total assets increased slightly by $1.6 million, or 0.7%, reflecting increases of capital
assets related primarily to construction in the Water Quality Control Plant (WQCP) Wet Weather
and Digester Improvements project, the rehabilitation of the WQCP secondary clarifiers and the
Orange Memorial Park Stormwater capture project. This was offset somewhat by lower cash
balances due to reduced sewer charge revenues as previously discussed, and a lower receivables
balance. Total liabilities, on the other hand, decreased by $10.7 million due to a lower accounts
payable balance at year end and a $6.1 million lower net pension liability due to substantial gains
made during the measurement period. Similar to Governmental Activities and pursuant to GASB
75 and GASB 68 requirements, respectively, the City, as in prior years, recognized the Net OPEB
liability of $5.8 million and Net Pension Liability of $14.4 million attributable to Business-Type
Activities.
Increase / (Decrease)
2022 2021 Amount %
Cash and Investments 25.0$ 30.2$ (5.2)$ (17.2%)
Other assets 5.1 8.3 (3.2) (38.6%)
Capital assets 196.4 186.4 10.0 5.4%
Total assets 226.5 224.9 1.6 0.7%
Deferred outflows related to pension/OPEB 3.2 3.4 (0.2) (5.9%)
Total Deferred outflow of resources 3.2 3.4 (0.2) (5.9%)
Long‐term liabilities outstanding 57.5 57.6 (0.1) (0.2%)
Other liabilities 29.1 39.7 (10.6) (26.7%)
Total liabilities 86.6 97.3 (10.7) (11.0%)
Deferred inflows related to pension/OPEB 5.3 0.2 5.1 2550.0%
Total deferred inflow of resources 5.3 0.2 5.1 2550.0%
Net position:
Net investment in capital assets 133.6 123.6 10.0 8.1%
Restricted 0.0 0.0 0.0 0.0%
Unrestricted 4.3 7.2 (2.9) 100.0%
Total net position 137.9$ 130.8$ 7.1$ 5.4%
14
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
Table 5 below shows the changes in net position for Business-Type Activities:
Table 5
Change in Business-Type Activities Net Position
(In Millions)
Expenses from Business-Type Activities in FY2021-22 decreased slightly by $0.2 million to $28.7
million while total revenues (program and general revenues combined) also decreased, more
significantly, by $6.3 million to $34.4 million. The total change in net position was an increase of
$7.1 million after transfers compared to the $16.8 million increase in net position in the prior year.
Despite lower revenues in FY2021-22 and a negative mark to market in investment earnings,
control of expenses and reduced transfers out to other funds helped to ensure an increase in net
position, albeit a lower increase than in the prior year.
Increase / (Decrease)
2022 2021 Amount %
Expenses
Sewer Enterprise 26.2$ 26.7$ (0.5)$ (1.9%)
Parking District 1.2 1.3 (0.1) (7.7%)
Storm Water 1.3 0.9 0.4 44.4%
Total expenses 28.7 28.9 (0.2) (0.7%)
Revenues
Program Revenues
Charges for Services 24.2 25.8 (1.6) (6.2%)
Operating and Capital grants and contributions 11.0 14.8 (3.8) (25.7%)
Total program revenues 35.2 40.6 (5.4) (13.3%)
General revenues
Investment earnings (0.8) 0.1 (0.9) (1700.0%)
Total general revenues (0.8) 0.1 (0.9) (1700.0%)
Excess (deficiency) before transfers 5.7 11.8 (6.1) (51.5%)
Transfers 1.4 5.0 (3.6) (72.0%)
Change in net position 7.1 16.8 (9.7) (57.6%)
Net position ‐ beginning 130.8 114.0 16.8 14.7%
Net position ‐ ending 137.9$ 130.8$ 7.1$ 5.5%
15
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
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 condition.
Unrestricted fund balance is a major indicator of designated and uncommitted resources available
for spending in future fiscal years.
At June 30, 2022, the City’s Governmental Funds reported combined fund balances of $343.7
million, an increase of $33.6 million, or 10.8%, compared to the prior year. This was primarily due
to the creation of new governmental funds for the capital improvement projects at Orange Memorial
Park funded by the series 2022A bond issuance. The General Fund ending fund balance, which
includes Measure W, was $76.6 million, reflecting an increase of $0.9 million, or 1.2%, over the
prior year primarily due to stronger revenues in most major revenue categories.
Total Governmental Fund revenues (excluding transfers and special items) increased by $35.6
million, or 21.4%, from $166.2 million to $201.8 million, with increases in all categories except
interest and rentals, licenses and permits and other revenues. Property tax, sales tax, TOT and
intergovernmental revenues all saw increases of at least $5 million in each category with charges
for services rising by $22.6 million mainly due to greater impact fee receipts from various
development projects in progress throughout the City.
Total Governmental Fund expenditures (excluding transfers and special items) increased by $30.2
million, or 14.7%, from $206.1 million in the prior year to $236.3 million in FY 2021-22, primarily
due to increased project expenditures for the new Civic Center Campus, partially offset by reduced
expenditures on the Police station which was completed during the year. In addition, most
departments saw increases in expenditures as public services expanded during the year as the
recovery from the pandemic continued and vacant positions were unfrozen. Debt service increased
by $6.9 million due to repayments beginning for the 2021A bond issuance. Capital outlay expenses
of $5.5 million were also incurred related to the purchase of land for the new fire station at 71
Camaritas Avenue.
Comparison of General Fund 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 expenditures
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 (including Measure W). Changes between the adopted and final
budgets are shown and explained in table 6:
16
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
Comparison of General Fund (excluding transfers) Final Budgets to Original Adopted
Budget (in Thousands)
Table 6
Original Final Pct Discussion:
Revenues Budget Budget Change Change (Items of more than 5% and $100,000 variance)
Property taxes 41,075$ 41,075$ -$
Sales taxes 32,239 32,989 750 2.3%
Transient occupancy taxes 7,085 8,585 1,500 21.2%
Travel industry continued to recover strongly from the
COVID-19 pandemic leading to higher hotel occupancy
rates and upward budget revision
Other taxes 3,615 3,615 -
Franchise Fee 4,600 4,600 -
Intergovernmental 2,325 5,820 3,495 150.3%
Reflects multiple federal, state and local grants applied for
during the year, adjustments for General Plan update, fire
rescue vehicles, Colma Creek project work, the Economic
Advancement Center and various other projects
Interest and rentals 3,565 3,505 (60) -1.7%
Licenses and permits 16,453 16,453 -
Charges for services 9,287 7,848 (1,439) -15.5%
Lingering effects of the COVID-19 pandemic on child care,
classes and facility rentals leading to a decision to revise
the budget downwards during the mid-year review
Fines and forfeitures 677 677 -
Other 233 394 161 69.1%Multiple small donations received during the year leading
to upward budget revision
Total 121,154$ 125,561$ 4,407$ 3.6%
Original Final Pct Discussion:
Expenditures Budget Budget Change Change (Items of more than 5% and $100,000 variance)
City Council 292$ 292$ -$
City Clerk 1,152 1,231 79 6.9%
City Treasurer 160 160 -
City Attorney 910 910 -
City Manager 3,608 4,512 904 25.1%Roll over of purchase orders related to General Plan
update, incentive pay adjustment
Finance 3,808 4,386 578 15.2%
Accounts for various purchase orders carried over from the
previous FY, e.g. ERP replacement project consultant,
incentive pay adjustment
Non-Departmental 1,294 1,369 75 5.8%
Human Resources 2,042 2,307 265 13.0%
Roll over of purchase orders related to summer jobs for
youth program and MOU labor negotiations, employee
incentive pay adjustment
Economic and Community
Development 8,228 16,293 8,065 98.0%
Roll over of purchase orders from the previous year for
plan review and building inspection services, General Plan
update and work related to the Economic Advancement
Center
Fire 29,508 29,892 384 1.3%
Police 32,388 32,844 456 1.4%
Public Works 5,978 6,396 418 7.0%
Roll over of purchase orders from the previous year plus
adjustments for employee incentive pay, part-time workers
for graffiti remediation and free South City shuttle outreach
Library 6,222 6,898 676 10.9%Adjustments for appropriations of multiple state and local
grants received for Library programs
Parks and Recreation 16,729 18,372 1,643 9.8%
Adjustments for appropriations of local grants received
during the year, roll over of purchase orders from the
previous year, adjustments for additional vehicles, concert
in the park, breezeway improvements, master arts plan
and employee incentive pay
Total 112,319$ 125,862$ 13,543$ 12.1%
17
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
Analysis of Major Governmental Funds
General Fund
In FY 2021-22, total General Fund revenues, excluding transfers in, were $140.9 million which was
$15.3 million, or 12.2% higher than the final amended budget. Total General Fund expenditures,
excluding transfers out and including encumbrances, ended FY 2021-22 at $129.5 million which
was $3.7 million, or 2.9%, higher than final budget due to overspends in various departments and
carry over of a significant number of purchase orders.
As of June 30, 2022, the General Fund total fund balance was $76.6 million, $11.9 million of which
was attributable to Measure W. Of the remaining fund balance, $25.1 million was held in reserve in
accordance with city policy which is aligned with the Governmental Finance Officers Association
(GFOA) recommended reserve practice of between 15-20 percent of General Fund operating
revenue. The remaining $39.6 million was held in designation/reserve accounts for various purposes
including unassigned fund balance (available for operational use), encumbrances (committed
expenditure items), capital projects and land held for development.
Revenues. Property tax collections in FY 2020-21 were $49.8 million, which was $8.7 million or
21.2% over final budget. This was mainly due to higher-than-expected Vehicle Licensing Fee (VLF)
payments which included an additional $3.7 million allocated to the City by the state in relation to
a VLF shortfall in the prior year.
Sales tax revenue, including Measure W, was $37.8 million, which was $4.8 million or 14.5% over
final budget, reflecting the City’s strong recovery from the COVID-19 pandemic.
Transient occupancy taxes totaled $12.1 million for the year, which was $3.6 million, or 41.4%,
over final budget. This category was budgeted conservatively due to the expected lingering impacts
of the pandemic on the hospitality industry seen in the prior year. However, travel rebounded quickly
leading to high hotel occupancy rates and considerably higher final collections than budget. By way
of contrast, pre-pandemic TOT levels were approximately $17 million (FY2018-19).
Intergovernmental revenues were $3.2 million which is $2.6 million, or 45.1%, lower than final
budget mainly due to the timing of receipt of various grants, many of which are on a reimbursement
basis so it depends on progress of projects during the year.
Licenses and permits revenues were $14.1 million, which was $2.4 million or 14.5% under final
budget. This category can be very difficult to budget since receipts depend on the timing of
development projects within the City.
Charges for services was $9.7 million, which was $1.9 million or 24.2% above budget. This category
was revised downward during the mid-year review due to lower than expected receipts at the time
for classes, rentals and child care but the year ended much stronger than expected and exceeded the
original budget.
18
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
Measure W revenue increased by $2.0 million, or 15.1%, from $13.4 million in FY2020-21 to $15.4
million in FY 2021-22 and exceeded budget by $2.7 million primarily due to the City’s strong
continued recovery from the COVID-19 pandemic.
Expenditures. Higher than expected expenditures in the Fire department are primarily payroll-
related, particularly in overtime due to regular staff working additional hours to cover unfilled
vacancies. To a lesser extent, the Police department also saw payroll-related expenditures exceed
budget but this was partially offset by underspends in supplies and services. The Non-Departmental
category was over budget due to a one-time transfer to the City Benefits Fund to address a deficit in
the fund. These overspends were offset by savings in other departments, including Finance, Library
and Economic and Community Development. Compared to the prior year, General Fund
expenditures, excluding transfers and including encumbrances, increased from $114.5 million to
$129.2 million. This was driven by the recovery from the pandemic and the commensurate return
to a more normal level of services to residents which led to more staffing and operational
expenditures. Versus final budget, the General Fund ended the year with a $3.7 million unfavorable
variance.
Low and Moderate Income Housing Assets Fund
Up until Redevelopment Agencies were abolished in FY 2011-12 by the State of California under
ABX1 26, the City set aside 20% of Redevelopment property taxes to fund the provision of new
affordable housing units, as well as the operation and maintenance of housing stock that the
Redevelopment Agency had already funded. That fund was formerly called the Low/Moderate
Income Housing Fund. With its source of funding (20% of Redevelopment property tax dollars)
abolished, the City Council voted to take on the operations of the former housing units by becoming
the Housing Successor Agency, with activities funded primarily from the rental revenues received
by the City for those City-owned occupied housing units. Any shortfall between the rents received
and the operations and maintenance costs of those housing units are funded by either one-time grants
or by the General Fund. Any fund balances will be held for future housing property maintenance
needs.
As of June 30, 2022, the fund balance was $3.0 million, a slight reduction from $3.2 million at the
end of the prior year. In FY 2021-22, the City Housing Fund received $0.1 million in revenues. The
fund had $0.3 million in expenditures, $0.1 million of which was for rental assistance to households
severely impacted by the COVID-19 pandemic and $0.2 million for administrative staff costs to
support the City’s Housing Division.
19
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
American Rescue Plan Act Fund
In response to the COVID-19 pandemic, the federal government passed the American Rescue Plan
Act (ARPA) in March 2021 which included financial aid to be provided to cities. The City of South
San Francisco was awarded $12.3 million in ARPA funds, received in two equal tranches in June
2021 and June 2022. During FY 2021-22, $1.1 million was spent on the Guaranteed Income Pilot
Program and other minor projects to support communities impacted by the pandemic. $2.6 million
was also transferred to the General Fund to replace revenues lost as a direct result of pandemic
impacts. ARPA funds are held as unearned revenue on the balance sheet, netting off against the cash
balance, and recognized as revenue as project expenditures are incurred. This results in a zero fund
balance at year end.
Capital Improvement Funds
The City consolidates and reports its governmental fund-type capital project expenditures in these
funds. 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. From time to time and when financially feasible and prudent to do so, the
City issues bonds which generate proceeds for large-scale public facility projects. In addition to the
bond issuances in FY2019-20 for the new Police station (series 2020A) and in FY2020-21 for the
Civic Center Campus (series 2021A), the City issued $65.4 million in bonds to fund the construction
of the new Aquatic Center and ballfields at Orange Memorial Park as well as the replacement of the
playground and two bridges over Colma Creek also at Orange Memorial Park (series 2022A). Entire
capital projects are appropriated in one-year, but expended over multiple years, with unspent
appropriations carried forward year-to-year until completion. In FY 2021-22, combined ending fund
balance for Capital Improvement Funds (excluding Impact Fee Funds) was $149.7 million which
increased $12.8 million from the combined ending fund balance of $130.9 million in the prior year.
The increase was due to the issuance of the $65.4 million series 2022A bonds which generated
proceeds for projects which was largely offset by the spending down of the series 2020A bond
proceeds as the new Police Station neared completion during the year, and the series 2021A bond
proceeds as the Civic Center Campus construction continued apace.
Developer Impact Fees Capital Projects Funds
To ensure developers pay their fair share of the impact of new developments on the City’s capital
and infrastructure, the City imposes impact fees. As South San Francisco emerged from the COVID-
19 pandemic during FY2021-22, the City continued to experience a robust development
environment that accounted for significant collection of developer impact fees including $1.0
million in East of 101 Sewer Impact Fees to be used for capital projects to maintain the sewer
collection and treatment facilities serving the east of 101 area. This fund experienced an overall $0.8
million increase during the year in fund balance from $4.1 million to $4.9 million.
20
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
The City also received $7.1 million in Traffic Impact Fees from developers to be used for expanded
roadway and intersection improvements serving the east of 101 area. After the effect of the negative
mark-to-market of city investments and transfer out of $6 million to fund CIP projects, the fund
balance increased slightly to $24.8 million from $24.5 million in the prior year.
Childcare impact fees in the amount of $7.7 million were also received in the year from developers.
These funds will be used for new and expanded childcare facilities in the City. As a result of these
receipts, fund balance climbed to $13.9 million in FY 2021-22 from $7.1 million in the prior year.
Other Governmental Funds
Presented as a group in the Basic Financial Statements, these funds are individually presented as
Supplementary Information.
In addition to the impact fees classified as major funds in FY 2021-22 discussed previously, it’s
worth noting that other impact fee funds, presented as non-major funds, also received considerable
developer payments during the year owing to the high level of development activity in the City. This
includes $4.0 million in Park Construction Impact Fees which will be used for the improvements
and construction of City-park facilities, $3.4 million in Commercial Linkage Impact Fees which
will be used to provide affordable housing and to support the City’s adopted 2015-2023 Housing
Element, $1.7 million in Public Safety Impact Fees to be used for new and expanded public safety
capital facility projects and equipment, $1.7 million in Park Land Acquisition Fees to be used to
acquire land for parks within the City, and $14.0 million in Oyster Point Development Impact Fees
to be used for interchange projects in the Oyster Point area.
Enterprise Funds
Sewer Enterprise Fund
The Sewer Enterprise fund reported operating revenue (before non-operating revenues and
operating transfers) of $28.4 million in FY2021-22, a decrease of $5.4 million, or 16.0%, from $33.8
million in the prior year. This substantial reduction in revenue is a direct impact from the COVID-
19 pandemic during which many commercial locations closed for long periods of time resulting in
substantially less water usage and therefore smaller sewer effluent volumes on which service
charges are based. This was combined with an overall drive by large commercial sites within the
City to conserve water which subsequently reduces service charge revenues. Since charges are
always based on the prior year water use, revenues for FY2021-22 were lower than normal.
Operating expenses decreased $0.3 million, or 1.0%, from $ 26.1 million to $25.8 million, due to
lower payroll-related expenses from vacancies, partially offset by increases in professional services,
program supplies and utilities.
21
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
Parking District Fund
In FY 2022, the Parking District fund reported an operating loss (before non-operating revenues and
operating transfers) of $0.2 million which was a reduction on the loss in the prior year of $0.6 million.
Operating revenues increased by $0.2 million, or 30.0%, from $0.8 million to $1.0 million, primarily
due to increased usage of parking meters as businesses opened up as the City continued to recover
from the pandemic and shoppers returned in their cars to the downtown area. Operating expenses
decreased by $0.1 million, or 12.5%, from $1.3 million to $1.2 million due to lower professional
services expenses.
Storm Water Fund
The Storm Water Fund is used to account for resources needed to fund storm drain and storm
infrastructure operations, maintenance, capital replacement, and compliance with various federal
and state regulations regarding storm water runoff. Revenues totaled $0.4 million, which is flat
compared to the prior year, primarily from a levy on property owners. Transfers in from other funds
totaled $0.9 million - $0.2 million from the General Fund and $0.7 million from non-Major
Governmental Funds. A total of $5.3 million in grant reimbursements was received during the year
from the state in relation to the Orange Memorial Park storm water capture CIP project. Operating
expenses in this fund totaled $1.3 million, an increase of $0.4 million, or 42.0%, from $0.9 million
in the prior year, primarily due to higher payroll-related expenditures. Net position increased $5.4
million from $11.5 million to $16.8 million, largely due to the grant received, and year-end accruals
for additional grant reimbursements for work completed during the year.
22
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
CAPITAL ASSETS
Generally accepted accounting principles require the City to add infrastructure to its reportable
capital assets. Infrastructure includes streets, drainage systems, and traffic control and safety devices.
The City has successfully reported on the depreciated value of all such assets acquired or built since
1980. The City reports the depreciated book value of other types of capital assets such as buildings,
land, equipment and furniture, on the City-wide Statement of Net Position. Such information is
summarized below and is more completely detailed in Note 3 to the Basic Financial Statements. The
City depreciates all of its capital assets, except land and construction in progress.
At June 30, 2022, the City had $662.1 million in capital assets (as shown in table 7 below), net of
depreciation, representing a substantial increase of $92.6 million from the prior year, driven
primarily by in-progress construction projects such as the new Civic Center Campus.
The City’s various capital asset types used in Governmental and Business-Type Activities, are
illustrated in Table 7:
Table 7
Capital Assets (in Millions) at June 30
Increase / (Decrease)
2022 2021 Amount %
Governmental Activities:
Land 72.2$ 66.7$ 5.5$ 8.2%
Buildings and improvements 97.4 97.4 0.0 0.0%
Equipment and vehicles 24.8 24.5 0.3 1.2%
Furniture and fixtures 2.6 2.6 0.0 0.0%
Infrastructure ‐ streets 205.6 200.9 4.7 2.3%
Infrastructure ‐ traffic control devices 12.6 12.6 0.0 0.0%
Infrastructure ‐ storm drains 8.9 8.9 0.0 0.0%
Construction in progress 241.9 160.4 81.5 50.8%
Less accumulated depreciation (200.3) (190.9) (9.4) 4.9%
Totals 465.7$ 383.1$ 82.6$ 21.6%
Business‐Type Activities
Land 0.8$ 0.8$ ‐$ 0.0%
Buildings and improvements 80.1 80.1 0.0 0.0%
Clean water facilities and transmission line 79.9 79.9 0.0 0.0%
Infrastructure ‐ storm drains 6.2 6.2 0.0 0.0%
Infrastructure ‐ streets 7.4 7.4 0.0 0.0%
Equipment and vehicles 18.5 18.5 0.0 0.0%
Construction in progress 84.0 68.9 15.1 21.9%
Less accumulated depreciation (80.5) (75.4) (5.1) 6.8%
Totals 196.4$ 186.4$ 10.0$ 5.4%
Total City 662.1$ 569.5$ 92.6$ 16.3%
23
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
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 shown in table 8 (excluding
unamortized bond premiums):
Table 8
Outstanding Debt
(In Millions) at June 30
In June 2022, the City of South San Francisco Public Facilities Financing Authority issued $65.4
million in lease revenue bonds, Series 2022A, for the construction of the new Aquatic Center and
ballfields, and the replacement of the playground and two bridges over Colma Creek at Orange
Memorial Park. The City received a total of $72.1 million in proceeds from this issuance, of which
$49 million, $12.3 million, $2.2 million and $1.5 million was allocated to the four projects
respectively, and $7.1 million reserved for capitalized interest and fees.
Outstanding debt for Business-Type Activities remained static when compared to the prior year
since the $5.1 million drawdown against the State Water Resources Board loan was equivalent to
the amount of the loan retired during FY 2021-22.
The largest remaining debt obligations are as follows:
- 1999, 2004, 2008 State Water Resources Control Board Loans – Original debt:
$78.144.286; 2.4% to 2.6% interest rate; due 8/1/22, 4/30/26, 7/15/28. These loans
were used to improve and expand the City’s Water Quality Control Plant (WQCP).
Loan proceeds were issued as projects progressed. Debt service payment commenced
one year after project completion. WQCP user fees support the debt service payments.
Because of the regional benefits and equity interest in these projects, the City of San
Bruno shares in the loan repayments for the first two of the four current loans.
Increase / (Decrease)
Governmental Activities 2022 2021 Amount %
Lease Revenue Bonds 191.6$ 129.4$ 62.2$ 100.0%
Plus: Unamortized Bond Premium 33.2 27.6 5.6 100.0%
Loan payable to Successor Agency 2.2 3.6 (1.4) (38.9%)
Capital leases 0.1 0.3 (0.2) (66.7%)
Total Governmental Activities Outstanding Debt 227.1$ 160.9$ 66.2$ 41.1%
Business ‐type Activities
State Water Resources Board loans 60.8$ 60.5$ 0.3$ 0.5%
2005 Sewer Bonds 2.0 2.3 (0.3) (13.0%)
Total Business‐type Activities Outstanding Debt 62.8$ 62.8$ ‐$ 0.0%
24
CITY OF SOUTH SAN FRANCISCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
For Fiscal Year Ended June 30, 2022
- 2018 State Water Resources Control Board Loan - Original debt: $53,403,000; 1.8%
interest rate; due October 3, 2042. The loan proceeds are being used for the WQCP
Wet Weather and Digester project. Loan proceeds have been issued over time as
projects progressed. Debt service payments are due to commence on October 3, 2023,
one year after project completion. WQCP user fees support the debt service payments.
- 2020A Lease Revenue Bonds - Original debt: $43,905,000; premium received:
$10,242,530; 4 - 5% interest rate; due June 1, 2046. The bonds were used for Phase I
of the Civic Center Campus project consisting of the planning and construction of a
new Police Station and Dispatch Center for the City of South San Francisco. Measure
W sales tax revenue will fund the repayments.
- 2021A Lease Revenue Bonds - Original debt: $86,410,000; premium received:
$18,116,565; 4% interest rate; due June 1, 2046. $78,000,000 of the bond proceeds are
to be used for Phase II of the Civic Center Campus project consisting of the design and
construction of the new library, parks and recreation center, council chambers and
landscaping of the immediate surrounding area. $24,000,000 will be used for road
pavement rehabilitation throughout the City, and $2,000,000 will be used for solar roof
installation at the City's Corporation Yard. Measure W sales tax revenue will fund the
repayments.
- 2022A Lease Revenue Bonds - Original debt: $65,420,000; premium received:
$6,686,317; 4-5.25% interest rate; due June 1, 2046. $49,000,000 of the bond proceeds
are to be used for construction of the new Aquatic Center. $12.3 million will be used
for constructions of new ballfields. $2.2 million will be used for replacement of the
playground at Orange Memorial Park. $1.5 million will be used for replacement of two
bridges over Colma Creek at Orange Memorial Park. Measure W sales tax revenue will
fund the repayments.
ECONOMIC OUTLOOK AND MAJOR ACCOMPLISHMENTS
The economic outlook and major accomplishments of the City are discussed in the accompanying
Transmittal Letter.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This Annual Comprehensive 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 addressed to the City of South San Francisco, Finance Department, P.O. Box 711, South
San Francisco, CA 94083.
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CITY OF SOUTH SAN FRANCISCO
STATEMENT OF NET POSITION AND
STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire City’s financial
activities and financial position.
The Statement of Net Position reports the excess of the City’s total assets and deferred outflows of
resources over the City’s total liabilities and deferred inflows of resources, including all the City’s capital
assets and all its long-term debt. The Statement of Net Position focuses the reader on the composition of
the City’s net position, by subtracting total liabilities and deferred inflows of resources from total assets
and deferred outflows of resources.
The Statement of Net Position summarizes the financial position of all the City’s Governmental Activities
in a single column, and the financial position of all the City’s Business-Type Activities in a single
column; these columns are followed by a total column which presents the financial position of the entire
City.
The City’s Governmental Activities include the activities of its General Fund, along with all its Special
Revenue, Capital Projects and Debt Service Funds. Since the City’s Internal Service Funds service these
Funds, their activities are consolidated with Governmental Activities, after eliminating inter-fund
transactions and balances. The City’s Business Type Activities include all its Enterprise Fund activities.
The Statement of Activities reports increases and decreases in the City’s net position. It is also prepared
on the full accrual basis, which means it includes all the City’s revenues and all its expenses, regardless of
when cash changes hands. This differs from the “modified accrual” basis used in the Fund financial
statements, which reflect only current assets, current liabilities, available revenues and measurable
expenditures.
The Statement of Activities presents the City’s expenses first, listed by program, and follow these with
the expenses of its business-type activities. Program revenues—that is, revenues which are generated
directly by these programs—are then deducted from program expenses to arrive at the net expense of each
governmental and business-type program. The City’s general revenues are then listed in the
Governmental Activities or Business-type Activities column, as appropriate, and the Change in Net
Position is computed and reconciled with the Statement of Net Position.
Both these Statements include the financial activities of the City, the City of South San Francisco Capital
Improvements Financing Authority, the Parking Authority of the City of South San Francisco and the
City of South San Francisco Public Facilities Financing Authority that are legally separate but are
component units of the City because they are controlled by the City, which is financially accountable for
the activities. Data for the South San Francisco Conference Center Authority is reflected as a discretely
presented component unit of the City. This data is presented separately from other funds of the City to
reflect operations under control of a governing body with a voting majority which is different from the
City Council.
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Component Unit
Primary Government South San Francisco
Governmental Business-Type Conference
Activities Activities Total Center
ASSETS
Cash and investments (Note 2)$239,818,986 $25,001,166 $264,820,152 $3,374,045
Receivables:
Accounts 22,031,560 5,539,679 27,571,239 239,569
Accrued interest 656,639 67,683 724,322
Loans 3,253,202 3,253,202
Due from Conference Center 40,379 40,379
Leases (Note 10)14,653,121 14,653,121
Internal balances (Note 4A)630,000 (630,000)
Deposits 309,790 309,790 17,042
Inventory 4,099 4,099
Prepaid items 1,204,373 1,204,373
Restricted cash and investments (Note 2)144,307,312 182,446 144,489,758
Properties held for redevelopment (Note 1N)14,763,033 14,763,033
Capital assets (Note 3):
Nondepreciable 314,107,786 84,778,042 398,885,828
Depreciable, net accumulated depreciation 151,587,263 111,599,962 263,187,225 3,656,555
Total Assets 907,367,543 226,538,978 1,133,906,521 7,287,211
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 7)23,087,021 2,565,225 25,652,246
Related to OPEB (Note 9)5,669,372 629,930 6,299,302
Total Deferred Outflows of Resources 28,756,393 3,195,155 31,951,548
LIABILITIES
Accounts payable 21,665,787 590,727 22,256,514 148,705
Accrued salaries and benefits 1,766,827 1,766,827 49,167
Accrued interest payable 690,006 210,916 900,922
Other payables 4,952,192 1,901,456 6,853,648
Deposits payable 5,348,610 7,500 5,356,110 256,306
Unearned revenue 8,481,273 33,027 8,514,300
Accrued insurance losses (Note 12):
Due within one year 3,047,258 3,047,258
Due in more than one year 13,436,000 13,436,000
Compensated absences obligation (Note 1L):
Due within one year 5,432,020 589,258 6,021,278
Due in more than one year 3,032,874 200,814 3,233,688
Debt and lease financing obligations (Note 5):
Due within one year 3,329,637 5,312,308 8,641,945
Due in more than one year 223,757,842 57,467,142 281,224,984
Lease liability (Note 10):
Due within one year 349,429
Due in more than one year 2,059,878
Net pension liability - due in more than one year (Note 7)129,941,552 14,437,950 144,379,502
Net OPEB Liability - due in more than one year (Note 9)52,307,242 5,811,916 58,119,158
Total Liabilities 477,189,120 86,563,014 563,752,134 2,863,485
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 7)41,567,798 4,618,644 46,186,442
Related to OPEB (Note 9)6,140,322 682,258 6,822,580
Related to leases (Note 10)14,390,446 14,390,446
Total Deferred Inflows of Resources 62,098,566 5,300,902 67,399,468
NET POSITION (Note 6)
Net investment in capital assets 452,722,446 133,598,554 586,321,000 1,247,248
Restricted for:
Debt service
Special revenue projects 39,574,200 39,574,200
Capital projects 84,722,535 84,722,535
Redevelopment and community development activities 14,763,033 14,763,033
Total Restricted Net Position 139,059,768 139,059,768
Unrestricted (194,945,964)4,271,663 (190,674,301)3,176,478
Total Net Position $396,836,250 $137,870,217 $534,706,467 $4,423,726
See accompanying notes to financial statements
CITY OF SOUTH SAN FRANCISCO
STATEMENT OF NET POSITION
JUNE 30, 2022
29
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary Government
Governmental Activities:
General Government $20,793,108 $5,413,298 $4,195,664
Fire 28,530,628 7,857,602 14,500
Police 35,635,007 2,878,353 775,579
Public Works 7,544,142 17,734,041 3,745,967 $3,342,651
Parks and Recreation 19,482,582 3,058,826 485,986
Library 6,060,920 1,054,339 566,457
Economic and Community Development 12,034,671 28,676,546 1,068,593
Interest on long term debt 4,686,930
Total Governmental Activities 134,767,988 66,673,005 10,852,746 3,342,651
Business-type Activities
Sewer 26,246,647 22,778,206 5,663,695
Parking District 1,170,305 993,986
Storm Water 1,309,360 412,842 5,252,622
Total Business-type Activities 28,726,312 24,185,034 5,663,695 5,252,622
Total Primary Government $163,494,300 $90,858,039 $16,516,441 $8,595,273
Component Unit
Conference Center $2,959,376 $752,191
General revenues:
Taxes:
Property taxes
Sales taxes
Transient occupancy taxes
Franchise Fees
Other taxes
Motor vehicle in lieu, unrestricted
Property taxes in lieu of vehicle license fees
Investment earnings
Gain on sale of property
Miscellaneous
Special Item:
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 Restated (Note 1T)
Net Position - Ending
See accompanying notes to financial statements
CITY OF SOUTH SAN FRANCISCO
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Program Revenues
30
Component Unit
South
San Francisco
Governmental Business-Type Conference
Activities Activities Total Center
($11,184,146)($11,184,146)
(20,658,526)(20,658,526)
(31,981,075)(31,981,075)
17,278,517 17,278,517
(15,937,770)(15,937,770)
(4,440,124)(4,440,124)
17,710,468 17,710,468
(4,686,930)(4,686,930)
(53,899,586)(53,899,586)
$2,195,254 2,195,254
(176,319)(176,319)
4,356,104 4,356,104
6,375,039 6,375,039
(53,899,586)6,375,039 (47,524,547)
($2,207,185)
40,011,221 40,011,221
38,143,689 38,143,689
12,135,638 12,135,638 1,817,344
4,863,076 4,863,076
6,537,423 6,537,423
77,558 77,558
11,988,715 11,988,715
(6,724,092)(761,751)(7,485,843)11,377
1,518,059 1,518,059
14,458,939 14,458,939
(2,962,923)(2,962,923)
(1,419,235)1,419,235
118,628,068 657,484 119,285,552 1,828,721
64,728,482 7,032,523 71,761,005 (378,464)
332,107,768 130,837,694 462,945,462 4,802,190
$396,836,250 $137,870,217 $534,706,467 $4,423,726
Primary Government
Net (Expenses) Revenues and Changes in Net Position
31
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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 2022. Individual non-
major funds may be found in the Supplemental section.
GENERAL FUND
This fund accounts for resources traditionally associated with government, such as administration, public
safety, library, parks maintenance, and recreation, outside of those accounted for in other funds.
LOW AND MODERATE INCOME HOUSING ASSETS SPECIAL REVENUE FUND
To account for the activities related to the assets assumed by the City as Housing Successor to the
housing activities of the former Redevelopment Agency of the City of South San Francisco. The main
source of revenue for this fund is the repayment of loans restricted for housing activities.
AMERICAN RESCUE PLAN ACT SPECIAL REVENUE FUND
To account for the City’s allocation of American Rescue Plan federal stimulus funds, as part of the federal
government’s response to the impacts of the COVID-19 pandemic.
CAPITAL IMPROVEMENT CAPITAL PROJECTS FUND
To account for expenditures associated with the acquisition, construction, or improvement of City owned
facilities and infrastructure. Funding comes from the general fund, special revenue funds, grants and fees.
EAST OF 101 SEWER IMPACT FEES CAPITAL PROJECTS FUND
These fees provide new development’s share of new and rehabilitated sewer collection and treatment
facilities to serve the East of Highway 101 area.
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 and other areas of the City.
CHILD CARE IMPACT FEES CAPITAL PROJECTS FUND
These citywide fees provide new development’s share of new and expanded childcare facilities to serve
the childcare needs of working parents.
CAPITAL INFRASTRUCTURE RESERVE FUND
Replacement, upgrade, and maintenance of the City’s infrastructure are backlogged, constituting a
significant liability. Funds are set aside in this fund as part of the budget process and as part of the City’s
reserve policy to address the replacement and/or upgrade of the city infrastructure (such as parks,
buildings, facilities, streets, sidewalks, and storm water facilities).
33
FUND FINANCIAL STATEMENTS (Continued)
CAPITAL IMPROVEMENT POLICE STATION CAPITAL PROJECTS FUND
To account for expenditures associated with the acquisition, construction, and installation of certain
capital improvements constituting the new City police station located within the City’s new Civic Center
Campus, and related improvements, facilities and equipment, and pay the costs incurred in connection
with the issuance of the Series 2020A Bonds.
CAPITAL IMPROVEMENT CIVIC CAMPUS CAPITAL PROJECTS FUND
To account for expenditures associated with the acquisition, construction, and installation of certain
capital improvements constituting the City’s new Civic Center Campus, and related improvements,
facilities and equipment, and pay the costs incurred in connection with the issuance of the Series 2021A
Bonds.
CAPITAL IMPROVEMENT ORANGE MEMORIAL PARK CAPITAL PROJECTS FUND
To account for expenditures associated with the acquisition, construction and installation of certain capital
improvements at the City-owned Orange Memorial Park and pay the costs incurred in connection with the
issuance of the Series 2022A Bonds.
34
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CITY OF SOUTH SAN FRANCISCO
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2022
Special Revenue Funds Capital Projects Funds
Low and
Moderate American East of 101
General Income Rescue Capital Sewer
Fund Housing Assets Plan Act Improvement Impact Fees
ASSETS
Cash and investments (Note 2)$50,061,615 $2,469,920 $8,263,293 $54,317 $4,860,145
Receivables:
Accounts 18,303,062 5,075 2,443,532
Accrued interest 161,122 7,634 12,661
Due from Conference Center 40,379
Loans 560,238
Leases (Note 10)13,455,776 1,197,345
Due from other funds (Note 4B)1,270,000
Inventory 4,099
Restricted cash and investments (Note 2)152,797 21,296,576
Properties held for redevelopment (Note 1N)14,763,033
Total Assets $98,211,883 $4,240,212 $8,263,293 $23,794,425 $4,872,806
LIABILITIES
Liabilities:
Accounts payable $4,589,446 $27,938 $5,128,420
Accrued salaries and benefits 1,766,827
Other payable 842,046 1,027,312
Deposits payable 1,159,644
Unearned revenue $8,263,293
Due to other funds (Note 4B)430,000
Total Liabilities 8,357,963 27,938 8,263,293 6,585,732
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - accounts receivable 1,799,387
Related to leases (Note 10)13,207,264 1,183,182
Total Deferred Inflows of Resources 13,207,264 1,183,182 1,799,387
FUND BALANCE
Fund Balances (Note 6):
Nonspendable 4,099
Restricted 14,763,033 3,029,092 16,847,198 $4,872,806
Committed 16,083,977
Assigned 7,482,439
Unassigned 38,313,108 (1,437,892)
Total Fund Balances (Deficits)76,646,656 3,029,092 15,409,306 4,872,806
Total Liabilities, Deferred Inflows of
Resources and Fund Balances (Deficits) $98,211,883 $4,240,212 $8,263,293 $23,794,425 $4,872,806
See accompanying notes to basic financial statements
36
Capital Projects Funds
Capital
Capital Capital Capital Improvement Other Total
Traffic Child Care Infrastructure Improvement Improvement Orange Governmental Governmental
Impact Fees Impact Fees Reserve Police Station Civic Campus Memorial Park Funds Funds
$24,685,029 $13,862,533 $24,822,132 $72,342,469 $201,421,453
1,279,891 22,031,560
76,528 38,631 68,792 186,179 551,547
40,379
2,692,964 3,253,202
14,653,121
1,270,000
4,099
$708,008 $50,463,437 $71,684,403 2,091 144,307,312
14,763,033
$24,761,557 $13,901,164 $24,890,924 $708,008 $50,463,437 $71,684,403 $76,503,594 $402,295,706
$1,100 $10,875,293 $614,031 $21,236,228
1,766,827
$239,226 2,307,779 535,797 4,952,160
4,188,966 5,348,610
217,980 8,481,273
210,000 640,000
1,100 239,226 13,183,072 5,766,774 42,425,098
1,799,387
14,390,446
16,189,833
4,099
$24,761,557 $13,901,164 468,782 37,280,365 $71,684,403 70,736,820 258,345,220
16,083,977
24,889,824 32,372,263
36,875,216
24,761,557 13,901,164 24,889,824 468,782 37,280,365 71,684,403 70,736,820 343,680,775
$24,761,557 $13,901,164 $24,890,924 $708,008 $50,463,437 $71,684,403 $76,503,594 $402,295,706
37
CITY OF SOUTH SAN FRANCISCO
GOVERNMENTAL FUNDS
BALANCE SHEET - RECONCILIATION OF GOVERNMENTAL
FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES
JUNE 30, 2022
Total fund balances reported on the governmental funds balance sheet $343,680,775
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. 461,292,492
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. 25,412,720
The assets and liabilities below are not due and payable in the current period and
therefore are not reported in the funds:
Long-term debt (226,942,842)
Interest payable (690,006)
Deferred outflows related pension 23,087,021
Deferred outflows related to OPEB 5,669,372
Net OPEB liability (52,307,242)
Net pension liability (129,941,552)
Deferred inflows related to OPEB (6,140,322)
Deferred inflows related to pension (41,567,798)
Compensated absences (6,515,755)
Net position of governmental activities $396,836,250
See accompanying notes to financial statements
38
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Special Revenue Funds Capital Projects Funds
Low and
Moderate American East of 101
General Income Rescue Capital Sewer
Fund Housing Assets Plan Act Improvement Impact Fees
REVENUES
Property taxes $49,779,284
Sales taxes 37,760,777
Transient occupancy taxes 12,135,638
Franchise Fees 4,863,076
Other taxes 6,537,423
Intergovernmental 3,196,346 $3,755,648 $842,462
Interest and rentals 1,553,209 $98,417 ($145,957)
Licenses and permits 14,062,474
Charges for services 9,747,605 59,335 985,102
Fines and forfeitures 700,961
Other 515,004 47,076 146,037
Total Revenues 140,851,797 145,493 3,755,648 1,047,834 839,145
EXPENDITURES
Current:
City Council 252,677
City Clerk 887,678
City Treasurer 39,852
City Attorney 1,138,457
City Manager 4,191,480
Finance 3,148,914
Non-departmental 2,580,748 1,111,389 2,800
Human Resources 2,065,927
Fire 32,560,468
Police 33,281,487
Public Works 6,294,564 26,413,361
Parks and Recreation 18,092,526
Library 6,495,279
Economic and Community Development 11,006,922 344,379
Other
Capital Outlay
Debt service:
Principal repayments
Interest and fiscal charges
Total Expenditures 122,036,979 344,379 1,111,389 26,413,361 2,800
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 18,814,818 (198,886)2,644,259 (25,365,527)836,345
OTHER FINANCING SOURCES (USES)
Gain from sale of property 1,507,641
Issuance of debt
Bond premium
Transfers in (Note 4C)4,763,729 2,784 14,526,753
Transfers out (Note 4C)(21,235,610)(2,644,259)(2,362)(107,818)
Total Other Financing Sources (Uses)(14,964,240)2,784 (2,644,259) 14,524,391 (107,818)
Net Change in Fund Balances before special items 3,850,578 (196,102)(10,841,136)728,527
SPECIAL ITEMS
Remittance of land sale proceeds (2,962,923)
Net Change in Fund Balances 887,655 (196,102)(10,841,136)728,527
Fund balances (deficits) - July 1 75,759,001 3,225,194 26,250,442 4,144,279
Fund balances (deficits) - June 30 $76,646,656 $3,029,092 $15,409,306 $4,872,806
See accompanying notes to financial statements
CITY OF SOUTH SAN FRANCISCO
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2022
40
Capital Projects Funds
Capital
Capital Capital Capital Improvement Other Total
Traffic Child Care Infrastructure Improvement Improvement Orange Governmental Governmental
Impact Fees Impact Fees Reserve Police Station Civic Campus Memorial Park Funds Funds
$2,220,652 $51,999,936
825,500 38,586,277
12,135,638
4,863,076
2,288,982 8,826,405
17,027,848 24,822,304
($880,148) ($441,678)($797,634)$13,028 $138,823 (2,075,384)(2,537,324)
14,062,474
7,083,871 7,656,815 20,254,318 45,787,046
700,961
1,815,999 2,524,116
6,203,723 7,215,137 (797,634)13,028 138,823 42,357,915 201,770,909
252,677
887,678
39,852
1,138,457
4,191,480
3,148,914
2,800 3,697,737
2,065,927
37,072 32,597,540
6,332,894 64,536 39,678,917
2,800 45,150 $40,930,120 14,137,377 87,823,372
2,203,316 20,295,842
6,495,279
1,357,866 12,709,167
5,610,278 5,610,278
5,520,422 5,520,422
4,635,000 4,635,000
6,013 421,914 5,097,833 5,525,760
2,800 2,800 5,565,572 6,332,894 40,936,133 421,914 33,143,278 236,314,299
6,200,923 7,212,337 (6,363,206) (6,319,866) (40,797,310)(421,914)9,214,637 (34,543,390)
1,507,641
65,420,000 65,420,000
6,686,317 6,686,317
8,500,000 102,542 8,324,659 36,220,467
(5,929,676) (99,499)(3,141,590)(5,611,193) (38,772,007)
(5,929,676) (99,499)5,358,410 102,542 72,106,317 2,713,466 71,062,418
271,247 7,112,838 (1,004,796) (6,319,866) (40,694,768) 71,684,403 11,928,103 36,519,028
(2,962,923)
271,247 7,112,838 (1,004,796) (6,319,866) (40,694,768) 71,684,403 11,928,103 33,556,105
24,490,310 6,788,326 25,894,620 6,788,648 77,975,133 58,808,717 310,124,670
$24,761,557 $13,901,164 $24,889,824 $468,782 $37,280,365 $71,684,403 $70,736,820 $343,680,775
41
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, 2022
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $33,556,105
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 91,732,476
Current year depreciation (8,611,519)
Long-Term Debt Payments
Bond proceeds provide current financial resources to governmental funds, but
issuing debt increases long-term liabilities in the Statement of Net Position.
Proceeds from issuance of bonds (65,420,000)
Bond premium (6,686,317)
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 4,635,000
Amortization of premium is added back to fund balance 1,104,016
Accrual of Non-Current Items
of current financial resources and therefore is not reported as revenue or expenditures in
governmental funds (net change):
Unavailable revenue 1,799,387
Interest payable (265,186)
Compensated absences 462,871
Net pension liability, deferred outflows and inflows of resources 11,225,062
Net OPEB liability, deferred outflows and inflows of resources 626,641
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.569,946
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $64,728,482
See accompanying notes to financial statements
The amount below included in the Statement of Activities does not require the use
42
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amount (Negative)
Resources (inflows):
Property taxes $41,074,710 $41,074,710 $49,779,284 $8,704,574
Sales taxes 32,239,177 32,989,177 37,760,777 4,771,600
Transient occupancy taxes 7,085,194 8,585,194 12,135,638 3,550,444
Franchise fees 4,600,000 4,600,000 4,863,076 263,076
Other taxes 3,614,753 3,614,753 6,537,423 2,922,670
Intergovernmental 2,325,338 5,818,982 3,196,346 (2,622,636)
Interest and rentals 3,564,976 3,504,976 1,553,209 (1,951,767)
Licenses and permits 16,453,166 16,453,166 14,062,474 (2,390,692)
Charges for services 9,287,470 7,848,478 9,747,605 1,899,127
Fines and forfeitures 676,975 676,975 700,961 23,986
Other 232,718 394,382 515,004 120,622
Amounts available for appropriation 121,154,477 125,560,793 140,851,797 15,291,004
Charges to appropriations (outflows):
City Council 292,426 292,427 252,677 39,750
City Clerk 1,151,844 1,231,044 887,678 343,366
City Treasurer 160,245 160,244 39,852 120,392
City Attorney 910,049 910,049 1,138,457 (228,408)
City Manager 3,607,557 4,512,195 4,451,837 60,358
Finance 3,807,781 4,385,682 3,603,809 781,873
Non-departmental 1,294,252 1,369,252 2,581,079 (1,211,827)
Human Resources 2,042,597 2,307,004 2,184,942 122,062
Fire 29,508,065 29,892,151 32,975,264 (3,083,113)
Police 32,386,774 32,843,169 33,383,916 (540,747)
Public Works 5,978,429 6,396,059 6,743,595 (347,536)
Parks and Recreation 16,729,027 18,371,855 18,920,003 (548,148)
Library 6,221,935 6,897,585 6,495,735 401,850
Economic and Community Development 8,227,651 16,293,222 15,860,574 432,648
Total charges to appropriations 112,318,632 125,861,938 129,519,418 (3,657,480)
OTHER FINANCING SOURCES (USES)
Gain from sale of property 630,000 690,000 1,507,641 817,641
Transfers in (Note 4C) 1,187,080 5,519,792 4,763,729 (756,063)
Transfers out (Note 4C) (9,771,783) (34,516,335) (21,235,610) 13,280,725
Total Other Financing Sources (Uses) (7,954,703) (28,306,543) (14,964,240) 13,342,303
881,142 (28,607,688) (3,631,861) 24,975,827
SPECIAL ITEM
Remittance of land sale proceeds (2,962,923) (2,962,923)
NET CHANGE IN FUND BALANCE $881,142 ($28,607,688) (6,594,784) $22,012,904
Fund Balance - July 1 75,759,001
Adjustment to budgetary basis:
Encumbrance adjustments 7,482,439
Fund Balance - June 30 $76,646,656
See accompanying notes to financial statements
Budgeted Amounts
NET CHANGE IN FUND BALANCES BEFORE SPECIAL ITEM
43
Variance with
Final Budget
Positive
Original Final Actual Amounts (Negative)
REVENUES:
Interest and rental $167,000 $167,000 $98,417 ($68,583)
Other 140,000 140,000 47,076 (92,924)
Total Revenues 307,000 307,000 145,493 (161,507)
EXPENDITURES:
Current:
Economic and Community Development 671,489 685,423 355,122 330,301
Total Expenditures 671,489 685,423 355,122 330,301
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (364,489) (378,423) (209,629) 168,794
OTHER FINANCING SOURCES (USES)
Transfers in (Note 4C) 2,784 2,784
NET CHANGE IN FUND BALANCE ($364,489) ($375,639) (206,845) $168,794
Fund balance - July 1 3,225,194
Adjustment to budgetary basis:
Encumbrance adjustments 10,743
Fund balance - June 30 $3,029,092
SPECIAL REVENUE FUND
See accompanying notes to financial statements
CITY OF SOUTH SAN FRANCISCO
LOW AND MODERATE INCOME HOUSING ASSETS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2022
Budgeted Amounts
44
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.
45
CITY OF SOUTH SAN FRANCISCO
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2022
Governmental
Business-type Activities - Enterprise Funds Activities
Sewer Parking Storm Internal
Enterprise District Water Total Service Funds
ASSETS
Current assets:
Cash and investments (Note 2)$21,609,890 $3,386,042 $5,234 $25,001,166 $38,397,533
Receivables:
Accounts 1,824,711 3,714,968 5,539,679
Accrued interest 57,079 10,604 67,683 105,092
Deposits 309,790
Prepaid items 1,204,373
Restricted cash and investments (Note 2)182,446 182,446
Total current assets 23,674,126 3,396,646 3,720,202 30,790,974 40,016,788
Noncurrent assets:
Capital assets (Note 3):
Nondepreciable 71,476,360 421,149 12,880,533 84,778,042
Depreciable, net accumulated depreciation 100,514,898 9,511,977 1,573,087 111,599,962 4,402,557
Total non-current assets 171,991,258 9,933,126 14,453,620 196,378,004 4,402,557
Total Assets 195,665,384 13,329,772 18,173,822 227,168,978 44,419,345
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 7)2,565,225 2,565,225
Related to OPEB (Note 9)629,930 629,930
Total Deferred Outflows of Resources 3,195,155 3,195,155
LIABILITIES
Current liabilities:
Accounts payable 552,817 16,028 21,882 590,727 429,559
Other payable 1,253,363 648,093 1,901,456 32
Accrued interest payable 210,916 210,916
Deposits payable 7,500 7,500
Unearned revenue 33,027 33,027
Due to other funds (Note 4B)630,000 630,000
Accrued insurance loss (Note 12)3,047,258
Compensated absences obligation (Note 1L)562,874 340 26,044 589,258 1,221,145
Current portion of long-term debt (Note 5)5,312,308 5,312,308 144,637
Total current liabilities 7,932,805 16,368 1,326,019 9,275,192 4,842,631
Noncurrent liabilities:
Accrued insurance losses (Note 12)13,436,000
Compensated absences obligation (Note 1L)186,174 14,640 200,814 727,994
Noncurrent portion of long-term debt (Note 5)57,467,142 57,467,142
Net pension liability (Note 7)14,437,950 14,437,950
Net OPEB liability (Note 9) 5,811,916 5,811,916
Total noncurrent liabilities 77,903,182 14,640 77,917,822 14,163,994
Total Liabilities 85,835,987 16,368 1,340,659 87,193,014 19,006,625
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 7)4,618,644 4,618,644
Related to OPEB (Note 9)682,258 682,258
Total Deferred Inflows of resources 5,300,902 5,300,902
NET POSITION:
Net investment in capital assets 109,211,808 9,933,126 14,453,620 133,598,554 4,257,919
Unrestricted (deficit) (1,488,158) 3,380,278 2,379,543 4,271,663 21,154,801
Total Net Position $107,723,650 $13,313,404 $16,833,163 $137,870,217 $25,412,720
See accompanying notes to financial statements
46
CITY OF SOUTH SAN FRANCISCO
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
Governmental
Business-type Activities - Enterprise Funds Activities
Sewer Parking Storm Internal
Enterprise District Water Total Service Funds
OPERATING REVENUES
Charges for services $22,567,226 $412,517 $22,979,743 $28,536,570
Other cities' participation 5,663,695 5,663,695
Permit fees 210,980 210,980
Parking fees $993,986 993,986
Total Operating Revenues 28,441,901 993,986 412,517 29,848,404 28,536,570
OPERATING EXPENSES
Personnel expenses 9,088,372 367,524 1,126,715 10,582,611 18,194,228
Professional services 3,346,076 339,154 51,169 3,736,399 567,727
OPEB Expenses 535,039 554 535,593
Program supplies 1,754,099 1,264 1,067 1,756,430 2,037,346
Insurance 210,870 3,698 214,568 2,623,826
Self-insurance and claims 2,248,076
Repair and maintenance 1,178,368 19,382 1,197,750 856,617
Rents 1,689,059 1,689,059
Utilities 1,742,123 96,164 12,781 1,851,068 176,937
Administration 1,427,208 113,007 48,535 1,588,750
Depreciation 4,814,962 252,638 39,839 5,107,439 967,562
Other 21,262 6,174 27,436 555,977
Total Operating Expenses 25,807,438 1,170,305 1,309,360 28,287,103 28,228,296
Operating Income (Loss) 2,634,463 (176,319) (896,843) 1,561,301 308,274
NONOPERATING REVENUES (EXPENSES)
Interest income (652,348) (121,962) 12,559 (761,751) (1,209,727)
Gain on dispositions of capital assets 10,418
Interest expense (439,209) (439,209) (6,614)
Other 325 325 335,290
Total Nonoperating Revenues (Expenses) (1,091,557) (121,962) 12,884 (1,200,635) (870,633)
Income (loss) before contributions and transfers 1,542,906 (298,281) (883,959) 360,666 (562,359)
TRANSFERS
Capital subventions and grants 5,252,622 5,252,622
Transfers in (Note 4C) 489,610 1,440 985,261 1,476,311 1,132,305
Transfers (out) (Note 4C) (57,076) (57,076)
Change in Net Position 1,975,440 (296,841) 5,353,924 7,032,523 569,946
Net Position (Deficits) - July 1 105,748,210 13,610,245 11,479,239 130,837,694 24,842,774
Net Position (Deficits) - June 30 $107,723,650 $13,313,404 $16,833,163 $137,870,217 $25,412,720
See accompanying notes to financial statements
47
CITY OF SOUTH SAN FRANCISCO
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
Governmental
Business-type Activities - Enterprise Funds Activities
Sewer Parking Storm Internal
Enterprise District Water Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $29,519,529 $993,986 $1,572,969 $32,086,484
Cash payments to suppliers for goods and services (12,673,778) (692,133) (126,245) (13,492,156) ($6,258,323)
Cash payments to employees for services (10,502,325) (388,938) (1,095,129) (11,986,392) (20,041,496)
Cash received from interfund service provided 28,902,887
Cash payments for judgments and claims (1,514,615)
Net Cash Provided by (Used in) Operating Activities 6,343,426 (87,085) 351,595 6,607,936 1,088,453
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Interfund receipts 630,000 630,000
Transfers in 489,610 1,440 985,261 1,476,311 1,132,305
Transfers in (57,076) (57,076)
Net Cash Provided by Noncapital Financing Activities 432,534 1,440 1,615,261 2,049,235 1,132,305
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Proceeds from issuance of debt 5,147,945 5,147,945
Principal paid on long-term debt (5,173,954) (5,173,954) (140,892)
Interest paid on long-term debt (533,286) (533,286) (6,614)
Subventions and grants 5,252,622 5,252,622
Acquisition of capital assets, net (9,769,879) (8,222,453) (17,992,332) (424,683)
Proceeds from the sale of capital assets 17,719
Net Cash Used in Capital and Related Financing Activities (10,329,174) (2,969,831) (13,299,005) (554,470)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received (paid) (1,476,607) (274,869) 4,707 (1,746,769) (2,726,433)
Changes in fair value of investments 822,621 152,820 13,385 988,826 1,514,594
Net Cash Provided by Investing Activities (653,986) (122,049) 18,092 (757,943) (1,211,839)
Net Increase (Decrease) in cash and cash equivalents (4,207,200) (207,694) (984,883) (5,399,777) 454,449
Cash and cash equivalents, beginning 25,999,536 3,593,736 990,117 30,583,389 37,943,084
Cash and cash equivalents, ending $21,792,336 $3,386,042 $5,234 $25,183,612 $38,397,533
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss) $2,634,463 ($176,319) ($896,843) $1,561,301 $308,274
Adjustments to reconcile operating income (loss)
to cash flows from operating activities:
Depreciation 4,814,962 252,638 39,839 5,107,439 967,562
Other non-operating revenue (expenses)325 325 335,290
Net change in assets and liabilities:
Accounts and lease receivables 1,077,628 1,160,127 2,237,755 31,027
Deposit
Prepaid items (1,204,373)
Accounts payable (1,185,649) (141,990) 16,562 (1,311,077) 24,191
Other payable 415,975 (1) 415,974 29
Unearned revenue
Accrued insurance losses 733,461
(Decrease) increase due to retirement system (1,247,231) (1,247,231)
(Decrease) increase due to OPEB (69,627) (69,627)
Compensated absence obligations (97,095) (21,414) 31,586 (86,923) (107,008)
Net Cash Provided by (Used in) Operating Activities $6,343,426 ($87,085) $351,595 $6,607,936 $1,088,453
NONCASH TRANSACTIONS
Retirement of capital assets ($7,301)
See accompanying notes to basic financial statements
48
FIDUCIARY FUNDS
These funds are used to account for assets held by the City as an agent for individuals, private
organizations, and other governments. The financial activities of these funds are excluded from the
government-wide financial statements, but are presented in separate Fiduciary Fund financial statements.
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.
CUSTODIAL FUNDS are used to report resources, not in a trust, that are held by the City for other
parties outside of the City’s reporting entity.
49
Successor
Agency
Private Purpose
Trust Fund Custodial Funds
ASSETS
Cash and investments (Note 2) $1,697,719 $139,655
Accounts receivable
Interest receivable 19,610 396
Prepaid items
Advances to the City (Note 5) 2,150,152
Loans receivable (Note 14B) 80,572
Restricted cash and investments (Note 2) 19,879,521 20,221,759
Capital assets (Note 14C):
Nondepreciable 111,219
Depreciable, net accumulated depreciation 238,124
Total Assets 24,176,917 20,361,810
LIABILITIES
Accounts payable 1,261 2,500
Total Liabilities 1,261 2,500
NET POSITION
Held in trust for other purposes 24,175,656
Restricted for others 137,551
Restricted for bondholders 20,221,759
Total Net Position $24,175,656 $20,359,310
See accompanying notes to financial statements
CITY OF SOUTH SAN FRANCISCO
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2022
50
CITY OF SOUTH SAN FRANCISCO
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
Successor
Agency
Private Purpose
Trust Fund Custodial Funds
ADDITIONS
Intergovernmental $4,248,681
Plan contributions $32,041
Contributions from property owners 20,764,872
Interest and rentals (218,539) 6,893
Total Additions 4,030,142 20,803,806
DEDUCTIONS
Economic and Community Development 13,709,828
Professional services 20,100
Payments to bondholders 554,565
Depreciation 6,594
Total Deductions 13,716,422 574,665
Change in net position (9,686,280) 20,229,141
NET POSITION
Beginning of the year 33,861,936 130,169
End of the year $24,175,656 $20,359,310
See accompanying notes to financial statements
51
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CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
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 Capital Improvements 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. The Capital
Improvements Financing Authority did not have any activity during fiscal year 2022. Separate
financial statements are not issued for the Capital Improvements Financing Authority.
The Parking Authority of the City of South San Francisco was formed in October 2019
pursuant to the California Parking Law of 1949, Streets and Highways Code Section 32500, et
seq. The City Council members serve as the Board of Directors. The financial activities of the
Parking Authority are included in the Parking District Enterprise Fund. Separate financial
statements are not issued for the Parking Authority.
The City of South San Francisco Public Facilities Financing Authority is a joint exercise of
powers authority created in December 2019 between the City and the Parking Authority. The
Public Facilities 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 or the
Parking Authority and other public or private entities to finance capital improvements. The City
Council members serve as the Board of Directors. The financial activities of the Public Facilities
Financing Authority are included in the Capital Improvements Police Station, Capital
Improvements Civic Campus and Capital Improvement Orange Memorial Park Capital Projects
Funds. Separate financial statements are not issued for the Public Facilities Financing Authority.
53
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 Authority’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.
D. Basis of Presentation
Government-wide Statements – The Statement of Net Position and the Statement of Activities
display information about the primary government (the City) and its component units. These
statements include the financial activities of the overall City government, except for fiduciary
activities. Interfund transfers and amounts owed between funds within the primary government
have been eliminated from the statements. Amounts representing interfund services and uses
remain in the statements. These statements distinguish between the governmental and business-
type activities of the City. Governmental activities generally are financed through taxes,
intergovernmental revenues, and other nonexchange transactions. Business-type activities are
financed in whole or in part by fees charged to external parties.
The Statement of Activities presents a comparison between direct expenses and program revenues
for each segment of the business-type activities of the City and for each function of the City’s
governmental activities. Direct expenses are those that are specifically associated with a program
or function and, therefore, are clearly identifiable to a particular function. Program revenues
include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants
and contributions that are restricted to meeting the operational needs of a particular program and
(c) fees, grants and contributions that are restricted to financing the acquisition or construction of
capital assets. Revenues that are not classified as program revenues, including all taxes, are
presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the City’s
funds, including fiduciary funds and blended component units. Separate statements for each fund
category – governmental, proprietary, and fiduciary – are presented. The emphasis of fund
financial statements is on major individual governmental and enterprise funds, each of which is
displayed in a separate column. All remaining governmental and enterprise funds are aggregated
and reported as nonmajor funds.
Proprietary fund operating revenues, such as charges for services, result from exchange
transactions associated with the principal activity of the fund. Exchange transactions are those in
which each party receives and gives up essentially equal values. Nonoperating revenues, such as
subsidies and investment earnings, result from nonexchange transactions or ancillary activities.
54
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Major Funds
Major funds are defined as funds that have either assets, liabilities, revenues or
expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand
total. The General Fund is always a major fund. The City may also select other funds it believes
should be presented as major funds.
The City reported the following major governmental funds in the accompanying financial
statements:
General Fund – Accounts for resources traditionally associated with government, such as
administration, public safety, library, parks, maintenance, and recreation, outside of those
accounted for in other funds.
Low and Moderate Income Housing Assets 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. The main
source of revenue for this fund is the repayment of loans restricted for housing activities.
American Rescue Plan Act Special Revenue Fund – This Fund was established to account for
the City’s allocation of American Rescue Plan federal stimulus funds, as part of the federal
government’s response to the impacts of the COVID-19 pandemic.
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.
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 and other areas within the City.
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.
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).
55
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Improvement Police Station – Accounts for expenditures associated with the
acquisition, construction, and installation of certain capital improvements constituting the new
City police station located within the City’s new Civic Center Campus, and related
improvements, facilities and equipment, and pay the costs incurred in connection with the
issuance of the Series 2020A Bonds.
Capital Improvement Civic Campus – Accounts for expenditures associated with the
acquisition, construction, and installation of certain capital improvements constituting the City’s
new Civic Center Campus, and related improvements, facilities and equipment, and pay the costs
incurred in connection with the issuance of the Series 2021A Bonds.
Capital Improvement Orange Memorial Park Capital Projects Fund – Accounts for
expenditures associated with the acquisition, construction and installation of certain capital
improvements at the City-owned Orange Memorial Park and pay the costs incurred in connection
with the issuance of the Series 2022A Bonds.
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.
Fiduciary Funds – The Fiduciary fund financial statements normally include a Statement of Net
Position and a Statement of Changes in Fiduciary Net Position. The financial activities of the
funds are excluded from the government-wide financial statements. The City’s fiduciary funds
represent a private purpose trust fund and custodial funds. 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. Custodial funds are used to account for assets held
by the City on behalf of other agencies for other purposes. The City’s Custodial Funds includes
the Employee Deferred Comp Trust Oversight Fund and the Community Facilities District 2021-
01, which accounted for payments of special assessment bonds.
56
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
F. Basis of Accounting
The government-wide, proprietary, fiduciary, and discretely presented component unit financial
statements are reported using the economic resources measurement focus and the full accrual
basis of accounting. Revenues are recorded when earned and expenses are recorded at the time
liabilities are incurred, regardless of when the related cash flows take place.
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, including lease liabilities, claims and judgments, and compensated absences, which are
recognized as expenditures to the extent they have matured. General capital asset acquisitions,
including entering into contracts giving the City the right to use leased assets, are reported as
expenditures in governmental funds. Proceeds from long-term debt and financing through leases
are reported as other financing sources.
Those revenues susceptible to accrual are property and sales taxes, certain intergovernmental
revenues, interest revenue, licenses and permits, charges for services, fines and forfeitures. Sales
taxes collected and held by the state at year end on behalf of the City are also recognized as
revenue. Other receipts and taxes are recognized as revenue when the cash is received.
Non-exchange transactions, in which the City gives or receives value without directly, receiving
or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the
accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or
assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in
which all eligibility requirements have been satisfied. Under the terms of grant agreements, the
City may fund certain programs with a combination of cost-reimbursement grants, categorical
block grants, and general revenue. Thus, both restricted and unrestricted net position may be
made available to finance program expenditures. The City’s policy is to first apply restricted
grant resources to such programs, followed by general revenues if necessary.
The City considers restricted shared state revenues such as gasoline taxes and public safety sales
taxes, restricted locally imposed transportation sales taxes, fines, forfeitures, licenses, permits,
charges for services, and program grants as program revenues.
57
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
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. All Capital Projects Funds are 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, except
the American Recovery Plan Act Special Revenue Fund, Developer Contributions Special
Revenue Fund, Supplemental Law Enforcement Services Special Revenue Fund, City Programs
Special Revenue Fund, and Affordable Housing Trust Special Revenue; Capital Projects Funds;
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, 2022.
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 a component 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.
58
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H.Expenditures in Excess of Appropriations – The City’s General Fund had the following
departmental expenditures in excess of appropriations and other funds had expenditures in excess
of appropriations for the year ended June 30, 2022:
Expenditures in
Excess of Budget
(Non GAAP
Legal Basis)
General Fund:
City Attorney $228,408
Non-departmental 1,211,827
Fire 3,083,113
Police 540,747
Public Works 347,536
Parks and Recreation 548,148
Non-Major Funds:
Community Development Block Grant Special Revenue Fund 216,389
Maintenance Districts Special Revenue Fund 10,617
Supplemental Law Enforcement Services Special Revenue Fund 64,536
City Programs Special Revenue Fund 1,049,683
Sufficient resources were available within each fund to finance these excesses.
I. Cash Equivalents – For purposes of the statement of cash flows, the City considers all highly
liquid investments (including all restricted assets) with maturity of three months or less when
purchased to be cash equivalents. The City maintains a cash and investment pool that is available
for use by all funds. As the proprietary funds' share of this pool is readily available when needed,
such share is also considered to be cash equivalent. Deposit assets in the proprietary funds are
related to insurance and benefits and are not considered cash equivalents for purposes of the
statement of cash flows.
J.Inventory and Prepaid Items – consist of consumable supplies. Inventory is stated at cost (first-
in, first-out method). The costs are recorded as expenditures at the time the individual inventory
or prepaid item is consumed. Reported inventory and prepaid items are equally offset by a fund
balance reservation, which indicates that they do not constitute "available spendable resources"
even though they are a component of net current assets.
K.Capital Assets – Donated capital assets, donated works of art and similar items, and capital assets
received in a service concession arrangement are valued at acquisition value. All other capital assets
are valued at historical cost or estimated historical cost if actual historical cost is not available
except for intangible right to‐use lease assets, the measurement of which is discussed in Note 10
below.
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.
59
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 and Authority have assigned the useful lives listed below to
capital assets and right to use leased building:
Buildings 50 years
Clean water facilities and transmission lines 40 years
Improvements 30 years
Machinery and equipment 5-20 years
Furniture and fixtures 12 years
Infrastructure 20-40 years
Right to use leased building 30 years
Major outlays for capital assets and improvements are capitalized as projects are constructed.
The capitalization level is $20,000 for vehicles, and $100,000 for all else, including all other
equipment that is not a vehicle.
L. Vacation and Sick Pay – are accrued as earned. Upon termination, employees are paid for all
unused vacation at their current hourly rates. After five to twenty years of employment, one half
of accumulated sick leave becomes vested, up to a maximum amount as specified under labor
contract provisions. The vested portion is available for current use or, if unused, is payable at
termination or retirement.
The long-term portion of the liability for compensated absences for governmental fund type
operations is recorded as compensated absences in the government-wide financial statements. The
portion expected to be permanently liquidated is recorded in the Health and Retirement Benefits
Internal Service Fund. Proprietary fund liabilities are recorded within their respective funds.
The changes of the compensated absences were as follows:
Governmental Business-Type
Activities Activities Total
Beginning Balance $9,034,773 $876,995 $9,911,768
Additions 6,367,587 630,228 6,997,815
Payments (6,937,466)(717,151) (7,654,617)
Ending Balance $8,464,894 $790,072 $9,254,966
Current Portion $5,432,020 $589,258 $6,021,278
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.
60
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
M. Property Tax Levy, Collection and Maximum Rates – State of California Constitution Article
XIII A provides that the combined maximum property tax rate on any given property may not
exceed 1% of its assessed value unless an additional amount for general obligation debt has been
approved by voters. Assessed value is calculated at 100% of market value as defined by Article
XIII A and may be adjusted by no more than 2% per year unless the property is sold, transferred,
or substantially improved. The State Legislature has determined the method of distribution of
receipts from a 1% tax levy among the counties, cities, school districts and other districts. The
County of San Mateo assesses properties, bills for and collects property taxes on the schedule that
follows:
Secured Unsecured
Valuation/lien dates January 1 January 1
Levy dates July 1 July 1
Due dates (delinquent as of) 50% on November 1 (December 10) July 1 (August 31)
50% on February 1 (April 10)
The term "unsecured" refers to taxes on personal property other than land and buildings. These
taxes are secured by liens on the property being taxed.
Property taxes levied are recorded as revenue and receivables when they are collected during the
fiscal year of levy or within 60 days of year-end.
N. Properties held for redevelopment – is stated at the lower of historical cost or net realizable value
(equal to agreed upon sales price if a disposition and development agreement has been reached
with a developer).
O. Unbilled Services – for the Sewer Rental Enterprise Fund are accrued at year-end.
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 assets 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 assets 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.
61
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Q. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The City
categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation
techniques used to measure fair value into three levels based on the extent to which inputs used in
measuring fair value are observable in the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs – other than quoted prices included within level 1 – that are observable
for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the
fair value hierarchy, the measurement is considered to be based on the lowest priority level input
that is significant to the entire measurement.
R. 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.
S. New and Renamed Funds
In fiscal year 2021-2022, the City established the following funds:
The Capital Improvement Orange Memorial Park Capital Projects Fund accounts for expenditures
associated with the acquisition, construction and installation of certain capital improvements at
the City-owned Orange Memorial Park and pay the costs incurred in connection with the issuance
of the Series 2022A Bonds.
The Library Impact Capital Projects Fund accounts for citywide fees to provide new
development’s share of the expansion, rehabilitation and replacement of library facilities and
collections to accommodate the increased demand for library services caused by future
development
The Oyster Point CFD Custodial Fund accounts for Community Facilities District No. 2021-01
special assessment collections and debt service payments.
The 2020 A Bonds Debt Service Fund was renamed the Debt Service Fund.
62
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
T. New Accounting Pronouncement
In June 2017, the Governmental Accounting Standards Board issued Statement No. 87, Leases.
The objective of this Statement is to better meet the information needs of financial statement
users by improving accounting and financial reporting for leases by governments. This Statement
increases the usefulness of governments’ financial statements by requiring recognition of certain
lease assets and liabilities for leases that previously were classified as operating leases and
recognized as inflows of resources or outflows of resources based on the payment provisions of
the contract. It establishes a single model for lease accounting based on the foundational principle
that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is
required to recognize a lease liability and an intangible right‐to‐use lease asset, and a lessor is
required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the
relevance and consistency of information about governments’ leasing activities.
A lease is defined as a contract that conveys control of the right to use another entity’s
nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an
exchange or exchange‐like transaction. Examples of nonfinancial assets include buildings, land,
vehicles, and equipment. Any contract that meets this definition should be accounted for under
the leases guidance, unless specifically excluded in this Statement.
The pronouncement became effective, and as disclosed in Note 10 to the financial statements
required a prior period restatement for the cumulative effect on the financial statements. The
beginning balances of leases receivable and deferred inflows of resources related to leases for the
City were $15,344,334 as of July 1, 2021 and restated and increased the balances in that amount,
and the net effect on beginning net position and fund balance was zero. In addition, the
Conference Center Authority’s beginning balances of right to use leased assets and the lease
liability were increased and restated in the amounts of $1,948,783 and $2,748,483, respectively,
and the net position was reduced and restated in the amount of $799,700 as of July 1, 2021. See
the Leases disclosure in Note 10.
NOTE 2 – CASH AND INVESTMENTS
The City’s goal is to invest at the maximum yield, consistent with safety and liquidity, while
individual funds can process payments for expenditures at any time.
A. Policies
The City invests in individual investments and in investment pools. Individual investments are
evidenced by specific identifiable securities instruments, or by an electronic entry registering the
owner in the records of the institution issuing the security, called the book entry system. In order
to increase security, the City employs the Trust Department of a bank as the custodian of certain
City managed investments, regardless of their form.
California Law requires banks and savings and loan institutions to pledge government securities
with a fair value of 110% of the City’s cash on deposit, or first trust deed mortgage notes with a
fair 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.
63
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 2 – CASH AND INVESTMENTS (Continued)
The City’s investments are carried at fair value, as required by generally accepted accounting
principles. The City adjusts the carrying value of its investments to reflect their fair value at each
fiscal year end, and it includes the effects of these adjustments in income for that fiscal year.
B. Classification
Cash and investments as of June 30, 2022 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 $264,820,152
Restricted cash and investments 144,489,758
Total Primary Government cash and investments 409,309,910
Statement of Fiduciary Assets:
Cash and investments available for operations 1,837,374
Restricted cash and investments 40,101,280
Total Fiduciary cash and investments 41,938,654
Conference Center:
Cash and investments available for operations 3,374,045
Total South San Francisco
Conference Center cash and investments 3,374,045
Total cash and investments $454,622,609
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.
64
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 2 – CASH AND INVESTMENTS (Continued)
C. Investments Authorized by the California Government Code and the City’s Investment Policy
The City’s investment policy and the California Government Code allow the City to invest in the
following provided the credit ratings of the issuers are acceptable to the City and approved
percentages and maturities are not exceeded. The table below also identifies certain provisions of
the California Government Code, or the City’s Investment Policy where it is more restrictive:
Minimum Maximum Maximum
Maximum Credit Percentage Investment
Authorized Investment Type Maturity Quality (A) of Portfolio in One Issuer
U.S. Treasury Securities 5 years N/A No Limit No Limit
Federal Agency or U.S.
Sponsored Enterprise Obligations 5 years N/A No Limit 25%
Supranational Obligations 5 years AA 30% 10%
Corporate Medium-Term Notes 5 years A 30% 5%
Asset-Backed Securities 5 years AA 20% 5%
Commercial Paper 270 days A1,P1 25% 5%
Negotiable Certificates of Deposit 5 years A-1 or A 30%5%
Repurchase Agreements 90 days AA No Limit No Limit
Local Agency Investment Fund (LAIF) Upon Demand N/A $75 million No Limit
Money Market Mutual Funds N/A AAAm 20% 10%
Rating System, or its equivalent.
(A) The City's Investment Policy includes credit ratings provided by Standard and Poor's Investment
65
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 2 – CASH AND INVESTMENTS (Continued)
D. Investments Authorized by Debt Agreements
The City and 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 or Successor Agency fail to meet its obligations under these debt issues. The California
Government Code requires these funds to be invested in accordance with City ordinance bond
indentures or State statute. The table below identifies the investment types that are authorized for
investments held by fiscal agents. The table also identifies certain provisions of these debt
agreements:
Minimum Maximum
Maximum Credit Percentage
Authorized Investment Type Maturity Quality of Portfolio
U.S. Treasury Obligations N/A N/A No Limit
Federal Agency or U.S. Government
Sponsored Enterprise Obligations N/A N/A No Limit
Federal Housing Administration Debentures N/A N/A No Limit
Bankers Acceptances 30 days A-1 or A-2 No Limit
Commercial Paper 270 days A1,P1 No Limit
Negotiable Certificates of Deposit 5 years A-1 or A No Limit
Guaranteed Investment Agreements N/A A1,P1 No Limit
Municipal Obligations N/A Aaa No Limit
State Obligations N/A A2 No Limit
Money Market Mutual Funds N/A AAAm No Limit
Repurchase Agreements 90 days AA No Limit
Local Agency Investment Fund (LAIF) Upon Demand N/A No Limit
E. Investments Authorized by the Authority
The City of South San Francisco Conference Center Authority follows the California Government
Code which authorizes an agency to invest in their own bonds, certain time deposits, obligations
of the U.S. Treasury, agencies and instrumentalities, commercial paper, bankers’ acceptances
with maturities not to exceed 270 days, and medium-term notes issued by corporations operating
within the U.S., commercial paper rated P-1 or higher by Moody’s or A-1 by Standard & Poor’s
commercial paper record, repurchase agreements of obligations of the U.S. Government or its
agencies for a term of one year or less and the Local Agency Investment Fund.
66
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 2 – CASH AND INVESTMENTS (Continued)
F. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity
of its fair value to changes in market interest rates. The City also manages its interest rate risk is
by holding most investments to maturity, thus reversing unrealized market gains and losses.
Information about the sensitivity of the fair values of the City’s investments (including
investments held by bond trustee) to market interest rate fluctuations is provided by the following
table that shows the distribution of the City’s investments by maturity or earliest call date:
Remaining maturity
Less than One to Five
1 year Years Total
City and Fiduciary:
U.S. Treasury Notes $2,099,668 $52,601,590 $54,701,258
Federal Agency Securities 8,459,753 33,990,359 42,450,112
Local Agency Investment Fund 199,044,480 199,044,480
Money Market Funds 58,100,862 58,100,862
Corporate Medium Term Notes 499,974 46,106,533 46,606,507
Negotiable Certificates of Deposit 3,989,919 3,989,919
Asset-Backed Securities 212,664 22,608,817 22,821,481
Supranational Obligations 499,666 6,188,331 6,687,997
South San Francisco Conference Center:
Local Agency Investment Fund 2,963,633 2,963,633
Total Investments $275,870,619 $161,495,630 437,366,249
Cash in Banks and on Hand - City of South San Francisco 16,845,948
Cash in Banks and on Hand - South San Francisco Conference Center 410,412
Total Cash and Investments $454,622,609
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. Each regular LAIF account is permitted to have up to 15 transactions per
month, with a minimum transaction amount of $5,000, a maximum transaction amount of $75
million and at least 24 hours advance notice for withdrawals of $10 million or more. Bond
proceeds accounts are subject to a one‐time deposit with no cap and are set up with a monthly
draw down schedule. 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, 2022, these investments have an
average maturity of 311 days.
Money market funds are available for withdrawal on demand and as of June 30, 2022 have an
average maturity of 43 to 49 days.
67
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 2 – CASH AND INVESTMENTS (Continued)
G. Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized
statistical rating organization. Presented below is the actual rating as of June 30, 2022, for each
of the Primary Government’s investment types as provided by Moody’s investment rating system,
except as noted:
Investment Type Aaa Aaa-mf Aa1-Aa3 A1-A3 P-1 Total
City and Fiduciary:
Federal Agency Securities $42,450,112 $42,450,112
Money Market Funds $58,100,862 58,100,862
Corporate Medium Term Notes 2,130,720 $7,229,229 $37,246,558 46,606,507
Negotiable Certificates of Deposit $3,989,919 3,989,919
Asset-Backed Securities 12,183,362 12,183,362
Supranational Obligations 6,687,997 6,687,997
Totals $63,452,191 58,100,862$ 7,229,229$ 37,246,558$ 3,989,919$ 170,018,759
City and Fiduciary:
Not rated:
Asset-Backed Securities 10,638,119 (A)
Local Agency Investment Fund 199,044,480
Exempt from credit rating disclosure:
U.S. Treasury Notes 54,701,258
Not rated:
Local Agency Investment Fund 2,963,633
Total Investments $437,366,249
South San Francisco Conference Center:
(A) Investments are not rated by Moody’s, but are rated AAA by Standard and Poor’s or Fitch investment
rating systems.
68
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
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, 2022:
Level 2 Total
Investments by Fair Value Level:
City and Fiduciary:
U.S. Treasury Notes $54,701,258 $54,701,258
Federal Agency Securities 42,450,112 42,450,112
Corporate Medium Term Notes 46,606,507 46,606,507
Negotiable Certificates of Deposit 3,989,919 3,989,919
Asset Backed Securities 22,821,481 22,821,481
Supranational Obligations 6,687,997 6,687,997
Totals $177,257,274 177,257,274
Investments Measured at Amortized Cost:
City and Fiduciary:
Money Market Mutual Funds 58,100,862
Investments Exempt from Fair Value Hierarchy:
City and Fiduciary:
Local Agency Investment Fund 199,044,480
South San Francisco Conference Center:
Local Agency Investment Fund 2,963,633
Total Investments $437,366,249
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 were reported at amortized cost.
69
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 3 – CAPITAL ASSETS
A. Capital Asset Changes – Changes in capital assets during the fiscal year consist of:
Balance 6/30/2021
Additions and
Adjustments
Retirements and
Adjustments Transfers Balance 6/30/2022
Governmental activities
Capital assets not being depreciated:
Land $66,729,001 $5,520,422 $72,249,423
Construction in Progress 160,376,869 86,212,054 ($4,730,560) 241,858,363
Total capital assets not being depreciated 227,105,870 91,732,476 (4,730,560) 314,107,786
Capital assets being depreciated:
Buildings and Improvements 97,370,638 97,370,638
Infrastructure - Streets 200,865,274 4,730,560 205,595,834
Infrastructure - Storm Drains 8,927,492 8,927,492
Infrastructure - Traffic Control Devices 12,591,370 12,591,370
Equipment and Vehicle 7,390,599 7,390,599
Furniture and Fixtures 2,614,215 2,614,215
Total capital assets being depreciated 329,759,588 4,730,560 334,490,148
Less accumulated depreciation for:
Buildings and Improvements (44,877,725) (2,572,139) (47,449,864)
Infrastructure - Streets (116,531,398) (5,153,778) (121,685,176)
Infrastructure - Storm Drains (3,980,061) (204,500) (4,184,561)
Infrastructure - Traffic Control Devices (4,729,238) (510,781) (5,240,019)
Equipment and Vehicle (6,683,993) (83,154) (6,767,147)
Furniture and Fixtures (1,891,508) (87,167) (1,978,675)
Total accumulated depreciation (178,693,923) (8,611,519) (187,305,442)
Net Governmental Fund
Capital Assets Being Depreciated 151,065,665 (8,611,519)4,730,560 147,184,706
Internal Service Fund Capital Assets
Capital assets being depreciated:
Equipment and Vehicle 17,138,859 424,683 ($185,212) 17,378,330
Accumulated depreciation (12,186,122) (967,562) 177,911 (12,975,773)
Net Internal Service Fund Capital Assets
Being Depreciated 4,952,737 (542,879) (7,301) 4,402,557
Governmental activities capital assets, net $383,124,272 $82,578,078 ($7,301) $465,695,049
Total capital assets not being depreciated $227,105,870 $91,732,476 ($4,730,560) $314,107,786
Net capital assets being depreciated 156,018,402 (9,154,398) ($7,301) 4,730,560 151,587,263
Governmental activities capital assets, net $383,124,272 $82,578,078 ($7,301) $465,695,049
70
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 3 – CAPITAL ASSETS (Continued)
Balance Balance
June 30, 2021 Additions Retirements Transfers June 30, 2022
Business-type activities
Capital assets, not being depreciated:
Land $794,587 $794,587
Construction in Progress 68,932,413 $15,051,042 83,983,455
Total capital assets not being depreciated 69,727,000 15,051,042 84,778,042
Capital assets being depreciated:
Buildings and Improvements 80,173,059 80,173,059
Clean Water Facilities and Lines 79,862,094 79,862,094
Infrastructure - Storm Drains 6,216,365 6,216,365
Infrastructure - Streets 7,377,546 7,377,546
Equipment and Vehicle 18,455,546 18,455,546
Furniture and Fixtures 31,154 31,154
Total capital assets being depreciated 192,115,764 192,115,764
Less accumulated depreciation for:
Buildings and Improvements (22,816,048) (2,056,389)(24,872,437)
Clean Water Facilities and Lines (35,054,212) (1,936,594)(36,990,806)
Infrastructure - Storm Drains (1,570,732) (187,980)(1,758,712)
Infrastructure - Streets (2,469,401) (209,570)(2,678,971)
Equipment and Vehicle (13,466,816) (716,906)(14,183,722)
Furniture and Fixtures (31,154)(31,154)
Total accumulated depreciation (75,408,363) (5,107,439)(80,515,802)
Net capital assets being depreciated 116,707,401 (5,107,439)111,599,962
Business-type activities capital assets, net $186,434,401 $9,943,603 $196,378,004
Balance
June 30, 2021 Balance
(as restated) Additions Retirements June 30, 2022
Component Unit:
South San Francisco Conference Center
Depreciable:
Buildings and Improvements $10,909,288 $10,909,288
Furniture and Fixtures 950,814 ($18,421) 932,393
Machinery and Equipment 582,722 $40,220 (23,227) 599,715
Total Depreciable 12,442,824 40,220 (41,648) 12,441,396
Right of Use Assets:
Leased Land 1,948,783 1,948,783
14,391,607 40,220 (41,648) 14,390,179
Less accumulated depreciation and
amortization
Depreciable (9,904,838) (592,036) 41,648 (10,455,226)
Leased Land (278,398) (278,398)
(9,904,838) (870,434) 41,648 (10,733,624)
Component Unit Capital Assets, Net $4,486,769 ($830,214) $3,656,555
71
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 3 – CAPITAL ASSETS (Continued)
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. Generally accepted
accounting principles require that these contributions be accounted for as revenues at the time the
capital assets are contributed.
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 $729,438
Fire 316,406
Police 64,491
Public works 6,815,642
Parks and recreation 566,692
Library 67,241
Economic and community development 51,609
Total Governmental Functions 8,611,519
Internal Service Funds 967,562
Total Governmental Activities $9,579,081
Business-Type Activities
Sewer Enterprise $4,814,962
Parking District 252,638
Storm Water 39,839
Total Business-Type Activities $5,107,439
NOTE 4 – INTER-FUND TRANSACTIONS
A. Internal Balances
Internal balances are presented in the entity-wide financial statements only. They represent the
net interfund receivables and payables remaining after the elimination of all such balances within
governmental and business-type activities.
72
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 4 – INTER-FUND TRANSACTIONS (Continued)
B. Inter-Fund Receivables and Payables
Amounts due to or due from other funds reflect inter-fund balances for services rendered or short-
term loans expected to be repaid in the next fiscal year.
Due From Other Fund Due to Other Fund Amount
General Fund Capital Improvement Capital Projects Fund $430,000
Storm Water Enterprise Fund 630,000
Community Development Block Grant Special Revenue Fund 210,000
$1,270,000
C. Transfers
Transfers between funds during the fiscal year ended June 30, 2022 were as follows:
FROM FUND (OUT) TO FUND (IN)AMOUNT
General Fund Capital Improvements Capital Projects Fund $3,642,829
Capital Infrastructure Reserve Capitol Projects Fund 8,500,000
Capital Improvements Civic Campus Capital Projects Fund 102,542
Non-Major Governmental Funds 8,287,833
Storm Water Enterprise Fund 250,000
Internal Service Fund 452,406
American Rescue Plan Act Special Revenue Fund General Fund 2,560,000
Capital Improvement Capital Projects Fund 84,259
Capital Improvements Capital Projects Fund Non-Major Governmental Funds 2,362
East of 101 Sewer Impact Fees Capital Projects Fund Sewer Enterprise Fund 107,818
Traffic Impact Fees Capital Projects Fund Capital Improvement Capital Projects Fund 5,929,676
Child Care Impact Fees Capital Projects Fund Capital Improvement Capital Projects Fund 99,499
Capital Infrastructure Reserve Capital Projects Fund General Fund 1,104,832
Low and Moderate Income Housing Asset Special Revenue Fund 2,784
Capital Improvement Capital Projects Fund 1,107,190
Non-Major Governmental Funds 34,464
Sewer Enterprise Fund 234,720
Parking District Enterprise Fund 1,440
Storm Water Enterprise Fund 36,720
Internal Service Fund 619,440
Non-Major Governmental Funds General Fund 1,098,897
Capital Improvement Capital Projects Fund 3,606,224
Sewer Enterprise Fund 147,072
Storm Water Enterprise Fund 698,541
Internal Service Fund 60,459
Sewer Enterprise Capital Improvement Capital Projects Fund 57,076
Total $38,829,083
73
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 5 – LONG-TERM DEBT
A. Current Year Transactions and Balances
A summary of governmental and business-type activities transactions for the fiscal year ended
June 30, 2022 follows:
Authorized
and Balance at Balance at Current
Issued June 30, 2021 Additions Retirement June 30, 2022 Portion
Governmental Activities
Lease Revenue Bonds:
2020A Police Station Project, 4.00 to 5.00% (1) $43,905,000 $42,970,000 $980,000 $41,990,000 $1,030,000
Plus: Unamortized bond premium 9,483,824 379,353 9,104,471
2021A Community Civic Campus Project, 4.00% (2) 86,410,000 86,410,000 2,210,000 84,200,000 2,155,000
Plus: Unamortized bond premium 18,116,565 724,663 17,391,902
2022A Orange Memorial Park Project, 4.00 to 5.25% (3) 65,420,000 $65,420,000 65,420,000
Plus: Unamortized bond premium 6,686,317 6,686,317
Total Lease Revenue Bonds 195,735,000 156,980,389 72,106,317 4,294,016 224,792,690 3,185,000
Direct Borrowing:
2007 Loans Payable to the Successor Agency (4) 3,595,152 1,445,000 2,150,152
Leases Financings (5):
2013 Fire Truck 285,529 140,892 144,637 144,637
Total Leases Financings 285,529 140,892 144,637 144,637
Total Direct Borrowing 3,880,681 1,585,892 2,294,789 144,637
Net Governmental Long-Term Debt $195,735,000 $160,861,070 $72,106,317 $5,879,908 $227,087,479 $3,329,637
Business-Type Activities
Revenue Bonds:
2005 Water and Wastewater Revenue Bonds, $6,000,000 $2,325,000 $345,000 $1,980,000 $360,000
2.75 to 4.75%, due 04/30/26 (6)
Direct Borrowing:
1999 State Water Resources Loan, 2.6%, due 8/1/22 (7) 47,721,252 6,300,086 3,109,618 3,190,468 3,190,468
2004 State Water Resources Loan, 2.5%, due 1/1/27 (7) 21,258,529 6,513,692 1,239,209 5,274,483 1,270,190
2008 State Water Resources Loan, 2.4%, (8) 9,164,505 4,179,619 480,127 3,699,492 491,650
2018 State Water Resources Loan, 1.8% (9) 53,403,000 43,487,062 $5,147,945 48,635,007
Total Direct Borrowing 131,547,286 60,480,459 5,147,945 4,828,954 60,799,450 4,952,308
Net Business-Type Long-Term Debt $137,547,286 $62,805,459 $5,147,945 $5,173,954 $62,779,450 $5,312,308
(1) 2020A Lease Revenue Bonds – In February 2020, the City of South San Francisco Public
Facilities Financing Authority entered into a $43.9 million lease agreement to finance costs of the
acquisition, construction, and installation of certain capital improvements constituting the new
City police station, located within the City’s new Civic Center Campus, and related
improvements, facilities and equipment, and pay the costs incurred in connection with the
issuance of the Series 2020A Bonds. The Series 2020A Bonds are equally and ratably payable
from base rental payments to be made by the City for the right to use certain real property
consisting of a City-owned parking garage and a City-owned park. The lease agreement contains
provisions that in an event of default, the lessor may exercise any and all remedies available to it
under the lease agreement, including the right to enforce the terms of the lease.
74
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 5 – LONG-TERM DEBT (Continued)
(2) 2021A Lease Revenue Bonds – In May 2021, the City of South San Francisco Public
Facilities Financing Authority entered into a $86.4 million lease agreement to finance costs of the
acquisition, construction, and installation of certain capital improvements constituting a new City
library, council chamber, parks and recreation facilities, and a community theater to be located
within the City’s new Civic Center Campus, street and roadway improvements located within the
City, solar equipment to be located on City property, and related improvements, facilities and
equipment, and pay the costs incurred in connection with the issuance of the Series 2021A Bonds.
The Series 2021A Bonds are equally and ratably payable from base rental payments to be made
by the City for the right to use certain real property consisting of the same City-owned parking
garage and City-owned park pledged under the 2020A Bonds and six additional properties,
including the property on which the first two phases of the Community Civic Campus project is
being constructed. The lease agreement contains provisions that in an event of default, the lessor
may exercise any and all remedies available to it under the lease agreement, including the right to
enforce the terms of the lease.
(3) 2022A Lease Revenue Bonds – In May 2022, the City of South San Francisco Public
Facilities Financing Authority entered into a $65.4 million lease agreement to finance costs of the
acquisition, construction and installation of certain capital improvements of the City to be located
at the City-owned Orange Memorial Park and pay the costs incurred in connection with the
issuance of the Series 2022A Bonds. The Series 2022A Bonds are equally and ratably payable
from base rental payments to be made by the City for the right to use certain real property
consisting of the same properties pledged under the 2021A Bonds. The lease agreement contains
provisions that in an event of default, the lessor may exercise any and all remedies available to it
under the lease agreement, including the right to enforce the terms of the lease.
(4) As of June 30, 2022, the Oyster Point Improvements Impact Fund owed the Successor Agency
(formerly the Merged Redevelopment Project Area Capital Project Fund) for developer fees in the
amount of $3,595,152 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 14). 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.
75
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 5 – LONG-TERM DEBT (Continued)
(5) The City has entered into long-term lease financing agreements with various financing
agencies. Under these 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 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. Lease financing payments are made from revenues of the Equipment Replacement
Internal Service Fund and the General Fund. The lease agreements contain provisions that in an
event of default, the lessor may (a) seize the properties, (b) sell or lease the properties or (c) exercise
any and all remedies available to it under applicable law, including the right to enforce the terms of
the lease, recover damages from the breach of the lease, and rescind the lease as to any portion of or
all of the properties.
(6) 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 the debt is $6,000,000. Proceeds were used to finance sewer system
capital improvement.
The principal payments on the debt commenced in October 2006 and principal is due each
October 1. The final principal payment is due on October 1, 2026. Interest payments ranging
from the rates of 2.75% to 4.75% are payable semi-annually each April 1 and October 1.
As of June 30, 2022, the City is in compliance with the provisions of Article VI of the Installment
Purchase Agreement associated with the 2005D Bonds.
The 1999 and 2004 State Water Resources Loans and the 2005D Water and Wastewater Revenue
Bonds are secured by a pledge of net revenues of the City’s Sewer Enterprise Fund. Net
Revenues available for debt service amounted to $8.3 million which represented coverage of 1.62
over the $5,126,802 in total debt service.
(7) The two loans were authorized by the State Water Resources Control Board (SWRCB) to
improve and expand the City’s wastewater treatment plant. Loan proceeds were issued as the
projects progressed and debt service payments commenced one year after project completion. The
loan agreements include provisions that in an event of default, all principal payments shall be
immediately due and payable, interests on all amounts owed shall be paid at the highest legal rate,
any additional payments shall be made and SWRCB shall enforce its rights under the agreements
by any judicial proceeding, whether in law or equity.
(8) 2008 State Water Resources Control Board Loan – In November 2007, the City approved
the $11.8 million loan agreement with the 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.
76
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 5 – LONG-TERM DEBT (Continued)
(9)2018 State Water Resources Control Board Loan – In September 2018, the City entered into a
$53.4 million loan agreement with the SWRCB to finance the South San Francisco/San Bruno’s
Water Quality Control Plant Wet Weather and Digester Project. A portion of this amount, $4 million,
is anticipated to be forgiven on the date of completion of construction. For the remaining $49.4
million, under the terms of the loan agreement the City has agreed to repay $59.2 million to the
State. The difference between the repayment obligation and proceeds amounted to $9.8 million
and represents in-substance interest on the outstanding balance.
As of June 30,2022, the City has drawn down $48.6 million from SWRCB, with the remaining
balance of $4.8 million expected to be drawn down in fiscal year 2023. There was no debt service
payment required in fiscal year 2022, with the first debt service payment due in fiscal year ending
2024. Future debt service is expected to average $3 million per year through fiscal year 2043.
In the event default has occurred, the City shall, upon demand, immediately accelerate the
payment of all principal owed under this loan agreement, if any, which shall be immediately due
and payable; pay interest at the highest legal rate on all amounts owed; and pay any additional
payments as defined in the loan agreement.
The 2008 and 2018 loans are secured by a pledge of sewer service charge revenues of the City’s
Sewer Enterprise Fund. Sewer service charge revenues available for debt service amounted to
$22.6 million which represented coverage of 42 over the $538,642 in debt service.
B. Debt Service Requirements
Annual debt service requirements are shown below for all long-term debt with specified
repayment terms:
Governmental Activities Business-Type Activities
For the Year Lease Revenue Bonds
2005 Water and
Wastewater Revenue Bonds
Ended June 30 Principal Interest Principal Interest
2023 $3,185,000 $8,280,065 $360,000 $90,000
2024 3,320,000 8,205,338 375,000 71,625
2025 5,170,000 8,058,737 395,000 52,375
2026 5,410,000 7,826,538 415,000 32,125
2027 5,650,000 7,580,287 435,000 10,875
2028-2032 32,225,000 33,938,388
2033-2037 39,855,000 26,306,437
2038-2042 49,280,000 16,877,788
2043-2047 47,515,000 5,414,012
191,610,000 $122,487,590 $1,980,000 $257,000
Plus: Unamortized bond premium 33,182,690
$224,792,690
77
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 5 – LONG-TERM DEBT (Continued)
Future debt service requirements, including interest and leases financings, but excluding the 2007
Loan payable to the Redevelopment Successor Agency and the 2018 State Water Resources Loan
at June 30, 2022, were as follows:
For the Year Governmental Activities Business-Type Activities
Ended June 30 Principal Interest Principal Interest
2023 $144,637 $2,870 $4,952,308 $266,607
2024 1,805,393 145,017
2025 1,850,025 105,421
2026 1,895,761 64,842
2027 540,574 23,253
2028-2032 1,120,382 23,621
Totals 144,637 $2,870 12,164,443 $628,761
2007 Loans Payable 2,150,152
2018 State Water Resources Loan 48,635,007
$2,294,789 $60,799,450
Direct Borrowings
Lease financing agreements are issued for the purpose of financing the construction or acquisition
of projects defined in each leasing arrangement. Projects are leased to the City for lease
payments which, together with unspent proceeds of the leasing arrangement, will be sufficient to
meet the debt service obligations of the leasing arrangement. At the termination of the leasing
arrangement, title to the project will pass to the City.
Leasing arrangements are similar to debt; they allow investors to participate in a share of
guaranteed payments which are made by the City. Because they are similar to debt, the present
value of the total of the payments to be made by the City is recorded as long-term debt. The
City’s leasing arrangements are included in long term obligations discussed above.
A summary of capital assets leased through the issuance of leasing arrangements follows:
Original
Leasing Arrangement Fund/Activity Cost
Capital Leases Governmental Activity $5,842,799
C. Legal Debt Margin
The City is subject to a debt limit that is 3.75% of the total assessed value of property, net of
exempt real property. At June 30, 2022, that amount was $924,439,440. As of June 30, 2022, the
City did not have any outstanding debt applicable to the limit.
D. Debt without City Commitment
In April 2022 the Community Facilities District No. 2021-01 Special Tax Bonds, Series 2022 in
the amount of $19,685,000 were issued by the City of South San Francisco Community Facilities
District No. 2021-01. The City is the collecting and paying agent for the debt issued by the
District, but has no direct or contingent liability or moral obligation for the payment of this debt.
As of June 30, 2022 the outstanding balance of the issue was $19,685,000.
78
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
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 is 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 generally accepted accounting
principles which require 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.
79
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
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, 2022, are below:
Low and Moderate East of 101
General Income Housing Capital Sewer Traffic
Fund Balance Classifications Fund Assets Improvement Impact Fees Impact Fees
Nonspendables:
Items not in spendable form:
Inventory and prepaid items $4,099
Total Nonspendable Fund Balances 4,099
Restricted for:
Sewer Impact Fees $4,872,806
Traffic impact fees projects $24,761,557
Civic campus projects $16,847,198
Low and moderate housing projects $3,029,092
Redevelopment and community development activities 14,763,033
Total Restricted Fund Balances 14,763,033 3,029,092 16,847,198 4,872,806 24,761,557
Committed for:
Capital projects 4,244,813
Local services 11,839,164
Total Committed Fund Balances 16,083,977
Assigned to:
Capital projects 7,482,439
Total Assigned Fund Balances 7,482,439
Unassigned:
General fund 38,313,108
Other fund deficits (1,437,892)
Total Unassigned Fund Balances 38,313,108 (1,437,892)
Total Fund Balances $76,646,656 $3,029,092 $15,409,306 $4,872,806 $24,761,557
Capital Project Funds
80
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 6 – NET POSITION AND FUND BALANCE (Continued)
Capital Project Funds
Capital
Capital Capital Capital Improvements Other
Child Care Infrastructure Improvements Improvements Orange Governmental
Fund Balance Classifications (continued) Impact Fees Reserve Fund Police Station Civic Campus Memorial Park Funds
Restricted for:
Child Care impact fees projects $13,901,164
Police station projects $468,782
Civic campus projects $37,280,365 $71,684,403
Gas Tax projects $287,907
Developer contributions projects 7,567,347
Community Development Block Grant projects 163,662
Maintenance districts projects 4,859,706
Transportation sales tax projects 3,713,678
City programs projects 10,908,572
Other Special Revenues projects 9,044,236
Capital projects activities 34,191,712
Total Restricted Fund Balances 13,901,164 468,782 37,280,365 71,684,403 70,736,820
Assigned to:
Capital infrastructure projects $24,889,824
Total Assigned Fund Balances 24,889,824
Total Fund Balances $13,901,164 $24,889,824 $468,782 $37,280,365 $71,684,403 $70,736,820
C. 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, 2022, were as listed below:
Governmental funds:Amount
General Fund $7,482,439
Low and Moderate Income Housing Assets Special Revenue Fund 10,743
Capital Improvement Capital Projects Fund 27,517,978
Capital Infrastructure Reserve Capital Projects Fund 1,617,850
Capital Improvements Police Station Capital Projects Fund 47,722
Capital Improvements Civic Campus Capital Projects Fund 34,182,728
Other Governmental Funds 2,677,758
Total $73,537,218
81
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 7 – PENSION PLANS
For purposes of measuring the net pension liability and deferred outflows/inflows of resources
related to pensions, and pension expense, information about the fiduciary net position of the
City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions
to/deductions from the Plans’ fiduciary net position have been determined on the same basis as
they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including
refunds of employee contributions) are recognized when due and payable in accordance with the
benefit terms. Investments are reported at fair value.
A. General Information about the Pension Plans
Plan Descriptions – All qualified permanent and probationary employees are eligible to
participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans,
agent multiple-employer defined benefit pension plans administered by the California Public
Employees’ Retirement System (CalPERS), which acts as a common investment and
administrative agent for its participating member employers. Benefit provisions under the Plans
are established by State statute and City resolution.
CalPERS issues publicly available reports that include a full description of the pension plans
regarding benefit provisions, assumptions and membership information that can be found on the
CalPERS website.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of
living adjustments and death benefits to plan members, who must be public employees and
beneficiaries. Benefits are based on years of credited service, equal to one year of full time
employment. Members with five years of total service are eligible to retire at age 50 with
statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10
years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957
Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments
for each plan are applied as specified by the Public Employees’ Retirement Law.
82
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 7 – PENSION PLAN (Continued)
The Plans’ provisions and benefits in effect at June 30, 2022, are summarized as follows:
Miscellaneous
Classic Plan* Tier 2 Plan* PEPRA Plan
Prior to After On or after
Hire date April 25, 2010 April 25, 2010 January 1,2013
Benefit formula 2.7% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 - 55 50 - 67 52 - 67
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 1.092% to 2.418% 1.0% to 2.5%
Required employee contribution rates 8%7%6.5%
Required employer contribution rates 9.99%9.99%9.99%
Required Unfunded Actuarial Liability Contribution $6,718,047
* Effective July 2021, Classic Plan and Tier 2 Plan members in the Executive Management Unit are required to pay an
additional 2% for their share of pension costs.
Safety
Classic Plan ** Tier 2 Plan ** PEPRA Plan
Hire date Prior to
April 25, 2010
After
April 25, 2010
On or after
January 1, 2013
Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 50 - 55 50 - 57
Monthly benefits, as a % of eligible compensation 3% 2.4% to 3.0% 2.0% to 2.7%
Required employee contribution rates 9%9%11.5%
Required employer contribution rates 20.59%20.59%20.59%
Required Unfunded Actuarial Liability Contribution $8,906,578
** Effective October 2018, Classic Plan and Tier 2 Plan members in the Executive Management Unit are required to pay an
additional 2% for their share of pension costs.
Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a
percentage of payroll for the normal cost portion as noted in the rates above and as a dollar
amount for contributions toward the unfunded liability (UAL). The dollar amounts are billed on a
monthly basis or the City can elect a lump sum payment option. The City’s required contributions
for the unfunded liability in the Miscellaneous and Safety Plans for the year ended June 30, 2022
were $6,718,047 and $8,906,578, respectively, which were made under the lump sum payment
option.
Employees Covered – As of the June 30, 2020 actuarial valuation date and the June 30, 2021
measurement date, the following employees were covered by the benefit terms for the Plans:
Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits 481 297
Inactive employees entitled to but not yet receiving benefits 396 104
Active employees 283 158
Total 1,160 559
83
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 7 – PENSION PLAN (Continued)
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. Employer Contribution rates
may change if plan contracts are amended.
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 Plan is measured as of
June 30, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30,
2021 using standard update procedures. The long-term portion of governmental activities net
pension liability is liquidated primarily by the General Fund. A summary of principal
assumptions and methods used to determine the net pension liability is shown below.
Actuarial Assumptions – The total pension liabilities as of the June 30, 2021 measurement date
were based on the following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Payroll Growth
Salary Increase
Investment Rate of Return
Mortality
Post Retirement Benefit Increase
(1) Actuarial assumptions are the same for all benefi tiers (Classic Tier 1, Classic Tier II, and PEPRA)
(2) Depending on age, service and type of employment.
(3)Net of pension plan investment expenses, including inflation.
Miscellaneous and Safety (1)
6/30/2020
6/30/2021
Entry-Age Normal Cost Method
7.15%
(4) The mortality table used was developed based on CalPERS' specific data. The probabilities of mortality are based
on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and post-retirement mortality
rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of
Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial
Assumptions report from December 2017 that can be found on the CalPERS website.
2.50%
(2)
7.15% (3)
The lesser of contract COLA or 2.50% until Purchasing Power Protection
Allowance Floor on Purchasing Power applies, 2.50% thereafter
Derived using CalPERS Membership Data for all Funds (4)
2.75%
84
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 7 – PENSION PLAN (Continued)
The underlying mortality assumptions and all other actuarial assumptions used in the June 30,
2020 valuation were based on the results of a December 2017 actuarial experience study for the
period 1997 to 2015. Further details of the Experience Study can be found on the CalPERS
website.
Discount Rate – The discount rate used to measure the total pension liability was 7.15%. The
projection of cash flows used to determine the discount rate for each Plan assumed that
contributions from all plan members in the Public Employees Retirement Fund (PERF) will be
made at the current member contribution rates and that contributions from employers will be
made at statutorily required rates, actuarially determined. Based on those assumptions, each
Plan’s fiduciary net position was projected to be available to make all projected future benefits
payments of current plan members for all plans in the PERF. Therefore, the long- term expected
rate of return on plan investment was applied to all periods of projected benefit payment to
determine the total pension liability for each Plan.
The long- term expected rate of return on pension plan investments was determined using a
building- block method in which expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class.
In determining the long- term expected rate of return, CalPERS took into account both short- term
and long- term market return expectations as well as the expected pension fund cash flows. Using
historical returns of all the fund’s asset classes, expected compound (geometric) returns were
calculated over the short- term (first 10 years) and the long -term (11+ years) using a building-
block approach. Using the expected nominal returns for both short- term and long- term, the
present value of benefits was calculated for each fund. The expected rate of return was set by
calculating the rounded 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 equal to the single equivalent rate calculated above and
adjusted for assumed administrative expenses.
The table below reflects the long-term expected real rates of return by asset class.
Asset Class(a)
Assumed
Asset
Allocation
Real Return
Years 1 - 10(b)
Real Return
Years 11+(c)
Public Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0% 0.00% -0.92%
Total 100%
(a) In the CalPERS's Annual Comprehensive Financial Reports, Fixed income is included in
Global Debt Securities; Liquidity is included in Short-Term Investments; Inflation Assets are
included in both Global Equity Securities and Global Debt Securities.
(b) An expected inflation of 2.0% used for this period.
(c) An expected inflation of 2.92% used for this period.
85
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 7 – PENSION PLAN (Continued)
C. Changes in the Net Pension Liability
The changes in the Net Pension Liability for each Plan are as follows:
Miscellaneous Plan:
Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2020 (Measurement Date)$254,824,922 $167,734,633 $87,090,289
Changes in the year:
Service cost 4,274,015 4,274,015
Interest on the total pension liability 17,951,111 17,951,111
Changes of benefit terms
Chases of assumptions
Differences between actual and expected experience 1,018,943 1,018,943
Plan to plan resource movement
Contribution - employer 8,623,876 (8,623,876)
Contribution - employees 2,006,497 (2,006,497)
Net investment income 38,008,815 (38,008,815)
Benefit payments, including refunds of employee
contributions (13,832,759) (13,832,759)
Administrative expenses (167,557) 167,557
Other Miscellaneous Income/(Expense)
Net changes 9,411,310 34,638,872 (25,227,562)
Balance at June 30, 2021 (Measurement Date)$264,236,232 $202,373,505 $61,862,727
Safety Plan:
Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2020 (Measurement Date)$359,168,480 $240,958,874 $118,209,606
Changes in the year:
Service cost 7,072,216 7,072,216
Interest on the total pension liability 25,441,168 25,441,168
Changes of benefit terms
Chases of assumptions
Differences between actual and expected experience 1,772,836 1,772,836
Plan to plan resource movement
Contribution - employer 12,413,770 (12,413,770)
Contribution - employees 2,893,339 (2,893,339)
Net investment income 54,912,645 (54,912,645)
Benefit payments, including refunds of employee
contributions (17,313,787) (17,313,787)
Administrative expenses (240,703) 240,703
Other Miscellaneous Income/(Expense)
Net changes 16,972,433 52,665,264 (35,692,831)
Balance at June 30, 2021 (Measurement Date)$376,140,913 $293,624,138 $82,516,775
Grand Total - Both Plans $640,377,145 $495,997,643 $144,379,502
86
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 7 – PENSION PLAN (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following
presents the net pension liability of the City for each Plan, calculated using the discount rate for
each Plan, as well as what the City’s net pension liability would be if it were calculated using a
discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Miscellaneous Safety
1% Decrease 6.15% 6.15%
Net Pension Liability $95,542,624 $133,020,062
Current Discount Rate 7.15% 7.15%
Net Pension Liab ility $61,862,727 $82,516,775
1% Increase 8.15% 8.15%
Net Pension Liability $33,959,512 $40,965,167
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary
net position is available in the separately issued CalPERS financial reports.
D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2022, the City recognized pension expense of $4,436,373 and
$5,970,893 for the Miscellaneous and Safety Plans, respectively, for total pension expense of
$10,407,266. At June 30, 2022, the City reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Miscellaneous Plan:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $9,491,640
Changes of assumptions
Differences between actual and expected experience 1,100,830
Net differences between projected and actual earning s on
plan investments ($18,914,071)
Total $10,592,470 ($18,914,071)
Safety Plan:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $13,387,919
Changes of assumptions
Differences between actual and expected experience 1,671,857
Net differences between projected and actual earning s on
plan investments ($27,272,371)
Total $15,059,776 ($27,272,371)
Grand Total $25,652,246 ($46,186,442)
87
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 7 – PENSION PLAN (Continued)
$22,879,559 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended
June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized as pension expense as follows:
Miscellaneous Plan:
Year Ended Annual
June 30 Amortization
2023 ($3,928,150)
2024 (4,110,738)
2025 (4,542,742)
2026 (5,231,611)
Safety Plan:
Year Ended Annual
June 30 Amortization
2023 ($5,867,151)
2024 (5,672,976)
2025 (6,504,757)
2026 (7,555,630)
E.Subsequent Event – Reduction of CalPERS Discount Rate
On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal
year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy
approved by the CalPERS Board in 2015, the excess return of 14.3% prescribes a reduction in
investment volatility that corresponds to a reduction in the discount rate used for funding
purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year
Asset Liability Management (ALM) cycle, the CalPERS Board elected to defer any changes to
the asset allocation until the ALM process concluded, and the board could make its final decision
on the asset allocation in November 2021.
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset
allocation along with the new capital market assumptions, economic assumptions and
administrative expense assumption support a discount rate of 6.80% (net of investment expense,
but without a reduction for administrative expense) for financial reporting purposes. This
includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in
the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This
study also recommended modifications to retirement rates, termination rates, mortality rates and
rates of salary increases that were adopted by the CalPERS Board. These new assumptions will
be reflected in the CalPERS GASB 68 accounting valuation reports for the June 30, 2022,
measurement date.
88
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 8 – DEFERRED COMPENSATION PLAN
City employees may defer a portion of their compensation under a City sponsored Deferred
Compensation Plan created in accordance with Internal Revenue Code Section 457. Under this
Plan, participants are not taxed on the deferred portion of their compensation until it is distributed
to them; distributions may be made only at termination, retirement, death or in an emergency as
defined by the Plan. The City does not make any contributions to the Plan.
The City has no liability for any losses incurred by the Plan and does not participate in any gains,
but does have the duty of due care that would be required of an ordinary prudent investor. The
City has a contract with Empower Retirement to manage and invest the assets of the Plan. The
assets in the Plan are the sole property of the participants or their beneficiaries. Since the assets
held under the Plan are not the City’s property and are not subject to claims by general creditors
of the City, they have been excluded from these financial statements. The Plan requires
investments to be stated at fair value and it requires all gains and losses on Plan investments to
accrue directly to participant accounts.
The laws governing deferred compensation plan assets require plan assets to be held by a Trust
for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under
these plans are not the City’s property and are not subject to City control, they have been
excluded from these financial statements.
NOTE 9 – OTHER POST-EMPLOYMENT BENEFITS
A. General Information about the City’s Other Post Employment Benefit (OPEB) Plans
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
employees.
B. Defined Benefit Plan Description
The City’s Post Employment Benefit Plan for employees hired prior to April 25, 2010 is an agent
multiple-employer defined benefit OPEB plan.
The City joined the California Employers’ Retiree Benefit Trust (CERBT), an agent multiple-
employer plan administered by CalPERS, consisting of an aggregation of single-employer
plans. The CERBT issues a publicly available financial report that includes financial statements
and required supplementary information. That report may be obtained from the California Public
Employees’ Retirement System, CERBT, P.O. Box 942703, Sacramento, CA 94229-2703.
89
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 9 – OTHER POST-EMPLOYMENT BENEFITS (Continued)
Benefits provided – The following is a summary of Plan benefits by employee group as of June 30,
2022:
Eligibility • Hired < 4/25/2010
• 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 2021/22:
- $1,430.80/month pre-65 (Blue Shield)
- $785.04/month post-65 Medicare eligible (Blue Shield)
- $1,971.53/ month post-65 not Medicare eligible (Kaiser)
• Medi care ine ligible retirees allowed to stay in t heir pre-
Medicare premium plans after age 65
Surviving Spouse
Benefit
• Participation with premium payment
• AFSCME, Local 1569, Mid-Management, IAFF
surviving spouses covered 2 months following death of
Other OPEB • City also reimburses Medicare Part B
• No City-paid contribution for dental, vision, or life
For the year ended June 30, 2022, the City’s contributions to the Plan were $4,810,361.
Employees Covered by Benefit Terms – Membership in the plan consisted of the following at the
measurement date of June 30, 2020:
Active employees 181
Inactive employees or beneficiaries currently
receiving benefit payments 368
Total 549
C. OPEB Liabilities, OPEB Expenses, and Deferred Outflows/Inflows of Resources Related to
OPEB
For purposes of measuring 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. The long-term portion of governmental activities net OPEB liability is liquidated
primarily by the General Fund.
90
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 9 – OTHER POST-EMPLOYMENT BENEFITS (Continued)
D. Net OPEB Liability
Actuarial Methods and Assumptions – The City’s net OPEB liability was measured as of June
30, 2021 and the total OPEB liability used to calculate the net OPEB liability was determined by
an actuarial valuation dated June 30, 2021, based on the following actuarial methods and
assumptions:
Valuation Date • June 30, 2021
Measurement Date • June 30, 2021
Contribution Policy • City contributes $802,000 per year into trust
Actuarial Cost Method • Entry Age Normal, Level Percentage of Payroll
Amortization Method • Level dollar
Amortization Period • Average of 21 years remaining for 2021/22
• 6.25% at June 30, 2021
• 6.75% at June 30, 2020
• Expected City contributions projected to keep sufficient plan
assets to pay all benefits from trust.
Inflation • 2.50% per annum
Salary Increases • Aggregate - 2.75% annually
• Merit - CalPERS 1997-2015 Experience Study
Healthcare/Medical Trend • Non-Medicare - 6.75% for 2022, decreasing to an ultimate
rate of 3.75% in 2076 and later years
• Medicare (Non-Kaiser) - 5.85% for 2022, decreasing to an
ultimate rate of 3.75% in 2076 and later years
• Medicare (Kaiser) - 4.75 for 2022, decreasing to an ultimate
rate of 3.75% in 2076 and later years
Mortality, Retirement, Disability, Termination • CalPERS 1997-2015 Experience Study
Mortality Improvement • Mortality projected fully generational with Scale MP-2021
Healthcare participation for future retirees • 100% if covered, 95% if waived
Discount Rate and Long-Term Expected
Rate of Return on Assets
Actuarial Assumptions
91
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 9 – OTHER POST-EMPLOYMENT BENEFITS (Continued)
The long-term expected rate of return on OPEB plan investments was determined using a building-
block method in which expected future real rates of return (expected returns, net of OPEB plan
investment expense and inflation) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real
rates of return by the target asset allocation percentage and by adding expected inflation. The target
allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
Global equity 59.0%4.56%
Fixed income 25.0%0.78%
TIPS 5.0%0.08%
Commodities 3.0%1.22%
REITs 8.0%4.06%
Total 100.0%
Assumed Long-Term Rate of Inflation 2.50%
Expected Long-Term Net Rate of Return, Rounded 6.25%
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.
Changes of Assumptions – For the measurement date of June 30, 2022, the discount rate decreased
from 6.75% to 6.25%, the inflation rate decreased from 2.75% to 2.50%, the payroll growth rate
decreased from 3.00% to 2.75%, the medical trend rate for Kaiser Senior Advantage decreased from
7.0% to 6.75% and the mortality improvement scale was updated to Scale MP- 2021.
92
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 9 – OTHER POST-EMPLOYMENT BENEFITS (Continued)
E. Changes in Net OPEB Liability
The changes in the net OPEB liability follows:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a) (b) (a) - (b)
Balance at June 30, 2020 Measurement Date $90,241,209 $25,868,613 $64,372,596
Changes Recognized for the Measurement Period:
Service Cost 1,515,601 1,515,601
Interest on the total OPEB liability 6,058,295 6,058,295
Changes in benefit terms
Differences between expected and actual experience (3,331,956) (3,331,956)
Changes of assumptions 1,446,069 1,446,069
Contributions from the employer 4,810,361 (4,810,361)
Net investment income 7,140,915 (7,140,915)
Benefit payments (4,008,599) (4,008,599)
Administrative expenses (9,829)9,829
Net changes 1,679,410 7,932,848 (6,253,438)
Balance at June 20, 2021 Measurement Date $91,920,619 $33,801,461 $58,119,158
Increase (Decrease)
F. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost
Trend Rates
The following presents the net OPEB liability of the City, as well as what the City's net OPEB
liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.75%)
or 1-percentage-point higher (7.75%) than the current discount rate:
Net OPEB Liability/(Asset)
Discount Rate -1% Current Discount Rate Discount Rate +1%
(5.75%) (6.75%) (7.75%)
$70,042,838 $58,119,158 $48,248,701
The following presents the net OPEB liability of the City, as well as what the City's net OPEB
liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point
lower or 1-percentage-point higher than the current healthcare cost trend rates as discussed in the
assumptions above:
Net OPEB Liability/(Asset)
Current Healthcare Cost
1% Decrease Trend Rates 1% Increase
$48,009,017 $58,119,158 $70,365,417
93
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 9 – OTHER POST-EMPLOYMENT BENEFITS (Continued)
G. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 2022, the City recognized OPEB expense of $4,372,607. At June 30,
2022, the City reported deferred outflows and inflows of resources related to OPEB from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Employer contributions made subsequent to the measurement date $4,868,877
Differences between actual and expected experience 483,000 ($2,183,006)
Changes of assumptions 947,425 (808,048)
Net differences between projected and actual earnings on
plan investments (3,831,526)
Total $6,299,302 ($6,822,580)
$4,868,877 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,
2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to OPEB will be recognized as part of OPEB expense as follows:
Year Annual
Ended June 30 Amortization
2023 ($1,800,034)
2024 (1,598,303)
2025 (916,853)
2026 (1,076,965)
H. Defined Contribution Plan
The City of South San Francisco funded HRA Plan is a defined contribution OPEB plan for
employees hired on or after April 25, 2010. For those new hires, the City provides a medical after
retirement health plan (MARA), and contributes 1.5% of salary for those employees. In addition,
employees contribute to the MARA plan as directed by their respective bargaining unit’s
Memorandum of Understanding or compensation plan.
The plan is administered by Matrix Trust Company. Employee contributions for the fiscal year
totaled $397,012. Employer contributions of $493,299 were paid into the Defined Contribution
Plan. No liability for the defined contribution has been included in the report since the City fully
paid the annual required contribution. Since the assets held under this plan are not the City’s
property and are not subject to claims by general creditors of the City, the assets have been
excluded from these financial statements.
94
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 10 – LEASES
A. Policies
A lease is defined as a contract that conveys control of the right to use another entity’s
nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an
exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land,
vehicles, and equipment. The City recognizes lease receivable or liabilities with an initial,
individual value of $1,000,000 or more, based on the present value of future lease payments
remaining at the start of the lease.
Lessee – The City does not have any noncancellable leases of nonfinancial assets as of June 30,
2022, other than the financed purchase discussed in Note 5. The Conference Center Authority is
a lessee for the noncancellable lease of the Conference Center from the City. At the
commencement of a lease, City or Conference Center Authority recognize a lease liability and an
intangible right‐to‐use lease asset (lease asset) in the government‐wide financial statements.
At the commencement of a lease, the City or Conference Center Authority initially measures the
lease liability at the present value of payments expected to be made during the lease term.
Subsequently, the lease liability is reduced by the principal portion of lease payments made. The
lease asset is initially measured as the initial amount of the lease liability, adjusted for lease
payments made at or before the lease commencement date, plus certain initial direct costs.
Subsequently, the lease asset is amortized on a straight‐line basis over its useful life.
Key estimates and judgments related to leases include how the City or Conference Center
Authority determines (1) the discount rate it uses to discount the expected lease payments to
present value, (2) lease term, and (3) lease payments as follows:
• The City or Conference Center Authority uses the interest rate charged by the lessor as
the discount rate. When the interest rate charged by the lessor is not provided, the City or
Conference Center Authority generally uses its respective estimated incremental
borrowing rate as the discount rate for leases.
• The lease term includes the noncancellable period of the lease.
• Lease payments included in the measurement of the lease liability are composed of fixed
payments and purchase option price that the City or Conference Center Authority is
reasonably certain to exercise.
The City and Conference Center Authority monitor changes in circumstances that would require a
remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur
that are expected to significantly affect the amount of the lease liability.
Lease assets are reported with other capital assets and lease liabilities are reported with long-term
debt on the statement of net position.
Lessor – The City is a lessor for a noncancellable leases of buildings, billboards and facilities.
The City recognizes a lease receivable and a deferred inflow of resources in the government‐wide
and fund financial statements.
95
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 10 – LEASES (Continued)
At the commencement of a lease, the City initially measures the lease receivable at the present
value of payments expected to be received during the lease term. Subsequently, the lease
receivable is reduced by the principal portion of lease payments received. The deferred inflow of
resources is initially measured as the initial amount of the lease receivable, adjusted for lease
payments received at or before the lease commencement date. Subsequently, the deferred inflow
of resources is recognized as revenue over the life of the lease term.
Key estimates and judgments include how the City determines (1) the discount rate it uses to
discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts as
follows:
• The City uses its estimated incremental borrowing rate as the discount rate for leases.
• The lease term includes the noncancellable period of the lease.
• Lease receipts included in the measurement of the lease receivable is composed of fixed
payments from the lessee.
The City monitors changes in circumstances that would require a remeasurement of its lease, and
will remeasure the lease receivable and deferred inflows of resources if certain changes occur that
are expected to significantly affect the amount of the lease receivable.
B. Leases Receivable
The balances related to leases receivable and deferred inflows of resources as of June 30, 2022
were:
Lease Deferred Inflows
Receivable of Resources
Governmental Activities
Leases Receivable (Lessor)
General Fund:
Conference Center $2,409,308 $2,404,923
Costco 4,165,186 4,107,234
Billboards 6,881,282 6,695,107
Low and Moderate Income Housing Assets Fund:
Magnolia 1,197,345 1,183,182
Total governmental activities leases receivable $14,653,121 $14,390,446
96
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 10 – LEASES (Continued)
Conference Center – 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. The cost and carrying
amount of leased land under this lease receivable is $5,040,000. The City recognized $343,560 in
lease revenue and $82,454 in interest revenue during the current fiscal year related to this lease.
Also, the City has deferred inflows of resources associated with these leases that will be
recognized as revenue over the lease term.
Costco – 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. The City recognized $328,579 in lease revenue and
$129,373 in interest revenue during the current fiscal year related to this lease. Also, the City has
deferred inflows of resources associated with these leases that will be recognized as revenue over
the lease term.
Billboards – The City leases digital billboard space to third parties under three lease agreements.
The original terms of the leases were thirty years and as of June 30, 2022, the leases had 22 to 29
years remaining. The rent is based on a minimum annual guaranteed payment, paid on an annual
basis, which increases 15% every five years. The City recognized $252,169 in lease revenue and
$208,007 in interest revenue during the current fiscal year related to these leases. Also, the City
has deferred inflows of resources associated with these leases that will be recognized as revenue
over the lease term.
Magnolia – 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.
The City recognized $29,580 in lease revenue and $36,383 in interest revenue during the current
fiscal year related to this lease. Also, the City has deferred inflows of resources associated with
these leases that will be recognized as revenue over the lease term.
C. Lease Payable
The Conference Center Authority’s lease payable consists of the following as of June 30, 2022:
Balance
June 30, 2021 Balance Current
(as restated) Deductions June 30, 2022 Portion
Land Lease $2,748,483 $339,176 $2,409,307 $349,429
97
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 10 – LEASES (Continued)
The Authority has a property lease agreement with the City of South San Francisco for 30 years
expiring in 2029. Under the agreement, the City subleases to the Authority, the property in
exchange for the annual lease payment for the use of land. During the fiscal year, the lease
payments totaled $420,000. The total principal and interest paid during the year was $80,824 and
$339,176, respectively. The initial present value of the right of use asset and lease liability, at a
treasury bond rate of 3.00% over the thirty years, was $2,748,483. The balance of the right of use
asset as of June 30, 2022 was $1,948,783, net of accumulated amortization, which is reported
with the Authority’s capital assets in Note 3. The balance of the lease liability as of June 30, 2022
was $2,409,307. There are termination clauses included in the lease agreement, however
management has determined that it is not likely that those clauses will be exercised.
Future minimum lease payments as of June 30, 2022 are as follows:
Year Ending Principal Interest
June 30 Payments Payments Total
2023 $349,429 $70,571 $420,000
2024 359,990 60,010 420,000
2025 370,871 49,129 420,000
2026 382,080 37,920 420,000
2027 393,629 26,371 420,000
2028-2029 553,308 16,692 570,000
$2,409,307 $260,693 $2,670,000
NOTE 11 – JOINTLY GOVERNED ORGANIZATIONS
The City participates in the jointly governed organizations discussed below through formally
organized and separate entities established under the Joint Exercise of Powers Act of the State of
California. As separate legal entities, these entities exercise full powers and authorities within the
scope of the related Joint Powers Agreements including the preparation of annual budgets,
accountability for all funds, the power to make and execute contracts and the right to sue and be
sued. Each joint organization is governed by a board consisting of representatives from member
municipalities. Each board controls the operations of the respective joint organization, including
selection of management and approval of operating budgets, independent of any influence by
member municipalities beyond their representation on that board. Obligations and liabilities of
this joint organization are not the City’s responsibility and the City does not have an equity
interest in the assets of each joint organization except upon dissolution of the joint organization.
A. Oyster Point Marina
(OPM) was established in 1977 by the City and the San Mateo County Harbor District (Harbor
District) for the purpose of expanding, improving and operating the Oyster Point Marina and
Park. The governing board consists of two of the City's council members and two Harbor District
commissioners. The Harbor District operates OPM. Operation of the Marina provides revenues
for the marina's operations. The City retains title to the land; however, the City is not liable for
any obligations of the San Mateo County Harbor District. Condensed unaudited financial
information may be obtained from San Mateo County Harbor District, #1 Johnson Pier, Half
Moon Bay, CA 94019.
98
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 11 – JOINTLY GOVERNED ORGANIZATIONS (Continued)
B.Peninsula Traffic Congestion Relief Alliance (PTCRA)
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 the cities of South San Francisco, Brisbane, Colma, Daly City, Half Moon Bay,
Millbrae, Pacifica and San Bruno and seven other members for the purpose of mitigating traffic
congestion. The governing board consists of one council member from each member city. The
finance director of the City of San Carlos acts as the treasurer and controller of PTCRA. The
individual cities are not liable for the debts, liabilities or obligations of PTCRA. Each member
city has an equal interest in PTCRA. Condensed accrual basis unaudited financial information
may be obtained from the City of San Carlos Finance Department, 666 Elm Street, San Carlos,
CA 94070.
C.City/County Association of Governments (C/CAG)
C/CAG was established in 1990 by the County of San Mateo and the Cities of San Mateo County
for preparation, adoption, monitoring and enforcing of Countywide state mandated plans. A Board
of Directors consisting of one council member from each member city and one member from the
County Board of Supervisors governs C/CAG. The city treasurer of San Carlos acts as the treasurer
of C/CAG. The individual cities and the County are not liable for the debts, liabilities, or obligations
of C/CAG. Condensed unaudited cash basis financial information may be obtained from the City of
San Carlos Finance Department, 666 Elm Street, San Carlos, CA 94070.
NOTE 12 – RISK MANAGEMENT
A.Insurance Coverage
The City participates in Pooled Liability Assurance Network Joint Powers Authority (PLAN
JPA), a nonprofit benefit corporation established to provide liability insurance coverage, claims
and risk management, and legal defense to its participating members. PLAN JPA provides
$1,000,000 of self- funded general liability and automobile coverage (except $250,000 is for the
Employee benefits Plan Administration liability) and $29,000,000 excess liability coverage per
occurrence and is responsible for paying claims in excess of the City’s $100,000 self-insured
retention. The Plan includes a per occurrence or wrongful act or employee benefit wrongful act
up to $10,000,000 with two retained limits of $5,000,000. For the year ended June 30, 2022, the
City paid PLAN JPA $2,036,357 in premiums and did not receive a refund of premiums paid in
prior years. Financial statements may be obtained from PLAN JPA 1750 Creekside Oaks Drive,
Suite 200, Sacramento, CA 95833.
The City has also purchased excess coverage insurance for worker’s compensation claims from
Public Risk, Innovation, Solutions and Management (PRISM) (formerly CSAC Excess Insurance
Authority (CSAC-EIA)). PRISM provides coverage up to statutory limits in excess of the City’s
$500,000 self-insured retention. For the past five fiscal years, general liability and worker
compensation settlements did not exceed insurance coverage.
99
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 12 – 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, 2022 Fiscal Year
Workers' General 2020-2021
Compensation Liability Total Total
Balance, beginning of year $15,696,000 $53,797 $15,749,797 $14,965,224
Current year claims and changes in
estimates of prior years claims 2,608,615 282,672 2,891,287 3,637,605
Claims Paid (2,061,615) (96,211) (2,157,826) (2,853,032)
Balance, end of year $16,243,000 $240,258 $16,483,258 $15,749,797
Current portion $2,807,000 $240,258 $3,047,258 $2,878,797
NOTE 13 – COMMITMENTS AND CONTINGENCIES
A. Litigation
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.
B. Federal and State Grant Programs
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.
100
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 13 – COMMITMENTS AND CONTINGENCIES (Continued)
C.Miller Parking Garage
The Miller Parking Garage (“Parking Garage)”, constructed in 2011, is located at 329 Miller
Avenue in the City. The Parking Garage consists of a five-level open-air concrete structure
building of approximately 100,000 square feet with 244 parking spaces. Approximately 14,350
square feet of commercial and office space (the “Commercial Space”) is located on the ground
floor of the Parking Garage.
In February 2020, the City sold the Commercial Space for $1,247,950. In connection with the
sale of the Commercial Space, a condominium map was recorded with the County to create
separate assessor parcel numbers for the Commercial Space and the balance of the property
included within the Parking Garage. No rights to the parking spaces were granted to the owners
of the Commercial Space in connection with its sale. However, the owners of the Commercial
Space may use such spaces upon payment to the City of the applicable parking fees.
D. Construction Contract Dispute
Following a competitive bid process, the City awarded a contract for construction of certain
improvements related to the Grand Boulevard Initiative. The project finished well past the
contract completion date and the City withheld funds for late completion and to correct
incomplete and defective work. The City and the contractor engaged a third-party mediator, but
were unable to resolve the dispute at mediation in August 2022. The contractor filed a complaint
in San Mateo County Superior Court on September 14, 2022, seeking $6,500,000 in
compensatory damages, interest, and costs of suit. No trial date has been set as of November
2022. The City disputes the allegations and intends to vigorously pursue affirmative claims
against the contractor. The City may be negatively impacted should the court rule in favor of the
contractor, however any such impact cannot be determined at this time.
NOTE 14 – 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.
On July 1, 2018, the duties of the South San Francisco Oversight Board transferred to a new San
Mateo Countywide Oversight Board, which will now be responsible for overseeing the winddown
affairs of all Successor Agencies in San Mateo County, including the Successor Agency to the
South San Francisco 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, 2022 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, 2022.
101
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 14 – 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 50 years
Improvements 30 years
Machinery and equipment 5-20 years
Furniture and fixtures 12 years
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase is reflected in the capitalized value of the asset
constructed, net of interest earned on the invested proceeds over the same period. The
capitalization level is $20,000 for vehicles, and $100,000 for all else, including all other
equipment that is not a vehicle.
102
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 14 – FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTIVITIES (Continued)
Capital assets recorded at June 30 are comprised of:
Balance Balance
June 30, 2021 Retirement June 30, 2022
Fiduciary activities
Capital assets not being depreciated:
Land $111,219 $111,219
Total capital assets not
being depreciated 111,219 111,219
Capital assets being depreciated:
Buildings and Improvements 329,671 329,671
Equipment and Vehicle 242,190 242,190
Furniture and Fixtures 21,506 21,506
Total capital assets being depreciated 593,367 593,367
Less accumulated depreciation for:
Buildings and Improvements (84,953) ($6,594) (91,547)
Equipment and Vehicle (242,190)(242,190)
Furniture and Fixtures (21,506)(21,506)
Total accumulated depreciation (348,649) (6,594) (355,243)
Net capital assets being depreciated 244,718 (6,594) 238,124
Fiduciary activity capital assets, net $355,937 ($6,594) $349,343
D. Defeased Bonds
As of June 30, 2022, the outstanding balance of defeased debt was $3,905,000 for the 1997
Downtown /Central Redevelopment Tax Allocation Bonds.
E. 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.
103
CITY OF SOUTH SAN FRANCISCO
NOTES TO BASIC FINANCIALS STATEMENTS
For the Fiscal Year Ended June 30, 2022
NOTE 14 – FORMER REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR
AGENCY ACTIVITIES (Continued)
State Asset Transfer Review
The activities of the former Redevelopment Agency and the Successor Agency were also subject
to further examination by the State of California. The State Controller’s Office conducted 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. The results of
that review were issued in July 2015 and although the review did identify ineligible transfers of
assets from the former Redevelopment Agency to the City, the report reflected the current year
and prior year transfers and made no further demands for the return of assets to the Successor
Agency.
104
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2022
Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plans
Last 10 Years*
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021
Total Pension Liability
Service cost $3,449,973 $3,075,813 $3,079,994 $3,922,518 $4,001,207 $4,118,735 $4,267,487 $4,274,015
Interest on total pension liability 13,930,544 14,393,013 14,870,988 15,430,998 15,885,315 16,624,514 17,306,781 17,951,111
Changes of benefit terms
Changes of assumptions (3,374,655)12,421,358 (1,361,078)
Difference between expected and actual experience (1,567,798) (476,337) 1,958,164 187,342 2,853,948 1,771,483 1,018,943
Benefit payments, including refunds of employee
contributions (9,287,975) (10,407,243) (11,085,829) (11,565,392) (12,164,689) (12,756,888) (13,336,957) (13,832,759)
Net change in total pension liability 8,092,542 2,119,130 6,388,816 22,167,646 6,548,097 10,840,309 10,008,794 9,411,310
Total pension liability - beginning 188,659,588 196,752,130 198,871,260 205,260,076 227,427,722 233,975,819 244,816,128 254,824,922
Total pension liability - ending (a)$196,752,130 $198,871,260 $205,260,076 $227,427,722 $233,975,819 $244,816,128 $254,824,922 $264,236,232
Plan fiduciary net position
Contributions - employer $4,235,454 $4,546,984 $5,726,981 $5,228,454 $6,165,764 $6,851,659 $7,823,463 $8,623,876
Contributions - employee 1,466,176 1,411,273 1,622,453 1,720,600 1,727,041 1,816,507 1,883,698 2,006,497
Net investment income 21,712,340 3,221,551 687,860 15,616,363 12,458,090 10,240,873 8,084,207 38,008,815
Benefit payments, including refunds of employee
contributions (9,287,975) (10,407,243) (11,085,829) (11,565,392) (12,164,689) (12,756,888) (13,336,957) (13,832,759)
Plan to plan resource movement (50,555) 229 (365) (20) (32)
Administrative expense (160,268) (86,726) (205,472) (233,683) (112,374) (230,510) (167,557)
Other miscellaneous income (443,767) 365
Net change in plan fiduciary net position 18,125,995 (1,438,258) (3,135,032) 10,794,553 7,508,391 6,040,122 4,223,869 34,638,872
Plan fiduciary net position - beginning 125,614,993 143,740,988 142,302,730 139,167,698 149,962,251 157,470,642 163,510,764 167,734,633
Plan fiduciary net position - ending (b)$143,740,988 $142,302,730 $139,167,698 $149,962,251 $157,470,642 $163,510,764 167,734,633 202,373,505
Net pension liability - ending (a)-(b)$53,011,142 $56,568,530 $66,092,378 $77,465,471 $76,505,177 $81,305,364 $87,090,289 $61,862,727
Plan fiduciary net position as a percentage of the total
pension liability 73.06% 71.56% 67.80% 65.94% 67.30% 66.79% 65.82% 76.59%
Covered payroll $17,725,581 $17,798,104 $21,409,193 $29,390,370 $23,630,354 $24,993,270 $26,275,955 $27,681,286
Net pension liability as percentage of covered payroll 299.07% 317.83% 308.71% 263.57% 323.76% 325.31% 331.44% 223.48%
Notes to Schedule:
*Fiscal year 2015 was the 1st year of implementation.
Benefit changes:The figures above do not include any liability impact that may have resulted from plan changes
which occurred after the June 30 valuation date. This applies for voluntary benefit changes as well as any offers of
Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes in assumptions: In 2017, the accounting discount rate reduced from 7.65% to 7.15%. In 2016, 2018, 2019, 2020, and 2021,
there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate form 7.5% (net of administrative expense)
to 7.65% (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5% discount
rate.
106
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2022
Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plans
Last 10 Years*
SCHEDULE OF CONTRIBUTIONS
Fiscal Year Ended June 30 2015 2016 2017 2018 2019 2020 2021 2022
Actuarially determined contribution $4,210,973 $5,399,856 $5,228,454 $6,166,024 $6,851,659 $7,831,598 $8,616,536 $9,491,640
Contributions in relation to the actuarially
determined contributions 4,210,973 5,399,856 5,228,454 6,166,024 6,851,659 7,831,598 8,616,536 9,491,640
Contribution deficiency (excess)$0 $0 $0 $0 $0 $0 $0 $0
Covered payroll $17,798,104 $21,409,193 $29,390,370 $23,630,354 $24,993,270 $26,275,955 $27,681,286 $28,788,170
Contributions as a percentage of covered payroll 23.66% 25.22% 17.79% 26.09% 27.41% 29.81% 31.13% 32.97%
Notes to Schedule
Valuation date: 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age
Amortization method Level percentage of payroll
Asset valuation method Fair value of assets
Inflation 2.75% for 2015 to 2019, and 2.625% for 2020, and 2.50% for 2021 and 2022
Salary increases
Investment rate of return
Retirement age
Mortality
*Fiscal year 2015 was the 1st year of implementation
Varies by entry age and service
7.50% for 2015 to 2018, 7.375% for 2019, 7.25% for 2020, and 7.00%
for 2021 and 2022, net of administrative expenses, including inflation
The probabilities of Retirement are based on the CalPERS Experience
Study.
The probabilities of mortality are based on the CalPERS Experience
Study. Pre-retirement and Post-retirement mortality rates include 20
years of projected mortality improvement using Scale AA published by
the Society of Actuaries for 2015 to 2018. For 2019, 2020, 2021, and
2022, pre-retirement and post-retirement mortality rates include 15 years
of projected mortality improvement using 90% of Scale MP-2016
published by the Society of Actuaries.
107
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2022
Safety Agent Multiple-Employer Defined Benefit Pension Plans
Last 10 Years*
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021
Total Pension Liability
Service cost $5,143,842 $4,968,087 $5,329,842 $6,264,307 $6,511,672 $6,379,124 $6,880,000 $7,072,216
Interest on total pension liability 18,899,544 19,398,484 20,134,558 21,238,842 22,129,483 23,249,091 24,284,010 25,441,168
Changes of benefit terms
Changes of assumptions (4,789,129)18,010,606 (1,293,579)
Difference between expected and actual experience (4,226,388) (915,267) 4,520,149 1,318,613 2,853,684 742,624 1,772,836
Benefit payments, including refunds of employee
contributions (13,161,296) (13,556,606) (14,463,995) (14,760,979) (15,629,698) (15,909,734) (16,384,059) (17,313,787)
Net change in total pension liability 10,882,090 1,794,448 10,085,138 35,272,925 13,036,491 16,572,165 15,522,575 16,972,433
Total pension liability - beginning 256,002,648 266,884,738 268,679,186 278,764,324 314,037,249 327,073,740 343,645,905 359,168,480
Total pension liability - ending (a)$266,884,738 $268,679,186 $278,764,324 $314,037,249 $327,073,740 $343,645,905 $359,168,480 $376,140,913
Plan fiduciary net position
Contributions - employer $6,535,399 $7,191,715 $8,535,737 $8,071,060 $9,323,936 $10,164,921 $11,402,434 $12,413,770
Contributions - employee 2,151,163 1,714,039 1,961,907 1,980,507 2,134,552 2,486,989 2,890,991 2,893,339
Net investment income 29,348,051 4,264,997 950,612 21,553,126 17,363,158 14,404,633 11,506,885 54,912,645
Benefit payments, including refunds of employee
contributions (13,161,296) (13,556,606) (14,463,995) (14,760,979) (15,629,698) (15,909,734) (16,384,059) (17,313,787)
Plan to plan resource movement (229) (512) 20 32
Administrative expense (219,696) (118,968) (283,579) (325,104) (157,625) (326,879) (240,703)
Other miscellaneous income (617,378) 512
Net change in plan fiduciary net position 24,873,317 (605,551) (3,134,936) 16,560,135 12,248,954 10,989,716 9,089,404 52,665,264
Plan fiduciary net position - beginning 170,937,835 195,811,152 195,205,601 192,070,665 208,630,800 220,879,754 231,869,470 240,958,874
Plan fiduciary net position - ending (b)$195,811,152 $195,205,601 $192,070,665 $208,630,800 $220,879,754 $231,869,470 $240,958,874 $293,624,138
Net pension liability - ending (a)-(b) $71,073,586 $73,473,585 $86,693,659 $105,406,449 $106,193,986 $111,776,435 $118,209,606 $82,516,775
Plan fiduciary net position as a percentage of the total
pension liability 73.37% 72.65% 68.90% 66.44% 67.53% 67.47% 67.09% 78.06%
Covered payroll $15,994,412 $16,679,857 $18,986,895 $19,563,549 $21,932,480 $22,975,254 $24,264,339 $24,378,494
Net pension liability as percentage of covered payroll 444.37% 440.49% 456.60% 538.79% 484.19% 486.51% 487.17% 338.48%
Notes to Schedule:
*Fiscal year 2015 was the 1st year of implementation.
Benefit changes.The figures above do not include any liability impact that may have resulted from plan changes which occurred after the
June 30 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a.
Golden Handshakes).
Changes in assumptions: In 2017, the accounting discount rate reduced from 7.65% to 7.15%. In 2016, 2018, 2019, 2020, and 2021, there
were no changes. In 2015, amounts reported reflect an adjustment of the discount rate form 7.5% (net of administrative expense) to 7.65%
(without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5% discount rate.
108
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2022
Safety Agent Multiple-Employer Defined Benefit Pension Plans
Last 10 Years*
SCHEDULE OF CONTRIBUTIONS
Fiscal Year Ended June 30 2015 2016 2017 2018 2019 2020 2021 2022
Actuarially determined contribution $7,191,715 $8,538,138 $8,071,060 $9,322,781 $10,164,821 $11,401,783 $12,413,770 $13,387,919
Contributions in relation to the actuarially
determined contributions 7,191,715 8,538,138 8,071,060 9,322,781 10,164,821 11,401,783 12,413,770 13,387,919
Contribution deficiency (excess)$0 $0 $0 $0 $0 $0 $0 $0
Covered payroll $16,679,857 $18,986,895 $19,563,549 $21,932,480 $22,975,254 $24,264,339 $24,378,494 $24,325,363
Contributions as a percentage of covered payroll 43.12%44.97% 41.26% 42.51% 44.24% 46.99% 50.92% 55.04%
Notes to Schedule
Valuation date:6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age
Amortization method Level percentage of payroll
Asset valuation method Fair value of assets
Inflation 2.75% for 2015 to 2019, and 2.625% for 2020, and 2.50% for 2021 and 2022
Salary increases Varies by entry
Investment rate of return 7.50% for 2015
to 2018, 7.375%
Retirement age The
Mortality The
probabilities of
mortality are
based on the
CalPERS
Experience
Study. Pre-
*Fiscal year 2015 was the 1st year of implementation
109
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2022
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 6/30/17 6/30/18 6/30/2019 6/30/2020 6/30/2021
Total OPEB Liability
Service Cost $1,574 $1,535 $1,558 $1,604 $1,516
Interest 5,087 5,325 5,568 5,952 6,058
Changes in benefit terms
Differences between expected and actual experience 91 2,895 (3,332)
Changes of assumptions (672)(1,859)1,446
Benefit payments (2,901)(3,326)(3,378)(4,052)(4,009)
Net change in total OPEB liability 3,760 3,625 5,971 1,645 1,679
Total OPEB liability - beginning 75,240 79,000 82,625 88,596 90,241
Total OPEB liability - ending (a)$79,000 $82,625 $88,596 $90,241 $91,920
Plan fiduciary net position
Contributions - employer $3,703 $4,128 $4,180 $4,854 $4,810
Contributions - employee
Net investment income 1,803 1,566 1,402 838 7,141
Administrative expense (9)(37)(5)(12)(9)
Benefit payments (2,901)(3,326)(3,378)(4,052)(4,009)
Net change in plan fiduciary net position 2,596 2,331 2,199 1,628 7,933
Plan fiduciary net position - beginning 17,114 19,710 22,041 24,240 25,868
Plan fiduciary net position - ending (b)$19,710 $22,041 $24,240 $25,868 $33,801
Net OPEB liability - ending (a)-(b)$59,290 $60,584 $64,356 $64,373 $58,119
Plan fiduciary net position as a percentage of the total OPEB liability 24.95%26.68%27.36%28.67%36.77%
Covered-employee payroll $26,539 $26,986 $27,662 $28,215 $26,824
Net OPEB liability as a percentage of covered-employee payroll 223.41% 224.50% 232.65% 228.15% 216.67%
* Fiscal year 2018 was the first year of implementation.
110
CITY OF SOUTH SAN FRANCISCO
REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2022
SCHEDULE OF CONTRIBUTIONS
Retiree Healthcare OPEB Plan - Agent Multiple Employer
Last 10 fiscal years*
(Amounts in 000's)
Fiscal Year Ended June 30, 2018 2019 2020 2021 2022
Actuarially determined contribution $6,279 $6,839 $6,995 $7,253 $7,373
Contributions in relation to the
actuarially determined contribution 4,128 4,180 4,854 4,810 4,869
Contribution deficiency (excess) $2,151 $2,659 $2,141 $2,443 $2,504
Covered-employee payroll $26,986 $27,662 $28,215 $26,824 $25,079
Contributions as a percentage of
covered-employee payroll 15.30%15.11%17.20%17.93%19.41%
*Fiscal year 2018 was the first year of implementation.
Valuation Date •June 30, 2019
Contribution Policy • City contributes $802,000 per year into trust
Actuarial Cost Method •Entry Age Normal, Level Percentage of Payroll
Amortization Method •Level dollar
Amortization Period •Average of 21 years remaining for 2021/22
•6.75% at June 30, 2020
•6.75% at June 30, 2019
•Expected City contributions projected to keep sufficient plan assets to pay all
benefits from trust.
Inflation •2.75% per annum
Salary Increases •Aggregate - 3% annually
•Merit - CalPERS 1997-2015 Experience Study
Healthcare/Medical Trend •Non-Medicare - 7.00% for 2022, decreasing to an ultimate rate of 4.0% in
2076 and later years
•Medicare - 6.1% for 2022, decreasing to an ultimate rate of 4.0% in 2076 and
later yearsMortality, Retirement, Disability, Termination •CalPERS 1997-2015 Experience Study
Mortality Improvement •Mortality projected fully generational with Scale MP-2019
Healthcare participation for future retirees •100% if covered, 95% if waived
Retiree Healthcare OPEB Plan - Agent Multiple Employer
NOTES TO SCHEDULE OF EMPLOYER CONTRIBUTION
Methods and Assumptions for Actuarially Determined Contribution
Discount Rate and Long-Term Expected
Rate of Return on Assets
111
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SUPPLEMENTARY INFORMATION
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GENERAL FUND
The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund. The General Fund is comprised of
the following:
GENERAL PURPOSE FUND
This fund accounts for resources traditionally associated with government, such as administration, public
safety, library, parks maintenance, and recreation, outside of those accounted for in other funds.
MEASURE W FUND
This fund accounts for revenue as the result of the voter-approved one-half percent sales and use tax 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.
115
General Purpose Measure W Total
ASSETS
Cash and investments $41,281,273 $8,780,342 $50,061,615
Receivables:
Accounts 15,224,674 3,078,388 18,303,062
Accrued interest 161,122 161,122
Leases 13,455,776 13,455,776
Due from other funds 1,270,000 1,270,000
Due from Conference Center 40,379 40,379
Inventory 4,099 4,099
Restricted cash and investments 152,797 152,797
Properties held for redevelopment 14,763,033 14,763,033
Total Assets $86,353,153 $11,858,730 $98,211,883
LIABILITIES
Accounts payable $4,582,555 $6,891 $4,589,446
Accrued salaries and benefits 1,766,827 1,766,827
Other payable 842,046 842,046
Deposits 1,159,644 1,159,644
Total Liabilities 8,351,072 6,891 8,357,963
DEFERRED INFLOWS OF RESOURCES
Related to leases 13,207,264 13,207,264
FUND BALANCES
Nonspendable 4,099 4,099
Restricted 14,763,033 14,763,033
Committed 4,244,813 11,839,164 16,083,977
Assigned 7,469,764 12,675 7,482,439
Unassigned 38,313,108 38,313,108
Total Fund Balances 64,794,817 11,851,839 76,646,656
Total Liabilities and Fund Balances $86,353,153 $11,858,730 $98,211,883
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
COMBINING BALANCE SHEETS
JUNE 30, 2022
116
General Purpose Measure W Total
REVENUES
Property taxes $49,779,284 $49,779,284
Sales taxes 22,361,011 $15,399,766 37,760,777
Transient occupancy taxes 12,135,638 12,135,638
Franchise Fees 4,863,076 4,863,076
Other taxes 6,537,423 6,537,423
Intergovernmental 3,196,346 3,196,346
Interest and rentals 1,553,209 1,553,209
Licenses and permits 14,062,474 14,062,474
Charges for services 9,747,605 9,747,605
Fines and forfeitures 700,961 700,961
Other 515,004 515,004
Total Revenues 125,452,031 15,399,766 140,851,797
EXPENDITURES
Current:
City Council 252,677 252,677
City Clerk 887,678 887,678
City Treasurer 39,852 39,852
City Attorney 1,138,457 1,138,457
City Manager 3,911,694 279,786 4,191,480
Finance 3,148,914 3,148,914
Non-departmental 2,580,748 2,580,748
Human Resources 2,065,927 2,065,927
Fire 32,560,468 32,560,468
Police 33,281,487 33,281,487
Public Works 6,294,564 6,294,564
Parks and Recreation 18,092,526 18,092,526
Library 6,495,279 6,495,279
Economic and Community Development 11,006,922 11,006,922
Total Expenditures 121,757,193 279,786 122,036,979
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 3,694,838 15,119,980 18,814,818
OTHER FINANCING SOURCES (USES)
Gain from sale of property 1,507,641 1,507,641
Transfers in 4,763,729 4,763,729
Transfers out (10,033,749) (11,201,861) (21,235,610)
Total Other Financing Sources (Uses)(3,762,379) (11,201,861) (14,964,240)
Net Change in Fund Balances before special items (67,541) 3,918,119 3,850,578
SPECIAL ITEMS
Remittance of land sale proceeds (2,962,923)(2,962,923)
Net Change in Fund Balances (3,030,464)887,655
Fund balance - July 1 67,825,281 7,933,720 75,759,001
Fund balance - June 30 $64,794,817 $11,851,839 $76,646,656
CITY OF SOUTH SAN FRANCISCO
GENERAL FUND
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2022
117
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, 2022
Variance with
Final Budget
Actual Positive
Original Final Amount (Negative)
Resources (inflows):
Property taxes $41,074,710 $41,074,710 $49,779,284 $8,704,574
Sales taxes 19,531,177 20,281,177 22,361,011 2,079,834
Transient occupancy taxes 7,085,194 8,585,194 12,135,638 3,550,444
Franchise fees 4,600,000 4,600,000 4,863,076 263,076
Other taxes 3,614,753 3,614,753 6,537,423 2,922,670
Intergovernmental 2,325,338 5,818,982 3,196,346 (2,622,636)
Interest and rentals 3,564,976 3,504,976 1,553,209 (1,951,767)
Licenses and permits 16,453,166 16,453,166 14,062,474 (2,390,692)
Charges for services 9,287,470 7,848,478 9,747,605 1,899,127
Fines and forfeitures 676,975 676,975 700,961 23,986
Other 232,718 394,382 515,004 120,622
Amounts available for appropriation 108,446,477 112,852,793 125,452,031 12,599,238
Charges to appropriations (outflows)
City Council 292,426 292,427 252,677 39,750
City Clerk 1,151,844 1,231,044 887,678 343,366
City Treasurer 160,245 160,244 39,852 120,392
City Attorney 910,049 910,049 1,138,457 (228,408)
City Manager 3,214,467 4,106,430 4,159,376 (52,946)
Finance 3,807,781 4,385,682 3,603,809 781,873
Non-departmental 1,294,252 1,369,252 2,581,079 (1,211,827)
Human Resources 2,042,597 2,307,004 2,184,942 122,062
Fire 29,508,065 29,892,151 32,975,264 (3,083,113)
Police 32,386,774 32,843,169 33,383,916 (540,747)
Public Works 5,978,429 6,396,059 6,743,595 (347,536)
Parks and Recreation 16,729,027 18,371,855 18,920,003 (548,148)
Library 6,221,935 6,897,585 6,495,735 401,850
Economic and Community Development 8,227,651 16,293,222 15,860,574 432,648
Total charges to appropriations 111,925,542 125,456,173 129,226,957 (3,770,784)
OTHER FINANCING SOURCES (USES)
Gain from sale of property 630,000 690,000 1,507,641 817,641
Transfers in 1,187,080 5,519,792 4,763,729 (756,063)
Transfers out (1,125,000) (13,098,660) (10,033,749) 3,064,911
Total Other Financing Sources (Uses) 692,080 (6,888,868) (3,762,379) 3,126,489
NET CHANGE IN FUND BALANCES
BEFORE SPECIAL ITEMS (2,786,985) (19,492,248) (7,537,305) 11,954,943
SPECIAL ITEMS
Remittance of land sale proceeds (2,962,923) (2,962,923)
Net Change in Fund Balances ($2,786,985) ($19,492,248)(10,500,228) $8,992,020
Fund Balance - July 1 67,825,281
Adjustment to budgetary basis:
Encumbrance adjustments 7,469,764
Fund Balance - June 30 $64,794,817
(Continued)
Budgeted Amounts
General Purpose
118
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, 2022
Variance with
Final Budget
Actual Positive
Original Final Amount (Negative)
Resources (inflows):
Property taxes
Sales taxes $12,708,000 $12,708,000 $15,399,766 $2,691,766
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 12,708,000 12,708,000 15,399,766 2,691,766
Charges to appropriations (outflows)
City Council
City Clerk
City Treasurer
City Attorney
City Manager 393,090 405,765 292,461 113,304
Finance
Non-departmental
Human Resources
Fire
Police
Public Works
Parks and Recreation
Library
Economic and Community Development
Total charges to appropriations 393,090 405,765 292,461 113,304
OTHER FINANCING SOURCES (USES)
Gain from sale of property
Transfers in
Transfers out (8,646,783) (21,417,675) (11,201,861) 10,215,814
Total Other Financing Sources (Uses)(8,646,783) (21,417,675) (11,201,861) 10,215,814
NET CHANGE IN FUND BALANCES
BEFORE SPECIAL ITEMS 3,668,127 (9,115,440)3,905,444 13,020,884
SPECIAL ITEMS
Remittance of land sale proceeds
Net Change in Fund Balances $3,668,127 ($9,115,440)3,905,444 $13,020,884
Fund Balance - July 1 7,933,720
Adjustment to budgetary basis:
Encumbrance adjustments 12,675
Fund Balance - June 30 $11,851,839
(Continued)
Budgeted Amounts
Measure W
119
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, 2022
Variance with
Final Budget
Actual Positive
Original Final Amount (Negative)
Resources (inflows):
Property taxes $41,074,710 $41,074,710 $49,779,284 $8,704,574
Sales taxes 32,239,177 32,989,177 37,760,777 4,771,600
Transient occupancy taxes 7,085,194 8,585,194 12,135,638 3,550,444
Franchise fees 4,600,000 4,600,000 4,863,076 263,076
Other taxes 3,614,753 3,614,753 6,537,423 2,922,670
Intergovernmental 2,325,338 5,818,982 3,196,346 (2,622,636)
Interest and rentals 3,564,976 3,504,976 1,553,209 (1,951,767)
Licenses and permits 16,453,166 16,453,166 14,062,474 (2,390,692)
Charges for services 9,287,470 7,848,478 9,747,605 1,899,127
Fines and forfeitures 676,975 676,975 700,961 23,986
Other 232,718 394,382 515,004 120,622
Amounts available for appropriation 121,154,477 125,560,793 140,851,797 15,291,004
Charges to appropriations (outflows)
City Council 292,426 292,427 252,677 39,750
City Clerk 1,151,844 1,231,044 887,678 343,366
City Treasurer 160,245 160,244 39,852 120,392
City Attorney 910,049 910,049 1,138,457 (228,408)
City Manager 3,607,557 4,512,195 4,451,837 60,358
Finance 3,807,781 4,385,682 3,603,809 781,873
Non-departmental 1,294,252 1,369,252 2,581,079 (1,211,827)
Human Resources 2,042,597 2,307,004 2,184,942 122,062
Fire 29,508,065 29,892,151 32,975,264 (3,083,113)
Police 32,386,774 32,843,169 33,383,916 (540,747)
Public Works 5,978,429 6,396,059 6,743,595 (347,536)
Parks and Recreation 16,729,027 18,371,855 18,920,003 (548,148)
Library 6,221,935 6,897,585 6,495,735 401,850
Economic and Community Development 8,227,651 16,293,222 15,860,574 432,648
Total charges to appropriations 112,318,632 125,861,938 129,519,418 (3,657,480)
OTHER FINANCING SOURCES (USES)
Gain from sale of property 630,000 690,000 1,507,641 817,641
Transfers in 1,187,080 5,519,792 4,763,729 (756,063)
Transfers out (9,771,783) (34,516,335) (21,235,610) 13,280,725
Total Other Financing Sources (Uses)(7,954,703) (28,306,543) (14,964,240) 13,342,303
NET CHANGE IN FUND BALANCES
BEFORE SPECIAL ITEMS 881,142 (28,607,688) (3,631,861) 24,975,827
SPECIAL ITEMS
Remittance of land sale proceeds (2,962,923) (2,962,923)
Net Change in Fund Balances $881,142 ($28,607,688) (6,594,784) $22,012,904
Fund Balance - July 1 75,759,001
Adjustment to budgetary basis:
Encumbrance adjustments 7,482,439
Fund Balance - June 30 $76,646,656
Budgeted Amounts
Total
120
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.
Community Development Block Grant – Accounts for Federal monies received to be expended
for development of jobs and suitable housing for low-income residents.
Maintenance Districts – 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.
San Mateo County (SMC) Measure W ½ Sales Tax – Accounts for the City’s portion of the
special half cent sales tax receipts restricted for congestion relief and transit improvements.
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:
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.
Commercial Linkage Impact Fee – Accounts for affordable housing funding created by new
commercial development.
Library Impact Fee – Accounts for citywide fees to provide new development’s share of the
expansion, rehabilitation and replacement of library facilities and collections to accommodate the
increased demand for library services caused by future development
Debt service funds are used to account for resources used for the payment of debt service on long-term
debt. Debt service funds used at the City of South San Francisco include:
Debt Service – Accounts for expenditures associated with the acquisition, construction, and
installation of certain capital improvements constituting the new City police station located within
the City’s new Civic Center Campus, and related improvements, facilities and equipment, and
pay the costs incurred in connection with the issuance of the Series 2020A Bonds, as well as
capital improvements constituting the City’s new Civic Center Campus, and related
improvements, facilities and equipment, and pay the costs incurred in connection with the
issuance of the Series 2021A Bonds.
122
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CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2022
SPECIAL REVENUE FUNDS
Community
Developer Development Maintenance Transportation
Gas Tax Contributions Block Grant Districts Sales Tax
ASSETS
Cash and investments $163,649 $11,435,046 $4,824,117 $3,680,937
Receivables:
Accounts 123,159 453,481 $249,130 55,850 22,727
Accrued interest 1,099 29,183 10,014
Loans 677,858
Restricted cash and investments 2,091
Total Assets $287,907 $11,917,710 $929,079 $4,879,967 $3,713,678
LIABILITIES
Liabilities:
Accounts payable $161,397 $30,630 $20,261
Other payable 524,787
Deposits 4,188,966
Unearned revenue
Due to other funds 210,000
Total Liabilities 4,350,363 765,417 20,261
Fund Balances:
Restricted $287,907 7,567,347 163,662 4,859,706 $3,713,678
Total Fund Balances 287,907 7,567,347 163,662 4,859,706 3,713,678
Total Liabilities and Fund Balances $287,907 $11,917,710 $929,079 $4,879,967 $3,713,678
124
SPECIAL REVENUE FUNDS
Road
Solid Supplemental Affordable PEG Transit Station Maintenance
Waste Law Enforce- City Housing Equipment and Enhancement and
Reduction ment Services Programs Trust Access In-Lieu Fee Rehabilitation
$774,021 $965 $11,008,982 $872,019 $1,690,372 $2,490,013 $1,898,482
34,871 332 39,335 119,856
134 35,175 2,815 5,115 6,079 4,677
15,106
$808,892 $1,099 $11,044,157 $890,272 $1,734,822 $2,496,092 $2,023,015
$2,104 $135,585 $43,539
11,010
217,980
2,104 135,585 272,529
806,788 $1,099 10,908,572 617,743 $1,734,822 $2,496,092 $2,023,015
806,788 1,099 10,908,572 617,743 1,734,822 2,496,092 2,023,015
$808,892 $1,099 $11,044,157 $890,272 $1,734,822 $2,496,092 $2,023,015
(Continued)
125
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2022
SPECIAL
REVENUE
FUND CAPITAL PROJECTS FUNDS
SMC Measure W Public Oyster Point Sewer Oyster Point
1/2 Cent Safety Improvement Capacity Development
Sales Tax Impact Fee Impact Fees Charges Impact Fees
ASSETS
Cash and investments $1,278,810 $2,546,153 $29,149 $10,382,735 $38,906
Receivables:
Accounts 83,097 98,053
Accrued interest 2,770 5,456 687 25,929
Loans
Restricted cash and investments
Total Assets $1,364,677 $2,551,609 $29,836 $10,408,664 $136,959
LIABILITIES
Liabilities:
Accounts payable $37,072 $143,943
Other payable
Deposits
Unearned revenue
Due to other funds
Total Liabilities 37,072 143,943
Fund Balances:
Restricted $1,364,677 2,514,537 $29,836 $10,408,664 (6,984)
Total Fund Balances 1,364,677 2,514,537 29,836 10,408,664 (6,984)
Total Liabilities and Fund Balances $1,364,677 $2,551,609 $29,836 $10,408,664 $136,959
126
DEBT SERVICE
CAPITAL PROJECTS FUNDS FUND
Total
Park Land Park Bicycle and Commercial Nonmajor
Acquisition Construction Pedestrian Linkage Library Debt Governmental
Fee Fee Impact Fee Impact Fee Impact Fee Service Funds
$3,223,001 $8,895,473 $185,475 $6,923,491 $673 $72,342,469
1,279,891
7,071 19,439 428 30,107 1 186,179
2,000,000 2,692,964
2,091
$3,230,072 $8,914,912 $185,903 $8,953,598 $674 $76,503,594
$39,500 $614,031
535,797
4,188,966
217,980
210,000
39,500 5,766,774
$3,230,072 $8,914,912 $185,903 8,914,098 $674 70,736,820
3,230,072 8,914,912 185,903 8,914,098 674 70,736,820
$3,230,072 $8,914,912 $185,903 $8,953,598 $674 $76,503,594
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, 2022
SPECIAL REVENUE FUNDS
Community
Developer Development Maintenance Transportation
Gas Tax Contributions Block Grant Districts Sales Tax
REVENUES
Property taxes $2,220,652
Sales taxes
Other taxes $2,122,941
Intergovernmental $1,716,706 $664,707
Interest and rentals (12,714) ($332,865) 15,258 (114,917)
Charges for services 2,613,506 203,639
Other 37,299
Total Revenues 1,703,992 2,317,940 883,604 2,220,652 2,008,024
EXPENDITURES
Current:
Fire
Police
Public works
Parks and recreation 2,203,316
Economic and community development 529,538 828,328
Other
Debt service:
Principal repayments
Interest and fiscal charges
Total Expenditures 529,538 828,328 2,203,316
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 1,703,992 1,788,402 55,276 17,336 2,008,024
OTHER FINANCING SOURCES (USES)
Transfers in 8,496 25,968 2,362
Transfers out (1,746,357) (674,452)(821,307)
Total Other Financing Sources (Uses)(1,746,357) (665,956)25,968 (818,945)
Net Change in Fund Balances (42,365) 1,122,446 55,276 43,304 1,189,079
Fund balance - July 1 330,272 6,444,901 108,386 4,816,402 2,524,599
Fund balance - June 30 $287,907 $7,567,347 $163,662 $4,859,706 $3,713,678
128
SPECIAL REVENUE FUNDS
Road
Solid Supplemental Affordable PEG Transit Station Maintenance
Waste Law Enforce- City Housing Equipment and Enhancement and
Reduction ment Services Programs Trust Access In-Lieu Fee Rehabilitation
$166,041
$1,343,632
(1,505) ($358,098) ($31,346) ($58,804) ($70,109) (53,544)
$209,224 1,041,789
362,502 5,450 157,275 1,253,473
209,224 164,536 1,046,193 (25,896)98,471 1,183,364 1,290,088
64,536
75,656
1,049,683 185,386
75,656 64,536 1,049,683 185,386
133,568 100,000 (3,490) (211,282)98,471 1,183,364 1,290,088
(28,541) (100,000) (489,105)(464,237) (296,282)
(28,541) (100,000) (489,105)(464,237) (296,282)
105,027 (492,595) (211,282)98,471 719,127 993,806
701,761 1,099 11,401,167 829,025 1,636,351 1,776,965 1,029,209
$806,788 $1,099 $10,908,572 $617,743 $1,734,822 $2,496,092 $2,023,015
(Continued)
129
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2022
SPECIAL
REVENUE
FUND CAPITAL PROJECTS FUNDS
SMC Measure W Public Oyster Point Sewer Oyster Point
1/2 Cent Safety Improvement Capacity Development
Sales Tax Impact Fee Impact Fees Charges Impact Fees
REVENUES
Property taxes
Sales taxes $825,500
Other taxes
Intergovernmental $13,302,803
Interest and rentals (31,622) ($62,973) ($8,080) ($298,394)
Charges for services 1,744,396 1,444,207 3,130,802 696,031
Other
Total Revenues 793,878 1,681,423 1,436,127 2,832,408 13,998,834
EXPENDITURES
Current:
Fire 37,072
Police
Public works 2,800 14,058,921
Parks and recreation
Economic and community development
Other
Debt service:
Principal repayments 1,445,000
Interest and fiscal charges
Total Expenditures 37,072 1,445,000 2,800 14,058,921
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 793,878 1,644,351 (8,873) 2,829,608 (60,087)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out (43,462) (629,200) (147,072)
Total Other Financing Sources (Uses) (43,462) (629,200) (147,072)
Net Change in Fund Balances 750,416 1,015,151 (8,873) 2,682,536 (60,087)
Fund balance - July 1 614,261 1,499,386 38,709 7,726,128 53,103
Fund balance - June 30 $1,364,677 $2,514,537 $29,836 $10,408,664 ($6,984)
130
DEBT SERVICE
CAPITAL PROJECTS FUNDS FUND
Total
Park Land Park Bicycle and Commercial Nonmajor
Acquisition Construction Pedestrian Linkage Library Debt Governmental
Fee Fee Impact Fee Impact Fee Impact Fee Service Funds
$2,220,652
825,500
2,288,982
17,027,848
($79,929) ($223,229) ($4,891) ($347,603) ($19) (2,075,384)
1,707,708 3,963,057 73,981 3,425,285 693 20,254,318
1,815,999
1,627,779 3,739,828 69,090 3,077,682 674 42,357,915
37,072
64,536
14,137,377
2,203,316
1,357,866
4,375,209 5,610,278
$3,190,000 4,635,000
5,097,833 5,097,833
4,375,209 8,287,833 33,143,278
1,627,779 3,739,828 69,090 (1,297,527) 674 (8,287,833) 9,214,637
8,287,833 8,324,659
(1,480) (169,698)(5,611,193)
(1,480) (169,698) 8,287,833 2,713,466
1,626,299 3,570,130 69,090 (1,297,527) 674 11,928,103
1,603,773 5,344,782 116,813 10,211,625 58,808,717
$3,230,072 $8,914,912 $185,903 $8,914,098 $674 $70,736,820
131
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, 2022
GAS TAX
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Property taxes
Sales taxes
Other taxes
Intergovernmental $1,886,008 $1,716,706 ($169,302) $610,685 $664,707 $54,022
Interest and rentals 15,000 (12,714) (27,714) 72,569 15,258 (57,311)
Charges for services 203,639 203,639
Other
Total Revenues 1,901,008 1,703,992 (197,016) 683,254 883,604 200,350
EXPENDITURES
Current:
Police
Public works
Parks and recreation
Economic and community development 856,551 1,072,940 (216,389)
Other
Debt service:
Principal repayments
Interest and fiscal charges
Total Expenditures 856,551 1,072,940 (216,389)
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 1,901,008 1,703,992 (197,016) (173,297) (189,336) (16,039)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out (2,421,465) (1,746,357) 675,108
Total Other Financing Sources (Uses) (2,421,465) (1,746,357) 675,108
NET CHANGE IN FUND BALANCES ($520,457) (42,365) $478,092 ($173,297) (189,336) ($16,039)
Adjustment to budgetary basis:
Encumbrance adjustments 244,612
Fund balance - July 1 330,272 108,386
Fund balance - June 30 $287,907 $163,662
BLOCK GRANT
COMMUNITY DEVELOPMENT
132
MAINTENANCE DISTRICTS SOLID WASTE REDUCTION
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative)
$1,903,851 $2,220,652 $316,801
$1,527,755 $2,122,941 $595,186
25,000 (114,917) (139,917)
$180,000 $209,224 $29,224
1,903,851 2,220,652 316,801 1,552,755 2,008,024 455,269 180,000 209,224 29,224
26,754 (26,754)214,843 75,656 139,187
2,219,453 2,203,316 16,137
126,753 (126,753)
2,219,453 2,230,070 (10,617)214,843 202,409 12,434
(315,602) (9,418) 306,184 1,552,755 2,008,024 455,269 (34,843) 6,815 41,658
25,968 25,968 2,362 2,362
(1,882,795) (821,307) 1,061,488 (106,627) (28,541) 78,086
25,968 25,968 (1,882,795) (818,945) 1,063,850 (106,627) (28,541) 78,086
($289,634) 16,550 $306,184 ($330,040) 1,189,079 $1,519,119 ($141,470) (21,726) $119,744
26,754 126,753
4,816,402 2,524,599 701,761
$4,859,706 $3,713,678 $806,788
(Continued)
TRANSPORTATION SALES TAX
133
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, 2022
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Property taxes
Sales taxes
Other taxes $100,000 $166,041 $66,041
Intergovernmental
Interest and rentals (1,505) (1,505)($358,098) ($358,098)
Charges for services 1,041,789 $1,041,789
Other 362,502 362,502
Total Revenues 100,000 164,536 64,536 1,046,193 1,046,193
EXPENDITURES
Current:
Police 64,536 (64,536)
Public works
Parks and recreation
Economic and community development
Other 1,049,683 (1,049,683)
Debt service:
Principal repayments
Interest and fiscal charges
Total Expenditures 64,536 (64,536)1,049,683 (1,049,683)
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 100,000 100,000 (3,490) (3,490)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out (100,000) (100,000)($1,934,611) (489,105) 1,445,506
Total Other Financing Sources (Uses) (100,000) (100,000)(1,934,611) (489,105) 1,445,506
NET CHANGE IN FUND BALANCES ($1,934,611) (492,595) $1,442,016
Adjustment to budgetary basis:
Encumbrance adjustments
Fund balance - July 1 1,099 11,401,167
Fund balance - June 30 $1,099 $10,908,572
CITY PROGRAMSENFORCEMENT SERVICES
SUPPLEMENTAL LAW
134
PEG
AFFORDABLE HOUSING TRUST EQUIPMENT AND ACCESS
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative)
$217,980 (217,980)$1,300,000 $1,343,632 $43,632
($31,346) ($31,346) $5,000 ($58,804) ($63,804)(53,544) (53,544)
5,450 5,450 125,000 157,275 32,275
217,980 (25,896) (243,876) 130,000 98,471 (31,529) 1,300,000 1,290,088 (9,912)
374,227 280,336 93,891
374,227 280,336 93,891
(156,247) (306,232) (149,985) 130,000 98,471 (31,529) 1,300,000 1,290,088 (9,912)
(2,477,055) (296,282) 2,180,773
(2,477,055) (296,282) 2,180,773
($156,247) (306,232) ($149,985) $130,000 98,471 ($31,529) ($1,177,055) 993,806 $2,170,861
94,950
829,025 1,636,351 1,029,209
$617,743 $1,734,822 $2,023,015
(Continued)
ROAD MAINTENANCE
AND REHABILITATION
135
CITY OF SOUTH SAN FRANCISCO
NONMAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (NON GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2022
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Property taxes
Sales taxes $600,000 $825,500 $225,500
Other taxes
Intergovernmental
Interest and rentals (31,622) (31,622)
Charges for services
Other
Total Revenues 600,000 793,878 193,878
EXPENDITURES
Current:
Police
Public works
Parks and recreation
Economic and community development
Other
Debt service:
Principal repayments $3,190,000 $3,190,000
Interest and fiscal charges 5,097,833 5,097,833
Total Expenditures 8,287,833 8,287,833
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 600,000 793,878 193,878 (8,287,833) (8,287,833)
OTHER FINANCING SOURCES (USES)
Transfers in 8,287,833 8,287,833
Transfers out (641,753) (43,462) 598,291
Total Other Financing Sources (Uses) (641,753) (43,462) 598,291 8,287,833 8,287,833
NET CHANGE IN FUND BALANCES ($41,753) 750,416 $792,169
Adjustment to budgetary basis:
Encumbrance adjustments
Fund balance - July 1 614,261
Fund balance - June 30 $1,364,677
DEBT SERVICE FUND
SMC MEASURE W
1/2 CENT SALES TAX
136
INTERNAL SERVICE FUNDS
Internal service funds account for department services and financing performed for other departments
within the same governmental jurisdiction. Funding comes from charges assessed to the departments
benefiting from the service. Internal service funds used at the City include:
City Service – Accounts for vehicle maintenance and information technology services provided
to City departments.
Self Insurance – Accounts for workers' compensation, general liability and property damage
claim activity and financing is represented in this fund.
Health and Retirement Benefits – Accounts for health and retirement benefits paid on the
behalf of eligible City employees.
Equipment Replacement – Accounts for resources set-aside for the future replacement of City
vehicles and equipment.
137
CITY OF SOUTH SAN FRANCISCO
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
JUNE 30, 2022
Health and
Self Retirement Equipment
City Service Insurance Benefits Replacement Total
ASSETS
Current assets:
Cash and investments $2,901,666 $18,410,189 $10,357,318 $6,728,360 $38,397,533
Receivables:
Accounts
Accrued interest 9,122 52,307 24,769 18,894 105,092
Deposit 216,000 93,790 309,790
Prepaid items 1,204,373 1,204,373
Total current assets 2,910,788 18,678,496 11,680,250 6,747,254 40,016,788
Noncurrent assets:
Capital assets:
Depreciable, net of accumulated depreciation 4,402,557 4,402,557
Total non-current assets 4,402,557 4,402,557
Total Assets 2,910,788 18,678,496 11,680,250 11,149,811 44,419,345
LIABILITIES
Current liabilities:
Accounts payable 125,149 29,571 206,804 68,035 429,559
Other payable 32 32
Current portion of accrued insurance loss 3,047,258 3,047,258
Current portion of compensated absences 64,204 1,156,941 1,221,145
Current portion of long-term debt 144,637 144,637
Total current liabilities 189,353 3,076,829 1,363,745 212,704 4,842,631
Noncurrent liabilities:
Accrued insurance loss 13,436,000 13,436,000
Compensated absences obligation 160,866 567,128 727,994
Total noncurrent liabilities 160,866 13,436,000 567,128 14,163,994
Total Liabilities 350,219 16,512,829 1,930,873 212,704 19,006,625
NET POSITION:
Net investment in capital assets 4,257,919 4,257,919
Unrestricted 2,560,569 2,165,667 9,749,377 6,679,188 21,154,801
Total Net Position $2,560,569 $2,165,667 $9,749,377 $10,937,107 $25,412,720
138
Health and
Self Retirement Equipment
City Service Insurance Benefits Replacement Total
OPERATING REVENUES
Charges for services $5,387,183 $6,420,013 $15,359,131 $1,370,243 $28,536,570
Total Operating Revenues 5,387,183 6,420,013 15,359,131 1,370,243 28,536,570
OPERATING EXPENSES
Personnel expenses 2,199,493 876,699 15,118,036 18,194,228
Professional services 469,266 98,461 567,727
Program supplies 1,707,775 1,125 328,446 2,037,346
Insurance 12,988 2,610,838 2,623,826
Self-insurance and claims 2,248,076 2,248,076
Repair and maintenance 657,991 198,626 856,617
Utilities 176,937 176,937
Depreciation 967,562 967,562
Other 14,972 541,005 555,977
Total Operating Expenses 5,239,422 5,834,074 15,660,166 1,494,634 28,228,296
Operating Income (Loss)147,761 585,939 (301,035) (124,391) 308,274
NONOPERATING
REVENUES (EXPENSES)
Interest income (104,605) (600,713) (287,019) (217,390) (1,209,727)
Interest expense (6,614)(6,614)
Gain from disposal of capital assets 10,418 10,418
Other 335,290 335,290
Total Nonoperating
Revenues (Expenses)(104,605) (265,423) (287,019) (213,586) (870,633)
Net income (loss) before transfers 43,156 320,516 (588,054) (337,977) (562,359)
TRANSFERS
Transfers in 49,440 250,000 832,865 1,132,305
Change in Net Position 92,596 320,516 (338,054)494,888 569,946
Net Position - July 1 2,467,973 1,845,151 10,087,431 10,442,219 24,842,774
Net Position - June 30 $2,560,569 $2,165,667 $9,749,377 $10,937,107 $25,412,720
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
CITY OF SOUTH SAN FRANCISCO
139
CITY OF SOUTH SAN FRANCISCO
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
Health and
Self Retirement Equipment
City Service Insurance Benefits Replacement Total
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from interfund service provided $5,418,210 $6,755,303 $15,359,131 $1,370,243 $28,902,887
Cash payments to suppliers for goods and services (3,039,929) (2,709,299)(509,095) (6,258,323)
Cash payments to employees for services (2,184,197) (954,835) (16,902,464)(20,041,496)
Cash payments for judgments and claims (1,514,615)(1,514,615)
Net Cash Provided by Operating Activities 194,084 1,576,554 (1,543,333) 861,148 1,088,453
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in 49,440 250,000 832,865 1,132,305
Net Cash Provided by Noncapital Financing Activities 49,440 250,000 832,865 1,132,305
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Principal paid on capital lease (140,892) (140,892)
Interest payments (6,614)(6,614)
Acquisition of capital assets, net (424,683) (424,683)
Proceeds from the sale of capital assets 17,719 17,719
Net Cash Used in Capital and Related Financing Activities (554,470) (554,470)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received (paid)(237,931) (1,361,148) (634,023) (493,331) (2,726,433)
Changes in fair values of investments 131,457 753,848 356,973 272,316 1,514,594
Net Cash Provided by Investing Activities (106,474) (607,300) (277,050) (221,015) (1,211,839)
Net Increase (Decrease) in cash and cash equivalents 137,050 969,254 (1,570,383) 918,528 454,449
Cash and cash equivalents, beginning 2,764,616 17,440,935 11,927,701 5,809,832 37,943,084
Cash and cash equivalents, ending $2,901,666 $18,410,189 $10,357,318 $6,728,360 $38,397,533
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)$147,761 $585,939 ($301,035) ($124,391) $308,274
Adjustments to reconcile operating income (loss)
to cash flows from operating activities:
Depreciation 967,562 967,562
Other non-operating revenue (expenses)335,290 335,290
Net change in assets and liabilities:
Accounts and lease receivables 31,027 31,027
Deposit
Prepaid items (1,204,373)(1,204,373)
Accounts payable (172) (78,136) 84,551 17,948 24,191
Other payable 29 29
Accrued insurance losses 733,461 733,461
Compensated absence obligations 15,468 (122,476)(107,008)
Net Cash Provided by (Used in) Operating Activities $194,084 $1,576,554 ($1,543,333) $861,148 $1,088,453
NONCASH TRANSACTIONS
Retirement of capital assets ($7,301) ($7,301)
140
CUSTODIAL FUNDS
Custodial Funds report resources, not in a trust, that are held by the City for other parties outside of the
City’s reporting entity.
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. The City does not make any contributions to the fund.
Oyster Point CFD – Accounts for Community Facilities District No. 2021-01 special assessment
collections and debt service payments.
141
CITY OF SOUTH SAN FRANCISCO
CUSTODIAL FUNDS
COMBINING STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2022
SSF Employee
Deferred Comp
Trust Oyster Point
Oversight CFD TOTAL
ASSETS
Cash and investments $139,655 $139,655
Interest receivable 396 396
Restricted cash and investments $20,221,759 20,221,759
Total Assets 140,051 20,221,759 20,361,810
LIABILITIES
Accounts payable 2,500 2,500
Total Liabilities 2,500 2,500
NET POSITION
Restricted for others 137,551 137,551
Restricted for bondholders 20,221,759 20,221,759
Total Net Position $137,551 $20,221,759 $20,359,310
142
CITY OF SOUTH SAN FRANCISCO
CUSTODIAL FUNDS
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
SSF Employee
Deferred Comp
Trust Oyster Point
Oversight CFD TOTAL
ADDITIONS
Plan contributions $32,041 $32,041
Contribution from property owners $20,764,872 20,764,872
Interest and rentals (4,559) 11,452 6,893
Total Additions 27,482 20,776,324 20,803,806
DEDUCTIONS
Professional services 20,100 20,100
Payments to bondholders 554,565 554,565
Total Deductions 20,100 554,565 574,665
Change in net position 7,382 20,221,759 20,229,141
NET POSITION
Beginning of the year 130,169 130,169
End of the year $137,551 $20,221,759 $20,359,310
143
This Page Left Intentionally Blank
STATISTICAL SECTION
This part of the City’s Annual Comprehensive 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.Property Tax Levies and Collections
Debt Capacity
These schedules present information to help the reader assess the affordability of the City’s current levels
of outstanding debt and the City’s ability to issue additional debt in the future:
1.Ratio of Outstanding Debt by Type
2.Computation of Direct and Overlapping Debt
3.Computation of Legal Bonded Debt Margin
4.Continuing Disclosure Requirements:
a.Revenue Bond Coverage
b.Sewer Debt Service Coverage
c.Bonded Debt Pledge Revenue Coverage
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the City’s financial activities take place:
1.Demographic and Economic Statistics
2.Principal Employers
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information
in the City’s financial report relates to the services the City provides and the activities it performs:
1.Full-Time City Government Employees by Function
2.Operating Indicators by Function/Program
3.Capital Asset Statistics by Function/Program
145
STATISTICAL SECTION - (Continued)
Miscellaneous Information
1.Collection and Use of 1% Special Transient Occupancy Tax
Sources
Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive
Financial Reports for the relevant year.
146
2013 2014 2015 2016 2017
Governmental activities
Net investment in capital assets $216,508,668 $230,440,390 $230,517,037 $231,142,079 $254,344,554
Restricted 30,514,986 42,367,623 49,311,828 52,406,602 54,478,093
Unrestricted 8,021,490 (12,317,511) (134,389,522) (120,119,617) (86,808,434)
Total governmental activities net position $255,045,144 $260,490,502 $145,439,343 $163,429,064 $222,014,213
Business-type activities
Net investment in capital assets $72,217,660 $78,045,318 $78,598,277 $83,930,073 $86,167,704
Restricted
Unrestricted 13,353,988 15,367,085 4,196,654 6,243,225 7,199,925
Total business-type activities net position $85,571,648 $93,412,403 $82,794,931 $90,173,298 $93,367,629
Primary government
Net investment in capital assets $288,726,328 $308,485,708 $309,115,314 $315,072,152 $340,512,258
Restricted 30,514,986 42,367,623 49,311,828 52,406,602 54,478,093
Unrestricted 21,375,478 3,049,574 (130,192,868) (113,876,392) (79,608,509)
Total primary government net position $340,616,792 $353,902,905 $228,234,274 $253,602,362 $315,381,842
2018 2019 2020 2021 2022
Governmental activities
Net investment in capital assets $254,570,044 $271,349,364 $296,243,640 $316,169,957 $452,722,446
Restricted 96,316,988 117,752,590 138,701,991 160,119,056 139,059,768
Unrestricted (129,833,581) (114,028,420) (130,288,161) (144,181,245) (194,945,964)
Total governmental activities net position $221,053,451 $275,073,534 $304,657,470 $332,107,768 $396,836,250
Business-type activities
Net investment in capital assets $90,097,907 $100,463,280 $111,968,328 $123,628,942 $133,598,554
Restricted
Unrestricted 3,227,395 44,966 2,040,842 7,208,752 4,271,663
Total business-type activities net position $93,325,302 $100,508,246 $114,009,170 $130,837,694 $137,870,217
Primary government
Net investment in capital assets $344,667,951 $371,812,644 $408,211,968 $439,798,899 $586,321,000
Restricted 96,316,988 117,752,590 138,701,991 160,119,056 139,059,768
Unrestricted (126,606,186) (113,983,454) (128,247,319) (136,972,493) (190,674,301)
Total primary government net position $314,378,753 $375,581,780 $418,666,640 $462,945,462 $534,706,467
Source: City of South San Francisco, Department of Finance
(a) The City adjusted certain beginning balances during fiscal years 2014-15 and 2017-18 due to the implementation of GASB
Statements 68 and 75. Financial data shown for the proceeding year were not adjusted for the presentation.
CITY OF SOUTH SAN FRANCISCO
(accrual basis of accounting)
Last Ten Fiscal Years (a)
Net Position by Component
($200)
($100)
$0
$100
$200
$300
$400
$500
$600
$700
$800
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Millions
Unrestricted
Restricted
Invested in Capital Assets Net of
Related Debt
147
CITY OF SOUTH SAN FRANCISCO
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2013 2014 2015 2016
Expenses
Governmental Activities:
General Government $8,360,945 $7,155,035 $8,421,857 $9,044,518
Fire Department 22,746,291 21,200,903 22,005,883 22,488,964
Police Department 24,756,958 24,376,379 23,910,436 23,158,168
Public Works 15,773,710 14,980,417 14,493,039 11,916,572
Park, Recreation and Maintenance Services 12,570,236 12,658,309 12,383,880 12,901,657
Library 4,615,967 4,310,550 4,300,885 4,442,577
Economic and Community Development 16,126,427 5,525,541 5,928,316 7,603,275
Interest on Long -Term Debt 52,139
Total Governmental Activities Expenses 105,002,673 90,207,134 91,444,296 91,555,731
Business-Type Activities:
Sewer Rental 20,870,522 19,301,103 23,969,579 18,273,580
Parking District 792,609 943,859 503,014 894,769
Storm Water 1,655,950 1,078,868 1,234,616 1,289,465
Total Business-Type Activities Expenses 23,319,081 21,323,830 25,707,209 20,457,814
Total Primary Government Expenses $128,321,754 $111,530,964 $117,151,505 $112,013,545
Program Revenues
Governmental Activities:
Charges for Services:
General Government $1,951,016 $5,785,598 $3,946,302 $4,194,563
Fire Department 2,987,956 3,304,952 3,520,275 3,450,524
Police Department 2,640,146 2,805,640 2,370,736 2,076,837
Public Works 2,926,227 4,734,813 5,071,729 10,361,525
Park, Recreation and Maintenance Services 3,433,567 3,571,947 3,708,272 3,744,137
Library 125,416 138,827 120,850 164,271
Economic and Community Development 3,457,020 5,800,849 5,337,177 6,131,463
Operating Grants and Contributions 5,455,010 5,601,916 5,753,845 5,581,492
Capital Grants and Contributions 4,036,786 1,538,225 632,735 1,147,337
Total Government Activities Program Revenues 27,013,144 33,282,767 30,461,921 36,852,149
Business-Type Activities:
Charges for Services:
Sewer Rental 19,338,107 19,155,467 19,798,033 19,569,341
Parking District 732,932 785,586 819,051 843,199
Storm Water 427,291 409,458 407,640 412,105
Operating Grants and Contributions 6,137,401 7,619,601 6,242,687 5,802,788
Capital Grants and Contributions
Total Business-Type Activities Program Revenue 26,635,731 27,970,112 27,267,411 26,627,433
Total Primary Government Program Revenues $53,648,875 $61,252,879 $57,729,332 $63,479,582
Net (Expense)/Revenue
Governmental Activities ($77,989,529) ($56,924,367) ($60,982,375) ($54,703,582)
Business-Type Activities 3,316,650 6,646,282 1,560,202 6,169,619
Total Primary Government Net Expense ($74,672,879) ($50,278,085) ($59,422,173) ($48,533,963)
148
2017 2018 2019 2020 2021 2022
$10,253,403 $12,506,188 $12,139,671 $15,378,452 $19,611,586 $20,793,108
25,750,126 30,352,387 31,986,738 34,442,874 34,492,838 28,530,628
25,838,242 30,732,288 32,994,122 36,095,698 33,376,962 35,635,007
12,396,998 18,379,278 20,425,958 17,737,243 7,567,745 7,544,142
15,217,677 17,162,377 17,962,298 19,620,848 17,159,696 19,482,582
5,184,282 5,910,406 6,241,093 6,728,102 6,274,811 6,060,920
8,927,162 10,094,626 10,557,116 9,837,938 11,728,168 12,034,671
512,376 2,200,344 4,686,930
103,567,890 125,137,550 132,306,996 140,353,531 132,412,150 134,767,988
22,661,768 24,397,607 25,719,049 26,213,885 26,644,459 26,246,647
940,181 1,202,319 896,994 1,116,840 1,338,092 1,170,305
1,333,409 1,026,948 1,188,182 1,206,694 922,057 1,309,360
24,935,358 26,626,874 27,804,225 28,537,419 28,904,608 28,726,312
$128,503,248 $151,764,424 $160,111,221 $168,890,950 $161,316,758 $163,494,300
$2,225,049 $1,966,755 $7,930,983 $5,217,199 $6,968,307 $5,413,298
4,242,940 6,327,921 6,052,804 6,073,247 5,952,872 7,857,602
2,146,909 2,230,824 2,351,491 2,092,791 1,642,726 2,878,353
10,869,608 24,727,897 27,811,701 23,355,636 24,859,635 17,734,041
3,756,369 4,489,665 4,293,474 2,872,786 1,165,630 3,058,826
96,987 102,124 105,466 97,603 19,037 1,054,339
3,911,597 13,052,441 14,214,991 9,067,781 4,275,808 28,676,546
4,533,539 5,827,149 12,091,079 8,757,554 8,021,958 10,852,746
577,995 2,515,868 1,629,730 4,930,640 5,498,698 3,342,651
32,360,993 61,240,644 76,481,719 62,465,237 58,404,671 80,868,402
19,897,769 22,417,156 24,078,076 24,296,811 24,705,044 22,778,206
916,687 1,084,472 1,180,538 1,003,222 764,514 993,986
418,840 656,315 540,679 412,707 410,745 412,842
5,763,645 5,834,455 6,452,950 7,440,041 14,815,460 5,663,695
5,252,622
26,996,941 29,992,398 32,252,243 33,152,781 40,695,763 35,101,351
$59,357,934 $91,233,042 $108,733,962 $95,618,018 $99,100,434 $115,969,753
($71,206,897) ($63,896,906) ($55,825,277) ($77,888,294) ($74,007,479) ($53,899,586)
2,061,583 3,365,524 4,448,018 4,615,362 11,791,155 6,375,039
($69,145,314) ($60,531,382) ($51,377,259) ($73,272,932) ($62,216,324) ($47,524,547)
149
2013 2014 2015 2016
General Revenues and Other Changes in Net Position
Governmental Activities:
Taxes:
Property Taxes $26,420,861 $22,890,828 $24,650,648 $26,438,620
Sales Taxes 12,931,805 12,725,141 13,932,125 15,188,686
Transient Occupancy Tax 9,659,281 11,174,017 12,947,473 13,393,437
Franchise fees 3,982,092
Other Taxes 7,588,471 8,141,010 8,650,056 5,124,574
Motor Vehicle In-Lieu 33,767 40,074 26,995 26,708
Property taxes in lieu of vehicle license fees 4,955,873 5,319,154 5,551,651 5,770,060
Interest Earnings 809,721 1,108,177 629,036 1,354,266
Gain from sale of property
Other 1,965,744 2,012,444 4,577,239 2,334,407
Extraordinary Item
Transfers (906,857) (1,041,120) (1,429,308) (919,547)
Special items 11,873,226
Total Government Activities 75,331,892 62,369,725 69,535,915 72,693,303
Business-Type Activities:
Interest Earnings 95,177 153,353 126,874 289,201
Transfers 906,857 1,041,120 1,429,308 919,547
Total Business-Type Activities 1,002,034 1,194,473 1,556,182 1,208,748
Total Primary Government $76,333,926 $63,564,198 $71,092,097 $73,902,051
Change in Net Position
Governmental Activities ($2,657,637) $5,445,358 $8,553,540 $17,989,721
Business-Type Activities 4,318,684 7,840,755 3,116,384 7,378,367
Total Primary Government $1,661,047 $13,286,113 $11,669,924 $25,368,088
CITY OF SOUTH SAN FRANCISCO
Changes in Net Position
Last Ten Fiscal Years
(continued)
(Accrual Basis of Accounting)
150
2017 2018 2019 2020 2021 2022
$29,023,618 $29,551,445 $33,446,750 $37,415,367 $41,561,039 $40,011,221
24,087,776 28,340,393 31,843,568 31,855,027 33,039,229 38,143,689
13,631,507 13,978,533 17,091,222 13,829,025 6,710,271 12,135,638
4,090,073 4,403,493 4,469,808 4,594,577 4,498,202 4,863,076
5,708,187 5,871,096 4,995,404 4,515,376 4,529,764 6,537,423
28,933 34,452 32,200 53,089 49,785 77,558
6,133,230 6,438,199 7,150,867 7,457,005 4,888,696 11,988,715
622,518 1,097,916 4,808,664 6,384,253 941,856 (6,724,092)
840,298 1,518,059
2,365,820 5,180,288 7,799,392 9,152,218 11,602,214 14,458,939
(1,105,038) (1,997,377) (2,101,222) (8,060,646) (4,984,746) (1,419,235)
45,205,422 (7,154,626) (531,591) 276,939 (1,378,533) (2,962,923)
129,792,046 85,743,812 109,845,360 107,472,230 101,457,777 118,628,068
27,710 37,072 633,704 824,916 52,623 (761,751)
1,105,038 1,997,377 2,101,222 8,060,646 4,984,746 1,419,235
1,132,748 2,034,449 2,734,926 8,885,562 5,037,369 657,484
$130,924,794 $87,778,261 $112,580,286 $116,357,792 $106,495,146 $119,285,552
$58,585,149 $21,846,906 $54,020,083 $29,583,936 $27,450,298 $64,728,482
3,194,331 5,399,973 7,182,944 13,500,924 16,828,524 7,032,523
$61,779,480 $27,246,879 $61,203,027 $43,084,860 $44,278,822 $71,761,005
151
CITY OF SOUTH SAN FRANCISCO
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
General Fund
Nonspendable $805,677 $14,163 $1,134 $33,580 $474 $106 $372 $574 $574 $4,099
Restricted 20,582,335 19,201,948 18,372,633 18,372,633 14,763,033
Committed 1,406,430 3,879,451 2,536,790 3,654,283 11,780,724 16,725,897 22,619,868 17,723,338 17,723,338 16,083,977
Assigned 566,104 743,746 1,458,029 1,578,153 5,244,279 4,334,322 11,881,363 5,720,788 5,720,788 7,482,439
Unassigned 23,498,194 15,891,899 17,285,422 17,751,169 39,278,746 19,644,232 31,239,632 43,296,762 43,296,762 38,313,108
Total General Fund $26,276,405 $20,529,259 $21,281,375 $23,017,185 $56,304,223 $61,286,892 $84,943,183 $85,114,095 $85,114,095 $76,646,656 (a)
All Other Governmental Funds
Nonspendable $39,205
Restricted $30,539,396 $42,392,238 $43,437,361 $52,938,897 $55,195,500 $78,603,366 103,135,202 $140,143,149 $140,143,149 $243,582,187
Assigned 1,105,320 6,188,554 367,023 29,363,924 29,363,924 24,889,824
Unassigned (1,379,895) (521,604) (40,459)(88,331) (11,073) (2,971,345) 235,649 235,649 (1,437,892)
Total all other governmental funds $30,264,821 $41,870,634 $49,585,456 $53,305,920 $55,107,169 $78,592,293 $100,203,062 $169,742,722 $169,742,722 $267,034,119
#REF!#REF!56,541,226 62,399,893 70,866,831 70,866,831 76,323,105 185,146,245 343,680,775
(a) The change in total fund balance for the General Fund and other governmental funds is explained in Management's Discussion and Analysis.
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Thousands
Total Committed
Total Unassigned
Total Assigned
Total Restricted
Total Nonspendable
152
This Page Left Intentionally Blank
CITY OF SOUTH SAN FRANCISCO
Changes in Fund Balance of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2013 2014 2015 2016
Revenues
Property Taxes $27,077,697 $23,010,136 $24,650,648 $26,438,620
Other Taxes 31,894,811 33,931,446 38,275,478 41,811,097
Intergovernmental revenues 13,054,594 10,757,440 10,453,071 12,360,354
Interest and Rents 3,238,089 3,632,693 3,531,966 4,207,453
Licenses and permits 3,054,451 4,366,271 4,795,158 6,896,897
Charges for services 9,275,724 16,864,409 13,387,712 15,386,358
Fines and forfeitures 1,753,682 1,528,319 1,221,413 791,756
Other 1,837,675 2,249,728 4,660,668 2,439,579
Total Revenues 91,186,723 96,340,442 100,976,114 110,332,114
Expenditures
Current:
General government 6,658,532 5,970,429 7,167,969 8,469,924
Fire Department 20,877,917 20,163,759 21,247,989 24,175,340
Police Department 22,542,135 23,309,568 23,611,743 25,458,986
Public works 9,186,493 16,791,894 15,923,071 14,846,346
Recreation and Community Services 10,927,433 11,552,502 11,826,407 13,234,028
Library 4,112,570 3,987,928 4,247,650 4,681,188
Economic and Community Development 20,512,545 5,972,966 5,917,508 7,907,655
Other 480,290 395,749
Capital outlay
Debt service:
Principal repayment 453,381 352,674 656,000
Interest and fiscal charges 52,139
Total Expenditures 94,869,764 88,202,427 90,775,301 99,825,216
Excess (deficiency) of revenues over
(under) expenditures (3,683,041)8,138,015 10,200,813 10,506,898
Other Financing Sources (Uses)
Transfers in 4,467,530 21,870,234 17,983,227 8,143,075
Transfers (out)(6,780,943) (24,149,582) (19,717,102)(13,193,699)
Lease revenue bonds issued
Premium on bonds
Sale of capital assets
Total other financing sources (uses)(2,313,413)(2,279,348)(1,733,875)(5,050,624)
Net Change in fund balances
before extraordinary and special items (5,996,454)5,858,667 8,466,938 5,456,274
Extraordinary item
Special item
Net change in fund balances ($5,996,454)$5,858,667 $8,466,938 $5,456,274
Debt service as a percentage of
noncapital expenditures 0.1%0.6%0.4%0.7%
For The Fiscal Year Ended June 30,
154
2017 2018 2019 2020 2021 2022
$35,156,848 $35,989,644 $40,597,617 $44,872,372 $46,449,735 $51,999,936
49,608,385 54,597,272 60,721,378 57,214,783 51,008,432 64,411,396
4,019,771 8,433,240 13,179,593 18,317,060 17,867,273 24,822,304
3,100,692 3,524,727 7,231,303 8,864,998 3,620,391 (2,537,324)
7,823,403 14,674,809 15,381,416 15,900,500 15,589,002 14,062,474
14,485,367 31,961,419 41,055,659 27,442,005 23,191,413 45,787,046
899,118 423,604 926,729 814,354 535,750 700,961
2,906,625 6,454,460 7,994,701 3,067,691 7,893,148 2,524,116
118,000,209 156,059,175 187,088,396 176,493,763 166,155,144 201,770,909
9,399,930 10,403,449 10,166,977 12,453,262 12,112,319 15,422,722
25,632,366 26,059,072 27,576,879 28,161,459 31,817,325 32,597,540
25,998,097 26,970,854 28,533,292 37,468,430 70,954,323 39,678,917
12,143,965 23,859,399 38,459,963 40,070,330 51,501,254 87,823,372
14,897,157 15,468,370 16,530,603 17,130,302 15,795,645 20,295,842
5,157,355 5,379,836 5,628,693 5,940,870 5,903,883 6,495,279
8,943,111 9,338,793 9,085,390 8,780,903 11,227,503 12,709,167
274,183 256,298 333,024 723,901 3,490,091 5,610,278
5,520,422
23,000 2,382,000 3,464,000 1,210,000 975,000 4,635,000
739,146 2,307,460 5,525,760
102,469,164 120,118,071 139,778,821 152,678,603 206,084,803 236,314,299
15,531,045 35,941,104 47,309,575 23,815,160 (39,929,659)(34,543,390)
14,327,130 26,486,651 22,230,499 38,117,966 37,970,252 36,220,467
(16,368,499)(30,795,941)(24,581,721)(46,647,023)(43,202,081)(38,772,007)
43,905,000 86,410,000 65,420,000
10,242,530 18,116,565 6,686,317
1,016,276 3,990,605 840,298 (2,718,691)1,507,641
(1,025,093)(318,685)(1,510,924)45,618,473 96,576,045 71,062,418
14,505,952 35,622,419 45,798,651 69,433,633 56,646,386 36,519,028
20,582,335 (7,154,626)(531,591)276,939 (1,378,533)(2,962,923)
$35,088,287 $28,467,793 $45,267,060 $69,710,572 $55,267,853 $33,556,105
0.0%2.2%3.0%1.7%2.9%7.0%
For The Fiscal Year Ended June 30,
155
Real Property Net Taxable value Total Real Total
Fiscal Residential Commercial Industrial Secured Unsecured Total Estimated Direct
Year Property Property Property Other Property Property Assessed (a) Full Market (a) Tax Rate (b)
2013 5,606,400,603$ 1,628,754,902$ 5,050,279,321$ 418,927,733$ 12,704,362,559$ 1,288,434,392$ 13,992,796,951$ 13,992,796,951$ 0.42174%
2014 5,900,441,192$ 1,713,575,060$ 4,273,694,531$ 1,204,288,116$ 13,091,998,899$ 1,212,353,871$ 14,304,352,770$ 14,304,352,770$ 0.13474%
2015 6,313,393,048$ 2,402,335,027$ 4,588,967,014$ 345,957,716$ 13,650,652,805$ 1,244,971,467$ 14,895,624,272$ 14,895,624,272$ 0.13804%
2016 6,716,642,000$ 2,000,204,271$ 5,189,813,366$ 376,874,603$ 14,283,534,240$ 1,197,263,526$ 15,480,797,766$ 15,480,797,766$ 0.13634%
2017 7,087,550,257$ 2,160,377,671$ 5,414,028,340$ 412,344,220$ 15,074,300,488$ 1,381,715,511$ 16,456,015,999$ 16,456,015,999$ 0.13632%
2018 7,458,269,085$ 2,171,084,856$ 5,838,028,479$ 383,589,586$ 15,850,972,006$ 1,423,348,022$ 17,274,320,028$ 17,274,320,028$ 0.13631%
2019 7,882,766,880$ 2,511,501,574$ 6,673,522,321$ 353,621,189$ 17,421,411,964$ 1,765,066,449$ 19,186,478,413$ 19,186,478,413$ 0.13640%
2020 8,459,303,983$ 2,717,851,133$ 7,535,473,093$ 491,981,925$ 19,204,610,134$ 1,727,590,717$ 20,932,200,851$ 20,932,200,851$ 0.13638%
2021 9,020,710,463$ 2,872,601,136$ 8,744,250,213$ 507,383,957$ 21,144,945,769$ 2,056,800,753$ 23,201,746,522$ 23,201,746,522$ 0.13622%
2022 9,440,006,474$ 4,059,376,407$ 8,650,209,742$ 508,430,937$ 22,658,023,560$ 1,993,694,829$ 24,651,718,389$ 24,651,718,389$ 0.13587%
Source: HdL Coren & Cone, San Mateo County Assessor 2012/13-2021/22 Tax Property Values.
(a)
(b)
CITY OF SOUTH SAN FRANCISCO
The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of no more than two percent annually, plus any local over-rides.
These values are considered to be full market values.
California cities do not set their own direct tax rate. The state constitution establishes the rate at 1% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax
rate area.
ASSESSED VALUE
OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Millions
Series1 Series2
156
Fiscal Basic School Total Direct/Overlapping
Year Levy Districts Tax Rates
2013 1.000 0.1959
1.1959 (1,19)
2014 1.000 0.2046
1.2046 (1,20)
2015 1.000 0.1822
1.1822 (1,21)
2016 1.000 0.1750
1.1750 (1,22)
2017 1.000 0.1749
1.1749 (1,23)
2018 1.000 0.1642
1.1642 (1,24)
2019 1.000 0.1548
1.1548 (1,25)
2020 1.000 0.1648
1.1648 (1,26)
2021 1.000 0.1893
1.1893 (1,27)
2022 1.000 0.1542
1.1542 (1,28)
Notes:
(28) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0579, which includes SSFUSD & San Mateo Jr College
bond. 4 has a rate of 1.1190 which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD, SMCCCD 2021
and SM Jr College bonds. 1 has a rate of 1.1103, which includes San Bruno Pk Elem bond, SM Union High, SM High,
SMCCCD 2021 and San Mateo Jr. Coll bonds.
(27) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0563, which includes SSFUSD & San Mateo Jr College
bond. 4 has a rate of 1.1543 which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD, SM Jr College
bonds. 1 has a rate of 1.1112, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond
and San Mateo Jr. Coll bonds.
(26) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0647, which includes SSFUSD & San Mateo Jr College
bond. 4 has a rate of 1.1267 which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD, SM Jr College
bonds. 1 has a rate of 1.1148, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College bond
and San Mateo Jr. Coll bonds.
CITY OF SOUTH SAN FRANCISCO
DIRECT AND OVERLAPPING
PROPERTY TAX RATES
LAST TEN FISCAL YEARS
(1) Like other cities, South San Francisco includes several property tax rate areas with different rates.
(23) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0714 percent, which includes SSFUSD bonds & San Mateo Jr
College bond. 4 has a rate of 1.1282 percent which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD, SM Jr
College bonds. 1 has a rate of 1.0910 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College
bond and San Mateo Comm Coll bond.
(24) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0601 percent, which includes SSFUSD bonds & San Mateo Jr
College bond. 4 has a rate of 1.1276 percent which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD, SM Jr
College bonds. 1 has a rate of 1.0900 percent, which includes San Bruno Pk Elem bond, SM Union High, SM High, SM Jr College
bond and San Mateo Comm Coll bond.
(25) Of the 68 tax rate areas in the City, 63 have a tax rate of 1.0597 percent, which includes SSFUSD & San Mateo Jr
College bond. 4 has a rate of 1.1126 percent which includes Brisbane ESD Bond, Jefferson High bonds, Jefferson USHD,
SM Jr College bonds. 1 has a rate of 1.0801 percent, which includes San Bruno Pk Elem bond, SM Union High, SM
High, SM Jr College bond and San Mateo Jr. Coll bonds.
(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.
157
This Page Left Intentionally Blank
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Genentech Inc.*$3,007,406,548 1 12.20% $1,886,267,716 1 13.48%
HCP Oyster Point III LLC 842,373,175 2 3.42%--
ARE San Francisco LLC*802,990,156 3 3.26% 333,776,264 4 2.39%
Slough SSF LLC*692,494,640 4 2.81% 477,096,721 3 3.41%
GNS North Tower LP*467,753,941 5 1.90%--
GNS South Tower LP*427,069,629 6 1.73%--
United Airlines Inc 346,047,018 7 1.40% 206,348,820 6 1.47%
Britannia Pointe Grand LP 325,871,517 8 1.32% 280,470,089 5 2.00%
ARE East Grand Ave Owner LLC 242,919,318 9 0.99%--
BMR 1000 Gateway LP*232,173,757 10 0.94%--
Slough BTC LLC -- ---- 560,040,064 2 4.00%
BMR 180 Oyster Point LLC*-- ---- 135,762,000 7 0.97%
Gateway Center LLC -- ---- 135,430,223 8 0.97%
Britannia Biotech Gateway LP -- ---- 132,496,505 9 0.95%
Myers Peninsula Venture LLC*-- ---- 122,122,090 10 0.87%
Subtotal $7,387,099,699 29.97% $4,269,810,492 30.51%
Total Net Assessed Valuation:
Fiscal Year 2021-22 $24,651,718,389
Fiscal Year 2012-13 $13,992,796,951
* Pending Appeals on Parcels
HdL Coren & Cone, 2012/13 & 2021/22 Top Ten Property Taxpayers (Net Values).
San Mateo County Assessor 2012/13 & 2021/22 Combined Tax Rolls and the SBE Non Unitary Tax Roll
Source:
2021-22 2012-13
CITY OF SOUTH SAN FRANCISCO
Principal Property Tax Payers
Current Year and Nine Years Ago
159
Fiscal Percent of
Year Allocations (5) Collections Delinquencies Delinquent taxes
2013 13,740,246$ (4)(4)0.0%
2014 14,928,197 (4)(4)0.0%
2015 15,184,788 (4)(4)0.0%
2016 15,994,773 (4)(4)0.0%
2017 17,065,875 (4)(4)0.0%
2018 17,894,855 (4)(4)0.0%
2019 19,365,814 (4)(4)0.0%
2020 20,651,650 (4)(4)0.0%
2021 22,660,544 (4)(4)0.0%
2022 23,680,782 (4)(4)0.0%
Notes:
(1) Excludes State Reimbursed Exemptions and deductions for County property tax administration.
(2) County adopted full cash value method of valuation rather than assessed valuation.
(3) Levies include real and personal property.
(5) San Mateo County controller's Office. Adjusted estimated revenue for City of South San Francisco.
Source: San Mateo County Auditor -- Controller's Office; Finance Department Revenue Reports
(4) Information not applicable. All general purpose property taxes are levied by the County and
allocated to other governmental entities.
CITY OF SOUTH SAN FRANCISCO
PROPERTY TAX LEVIES AND COLLECTIONS (1)
LAST TEN FISCAL YEARS
$6
$7
$8
$9
$10
$11
$12
$13
$14
$15
$16
$17
$18
$19
$20
$21
$22
$23
$24
$25
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Millions
160
CITY OF SOUTH SAN FRANCISCO
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities
Loans from Lease
Fiscal Successor Revenue Capital
Year Agency Bonds Lease Total
2013 13,343,039$ 3,084,553$ 16,427,592$
2014 11,722,826 3,316,836 15,039,662
2015 11,370,152 2,786,573 14,156,725
2016 10,714,152 2,238,998 12,953,150
2017 10,691,152 1,673,522 12,364,674
2018 8,309,152 1,135,102 9,444,254
2019 4,845,152 753,619 5,598,771
2020 3,635,152 43,905,000 489,781 48,029,933
2021 3,595,152 156,980,389 285,529 160,861,070
2022 2,150,152 224,792,690 144,637 227,087,479
Business-Type Activities
Sewer State Water Total Percentage
Fiscal Revenue Resources Primary of Personal Per
Year Bonds Loans Total Government Income (a) Capita (a)
2013 4,640,000$ 52,118,587$ 56,758,587$ 73,186,179$ 3.65% 1,113.78
2014 4,385,000 47,591,019 51,976,019 67,015,681 3.30% 1,019.27
2015 4,120,000 43,543,614 47,663,614 61,820,339 2.92% 957.19
2016 3,850,000 39,392,832 43,242,832 56,195,982 2.59% 858.60
2017 3,570,000 35,136,032 38,706,032 51,070,706 2.22% 761.32
2018 3,275,000 30,770,503 34,045,503 43,489,757 1.80% 648.35
2019 2,970,000 35,148,205 38,118,205 43,716,976 1.63% 644.04
2020 2,655,000 50,150,607 52,805,607 100,835,540 3.48% 1,501.98
2021 2,325,000 60,480,459 62,805,459 223,666,529 7.10% 3,468.13
2022 1,980,000 60,799,450 62,779,450 289,866,929 n/a n/a
Note : Debt amounts exclude any premiums, discounts, or other amortization amounts.
Sources: City of South San Francisco
State of California, Department of Finance (population)
U.S. Department of commerce, Bureau of the Census (income)
(a) See Schedule of Demographic and Economic Statistics for personal income and population data.
$-
$50
$100
$150
$200
$250
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022MillionsTotal Governmental Total Business
161
CITY OF SOUTH SAN FRANCISCO
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
JUNE 30, 2022
2021-22 Assessed Valuation:$24,651,718,389
Redevelopment Incremental Valuation:-
Adjusted Assessed Valuation:$24,651,718,389
Total Debt City's Share of
OVERLAPPING TAX AND ASSESSMENT DEBT:6/30/2022 % Applicable (1) Debt 6/30/22
San Mateo Community College District $733,897,184 9.255% $67,922,184
Jefferson Union High School District 250,808,014 4.467 11,203,594
South San Francisco Unified School District 164,131,912 90.986 149,337,061
Brisbane School District 24,851,439 24.834 6,171,606
City of South San Francisco Community Facilities District No. 2021-1 19,685,000 100.000 19,685,000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $254,319,445
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
San Mateo County General Fund Obligations $612,605,687 9.255% $56,696,656
San Mateo County Board of Education Certificates of Participation 6,490,000 9.255 600,650
San Mateo County Flood Control and Sea LRR District General Fund Obligations 14,675,000 61.572 9,035,691
South San Francisco Unified School District General Fund Obligations 2,980,000 90.986 2,711,383
Jefferson Union High School District Certificates of Participation 47,490,000 4.467 $2,121,378
City of South San Francisco Lease Revenue Bonds 224,792,690 100.000 224,792,690
City of South San Francisco Loans Payable 2,150,152 100.000 $2,150,152
City of South San Francisco Capital Leases 144,637 100.000 144,637
San Mateo County Mosquito and Vector Control District General Fund Obligations 3,825,000 9.255 $354,004
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT:$298,607,241
TOTAL DIRECT DEBT 227,087,479
Total Overlapping Debt $325,839,207
COMBINED TOTAL DEBT $552,926,686 (2)
(1) Percentage of overlapping debt applicable to the city is estimated uisng taxable assessed property value. Applicable percentages were estimated
by determining the portion of the overlapping district's asseessed value that is within the boundaries of the city divided by the destrict's total taxable ass
Ratios to Adjusted Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.03%
Total Direct Debt 0.92%
Combined Total Debt 2.24%
Source: California Municipal Statistics, Inc. and City of South San Francisco
510-658-2640 Austin Busch
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
162
ASSESSED VALUATION:$24,651,718,389
BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a)$924,439,440
LESS AMOUNT OF DEBT SUBJECT TO LIMIT:0
LEGAL BONDED DEBT MARGIN $924,439,440
Total net debt
Total Net Debt Legal applicable to the limit
Fiscal Debt Applicable to Debt as a percentage
Year Limit Limit Margin of debt limit
2013 524,729,886$ 0 524,729,886$ 0.00%
2014 536,413,229 0 536,413,229 0.00%
2015 558,585,910 0 558,585,910 0.00%
2016 580,561,386 0 580,561,386 0.00%
2017 617,102,145 0 617,102,145 0.00%
2018 647,787,001 0 647,787,001 0.00%
2019 719,492,940 0 719,492,940 0.00%
2020 784,957,532 0 784,957,532 0.00%
2021 870,065,495 0 870,065,495 0.00%
2022 924,439,440 0 924,439,440 0.00%
NOTE: (a)
Source: HDL Coren & Cone, San Mateo County Assessor - Combined Tax Rolls
CITY OF SOUTH SAN FRANCISCO
COMPUTATION OF LEGAL BONDED DEBT MARGIN
JUNE 30, 2022
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.
163
CITY OF SOUTH SAN FRANCISCO
REVENUE BOND COVERAGE
SEWER RENTAL ENTERPRISE FUND
LAST TEN FISCAL YEARS
Net Revenue Debt Service Requirements (4)
Fiscal Gross Operating Available for
Year Revenue (1)Expenses (2)Debt Service Principal Interest Total Coverage
2013 24,782,587$ 15,151,968$ 9,630,619$ 245,000$ 208,459$ 453,459$ 21.24
2014 26,908,316 14,904,225 12,004,091 255,000 199,831 454,831 26.39
2015 26,147,550 18,630,672 7,516,878 265,000 190,533 455,533 16.50
2016 25,610,518 13,514,706 12,095,812 270,000 180,566 450,566 26.85
2017 25,684,966 17,357,273 8,327,693 280,000 169,976 449,976 18.51
2018 28,287,485 19,073,940 9,213,545 295,000 158,616 453,616 20.31
2019 30,393,993 20,398,157 9,995,836 305,000 146,616 451,616 22.13
2020 31,807,110 21,064,165 10,742,945 315,000 134,019 449,019 23.93
2021 33,885,393 21,401,332 12,484,061 330,000 120,593 450,593 27.71
2022 27,789,553 20,992,476 6,797,077 345,000 106,331 451,331 15.06
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Gross revenue includes operating revenue and non-operating revenue.
(2) Direct operating expenses include operating expenses (except depreciation) and non-operating expenses
(except interest expense).
(3) Retirement of principal for 2005 Sewer Revenue Bonds begins in fiscal year 2008.
(4) The requirement does not include loan payments on State Water Resources Board loans. See schedule of Sewer Debt
service coverage for details.
Source: City of South San Francisco, Department of Finance
$5
$10
$15
$20
$25
$30
$35
$40
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022MillionsRevenue (1)
Expenses (2)
164
Fiscal Year
2016 2017 2018 2019 2020 2021 2022
Revenues
Service Charges $19,515,093 $19,750,636 $22,188,154 $23,556,871 $24,150,139 $24,526,952 $22,567,226
Connection and Other Fees 104,283 147,134 229,002 521,205 146,672 178,092 210,980
Interest Income 238,389 23,552 31,061 488,437 623,256 41,888 (652,348)
Developer Fees
Other Cities' Participation (1)5,752,765 5,763,644 5,834,455 5,827,480 6,887,043 9,138,461 5,663,695
Total Revenues $25,610,530 $25,684,966 $28,282,672 $30,393,993 $31,807,110 $33,885,393 $27,789,553
Operating Expenses (2)$18,759,650 $13,514,718 $19,073,943 $20,398,147 $21,064,167 $21,401,330 $21,049,553
Wastewater System Net Revenues $6,850,880 $12,170,248 $9,208,729 $9,995,846 $10,742,943 $12,484,063 $6,740,000
Parity Debt Service (3)
State Water Resources Control Board Loans $5,449,692 $5,454,747 $5,469,175 $5,477,075 $5,485,587 $5,497,048 $5,510,447
CSCDA Series 2005D Revenue Bonds 178,036 167,284 155,706 143,608 130,815 117,175 102,716
Total Parity Debt $5,627,728 $5,622,031 $5,624,881 $5,620,683 $5,616,402 $5,614,223 $5,613,163
Total Parity Debt Service Coverage 1.22 2.16 1.64 1.78 1.91 2.22 1.20
10,012,867 10,012,867 10,012,867 10,012,867 10,012,867 10,012,867 10,012,867
(2) Excludes depreciation, capital expenditures and debt service.
(3) Includes Sewer Revenue Bonds and State Water Loan payments
(1) Primarily consists of payments from the City of San Bruno. The City of San Bruno is a co-owner of the Plant and pays the City in advance on a quarterly basis for the City of San Bruno's share of
operating costs. See "Wastewater System" herein.
(4) Reflects an adopted increase in rates for Fiscal Year 2004-05 of 25% per Resolution No. 68-2004, adopted by the City Council on July 14, 2004 and effective on and after July 1, 2004 and an adopted
increase in rates for Fiscal Year 2005-06 of 9% per Resolution No. 68-2005, adopted by the City Council on June 22, 2005 and effective on and after June 22, 2005.
CITY OF SOUTH SAN FRANCISCO
SEWER DEBT SERVICE COVERAGE
SEWER RENTAL ENTERPRISE FUND
LAST SEVEN FISCAL YEARS
165
CITY OF SOUTH SAN FRANCISCO
REDEVELOPMENT PLEDGED REVENUE COVERAGE
LAST EIGHT FISCAL YEARS
Funding Source: RDA tax increment revenues
Fiscal Available Debt Service Requirements Fiscal Available Debt Service Requirements
Year Revenue Principal Interest Total Coverage Year Revenue Principal Interest Total Coverage
2015 1,605,000$ 2,904,331$ 4,509,331$ 2015 230,000$ 58,750$ 288,750$
2016 1,680,000 2,834,619 4,514,619 2016 245,000 46,875 291,875
2017 1,745,000 2,761,756 4,506,756 2017 255,000 34,375 289,375
2018 2018 275,000 21,125 296,125
2019 2019 285,000 7,125 292,125
2020 2020
2021 2021
2022 2022
Bond was paid off in fiscal year 2017
Funding Source: RDA tax increment revenues Funding Source: RDA tax increment revenues
Fiscal Available Debt Service Requirements Fiscal Available Debt Service Requirements
Year Revenue Principal Interest Total Coverage Year Revenue Principal Interest Total Coverage
2015
2016
2017
2018
2019
2020
2021
2022
Funding Source: RDA tax increment revenues
Fiscal Available Debt Service Requirements
Year Revenue Principal Interest Total Coverage
2015 1,605,000 2,904,331 4,509,331
2016 1,680,000 2,834,619 4,514,619
2017 1,745,000 2,761,756 4,506,756
2018 0 0 0
2019 0 0 0
2020 0 0 0
2021 0 0 0
2022 0 0 0
Note: Redevelopment Agencies abolished as of 1/31/2012.
Numbers for 2012 include the first and second RPTTF distributions received.
(A)Shows coverage of all non-housing bonds pledged to tax increment.
Source: City of South San Francisco, Department of Finance
RDA All Non-housing (A)
2006 RDA Revenue Bonds
Funding Source: RDA Gateway and Low Moderate Income Housing tax increment revenues.
Gateway bonds defeased in FY 05-06.
1999 RDA Revenue Bonds (Housing)
1989 Cal Health Facilities Financing Authority Revenue Bonds1999 Certificates of Participation
166
City City
Estimated Personal Per Capita City San Mateo City
City Income (2) Personal Unemployment County Population
Year Population (1) (in thousands) Income (2) Rate (3) Population (4) % of County
2012 65,127 1,982,857$ 30,446$ 6.3% 735,678 8.85%
2013 65,710 2,005,666$ 30,523$ 5.2% 747,373 8.79%
2014 65,749 2,033,156$ 30,923$ 4.5% 745,635 8.82%
2015 64,585 2,114,826$ 32,744$ 3.6% 765,135 8.44%
2016 65,451 2,167,750$ 33,120$ 3.2% 764,797 8.56%
2017 67,082 2,303,425$ 35,193$ 3.2% 771,410 8.70%
2018 67,078 2,421,033$ 36,092$ 2.3% 769,545 8.72%
2019 67,879 2,684,438$ 39,547$ 2.3% 766,573 8.85%
2020 67,135 2,895,980$ 43,136$ 8.9% 765,245 8.77%
2021 64,492 3,148,543$ 48,820$ 5.7% 737,888 8.74%
Notes:
** All data were updated to reflect the City of South San Francisco's current information available
through HDL, Coren & Cone
Data Sources:
(1) City Population: HDL/California State Dept of Finance.
(2) Personal and per capita income: HDL, Coren & Cone
(3) Unemployment Data: HDL/California Employment Development Department
(4) San Mateo County Population- https://www.census.gov/quickfacts/fact/table/sanmateocountycalifornia,CA/PST045219
CITY OF SOUTH SAN FRANCISCO
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
City Personal Income
(in Thousands)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
City Unemployment Rate
8.20%
8.30%
8.40%
8.50%
8.60%
8.70%
8.80%
8.90%
City Population % of County
$-
$10,000
$20,000
$30,000
$40,000
$50,000
City Per Capita Personal Income
167
Percentage Percentage
Number of of Total City Number of of Total City
Employer Employees Rank Employment Employees Rank Employment
Genentech Inc.8,632 1 13.4% 7,777 1 11.9%
ABBVIE 1,000 2 1.6%
Costco Wholesale (4 stores)834 3 1.3% 508 3 0.8%
Life Technologies Corporation 622 4 1.0% 650 2 1.0%
Amgen Inc 600 5 0.9% 419 4 0.6%
Verily Life Sciences LLC 555 6 0.9%
Amazon.com Services 425 7 0.7%
ZS Associates, Inc 390 8 0.6%
MRL San Francisco, LLC 317 9 0.5%
Frank & Grossman Landscape Contractors 265 10 0.4%
Successfactors, Inc 400 5 0.6%
Guardsmark LLC 351 6 0.5%
American Etc Inc/ Royal Laundry 318 7 0.5%
The New French Bakery, Inc 300 8 0.5%
DBI Beverage 232 9 0.4%
Oroweat/ Entenmann's 230 10 0.4%
Subtotal 13,640 21.1% 11,185 17.2%
Total City Population 64,492 65,127
Data Sources:
(1) SSF Business License Database- Business licenses expiring 12/31/22.
(2) City of South San Francisco CAFR 2012-13
(3) Population: HDL/California State Dept of Finance 2021.
2012-132021-22
CITY OF SOUTH SAN FRANCISCO
Principal Employers
Current Year and Nine Years Ago
168
Function 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
General Government (1) 36.60 37.60 40.60 47.10 47.10 43.60 41.60 46.60 46.60 51.30
Fire Department (2)82.48 82.98 83.48 92.68 92.68 92.68 91.93 91.68 91.68 93.49
Police Department 115.65 119.75 118.87 120.87 120.87 120.87 122.87 121.87 120.92 122.09
Park, Rec. & Maintenance Services 111.66 117.21 121.31 134.16 137.19 144.29 144.79 151.75 143.84 150.44
Library 35.35 37.66 37.71 38.71 39.26 40.49 41.49 41.49 38.56 38.15
Economic and Comm. Development 23.45 24.40 26.15 27.15 29.40 30.40 30.40 31.40 29.00 31.40
Public Works (2) 45.02 47.21 47.68 49.00 49.00 49.00 53.00 52.00 47.00 52.85
Water Quality Control Plant 38.82 39.63 39.06 41.74 41.50 41.50 41.50 41.50 41.50 41.50
Total 489.03 506.44 514.86 551.41 557.00 562.83 567.58 578.29 559.10 581.22
Notes:
1. City Council, City Treasurer, City Clerk, City Manager, HR, IT and Finance are under General Government.
2. Oversight of the Code Enforcement has been moved from Fire to Public Works Department.
Source: City of South San Francisco's FY2013-2022 Adopted Operating budget.
CITY OF SOUTH SAN FRANCISCO
Full-Time Equivalent City Government
Employees by Function
Last Ten Fiscal Years (Adopted Operating Budget)
0.00
100.00
200.00
300.00
400.00
500.00
600.00
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
General Government (1)Fire Department (2)Police Department Park, Rec. & Maintenance Services
Library Economic and Comm. Development Public Works (2)Water Quality Control Plant
169
2015 2016 2017 2018 2019 2020 2021 2022
Function/Program
Public safety:
Fire:
Inspections conducted 1,817 2,563 3,426 2,292 2,511 2,375 3,888 3,060
Police:
Police calls for service 31,532 32,477 33,313 34,811 38,299 38,541 40,503 60,333
Law violations:
Part I crimes 1,874 2,126 2,103 2,276 2,007 2,070 3,481 1,955
Physical arrests (adult and juvenile)1,933 2,071 1,870 1,891 1,943 1,871 1,635 2,025
Traffic violations 3,828 4,211 3,785 3,359 3,620 4,172 2,119 1,985
Parking violations 13,378 12,006 15,291 18,339 26,228 12,269 13,276 17,667
Public works
Street resurfacing (miles) (Eng Div) 0 2 8 3.3 7.0 7.9 19.57 9.60
Potholes repaired (square miles
prior)/(square feet)0.11 2 0 (2) 3221 410 190 165 264
Asphalt used for street repairs (tons) 250 151 94 148 13 46 69 68
Culture and recreation:
Recreation class participants (5) 26,879 23,399 23,939 25,688 23,394 17,333 (4) 5,282 8,631
Library:
Total items borrowed 643,630 565,806 558,106 544,059 582,497
(3) 450,637 (3) 245,869 456,652
Items in collection 130,106 (1) 208,400 209,895 219,114 228,224 247,393 260,205 229,891
Wastewater
Residential connections 16,470 16,491 16,488 12,556 12,559 12,549 12,571 12,672
Commercial connections 1,560 1,561 1,562 1,575 1,576 1,582 1,575 1,523
Other connections 128 131 140 140 140 140 140 140
Average daily sewage treatment
(millions of gallons)8.89 7.92 8.41 8.62 8.62 7.12 6.76 7.35
Note: N/A denotes information not available.
(1) New items added for Grand Library and electronic books are also included.
(2) Beginning 2018, pothole repairs will be measured by square feet instead of square miles.
(3) Fewer items borrowed in FY2020 and FY2021 due to COVID-19 closures.
(4) Summer camp and traditional sports programs included. Lower participant counts due to COVID-19 limitations and closures.
(5) Registration counts have excluded all withdrawals from the classes for the year while the numbers in 2015 did not.
CITY OF SOUTH SAN FRANCISCO
Operating Indicators by Function/Program
Last Eight Fiscal Years
170
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Function/Program
Public safety:
Fire stations 5555555555
Police stations 1111111111
Police Fleet 51 50 53 53 52 59 63 60 63 60
Public works
Miles of streets 127 127 127 127 127 127 127 127 127 127
Street lights (3)4,505 4,505 4,505 4,505 4,505 4,531 4,531 4,531 4,581 4,581
Parking District lights (4)20 20 20 20 16 16 16 16 16 16
Traffic Signals 74 74 74 76 76 76 76 76 80 80
Culture and recreation:
Community services:
City parks 28 28 28 28 28 28 28 28 28 28
City parks acreage 190 190 190 190 190 190 210 210 210 210
Playgrounds (5)24 24 24 24 24 24 24 34 34 34
City trails 6666666666
Community gardens 1111111111
Community centers 4444444444
Senior centers (2)1111111111
Skate Park 1111111111
Dog park 1111111111
Swimming pools 1111111111
Tennis courts 7777777777
Basketball Courts 12 12 12 12 12 12 12 12 12 12
Baseball/softball diamonds11111111111111111111
Soccer/football fields 5555555555
Library:
City Libraries (1)2222222222
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 1111111111
Source: ssf.net/depts/rcs; Director of Rec & Comm Services; Superintendent of parks & Maintenance
(1) Community Learning Center not included on count as it is only a homework center not a library.
(2) The only senior center is Magnolia Center but programming still continues at El Camino.
(3) Year 2013- Includes all lights in SSF billed as LS-2 from PG&E.
(4) Year 2017- Lot 6 sold for Rotary Plaza development.
(5) Year 2020 -Playgrounds in the Common Greens areas are now included.
CITY OF SOUTH SAN FRANCISCO
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
171
2019 2020 2021 2022
Transient Occupancy Tax Detail
TOT Collected 15,535,213$ 12,591,459$ 6,215,172$ 11,268,807$
1% Measure I Special Tax 1,556,009 1,114,911 495,099 866,831
Total TOT Collection 17,091,222$ 13,706,371$ 6,710,270$ 12,135,638$
1% Measure I Special Tax Use
Police 311,202$ 222,982$ 99,020$ 173,366$
Fire 311,202 222,982 99,020 173,366
Library 311,202 222,982 99,020 173,366
Parks 311,202 222,982 99,020 173,366
Recreation 311,202 222,982 99,020 173,366
Total 1% Measure I Special Tax 1,556,009$ 1,114,911$ 495,099$ 866,831$
* Note: The current TOT consists of three components - a 9% general excise tax (Measure FF) that generates General Fund revenues; a 1% special tax (Measure I-
effective January 1, 2005) was earmarked for use to supplement funding parks, recreation, library, and public safety services (SSFMC 4.20.033) and a $2.50 tax
devoted to the acquistion, renovation, maintenance and operation of the South San Francisco Conference Center. The City Council last increased the total TOT
rate from 9% to 10% in 2009 with the incremental 1% increase being a general tax. City's TOT rate from 10% to 12% effective january 1, 2019. A subsequent 2%
increase over the next two years would revise the TOT rate to 13% (effective January 1, 2020) and 14% (effective January 1, 2021).
CITY OF SOUTH SAN FRANCISCO
Collection and Use of 1% Special Transient Occupancy Tax (TOT) Approved by Voters as Measure I *
Miscellaneous Information
Last Four Fiscal Years
172
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT
ARTICLE III FUND
BASIC FINANCIAL STATEMENTS
FOR THE YEARS ENDED
JUNE 30, 2022 AND 2021
Attachment 2
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CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
Basic Financial Statements
For the Years Ended June 30, 2022 and 2021
Table of Contents
Page
Independent Auditor's Report ........................................................................................................................ 1
Fund Financial Statements:
Comparative Balance Sheets ................................................................................................................... 3
Comparative Statements of Revenues and Expenditures ........................................................................ 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
Status of Prior Year Findings and Responses ............................................................................................... 9
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INDEPENDENT AUDITOR'S REPORT
Honorable Members of the City Council of the
City of South San Francisco
South San Francisco, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the City of South San Francisco Transportation
Development Act Article III Fund (TDA Fund), which are included in the Capital Projects Fund of the City
of South San Francisco (City), California, as of and for the years ended June 30, 2022 and 2021, and related
notes to the financial statements as listed in the Table of Contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the TDA Fund as of June 30, 2022 and 2021, and the respective changes in
financial position for the years then ended in accordance with accounting principles generally accepted in
the United States of America.
Basis for Opinions
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. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We
are required to be independent of the City and to meet our other ethical responsibilities, in accordance with
the relevant ethical requirement relating to our audit. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinions.
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, 2022 and 2021 or the changes in its
financial position for the years then ended in accordance with accounting principles generally accepted in
the United States of America. Our opinions are not modified with respect to this matter.
Responsibilities of Management 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.
1
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is
not a guarantee that an audit conducted in accordance with generally accepted auditing standards and
Government Auditing Standards will always detect a material misstatement when it exists. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control. Misstatements are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing
Standards, we:
•Exercise professional judgment and maintain professional skepticism throughout the audit.
•Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
•Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the TDA Fund’s internal control. Accordingly, no such opinion is expressed.
•Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control-related matters
that we identified during the audit.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 16,
2022, on our consideration of the TDA Fund’s internal control over financial reporting and on our tests of
its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely 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 the
effectiveness of the TDA Fund’s internal control over financial reporting or on compliance. That report is
an integral part of an audit performed in accordance with Government Auditing Standards in considering
the TDA Fund’s internal control over financial reporting and compliance.
Pleasant Hill, California
December 16, 2022
2
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
COMPARATIVE BALANCE SHEETS
FOR THE YEARS ENDED JUNE 30, 2022 AND 2021
2022 2021
ASSETS
Due from Metropolitan Transportation Commission 400,000$ -$
Total Assets $400,000 -$
LIABILITIES
Due to the City 400,000$ -$
Total Liabilities 400,000 -
FUND BALANCE - -
Total Fund Balance - -
Total Liabilities, Deferred Inflows of Resources
and Fund Balance -$ -$
See accompanying notes to financial statements
3
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
COMPARATIVE STATEMENTS OF REVENUES AND EXPENDITURES
FOR THE YEARS ENDED JUNE 30, 2022 AND 2021
2022 2021
REVENUES
TDA Article 3.0 (Note 2) 400,000$ 325,847$
Total Revenues 400,000 325,847
EXPENDITURES
Linden Avenue Complete Streets Safety Project - 325,847
East Grand Avenue - CalTrain Bicycle and Pedestrian Access 400,000 -
Total Expenditures 400,000 325,847
Net change in fund balance - -
Fund balance at beginning of year, as restated (Note 2)- -
Fund balance at end of year -$ -$
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, 2022 and 2021
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of South San Francisco, California (City), Transportation Development Act Article III Fund
(TDA Fund) includes the financial activities associated with the State of California Transportation
Development Act. The State of California created a local transportation fund for each County funded
by a portion of the State sales tax.
The TDA Fund is distributed through the Metropolitan Transportation Commission (MTC) which is
the agency responsible for allocation of funds to eligible claimants within the greater San Francisco
Bay Area.
The TDA Fund is included in a Capital Projects Fund of the Annual Comprehensive Financial Report
of the City. The financial statements are intended to present the financial position and results of
operation for the TDA Fund, and not those of the City as a whole.
B. Basis of Accounting
Basis of accounting refers to when revenues and expenditures are recognized. The TDA Fund is
accounted for in a governmental fund type and the modified accrual basis of accounting is used.
Under the modified accrual basis, revenues are recognized when they become measurable and
available as net current assets. TDA Article 3.0 revenues are recognized when qualifying project
expenditures are incurred. Expenditures are generally recognized when they are incurred.
C. Deferred Inflows of Resources
In addition to liabilities, the balance sheet reports a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represents an
acquisition of fund balance that applies to a future period(s) and so will not be recognized as an
inflow of resources (revenue) until that time. The City has only one item, which arises only under
a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly,
the item, unavailable revenue, is reported only in the balance sheet. The TDA Fund reports
unavailable revenues from grants receivable. These amounts are deferred and recognized as an
inflow of resources in the period that the amounts become available.
5
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
Notes to the Financial Statements
For the Years Ended June 30, 2022 and 2021
NOTE 2 – TDA ARTICLE 3.0 REVENUE
For the years ended June 30, 2022 and 2021 the City received allocation instructions from the
Metropolitan Transportation Commission for the following projects:
Instruction
Number Project Name Grant Award
Expended in
June 30, 2022
Revenue in
June 30, 2022
Expenditures
to date
through
June 30, 2022
Revenue to
date through
June 30, 2022
18001094 and
20001115 (A)
Linden Avenue Complete Streets
Safety Project 363,300$ -$ -$ 363,300$ 363,300$
20001106 East Grand Avenue - CalTrain Bicycle
and Pedestrian Access 400,000 400,000 400,000 400,000 400,000
763,300$ 400,000$ 400,000$ 763,300$ 763,300$
(A) Instruction number 18001094 expired on June 30, 2020, but the remaining balance of $325,847 was reallocated
under Instruction Number 20001115 in July 2020, with a new expiration date of June 30, 2022.
During fiscal year 2021, the City determined that prior year expenditures for the Linden Avenue
Complete Streets Safety Project (Allocation Instruction #18001094/20001115) had been overstated
in the amount of $40,789 during the year ended June 30, 2020 and in the amount of $89,253 prior to
July 1, 2019. As a result, beginning fund balance as of July 1, 2020 has been restated and increased
in the amount of $130,042 and due from Metropolitan Transportation Commission and Due to the
City have been reduced and restated in the same amount.
NOTE 3 – COMMITMENTS AND CONTINGENCIES
The City participates in several grant programs. These programs have been audited by the City’s
independent accountants in accordance with the provisions of applicable State requirements. No cost
disallowances were proposed as a result of these audits; however, these programs are still subject to
further examination by the grantors and the amount, if any, of expenditures which may be disallowed
by the granting agencies cannot be determined at this time. The City expects such amounts to be
immaterial.
The City is subject to litigation arising in the normal course of business. In the opinion of the City
Attorney, there is no pending litigation which is likely to have a material adverse effect on the financial
position of the City.
6
INDEPENDENT AUDITOR’S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING,
ON COMPLIANCE WITH THE TRANSPORTATION DEVELOPMENT ACT
AND OTHER MATTERS BASED ON
AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
Honorable Members of the City Council of
City of South San Francisco
South San Francisco, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States, the financial statements of the Transportation Development Act
Article III Fund (the TDA Fund) of the City of South San Francisco (City), California, as of and for the year
ended June 30, 2022, and the related notes to the financial statements, and have issued our report thereon
dated December 16, 2022
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the TDA Fund’s internal
control over financial reporting (internal control) as a basis for designing the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but
not for the purpose of expressing an opinion on the effectiveness of the TDA Fund’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the TDA Fund’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the TDA Fund’s
financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency
is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness,
yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not
identified. 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.
7
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 TDA Fund’s provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts. Our procedures included the applicable audit
procedures contained in §6666 of Title 21 of California Code of Regulations and tests of compliance with
the applicable provisions of the Transportation Development Act and the Allocation Instructions and
Resolutions of the Metropolitan Transportation Commission. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are
required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the TDA Fund’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the TDA Fund’s internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
This report is intended solely for the information and use of the Metropolitan Transportation Commission,
management, City Council, others within the City, and federal awarding agencies and pass-through entities
and is not intended to be and should not be used by anyone other than these specified parties; however, this
restriction is not intended to limit the distribution of this report, which is a matter of public record.
Pleasant Hill, California
December 16, 2022
8
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
STATUS OF PRIOR YEAR FINDINGS AND RESPONSES
TDA2021-01 – Accurate TDA Program Reimbursement Requests and Reporting
Criteria: Transportation Development Act (TDA) program expenditures should be reported in the proper
period and requests for reimbursement should include only those costs that are eligible to be charged to the
TDA program.
Condition: The original reports of TDA project expenditures provided for audit totaled to $757,519 across
three projects that incurred costs during fiscal year 2021.
As we began testing the amounts reported, we noted the following:
•The December 2020 reimbursement request of $325,847 for the Linden Avenue Complete Streets
Safety Project (Allocation Instruction #20001115) included three vendor payments that had
occurred in fiscal year 2021. However, expenditures had been included in the prior year TDA
reports totaling $130,042, which were comprised of $40,789 in the fiscal year 2020 report and
$89,253 of expenditures incurred prior to July 1, 2019.
•The City reported expenditures of $5,506 for the Regional Bike Network Connectivity Project
North (Allocation Instruction #18001084), but that project had been completed and fully
reimbursed in the prior fiscal year.
•The City reported expenditures of $5,337 for the SSF Pedestrian and Bicycle Master Planning
Project (Allocation Instruction #18001085), but that project had been completed and fully
reimbursed in the prior fiscal year.
After we discussed the above issues with City staff, City staff determined that the project expenditures for the
Linden Avenue Complete Streets Safety Project (Allocation Instruction #20001115) had been overstated in
the prior year TDA reports, because those project costs were not applied to the TDA funding. And, the
other two projects listed above incurred project expenditures during fiscal year 2021, but they should not
have been included in the expenditures provided for the fiscal year 2021 TDA report.
Cause: We understand that City staff that are responsible for preparing the reimbursement requests do not
reconcile the project accounting information to the general ledger data for the projects or to the data previously
reported in the Transportation Development Act Article III Fund financial statements, which lead to inaccurate
reporting in the TDA financial statements.
Effect: When the worksheet provided for audit does not agree with the actual project costs incurred and
reimbursed, it leads to inaccurate reporting and the City is not in compliance with the requirements of the
TDA program.
Recommendation: The City must develop procedures to ensure that the TDA financial statements include
only eligible project costs that will be applied to the TDA funding and requested for reimbursement from
MTC. In addition, the TDA financial statements should be reviewed when reimbursement requests are filed
to determine whether eligible project costs incurred reconcile and agree to those previously reported in the
TDA financial statements.
9
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
STATUS OF PRIOR YEAR FINDINGS AND RESPONSES
TDA2021-01 – Accurate TDA Program Reimbursement Requests and Reporting (Continued)
Current Status:
Implemented – The City has taken to steps to improve internal controls related to TDA program
reimbursements, requiring program managers to provide data to Finance prior to requesting reimbursement
such that reconciliation to the general ledger can be performed and invoices checked to ensure no
consolidation of multiple projects on a single invoice. A requirement to request reimbursement on a more
regular basis has also been communicated to avoid time pressures when requesting reimbursement at year
end.
TDA2020-01 – Accurate TDA Program Reimbursement Requests and Reporting
Criteria: Transportation Development Act (TDA) program expenditures should be reported in the proper
period and requests for reimbursement should include only those costs that are eligible to be charged to the
TDA program.
Condition: The original worksheet of TDA project expenditures provided for audit totaled to $215,213 across
the three projects that incurred costs during fiscal year 2020.
As we began testing the worksheet, we noted the following:
•The City had received reimbursement of $100,000 for the SSF Pedestrian and Bicycle Master
Planning Project (Allocation Instruction #18001085) for expenditures incurred in fiscal year 2019,
but the worksheet included expenditures of only $90,198.
•The City had received reimbursement of $311,994 in August 2020 for the Regional Bike Network
Connectivity Project North (Allocation Instruction #18001084) for expenditures incurred in fiscal
years 2019 and 2020, but the worksheet included expenditures of only $200,199 for those fiscal
years.
•The July 2020 reimbursement request of $311,994 for the Regional Bike Network Connectivity
Project North (Allocation Instruction #18001084) included two duplicate vendor payments totaling
$5,141, included ineligible costs related to a vendor payment of $16,994 for a non-TDA funded
project, and included two vendor payments in the amounts of $62,991 and $91,458 that were gross
of the vendor retention that was not paid to the vendor until December 2020.
After we discussed the above issues with City staff, City staff determined that the project expenditures for the
SSF Pedestrian and Bicycle Master Planning Project (Allocation Instruction #18001085) had been
understated on the worksheet provided for audit by the $9,802. We also noted that the reimbursement
request filed with the Metropolitan Transportation Commission for the project in February 2020 included
eligible project expenditures totaling $105,699, but also included unrelated expenditures of $66,109.
10
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
STATUS OF PRIOR YEAR FINDINGS AND RESPONSES
TDA2020-01 – Accurate TDA Program Reimbursement Requests and Reporting (Continued)
For the Regional Bike Network Connectivity Project North (Allocation Instruction #18001084), the City
filed a revised reimbursement request with the Metropolitan Transportation Commission in January 2021
to replace the ineligible costs of $16,224 and the duplicate costs of $5,141 with eligible costs, which was
approved by the grantor. Although the City did not make the correction to the revised invoice to remove
the retention payments that had not been paid to the vendor as of the date of the original reimbursement
request filing in July 2020, we did note that the retention had been paid to the vendor in December 2020,
which was prior to the revised reimbursement request filing date in January 2021.
The final, revised worksheet included project expenditures to be reported of $339,430 for the three
Allocation Instructions that incurred costs in fiscal year 2020 and the identification of expenditures in fiscal
year 2019 that were not deemed to be eligible project costs until fiscal year 2020.
Cause: We understand that City staff that are responsible for preparing the reimbursement requests do not
reconcile the project accounting information to the general ledger data for the projects or to the data previously
reported in the Transportation Development Act Article III Fund financial statements, which leads to
inaccurate reporting in the reimbursement requests and the TDA program worksheet.
Effect: When the City requests reimbursement for ineligible costs, the City is not in compliance with the
requirements of the TDA program. And, when the worksheet provided for audit does not agree with the actual
project costs incurred and reimbursed, it could lead to inaccurate reporting.
Recommendation: The City must develop procedures to ensure that reimbursement requests for the TDA
program include only eligible costs incurred and that the amounts reported in the Transportation Development
Act Article III Fund financial statements accurately include the eligible costs incurred for each project in each
fiscal year.
In addition, the City should confirm with the Metropolitan Transportation Commission that the City does not
need to return interest earned on the reimbursement of the retention payable total from the date the
reimbursement was received in August 2020 to the date the retention was paid to the vendor in December
2020.
Current Status: The City agrees with the audit finding that internal controls need to be strengthened to prevent
inaccuracies related to grant reporting and reimbursement requests. Upon realizing the errors related to the
TDA program expenditures, the City has actively changed procedures to broaden and strengthen the oversight
of grant-funded projects and is in the process of developing a new model that includes training and coaching
for all new program managers on the grants process as a preventive measure. In addition, all reimbursement
requests will require additional review by divisional management staff and require the reconciling of revenues
and expenditures to the general ledger as outlined in the City’s Grant Management Policy, which was adopted
in April 2020.
To enhance future oversight of grant-related projects, vendors for the City will no longer be allowed to submit
a consolidated invoice for work related to multiple projects. The administrative change of requiring itemized
invoices for specific projects will mitigate the chances of the inadvertent reimbursement requests for unrelated
projects.
11
CITY OF SOUTH SAN FRANCISCO
TRANSPORTATION DEVELOPMENT ACT ARTICLE III FUND
STATUS OF PRIOR YEAR FINDINGS AND RESPONSES
TDA2020-01 – Accurate TDA Program Reimbursement Requests and Reporting (Continued)
Related to the accurate tracking of project expenditures in each fiscal year, program managers will be required
to reconcile all project expenditures quarterly. Any reconciliations that do not occur within the quarter the
expense was incurred will require appropriate documentation as to why the request did not occur within the
quarterly timeframe.
Lastly, City did not receive a request from MTC to return any interest earned. If required to return any interest
earnings, the City will reimburse MTC from its General Fund.
See also finding TDA2021-01.
12
CITY OF SOUTH SAN FRANCISCO
MEASURE A FUNDS
Report on Compliance with the
Agreement for Distribution of San Mateo County
Measure A Funds for Local Transportation Purposes
For the Year Ended June 30, 2022
Attachment 3
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CITY OF SOUTH SAN FRANCISCO
MEASURE A FUNDS
For the Year Ended June 30, 2022
Table of Contents
Page
Independent Accountant’s Report on Management’s Assertion .................................................... 1
Financial Statements:
Balance Sheet .................................................................................................................................. 2
Schedule of Revenues, Expenditures and Changes in Fund Balance ............................................. 3
Notes to Financial Statements ......................................................................................................... 5
Management’s Report on Compliance with the
Agreement for Distribution of San Mateo County
Measure A Funds for Local Transportation Purposes ................................................................. 7
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INDEPENDENT ACCOUNTANT'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 of the City of South San Francisco’s assertion, included in accompanying
Management’s Report on Compliance with the Agreement for Distribution of San Mateo County Measure A
Funds for Local Transportation Purposes (the Agreement) between the City of South San Francisco and the
San Mateo County Transportation Authority dated March 5, 2009, that the City complied with the requirements
of the Agreement during the year ended June 30, 2022. Management is responsible for that assertion. 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. Those standards require that we plan and perform the examination to
obtain reasonable assurance about whether management’s assertion that the City complied with the
requirements of the Agreement is fairly stated, in all material respects. An examination involves performing
procedures to obtain evidence about management’s assertion. The nature, timing and extent of procedures
selected depend on our judgment, including an assessment of the risks of material misstatement of
management’s assertion, whether due to fraud or error. We believe that the evidence we obtained is sufficient
and appropriate to provide a reasonable basis for our opinion.
We are required to be independent and to meet our other ethical responsibilities in accordance with relevant
ethical requirements relating to the engagement.
In our opinion, management’s assertion that the City complied with the requirements of the Agreement for the
year ended June 30, 2022 is fairly stated, in all material respects.
This report is intended solely for the information and use of management, the City Council and the San
Mateo County Transportation Authority and is not intended to be and should not be used by anyone other
than those specified parties; however, this restriction is not intended to limit the distribution of this report,
which is a matter of public record.
Pleasant Hill, California
December 16, 2022
1
CITY OF SOUTH SAN FRANCISCO
MEASURE A FUNDS
BALANCE SHEET
JUNE 30, 2022
ASSETS:
Cash and investments $3,680,937
Accounts receivable 22,727
Accrued interest receivable 10,014
TOTAL ASSETS $3,713,678
FUND BALANCE:
Restricted for Measure A capital projects and maintenance $3,713,678
TOTAL FUND BALANCE $3,713,678
See accompanying notes to the financial statements.
2
CITY OF SOUTH SAN FRANCISCO
MEASURE A FUNDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 2022
REVENUES
Sales tax from the County of San Mateo $2,022,215
County grants 100,726
Reimbursement from South Linden Avenue Grade Separation Partner 2,362
Interest and investment income (114,917)
Total Revenues 2,010,386
TRANSFERS OUT
Capital Improvements Projects:
Street Rehabilitation Program FY 18-19 9,677
2020 Pavement Rehabilitation 39,015
Grand Blvd Project - Chestnut to Arroyo 21,584
Linden Avenue Complete Streets (Aspen-Miller) 264,159
West Orange and Hillside Pedestrian Crossing Improvements 53,912
Oyster Point Peninsula Flood Improvements 47,934
Commercial and Spruce Signalized Intersection 308,615
General Fund Projects:
South City Shuttle 76,411
Total Transfers Out 821,307
Net Change in Fund Balance 1,189,079
Fund Balance, July 1 2,524,599
Fund Balance, June 30 $3,713,678
See accompanying notes to the financial statements.
3
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CITY OF SOUTH SAN FRANCISCO
MEASURE A FUNDS
Notes to Financial Statements
For the Year Ended June 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
At the General Election of June 7, 1988, the voters of City of San Mateo County approved
Measure A, which is an ordinance providing for the creation of the San Mateo County
Transportation Authority for the imposition of a one-half of one percent sales transaction and
use tax. Twenty percent of the aforementioned tax is to be allocated to the cities of San Mateo
County and to the County of San Mateo for the improvement of local transportation, including
streets and roads in accordance with Measure A requirements.
B. Basis of Accounting
The Schedule of Measure A Funds (Transportation Sales Tax), a special revenue fund of the
City of South San Francisco, California, have been prepared in conformity with accounting
principles generally accepted in the United States of America as applied to governmental units.
The Governmental Accounting Standards Board is the accepted standard-setting body for
establishing governmental accounting and financial reporting principles.
The Measure A Funds are accounted for using the modified accrual basis of accounting. Under
this basis, revenues are recognized when they become both measurable and available to finance
expenditures of the fiscal period. Expenditures are recognized when the liability is incurred.
5
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December 16, 2022
San Mateo County Transportation Authority
120 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 for Local Transportation Purposes (the Agreement) between the City and
the San Mateo County Transportation Authority entered into 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, 2022:
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 Schedule of Revenues,
Expenditures and Changes in Fund Balance for the Year Ended June 30, 2022, are in
compliance with the Agreement.
__________________________ ________________________
City Manager Finance Director
CITY COUNCIL 2022
FLOR NICOLAS, MAYOR (DIST. 3)
MARK NAGALES, VICE MAYOR (DIST. 2)
MARK ADDIEGO, MEMBER (DIST. 1)
JAMES COLEMAN, MEMBER (DIST. 4)
EDDIE FLORES, MEMBER (DIST. 5)
MIKE FUTRELL, CITY MANAGER
SHARON RANALS, INTERIM CITY MANAGER
DocuSign Envelope ID: D4CDF7BE-AA7D-4A9D-8917-654A5BC189B8
, Acting
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City of South San Francisco
Measure W Funds
Report on Compliance with the
Agreement for Distribution of San Mateo County
Measure W Funds for
Local Transportation Purposes in Accordance
with the San Mateo County Congestion Relief Plan
For the Year Ended June 30, 2022
Attachment 4
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CITY OF SOUTH SAN FRANCISCO
MEASURE W FUNDS
For the Year Ended June 30, 2022
Table of Contents
Page
Independent Accountant’s Report on Management’s Assertion ..................................................... 1
Financial Statements:
Balance Sheet ................................................................................................................................... 2
Schedule of Revenues, Expenditures and Changes in Fund Balance .............................................. 3
Notes to Financial Statements .......................................................................................................... 5
Management’s Report on Compliance with the
Agreement for Distribution of San Mateo County
Measure W Funds for Local Transportation Purposes in
Accordance with the San Mateo County Congestion Relief Plan ................................................. 7
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INDEPENDENT ACCOUNTANT'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 of the City of South San Francisco’s assertion, included in accompanying
Management’s Report on Compliance with the Agreement for Distribution of San Mateo County Measure W
Funds for Local Transportation Purposes in Accordance with the San Mateo County Congestion Relief Plan
(the Agreement) between the City of South San Francisco and the San Mateo County Transportation
Authority dated October 1, 2019, that the City complied with the requirements of the Agreement during the
year ended June 30, 2022. Management is responsible for that assertion. 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. Those standards require that we plan and perform the examination
to obtain reasonable assurance about whether management’s assertion that the City complied with the
requirements of the Agreement is fairly stated, in all material respects. An examination involves performing
procedures to obtain evidence about management’s assertion. The nature, timing and extent of procedures
selected depend on our judgment, including an assessment of the risks of material misstatement of
management’s assertion, whether due to fraud or error. We believe that the evidence we obtained is
sufficient and appropriate to provide a reasonable basis for our opinion.
We are required to be independent and to meet our other ethical responsibilities in accordance with relevant
ethical requirements relating to the engagement.
In our opinion, management’s assertion that the City complied with the requirements of the Agreement for
the year ended June 30, 2022 is fairly stated, in all material respects.
This report is intended solely for the information and use of management, the City Council and the San
Mateo County Transportation Authority and is not intended to be and should not be used by anyone other
than those specified parties; however, this restriction is not intended to limit the distribution of this report,
which is a matter of public record.
Pleasant Hill, California
December 16, 2022
1
CITY OF SOUTH SAN FRANCISCO
MEASURE W FUNDS
BALANCE SHEET
JUNE 30, 2022
ASSETS:
Cash and investments $1,278,810
Accounts receivable 83,097
Accrued interest receivable 2,770
TOTAL ASSETS $1,364,677
FUND BALANCE:
Restricted for Measure W capital projects and maintenance $1,364,677
TOTAL FUND BALANCE $1,364,677
See accompanying notes to the financial statements.
2
CITY OF SOUTH SAN FRANCISCO
MEASURE W FUNDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 2022
REVENUES
Sales tax from the County of San Mateo $825,500
Interest and investment income (31,622)
Total Revenues 793,878
TRANSFERS OUT
Capital Improvements Projects:
Street Rehabilitation Program 43,462
Total Transfers Out 43,462
Net Change in Fund Balance 750,416
Fund Balance, July 1 614,261
Fund Balance, June 30 $1,364,677
See accompanying notes to the financial statements.
3
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CITY OF SOUTH SAN FRANCISCO
MEASURE W FUNDS
Notes to Financial Statements
For the Year Ended June 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
At the General Election of November 6, 2018, the voters of City of San Mateo County approved
Measure W, which is an ordinance providing for the San Mateo County Transportation Authority to
impose a one-half of one percent sales transaction and use tax. The San Mateo County Congestion
Relief Plan includes an annual allocation of 12.5% of the total revenue generated by the
aforementioned tax for the Local Safety, Pothole and Congestion Relief Improvement Program
Category, of which 10% is to be allocated to the cities of San Mateo County and to the County of
San Mateo for transportation and public transit in accordance with the Congestion Relief Plan.
B. Basis of Accounting
The Schedule of Measure W Funds (Transportation Sales Tax), a special revenue fund of the City
of South San Francisco, California, have been prepared in conformity with accounting principles
generally accepted in the United States of America as applied to governmental units. The
Governmental Accounting Standards Board is the accepted standard-setting body for establishing
governmental accounting and financial reporting principles.
The Measure W Funds are accounted for using the modified accrual basis of accounting. Under this
basis, revenues are recognized when they become both measurable and available to finance
expenditures of the fiscal period. Expenditures are recognized when the liability is incurred.
5
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December 16, 2022
San Mateo County Transportation Authority
120 San Carlos Avenue
San Carlos, California 94070
Management’s Report on Compliance with the Agreement for Distribution of San Mateo County
Measure W Funds for Local Transportation Purposes in accordance with the San Mateo County
Congestion Relief Plan
The City of South San Francisco is responsible for complying with the Agreement for Distribution of San
Mateo County Measure W Funds for Local Transportation Purposes in Accordance with the San Mateo
County Congestion Relief Plan (the Agreement) between the City and the San Mateo County Transportation
Authority entered into on October 1, 2019. 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 W – San Mateo
County Transportation Expenditure Plan (the Measure), the City agrees that funds shall not be used to
replace funds previously provided for public transportation investments, and that City will limit the use of
funds provided pursuant to this Agreement to invest in major arterial and local roadway improvements in
key congested areas throughout the County, focusing on improving safety, reducing congestion, and
supporting all modes of travel on the County’s roadway system.
With respect to compliance with the Agreement, management attests to the following for the year ended
June 30, 2022:
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 Schedule of Revenues,
Expenditures and Changes in Fund Balance for the Year Ended June 30, 2022, are in
compliance with the Agreement.
__________________________ ________________________
City Manager Finance Director
CITY COUNCIL 2022
FLOR NICOLAS, MAYOR (DIST. 3)
MARK NAGALES, VICE MAYOR (DIST. 2)
MARK ADDIEGO, MEMBER (DIST. 1)
JAMES COLEMAN, MEMBER (DIST. 4)
EDDIE FLORES, MEMBER (DIST. 5)
MIKE FUTRELL, CITY MANAGER
SHARON RANALS, INTERIM CITY MANAGER
DocuSign Envelope ID: D4CDF7BE-AA7D-4A9D-8917-654A5BC189B8
Acting
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INDEPENDENT ACCOUNTANT’S REPORT ON
APPLYING AGREED UPON PROCEDURES FOR
COMPLIANCE WITH THE PROPOSITION 111
2021-2022 APPROPRIATIONS LIMIT INCREMENT
Honorable Mayor and Members of the City Council
City of South San Francisco, California
We have performed the procedures enumerated below on the Appropriations Limit Worksheet (Worksheet)
of the City of South San Francisco, California, for the year ended June 30, 2022. The City’s management is
responsible for the Worksheet.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the
intended purpose of these procedures, which were suggested by the League of California Cities and
presented in their Article XIIIB Appropriations Limitation Uniform Guidelines, were performed solely to
assist you in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. This
report may not be suitable for any other purpose. The procedures performed may not address all the items
of interest to a user of this report and may not meet the needs of all users of this report and, as such, users
are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and associated findings were as follows:
A. We obtained the Worksheet and determined that the 2021-2022 Appropriations Limit of
$158,259,206 and annual adjustment factors were adopted by Resolution of the City Council.
However, we were not able to determine if the population and inflation options were selected by a
recorded vote of the City Council.
B. We recomputed the 2021-2022 Appropriations Limit by multiplying the 2020-2021 Prior Year
Appropriations Limit by the Total Growth Factor.
C. For the Worksheet, we agreed the Per Capita Income Factor and City Population Factor to
California State Department of Finance Worksheets. The County Population Factor was not
included in the City’s Worksheet.
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our
engagement in accordance with attestation standards established by the American Institute of Certified
Public Accountants. We were not engaged to and did not conduct an examination or review engagement,
the objective of which would be the expression of an opinion or conclusion, respectively, on the Worksheet.
Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures,
other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance
with the relevant ethical requirements related to our agreed-upon procedures engagement.
Attachment 5
This report is intended solely for the information and use of management and the City Council and is not
intended to be and should not be used by anyone other than those specified parties; however, this
restriction is not intended to limit the distribution of this report, which is a matter of public record.
Pleasant Hill, California
December 27, 2022
CITY OF SOUTH SAN FRANCISCO
REQUIRED COMMUNICATIONS
FOR THE YEAR ENDED
JUNE 30, 2022
Attachment 6
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CITY OF SOUTH SAN FRANCISCO
REQUIRED COMMUNICATIONS
For the Year Ended June 30, 2022
Table of Contents
Page
Required Communications ................................................................................................................................ 1
Significant Audit Matters:
Qualitative Aspects of Accounting Practices ................................................................................... 1
Difficulties Encountered in Performing the Audit ........................................................................... 4
Corrected and Uncorrected Misstatements ...................................................................................... 4
Disagreements with Management .................................................................................................... 4
Management Representations ............................................................................................................ 4
Management Consultations with Other Independent Accountants ................................................. 4
Other Audit Findings and Issues ........................................................................................................ 4
Other Information Accompanying the Financial Statements ................................................................... 5
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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, California, for the year
ended June 30, 2022. We did not audit the financial statements of the South San Francisco Conference
Center Authority, a discretely presented component unit of the City, as of and for the year ended June 30,
2022, which represents 0.64%, 0.82%, and 1.08%, of the assets, net position and revenues, respectively,
of the primary government. The 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 auditors.
Professional standards require that we provide you with information about our responsibilities under
generally accepted auditing standards and Government Auditing Standards and the Uniform Guidance, as
well as certain information related to the planned scope and timing of our audit. We have communicated
such information in our letter to you dated July 12, 2022 and in our meeting with the City Manager on
October 8, 2022. Professional standards also require that we communicate to you the following
information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Accounting Policies - Management is responsible for the selection and use of appropriate accounting
policies. The significant accounting policies used by the City 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 the following Governmental Accounting Standards Board (GASB)
pronouncements became effective:
GASB 87 – Leases
The objective of this Statement is to better meet the information needs of financial statement
users by improving accounting and financial reporting for leases by governments. This Statement
increases the usefulness of governments’ financial statements by requiring recognition of certain
lease assets and liabilities for leases that previously were classified as operating leases and
recognized as inflows of resources or outflows of resources based on the payment provisions of
the contract. It establishes a single model for lease accounting based on the foundational principle
that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is
required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is
required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the
relevance and consistency of information about governments’ leasing activities.
1
A lease is defined as a contract that conveys control of the right to use another entity’s
nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an
exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land,
vehicles, and equipment. Any contract that meets this definition should be accounted for under
the leases guidance, unless specifically excluded in this Statement.
The pronouncement became effective, and as disclosed in Note 1T to the financial statements
required a prior period restatement for the cumulative effect on the financial statements.
GASB 97 – Certain Component Unit Criteria, and Accounting and Financial Reporting for
Internal Revenue Code Section 457 Deferred Compensation Plans—An
Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB
Statement No. 32
The primary objectives of this Statement are to (1) increase consistency and comparability related
to the reporting of fiduciary component units in circumstances in which a potential component
unit does not have a governing board and the primary government performs the duties that a
governing board typically would perform; (2) mitigate costs associated with the reporting of
certain defined contribution pension plans, defined contribution other postemployment benefit
(OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other
employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and
(3) enhance the relevance, consistency, and comparability of the accounting and financial
reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457
plans) that meet the definition of a pension plan and for benefits provided through those plans.
The pronouncement became effective, and required revisions to the disclosures related to the
City’s deferred compensation plan as disclosed in Note 8 to the financial statements.
The following pronouncements became effective, but did not have a material effect on the financial
statements:
GASB 89 – Accounting for Interest Cost Incurred before the End of a Construction Period
GASB 90 – Majority Equity Interests (an amendment of GASB Statements No. 14 and No. 61)
GASB 92 – Omnibus 2020
GASB 93 – Replacement of Interbank Offered Rates
GASB 99 – Omnibus 2022 (paragraphs 26-32)
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.
2
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, 2022, the City held approximately $454.6
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, 2022. These fair
values are not required to be adjusted for changes in general market conditions occurring
subsequent to June 30, 2022.
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 1K 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 Liabilities and Pension-Related Deferred Outflows and Inflows of
Resources: Management’s estimate of the net pension liabilities and deferred outflows/inflows of
resources are disclosed in Note 7 to the financial statements and are based on actuarial studies and
accounting valuations determined by the California Public Employees Retirement System, which
are based on the experience of the City. We evaluated the key factors and assumptions used to
develop the estimates and determined that the estimates are reasonable in relation to the basic
financial statements taken as a whole.
Estimated Net OPEB Liability and OPEB-Related Deferred Outflows and Inflows of Resources:
Management’s estimate of the net OPEB liability and deferred outflows/inflows of resources are
disclosed in Note 9 to the financial statements and are based on an actuarial study determined by
a consultant, which is based on the experience of the City. We evaluated the key factors and
assumptions used to develop the estimates and determined that the estimates are reasonable in
relation to the basic financial statements taken as a whole.
Estimated Compensated Absences: Accrued compensated absences, which are comprised of
accrued vacation and sick leave, is estimated using accumulated unpaid leave hours and hourly
pay rates in effect at the end of the fiscal year, and are disclosed in Note 1L to the financial
statements. We evaluated the key factors and assumptions used to develop the accrued
compensated absences and determined that it is reasonable in relation to the basic financial
statements taken as a whole.
\
Estimated Claims Liabilities: Management’s estimate of the claims liabilities payable is disclosed
in Note 12 to the financial statements and the worker’s compensation claims payable is based on
an actuarial study determined by a consultant and the general liability claims payable is based on
estimates determined by the City’s third party claims administrator, which are both based on the
claims 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.
3
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 27, 2022.
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.
4
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.
Pleasant Hill, California
December 27, 2022
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CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
FOR THE YEAR ENDED
JUNE 30, 2022
Attachment 7
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CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
For the Year Ended June 30, 2022
Table of Contents
Page
Memorandum on Internal Control ................................................................................................................... 1
Schedule of Other Matters ....................................................................................................................... 3
Status of Prior Year Other Matters ........................................................................................................ 13
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1
MEMORANDUM ON INTERNAL CONTROL
To the City Council of
The City of South San Francisco, California
We have audited the basic financial statements of the City of South San Francisco, California, for the year
ended June 30, 2022, and have issued our report thereon dated December 27, 2022. 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 as of and for the year ended June 30, 2022, 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 are opportunities for strengthening internal controls and operating efficiency or other
informational items.
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.
Pleasant Hill, California
December 27, 2022
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CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
NEW GASB PRONOUNCEMENTS OR PRONOUNCEMENTS NOT YET EFFECTIVE
The following comment represents new pronouncements taking affect in the next few years. We have
cited them here to keep you informed of developments:
EFFECTIVE FISCAL YEARS 2021/22, 2022/23 and 2023/24:
GASB 99 – Omnibus 2022
The objectives of this Statement are to enhance comparability in accounting and financial reporting and to
improve the consistency of authoritative literature by addressing (1) practice issues that have been
identified during implementation and application of certain GASB Statements and (2) accounting and
financial reporting for financial guarantees. The practice issues addressed by this Statement are as
follows:
• Classification and reporting of derivative instruments within the scope of Statement No. 53,
Accounting and Financial Reporting for Derivative Instruments, that do not meet the definition of
either an investment derivative instrument or a hedging derivative instrument
• Clarification of provisions in Statement No. 87, Leases, as amended, related to the determination
of the lease term, classification of a lease as a short term lease, recognition and measurement of a
lease liability and a lease asset, and identification of lease incentives
• Clarification of provisions in Statement No. 94, Public-Private and Public-Public Partnerships
and Availability Payment Arrangements, related to (a) the determination of the public-private and
public-public partnership (PPP) term and (b) recognition and measurement of installment
payments and the transfer of the underlying PPP asset
• Clarification of provisions in Statement No. 96, Subscription-Based Information Technology
Arrangements, related to the subscription-based information technology arrangement (SBITA)
term, classification of a SBITA as a short term SBITA, and recognition and measurement of a
subscription liability
• Extension of the period during which the London Interbank Offered Rate (LIBOR) is considered
an appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of an
interest rate swap that hedges the interest rate risk of taxable debt
• Accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance
Program (SNAP)
• Disclosures related to nonmonetary transactions
• Pledges of future revenues when resources are not received by the pledging government
• Clarification of provisions in Statement No. 34, Basic Financial Statements—and Management’s
Discussion and Analysis—for State and Local Governments, as amended, related to the focus of
the government-wide financial statements
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GASB 99 – Omnibus 2022 (Continued)
• Terminology updates related to certain provisions of Statement No. 63, Financial Reporting of
Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position
• Terminology used in Statement 53 to refer to resource flows statements.
The Requirements of this Statement are Effective as Follows:
The requirements in paragraphs 26–32 related to extension of the use of LIBOR, accounting for SNAP
distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging
governments, clarification of certain provisions in Statement 34, as amended, and terminology updates
related to Statement 53 and Statement 63 are effective upon issuance.
The requirements in paragraphs 11–25 related to leases, PPPs, and SBITAs are effective for fiscal years
beginning after June 15, 2022, and all reporting periods thereafter.
The requirements in paragraphs 4–10 related to financial guarantees and the classification and reporting
of derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after
June 15, 2023, and all reporting periods thereafter.
Earlier application is encouraged and is permitted by individual topic.
How the Changes in This Statement Will Improve Financial Reporting
The requirements of this Statement will enhance comparability in the application of accounting and
financial reporting requirements and will improve the consistency of authoritative literature. Consistent
authoritative literature enables governments and other stakeholders to more easily locate and apply the
correct accounting and financial reporting provisions, which improves the consistency with which such
provisions are applied. The comparability of financial statements also will improve as a result of this
Statement. Better consistency and comparability improve the usefulness of information for users of state
and local government financial statements.
EFFECTIVE FISCAL YEAR 2022/23:
GASB 91 – Conduit Debt Obligations
The primary objectives of this Statement are to provide a single method of reporting conduit debt
obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by
issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This
Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation;
establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for
accounting and financial reporting of additional commitments and voluntary commitments extended by
issuers and arrangements associated with conduit debt obligations; and improving required note
disclosures.
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CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 91 – Conduit Debt Obligations (Continued)
A conduit debt obligation is defined as a debt instrument having all of the following characteristics:
• There are at least three parties involved:
(1) an issuer
(2) a third-party obligor, and
(3) a debt holder or a debt trustee.
• The issuer and the third-party obligor are not within the same financial reporting entity.
• The debt obligation is not a parity bond of the issuer, nor is it cross-collateralized with other debt
of the issuer.
• The third-party obligor or its agent, not the issuer, ultimately receives the proceeds from the debt
issuance.
• The third-party obligor, not the issuer, is primarily obligated for the payment of all amounts
associated with the debt obligation (debt service payments).
All conduit debt obligations involve the issuer making a limited commitment. Some issuers extend
additional commitments or voluntary commitments to support debt service in the event the third party is,
or will be, unable to do so.
An issuer should not recognize a conduit debt obligation as a liability. However, an issuer should
recognize a liability associated with an additional commitment or a voluntary commitment to support debt
service if certain recognition criteria are met. As long as a conduit debt obligation is outstanding, an
issuer that has made an additional commitment should evaluate at least annually whether those criteria are
met. An issuer that has made only a limited commitment should evaluate whether those criteria are met
when an event occurs that causes the issuer to reevaluate its willingness or ability to support the obligor’s
debt service through a voluntary commitment.
This Statement also addresses arrangements—often characterized as leases—that are associated with
conduit debt obligations. In those arrangements, capital assets are constructed or acquired with the
proceeds of a conduit debt obligation and used by third-party obligors in the course of their activities.
Payments from third-party obligors are intended to cover and coincide with debt service payments.
During those arrangements, issuers retain the titles to the capital assets. Those titles may or may not pass
to the obligors at the end of the arrangements.
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SCHEDULE OF OTHER MATTERS
GASB 91 – Conduit Debt Obligations (Continued)
Issuers should not report those arrangements as leases, nor should they recognize a liability for the related
conduit debt obligations or a receivable for the payments related to those arrangements. In addition, the
following provisions apply:
• If the title passes to the third-party obligor at the end of the arrangement, an issuer should not
recognize a capital asset.
• If the title does not pass to the third-party obligor and the third party has exclusive use of the
entire capital asset during the arrangement, the issuer should not recognize a capital asset until the
arrangement ends.
• If the title does not pass to the third-party obligor and the third party has exclusive use of only
portions of the capital asset during the arrangement, the issuer, at the inception of the
arrangement, should recognize the entire capital asset and a deferred inflow of resources. The
deferred inflow of resources should be reduced, and an inflow recognized, in a systematic and
rational manner over the term of the arrangement.
This Statement requires issuers to disclose general information about their conduit debt obligations,
organized by type of commitment, including the aggregate outstanding principal amount of the issuers’
conduit debt obligations and a description of each type of commitment. Issuers that recognize liabilities
related to supporting the debt service of conduit debt obligations also should disclose information about
the amount recognized and how the liabilities changed during the reporting period.
How the Changes in this Statement will Improve Financial Reporting
The requirements of this Statement will improve financial reporting by eliminating the existing option for
issuers to report conduit debt obligations as their own liabilities, thereby ending significant diversity in
practice. The clarified definition will resolve stakeholders’ uncertainty as to whether a given financing is,
in fact, a conduit debt obligation. Requiring issuers to recognize liabilities associated with additional
commitments extended by issuers and to recognize assets and deferred inflows of resources related to
certain arrangements associated with conduit debt obligations also will eliminate diversity, thereby
improving comparability in reporting by issuers. Revised disclosure requirements will provide financial
statement users with better information regarding the commitments issuers extend and the likelihood that
they will fulfill those commitments. That information will inform users of the potential impact of such
commitments on the financial resources of issuers and help users assess issuers’ roles in conduit debt
obligations.
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MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 94 – Public-Private and Public-Public Partnerships and Availability Payment Arrangements
The primary objective of this Statement is to improve financial reporting by addressing issues related to
public-private and public-public partnership arrangements (PPPs). As used in this Statement, a PPP is an
arrangement in which a government (the transferor) contracts with an operator (a governmental or
nongovernmental entity) to provide public services by conveying control of the right to operate or use a
nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of
time in an exchange or exchange-like transaction. Some PPPs meet the definition of a service concession
arrangement (SCA), which the Board defines in this Statement as a PPP in which (1) the operator collects
and is compensated by fees from third parties; (2) the transferor determines or has the ability to modify or
approve which services the operator is required to provide, to whom the operator is required to provide
the services, and the prices or rates that can be charged for the services; and (3) the transferor is entitled to
significant residual interest in the service utility of the underlying PPP asset at the end of the arrangement.
This Statement also provides guidance for accounting and financial reporting for availability payment
arrangements (APAs). As defined in this Statement, an APA is an arrangement in which a government
compensates an operator for services that may include designing, constructing, financing, maintaining, or
operating an underlying nonfinancial asset for a period of time in an exchange or exchange-like
transaction.
PPPs – This Statement requires that PPPs that meet the definition of a lease apply the guidance in
Statement No. 87, Leases, as amended, if existing assets of the transferor that are not required to be
improved by the operator as part of the PPP arrangement are the only underlying PPP assets and the PPP
does not meet the definition of an SCA. This Statement provides accounting and financial reporting
requirements for all other PPPs: those that either (1) meet the definition of an SCA or (2) are not within
the scope of Statement 87, as amended (as clarified by this Statement). The PPP term is defined as the
period during which an operator has a noncancelable right to use an underlying PPP asset, plus, if
applicable, certain periods if it is reasonably certain, based on all relevant factors, that the transferor or the
operator either will exercise an option to extend the PPP or will not exercise an option to terminate the
PPP.
A transferor generally should recognize an underlying PPP asset as an asset in financial statements
prepared using the economic resources measurement focus. However, in the case of an underlying PPP
asset that is not owned by the transferor or is not the underlying asset of an SCA, a transferor should
recognize a receivable measured based on the operator’s estimated carrying value of the underlying PPP
asset as of the expected date of the transfer in ownership. In addition, a transferor should recognize a
receivable for installment payments, if any, to be received from the operator in relation to the PPP.
Measurement of a receivable for installment payments should be at the present value of the payments
expected to be received during the PPP term. A transferor also should recognize a deferred inflow of
resources for the consideration received or to be received by the transferor as part of the PPP. Revenue
should be recognized by a transferor in a systematic and rational manner over the PPP term.
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MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 94 – Public-Private and Public-Public Partnerships and Availability Payment Arrangements
(Continued)
This Statement requires a transferor to recognize a receivable for installment payments and a deferred
inflow of resources to account for a PPP in financial statements prepared using the current financial
resources measurement focus. Governmental fund revenue would be recognized in a systematic and
rational manner over the PPP term.
This Statement also provides specific guidance in financial statements prepared using the economic
resources measurement focus for a government that is an operator in a PPP that either (1) meets the
definition of an SCA or (2) is not within the scope of Statement 87, as amended (as clarified in this
Statement). An operator should report an intangible right-to-use asset related to an underlying PPP asset
that either is owned by the transferor or is the underlying asset of an SCA. Measurement of the right-to-
use asset should be the amount of consideration to be provided to the transferor, plus any payments made
to the transferor at or before the commencement of the PPP term, and certain direct costs. For an
underlying PPP asset that is not owned by the transferor and is not the underlying asset of an SCA, an
operator should recognize a liability measured based on the estimated carrying value of the underlying
PPP asset as of the expected date of the transfer in ownership. In addition, an operator should recognize a
liability for installment payments, if any, to be made to the transferor in relation to the PPP. Measurement
of a liability for installment payments should be at the present value of the payments expected to be made
during the PPP term. An operator also should recognize a deferred outflow of resources for the
consideration provided or to be provided to the transferor as part of the PPP. Expense should be
recognized by an operator in a systematic and rational manner over the PPP term.
This Statement also requires a government to account for PPP and non-PPP components of a PPP as
separate contracts. If a PPP involves multiple underlying assets, a transferor and an operator in certain
cases should account for each underlying PPP asset as a separate PPP. To allocate the contract price to
different components, a transferor and an operator should use contract prices for individual components
as long as they do not appear to be unreasonable based on professional judgment or use professional
judgment to determine their best estimate if there are no stated prices or if stated prices appear to be
unreasonable. If determining the best estimate is not practicable, multiple components in a PPP should be
accounted for as a single PPP.
This Statement also requires an amendment to a PPP to be considered a PPP modification, unless the
operator’s right to use the underlying PPP asset decreases, in which case it should be considered a partial
or full PPP termination. A PPP termination should be accounted for by a transferor by reducing, as
applicable, any receivable for installment payments or any receivable related to the transfer of ownership
of the underlying PPP asset and by reducing the related deferred inflow of resources. An operator should
account for a termination by reducing the carrying value of the right-to-use asset and, as applicable, any
liability for installment payments or liability to transfer ownership of the underlying PPP asset. A PPP
modification that does not qualify as a separate PPP should be accounted for by remeasuring PPP assets
and liabilities.
APAs – An APA that is related to designing, constructing, and financing a nonfinancial asset in which
ownership of the asset transfers by the end of the contract should be accounted for by a government as a
financed purchase of the underlying nonfinancial asset. This Statement requires a government that
engaged in an APA that contains multiple components to recognize each component as a separate
arrangement. An APA that is related to operating or maintaining a nonfinancial asset should be reported
by a government as an outflow of resources in the period to which payments relate.
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CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 96 – Subscription-Based Information Technology Arrangements
This Statement provides guidance on the accounting and financial reporting for subscription-based
information technology arrangements (SBITAs) for government end users (governments). This Statement
(1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an
intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for
outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires
note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the
standards established in Statement No. 87, Leases, as amended.
A SBITA is defined as a contract that conveys control of the right to use another party’s (a SBITA
vendor’s) information technology (IT) software, alone or in combination with tangible capital assets (the
underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like
transaction.
The subscription term includes the period during which a government has a noncancelable right to use the
underlying IT assets. The subscription term also includes periods covered by an option to extend (if it is
reasonably certain that the government or SBITA vendor will exercise that option) or to terminate (if it is
reasonably certain that the government or SBITA vendor will not exercise that option).
Under this Statement, a government generally should recognize a right-to-use subscription asset—an
intangible asset—and a corresponding subscription liability. A government should recognize the
subscription liability at the commencement of the subscription term, —which is when the subscription
asset is placed into service. The subscription liability should be initially measured at the present value of
subscription payments expected to be made during the subscription term. Future subscription payments
should be discounted using the interest rate the SBITA vendor charges the government, which may be
implicit, or the government’s incremental borrowing rate if the interest rate is not readily determinable. A
government should recognize amortization of the discount on the subscription liability as an outflow of
resources (for example, interest expense) in subsequent financial reporting periods.
The subscription asset should be initially measured as the sum of (1) the initial subscription liability
amount, (2) payments made to the SBITA vendor before commencement of the subscription term, and (3)
capitalizable implementation costs, less any incentives received from the SBITA vendor at or before the
commencement of the subscription term. A government should recognize amortization of the subscription
asset as an outflow of resources over the subscription term.
Activities associated with a SBITA, other than making subscription payments, should be grouped into the
following three stages, and their costs should be accounted for accordingly:
• Preliminary Project Stage, including activities such as evaluating alternatives, determining needed
technology, and selecting a SBITA vendor. Outlays in this stage should be expensed as incurred.
• Initial Implementation Stage, including all ancillary charges necessary to place the subscription
asset into service. Outlays in this stage generally should be capitalized as an addition to the
subscription asset.
• Operation and Additional Implementation Stage, including activities such as subsequent
implementation activities, maintenance, and other activities for a government’s ongoing
operations related to a SBITA. Outlays in this stage should be expensed as incurred unless they
meet specific capitalization criteria.
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CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 96 – Subscription-Based Information Technology Arrangements (Continued)
In classifying certain outlays into the appropriate stage, the nature of the activity should be the
determining factor. Training costs should be expensed as incurred, regardless of the stage in which they
are incurred.
If a SBITA contract contains multiple components, a government should account for each component as a
separate SBITA or nonsubscription component and allocate the contract price to the different
components. If it is not practicable to determine a best estimate for price allocation for some or all
components in the contract, a government should account for those components as a single SBITA.
This Statement provides an exception for short-term SBITAs. Short-term SBITAs have a maximum
possible term under the SBITA contract of 12 months (or less), including any options to extend,
regardless of their probability of being exercised. Subscription payments for short-term SBITAs should
be recognized as outflows of resources.
This Statement requires a government to disclose descriptive information about its SBITAs other than
short-term SBITAs, such as the amount of the subscription asset, accumulated amortization, other
payments not included in the measurement of a subscription liability, principal and interest requirements
for the subscription liability, and other essential information.
How the Changes in this Statement will Improve Financial Reporting
The requirements of this Statement will improve financial reporting by establishing a definition for
SBITAs and providing uniform guidance for accounting and financial reporting for transactions that meet
that definition. That definition and uniform guidance will result in greater consistency in practice.
Establishing the capitalization criteria for implementation costs also will reduce diversity and improve
comparability in financial reporting by governments. This Statement also will enhance the relevance and
reliability of a government’s financial statements by requiring a government to report a subscription asset
and subscription liability for a SBITA and to disclose essential information about the arrangement. The
disclosures will allow users to understand the scale and important aspects of a government’s SBITA
activities and evaluate a government’s obligations and assets resulting from SBITAs.
EFFECTIVE FISCAL YEAR 2023/24:
GASB 100 – Accounting for Changes and Error Corrections
The primary objective of this Statement is to enhance accounting and financial reporting requirements for
accounting changes and error corrections to provide more understandable, reliable, relevant, consistent,
and comparable information for making decisions or assessing accountability
This Statement defines accounting changes as changes in accounting principles, changes in accounting
estimates, and changes to or within the financial reporting entity and describes the transactions or other
events that constitute those changes. As part of those descriptions, for (1) certain changes in accounting
principles and (2) certain changes in accounting estimates that result from a change in measurement
methodology, a new principle or methodology should be justified on the basis that it is preferable to the
principle or methodology used before the change. That preferability should be based on the qualitative
characteristics of financial reporting—understandability, reliability, relevance, timeliness, consistency,
and comparability. This Statement also addresses corrections of errors in previously issued financial
statements.
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CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 100 – Accounting for Changes and Error Corrections (Continued)
This Statement prescribes the accounting and financial reporting for (1) each type of accounting change
and (2) error corrections. This Statement requires that (a) changes in accounting principles and error
corrections be reported retroactively by restating prior periods, (b) changes to or within the financial
reporting entity be reported by adjusting beginning balances of the current period, and (c) changes in
accounting estimates be reported prospectively by recognizing the change in the current period. The
requirements of this Statement for changes in accounting principles apply to the implementation of a new
pronouncement in absence of specific transition provisions in the new pronouncement. This Statement
also requires that the aggregate amount of adjustments to and restatements of beginning net position, fund
balance, or fund net position, as applicable, be displayed by reporting unit in the financial statements.
This Statement requires disclosure in notes to financial statements of descriptive information about
accounting changes and error corrections, such as their nature. In addition, information about the
quantitative effects on beginning balances of each accounting change and error correction should be
disclosed by reporting unit in a tabular format to reconcile beginning balances as previously reported to
beginning balances as restated.
Furthermore, this Statement addresses how information that is affected by a change in accounting
principle or error correction should be presented in required supplementary information (RSI) and
supplementary information (SI). For periods that are earlier than those included in the basic financial
statements, information presented in RSI or SI should be restated for error corrections, if practicable, but
not for changes in accounting principles.
EFFECTIVE FISCAL YEAR 2024/25:
GASB 101 – Compensated Absences
The objective of this Statement is to better meet the information needs of financial statement users by
updating the recognition and measurement guidance for compensated absences. That objective is
achieved by aligning the recognition and measurement guidance under a unified model and by amending
certain previously required disclosures.
Recognition And Measurement
This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not
been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A
liability should be recognized for leave that has not been used if (a) the leave is attributable to services
already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time
off or otherwise paid in cash or settled through noncash means. Leave is attributable to services already
rendered when an employee has performed the services required to earn the leave. Leave that accumulates
is carried forward from the reporting period in which it is earned to a future reporting period during which
it may be used for time off or otherwise paid or settled. In estimating the leave that is more likely than not
to be used or otherwise paid or settled, a government should consider relevant factors such as
employment policies related to compensated absences and historical information about the use or
payment of compensated absences. However, leave that is more likely than not to be settled through
conversion to defined benefit postemployment benefits should not be included in a liability for
compensated absences.
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CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 101 – Compensated Absences (Continued)
This Statement requires that a liability for certain types of compensated absences—including parental
leave, military leave, and jury duty leave—not be recognized until the leave commences. This Statement
also requires that a liability for specific types of compensated absences not be recognized until the leave
is used.
This Statement also establishes guidance for measuring a liability for leave that has not been used,
generally using an employee’s pay rate as of the date of the financial statements. A liability for leave that
has been used but not yet paid or settled should be measured at the amount of the cash payment or
noncash settlement to be made. Certain salary-related payments that are directly and incrementally
associated with payments for leave also should be included in the measurement of the liabilities.
With respect to financial statements prepared using the current financial resources measurement focus,
this Statement requires that expenditures be recognized for the amount that normally would be liquidated
with expendable available financial resources.
Notes To Financial Statements
This Statement amends the existing requirement to disclose the gross increases and decreases in a liability
for compensated absences to allow governments to disclose only the net change in the liability (as long as
they identify it as a net change). In addition, governments are no longer required to disclose which
governmental funds typically have been used to liquidate the liability for compensated absences.
How the Changes in this Statement Will Improve Financial Reporting
The unified recognition and measurement model in this Statement will result in a liability for
compensated absences that more appropriately reflects when a government incurs an obligation. In
addition, the model can be applied consistently to any type of compensated absence and will eliminate
potential comparability issues between governments that offer different types of leave.
The model also will result in a more robust estimate of the amount of compensated absences that a
government will pay or settle, which will enhance the relevance and reliability of information about the
liability for compensated absences.
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MEMORANDUM ON INTERNAL CONTROL
STATUS OF PRIOR YEAR OTHER MATTERS
2021-01 Uninsured and Uncollateralized Bank Deposits
Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned
to it. California Law requires banks and savings and loan institutions to pledge government securities
with a fair value of 110% of the City’s cash on deposit, or first trust deed mortgage notes with a fair value
of 150% of the deposit, as collateral for these deposits that are in excess of the FDIC insurance level of
$250,000. 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 account balances with its fiscal agent that processes transactions related to bond issuances are
only insured up to the FDIC level of $250,000. Cash balances held by the fiscal agent in excess of that
balance are not insured or collateralized. As of June 30, 2021, $103,801,305 of the City’s bank balances
of $119,581,015 were exposed to custodial credit risk, because the balance in the fiscal agent account
related to the 2021A Community Civic Campus Project Lease Revenue Bonds was uninsured and
uncollateralized.
We understand the large cash balance was held by the fiscal agent due to timing of receipt of the bond
proceeds for the Bonds, as well as delays on the bank’s side in opening up a new investment account. As
a result, the City was not able to transfer the bond proceeds to a Local Agency Investment Fund (LAIF)
investment account until August 2021.
In the future, the City should ensure that all cash balances in excess of FDIC insurance are collateralized
to minimize custodial credit risk.
Current Status:
Implemented
2020-01 Documentation of Timely Preparation and Review of Bank and Investment
Reconciliations
Bank account and investment reconciliations are one of the most important internal controls a City can
have, and the reconciliation cannot be considered complete until it has been reviewed and approved. To
be an effective control, reconciliations and the associated review should be completed in their entirety as
soon as reasonably possible after each month-end, usually within thirty to forty-five days of the bank
statement date. The dates of preparation and performance of review of the reconciliations should be
documented to clearly indicate proper internal controls are in place and the reconciliation process was
completed timely. In addition, the Reporting Section of the City’s Investment Policy requires that the
City provide a quarterly investment report to the City Council.
We selected the October 2019, January 2020 and June 2020 reconciliations for testing and noted that they
were reviewed in December 2019, April 2020, and September 2020, respectively, but there was no
documentation of when the reconciliations had been prepared. In addition, we noted that the June 30,
2020 quarterly Investment Report was not provided to the City Council until October 2020.
We understand that City staff did not realize that the preparation date of the reconciliations should be
formally documented, and we also understand that during the fiscal year the City fell behind on the bank
and investment reconciliations and the preparation of the Investment Report due to the COVID-19
pandemic and City staff working remotely.
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CITY OF SOUTH SAN FRANCISCO
MEMORANDUM ON INTERNAL CONTROL
STATUS OF PRIOR YEAR OTHER MATTERS
2020-01 Documentation of Timely Preparation and Review of Bank and Investment
Reconciliations (Continued)
Update for June 30, 2021: We selected the September 2020, March 2021 and June 2021 reconciliations
for testing and noted that they were reviewed on December 7, 2020, May 17, 2021 and October 28, 2021.
Although we noted the March 2021 reconciliation was prepared and reviewed timely, the others were not.
We understand that during the fiscal year the City continued to fall behind on the bank and investment
reconciliations due to the COVID-19 pandemic and City staff working remotely.
By not completing and reviewing the bank reconciliations timely, accounting errors, misstatements and/or
unauthorized activities may not be identified or corrected in a timely manner and could accumulate to
amounts that cannot be identified and resolved.
The City should develop procedures to ensure the timely preparation and review of bank reconciliations
throughout the fiscal year and that the date the reconciliations are prepared is documented in some formal
manner. In addition, the City should ensure that the quarterly investment report is provided timely to the
City Council throughout the fiscal year.
Current Status:
Implemented
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