HEART OF SOLANO COUNTY
C A L FOR N A
City ofFairfield California
Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30 2006
CIlY OF FAIRFIELD CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30 2006
City Council
Harry T Price Mayor
Jack Batson Vice Mayor
John Mraz
Marilyn Farley
Frank Kardos
City Clerk
Arletta K Cortright
City Treasurer
Oscar G Reyes Jr
Executive Staff
Kevin O Rourke City Manager
Nancy Huston Assistant City Manager
Greg Stepanicich City Attorney
Gene Cortright Director of Public Works
John De Lorenzo Director of Community Services
Barbara Dillon Director of Human Resources
Bill Gresham Police Chief
Bob Leland Director of Finance
Sean Quinn Director of Community Development
Michael Smith Fire Chief
Prepared by City of Fairfield Finance Department
Telephone 707 428 7569 Fax 707 428 7597
City ofFairfield
Comprehensive Annual Financial Report
For the Year Ended June 30 2006
Table of Contents
INTRODUCTORY SECTION unaudited
Table of Contents
City Manager and Finance Director s Letter of Transmittal
Certificate of Achievement for Excellence in Financial Reporting GFOA
Certificate of Award for Outstanding Financial Reporting CSMFO
Organization Chart
City of Fairfield Mission Statement and City Values
Municipal Officers
v
xv
xvi
xvii
xviii
xix
FINANCIAL SECTION
Report of Independent Auditors 1
Managements Discussion and Analysis Required Supplementary Information 3
Basic Financial Statements
Government Wide Financial Statements
Statement of Net Assets 17
Statement of Activities and Changes in Net Assets 18
Fund Financial Statements
Government Funds
Balance Sheet 22
Reconciliation of the Governmental Funds Balance Sheet
to the Government Wide Statement of Net Assets 24
Statement of Revenues Expenditures and Changes in Fund Balances 26
Reconciliation ofthe Governmental Funds Statement
of Revenues Expenditures and Changes in Fund Balances
to the Government Wide Statement of Activities and Changes in Net Assets 28
General Fund Statement of Revenues Expenditures and Changes
in Fund balance Budget and Actual 29
Low and Moderate Income Housing Major Special Revenue Fund
Statement of Revenues Expenses and Changes in Fund Balance Budget to Actual 30
Proprietary Funds
Statement of Net Assets 32
Statement of Revenues Expenditures and Changes in Net Assets 34
Statement of Cash Flows 36
Fiduciary Funds
Statement of Net Assets 42
Notes to the Basic Financial Statements 43
City ofFairfield
Comprehensive Annual Financial Report
For the Year Ended June 30 2006
Table of Contents continued
FINANCIAL SECTION Continued
Required Supplementary Information
Public Employees Retirement System Schedule of Funding Progress 75
Supplementary Information
Non Major Governmental Funds
Combining Balance Sheet 80
Combining Statement of Revenues Expenditures and Changes in Fund Balances 84
Internal Service Funds
Combining Statement of Net Assets 88
Combining Statement of Revenues Expenses and Changes in Net Assets 90
Combining Statement of Cash Flows 92
Governmental Funds by Fund Type
General Fund
Balance Sheet 98
Statement of Revenues Expenditures and Changes in Fund Balances 99
Special Revenue Funds
Combining Balance Sheet 102
Combining Statement of Revenues Expenditures and Changes in Fund Balances 104
Combining Statement of Revenues Expenditures and Changes in Fund Balances
Budget and Actual Comparison 106
Debt Service Funds
Combining Balance Sheet 114
Combining Statement of Revenues Expenditures and Changes in Fund Balances 115
Capital Projects Funds
Combining Balance Sheet 118
Combining Statement of Revenues Expenditures and Changes in Fund Balances 119
Permanent Fund
Balance Sheet 122
Statement of Revenues Expenditures and Changes in Fund Balances 123
Agency Funds
Combining Balance Sheet 126
Combining Statement of Changes in Assets and Liabilities 128
ii
City ofFairfield
Comprehensive Annual Financial Report
For the Year Ended June 30 2006
Table of Contents continued
STATISTICAL SECfION unaudited
Net Assets by Component accrual basis of accounting
Changes in Net Assets accrual basis of accounting
Governmental Activities Tax Revenues by Source
Fund Balances of Governmental Funds accrual basis of accounting
Changes in Fund Balances of Governmental Funds
accrual basis of accounting
Assessed Value and Estimated Actual Value of Taxable Property
accrual basis of accounting
Property Tax Rates Direct and Overlapping Governments
Principal Taxpayers
Property Tax Levies and Collections
Ratio of Outstanding Debt by Type
Ratio of General Bonded Debt Outstanding
Direct and Overlapping Governmental Activities Debt
Legal Debt Margin Information
Pledged Revenue Coverage
Demographic and Economic Statistics
Principal Employers Current Year
Full time Equivalent City Government Employees by Function
Operating Indicators by Function
Capital Asset Statistics by Function
Table Page
1 135
2 136
3 138
4 139
5 140
6 141
7 142
8 143
9 144
10 145
11 146
12 147
13 148
14 149
15 152
16 153
17 154
18 155
19 156
SINGLE AUDIT
Independent Auditors Report on Compliance with Requirements
Applicable to Each Major Program and Internal Control over
Compliance in Accordance with OMB Circular A 133
Schedule of Expenditures of Federal Awards
Independent Auditors Report on Compliance and on Internal Control Over
Financial Reporting Based on an Audit of Financial Statements Performed
In Accordance with Government Auditing Standards
Summary of Audit Results and Findings
157
159
160
161
iii
HEART OF SOLANO COUNTY
C A L FOR N A
iv
CITY OF FAIRFIELD
Founded 1856 Incorporated Decem ber 12 1903
Home of
Travis Air Force Base
October 27 2006
COUNCIL
Mayor
Harry 1 Price
470278 7395
Vice Mayor
Jack Batson
707 429 6298
Councilmembers
707 429 6298
Marilyn Farley
Frank Kardos
John Mraz
City Manager
Kevin O Rourke
470278 7400
City Attorney
Greg Stepanrclch
470278 7419
City Clerk
Arletta Cortright
470278 7384
CityTreasurer
OscarG Reyes Jr
470278 7496
Honorable Mayor and City Council
City of Fairfield California
We are pleased to submit to you the Comprehensive Annual Financial Report CAFR of the City of
Fairfield the City for the fiscal year ended June 30 2006 State law requires that all general purpose
local governments publish a complete set of financial statements presented in conformity with general
accepted accounting principles GAAP and audited in accordance with generally accepted accounting
standards by a firm of licensed certified public accountants
REPORTING MODEL
The CAFR is presented in four sections introductory financial statistical and single audit The
introductory section includes this transmittal letter the City s organizational chart and a list of municipal
officers The financial section includes management s discussion and analysis MAD government wide
financial statements fund financial statements notes to the financial statements and required
supplementary information as well as the auditor s report on the financial statements and schedules The
MAD will provide additional information regarding management of the City s finances and should be
read in conjunction with the transmittal letter The statistical section includes selected financial and
demographic information generally presented on a multi year basis Information related to the single
audit including the schedule of federal financial assistance findings and recommendations and auditor s
reports on the internal control structure and compliance with applicable laws and regulations are
included in the single audit section of this report
Responsibility for both the accuracy of the data and the completeness and fairness of the presentation
including all disclosures rests with the City To the best of our knowledge and belief the enclosed data is
accurate in all material respects and is reported in a manner designed to fairly represent the financial
DEPARTMENTS
position and the results of operations of the various funds and account groups of the City All disclosures
n
6
ervlces
necessary to enable the reader to gain an understanding of the City s financial activities have been
included
Finance
470278 7496
Fire
470278 7375
Human Resources
470278 7394
Planning
Development
470278 7461
Police
707428 7551
Public Works
470278 7485
THE REPORTING ENTITYAND ITSSERVICES
This report includes all of the funds and account groups of the City It reports all activities considered to
be a part of controlled by and dependent on the City Accordingly this report includes the financial
activities of the Fairfield Water Facilities Improvement District No 1 the Water Improvement District
the Fairfield Sewer Facilities Improvement District No 1 the Sewer Improvement District the Fairfield
Municipal Park Improvement District No 1 the Park Improvement District the Fairfield Redevelopment
Agency the Agency the Housing Authority of the City of Fairfield the Housing Authority the Fairfield
CITY OF FAIRFIELD 1000 WEBSTER STREET FAIRFIELD CALIFORNIA 94533 4883
V
www ci fairfield ca us
Public Improvement Corporation the Corporation the Fairfield Public Financing Authority the Financing
Authority the Fairfield Storm Drain Facilities Improvement District No 1 the Storm Drain Improvement District
and the Fairfield Community Facilities Districts the Community Facilities Districts
Fairfield is a general law city and operates under a Council Manager form of government The City provides a full
range of municipal services including police fire water public transportation streets and highways housing
assistance cultural and recreation facilities social services golf course public works and parks planning
redevelopment economic development and general administration Sewer service is provided by agreement with
the Fairfield Suisun Sewer District which operates and maintains interceptors and the treatment plant while the
City maintains local collector sewers
CITY MANAGEMENT
Fairfield has benefited from stability of leadership and experience Harry Price was elected Mayor in 2005 and has
served on the City Council since 1997 Kevin O Rourke has been City Manager since 1997 and has another 16
years of prior city manager experience with the cities of Stanton and Buena Park He served a term as a Vice
President of the International City Management Association from 2000 2003 and served on the board of directors
of the League of California Cities City Attorney Greg Stepanicich has served the City since 1997 The other
members of the executive management team average 19 3 years of service with the City
The City has developed a reputation for progressive and business like management that in past years has earned
it statewide and national recognition for its financial management and entrepreneurial orientation Its leadership
has stressed long term planning and the ability to turn fiscal and other challenges into opportunities The need
for a businesslike outlook becomes ever more critical as other traditional sources of government revenues such
as state subvention and property tax allocations are eliminated or curtailed The City s long term financial health
is dependent on taking an active economic development role to create large and stable sources of revenue to
provide a high level of service required by a growing community in an efficient and cost effective manner
There has long been a strong focus on sound management of the City s financial resources to permit flexibility
and to preserve the City s good reputation in financial markets In 1981 the Assembly Office of Research cited
Fairfield as having maintained a very healthy fiscal position post Proposition 13 In 1982 the Wall StreetJournal
stated in a feature article on the City Perhaps no city though has been as enterprising as Fairfield The New
York Times in 1987 called Fairfield one of the first and most aggressive practitioners of government
entrepreneurship The California Taxpayers Association calls Fairfield s financial system a pioneering method of
government budgeting founded on incentives This budgeting system won former long time City Manager B
Gale Wilson the Outstanding Management Innovation Award in 1980 from the International City Management
Association Fairfield wasawarded the prestigious Helen Putnam Award for Excellence by the League of California
Cities for its assistance to the neighboring city of Rio Vista during that city s financial crisis in the spring of 1987
The City was cited extensively in the 1992 best selling book Reinventing Government
CITY ACCOMPUSHMENTS AND INITIATIVES
The Council adopted the following items as its priorities for fiscal year 2005 06 at the January 2005 goal setting
session Here is the progress made on each item during the past year
1 Making Fairfield Safer
Crime Rate In 2005 violent crime was reduced by 23 from the prior year Overall Part 1 crime was reduced
by 6 which exceeded the Council s goal of a 5 reduction The Crime Index which is a ratio between the
number of crimes and the population dropped to its 3rd lowest level in the past 15 years Total arrests were up
by 14 from 2004
Crime Free Multi Housing Program A Crime Prevention Specialist was hired a Police Officer assigned to the
program and training wasconducted The first apartment complex wascertified in February 2006
vi
Violent Crime Action Plan VCAP In line with City Council goals to reduce crime a major redeployment of
special units occurred during 2005 with the creation of the Gang and Drug Suppression Unit GDSU and the
Violent Crime Suppression Unit VCSU GDSU works primarily undercover to eradicate drug dealers and gang
activity The VCSU is a uniformed unit charged with targeting violent street criminals probationers and parolees
This highly visible highly mobile task force operated anywhere in the city without being tied to radio calls One
more VCSU team will be created in 2006 as soon as additional police officers can be hired and trained so that
seven day a week coverage can become a reality
Community Involvement and Public Outreach CIPO Several programs were developed in response to
improving the department s outreach and communication efforts including the Holiday Shopping Security
Operation at Solano Mall the return of the new and improved Citizens Police Academy a monthly Coffee with
the Chief program an improved Police website and the development of a Strategic Communications
Domestic Violence Program Council authorized creation of a Domestic Violence Unit to which a Master Social
Worker has been assigned along with two detectives part time
Building Great Neighborhoods This is an inter department effort focused on physical clean up and improved
safety and services in the East Tabor area A redesign of Dover Park was initiated and video surveillance
cameras installed there A 600 000 federal grant paid for a new Fun On The Run recreation program which
provided services in Dover Park and other park locations and for a new after school program called Kids Corner
which was provided in this target area free of charge
Community Development Quality Neighborhood Program QNT worked to expand the redevelopment area into
the PACE neighborhoods In conjunction with this effort a number of property acquisitions werecompleted in
North PACE Two successful after school programs were established in the PACE areas in partnership with
Parkway Community and True Love Baptist churches A partnership was developed with FSUSD to bring a free
lunch snack program to QNT neighborhoods A total of 113 Fairfield children primarily from QNT neighborhoods
participated in the summer National Youth Sports Program at U c Davis with funding from Clorox FSUSD
reduced bus costs and City CDBG funds Partnerships were also developed with Solano Kids Insurance Program
SKIP Safequest Kaiser Permanente North Bay Healthcare and Community Services to provide needed services
and access to programs Back to school night holiday and health fair events were held for the neighborhoods
2 Job Creation Business Growth and Retention
In 2005 the City Council adopted the Economic Development Strategy and Implementation Plan The marketing
firm e agency has been hired to implement a public relations marketing effort and to provide materials to assist
with the recruitment of new companies to Fairfield Also staff continued to work with the Fairfield Hotel
Association FHA to secure a California Welcome Center designation for Fairfield In support of this activity staff
assisted the FHA to create a 62 foot high pylon sign on Auto Mall Parkway New businesses recruitment
successes this year include Columbus Sa lame and Abbott In North Cordelia staff sold land to facilitate the
development of the Costco pads including Applebee s Bank of America and Pet Club In Green Valley Office
Park staff successfully negotiated the sale of land for the development of the Wiseman office building and the
completion of landscaping surrounding the detention pond at the entry to the park In Green Valley Corporate
Park Economic Development facilitated the sale ofAgency land within Green Valley Corporate Park for Venture
Corporation and North Bay Hospital and facilitated the development of two new hotels Staybridge Suites and
Homewood Suites In the Tolenas Industrial Park St Gobain broke ground on a 1 million square foot facility
Implementation of a new Business Retention Program is underway Economic Development Division staff has
committed to visit 250 businesses during the upcoming year Technical Assistance was provided to the Fairfield
Hotel Association and Suisun Valley Fund to help promote tourism
3 Infill Strategies and the 80 to 80 Corridor
The new Economic Development Strategy emphasized the need to focus on enhancing existing business districts
in Fairfield including the 80 to 80 corridor In addition 14 million in funding was provided in the budget for
Agency acquisition of the property in the corridor to facilitate infill redevelopment projects The benefits of
preparing a comprehensive 80 to 80 corridor specific plan that will provide the basis of new development
vii
regulations to encourage redevelopment and mixed use projects is being reviewed This could be based on form
based zoning which has been effective in other communities
In the downtown two major projects were completed including the County Government Center and McInnis
Corner The County Center has provided an employment anchor on Texas Street and the County Center Plaza
has provided a significant open space amenity that will serve as a community gathering spot for special events
The California League of Cities awarded a Helen Putman Award to this project
In addition a Purchase and Sale Agreement was negotiated with the County that will facilitate the new Stonefield
Corners project directly across Jefferson Street from the County Center Plaza This is a proposed three story
mixed use project with ground floor retail and restaurant space office condominiums and residential units The
first mural project downtown was also completed at the end of the year The Tomato and Candy Festivals had
record crowds On North Texas Street the Fairfield Bowl building wasdemolished making way for either a new
Post Office or a mixed use private development
On WestTexas Street the Allan Witt redevelopment project is the major effort Along Auto Mall Parkway the
Agency purchased the Economy Inn motel and removed the building This blighted motel produced over 600
calls for police service in 2004 and occupied a site more appropriate for an automobile dealership Agency staff is
working with the adjacent property owner to market the site for a new auto dealership Staff is working with
interested parties on vacant and underutilized parcels and a streetscape plan along West Texas Street
4 Funding in Challenging Times
The Finance Department developed a two year 2005 07 City Budget that identified an on going structural deficit
in the General Fund and estimated the size and timing of future budget reductions that will be necessary to
balance the budget In addition several potential sources of new revenue were identified and evaluated for
possible future implementation These include the establishment of area specific and or citywide Mello Roos
Districts to fund public safety and park maintenance the establishment of a new 911 Communications Fee to pay
for emergency dispatch costs and the re configuration of False Alarm Fees to recover more of the costs of police
responses to false alarms
As a cost saving measure the City issued 42 million of pension obligation bonds POB s to refinance its
unfunded liability with PERS thereby reducing the State s effective interest costs of 775 to 5 5 for an annual
citywide net savings of over 1 100 000 900 000 of these savings accrue to the General Fund
The Finance Department also provided the financial background information need for citizens to understand the
half cent sales tax proposal in Measure E the ballot question which was presented to voters in November 2005
Although the measure did not succeed it provided a valuable opportunity to inform citizens about the financial
realities faced by the City of Fairfield and prepare them to make future decisions about the level of city services
and the potential for increased revenues
Community Development staff applied for and received 63 000 in grant funds for park security and
neighborhood improvements 397 000 for the next segment of the Linear Park 350 000 for the pedestrian
connection between Downtown and the Suisun Train Station and 50 000 for pedestrian connections and
streetscape improvements on West Texas Street and Woolner Avenue Staff also negotiated the sale of land in
North Cordelia for Venture Corporation NorthBay Hospital and Green Valley Executive Center this past year that
generated approximately 3 9 million
5 BRAC 2005 and Travis AFB
A successful effort by the Travis Community Consortium TCe kept Travis off the 2005 Base Realignment and
Closure BRAe list The TCC waschaired by the City Manager and TCC staff was housed and supervised by
Planning and Development staff Effective lobbying also helped bring in 446 million in military construction at
Travis in FY2005 Add ons to the President s budget resulted in 15 million for C 17 related projects This was a
result of direct lobbying and the City s working relationship with Congresswoman Tauscher Other activities of
the City to support and enhance Travis included assistance on the Main Gate and North Gate reconstruction
viii
projects completing the transfer of 648 acres of the Wilcox Ranch to the Air Force incorporating 130 units in the
Villages at Fairfield project to be set aside for military personnel and participation on the State Advisory
Committee for the preparation of the Handbook for Community and Military Compatibility Planning
6 Clear Direction on New Developments
The City Council s goal was to ensure that as major development projects were processed through the
entitlement process that they meet the City s vision of the General Plan and that the impacts of these
developments werefully understood and addressed During 2005 two major development applications were
processed with this goal as their guiding factor These development wereThe Villages at Fairfield and the
Fairfield Corporate Commons Development The Villages includes approximately 2 400 housing units an 111 000
sf shopping center and school and park sites The Corporate Commons project consisted of approximately 400
housing units and approximately 850 000 sf of office space Once all of the projects impacts were identified and
the projects were deemed to meet the General Plan s goals and objectives such as livability and walk ability
specific mitigation measures and conditions were developed to address these impacts and ensure compliance
with the City s General Plan Several key public benefits were negotiated through the use of Development
Agreements above and beyond specific project mitigation required by the EIR They are summarized below
The Villages at Fairfield
Creation of a Community Facility District which will generate 1 033 000 annually for Public Safety and
126 000 annually for Park Maintenance
Dedication and construction of 19 acres of public parks
Development at no cost to City of a 2 400 sq ft Neighborhood Center building
Dedication of conservation easements or fee title of approximately 120 acres of open space lands
Development of 130 units of housing specifically for Military Personnel for a period of 55 years
Developer to advance major infrastructure improvements including major roadway segments above and
beyond that required by the EIR at an estimated cost of 19 million
Creation of a Community Enhancement Fee which will total 12 million
Fairfield Corporate Commons
Payment of 186 million in park fees
Payment of one quarter of one percent oftotal valuation of all commercial and industrial development for
Public Art
Creation of a Community Facility District which will generate approximately 258 100 annually for Public
Safety and 31 900 annually for Park Maintenance
Developer to construct a number of roadway and water improvements above and beyond those required
by the EIR including the advance of these costs These roadways improvements include segments of the
Northern Connector which will save the City and STA millions in future land acquisition costs
Many others projects processed during the last year were held to similar levels of review and many of them had
similar obligations such as the creation of the new Community Facilities District requirements placed upon them
ECONOMIC CONDITION AND OUTLOOK
General Economic Overview
The Legislative Analyst s Office LAO issued an economic report in February 2006 and their assessment was as
follows We forecast that California s economic growth will ease some in 2006 and 2007 but that the state s
economy will continue to expand during the next two years A key assumption underlying our forecast is that the
slowdown in real estate will not be dramatic and that output and hiring in other industries will offset most of the
softness in this sector Key assumptions underlying the LAO economic forecast are that 1 energy prices will
hold near current levels rather than rising significantly further in 2006 and 2007 and 2 California s housing
markets will experience only modest declines in sales construction and prices in 2006 Both of these
assumptions are subject to risks Key projections by the LAO are as follows
ix
Personalincome is projected to expand by 5 7 percent in 2006 and 5 percent in 2007 compared to
6 3 percent for 2005 Virtually all of the slowdown is related to more subdued growth in non wage
earnings particularly business profits related to real estate Wages in contrast are expected to grow at
a steady pace during the next two years
Payroll employment growth is projected to increase by 15 percent in 2006 and 2007 down slightly
from the 16 percent gain in 2005 These moderate increases are slightly greater than the state s adult
population and labor force growth rates which will result in a decline in the unemployment rate from
54percent in 2005 to 5 2 percent in 2006
Residential construction permits are projected to fall from 208 000 units in 2005 to 190 000 units in
2006 and 181 000 units in 2007 as higher interest rates tighter lending standards and slower sales
take their toll on building activity during this year and the next
Nonresidential permit valuations will continue to grow from 17 7 billion in 2005 to over 20 billion
in 2006 reflecting increases in both commercial and industrial building activity
Taxable sales growth is expected to slow from 6 5 percent in 2005 to 53percent in 2006 and
54percent in 2007 The slowdown is related to less spending on residential building materials and a
slight softening of consumer spending on home furnishings automobiles and other durable goods
Business investment related spending is expected to remain strong during 2006 and 2007
Housing Downturn
Since February 2006 the real estate market has fallen considerably Christopher Thornberg of the UCLA Forecast
said the following in October At the end of last year the real estate bubble popped And right now we re in the
middle of the bubble popping The real question is of course is it going to be a hard or soft landing
This is a slow moving train wreck Prices are easily 30 to 35 percent over valued
Local Growth Projections
Residential The number of new homes also is a good indicator of growth in the City s population which directly
results in increased demands for infrastructure and government services The City issued only 448 permits for
new units in 2005 06 which indicates the start of a projected 4 year downturn in housing starts Since 1980
housing starts have generally alternated in 4 5 year periods of higher growth 900 1 000 units per year and
slower growth 400 500 units per year Permits for new housing units have averaged 719 annually from fiscal
years 1979 80 through 2005 06 compared to 928 from 1999 00 through 2004 05 and are projected to average
408 units per year from 2005 06 through 2008 09 Under the current General Plan there are an estimated total
of 9 230 new housing units remaining through the projected build out in 2021 22
Non Residential The City has also maintained strong levels of commercial and industrial construction which is
consistent with the General Plan policy to increase the ratio of jobs to housing over the next thirty years Permits
for commercial and industrial development hit an all time high in 2005 06 with 1 828 000 square feet of which
one million square feet was a single facility compared to the annual average since 1979 80 680 000 square feet
The long term forecast assumes a higher annual average of 761 000 square feet of new development through
2021 22
x
RESIDENTIAL
1 800
1 600
1400
1 200
1 000
800
600
400
200
o
new housing units
80 83 86 89 92 95 98 01 04 07 10 13 16 19 22
COMMERCIAL INDUSTRIAL
2 000
1 800
1 600
1400
1 200
1 000
800
600
400
200
o
new square footage
80 83 86 89 92 95 98 01 04 07 10 13 16 19 22
The Association of Bay Area Governments ABAG periodically prepares a report that forecasts growth throughout
the nine county San Francisco Bay Area In Projections 2005 their latest report ABAG incorporated the smart
growth policies as adopted by agencies throughout the Bay Area and revised their projections accordingly As
an example Fairfield s latest General Plan reduced the scale of potential development particularly in the
Northeast Area and adopted an Urban Limit Line that requires voter approval to before it can be expanded
ABAG continues to see Solano County as the fastest growing county in the Bay Area over the next 15 years and
Fairfield as the leader in projected population and second when it comes to job growth within Solano County The
following charts compare actual and projected population and employment levels from 2000 to 2015 from ABAG s
report
Population Households Total Jobs Employed Residents
oano Solano 28 Solano 29 oano
Napa 17 Napa 18 Napa 25 Contra Costa
Santa Clara 16 Santa Clara 17 Sonoma 20 Sonoma 26
Contra Costa 16 Contra Costa 17 Contra Costa 18 Alameda 21
Alameda 14 Sonoma 16 Alameda 18 Santa Clara 17
Sonoma 14 Alameda 13 Marin 11 Napa 16
San Mateo 9 San Mateo 10 San Francisco 5 Marin 13
Marin 9 Marin 8 San Mateo 3 San Mateo 12
San Francisco 6 San Francisco 8 Santa Clara 3 San Francisco 8
Population Households Total Jobs Employed Residents
al Ie Fairfield 11 050 Vallejo 11 050 al Ie
Vallejo 25 300 Vacaville 8 570 Fairfield 9940 Vacaville 9 780
Vacaville 25 100 Vallejo 8 340 Vacaville 8 890 Vallejo 9 500
Rio Vista 10 200 Rio Vista 4 130 Benicia 3 830 Rio Vista 4 240
Suisun City 7 200 Suisun City 2 110 Suisun City 2 550 Suisun City 2 960
Dixon 5 700 Dixon 1 790 Dixon 1 650 Dixon 2410
Benicia 1 900 Benicia 670 Rio Vista 1 290 Benicia 550
xi
FINANCIAL INFORMATION
Internal Controls
City management is responsible for establishing and maintaining an internal control structure designed to ensure
that the assets of the government are protected from loss theft or misuse and to ensure that adequate
accounting data are compiled to allow for the preparation of financial statements in conformity with generally
accepted accounting principles The internal control structure is designed to provide reasonable but not absolute
assurance that these objectives are met 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 valuation of costs and benefits requires
estimates and judgments by management
Single Audit
As a recipient of federal and state financial assistance the City also is responsible for ensuring that an adequate
internal control structure is in place to ensure compliance with applicable laws and regulations related to those
programs This internal control structure is subject to periodic evaluation by management and the Finance staff of
the City In management s opinion the City s internal controls adequately safeguard assets and provide
reasonable assurance of the proper recording of financial transactions Also the results of the City s single audit
for the fiscal year ended June 30 2006 provided no instances of material weaknesses in the internal control
structure or significant violations of applicable laws and regulations
Budgeting Controls
In addition the City maintains budgetary controls The objective of these budgetary controls is to ensure
compliance with legal provisions embodied in the annual appropriated budget approved by the City Council
Activities of the general fund and special revenue funds are included in the annual appropriated budget
Project length financial plans are adopted for the capital projects funds Budgetary control is maintained at the
department level for administrative and operating expenditures and at the project budget level for capital
improvements For the administrative and operating budgets the line item budget authority is delegated to
department managers The City also maintains an encumbrance accounting system as one technique of
accomplishing budgetary control For the last seventeen fiscal years the City has adopted an annual budget with
a ten year financial plan The integration of the financial activities of the various agencies is accomplished
through the budget process pooling of cash for investments centralized cash receipting cash disbursement and
purchasing and the preparation of audited financial statements As demonstrated by the statements and
schedules included in the financial section of this report the City continues to meet its responsibility for sound
financial management
Cash Management
The cash and investments of both the City and its affiliated agencies are managed on a pooled basis The
average investment portfolio was 248 million in fiscal year 2005 06 Investments consisted primarily of
short term certificates of deposit commercial paper U S Government and U S Government Agency Securities
corporate notes repurchase agreements and the Local Agency Investment Fund LAIF managed by the
Treasurer of the State of California These investments are allowed under an investment policy adopted by the
City Council which defines eligible investments and maturities of the City s investment portfolio and requires
securities to be held by the City or by a qualified custodial institution and registered in the name of the City The
annualized return on pooled investments in 2005 06 was 3 63 the average maturity was 147 years and total
interest earned was 9 002 000 Approximately 133 million in market value of the portfolio is managed by
outside investment managers with the remaining balance of the portfolio managed by the City
Risk Management
The City is self insured for the first 500 000 of general liability and first 1 000 000 of workers compensation
claims Reserves are accumulated within the City s insurance funds to meet potential losses As protection
against catastrophic loss the City obtains commercial insurance for property claims Excess loss coverage
xii
through the California Joint Powers Risk Management Authority OPRMA a joint exercise of powers agency
provides up to 24 500 000 for excess general liability coverage The Fairfield Housing Authority is insured
through the Housing Authority s Risk Retention Pool HARRP Finally the City purchases excess workers
compensation insurance up to 100 000 000 per occurrence from governmental joint powers authority
Appropriations Limit
Proposition 4 the Gann initiative was passed by California voters in 1978 and is intended to limit government
appropriations The appropriations limit is calculated each year based upon fiscal year 1978 79 appropriations
which are modified by the composite consumer price index and population changes which have occurred in
subsequent years The City s appropriations limit and the estimated appropriations subject to limit for fiscal year
2005 06 amounted to 141 350 000 and 47 531 000 respectively City appropriations subject to the limit have
consistently remained 40 or less of the limit itself and are not expected to deviate from this trend in the
foreseeable future The Redevelopment Agency and Housing Authority appropriations are not subject to the
above limitations
INDEPENDENT AUDIT AND FINANCIAL REPORTING AWARDS
Caporicci Larson an independent public accounting firm have examined the financial statements of the City and
its affiliated agencies Their opinion on the City s financial statements and supplemental information is included
within this report
GFOA Certificate of Achievement Award The Government Finance Officers Association of the
United States and Canada GFOA awarded a Certificate of Achievement for Excellence in Financial
Reporting to the City of Fairfield for its comprehensive annual financial report CAFR for the fiscal year
ended June 30 2005 marking the 18th time Fairfield has received this award in the past 19 years In
order to be awarded a Certificate of Achievement a government unit must publish an easily readable and
efficiently organized CAFR whose contents conform to program standards Such reports must satisfy
both generally accepted accounting principles and applicable legal requirements A Certificate of
Achievement is valid for a period of one year only We believe our current report continues to conform to
Certificate of Achievement Program requirements and we are submitting it to GFOA to determine its
eligibility for another certificate
CSMFO Certificate of Award for Outstanding Financial Reporting The California Society of
Municipal Finance Officers awarded a Certificate of Award for Outstanding Financial Reporting to the City
of Fairfield for its CAFR for the fiscal year ended June 30 2005 the 19th consecutive year this award has
been received The certificate is issued in recognition of meeting professional standards and criteria in
reporting which reflect a high level of quality in the City s annual financial statements
xiii
ACKNOWLEDGMENTS
The preparation of this report could not be accomplished without the efficient and dedicated services of all the
employees of the Fairfield Finance Department We would like to express our special appreciation to the team
that worked hundreds of hours between them to prepare this document headed by Accounting Officer Arvinda
Krishnan with Principal Accountant Michael Less Senior Accountants Norman Veloso Joann Alcordo and Myles
Dixon and with Finance Technician Dave Benson Special assistance was also provided by Chief Information
Officer Laura Peabody Financial Services Manager David Creighton Revenue Officer Geri Martin Financial
Services Supervisor Wade Brown and City Treasurer Oscar G Reyes Jr We would also like to thank the Mayor
and members of the City Council for their support in planning and conducting the financial operations of the City
in a responsible and progressive manner
Respectfully submitted
tfI Kevin O Rourke
City Manager
Robert C Leland
Finance Director
xiv
Certificate of
Achievenlent
for Excellence
in Financial
Reporting
Presented to
City of Fairfield
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30 1005
A Cerlltkate of Achievement ror Excellence in FinanCIal
Reporting is presented by the Government Finance Of1icers
Assoclallon oCthe United States and Canada to
government units and public employee retnement
systems whose comprehensive annual finanClZ11
reports CAFRs achieve the lug hcst
standards III government accounllng
and financial reportjng
tfT
President
Executive Director
xv
Vl
t
Ll Ll
Q1Ljl
O
t
t
Q t3 V
t3
l
LQ 1
1
cj
xvi
t3
t
CS
c
O
QJ
CJ
QJ
U
lr
I
tl
t
t
t
t
s
C
c
c
lo
c
CJ
QI
i
l
t
5
t l 1
t IS
I t
1c
l
1 Q
Ji
ti
e
i 1
S
QI IS s
IS
t
J
1
tS
1 4
j oJ te
s
1 1t
lo r
l
J
1
t
1
C
Il
It
l
r
t
E
IE
a 5
ij
c
i
2
e
a
t
ts
t
t
U
5
ji
t1
l
U
I0
J
o
Zo
I
N
Z
C0
o
C
JW
LL
0
C
LL
LL
o
I
o
I u
o 0
J
VlUJ
Z
UJ I
N Elf
u
I
J
a
UJ
J
U
6
I
I
I
I
I
I
I
I
I
a
UJ
a
Vl
UJ
aI
6
IQU
u
c
Q 0
Vl
E
C E
8
E
8
I
i
I
J
cXS
a
00
u
I
I
J
C
Cl Q
C U
U
C
C E
jg E a 0
U
I
I
I
I
I
I
I
I
I
I
I
I
I
I
Co
c
J EE
ou
r
UJ
u
L
I
a
UJ
UZ
1
I I
Q C
U 0
to
o
Vl
c E
Q E
0 0
ou
J
I
I
J
U
2l
5
Iii
UJ
ij
eQJ
I
Vl
I
UJ
Z U
r
UJ
OVl
u
I
L
UJ
U
J
0
a
L
UVl
co a0 a
L
I
I
I
I
I
c
o
E
OlE
Q
g
rol
x
UJ a
I
5 1wC 8
u 1l Zc 1 6aiQ 5 u
EtU Q E 80 a1UaliU8l
I
llJ
C c
o c i llJ
igJi QJC urt
Jt51 aJ
rt Q
u u a5
UJ
a
u
c
o
Ill
c
g
Ill Ill C
a 8 E
E
0
u
0
1 8 llJ c E B
210
e a
1 t jjj
OllJ Z
U g z drofi ljij lO
co 13
01
t5 E
OlllJ
gg
lDUJ
c
cO
E
Q s aUl u c0 13 E Z g fij
ffi E 8
SO1U 2 Q ltJro
l 5
llJ
c UJ 2 2 ID
rc
U E
Z 00l
0l tiOl 82 E C a1ffi
g rc CI
Z
u
J 5u g ccQQ5e5c gs5o
c
o
c
tj 8 I C1J Ill ijj Ul C 6 1ii
c EE
g1llJ l6l ggllJ8 um llJE13aai etcliiz
c rc E c oB 2 Bi UO fij g cs E
U I
I
rE
Za 0J
UJ
0
uUJ
o
C c
g 0l8010ij g g Qjc 2 Q Os l1 5J Q ac I ffi 0
llJ jjj is ffi d f2llJ z
E gt
O aniCg Bro V5i t CSllJlf
J 3aUJ t c6 c
xvii
MISSION STATEMENT
We are committed to responding to the changing needs of our community to providing superior quality
public service and to creating a distinctive place to live through innovation professionalism and efficient
use of resources
CITYVALUES
WE VALUE TRUST
We are committed to uncompromised honesty and integrity in all our actions
We believe our actions should be reliable dependable and consistent
We want teamwork and a spirit of cooperative effort
We strive for a record of honesty fairness and approachability
WE VALUE QUALITY
We strive for excellence professionalism and pride in everything we do
We believe in providing the best quality of service and facilities
We expect quality from employees vendors and contractors
WE VALUE INNOVATION
We have a bias for action and support reasonable risk taking
We strive to recognize and take advantage of any opportunity that arises
We encourage fiscal innovation that creates new revenue sources
We accept that innovators have their share of failures
WE VALUE THE WORTH OF THE INDIVIDUAL
We respect individuals and are sensitive to their needs
We are committed to fair treatment of people
We seek ideas and participation from all levels
We encourage individual initiative and acceptance of responsibility
WE VALUE EFFECTIVE SERVICE
We believe in timely efficient and effective public service
We set trends and provide leadership in municipal services
We conduct sound and prudent financial operations
We take pride in conserving public resources
We place a high value on cooperation with other public and private entities but will not sacrifice
the best interest of the citizens of Fairfield
WE VALUE FUTURE ORIENTATION
We want to make decisions that will endure the test of time
We want to control our own destiny
We will foster economic success in the private sector and develop new resources in the public sector
We will promote the City s financial security and independence
We stive for economic development employment housing diversitifcation cultural and leisure
opportunities
We want to build a place you would like to live in
xviii
MUNICIPAL OFFICERS
CITY COUNCL Elected Term Expires
HarryT Price
Jack Batson
Marilyn Farley
Frank Kardos
John Mraz
Nov 3 2009
Nov 3 2007
Nov 3 2007
Nov 3 2009
Nov 3 2009
REDEVELOPMENT AGENCY Council Members
HOUSING AUTHORITY
Council plus 2 public members
Carmen M Aguilar Jun 30 2009
Mary Williams Jul 15 2007
CouncilAgency meets 1st and 3rd Tuesday 7 00 p m
Council Chambers Civic Center
Housing Authority meets as needed
PLANNING COMMISSION AODOinted
Gian Aggarwal
George Curry
Gupreet Dhugga
Andre Gardner
Liesa Houdashelt
Gary E Laski Vice Chair
Charles B Wood Chair
Jun 30 2010
Jun 30 2009
Jun 30 2008
Jun 30 2009
Jun 30 2007
Jun 30 2008
Jun 30 2007
COMMUNITY SERVICES COMMISSION Aooointed
Jesse Branch
Joseph Cherry
Maggie Halls
Clyde Jones Sr
Sharon Wellins
Muffy Jordan Vice Chair
Peter Gaudet Chair
Dec 31 2008
Dee 312009
Dec 31 2009
Dec 31 2009
Dec 31 2008
Dec 31 2006
Dec 31 2008
Youth Commission aDDointed
Meets 1st Sunday 3rd Monday 7 00 p m
Council Chamber Civic Center
Bryan Fagan
Vanessa Reyes
Andrew Crutchfield
Chloe Meadows
Beryl Thomas
Kevin Doherty
Simi Singh
CITY CLERK Elected
Arletta Cortright
CITY TREASURER Elected
Oscar G Reyes Jr
APPOINTED OFFICIALS
City Manager
Assistant City Manager
City Attorney
DEPARTMENT HEADS
Community Development
Finance
Public Works
Police
Fire
Community Services
Human Resources
Address 1000 Webster Street
Fairfield CA 944858333
Ana Ramirez
Elease Faye Dimond
Lindsay Guinto
Cassandra Glover
Kaitlyn Oren
Lauren Young
Kiran Singh
Nov 4 2007
Nov 4 2007
Kevin O Rourke
Nancy Huston
Greg Stepanicich
Sean Quinn
Bob leland
Gene Cortright
Bill Gresham
Michael Smith
John Delorenzo
Barbara Dillon
xix
HEART OF SOLANO COUNTY
C A L FOR N A
xx
I C L
Caporicci Larson
Certified Public Accountants
INDEPENDENT AUDITORS REPORT
To the Honorable Mayor and Members of City Council
of the City of Fairfield
Fairfield California
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 Fairfield Califor
nia City as of and for the year ended June 30 2006 which collectively comprise the City s basic financial
statements as listed in the table of contents These basic financial statements are the responsibility of the
City s management Our responsibility is to express an opinion on these basic financial statements based
on our audit
We conducted our audit in accordance with generally accepted auditing standards in the United States
and the standards applicable to financial audits contained in Government Auditing Standards issued by
the Comptroller General of the United States Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement
An audit includes examining on a test basis evidence supporting the amounts and disclosures in the
financial statements An audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall basic financial statement presentation
We believe that our audit provides a reasonable basis for our opinions
In our opinion the basic financial statements referred to above present fairly in all material respects the
respective financial position of the governmental activities the business type activities each major fund
and the aggregate remaining fund information of the City as of June 30 2006 and the respective changes
in financial position and cash flows where applicable thereof and the budgetary comparison for the
General Fund and Low and Moderate Income Housing Major Special Revenue Fund for the year then
ended in conformity with generally accepted accounting principles in the United States
As described in Note 1 to the basic financial statements the City adopted Statements of the Governmental
Accounting Standards Board No 42 Accounting andFinancial Reporting for Impairment ofCapital Assets
andInsurance Recoveries No 44 Economic Condition Reporting TheStatistical Section anamendment
ofNCGA Statement 1 No 46 Net Assets Restricted by Enabling Legislation and No 47 Accounting for
Termination Benefits
In accordance with Government Auditing Standards we have also issued our report dated October 27
2006 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 grants That report is an integral
part of an audit performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit
Toll Free Tel 877 862 2200 Toll Free Fax 866 436 0927
Oakland
180 Grand Ave Suite 1365
Oakland California 94612
Orange County
9 Corporate Park Suite 100
Irvine California 95606
Sacramento
777 Campus Commons Rd Suite 200
Sacramento California 95825
San Diego
4858 Mercury Suite 106
San Diego California 92111
1
To the Honorable Mayor and Members of City Council
of the City of Fairfield
Fairfield California
Page 2
The accompanying Required Supplementary Information such as Management s Discussion and Analysis
and other information as listed in the table of contents are not a required part of the basic financial
statements but are supplementary information required by the Governmental Accounting Standards Board
We have applied certain limited procedures which consisted principally of inquires of management re
garding the methods of measurement and presentation of the Required Supplementary Information
However we did not audit the information and express no opinion on it
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 is pre
sented for purpose of additional analysis and is not a required part of the basic financial statements The
Supplementary Information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and in our opinion are fairly stated in all material respects in relation to the
basic financial statements taken as a whole The Introductory and Statistical Sections have not been
subjected to the auditing procedures applied in the audit of the basic financial statements and accord
ingly we express no opinion on them
1
Oakland California
October 27 2006
2
MANAGEMENT S DISCUSSION AND ANALYSIS
Fiscal Year Ended June 30 2006
This discussion and analysis of the City of Fairfield s City s financial performance provides an overview of the
City s financial activities for the fiscal year ended June 30 2006 Please read it in conjunction with the transmittal
letter the basic financial statements and the accompanying notes to those financial statements
A FINANCIAL HIGHUGHTS
The assets of the City exceeded its liabilities at the close of the most recent fiscal year by 4618 million
Of this amount 167 2 million may be used to meet the City s ongoing obligations to citizens and
creditors
As of the close of the current fiscal year the City s governmental funds reported combined ending fund
balance of 124 0 million Approximately 12 5 of the combined fund balance 15 5 million is
considered unreserved and is available for spending at the City s discretion
The City s total debt decreased by 10 7 million during the current fiscal year The decrease is
attributable to the net result of normal amortization of the debt
B OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City s basic financial statements which
consists of three parts 1 Government Wide Financial Statements 2 Fund Financial Statements and 3 Notes
to the Basic Financial Statements This report also contains other supplementary information in addition to the
basic financial statements The financial statements presented herein include all of the activities of the City and
its component units using the integrated approach as prescribed by GASB Statement No 34
Government Wide Financial Statements
The Government Wide Statements provide readers with a broad view of the City s finances using the economic
resources measurement focus and accrual basis of accounting These accounting methods are similar to those
used by private sector companies All of the current years revenues and expenses are taken into account
regardless of when cash is received or paid Additionally certain interfund receivables payables and other
interfund activity have been eliminated as prescribed by GASB Statement No 34
The Statement of Net Assets and the Statement of Activities and Changes in Net Assets report information about
all assets including infrastructure as well as all liabilities including long term debt of the City Net assets are
the difference between assets and liabilities which is one way to measure the City s financial health All changes
in net assets are reported as soon as the underlying event giving rise to the change occurs regardless of timing
of related cash flows Over time increases or decreases in the City s net assets are one indicator of whether its
financial health is improving or deteriorating
In these statements City activities are separated into two categories
Governmental activities Most of the City s basic services are reported in this category including
administration human resources finance housing programs police fire public works planning and
development community services and redevelopment Property and sales taxes user fees interest
income franchise fees and state and federal grants are among the revenues that finance these activities
3
CityofFairfield
Management s Discussion and Analysis continued
For the Year Ended June 30 2006
Business type activities The City charges a fee to customers to cover all or most of the cost of
certain services it provides The City s water system and treatment plants golf courses transit services
and senior housing program are reported as business type activities
Fund Financial Statements
A fund is a group of related accounts that is used to maintain control over resources that have been segregated
for specific activities or objectives Some funds are required to be established by State law or bond covenants
However management establishes many other funds to help it control and manage money for particular
purposes or to demonstrate it is meeting legal responsibilities for using certain taxes grants or other money that
is restricted in its use Fund Financial Statements provide detailed information about the most significant funds
not the City as a whole
The City has three types of funds
Governmental funds Most of the City s basic services are reported in governmental funds using the
current financial resources measurement focus and modified accrual accounting method which measures
cash and all other financial assets that can readily be converted to cash The governmental funds are
used to account for essentially the same functions reported as governmental activities in the
Government Wide Financial Statements However unlike the Government Wide Statements
Governmental Funds Financial Statements focus on current financial resources The focus is on how
spendable money flows into and out of those funds and the balances left at year end which are
available for spending Governmental fund information helps determine whether there are more or fewer
financial resources that can be spent in the near future to finance the City s programs
To better understand the City s long term and short term requirements it is useful to compare the City s
Governmental Funds Statements with the governmental activities in the Government Wide Financial
Statements A reconciliation is provided for both the governmental fund balance sheet and the statement
of revenues expenditures and changes in fund balances to facilitate this comparison
Proprietary funds When the City charges customers for the services it provides whether to outside
customers or to other units of the City these services are generally reported in proprietary funds
Proprietary funds are reported in the same way in which all activities are reported under the Government
Wide Financial Statements using the accrual basis of accounting The City s enterprise funds are actually
the same as business type activities reported in the government wide statements but provide more
detail and additional information such as cash flows for proprietary funds The City uses internal service
funds the other component of proprietary funds to report activities that provide supplies and services
for the City s other programs and activities such as the City s self insurance fleet operations equipment
replacement and loan funds The internal service funds are reported with governmental activities in the
Government Wide Financial Statements
Fiduciary fundsThe City is the trustee or fiducia for certain funds held on behalf of a variety of
third parties The fiduciary activities are agency funds which only report a balance sheet and do not have
a measurement focus The City s fiduciary activities are reported in separate Statements of Fiduciary Net
Assets These activities are excluded from the City s other financial statements because the City cannot
use these assets to finance its operations However the City is responsible for ensuring that the assets
reported in these funds are used for their intended purposes
4
City ofFairfield
Management s Discussion and Analysis continued
For the Year Ended June 30 2006
Notes tothe Financial Statements
The notes provide additional information essential to a full understanding of the data provided in both the
Government Wide Statements and Fund Financial Statements The notes to the financial statements can be found
on pages 43 74 of this report
Other Information
In addition to the basic financial statements and accompanying notes this report also presents certain Required
Supplementary Information concerning the City s progress in funding its obligation to provide pension benefits to
its employees and budgetary comparison schedules for the general fund and each major special revenue fund
This information can be found on page 75
C GOVERNMENT WIDE FINANCIAL ANALYSIS
The City s combined Net Assets in millions for the fiscal year ended June 30 2006 totaled 4618 million The
detail may not add due to rounding
Summary ofNetAssets
in millions
Governmental Activities Business Type Activities Total
2006 2005 2006 2005 2006 2005
Current and other assets 3438 314 3 57 6 62 5 396 0 376 8
Capital Assets 215 0 206 0 113 2 107 5 328 2 313 5
Total Assets 5453 520 3 170 8 170 0 724 2 690 3
Long term liabilities outstanding 166 5 173 2 65 3 649 231 8 242 6
Other liabilities 8 2 10 1 242 22 2 30 6 32 3
Total liabilities 174 7 183 3 87 7 916 2462 274 9
Net Assets
Invested in capital assets
net of related debt 97 1 74 8 244 9 2 121 5 84 0
Restricted 197 5 1470 197 5 1470
Unrestricted 84 1 918 58 7 69 2 142 8 1610
Total Net Assets 378 7 337 0 83 1 748 461 8 4415
The restricted net assets represent 43 of the total net assets and are subject to external restrictions The
increase of 27 1 million in restricted net assets is due mainly to an increase in reserves for capital projects debt
service and community development This money will be available for future spending but only for speCific
projects around the City The balance of unrestricted net assets which represents 36 of the total net assets
may be used to meet the government s ongoing obligations to citizens and creditors
During the current fiscal year the City s net assets increased by 446 million The increase to net assets is
attributable to additional purchases on land held for resale the issuance of addition notes receivable along with
additional purchases and donations of capital assets
A Statement of Activities and Changes in Net Assets as of June 30 2006 is presented on the next page
5
City ofFairfield
Management s Discussion and Analysis continued
For the Year Ended June 30 2006
Statement ofActivities and Changes in NetAssets
in millions
Governmental Activities Business type Activities Total
2006 2005 2006 2005 2006 2005
Revenues
Program Revenues
Charges for services 7 7 8 1 42 5 42 1 50 2 50 2
Operating grants and contributions 137 231 45 7 2 22 7 28 5
Capital grants and contributions 25 0 34 1 2 3 04 27 3 34 5
General revenues
Taxes
Property taxes 45 0 39 8 45 0 39 8
Other taxes 29 6 247 29 6 247
Grants and contributions not
restricted to specific programs 16 2 6 8 16 2 6 8
Investment earnings 6 7 5 6 16 14 8 3 7 0
Miscellaneous 7 3 12 5 7 3 12 5
Total revenues 154 8 155 6 518 511 206 6 2706
Expenses
Administration 1 2 0 1 2 0
Human Resources 07 0 8 0 7 0 8
Finance 2 7 2 7 2 7 2 7
Police 25 9 23 8 25 9 23 8
Fire 12 9 114 12 9 114
Public Works 30 7 312 370 312
Community Development 8 3 94 8 3 94
Community Services 8 0 7 9 8 0 7 9
Redevelopment 13 6 13 5 13 6 13 5
Non Departmental 3 6 3 0 3 6 3 0
Interest on long term debt 5 9 47 5 9 4 7
Water Utility 24 2 245 24 2 245
North Bay Treatment Plant 65 57 6 5 57
Transportation 8 2 8 1 8 2 8 1
Golf Courses 69 7 1 6 9 7 1
Housing Programs 10 10 10 10
Total expenses 1413 1410 46 8 47 3 160 2 1757
Increase in net assets before transfers 414 45 2 5 0 3 8 446 49 0
Transfers 0 3 04 03 04 0 0 0 0
Increase decrease in net assets 417 44 8 4 7 4 2 446 49 0
Net assets July 1 337 0 292 2 748 74 2 4415 3466
Net assets June30 3778 337 0 83 1 748 4618 4415
Governmental Activities
The cost of all governmental activities this year was 1413 million However as shown in the Statement of
Activities the amount that the taxpayers ultimately financed for these activities was only 643 million because
some of the cost was paid by those who directly benefited from the programs 7 million or by other
governments and organizations that subsidized certain programs with operating grants and contributions 137
million and capital grants and contributions 25 0 million Overall these governmental program revenues
totaled 50 0 million The City paid for the remaining public benefit portion of governmental activities with
6
City ofFairfield
Management s Discussion and Analysis continued
For the Year Ended June 30 2006
74 6 million in taxes some of which could only be used for certain programs and 30 2 million with other
revenues such as interest and general entitlements
Total resources available during the year to finance governmental operations were 492 1 million consisting of
Net Assets at July 1 2005 of 337 0 million program revenues of 50 0 million and General Revenues including
transfers of 105 1 million Total Governmental Activities expenses during the year were 1413 million thus
Net Assets increased from 377 0 million to 378 7 million The following table shows the Net Cost of
Governmental Activities which totaled a cost of 643 million
NetCost ofGovernmental Activities
in millions
Total Cost ofServices
2006 2005
Administration 11 2 0
Human Resources 0 7 0 8
Finance 27 27
Police 25 9 23 8
Fire 12 9 114
Public Works 30 7 312
Community Development 83 94
Community Services 8 0 7 9
Redevelopment 13 6 63
Non departmental 3 6 10 2
Interest on long term debt 5 9 47
Total 1413 1410
NetCost ofServices
2006 2005
11
07
2 7
23 2
12 8
2 1
13
43
12 5
3 6
5 9
643
2 0
0 8
27
213
111
13 5
2 5
5 1
10 2
47
46 9
Business Type Activities
The cost of all Business Type activities this year was 46 8 million As shown in the Statement of Activities and
Changes in Net Assets the amounts paid by users of the systems was 42 5 million operating grants and
contributions were 54 million and capital grants and contributions were 23 million for a total of 50 2
program revenues to offset the cost of these activities
Total resources available during the year to finance Business Type Activities were 129 9 million consisting of Net
Assets at July 1 2005 of 748 million program revenues of 50 2 million and General Revenues including
transfers of 13 million Total expenses of Business Type Activities during the year were 46 8 million thus Net
Assets increased from 748 million to 83 1 million
7
City ofFairfield
Management s Discussion and Analysis continued
For the Year Ended June 30 2006
NetCost and Revenue and Expense ofBusiness Type Activities
in millions
Total Cost ofServices NetCost ofServices
2006 2005 2006 2005
Water Utility 24 2 245 7 1 6 7
North Bay Treatment Plant 65 5 7 04 0 1
Transportation 83 8 1 08 19
Golf Courses 6 9 7 1 23 2 0
Housing Programs 10 10 0 2 0 2
Total 46 9 437 34 2 5
35 0
30 0
25 0
20 0
15 0
10 0
5 0
0 0
lEI 2006 Revenue
2006 Expense
Water North Bay Transpor Golf Housing
Utility Plant tation Courses Program
313 6 1 7 5 4 6 07
24 2 6 5 8 3 6 9 1 0
Revenue generated by the Golf Courses together with a transfer from the General Fund did not cover the
increased cost in operation and maintenance expenses for the courses The decrease in Transportation revenue
is attributed to the decrease in capital grants due to lower capital expenditures
D FINANCIAL ANALYSIS OF THE CITYS FUNDS
The City uses fund accounting to ensure and demonstrate compliance with finance related legal requirements
The Fund Financial Statements focus on individual parts of the City government reporting operations in more
detail than the Government Wide Statements
Governmental Funds
The City s governmental funds provide information on near term inflows outflows and balances of spendable
resources The City s governmental funds reported a combined fund balance at June 30 2006 of 124 0 million
an increase of 147 million over the end of the previous fiscal year
The General Fund is the chief operating fund of the City As a measure of the General Fund s liquidity it may be
useful to compare both unreserved and total fund balance to total funding requirements At the end of the
8
City ofFairfield
Management s Discussion and Analysis continued
For the Year Ended June 30 2006
2005 06 fiscal year the total fund balance of the General Fund was 16 9 million of which the unreserved
portion was 15 5 million This unreserved fund balance is equal to 24 9 of total General Fund expenditures
and operating transfers out
The Low and Moderate Income Housing funds show an increase in the fund balance of 4 6 million from the prior
year The redevelopment requirement for 20 set aside contribution to the Low and Moderate Housing funds
from the property taxes received attributes to the increase in the funds
The Redevelopment Agency Debt Service funds show a decrease in the fund balance of 40 million from the
prior year with a cumulative fund balance deficit of 79 6 million This decrease is attributed to the fact the
Agency borrowed additional debt in order to fund the various capital projects within the Agency The overall fund
deficit can be attributed to the fact the Agency s inter fund loans from the City primarily from the
Intragovernmental Loan Fund are now required under GASB 34 to be shown in the Debt Service funds
themselves rather than under General Long Term Debt as in pre GASB 34 fiscal years
The Redevelopment Agency Capital Project Funds show an increase in the fund balance of 3 7 million from the
prior year This is due to a combination of scheduled projects beginning while other projects were being
completed Most of this increase is attributed towards the transfer from the Agency s debt service fund to
purchase land held for resale
The City Projects Capital Projects fund balance increased by 54 million to 52 0 which is largely the result of
the continued collection of AB1600 growth impact fees toward future projects
The fund balance of Other Governmental Funds increased by 4 2 million to 84 1 million which is due to the
reduction of project expenditures
Proprietary Funds
The City s proprietary funds provide the same type of information found in the Government Wide Financial
Statements but in more detail Factors concerning these funds have already been addressed in the discussion of
business type activities under the Government Wide Statements
E GENERAL FUND BUDGETARY HIGHUGHTS
Over the course of the year the City Council may revise the City budget on more than one occasion The
Approved Budget is adopted by the City Council prior to the July 1 start of the fiscal year Original Budget The
City Council may make appropriation or revenue estimate changes during the course of the fiscal year primarily
at the midyear budget review Finally the revenue and expenditure estimates for the current fiscal year are
revised as part of the Approved Budget for the folowingfiscal year Final Budget
Fiscal year 2005 06 wasthe first year of a two year budget The original estimates were made in April 2005 and
the final estimates in April 2006 along with a change in the cost allocation plan that converted General Fund
revenues to an equal of expense credits for each affected department The final 2005 06 revenue estimate of
60 2 million compares to 62 1 million of actual revenues 3 2 variance with the majority of the increase
coming from property taxes and land sale income The final 2005 06 expenditure estimate of 547 million
compares to 56 2 million of actual expenditures 2 2 variance with nearly all of the decrease coming from
higher than projected employee vacancies General Fund departments began the fiscal year with a total adjusted
carryover cumulative unspent appropriations from prior years of 5 2 million and ended at 6 5 million an
increase of 26 The carryover is designated for subsequent years expenditures and is part of the General Fund
balance
9
City ofFairfield
Management s Discussion and Analysis continued
For the Year Ended June 30 2006
F CAPITAL ASSETS AND LONG TERM OBUGATIONS
Capital Assets
The capital assets of the City are those assets which are used in the performance of the City s functions including
infrastructure assets The City has elected to use the Basic Approach as defined by GASB Statement No 34 for
infrastructure reporting Under GASB Statement No 34 eligible infrastructure capital assets are depreciated
under the straight line method At June 30 2006 net capital assets of the governmental activities totaled 215 0
million and the net capital assets of the business type activities totaled 113 2 million Depreciation on capital
assets is recognized in the Government Wide Financial Statements Refer to note 7 on pages 60 61 for a more
detailed listing of all capital assets
Summary of Capital Assets
in millions
Accumulated Carrying
Cost Depreciation Amount
Governmental Activities
Land 23 2 23 2
Buildings and Improvements 57 8 28 1 29 7
Equipment Vehicles Machinery 26 8 175 111
Infrastructure 259 1 124 6 134 5
Construction in Progress 16 5 16 5
Total Governmental Activities 3483 1468 215 0
Business Type Activities
Land 134 14 3
Buildings and Improvements 65 8 27 1 378
Equipment Vehicles Machinery 22 9 16 9 6 0
Infrastructure 68 1 46 0 22 1
Construction in Progress 32 1 32 1
Total Business Type Activities 203 2 90 0 113 2
This years major capital asset additions were
Acceptance of five subdivisions which mostly consist of donated infrastructure additions ie roads
water and sewer lines etc along with the purchase of land for the expansion of the corporation yard
Additional assets being constructed are Cordelia Library North and South Cordelia Reservoirs Waterman
Water Treatment Plant upgrade along with other projects currently under construction
10
City ofFairfield
Management s Discussion and Analysis continued
For the Year Ended June 30 2006
Long Term Indebtedness
Debt considered a liability of governmental activities decreased during 2005 06 by a net of 67 million to an
outstanding balance of 166 5 million as of June 30 2006 The decrease is a result of normal amortization of the
debt The City s bonded debt per capita is a useful indicator to citizens and investors of the City s debt position
The bonded debt at June 30 2006 is equivalent to 119 per capita down 5 6 from the previous fiscal year
Debt for business type activities decreased in 2005 06 by 4 0 million to 65 3 million as a result of the normal
amortization of debt A schedule of outstanding bonded debt is presented on the following page Refer to Note
9 on page 62 of the notes to the financial statements for a more detailed listing
Summary of Long Term Indebtedness
in millions
Governmental Activities Business Type Activities Total
2006 2005 2006 2005 2006 2005
General Obligation Bonds 12 8 13 2 12 8 13 2
Pension Obligation Bonds 417 417 417
Special Assessment District Bonds 8 2 lOA 8 2 lOA
Open Space Revenue Bonds 0 8 0 8 0 8 0 8
Redevelopment Revenue Bonds 77 5 80 9 757 80 9
Utility Water Revenue Bonds 52 2 575 52 2 55 7
Recreational Revenue Bonds 13 1 13 6 13 1 13 6
Long Term Notes Payable 83 10 0 8 3 10 0
Compensated Absences 9 6 8 6 9 6 8 6
Claims and Judgements 7 6 7 6 7 6 7 6
Total Indebtedness 1566 173 2 65 3 639 231 8 242 5
G ECONOMIC FACTORS AND NEXT YEAR S BUDGET
The City annually prepares a ten year financial plan which focuses on long term financial viability and allows
decision makers to better understand the on going impact of current policy decisions Multi year planning also
provides both an early warning of adverse financial trends and more time to implement changes to ensure
better outcomes Budget development is guided by a series of budget and financial policies adopted by the City
Council including long term planning the Expenditure Control Budget concept minimum reserve levels
employee compensation cash and debt management information technology and utility rates Due to financial
uncertainties caused by the State Budget deficit and rising personnel costs for retirement and health insurance
the City enacted a two year budget for fiscal years 2005 06 and 2006 07 The budget wasbased on the following
key assumptions
The return of the Prop 1A property tax shift starting in 2006 07 11 million lost in both 2004 05 and
2005 06
Strong property tax growth in the near term with growth tapering off to 4 annually as real estate market
cools assumes no real estate bubble bursting
No new revenue sources are enacted
Continued moderate growth for sales tax revenues in the 4 range at below statewide average due to
increased retail competition from neighboring cities
Low growth in Transient Occupancy Tax reflects the increased competition among a greater number of
motels and the impact of the 350 room hotel on Travis AFB that will reduce business at the privately owned
motels in town starting in 2006
11
City ofFairfield
Management s Discussion and Analysis continued
For the Year Ended June 30 2006
The General Fund will continue to receive an amount equal to the currently budgeted water utility payments
in lieu of taxes
The Police Department receives 2758 additional full time equivalent FTE positions in 2005 06 and the Fire
Department seven positions There will be 648 298 authorized FTE in 2005 06 up from 606 624 in 2004 05
The Consumer Price Index on which annual cost of living salary adjustments are based will increase at 3
over time Health insurance costs will increase at 9 27 in 2005 06 with 12 annual growth over the
next fours years Long term PERS rates will be as forecasted by John Bartel Associates with 42 million of
unfunded liability paid off using pension obligation bonds
New development assumes an average of 608 new housing units per year from 2006 07 through 2021 22
and an average of 761 000 in non residential square footage added annually over the same period
From fiscal years 2005 06 through 2008 09 expenditure cuts will not be required to maintain a 7 General
Fund reserve However the addition of 50 police and fire positions since 2003 will require 8 million in
budget cuts to be implemented over fiscal years 2009 10 and 2010 11 to bring the General Fund budget into
balance with a 7 reserve level From 2006 07 through 2010 11 a total of 7 9 million in General Fund
reserves will be used up in maintaining budgeted service levels
2006 City Priorities
The City Council annually adopts priorities for the coming year The Council set the following priorities in January
2006 which are listed in order and include key discussion notes
1 Public Safety
Develop a plan for reducing crime in all categories focus on reductions in violent crime strive for overall
Part Icrime reduction of 5
Include community development particularly in high risk areas Boys and Girls Club coordinating with
schools tutoring after school programs nonprofits schools involved Police Athletic League domestic
violence programs gang suppression program etc
Better deployment of officers
Serious data collection and examination
Examine more efficient use of staff dollars
Explore ways to relieve burden on dispatch
Explore gang injunctions resisting arrest4001
Investigate revenue enhancements via fees false alarms 911
Develop a new slogan Safe Streets Safe Community
Survey public again in 2 years
Code enforcement
2 Budget Fiscal Future
Economic development planning
Community engagement strategies
Three study sessions to be scheduled
Continue to deal with long term fiscal deficit
Publicize and continue to recognize the efforts and performance of staff in providing services efficiently
Explore new sources of revenue public safety related fees grants etc
Lobby for state national for city funding
AB 1600 fee review
Development of new managers and succession planning remains a priority
Examine infrastructure funding 30 year park plan cost of new projects etc
3 Economic Development
Continuing support of current programs
12
City ofFairfield
Management s Discussion and Analysis continued
For the Year Ended June 30 2006
Maintain long term strategy
Attract major business
Explore work force development initiative with UCD Solano Community College School Districts K 12 and
Sacramento State University
Technology Park feasibility of site
Goals for Business Improvement Associations
4 80 to 80 Infill Strategies
Re evaluate design strategy of this area form based zoning
Redevelopment strategies
S Travis Air Force Base
Continue involvement with Travis Community Consortium
Lobby on key issues 2006 MilCon legislation
6 Transportation and Transit
Review transportation sales tax initiative and consider its recommendation
Clarify Central Transfer Center location issues
Fairfield Transportation Center Phase III
Implement Northern connector
7 Affordable Housing
Schedule a study session on inclusionary housing and affordable housing include Home Builder s
Association and non profit housing association
8 Funding Infrastructure
Re evaluate Linear Park concept
New project construction costs will be higher
AB 1600 fee increase to ensure growth pays its own way
Ability to fund 3D year park plan
Sewer funding adequacy given new regulations
H CONTACTING THE CITY S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens taxpayers customers and investors and creditors with a
general overview of the City s finances and to show the City s accountability for the money it receives Ifyou have
questions about this report separate reports of the City s component units or need any additional financial
information contact the Finance Department at 1000 Webster Street Fairfield CA 94533 phone 707 428 7569
or e mail akrishnan@ cLfairfield ca us
13
HEART OF SOLANO COUNTY
C A L FOR N A
14
Government Wide Financial Statements
15
ME ATOP BOLAND CIOUiNT
C If L F c R III I
16
CITY OF FAIRFIELD
Statement of NetAssets
June 30 2006
Primary Government
Governmental Business Type
Activities Activities Total
ASSETS
Cash and investments 192 958 977 38 772 083 231 731 060
Receivables net 51 676 306 5 756 792 57 433 098
Inventory 379 985 227 906 607 891
Prepaid items 38 729 646 094 684 823
Restricted cash and investments 9 120 496 20 410 925 29 531 421
Land helcl for resale 27 609 755 27 609 755
Internal balances 13 083 802 13 083 802
Investment in joint agencies 795 714 795 714
Deferred charges net 4 238 656 4 086 027 8 324 683
Net Pension Asset 39 338 500 39 338 500
Capital Assets
Nondepreciable 39 610 334 46 393 745 86 004 079
Depreciable buildings property equipment
and infrastructure net 175 361 814 66 808 510 242 170 324
Total Capital Assets 214 972 148 113 202 255 328 174 403
Total assets 553 417 354 170 813 994 724 231 348
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts payable and other current liabilities 6 313 911 3 751 982 10 065 893
Interest payable 1 581 421 881 225 2 462 646
Unearned revenue 307 284 59 194 366 478
Noncontrollable interest in joint agencies 17 763 052 17 763 052
Long term Obligations
Lang term debt due within one year 8 580 623 4 260 000 12 840 623
Long term debt due in more than one year 157 956 944 60 995 000 218 951 944
Total liabilities 174 740 183 87 710 453 262 450 636
NET ASSETS
Invested in capital assets net of related debt 97 102 642 24 435 740 121 538 382
Restricted for
Capital Projects 88 518 769 88 518 769
Debt Service 23 609 809 23 609 809
Community Development 47 615 060 47 615 060
Special Projects 37 694 629 37 694 629
Total Restricted Net Assets 197 438 267 197 438 267
Unrestricted 84 136 262 58 667 801 142 804 063
Total net assets 378 677 171 83 103 541 461780 712
The notes to the financial statements are an integral part of this statement
17
CITY OF FAIRFIELD
Statement ofActivities and Changes in NetAssets
For the Year Ended June 30 2006
Functions Programs
Primary government
Governmental Activities
Administrative
Human resources
Finance
Po lice
Fire
Public works
Community development
Community services
Redevelopment agency
dNeparotmenntal
Interest on long term debt
Total governmental activities
Business type activities
Water Utility
North Bay Treatment Plant
Transportation
Golf Courses
Housing Program
Total business type activities
Total primary government
18
Expenses
Charges for
Services
Program Revenues
Operating
Grants and
Contributions Total
Capital
Grants and
Contributions
1 073 844 1 437 1 437
713 005 31 776 36 119 67 895
2704 510 9 013 8 422 17 435
25 865 919 485 201 2 153 638 2 638 839
12 950 385 53 611 61 639 115 250
73405 284 3 956 977 3 965 004 24 928 691 32 850 672
8 297 262 58 085 9 543 441 9 601 526
7 983 924 2 091 940 1 548 673 3 640 613
13 579 272 1 037 380 1 037 380
3 584 354
5 920 276
113 418 035 7 725 420 17 316 936 24 928 691 49 971 047
24 27416 29 627 575 1 676 835 31 304 410
6 476 534 6 077 388 41 218 6 118 606
8 246 921 1 507 264 5 359 110 605 362 7 473716
6 925 820 4 623 537 4 623 537
956 957 702 826 702 826
46 852 973 42 538 590 5 400 328 2 282 197 50 221 115
160 271 008 50 264 010 72127 264 27 210 888 100 192 162
General Revenues and Transfers
Taxes
Property taxes
Sales taxes
Other taxes
Total Taxes
Intergovernmental
Investment earnings
Miscellaneous
Gain on sale of property
Transfers
Total general revenues and transfers
Change in net assets
Net assets beginning of year
Net assets end of year
The notes to the financial statements are an integral part of this statement
Net Expense Revenue
and Changes in Net Assets
Governmental Business Type
Activities Activities Total
1 072 407 1 072 407
645 110 645 110
2 687 075 2 687 075
23 227 080 23 227 080
12 835 135 12 835 135
2 105 388 2 105 388
1 304 264 1 304 264
4 343 311 4 343 311
12 541 892 12 541 892
3 584 354 3 584 354
5 920 276 5 920 276
63 446 988 63 446 988
7 057 669 7 057 669
357 928 357 928
775 185 775 185
2 302 283 2 302 283
254 131 254 131
3 368 142 3 368 142
63 446 988 3 368 142 60 078 846
44 950 233 44 950 233
71384 988 71384 988
10 887 280 10 887 280
74 572 501 74 572 501
16 204 963 16 204 963
6 685 891 1 616 861 8 302 752
7 284 399 7 284 399
46 326 46 326
329 837 329 837
105 123 917 1 287 024 106 410 941
41 676 929 4 655 166 46 332 095
337 000 242 78 448 375 415 448 617
378 677 171 83 103 541 476801 712
The notes to the financial statements are an integral part of this statement
19
IE RTOP SOLANO COUNT
C A L F CI R II
20
Government FundFinancial Statements
21
CITY OF FAIRFIELD
Balance Sheet
Government Funds
June 30 2006
General
Fund
Major Funds
Redevelopment
Low Mod
Income Housing
Special Revenue
Redevelopment
Debt Service
ASSETS
Assets
Cash and investments 15 989 620 6 631 201 11 900 846
Receivables net 1 669 343 12 470 085 4 455 562
Due from other funds 283 977
Restricted cash and investments 7 286 074
Land held for resale 13 801 437
Advances to other funds 3 297 288
Total assets 17 658 963 43863 988 23 46482
LIABILmES AND RJND BALANCES
Liabilities
Accounts payable and other current liabilities 722 346 185 216 180 386
Due to other funds
Advances from other funds 269 685 98 489 328
Deferred revenues 2 085 757 4 550 000
Total liabilities 722 346 2 540 658 103 219 714
Fund Balances
Reserved for
Encumbrances 1 467 233 924 192
Endowment
Notes receivable and Advances to other funds 13 204 521
Land held for resale 13 801 437
Major Maintenance
Debt service
Low and moderate income housing 6 013 180
Special projects and programs
Unreserved
Designated for subsequent
years expenditures 6 527 671
Undesignated 8 941 713 79 577 232
Total fund balances 16 936 617 33 943 330 79 577 232
Total liabilities and fund balances 17 658 963 43863 988 23 46482
The notes to the financial statements are an integral part of this statement
22
Major Funds
Other
Non Major Total
City Redevelopment Governmental Governmental
Capital Projects Capital Projects Funds Funds
53 471 311 2 530 245 65 851 135 156 374 358
2 688 974 2 843 049 26 061 747 50 188 760
283 977
1 834 422 9 120 496
13 808 318 27 609 755
7 321 122 10 618 410
56 160 285 19 181 612 101 042668 254 195 756
3 692 611 252 664 376 151 5 409 374
500 000 504 839 1 004 839
404 118 99 163 131
1 820 683 16 112 309 24 568 749
4 192 611 2 477 465 16 993 299 130 146 093
14 276 641 983 673 1 082 148 18 733 887
335 375 335 375
1 006 159 15 921 859 30 132 539
13 808 318 27 609 755
2 450 845 2 450 845
6 066 805 6 066 805
6 013 180
37 691 033 905 997 58 218 095 96 815 125
6 527 671
70 635 519
51 967 674 16 704 147 84 075 127 124 049 663
56 160 285 19 181 612 101 042668 254 195 756
The notes to the financial statements are an integral part of this statement
23
CITY OF FAIRFIELD
Reconciliation ofthe Governmental Funds Balance Sheet
tothe Government Wide Statement ofNetAssets
June 30 2006
Total Fund Balances Total Governmental Funds 124 049 663
Amounts reported for Governmental Activities in the Statement of Net Assets are
different because
Capital assets used in governmental activities are not current financial resources and
therefore are not reported in the Governmental Funds Balance Sheet Except for the
Internal Service Funds amount of 7 652 966 the capital assets were adjusted as
follows
Nondepreciable Assets
Depreciable buildings property equipment and infrastructure net
Tota I Capita I Assets
Bond Issuance costs are recorded as an expenditure in the fund financial statements but
are capitalized as deferred charges and subsequently amortized over the life of the
bond issue in the government wide financial statements
The net pension asset resulting from the contributions in excess of the annual required
contribution from the issuance of the Pension Obligation Bonds and the subsequent
payment to PERS for pension costs are not financial resources and therefore are not
reported in the funds
In the fund financial statements the Redevelopment Debt Service Fund shows a long
term debt owed to the Internal Service Fund while the Internal Service Fund shows an
Investment in bonds of Redevelopment Agency This debt item is eliminated when the
item rolls up the government wide financial statements since both debt service fund and
internal service fund are shown in governmental activities This item removes the asset
of the Internal Svc Fund
Interest payable on long term debt does not require current financial resources
Therefore interest payable is not reported as a liability in Governmental Funds Balance
Sheet Except for the Internal Service Funds amount of 11 289 the interest payable
wasadjusted as follows
Internal Service Funds are used by management to charge the costs of certain
activities such as insurance and fleet management to individual funds The assets and
liabilities of the Internal Service Funds are included in governmental activities in the
Government Wide Statement of Net Assets
Deferred Revenue in the fund financial statements is not a current financial resource
and is therefore not reported in the Government Wide Financial Statements
Long term liabilities are not due and payable in the current period and therefore they
are not reported in the Governmental Funds Balance Sheet Except for the Internal
Service Funds amount of 9 875 227 the long term liabilities were adjusted as follows
Long term liabilities due within one year
Long term liabilities due in more than one year
Total long term liabilities
Net Assets of Governmental Activities
The notes to thefinancial statements are an integral part of this statement
24
39 610 334
167 708 848
207 319 182
4 238 656
39 338 500
1 828 011
1 570 132
139 530 188
24 261 465
8 272 755
148 389 585
156 662 340
378 677 171
HEATDP aOLAH D eOUINTlI
CAtF CI R II
25
CITY OF FAIRFIELD
Statement of Revenues Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30 2006
Major Funds
Redevelopment
Low Mod
General Income Housing Redevelopment
Fund Special Revenue Debt Service
REVENJES
Taxes 29 191 755
Property taxes 10 287 073 6 310 945 25 243 780
Development fees
Special assessments levied
Ucenses permts and fines 4 337 521
Developers contribution
Intergovernmental 8 133 723
Charges for services 3 614 617
Investment income 1 113 841 326 096 448 194
Miscellaneous 5 430 391 223 347 310 239
Total revenues 62 108 921 6 860 388 26 002 213
EXPENITURES
Current
Admnistrative 984 681
Human resources 666 759
Finance 2 570 159
Police 22 063 232
Fire 11 112 584
Public works 9 991 919
Community services 7 219 451
Community development 613 505
Redevelopment agency 2 556 215
Non departmental 939 284
Intergovernmental 8 053 570
Capital outlay
Debt service
Principal retirement 5 264 323
Interest 9 877 151
Fiscal agent fees 462 467
Special assessment payments 373 911
Total expenditures 56 161 574 2 556 215 24 031 422
Revenues over under expenditures 5 947 347 4 304 173 1 970 791
OTHER FINANCING SOURCES USES
Proceeds from long term debt 30 000
Gain on sale of property 46 326
Transfers in 3 703 482 375 000 110 000
Transfers out 6 103 306 152 535 6 083 739
Total other financing sources uses 2 399 824 298 791 5 973 739
Net change in fund balances 3 547 523 4 602 964 4 002 948
FUN BALANCES
Beginning of year 13 389 094 29 340 366 75 574 284
End of year 16 936 617 33 943 330 79 577 232
The notes to the financial statements are an integral part of this statement
26
Major Funds
Non Major Total
City Redeveloprrent Governrrental Governrrental
Capital Projects Capital Projects Funds Funds
3 307 899 32 499 654
485 103 42 326 901
8 726 452 8 726 452
7 178 654 7 178 654
4 337 521
199 213 397 033 596 246
7 714 878 13 114 905 28 963 506
3 614 617
1 212 260 144 881 1 881 333 5 126 605
78 127 713 390 339 674 7 095 168
17 930 930 858 271 26 704 601 144605 324
984 681
666 759
2 570 159
2 236 962 24 300 194
914 442 12 027 026
3 239 740 13 231 659
143 465 7 362 916
7 584 251 8 197 756
2 252 007 4 808 222
939 284
117 500 184 8 171 254
20 659 955 780 580 1 071 501 22 512 036
2 626 890 7 891 213
5 383 2 747 531 12 630 065
307 652 770 119
373 911
20 659 955 3 145705 20 872 618 14237 254
2 729 025 2 297 199 5 831 983 13 028 070
30 000
46 326
8 132 209 6 083 739 3 257 403 21 661 833
60 212 4 926 186 17 325 978
8 132 209 6 023 527 1 668 783 4412 181
5 403 184 3 726 328 4 163 200 17 440 251
46 456904 12 977 819 79 911 927 106 460129
51967 674 16 704 147 84 075 127 124 049 663
The notes to the financial statements are an integral part of this statement
27
CITY OF FAIRFIELD
Reconciliation ofthe Governmental Funds Statement of Revenues Expenditures and Changes in
Fund Balances tothe Government WideStatement ofActivities and Changes in NetAssets
For the Year Ended June 30 2006
Net Change in Rnd Balances Total Governmental Rnds 17 440 251
Amounts reported for governmental activities in the Statement of Activities are different because
Governmental Funds report capital outlay as expenditures in the amount of 22 512 036 In the
Government Wide Statement of Activities and Changes in Net Assets a portion of these
expenditures 13 295 664 are reported as capital assets with 4054 308 of developer donated
assets 17 349 982
In the Government Wide Statement of Activities and Changes in Net Assets disposals of assets
that are not fully depreciated results in an expense 87 453
Depreciation expense on capital assets is reported in the Government Wide Statement of Activities
and Changes in Net Assets but they do not require the use of current financial resources
Therefore depreciation expense is not reported as expenditures inGovernmental Funds 8 969 729
Long term compensated absences are reported in the Government Wide Statement of Activities
and Changes in Net Assets but they do not require the use of current financial resources
Therefore the changes in long term compensated absences are not reported as expenditures in
Governmental Funds 1 062 219
Bond proceeds provide current financial resources to Governmental Funds but issuing debt
increases long term liabilities in the Government Wide Statement of Net Assets Repayment of
bond principal is an expenditure in Governmental Funds but the repayment reduces long term
liabilities in the Government Wide Statementof NetAssets
Current year bond proceeds
Current year long term debt repayments
30 000
7 891 213
Amortization of NetPension Asset does not take place at the fund financial statementlevel as this
item was recorded as expenditures in the year of bond issuance For the Government Wide
Statements these charges are capitalized and amortized over time This amount is the current
year amortization of the NetPension Asset 1 356 500
Amortization of Deferred Charges does not take place at the fund financial statement level as
these items are recorded as expenditures For the Government Wide Statements these charges
are capitalized and amortizedover time This amount is the current year amortization of deferred
charges 144 356
Accrued interest expense on long term debt is reported in the Government Wide Statement of
Activities and Changes in Net Assets but they do not require the use of current financial
resources Therefore accrued interest expense is not reported as expenditures in Governmental
Funds The following amount represents the change in accrued interest from prior year 92 137
In the Governmental Funds current year recognition of revenue from previous year s recorded
deferred revenue has been recorded as certain amounts became available measurable and
available in the current year However In the Statement of Changes in NetAssets this revenue
recognition would have already taken place in prior years as available is only a criteria for
recognizing revenue in the modified accrual basis of accounting 9 266 866
Internal Service Funds are used by management to charge the costs of certain activities such as
insurance and fleet management to individual funds The increase in net assets of the Internal
Service Funds is reported with Governmental Activities 1 286 737
Change in Net Assets of Governmental Activities 41 676 929
The notes to the financial statements are an integral part of this statement
28
CITY OF FAIRFIELD
Statement ofRevenues Expenditures and Changes in Fund Balances Budget and Actual
General Fund
For the Year Ended June 30 2006
Variance with
Budgeted Amounts Fina I BUdget
Positive
Original Final Actual Negative
28 110 000 28 242 655 29 191 755 949 100
15 137 000 10 069 000 10 287 073 218 073
3 401 000 4 337 521 4 337 521
543 000 8 098 607 8 133 723 35 116
3 674 000 3 614 617 3 614 617
1 057 000 1 208 000 1 113 841 94 159
9 967 000 4 585 600 5 430 391 784914
61 889 000 60 156 000 62 108 921 1 952 921
Revenues
Taxes
Property taxes
Licenses pernits and fines
Intergovernrrenta I
Charges for services
Investrrent incorre
Miscellaneous
Total Revenues
Expenditures
Current
Adninistrative
Hurran resources
Finance
Police
Fire
Public works
Comnmity services
Conmmity developrrent
Non departrrental
2 092 000 1 031 000 984 681 46 319
965 000 674 000 666 759 7 241
2 889 000 2 653 000 2 570 159 82 841
22 941 000 22 269 000 22 063 232 205 768
11 154 000 11 448 000 11 112 584 335 416
13 113 000 10 667 000 9 991 919 675 081
7 975 000 7 079 000 7 219 451 140 451
1 048 000 642 000 613 505 28 495
1 267 000 951 000 939 284 11 716
63 444 000 57 414 000 56 161 574 1 252 426
1 555 000 2 742 000 5 947 347 3 205 347
3 185 000 3 256 000 3 703 482 447 482
2 201 000 3 168 000 6 103 306 2 935 306
984 000 88 000 2 399 824 2 487 824
Total Expenditures
Excess Revenues Over Under Expenditures
Other Financial Sources Uses
Transfers in
Transfers out
Total Other Financing Sources Uses
Excess of Revenues and Other
Sources Over Under Expenditures
and Other Sources Uses 571 000 2 830 000 3 547 523 717 523
Fund Balance Beginning of Year
Fund Ba lance End of Year
13 389 094
16 936 617
The notes to the financial statements are an integral part of thisstatement
29
CITY OF FAIRFIELD
Statement ofRevenues Expenditures and Changes in Fund Balances Budget and Actual
Low and Moderate Income Housing Major Special Revenue Fund
For the Year Ended June 30 2006
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actua I Negative
6 034 000 6 234 000 6 310 945 76 945
286 000 324 000 326 096 2 096
10 000 10 000 223 347 213 347
6 330 000 6 568 000 6 860 388 292 388
Revenues
Property taxes
Investrrent incorre
Miscellaneous
Total Revenues
Expenditures
Current
Redeveloprrent 16 919 000 15 378 000 2 556 215 12 782815
16 919 000 15 378 000 2 556 215 12 821 785
10 589 000 8 810 000 4 304 173 13 114 173
30 000 30 000
46 326 46 326
375 000 375 000 375 000
152 535 152 535 152 535
222 465 222 465 27918 76 326
Total Expenditures
Excess Revenues Over Under Expenditures
Other Financial Sources Uses
Proceeds from borrowing
Gain on sale of property
Transfers in
Transfers out
Total Other Financing Sources
Excess of Revenues and Other
Sources Over Expenditures
and Other Uses 10 366 535 8 587 535
Fund Balance Beginning of Year
Fund Balance End of Year
The notes to the financial statements are an integral part of this statement
30
Proprietary FundFinancial Statements
31
CITY OF FAIRFIELD
Statement ofNetAssets
Proprietary Funds
June 30 2006
Major Funds
North Bay
Water Treatment
Ut ity Plant Transportation Golf Courses
ASSETS
Current Assets
Cash and investments 34 250 674 4 049 020 233 935 5 745
Receivables net 4 115 975 907 486 605 965 46 411
Inventory 227 906
Prepaid items 464 933 141 808
Due from other funds
Total Current Assets 38 831 582 5 098 314 839 900 280 062
Noncurrent Assets
Restricted cash and investments 5 901 884 11 548 359 2 960 682
Advances to other funds
Investment in joint agencies 795 714
Investment in bonds of Redevelopment Agency
Notes receivable
Deferred Charges 1 224 331 2 861 696
Capital Assets
Nondepreciable 32 720 982 924 549 1 723 612 10 616 939
Depreciable lbinugiks property equipment
and infrastructure net 19 234 813 29 433 442 9 115 107 8 430 729
Total Capital Assets 51 955 795 30 357 991 10 838 719 19 047 668
Total Noncurrent Assets 59 877 724 41 906 350 10 781389 24 870 046
Total assets 98 709 306 47 004 664 11 678 619 25 150 108
LIABILmES
Current Liabilities
Accounts payable and other current liabilities 2 598 197 270109 390 372 514 323
Accrued interest payable 556 675 324 550
Deferred revenue 59 194
Long term debt due within one year 3 645 000 615 000
Total current liabilities 6 799 872 270109 390 372 1 513 067
Noncurrent Liabilities
Noncontrollable interest in joint agencies 17 763 052
Claims and judgments payable
Advances from other funds 13 083 802
Long term debt due in more than one year 48 560 000 12 435 000
Total noncurrent liabilities 48 560 000 17 763 052 25 518 802
Total liabilities 55 359 872 17 972 762 390 372 27 031 869
NET ASSETS
Invested in Capital Assets Net of Related Debt 12 594 939 10 838 719
Unrestricted 43 349 434 16 436 963 449 528 1 881 761
Total net assets 43 349 434 29 031 902 11 288 247 1 881 761
The notes to the financial statements are an integral part of this statement
32
Major Fund
Housing
Programs Totals
Govemmental
Activities
Intemal
Service Funds
232 709 38 772 083 36 584 619
63 455 5 739 292 314 536
227 906 379 985
39 353 646 094 38 729
720 862
335 517 45 385 375 38 038 731
20 410 925
101 628 523
795 714
1 828 011
17 500 17 500 1 173 010
4 086 027
407 663 46 393 745
594 419 66 808 510 7 652 966
1 002 082 113 202 255 7 652 966
1 019 582 138 512 421 112 282 510
1 355 099 183 897 796 150 321 241
39 380 3 751 982 904 537
881 225 11 289
59 194
4 260 000 307 868
39 380 8 952 401 1 223 694
17 763 052
7 614 900
13 083 802
60 995 000 1 952 459
91 841 854 9 567 359
39 380 100 794 255 10 791 053
1 002 082 24 435 740 5 392 638
313 637 58 667 801 134 137 550
1 37159 83 103 541 139 530 188
The notes to the financial statements are an integral part of this statement
33
CITY OF FAIRFIELD
Statement ofRevenues Expenditures and Changes in NetAssets
Proprietary Funds
For the Year Ended June 3D 2006
Major Funds
North Bay
Water Treatment
Utility Plant Transportation Golf Courses
OPERATING REVEMJES
Charges for services 29 121 035 6 077 388 1 350 046 4 623 357
Miscellaneous 506 540 157 218 180
Total operating revenues 29 627 575 6 077 388 1 507 264 4 623 537
OPERATING EXPENSES
Material and supplies 61 625
Operating and maintenance 16 061 544 5 039 142 5 955 872 3 956 199
General and administrative 3 196 820 629 984 903 656 553 442
Premiums provision for insurance claims
Depreciation 2 536 716 807 408 1 387 393 792 825
Total operating expenses 21 795 080 6 476 534 8 246 921 5 364 091
Operating Income 7 832 495 399 146 6 739 657 740 554
NONOPERATING REVEMJES EXPENSES
Investment income 1 171 132 368 659 1 498 59 822
Interest expense 2 451 661 1 561 729
Intergovernmental revenue expense 13 481 5 964 472
Other revenue expense 1 676 835
Minority interest in earnings losses of joint agencies 27 737
Total nonoperating revenues expenses 396 306 409 877 5 965 970 1 501 907
Income loss before transfers 8 228 801 10 731 773 687 2 242 461
Transfers
Transfers in 519 880
Transfers out 697 029 59 341 21 397 61 326
Total transfers 697 029 59 341 21 397 458 554
Increase decrease in net assets 7 531 772 48 610 795 084 1 783 907
NET ASSETS
Beginning of year 35 817 662 29 080 512 12 083 331 97 854
End of year 43 349 434 29 031 902 11288 247 1 78681
The notes to thefinancial statements are an integral part of this statement
34
Major Fund
Governmental
Activities
Housing Internal
Programs Totals Service Funds
702 826 41 874 652 14 739 510
663 938
702 826 42 538 590 14 739 510
26 317 87 942 3 315 064
189 212 31 201 969 2 018 549
594 819 5 878 721 1 323 926
2 481 004
146 609 5 670 951 1 240 515
956 957 42 839 583 10 379 058
254 131 300 993 4 360 452
15 750 1 616 861 926 232
4 013 390 89 949
5 977 953
1 676 835 32 165
27 737
15 750 5 285 996 932 303
238 381 4 985 003 5 292 755
519 880 3 731 000
10 624 849 717 7737 018
10 624 329 837 4 006 018
249 005 4 655 166 1 286 737
1 564 724
1 37159
78 448 375
83 103 541
138 243 451
139 530 188
The notes to the financial statements are an integral part of this statement
35
Page 1 of 4
CITY OF FAIRFIELD
Statement ofCash Flows
Proprietary Funds
For the Year Ended June 30 2006
Major Funds
North Bay
Water Treatment
Utility Plant Transportation Golf Courses
CASHROWS FROM OPERATIJlliAcnvITIES
Receipts from customers and users 29 627 575 6 248 830 6 869 496 4 614 618
Payments to suppliers 15 532 193 3 950 151 5 914 380 4 005 541
Payments to employees 3 670329 1 698 483 599 952 167 636
Payments for Interfund Services Used 126 391 385 804
Net cash provided by used for operating activities 10 485 650 473 805 355 164 55 637
CASHROWS FROMIOAPITAL FlNAIJNG AcnvITIES
Receipt of intergovernmental lease revenue
Advancesfrom other funds 605 362 1 081 000
Transfers in 519 880
Transfers out 697 029 59 341 21 397 61 326
Net cash provided by used for noncapital
fmancing activities 697 029 59 341 583 965 1 539 554
CASHROWS FROM CAPITALAM
RELATED JFNGlANcnvIATIESI
Principal payments bonds 3 495 000 590 000
Principal payments notes payable
Interest paid 2 378 895 661 785
Fiscal agent fees paid 23 169 4 789
Proceeds from sales of capital assets
Purchases of capital assets 108 924 58 245 506 208 401 892
Construction of capital assets 7 911 479 25 885 200 486
Net cash used by capital and related fmancing activities 13 917 467 84 130 706 694 1 658 466
CASHROWS FROM ItNESllNGAcnvITIES
Investment income received 1 171 132 368 410 1 500 61 894
Net cash provided by investing activities 1 171 132 368 410 1 500 61 894
Net increase decrease in cash and cash equivalents 2 957 714 698 744 233 935 1 381
CASHAMCASH EQUIVALENIS
Beginning of year 43 110 272 14 898 635 2 967 808
End of year 40 152 558 15 597 379 233 935 2 492667
The notes to the financial statements are an integral part of this statement
36
Page 2 of 4
Major Fund
Governmental
Activities
Housing Internal
Programs Totals Service Funds
702 826 48 063 345 13 989 930
333 021 29 735 286 11 646 929
326 051 6 401 854 1 728 252
217 726 729 921 29 875
173 972 11 196 284 584 874
63 855
1 686 362
519 880 3 731 000
10 624 849 717 7 737 018
10 624 1 356 525 3 942 163
4 085 000
270946
3 040 680 91 516
27 958
42 324
436 799 1 512 068 1 964 912
8 137 850
436 799 16 803 556 2 310 808
71653 1 618 699 955 604
15 763 1 618 699 955 604
605 632 2 632 048 4 712 493
838 341 61 815 056 41 297 112
270329 59 183 008 36 584 619
The notes to the financial statements are an integral part of this statement
37
Page 3 of 4
CITY OF FAIRFIELD
Statement ofCash Flows
Proprietary Funds
For the Year Ended June 30 2006
Major Funds
North Bay
Water Treatment
Uti Ii ty Plant Transportation Golf Courses
Reconciliation of Operating Income to Net Cash
Provided by Used for by Operating Activities
Operating income loss 7 832 495 399 146 1 380 547 740 554
Adjustments to reconcile operating income loss
to netcash provided by used for operating activities
Depreciation expense 2 536 716 807 408 1 387 393 792 825
Increase decrease in accounts receivable 447 928 171 442 1 925 490 8 919
Increase Decrease in inventory 11 800
Increase decrease in prepaid items 22 428 10 414 750
Increase in advances to other funds
Decrease in deferred revenue 2 053
Increase decrease in accounts payable 541 939 95 485 136 005 22 032
Increase in due from other funds
Decrease in due to other funds 1 441 917
Total adjustment 2 653 155 872 951 1 735 711 796 191
Net cash provided by usedfor operating activities 41805 650 473 805 355 164 55 637
The notes to the financial statements are an integral part of this statement
38
Page 4of 4
Major Fund
Housing
Programs Totals
Governmental
Activities
InternaI
Service Funds
254 131 5 058 117 4 360 452
146 609 5 670 951 1 240 515
55 315 1 584 770 487 951
11 800 69 258
2 637 10 127 7 398
6 407 469
2 053
8 498 323 983 128 039
969 604
1 441 917
80 159 6 138 167 3 775 578
173 972 11 196 284 584 874
The notes to the financial statements are an integral part of this statement
39
E A IF T 0 1 15 0 LA NO e0 II N T
C A L F Q R M I
40
Fiduciary FundFinancialStatements
41
CITY OF FAIRFIELD
Statement of NetAssets
Fiduciary Funds
June 30 2006
Agency
Funds
ASSETS
Cash and cash equivalents
Total assets
7J73 437
7 473737
LIABILmES
Accounts payable and other current liabilities
Total liabilities
7 773 437
7 473737
The notes to the financial statements are an integral part of this statement
42
ITYOFFAIRFIELD
Notes to theBasic Financial Statements
1 Summary ofSignificant Accounting Policies
A Organization and Reporting Entity
The City of Fairfield the City wasincorporated on December 12 1903 under the laws of the State ofCalifornia
The City is a general law city administered by a Council Manager form of government As required by generally
accepted accounting principles these financial statements present the City and its component units entities for
which the City is considered to be financially accountable Component units are legally separate entities that
meet anyone of the following three tests
1 The City appoints the voting majority of the board of potential component unit and
is able to impose its will on the component unit and or
is in a relationship of financial benefit or burden with the potential component unit
2 The potential component unit is fiscally dependent upon the City
3 The financial statements would be misleading if data from the potential component unit werenot included
Component units although legally separate entities are in substance part of the City s operations and so data
from these units are combined with data of the City Based on the above criteria the accompanying financial
statements include the financial activities of these component units
Fairfield Redevelopment Agency
Fairfield Public Financing Authority
Fairfield Public Improvement Corporation
Fairfield Water Facilities Improvement District No 1
Fairfield Municipal Park Improvement District No 1
Fairfield Storm Drain Facilities Improvement District No 1
Fairfield Community Facilities Districts
Housing Authority of the City of Fairfield
In addition individual financial statements are available for many of these entities and can be obtained by
contacting the City of Fairfield These entities are legally separate from each other however the City Council
serves in separate session as the governing body of these related agencies The financial activities of these
entities are integrally related to those of the City and blended with those ofthe City Blending involves aggregating
merging component unit data and data from the City at both the Government Wide and Fund Financial Statement
level
The City also has an ownership interest in the SolanoWater Authority the California Joint Powers Risk Management
Authority and the Housing Authority s Risk Retention Pool These entities have not met the criteria stated above
and their financial information is not combined with that of the City The City s equity investment in the Solano
Water Authority is reported in the Enterprise Fund
43
ITY OFFAIRFIELD
Notes tothe Basic Financial Statements continued
Each of the component units or activities included in the Government Wide and Fund Financial Statements is
described as follows
Fairfield Redevelopment Agency
The Fairfield Redevelopment Agency the Agency is organized under the State of California Community
Redevelopment Law The Agency has established the 1 Fairfield Regional Center Project Area 2 Highway 12
Project Area 3 City Center Project Area 4 Cordelia Project Area and 5 North Texas Street Project area The
projects within each area are financed through debt which is repaid by property tax increment revenues The
Agency participates in low and moderate housing activities including rehabilitation of a low and moderate income
rental housing project The City Council is the governing board of the Agency
Fairfield Public Financing Authority
The Fairfield Public Financing Authority the Financing Authority is a public agency created under a joint exercise
of powers agreement between the City and the Agency The Financing Authority wascreated for the purpose of
providing financing of public capital improvements for the City and the Agency The City Council is the governing
board of the Financing Authority
Fairfield Public Improvement Corporation
The Fairfield Public Improvement Corporation the Corporation is a non profit tax exempt corporation The
primary purpose of the Corporation is to render financial assistance to the City by issuing debt and financing the
construction of public facilities The Corporation is governed by a board of five directors New board members
are elected by the existing members although the City Council has the authority to disapprove any individual
elected by the board
Fairfield Water Facilities Improvement District No 1
The Fairfield Water Facilities Improvement District No 1 the Water Improvement District is a voter approved
improvement district formed in 1972 to finance and build water treatment and storage facilities The City Council
is the governing board of the Water Improvement District
Fairfield Municipal Park Improvement District No 1
The Fairfield Municipal Park Improvement District No 1 the Park Improvement District is a voter approved
improvement district formed in 1972 to finance acquisition and construction of parks and recreational facilities
The City Council is the governing board of the Park Improvement District
Fairfield Storm Drain Facilities Improvement District No 1
The Fairfield Storm Drain Facilities Improvement District No l the Storm Drain Facilities Improvement District is
a voter approved improvement district formed in 1972 to finance construction of storm drainage facilities The
City Council is the governing board of the Storm Drain Facilities Improvement District
Fairfield Community Facilities Districts
The City of Fairfield Community Facilities Districts werecreated in accordance with the State of California Mello
Roos Community Facilities Act of 1972 The Districts wereformed to levy special taxes issue bonds and obtain
loans supported by special taxes for open space and general traffic and street improvements The City Council
44
ITY OFFAIRFIELD
Notes tothe Basic Financial Statements continued
is the governing board of the Fairfield Community Facilities District
Housing Authority ofthe City ofFairfield
The Housing Authority of the City of Fairfield the Housing Authority is organized underthe California Health and
Safety Code The objectives of the Housing Authority are to aid low income families in obtaining decent safe
and sanitary housing through Federal assistance programs and low moderate income housing programs The
Housing Authority is governed by a Board of Commissioners composed of five City Council members and two
tenants of the Housing Authority
The financial statements of the City have been prepared in conformity with generally accepted accounting
principles GMP as applied to governmental units The Governmental Accounting Standards Board GASB is
the accepted standard setting body for governmental accounting and financial reporting principles These
statements implement all the applicable GASB statements
B Measurement Focus Basis ofAccounting and Financial Statement Presentation
The accounts of the City and affiliated agencies are organized and operated on the basis of fund accounting A
fund is an independent fiscal and accounting entity with a self balancing set of accounts Fund accounting
segregates funds according to their intended purpose and is used to aid management in demonstrating compliance
with finance related legal and contractual provisions The minimum number of funds are maintained consistent
with legal and managerial requirements
Government Wide Financial Statements
The City Government Wide Financial Statements include a Statement of Net Assets and a Statement of Activities
and Changes in Net Assets These statements present summaries of Governmental and Business Type Activities
for the City accompanied by a total column Fiduciary activities of the City are not included in these statements
These statements are presented on an economic resources measurement focus and the accrual basis of
accounting Accordingly all of the City s assets and liabilities including capital assets as well as infrastructure
assets and long term liabilities are included in the accompanying Statement of Net Assets The Statement of
Activities presents changes in net assets Under the accrual basis of accounting revenues are recognized in the
period in which they are earned while expenses are recognized in the period in which the liability is incurred The
Statement of Activities demonstrates the degree to which the direct expenses of a given function orsegment are
offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or
segment The types oftransactions reported as program revenues for the City are reported in three categories
1 charges for services 2 operating grants and contributions and 3 capital grants and contributions Taxes and
other items not properly included among program revenues are reported instead as general revenues
Certain eliminations have been made as prescribed by GASB Statement No 34 in regards to interfund activities
payables and receivables All internal balances in the Statement of Net Assets have been eliminated except
those representing balances between the governmental activities and the business type activities which are
presented as internal balances and eliminated in the total primary government column In the Statement of
Activities internal service fund transactions have been eliminated however those transactions between
governmental and business type activities have not been eliminated
The City applies all applicable GASB pronouncements including all NCGA Statements and Interpretations currently
in effect as well as the following pronouncements issued on or before November 30 1989 to the business type
activities unless those pronouncements conflict with or contradict GASB pronouncements Financial Accounting
Standards Board FASB Statements and Interpretations Accounting Principles Board APB Opinions and
45
ITYOF FAIRFIELD
Notes tothe Basic Financial Statements continued
Accounting Research Bulletins ARB of the committee on Accounting Procedure The City applies all applicable
FASB Statements and Interpretations issued after November 30 1989 except those that conflict with or contradict
GASB pronouncements
Governmental Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues Expenditures
and Changes in Fund Balances for all major governmental funds and non major funds aggregated An accompanying
schedule is presented to reconcile and explain the differences in governmental fund balances as presented in
these statements to the net assets presented in the Government Wide financial statements The City has
presented all major funds that met the applicable criteria
All governmental funds are accounted for on a spending or currentfinancialresources measurement focus and
the modified accrual basis of accounting Accordingly only current assets and current liabilities are included on
the Balance Sheets The Statement of Revenues Expenditures and Changes in Fund Balances present increases
revenues and other financing sources and decreases expenditures and other financing uses in net current
assets Under the modified accrual basis of accounting revenues are recognized when susceptible to accrual
i e when they are measurable and available Measurable means the amount of the transaction can be
determined and available means collectible within the current period or soon enough thereafter to pay liabilities
of the current period the City considers all revenues available if they are collected within 60 days after year
end Property taxes sales tax franchise taxes licenses interest and special assessments are susceptible to
accrual Other receipts and taxes become measurable and available when cash is received by the government
and recognized as revenue at that time Expenditures are recorded when the related fund liability is incurred
except for unmatured interest which is recognized when due and certain compensated absences and claims
and judgments which are recognized when the obligations are expected to be liquidated with expendable
available financial resources
The City of Fairfield reports the following major governmental funds
The General fund is the general operating fund of the City It is used to account for all
financial resources except those which are restricted as to use
The Redevelopment Special Revenue fund is used to account for the Redevelopment Agency s
low mod housing activities
The Redevelopment Debt Service fund accounts for tax increment revenue and other
miscellaneous revenue as well as payments of principal and interest on Redevelopment
Agency debt
The City Capital Projects fund is used to account for construction projects The primary
sources of funding have been City levied development taxes State Gas Tax Local
Transportation Tax Traffic Safety funds and temporary loans to projects
The Redevelopment Capital Projects fund accounts for transactions related to proceeds
from bonds and other resources and their use to perform redevelopment related activities
within specific redevelopment project areas
46
ITYOF FAIRFIELD
Notes to theBasic Financial Statements continued
Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Assets a Statement of Revenues Expenses
and Changes in Fund Net Assets and a Statement of Cash Flows for each major proprietary fund The City has
presented all proprietary funds as major funds because the City believes the financial position and activities of
these funds are significant to the City as a whole
A column representing internal service funds is also presented in these statements However internal service
balances and activities have been combined with the governmental activities in the Government Wide financial
statements Internal Service Funds account for the following activities Central Stores Automotive Services
Communication Services Intra governmental Loans Insurance and Public Buildings
Proprietary funds are accounted for using the economic resources measurementfocus and the accrual basis of
accounting Accordingly all assets and liabilities whether current or non current are included on the Statement
of NetAssets The Statementof Revenues Expenses and Changes in Fund NetAssets presents increases revenues
and decreases expenses in total net assets Under the accrual basis of accounting revenues are recognized in
the period in which they are earned while expenses are recognized in the period in which the liability is incurred
Operating revenues in the proprietary funds are those revenues that are generated from the primary operations
of the fund All other revenuesare reported as non operating revenues Operating expenses are those expenses
that are essential to the primary operations of the fund All other expenses are reported as non operating
expenses
The City of Fairfield reports the following major proprietary fund types
The Water Utility Fund accounts for the operations of the water system This is a self supporting activity which
provides water services on a user charge basis to residences and businesses located