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CITY OF ANTIOCH, CALIFORNIA
Comprehensive Annual Financial Report
For The Fiscal Year Ended
June 30, 2006
Prepared By
Department of Finance
City of Antioch
Comprehensive Annual Financial Report
Table of Contents
Page
INTRODUCTORY SECTION
Letter of Transmittal ............................................................................................................................... ................................ i
Elected Officials and Administrative Personnel .................................................................................................................. v
Organizational of City Governments ............................................................................................................................... ... vi
Location/ Area Map............................................................................................................................ ................................... vii
GFOA Certificate of Achievement for Excellence in Financial Reporting...................................................................... viii
CSMFO Certificate of Award for Outstanding Financial Reporting................................................................................ ix
FINANCIAL SECTION
Independent Auditors’ Report ............................................................................................................................... ............... 1
Management Discussion and Analysis....................................................................................................................... ......... 3
Basic Financial Statements:
Government – Wide Financial Statements:
Statement of Net Assets ............................................................................................................................... ............ 15
Statement of Activities and Changes in Net Assets .............................................................................................. 16
Major Governmental Funds:
Governmental Fund Financial Statements:
Balance Sheet.......................................................................................................................... ............................ 22
Reconciliation of the Governmental Funds Balance Sheet
to the Government – Wide Statement of Net Assets................................................................................... 25
Statement of Revenues, Expenditures and Changes in Fund Balances
and Changes in Fund Balances ..................................................................................................................... 26
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Government – Wide
Statement of Activities and Changes in Net Assets ................................................................................... 28
Proprietary Fund Financial Statements:
Statement of Net Assets ............................................................................................................................... ..... 30
Statement of Revenues, Expenses and Changes in Net Assets .................................................................... 31
Statement of Cash Flows.......................................................................................................................... ......... 32
Fiduciary Fund Financial Statements:
Statement of Fiduciary Funds Assets and Liabilities..................................................................................... 34
Notes to Basic Financial Statements..................................................................................................................... ....... 35
Required Supplementary Information ............................................................................................................................... 59
City of Antioch
Comprehensive Annual Financial Report
Table of Contents
Page
SUPPLEMENTARY INFORMATION:
Budgetary Comparison Schedule:
Capital Improvement Fund – Major Fund ............................................................................................................. 70
Sierra Crete Fund – Major Fund .............................................................................................................................. 71
ADA Project Area # 1 Capital Project Fund – Major Fund ................................................................................... 72
Non- Major Governmental Funds:
Combining Balance Sheet ............................................................................................................................... ......... 73
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances ............................................................................................................................ 74
Non- Major Special Revenue Funds:
Combining Balance Sheet ............................................................................................................................... ......... 78
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances ............................................................................................................................ 82
Budgetary Comparison Schedule:
Delta Fair Property Special Revenue Fund ..................................................................................................... 86
Recreation Programs Special Revenue Fund .................................................................................................. 87
Animal Control Special Revenue Fund ........................................................................................................... 88
Gas Tax Special Revenue Fund......................................................................................................................... 89
Civic Arts Special Revenue Fund ..................................................................................................................... 90
Park in Lieu Special Revenue Fund ................................................................................................................. 91
Senior Bus Special Revenue Fund .................................................................................................................... 92
Abandoned Vehicle Special Revenue Fund.................................................................................................... 93
Traffic Signal Fee Special Revenue Fund ........................................................................................................ 94
Assets Forfeitures Special Revenue Fund ....................................................................................................... 95
Measure C Growth Management Program Special Revenue Fund............................................................. 96
Child Care Special Revenue Fund.................................................................................................................... 97
Tidelands Assembly Bill- 1900 Special Revenue Fund................................................................................... 98
Lonetree Maintenance District Special Revenue Fund.................................................................................. 99
Downtown Maintenance District Special Revenue Fund ........................................................................... 100
Almondridge Maintenance District Special Revenue Fund ....................................................................... 101
Hillcrest Maintenance District Special Revenue Fund ................................................................................ 102
Park 1A Maintenance District Special Revenue Fund................................................................................. 103
City Wide 2A Maintenance District Special Revenue Fund ....................................................................... 104
East Lone Tree SLL Maintenance District Special Revenue Fund ............................................................. 105
Administration Maintenance District Special Revenue Fund .................................................................... 106
Solid Waste Reduction AB 939 Special Revenue Fund................................................................................ 107
Pollution Elimination Special Revenue Fund ............................................................................................... 108
Auxiliary Property Special Revenue Fund.................................................................................................... 109
Supplemental Law Enforcement Special Revenue Fund ............................................................................ 110
Local Law Enforcement Block Grant Special Revenue Fund ..................................................................... 111
Street Impact Special Revenue Fund.............................................................................................................. 112
Traffic Safety Special Revenue Fund.............................................................................................................. 113
Non- Major Debt Service Funds:
Combining Balance Sheet ............................................................................................................................... ....... 116
Combining Statement of Revenues, Expenditures and Changes in Fund Balances....................................... 117
City of Antioch
Comprehensive Annual Financial Report
Table of Contents
Page
SUPPLEMENTARY INFORMATION, CONTINUED:
Non- Major Capital Projects Funds:
Combining Balance Sheet ............................................................................................................................... ....... 120
Combining Statement of Revenues, Expenditures and Changes in Fund Balances....................................... 122
Budgetary Comparison Schedule:
ADA Project Area # 2 Capital Projects Fund................................................................................................. 125
ADA Project Area # 3 Capital Projects Fund................................................................................................. 126
ADA Project Area # 4 Capital Projects Fund................................................................................................. 127
ADA Project Area # 4.1 Capital Projects Fund.............................................................................................. 128
Prewett Community Park Capital Projects Fund......................................................................................... 129
Hillcrest District # 26 Capital Projects Fund.................................................................................................. 130
Lone Diamond Capital Projects Fund............................................................................................................ 131
Hillcrest Bridge District Capital Projects Fund............................................................................................. 132
Highway 4 Bridge District Capital Projects Fund ........................................................................................ 133
Residential Development Allocation Capital Projects Fund....................................................................... 134
Internal Service Funds:
Combining Statement of Net Assets ..................................................................................................................... 136
Combining Statement of Revenues, Expenses and Changes in Net Assets..................................................... 138
Combining Statement of Cash Flows.................................................................................................................... 140
Agency Funds:
Combining Statement of Changes in Assets and Liabilities .............................................................................. 144
STATISTICAL SECTION ( Unaudited)
Net Assets by Component – Last Five Fiscal Years........................................................................................................... 148
Changes in Net Assets – Last Five Fiscal Years ................................................................................................................. 149
Fund Balances of Governmental Funds – Last Four Fiscal Years.................................................................................... 151
Changes in Fund Balances of Governmental Funds – Last Five Fiscal Years................................................................ 152
Governmental Activities Tax Revenues By Source – Last Ten Fiscal Years – General Fund....................................... 153
Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ........................................ 154
Principal Property Taxpayers FY 2005- 06 Compared to FY 1996- 97............................................................................... 155
Property Tax Rates – Last Ten Fiscal Years ........................................................................................................................ 156
Property Tax Levies and Collections – Last Ten Fiscal Years .......................................................................................... 157
Ratios of Outstanding Debt by Type – Last Nine Fiscal Years ........................................................................................ 158
Direct and Overlapping Debt ............................................................................................................................... ............... 159
Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years ............................................................................ 160
Legal Debt Margin Information – Last Ten Fiscal Years .................................................................................................. 161
Pledged- Revenue Coverage – Last Ten Fiscal Years......................................................................................................... 163
Demographic and Economic Statistics – Last Ten Fiscal Years ....................................................................................... 164
Principal Employers – Current Year and Four Years Ago ............................................................................................... 165
Operating Indicators by Function – Last Five Fiscal Years .............................................................................................. 166
Full Time City Employee by Function – Last Two Fiscal Years ...................................................................................... 167
Capital Asset Statistics by Function – Last Five Fiscal Years ........................................................................................... 168
i
Office of the City Manager Phone 925.779- 7011
P. O. Box 5007, Antioch, CA 94531- 5007 Fax 925.779- 7054
December 15, 2006
To the Honorable Mayor, Members of the City Council, and Citizens of the City of Antioch:
State law requires that every general- purpose local government publish within six months of the close of
each fiscal year a complete set of audited financial statements. This report is published to fulfill that
requirement for the fiscal year ended June 30, 2006.
Management assumes full responsibility for the completeness and reliability of the information contained
in this report, based upon a comprehensive framework of internal control that it has established for this
purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to
provide reasonable, rather than absolute, assurance that the financial statements are free on any material
misstatements.
Caporicci & Larson, Certified Public Accountants, have issued an unqualified (“ clean”) opinion on the City
of Antioch’s financial statements for the year ended June 30, 2006. The independent auditor’s report is
presented as the first component of the financial section of this report.
Management’s discussion and analysis ( MD& A) immediately follows the independent auditor’s report and
provides a narrative introduction, overview, and analysis of the basic financial statements. MD& A
complement this letter of transmittal and should be read in conjunction with it
Profile of the Government
The City of Antioch, incorporated in 1872, is located in the western part of the state and is the third largest
city in Contra Costa County. California State Highway 4, connecting San Francisco- Oakland with
Stockton and Central Valley points, bisects the City. Connecting with this freeway east of Antioch is State
Highway 160, running north to Sacramento, across the Nejedly Bridge, offering access to Solano County
and the Sacramento area. The City of Antioch currently occupies a land area of 29 square miles and
serves a population of 100,950. The City of Antioch receives property taxes levied on real and personal
properties located within its boundaries. It also is empowered by state statute to extend its corporate
limits by annexation, which it has done from time to time.
The City of Antioch has operated under the Council- Manager form of government since 1872. Policy-making
and legislative authority are vested in a City Council consisting of the Mayor and four other
Council members. The four Council members are elected to four- year overlapping terms. The Mayor,
who sits on the Council, is elected directly by the people and serves a term of four years. The City Clerk
and City Treasurer are also elected for terms of four years. The City Council is responsible, among other
things, for passing ordinances, adopting the budget, appointing committees, and hiring both the City
Manager and City Attorney. The Antioch’s City Manager is responsible for carrying out the policies and
ordinances of the City Council and all management functions of the City including the budget, delivery of
services, hiring of all Department Directors, and implementation of capital projects.
The City of Antioch provides a wide range of municipal services, including police protection; recreational
activities, community and economic development, street improvements and maintenance services, parks
maintenance, water; sewer; general administrative and support services. The City does not provide fire
services.
ii
The annual budget serves as the foundation for the City of Antioch’s financial planning and control. All
departments of the City of Antioch are required to submit requests for appropriation to the City Manager
by April 1. The City Manager uses these requests as the starting point for developing a proposed budget.
The City Manager then presents the proposed budget to the City Council for review prior to June 30. The
City Council is required to hold public hearings on the proposed budget and to adopt a final budget by no
later than June 30, the close of the City of Antioch’s fiscal year.
The appropriated budget is prepared by fund, function ( e. g. public safety), and department ( e. g., police).
Department managers may make transfers of appropriations within a department. The level of budgetary
control, that is, the level at which expenditures cannot legally exceed the appropriated amount, is
established at the individual fund level. Expenditures above the appropriated amount require the special
approval of the City Council.
Local economy. Local projects that are pending that will help improve and enrich the City of Antioch
include the widening of Highway 4 to Hillcrest, delivery of eBART service to eastern Contra Costa County
and revitalization of the Rivertown area. Rivertown revitalization projects are planned to design and build
mixed- use commercial and residential projects in the downtown and waterfront areas of the City of
Antioch.
Antioch continues to experience growth in retail and employment sectors. Major retail projects in recent
years include the Slatten Ranch Regional Shopping Center on Lone Tree Way with approximately
500,000 sq. ft. fully leased retail space. Growth is also strong in the office/ employment sector with over
500,000 sq. ft. of new office and R& D space either approved or under construction. The largest single
project in the City is a new hospital being built by Kaiser Permanente on a 75- acre site off of Deer Valley
Road. This 150- bed medical facility includes over 600,000 sq. ft. of medical office and hospital space,
and is scheduled to open in November of 2007.
The region, Contra Costa County, which includes the City of Antioch, has a civilian unemployment rate of
4.8% while the City’s unemployment rate is 4.6%. There is a trend toward slowing residential growth.
Antioch’s population has grown 10.6% since 2000 while the overall Contra Costa County population has
grown 7.7%
Long- term financial planning: Growth in General Fund expenditures has leveled off to meet the growth
in revenues in the current year. This is a result of significant efforts to curb expenditure growth and
reverse the deficit spending trend of recent years.
Job development and expansion of the City’s retail sales tax base are important factors of Antioch’s
economic health. Property and sales tax revenues within the City continue to rise as the State economy
also improves. The City has increased its efforts to attract companies with high- paying jobs and
employment within the City is estimated to be approximately 20,000 jobs and growing. .
The City Council recognizes the importance of maintaining a serviceable network of local and regional
roads. Like most cities in the State, it is dependent on a combination of local, State and federal revenue
to support that work. An analysis of the current condition of all roads in Antioch along with a
recommendation regarding the level at which the roads can be maintained in the long term is continuing
from the last fiscal year. When completed, this analysis will include options for funding the long- term
maintenance of the City’s roads.
In addition to the City’s roads, water processing and distribution facilities, sidewalks, parks, medians,
trails, open space, sanitary sewers, storm water sewers, street lights, traffic signals, fiber optic cabling,
marina, Prewett Water Park and public buildings provide the framework and infrastructure that contributes
to Antioch’s quality of life. The better maintained and adequately sized they are, the greater the
opportunity for commerce, health, recreation and mobility within the community. Budgets include
contributions toward the maintenance of these facilities and staff continues to look for new opportunities
for funding of maintenance and replacement of infrastructure.
The most fundamental expectation of any community is public safety for its people and their property. An
adequately staffed, well- trained and equipped police department is one of the keys to meeting that
expectation. Historically, the Police Department has accounted for the most significant expenditure of
General Fund revenues. In the current year, four new sworn officer positions were added.
iii
Strategies for increasing revenues and reducing expenditures in the General Fund are under continuous
development and review. Along these lines, a cost allocation and fee study was completed this year and
the recommendations were adopted by the City Council for implementation on July 1, 2006.
Cash management policies, practices and performance: Cash temporarily idle during the year was
invested in certificates of deposit, obligations of the U. S. Treasury, commercial paper, corporate bonds,
money market funds, and the State Treasurer’s investment pool ( LAIF). The maturities of the investments
range from 30 days to 3.5 years. The investment portfolio performance since inception has been 4.76%.
Investment income includes both appreciation and depreciation in the fair value of investments. Changes
in fair value, however, do not necessarily represent trends that will continue; nor is it always possible to
realize such amounts, especially in the case of temporary changes in the fair value of investments that
the government intends to hold to maturity.
Risk management. The City is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City reports
all of its risk management activities in its General Fund and in the Government- Wide Financial
Statements. The City participates in the Municipal Pooling Authority ( MPA), a joint powers agency ( risk-sharing
pool) established to provide an independently managed self- insurance program for members.
The purpose of MPA is to spread the adverse effect of losses among the member agencies and to
purchase excess insurance as a group, thereby reducing its expense.
The City contributes its pro rata share of anticipated losses to a pool administered by MPA. Should
actual losses among participants be greater than the anticipated losses, the City will be assessed its pro
rata share of that deficiency. Conversely, if the actual losses are less than anticipated, the City will be
refunded its pro rata share of the excess. MPA has also purchased excess property damage coverage
through various commercial carriers.
Pension and other postemployment benefits. All permanent employees of the City of Antioch are
eligible to participate in the Public Employees’ Retirement Fund ( the Fund) of CALPERS. The fund is an
agent multiple- employer defined benefit plan that acts as a common investment and administrative agent
for various local and state governmental agencies within the State of California. The Fund provides
retirement, disability and death benefits based on the employee’s years of service, age and final
compensation. Employees vest after five years of service and may receive retirement benefits at the age
of 50 for public safety personnel or age 55 for miscellaneous employees. These benefit provisions and all
other requirements are established by State statute and City ordinance.
Public safety employees and all other employees have an obligation to contribute 9% and 8% of their
salary to CALPERS, respectively. The City pays the entire 9% for sworn and the entire 8% for non- sworn
public safety employees; and 7% of the 8% for all others. The City is required to contribute at an
actuarially determined rate. The contribution requirements of the plan members are established by State
statute, and the employer contribution rate is established and may be amended by CALPERS.
The City of Antioch also provides postretirement health benefits for certain retirees. At the end of the
current fiscal year, there were one hundred twenty- five retired employees eligible to receive these
benefits. Some City employees and their surviving spouses are eligible for postemployment health care
benefits under the provisions of their bargaining agreements. These costs are funded on a current, or
pay- as- you- go, basis. In the current year, the City is not required by GAAP to report a liability in the
financial statements in connection with an employer’s obligation to provide these benefits. In future
years, however, the City will be required by GASB 45 to report the liability in the financial statements and
to report its adopted plan for paying the current and future liability, whether pay- as- you- go, fully prefunded
or something in between.
Additional information on the City of Antioch’s pension arrangements and postemployment benefits can
be found in the notes to the basic financial statements.
iv
Awards and Acknowledgements
The Government Finance Officers Association ( GFOA) awarded a Certificate of Achievement for
Excellence in Financial Reporting to the City of Antioch for its comprehensive annual financial report
( CAFR) for the fiscal year ended June 30, 2005. This was the seventeenth consecutive year that the
government has received this prestigious award. In order to be awarded a Certificate of Achievement,
the City published an easily readable and efficiently organized CAFR that satisfied both generally
accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR
continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the
GFOA to determine its eligibility for another certificate.
The preparation of this report would not have been possible without the efficient and dedicated services
of the entire staff of the finance department, particularly Dawn Merchant, Jo Castro, and Janan Roybal. I
would like to express our appreciation to all members of the department who assisted and contributed to
the preparation of this report. Credit also must be given to the Mayor and the City Council for their
unfailing support for maintaining the highest standards of professionalism in the financial management of
the City of Antioch.
Respectfully submitted,
James M. Jakel Dee Brookshire
City Manager Finance Director
v
CITY OF ANTIOCH
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
ELECTED OFFICIALS AND
ADMINISTRATIVE PERSONNEL
JUNE 30, 2006
ELECTED OFFICIALS
Donald P. Freitas, Mayor
Brian Kalinowski, Mayor Pro- Tem
Jim Davis, Council Member
Arne Simonsen, Council Member
James W. Conley, Council Member
Donna Conley, City Treasurer
L. Jolene Martin, City Clerk
ADMINISTRATIVE PERSONNEL
City Manager James M. Jakel
Chief of Police Mark Moczulski
City Attorney Lynn Tracy Nerland
Director of Community Development/ City Engineer Joseph G. Brandt
Director of Public Works Phil Harrington
Personnel Director Deborah McHenry
Finance Director Dee Brookshire
Assistant Finance Director Dawn Merchant
Director of Information Services Bill Gegg
vi
vii
Location Map
Area Map
viii
ix
x
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CITY OF ANTIOCH
Management's Discussion and Analysis
For the Fiscal Year Ended June 30, 2006
3
As management of the City of Antioch, we offer readers of the City of Antioch’s financial statements this narrative
overview and analysis of the financial activities of the City of Antioch for the fiscal year ended June 30, 2006. We
encourage readers to consider the information presented here in conjunction with additional information that we
have furnished in our letter of transmittal, which can be found on pages i- ix of this report.
Financial Highlights
• The assets of the City of Antioch exceeded its liabilities at the close of the most recent fiscal year by
$ 500,985,549 ( net assets). Of this amount, $ 76,757,609 ( unrestricted net assets) may be used to meet
the government’s ongoing obligations to citizens and creditors.
• The government’s total net assets increased by $ 14,184,316 due mainly to donated capital contributions
and higher than anticipated revenues.
• As of the close of the current fiscal year, the City of Antioch’s governmental funds reported ending fund
balances of $ 57,587,591, an increase of $ 4,348,779 in comparison with the prior year.
• At the end of the current fiscal year, unreserved fund balance for the General Fund was $ 8,685,831, or
26.9% of total General Fund expenditures, and 20.9% of total General Fund revenues.
• The City of Antioch's total long- term obligations for governmental activities decreased by $ 2,182,406 and
total long- term obligations for business- type activities decreased by $ 1,871,245.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Antioch’s basic financial
statements. The City of Antioch’s basic financial statements comprise three components: 1) government- wide
financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also
contains other supplementary information in addition to the basic financial statements themselves.
Government- wide financial statements. The government- wide financial statements are designed to provide
readers with a broad overview of the City of Antioch’s finances, in a manner similar to a private- sector business.
The statement of net assets presents information on all of the City of Antioch’s assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as
a useful indicator of whether the financial position of the City of Antioch is improving or deteriorating.
The statement of activities presents information showing how the government’s net assets changed during the
most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future fiscal periods ( e. g., uncollected taxes and
earned but unused vacation leave).
Both of the government- wide financial statements distinguish functions of the City of Antioch that are principally
supported by taxes and intergovernmental revenues ( governmental activities) from other functions that are
intended to recover all or a significant portion of their costs through user fees and charges ( business- type
activities). The governmental activities of the City of Antioch include general government, public works, public
safety, parks and recreation and community development. The business- type activities of the City of Antioch
include water and sewer utilities; a marina and a water park facility.
The government- wide financial statements include not only the City of Antioch itself ( known as the primary
government), but also a legally separate development agency and a legally separate public financing authority.
Financial information for these component units is blended with the financial information presented for the primary
government itself. The government- wide financial statements can be found on pages 13- 17 of this report.
CITY OF ANTIOCH
Management's Discussion and Analysis, Continued
For the Fiscal Year Ended June 30, 2006
4
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The City of Antioch, like other state and
local governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal
requirements. All of the funds of the City of Antioch can be divided into three categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental funds. 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
financial statements, governmental funds financial statements focus on near- term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government’s near- term financing requirements.
Because the focus of governmental funds is narrower than that of the government- wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government- wide financial statements. By doing so, readers may better understand
the long- term impact of the government’s near- term financing decisions. Both the governmental funds balance
sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City of Antioch maintains fifty- five individual funds. Information is presented separately in the governmental
funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund
balances for the general fund, two special revenue funds ( Housing and Community Development and Low and
Moderate Income Housing) and two capital projects funds ( Capital Improvement and ADA Project # 1) all of which
are considered to be major funds. Data from the other governmental funds are combined into a single,
aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the
form of combining statements elsewhere in this report.
The governmental fund financial statements can be found on pages 21- 28 of this report.
The City of Antioch adopts an annual appropriated budget for its general fund and its major special revenue
funds. A budgetary comparison schedule has been provided for the general fund and major special revenue
funds to demonstrate compliance with this budget.
Proprietary funds. The City of Antioch maintains two different types of proprietary funds. Enterprise funds are
used to report the same functions presented as business- type activities in the government- wide financial
statements. The City of Antioch uses enterprise funds to account for its Water, Sewer, Marina and Prewett Water
Park funds. Internal service funds are an accounting device used to accumulate and allocate costs internally
among the City of Antioch’s various functions. The City of Antioch uses internal service funds to account for its
vehicle repair and replacement, stores, office equipment replacement, printing and mailing, , cash management,
financial services, post employment medical benefits and loss control functions. Because all of these services
predominantly benefit governmental rather than business- type functions, they have been included within
governmental activities in the government- wide financial statements.
Proprietary funds provide the same type of information as the government- wide financial statements, only in more
detail. The proprietary fund financial statements provide separate information for the Water, Sewer, Marina and
Prewett Water Park funds. The Water, Sewer, Marina and Prewett Water Park funds are considered to be major
funds of the City of Antioch. All internal service funds are combined into a single, aggregated presentation in the
proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of
combining statements elsewhere in this report.
The proprietary fund financial statements can be found on pages 29- 32 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. Fiduciary funds are not reflected in the government- wide financial statements because the
resources of those funds are not available to support the City of Antioch’s own programs. The accounting used
for fiduciary funds is much like that used for proprietary funds.
The fiduciary fund financial statements can be found on page 34 of this report.
CITY OF ANTIOCH
Management's Discussion and Analysis, Continued
For the Fiscal Year Ended June 30, 2006
5
Notes to the basic financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government- wide and fund financial statements. The notes to the
financial statements can be found on pages 35- 58 of this report.
Government- wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the
case of the City of Antioch, assets exceeded liabilities by $ 500,985,549 at the close of the most recent fiscal year.
By far the largest portion of the City of Antioch’s net assets ( 77%) reflects its investment in capital assets ( e. g.,
infrastructure ( including water and sewer pipes), land, structures and improvements and equipment), less any
related debt used to acquire those assets that are still outstanding. The City of Antioch uses these capital assets
to provide services to citizens; consequently, these assets are not available for future spending. Although the City
of Antioch’s investment in its capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources since the capital assets themselves cannot be
used to liquidate these liabilities.
Governmental Activities Business- type Activities TOTAL
2006 2005 2006 2005 2006 2005
Current and other assets $ 89,008,509 $ 84,300,440 $ 39,863,339 $ 39,531,673 $ 128,871,848 $ 123,832,113
Capital assets 303,495,619 302,833,522 136,351,521 132,411,026 439,847,140 435,244,548
Total assets 392,504,128 387,133,962 176,214,860 171,942,699 568,718,988 559,076,661
Current and other liabilities 7,631,120 8,748,901 3,057,147 3,376,172 10,688,267 12,125,073
Long- term obligations 46,021,121 47,626,288 11,024,051 12,524,067 57,045,172 60,150,355
Total liabilities 53,652,241 56,375,189 14,081,198 15,900,239 67,733,439 72,275,428
Net assets:
Invested in capital assets,
net of related debt 257,714,933 257,474,830 125,698,699 119,886,959 383,413,632 377,361,789
Restricted 37,170,025 34,636,282 3,644,283 3,628,964 40,814,308 34,636,282
Unrestricted 43,966,929 38,647,661 32,790,680 32,526,537 76,757,609 74,803,162
Total net assets $ 338,851,887 $ 330,758,773 $ 162,133,662 $ 156,042,460 $ 500,985,549 $ 486,801,233
An additional portion of the City of Antioch’s net assets ( 8%) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets ($ 76,757,609) may be
used to meet the government’s ongoing obligations to citizens and creditors.
The government’s total net assets increased by $ 14,184,316 due mainly to donated capital contribution from
Black Diamond Knolls, Dallas Ranch, Mira Vista Hills, and Los Vinedos developments. At the end of the current
fiscal year, the City of Antioch is able to report positive balances in all three categories of net assets, both for the
government as a whole, as well as for its business- type activities.
Current and other assets increased $ 5,039,735 primarily due to receiving the motor vehicle license repayment
and increased property tax revenue.
Current and other liabilities decreased $ 1,436,806 due to fewer accounts payable related to capital projects.
Long- term obligations decreased $ 3,105,183 due to scheduled debt service payments.
Governmental and Business- Type Activities. Governmental activities increased the City of Antioch’s net
assets by $ 8,093,114. There was an increase of $ 6,091,202 in net assets reported in connection with the City of
Antioch's business- type activities.
CITY OF ANTIOCH
Management's Discussion and Analysis, Continued
For the Fiscal Year Ended June 30, 2006
6
CITY OF ANTIOCH'S CHANGE IN NET ASSETS
Governmental Activities Business- type Activities Total
2006 2005 2006 2005 2006 2005
Revenue:
Program revenues:
Charges for services $ 8,732,356 $ 9,108,069 $ 24,853,038 $ 23,530,167 $ 33,585,394 $ 32,638,236
Operating grants and contributions 5,609,086 5,705,714 - - 5,609,086 5,705,714
Capital grants and contributions 4,088,162 19,409,247 4,928,958 10,547,566 9,017,120 29,956,813
General revenues:
Property taxes 15,911,568 14,074,199 - - 15,911,568 14,074,199
Sales tax 11,070,795 10,945,310 - - 11,070,795 10,945,310
Motor vehicle in lieu 9,038,846 5,968,731 - - 9,038,846 5,968,731
Other 9,256,776 8,134,944 1,102,777 1,462,650 10,359,553 9,597,594
Total revenues 63,707,589 73,346,214 30,884,773 35,540,383 94,592,362 108,886,597
Expenses:
General government 6,560,335 7,510,008 - - 6,560,335 7,510,008
Public works 14,253,790 15,348,590 - - 14,253,790 15,348,590
Public safety 22,721,128 20,941,238 - - 22,721,128 20,941,238
Parks and recreation 3,941,634 3,628,462 - - 3,941,634 3,628,462
Community development 6,845,858 7,969,389 - - 6,845,858 7,969,389
Interest on long- term debt 2,380,505 2,438,330 - 2,380,505 2,438,330
Water - - 17,827,122 18,042,622 17,827,122 18,042,622
Sewer - - 2,899,700 3,331,322 2,899,700 3,331,322
Marina - - 1,133,447 1,092,121 1,133,447 1,092,121
Prewett Water Park - - 1,844,528 1,708,346 1,844,528 1,708,346
Total expenses 56,703,249 57,836,017 23,704,797 24,174,411 80,408,046 82,010,428
Increase in net assets
before transfers
7,004,340
15,510,197 7,179,976 11,365,972 14,184,316 26,876,169
Transfers 1,088,774 1,207,520 ( 1,088,774) ( 1,207,520) - -
Increase in net assets 8,093,114 16,717,717 6,091,202 10,158,452 14,184,316 26,876,169
Net assets – July 1, 2005 330,758,773 314,041,056 156,042,460 145,884,008 486,801,233 459,925,064
Net assets – June 30, 2006 $ 338,851,887 $ 330,758,773 $ 162,133,662 $ 156,042,460 $ 500,985,549 $ 486,801,233
Governmental activities. General Fund and Antioch Development Agency property tax revenues increased due to
higher assessed valuations ( assessed valuation is $ 8,460,221,139, a 12.93% increase over the prior year).
Capital grants and contributions decreased due to settlement monies received for Sierra- Crete litigation received
in the prior year.
Business- type activities. Business- type activities increased the City of Antioch’s net assets by $ 6,091,202,
accounting for growth in the government’s net assets. The capital grants and contributions increased net assets
by $ 3,138,400 due to infrastructure donations.
Financial Analysis of the Government’s Funds
As noted earlier, the City of Antioch uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements.
Governmental funds. The focus of the City of Antioch’s governmental funds is to provide information on near- term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of
Antioch’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a
government’s net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City of Antioch’s governmental funds reported combined ending fund
balances of $ 57,587,591, an increase of $ 4,348,779 in comparison with the prior year. About 64% of this total
amount ($ 37,066,470) constitutes unreserved fund balance, which is available for spending at the government’s
discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because
it has already been committed 1) to liquidate contracts and purchase orders of the prior period ($ 4,052,537), 2) to
pay debt service ($ 3,966,710), 3) to pay for construction ($ 8,220,635) or 4) for a variety of other restricted
purposes ($ 4,281,239).
CITY OF ANTIOCH
Management's Discussion and Analysis, Continued
For the Fiscal Year Ended June 30, 2006
7
The following table presents the amount of revenues from various sources as well as increases or decreases from
the prior year.
Revenues Classified by Source
Governmental Funds
FY 2005/ 06 FY 2004/ 05 Increase ( Decrease)
Revenue by Source
Amount
Percent of
Total
Amount
Percent of
Total
Amount
Percent of
Change
Taxes $ 42,675,112 67.7% $ 37,293,374 56.3% $ 5,381,738 ( 166.1%)
Licenses and permits 1,684,075 2.7% 1,762,792 2.7% ( 78,717) 2.4%
Fines and penalties 375,963 0.6% 392,442 0.6% ( 16,479) 0.5%
Investment income and rentals 1,990,784 3.2% 1,546,966 2.3% 443,818 ( 13.7%)
Revenue from other agencies 4,456,520 7.1% 4,062,668 6.1% 393,852 ( 12.2%)
Current service charges 5,360,553 8.5% 5,736,968 8.7% ( 376,415) 11.6%
Special assessment revenue 2,698,717 4.3% 2,379,246 3.6% 319,471 ( 9.6%)
Other 3,768,458 5.9% 13,076,275 19.7% ( 9,307,817) 287.1%
Total $ 63,010,182 100.0% $ 66,250,731 100.0% ($ 3,240,549) 100.0%
The following provides an explanation of revenues by source that changed significantly over the prior year.
• Taxes increased during the fiscal year. Most of this increase is the result of increased property taxes due
to increases in assessed valuation for homes as well as commercial and industrial property and new
home sales.
• Other revenues decreased primarily due to settlement monies received from Sierra- Crete litigation in the
prior year.
The following table presents the amount of expenditures by function as well as increases or decreases from
the prior year.
Expenditures by Function
Governmental Funds
FY 2005/ 06 FY 2004/ 05 Increase ( Decrease)
Expenditures by Function
Amount
Percent of
Total
Amount
Percent of
Total
Amount
Percent of
Change
Current
General government $ 7,433,986 12.4% $ 5,992,872 10.4% $ 1,441,114 59.8%
Public works 7,586,222 12.7% 8,747,586 15.3% ( 1,161,364) ( 48.2%)
Public safety 22,412,949 37.5% 20,209,026 35.2% 2,203,923 91.5%
Parks and recreation 3,560,286 5.9% 3,251,345 5.7% 308,941 12.8%
Community development 8,901,843 14.9% 8,939,139 15.6% ( 37,296) ( 1.5%)
Capital outlay 6,139,849 10.3% 6,853,081 11.9% ( 713,232) ( 29.6%)
Debt service 3,728,627 6.3% 3,363,710 5.9% 364,917 15.2%
Total $ 59,763,762 100.0% $ 57,356,759 100.00% $ 2,407,003, 100.0%
The following provides an explanation of the expenditures by function that changed significantly over the prior
year.
• Public works expenditures decreased primarily due to less monies being spent on capital projects.
• Public safety - the increase can be attributed primarily to an increase in personnel costs.
The General Fund is the chief operating fund of the City of Antioch. At the end of the current fiscal year,
unreserved fund balance of the General Fund was $ 8,685,831, while total fund balance was $ 8,733,843. As a
measure of the General Fund's liquidity, it may be useful to compare both unreserved fund balance and total fund
balance to total fund expenditures. Unreserved fund balance represents 22.1% of total General Fund
expenditures, while total fund balance represents 22.2% of that same amount.
The fund balance of the City of Antioch's general fund increased by $ 2,493,017 during the current fiscal year.
Key factors in this increase are revenues received earlier than anticipated and the City’s decision to no longer
fund compensated absences.
CITY OF ANTIOCH
Management's Discussion and Analysis, Continued
For the Fiscal Year Ended June 30, 2006
8
Proprietary funds. The City of Antioch’s proprietary funds provide the same type of information found in the
government- wide financial statements, but in more detail.
Unrestricted net assets of the Water Fund at the end of the year amounted to $ 28,151,036 and those of the
Sewer Fund amounted to $ 4,430,530. Unrestricted net assets of the Marina Fund at the end of the year
amounted to $ 361,885 and unrestricted net assets of the Prewett Water Park Fund amounted to $ 36,783. The
total growth increase/( decrease) in net assets for each fund was $ 3,739,939, $ 3,304,340, ($ 111,343), and
($ 728,388), respectively. Other factors concerning the finances of these four funds have already been addressed
in the discussion of the City of Antioch’s business- type activities.
General Fund Budgetary Highlights
Differences between the final amended budget and the actual results resulted in a ($ 1,058,578) variance from
appropriations and can be briefly summarized as follows:
• $ 717,836 over budget in general government activities due to closing the Compensated Absences
Internal Service Fund during the fiscal year. The General Fund contributed $ 950,000 to this fund to close
it out.
• $ 324,290 under budget for public works because of reduced park maintenance expenses and salary and
benefit savings due to vacancies in the street maintenance division.
• $ 851,641 over budget for public safety due to the position vacancy factor not being adjusted in the
revised budget.
• $ 189,675 under budget for community development due to salary and benefit savings from vacancies.
• $ 21,604 overrun for Parks and Recreation due to underbudgeted expenditures of donated funds.
• $ 25,792 under budget for capital outlay.
• $ 7,254 over budget for transfers.
Capital Asset and Debt Administration
Capital assets. The City of Antioch’s investment in capital assets for its governmental and business- type
activities as of June 30, 2006, amounts to $ 439,847,140 ( net of accumulated depreciation). This investment in
capital assets includes land, infrastructure ( including water and sewer pipes), structures and improvements, and
equipment. The total net increase in the City of Antioch’s investment in capital assets for the current fiscal year
was $ 4,602,592.
Major capital asset events during the current fiscal year included the following:
• A variety of street construction projects in new residential developments and widening and expansion
projects for existing streets began; construction in progress for governmental activities as of the end of
the current fiscal year had reached $ 10,380,563.
• Various building and system additions and improvements were completed in the Water, Sewer, Marina
and Prewett Water Park funds at a cost of $ 3,567,709.
• Acceptance of donated infrastructure at an estimated value of $ 5,871,219.
For government- wide financial statement presentation, all depreciable capital assets were depreciated from
acquisition date to the end of the current fiscal year. Fund financial statements record capital asset purchases as
expenditures.
CITY OF ANTIOCH
Management's Discussion and Analysis, Continued
For the Fiscal Year Ended June 30, 2006
9
Capital assets for the governmental and business- type activities are presented below to illustrate changes from
the prior year.
Governmental Activities Business- type Activities Total
2006
2005
2006
2005
2006
2005
Increase/
Decrease
Land $ 13,155,342 $ 13,140,011 $ 3,558,467 $ 3,558,467 $ 16,713,809 $ 16,698,478 $ 15,331
Construction in
Progress
10,380,564
13,747,085
13,874,788
10,017,547
24,255,352
23,764,632
490,720
Infrastructure 251,650,969 252,952,599 91,109,306 89,380,027 342,760,275 342,332,626 427,649
Structures and
Improvements
25,090,801
19,298,067
27,249,651
28,858,714
52,340,452
48,156,781
4,183,671
Equipment 3,217,943 3,695,760 559,309 596,271 3,777,252 4,292,031 ( 514,779)
Total $ 303,495,619 $ 302,833,522 $ 136,351,521 $ 132,411,026 $ 439,847,140 $ 435,244,548 $ 4,602,592
Construction Commitments. Among the significant construction commitments were $ 1.9 million toward street
projects and approximately $ 17 million for the Water Treatment Plant Expansion.
Additional information on the City of Antioch's capital assets can be found in Note 7 on page 49.
Long- term debt. At the end of the current fiscal year, the City of Antioch had total debt outstanding of
$ 54,790,601. Of this amount, $ 36,730,000 represents bonds secured solely by specified revenue sources ( i. e.,
revenue bonds), $ 13,840,000 represents tax allocation bonds, $ 4,043,396 represents loans payable and
$ 177,205 comprises a capital lease obligation.
The City of Antioch’s total long- term obligations for governmental activities decreased by $ 2,182,406, and total
long- term obligations for business- type activities decreased by $ 1,871,245 during the current fiscal year.
In October 2002, Standard and Poor’s changed the ratings on the Antioch Public Financing Authority Lease
Revenue Bonds Series 2002 B to AAA from A. In April 2003, the Authority received a rating of AAA from
Standard & Poor’s for its Water Revenue Refunding Bonds, Series 2003. These ratings reflect Standard & Poor’s
assessment of the likelihood of repayment of principal and interest based on the bond insurance policy the
Authority provided.
State statutes limit the amount of general obligation debt a governmental entity may issue to 15% of its total
assessed valuation. The current debt limitation for the City of Antioch is $ 1,269,033,170. The City of Antioch has
no outstanding general obligation debt.
Additional information on the City of Antioch’s long- term debt can be found in note 8 on pages 50- 52 of this report.
Economic Factors and Next Year’s Budget
• The unemployment rate for the City of Antioch is currently 5.3%, which is a decrease of 0.9% from a year
ago. This is comparable to the state’s average unemployment rate of 5.4% and the national average rate
of 5.4%.
• The occupancy rate of the City’s two main business districts is approximately 90%.
• Inflationary trends in the region compare favorably to national indices.
All of these factors were considered in preparing the City of Antioch’s budget for the 2006- 2007 fiscal year. The
impact of the State budget on Antioch was unknown at the time the budget was prepared.
During the current fiscal year, unreserved fund balance in the general fund increased by $ 2,611,589. The City of
Antioch has appropriated $ 31,046 of the unreserved fund balance for spending in the 2006- 2007 fiscal year
budget.
CITY OF ANTIOCH
Management's Discussion and Analysis, Continued
For the Fiscal Year Ended June 30, 2006
10
Requests for Information
This financial report is designed to provide a general overview of the City of Antioch’s finances for all those with
an interest in the government’s finances. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to the Office of the Finance Director, City of
Antioch, P. O. Box 5007, Antioch, CA 94531- 5007.
BASIC FINANCIAL STATEMENTS
11
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12
GOVERNMENT- WIDE FINANCIAL STATEMENTS
13
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14
City of Antioch
Statement of Net Assets
June 30, 2006
Governmental Business- Type
Activities Activities Total
ASSETS
Cash and investments $ 64,083,648 33,844,069 $ 97,927,717
Receivables ( net):
Accounts 1,617,077 2,126,148 3 ,743,225
Taxes 2,661,952 - 2 ,661,952
Interest 9 29,275 7 ,589 936,864
Materials, parts and supplies 231,846 1 5,817 247,663
Internal balances ( 77,266) 77,266 -
Prepaid items 30,771 12,695 43,466
Restricted cash and investments, held by fiscal agents 4,599,754 3 ,644,283 8,244,037
Loans receivable 13,449,901 - 1 3,449,901
Deferred bond issuance costs 880,127 135,472 1,015,599
Investment in land held for development 601,424 - 601,424
Capital assets:
Nondepreciable 2 3,535,906 17,433,255 4 0,969,161
Depreciable, net 2 79,959,713 118,918,266 398,877,979
Total assets 3 92,504,128 176,214,860 568,718,988
LIABILITIES
Accounts payable 3,514,522 2,501,999 6 ,016,521
Accrued payroll 5 06,552 107,122 613,674
Interest payable 1,050,479 2 74,772 1,325,251
Deposits 2,343,231 7 4,939 2,418,170
Unearned revenue 2 16,336 9 8,315 314,651
Long- term obligations:
Due within one year 1 ,419,534 1,978,151 3 ,397,685
Due beyond one year 4 4,601,587 9,045,900 5 3,647,487
Total liabilities 53,652,241 14,081,198 67,733,439
NET ASSETS
Invested in capital assets, net of related debt 257,714,933 125,698,699 383,413,632
Restricted for:
Debt service 2,916,231 3,644,283 6 ,560,514
Housing 19,067,564 - 1 9,067,564
Public safety 3 34,862 - 334,862
Public and capital facilities 6 ,785,959 - 6,785,959
Roads 8,065,409 - 8,065,409
Total restricted net assets 37,170,025 3 ,644,283 4 0,814,308
Unrestricted net assets 43,966,929 32,790,680 7 6,757,609
Total net assets $ 3 38,851,887 $ 162,133,662 $ 500,985,549
See accompanying notes to the basic financial statements.
Primary Government
15
City of Antioch
Statement of Activities
For the Fiscal Year Ended June 30, 2006
Charges Operating Capital
for Grants and Grants and
Functions / Programs Expenses Services Contributions Contributions
Primary government:
Governmental activities:
General government $ 6 ,560,335 $ 5 0,263 $ 200,323 $ -
Public works 14,253,790 1,179,537 3,465,421 4 ,088,162
Public safety 2 2,721,128 1,336,167 503,363 -
Parks and recreation 3,941,634 2,541,284 395,283 -
Community development 6,845,858 3,625,105 1,044,696 -
Interest on long- term liabilities 2 ,380,505 - - -
Total governmental activities 56,703,249 8,732,356 5,609,086 4 ,088,162
Business- type activities:
Water 1 7,827,122 19,364,293 - 2 ,535,168
Sewer 2,899,700 3,901,971 - 2 ,393,790
Marina 1,133,447 762,502 - -
Prewett Water Park 1 ,844,528 824,272 - -
Total business- type activities 2 3,704,797 24,853,038 - 4 ,928,958
Total primary government $ 80,408,046 $ 33,585,394 $ 5,609,086 $ 9 ,017,120
General Revenues:
Taxes:
Property taxes
Transient lodging tax
Franchise
Business license taxes based on gross receipts
Property transfer taxes
Sales and use tax
Other
Motor vehicle in lieu
Park in lieu
Investment income not restricted to specific programs
Other
Transfers
Total general revenues and transfers
Change in net assets
Net assets - beginning of year
Net assets - end of year
Program Revenues
See accompanying notes to the basic financial statements
16
Governmental Business- Type
Activities Activities Total
$ ( 6,309,749) $ - $ ( 6,309,749)
( 5,520,670) - ( 5,520,670)
( 20,881,598) - ( 20,881,598)
( 1,005,067) - ( 1,005,067)
( 2,176,057) - ( 2,176,057)
( 2,380,505) - ( 2,380,505)
( 38,273,645) - ( 38,273,645)
- 4,072,339 4,072,339
- 3,396,061 3,396,061
- ( 370,945) ( 370,945)
- ( 1,020,256) ( 1,020,256)
- 6,077,199 6,077,199
( 38,273,645) 6,077,199 ( 32,196,446)
15,911,568 - 1 5,911,568
326,977 - 326,977
2,409,707 - 2,409,707
1,194,249 - 1 ,194,249
874,604 - 874,604
11,070,795 - 1 1,070,795
- 288,060 288,060
9,038,846 - 9,038,846
586,072 - 586,072
1,521,539 814,717 2 ,336,256
2,343,628 - 2,343,628
1,088,774 ( 1,088,774) -
46,366,759 14,003 4 6,380,762
8,093,114 6,091,202 1 4,184,316
330,758,773 156,042,460 486,801,233
$ 338,851,887 $ 162,133,662 $ 500,985,549
Net ( Expense) Revenue
and Changes in Net Assets
17
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18
MAJOR GOVERNMENTAL FUNDS
General Fund - The General Fund is used to account for all of the general revenues of the City not specifically levied or
collected for other City funds and the related expenditures. The General Fund accounts for all financial resources of the
City which are not accounted for in another fund. For the City, the General Fund includes such activities as general
government, public works, public safety, parks and recreation and community development.
Housing and Community Development Fund - This fund accounts for grant funds received from the Federal
government for the purpose of developing viable urban communities.
Low and Moderate Income Housing Fund - This fund was established by the Antioch Development Agency to account
for tax allocations set aside for the purpose of increasing or improving the City's supply of low or moderate income
housing.
Capital Improvement Fund - This fund records all revenues, expenditures, assets and liabilities associated with City
capital projects. It accounts for resources used to construct or acquire capital assets and make capital improvements.
Sierra- Crete Fund - The E. I. du Pont Nemours Corporation manufactured an artificial rock road base material called
" Sierra- Crete". The company promoted this material as a good alternative to traditional rock for street base and sold it to
a number of paving contractors. Several streets were constructed in Antioch using this material. It turned out that Sierra-
Crete caused a number of problems, including corrosion of city underground utilities and premature cracking and wear
of the asphalt surface. The City sued DuPont, the paving contractors and various subdividers which had installed the
material. In all, there were 19 defendants in the case brought by the City. The parties settled the case, with the
defendants defining the total amount to be paid to the City, but the amount per defendant to be kept confidential and
known only to the City's trustee/ litigation counsel. This trustee established a trust account for receipt of the settlement
funds, and when all funds were paid in to satisfy the settlement, all funds and interest were then forwarded to the City.
ADA Project Area # 1 Fund was established by the Antioch Development Agency to account for acquisition, demolition
and construction of Development Agency Project Area # 1 of the City of Antioch. Financing is provided by property tax
increments and bond proceeds.
19
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20
GOVERNMENTAL FUND FINANCIAL STATEMENTS
21
City of Antioch
Balance Sheet
Governmental Funds
June 30, 2006
Capital
Projects Funds
Housing and Low and
Community Moderate Capital
General Fund Development Income Housing Improvement
ASSETS
Cash and investments $ 7,956,413 $ 6 1,302 $ 2,140,875 $ 271,178
Receivables ( net):
Accounts 502,306 112,480 2 7,084 414,569
Taxes 2,265,540 - - -
Interest - - - -
Due from other funds 1,826,114 - - -
Prepaid items 15,346 - - -
Restricted cash and investments - - - -
Loans receivable 1,196,220 3,928,166 8 ,255,688 -
Advances to other funds - - 3,662,849 -
Investment in land held for redevelopment - - - -
Total assets $ 13,761,939 $ 4,101,948 $ 1 4,086,496 $ 685,747
LIABILITIES
Accounts payable $ 1,223,281 $ 7 9,643 $ 275,044 $ 268,674
Accrued payroll 403,197 633 - -
Deposits 2,135,120 - - 2 00
Due to other funds - 31,607 - -
Unearned revenue 1,196,220 3,928,166 8 ,255,688 -
Compensated absences 70,278 - - -
Advances from other funds - - - -
Total liabilities 5,028,096 4,040,049 8 ,530,732 268,874
FUND BALANCES
Reserved for:
Advances to other funds - - 3,662,849 -
Construction - - - -
Petty cash and prepaid items 16,966 - - -
Encumbrances 31,046 - - 537,813
Land held for redevelopment - - - -
Debt services - - - -
Unreserved, reported in:
General fund 8 ,685,831 - - -
Special revenue funds - 61,899 1,892,915 -
Capital project funds - - - ( 120,940)
Total fund balances 8,733,843 6 1,899 5,555,764 416,873
Total liabilities and fund balances $ 13,761,939 $ 4,101,948 $ 1 4,086,496 $ 685,747
Special Revenue Funds
See accompanying notes to the basic financial statements.
22
Non- major
Sierra ADA Governmental
Crete Project # 1 Funds Total
$ 11,457,140 $ 1,928,347 $ 2 9,852,516 $ 53,667,771
- - 490,112 1 ,546,551
- - 396,412 2 ,661,952
- - 24,837 24,837
- - - 1,826,114
- - 1 20 1 5,466
- - 4 ,599,754 4,599,754
- - 69,827 1 3,449,901
- - - 3,662,849
- 601,424 - 6 01,424
$ 11,457,140 $ 2,529,771 $ 3 5,433,578 $ 82,056,619
$ 1 5,913 $ 15,662 $ 1 ,458,920 $ 3 ,337,137
- 64 5 5,902 459,796
- 3 ,525 204,386 2 ,343,231
- - 897,893 9 29,500
- - 286,163 1 3,666,237
- - - 70,278
- 3,662,849 - 3,662,849
1 5,913 3,682,100 2,903,264 2 4,469,028
- - - 3,662,849
- - 8 ,220,635 8,220,635
- - - 16,966
- 328,859 3 ,154,819 4,052,537
- 601,424 - 6 01,424
- - 3 ,966,710 3,966,710
- - - 8,685,831
- - 1 4,251,236 16,206,050
11,441,227 ( 2,082,612) 2 ,936,914 1 2,174,589
11,441,227 ( 1,152,329) 3 2,530,314 57,587,591
$ 11,457,140 $ 2,529,771 $ 3 5,433,578 $ 82,056,619
Capital Projects Funds
23
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24
City of Antioch
Reconciliation of the Governmental Funds Balance Sheet to the
Government- Wide Statement of Net Assets - Governmental Activities
June 30, 2006
$ 57,587,591
Capital assets used in governmental activities are not current financial resources. Therefore they were not reported
in the Governmental Funds Balance Sheet. 300,797,262
Loans receivables are not available to pay for current- period expenditures and therefore are reported as deferred
revenue in the fund financial statements. 13,449,901
Bond issuance costs are an expenditure in the governmental funds but are capitalized and amortized over the life
of the bonds in the government- wide financial statements. 880,127
Internal service funds are used by management to charge the costs of vehicle repair and maintenance, stores, office
equipment and replacement, printing and mail service, compensated absences, cash management, financial
services, and post employment medical benefits to individual funds. The assets and liabilities are included in
governmental activities in the statement of net assets. 12,957,072
Certain liabilities, including bonds payable, are not due and payable in the current period and therefore are not
reported in the governmental fund financial statements:
Long- term debt:
Due in one year ( 1,331,132)
Due in more than one year ( 44,438,455)
Accrued interest payable ( 1,050,479)
Total long- term liabilities ( 46,820,066)
$ 338,851,887
-
See accompanying notes to the basic financial statements.
Amounts reported for governmental activities in the Statement of Net Assets were different because:
Net Assets of Governmental Activities
Fund Balances - Total Governmental Funds
25
City of Antioch
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2006
Capital
Projects Funds
Housing and Low and
General Community Moderate Capital
Fund Development Income Housing Improvement
REVENUES:
Taxes $ 33,847,312 $ - $ - $ -
Licenses & permits 1,684,075 - - -
Fines and penalties 207,425 - - -
Investment income and rentals 304,266 6 ,007 39,998 54,856
Revenue from other agencies 257,839 949,279 - 432,734
Current service charges 2,818,280 - - 7 6,698
Special assessment revenue - - - -
Other 2 ,260,469 141 1 00,685 260,025
Total revenues 41,379,666 955,427 140,683 824,313
EXPENDITURES:
Current:
General government 7 ,433,234 - - -
Public works 5,330,070 - - 429,219
Public safety 2 1,466,904 - - -
Parks and recreation 44,531 - - -
Community development 4,985,614 924,870 1,381,657 -
Capital outlay 3 4,958 325,133 - 963,197
Debt service:
Principal retirement - - - -
Interest and fiscal charges - - - -
Total expenditures 39,295,311 1,250,003 1 ,381,657 1,392,416
REVENUES OVER
( UNDER) EXPENDITURES 2,084,355 ( 294,576) ( 1,240,974) ( 568,103)
OTHER FINANCING SOURCES ( USES):
Transfers in 3,030,735 - 1,316,637 1 ,357,406
Transfers ( out) ( 2,622,073) - ( 57,000) ( 52,884)
Total other financing sources ( uses) 408,662 - 1,259,637 1 ,304,522
Net change in fund balances 2,493,017 ( 294,576) 18,663 736,419
FUND BALANCES:
Beginning of year 6 ,240,826 356,475 5,537,101 ( 319,546)
End of year $ 8,733,843 $ 6 1,899 $ 5,555,764 $ 416,873
Special Revenue Funds
See accompanying notes to the basic financial statements.
26
Non- major
Sierra ADA Governmental
Crete Project # 1 Funds Total
$ - $ 4,459,956 $ 4,367,844 $ 4 2,675,112
- - - 1,684,075
- - 168,538 3 75,963
250,038 2 3,253 1 ,312,366 1 ,990,784
- - 2 ,816,668 4,456,520
- - 2 ,465,575 5,360,553
- - 2 ,698,717 2,698,717
2,995 226 1,143,917 3 ,768,458
253,033 4,483,435 1 4,973,625 63,010,182
- - 7 52 7,433,986
156,983 - 1,669,950 7 ,586,222
- - 946,045 2 2,412,949
- - 3 ,515,755 3,560,286
- 476,745 1 ,132,957 8,901,843
- 151,231 4 ,665,330 6,139,849
- - 1 ,376,517 1,376,517
- - 2 ,352,110 2,352,110
156,983 627,976 1 5,659,416 59,763,762
9 6,050 3,855,459 ( 685,791) 3 ,246,420
- - 4,868,188 1 0,572,966
( 210,000) ( 3,307,687) ( 3,220,963) ( 9,470,607)
( 210,000) ( 3,307,687) 1 ,647,225 1 ,102,359
( 113,950) 547,772 961,434 4 ,348,779
11,555,177 ( 1,700,101) 3 1,568,880 53,238,812
$ 11,441,227 $ ( 1,152,329) $ 3 2,530,314 $ 57,587,591
Capital Projects Funds
27
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of
Governmental Funds to the Government- Wide Statement of Activities - Governmental Activities
$ 4,348,779
Governmental funds report acquisition of capital assets as part of capital outlay as expenditures. However, in the
Government- Wide Statement of Activities, the cost of those assets were allocated over their estimated useful lives
as depreciation expense.
Capital outlay 6,139,849
Depreciation, net of internal service funds depreciation of $ 874,906 ( 7,692,862)
In the Statement of Activities, capital assets donated to the City are reported as general revenue, whereas in the
governmental funds, capital assets donated do not increase financial resources. Thus, the change in net assets
differs from the change in fund balances by the value of the asset donated. 2,732,819
In the Statement of Activities, only the gain ( loss) on the sale or disposal of capital assets in reported, whereas in
the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net assets
differs from the change in fund balances by the cost of the asset sold. ( 59,000)
Interest on deferred loans in the Statement of Activities do not provide current financial resources and are not
reported as revenues in the funds. 211,616
Repayment of loans is reported as a revenue in governmental funds, and thus, has the effect of increasing fund
balance because current financial resources have been received. For the City as a whole, however, the loan
payments reduce the receivables in the Statement of Net Assets and do not result as a revenue in the Statement of
Activities. The City's loan receivable was reduced because loan payments were received. ( 683,589)
Cash received to fund the compensated absences balances in the governmental funds financial statements is
recorded as revenue. However, on the government- wide statements this amount is offseted by the compensated
absences liabilities. ( 1,793,705)
Governmental funds report expenditures pertaining to the establishment of certain deferred revenue related to
long- term loans made. These deferred credits are not reported on the Statement of Net Assets and, therefore, the
corresponding expense is not reported on the Statement of Activities. 2,411,836
Bonds issuance cost are expensed on the fund statements. However, in the government- wide statement of
activities, the bonds issuance cost are allocated over the life of the bonds. This amount represent the current year
amortization of the bond issuance cost. ( 35,790)
Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long- term
liabilities in the Statement of Net Assets.
Lease revenue bonds 180,000
Tax allocation bonds 850,000
Capital lease obligations 346,517
Some expenses reported in the Statement of Activities do not require the use of current financial resources and
therefore are not reported as expenditures in governmental funds. In addition, interst on long- term debt is not
recognized under the modified accrual basis of accounting until due, rather than as it accrues.
Change in long- term claims liability 11,099
Amortization of debt premium 10,377
Amortization of debt discount ( 4,337)
Amortization of advance refunding difference ( 56,321)
Change in accrued interest payable 21,886
Internal service funds are used by management to charge the costs of certain activities to individual funds. The net
expense of certain activities of the internal service funds is reported with governmental activities. 1,153,940
Change in Net Assets of Governmental Activities $ 8 ,093,114
See accompanying notes to the basic financial statements.
City of Antioch
For the Fiscal Year Ended June 30, 2006
Amounts reported for governmental activities in the Statement of Activities are different because:
Net Change in Fund Balances - Total Governmental Funds
28
PROPRIETARY FUND FINANCIAL STATEMENTS
Water Fund – This fund accounts for the operation of the City’s water utility, a self- supporting activity which provides
services on a user charge basis to residences and businesses.
Sewer Fund – This fund accounts for the maintenance of the City’s sewer lines and related facilities. It is a self-supporting
activity which provides services on a user charge basis to residences and businesses.
Marina Fund – This fund accounts for the operation of the City’s Marina, which includes renting berths and fueling
boats.
Prewett Water Park – This fund accounts for the operation of the Prewett Water Park, an aquatic recreational park.
29
City of Antioch
Statement of Fund Net Assets
Proprietary Funds
June 30, 2006
Governmental
Activities
Internal
Prewett Service
Water Sewer Marina Water Park Total Funds
ASSETS
Current assets:
Cash and investments $ 2 8,774,970 $ 4 ,261,644 $ 5 49,770 $ 2 57,685 $ 3 3,844,069 $ 1 0,415,877
Accounts receivables, net 1 ,744,687 2 95,692 7 9,931 5 ,838 2 ,126,148 7 0,526
Interest receivables 7 ,589 - - - 7 ,589 9 04,438
Materials, parts and supplies - - 1 5,817 - 1 5,817 2 31,846
Prepaid items 1 1,345 - 1 ,350 - 1 2,695 1 5,305
Deferred charges 1 35,472 - - - 1 35,472 -
Restricted cash and investments 3 ,644,283 - - - 3 ,644,283 -
Total current assets 3 4,318,346 4 ,557,336 6 46,868 2 63,523 3 9,786,073 1 1,637,992
Noncurrent assets:
Advances to other funds 2 66,820 - - - 2 66,820 -
Capital assets:
Nondepreciable:
Land 1 ,002,231 1 4,553 4 69,953 2 ,071,730 3 ,558,467 -
Construction in progress 6 ,826,780 6 ,865,612 1 82,396 - 1 3,874,788 -
Depreciable:
Water and sewer pipes 5 3,307,616 5 2,376,495 - - 1 05,684,111 -
Structures and improvements 2 8,849,603 2 00,090 9 ,686,345 1 4,659,621 5 3,395,659 7 0,436
Vehicles and equipment 2 ,896,487 1 40,529 1 37,082 3 00,961 3 ,475,059 1 0,208,458
Less accumulated depreciation ( 25,400,390) ( 7,934,214) ( 4,540,330) ( 5,761,629) ( 43,636,563) ( 7,580,537)
Total capital assets 6 7,482,327 5 1,663,065 5 ,935,446 1 1,270,683 1 36,351,521 2 ,698,357
Total assets 1 02,067,493 5 6,220,401 6 ,582,314 1 1,534,206 1 76,404,414 1 4,336,349
LIABILITIES
Current liabilities:
Accounts payable 2 ,350,553 5 4,024 3 2,860 6 4,562 2 ,501,999 1 77,385
Accrued payroll 5 6,672 1 7,664 4 ,519 2 8,267 1 07,122 4 6,756
Interest payable 1 07,982 - 1 66,790 - 2 74,772 -
Deposits 1 4,834 2 5 4 0,648 1 9,432 7 4,939 -
Due to other funds - - - - - 8 96,614
Deferred revenue - - - 9 8,315 9 8,315 -
Compensated absences - due within one year 2 5,981 5 ,509 4 ,017 1 ,616 3 7,123 1 8,124
Water revenue bonds - due within one year 1 ,829,918 - - - 1 ,829,918 -
Marina loans payable - due within one year - - 1 11,110 - 1 11,110 -
Total current liabilities 4 ,385,940 7 7,222 3 59,944 2 12,192 5 ,035,298 1 ,138,879
Noncurrent liabilities:
Compensated absences - due in more than one year 2 33,825 4 9,584 3 6,149 1 4,548 3 34,106 1 63,132
Advances from other funds - - - - - 2 66,820
Water reveune bonds - due in more than one year 4 ,779,508 - - - 4 ,779,508 -
Marina loans - due in more than one year - - 3 ,932,286 - 3 ,932,286 -
Total noncurrent liabilities 5 ,013,333 4 9,584 3 ,968,435 1 4,548 9 ,045,900 4 29,952
Total liabilities 9 ,399,273 1 26,806 4 ,328,379 2 26,740 1 4,081,198 1 ,568,831
NET ASSETS
Invested in capital assets, net of related debt 6 0,872,901 5 1,663,065 1 ,892,050 1 1,270,683 1 25,698,699 2 ,698,357
Restricted for debt service 3 ,644,283 3 ,644,283
Unrestricted 2 8,151,036 4 ,430,530 3 61,885 3 6,783 3 2,980,234 1 0,069,161
Total net assets $ 9 2,668,220 $ 5 6,093,595 $ 2 ,253,935 $ 1 1,307,466 1 62,323,216 $ 1 2,767,518
( 189,554)
Net assets of business- type activities $ 1 62,133,662
Business- type Activities - Enterprise Funds
Some amounts reported for business- type activities in the statement of net assets are different because certain internal
service fund assets and liabilities are included with business- type activities.
See accompanying notes to the basic financial statements
30
City of Antioch
Statement of Revenues, Expenses and Changes in Fund Net Assets
Proprietary Funds
For the Fiscal Year Ended June 30, 2006
Governmental
Activities
Internal
Prewett Service
Water Sewer Marina Water Park Total Funds
OPERATING REVENUES:
Charges for services $ 19,364,293 $ 3,901,971 $ 762,502 $ 824,272 $ 24,853,038 $ 8,552,175
Other revenue 202,615 48,482 14,254 22,709 288,060 1,088,651
Total operating revenues 19,566,908 3,950,453 776,756 846,981 25,141,098 9,640,826
OPERATING EXPENSES:
Wages and benefits 3,257,728 973,457 322,723 792,078 5,345,986 3,911,512
Utilities 1,445,432 - 29,585 122,507 1,597,524 -
Contractual services 7,740,885 970,496 54,485 174,701 8,940,567 1,917,296
Tools and supplies 3,108,372 157,392 153,251 169,419 3,588,434 1,329,463
Depreciation 1,831,031 713,584 384,016 555,824 3,484,455 874,906
Repairs and maintenance 152,944 17,380 9,569 36,194 216,087 816,821
Total operating expenses 17,536,392 2,832,309 953,629 1,850,723 23,173,053 8,849,998
OPERATING INCOME ( LOSS) 2,030,516 1,118,144 ( 176,873) ( 1,003,742) 1,968,045 790,828
NONOPERATING REVENUES ( EXPENSES):
Gain ( loss) from sale of capital assets - - - - - 33,085
Investment income 712,579 86,143 8,024 7,971 814,717 230,266
Investment ( expense) ( 236,047) - ( 182,351) - ( 418,398) -
Total nonoperating revenues ( expenses) 476,532 86,143 ( 174,327) 7,971 396,319 263,351
INCOME ( LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 2,507,048 1,204,287 ( 351,200) ( 995,771) 2,364,364 1,054,179
Capital contribution - developer 1,368,900 1,769,500 - - 3,138,400 -
Capital contribution - connection fees 1,166,268 624,290 - - 1,790,558 -
Transfers in 33,433 1,443 251,008 267,383 553,267 70,203
Transfers ( out) ( 1,335,710) ( 295,180) ( 11,151) - ( 1,642,041) ( 83,788)
CHANGE IN NET ASSETS 3,739,939 3,304,340 ( 111,343) ( 728,388) 6,204,548 1,040,594
NET ASSETS:
Beginning of year 88,928,281 52,789,255 2,365,278 12,035,854 11,726,924
End of year $ 92,668,220 $ 56,093,595 $ 2,253,935 $ 11,307,466 $ 12,767,518
( 113,346)
Change in net assets of business- type activities $ 6,091,202
See accompanying notes to tbe basic financial statements.
Business- type Activities - Enterprise Funds
Some amounts reported for business- type activities in the statement of activities are different because the net
revenue ( expense) of certain internal service funds is reported with business- type activities.
31
City of Antioch
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2006
Governmental
Activities
Non- major Internal
Prewett Service
Water Sewer Marina Water Park Total Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash receipt from customers $ 1 9,468,736 $ 3 ,951,355 $ 7 41,554 $ 8 72,869 $ 2 5,034,514 $ 9 ,588,181
Cash paid to suppliers for goods and services ( 11,897,878) ( 1,901,193) ( 332,518) ( 489,923) ( 14,621,512) ( 4,993,372)
Cash paid to employees for services ( 2,987,428) ( 910,936) ( 282,221) ( 787,687) ( 4,968,272) ( 6,037,487)
Net cash provided by ( used in) operating activities 4 ,583,430 1 ,139,226 1 26,815 ( 404,741) 5 ,444,730 ( 1,442,678)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Interfund lending receipts ( 88,231) - - - ( 88,231) -
Interfund lending payment - - - - - 1 ,204,439
Transfers in 3 3,433 1 ,443 2 51,008 2 67,383 5 53,267 4 8,749
Transfers ( out) ( 1,335,710) ( 295,180) ( 11,151) - ( 1,642,041) ( 83,788)
Net cash provided by ( used in)
noncapital financing activities ( 1,390,508) ( 293,737) 2 39,857 2 67,383 ( 1,177,005) 1 ,169,400
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Capital asset additions ( 2,448,216) ( 1,704,331) ( 134,003) - ( 4,286,550) ( 401,658)
Capital contributions 1 ,166,268 6 24,290 - - 1 ,790,558 -
Proceeds from sale of capital assets - - - - - 4 0,000
Principal paid on bonds ( 1,785,000) - ( 106,327) - ( 1,891,327) -
Interest paid on bonds ( 229,608) - ( 186,737) - ( 416,345) -
Net cash provided by ( used in) capital
and related financing activities ( 3,296,556) ( 1,080,041) ( 427,067) - ( 4,803,664) ( 361,658)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received 7 09,024 8 6,143 8 ,024 7 ,971 8 11,162 ( 26,105)
Net cash provided by ( used in) investing activities 7 09,024 8 6,143 8 ,024 7 ,971 8 11,162 ( 26,105)
Net change in cash and cash equivalents 6 05,390 ( 148,409) ( 52,371) ( 129,387) 2 75,223 ( 661,041)
CASH AND CASH EQUIVALENTS:
Beginning of year 3 1,813,863 4 ,410,053 6 02,141 3 87,072 3 7,213,129 1 1,076,918
End of year $ 3 2,419,253 $ 4 ,261,644 $ 5 49,770 $ 2 57,685 $ 3 7,488,352 $ 1 0,415,877
RECONCILIATION OF OPERATING INCOME ( LOSS)
TO NET CASH PROVIDED BY ( USED IN)
OPERATING ACTIVITIES:
Operating income ( loss) $ 2 ,030,516 $ 1 ,118,144 $ ( 176,873) $ ( 1,003,742) $ 1 ,968,045 $ 7 90,828
Adjustments to reconcile operating income ( loss) to
cash flows from operating activities:
Depreciation 1 ,831,031 7 13,584 3 84,016 5 55,824 3 ,484,455 8 74,906
Decrease ( increase) in:
Accounts receivable ( 86,788) 9 02 ( 34,723) 1 3,291 ( 107,318) ( 52,645)
Materials, parts, and supplies - - 5 ,642 - 5 ,642 1 2,830
Prepaid items 8 84 4 5 - 3 ,391 4 ,320 ( 3,089)
Increase ( decrease) in:
Accounts payable 5 48,871 ( 755,970) ( 91,270) 9 ,507 ( 288,862) ( 939,533)
Accrued payroll 1 0,494 7 ,428 3 36 ( 11,773) 6 ,485 5 ,840
Deposits ( 11,384) - ( 479) 1 ,367 ( 10,496) -
Deferred revenue - - - 1 1,230 1 1,230 -
Accrued compensated absences 2 59,806 5 5,093 4 0,166 1 6,164 3 71,229 ( 2,131,815)
Net cash provided by ( used in) operating activities $ 4 ,583,430 $ 1 ,139,226 $ 1 26,815 $ ( 404,741) $ 5 ,444,730 $ ( 1,442,678)
SUPPLEMENTAL DISCLOSURE OF NONCASH
CAPITAL AND RELATED FINANCING ACTIVITIES:
Contributions of capital assets from ( to) the general government $ - $ - $ - $ - $ - $ 2 1,454
Capital assets contributed by developers 1 ,368,900 1 ,769,500 - - 3 ,138,400 -
Total noncash capital and related financing activities $ 1,368,900 $ 1,769,500 $ - $ - $ 3,138,400 $ 2 1,454
Business- type Activities - Enterprise Funds
See accompanying notes to the basic financial statements.
32
FIDUCIARY FUND FINANCIAL STATEMENTS
33
City of Antioch
Statement of Fiduciary Fund Assets and Liabilities
Agency Funds
June 30, 2006
ASSETS
Cash and investments $ 3,961,120
Accounts receivable 21
Assessment receivable 366,382
Interest receivable 318,779
Prepaids 13,037
Restricted cash and investments 17,585,149
Total assets $ 22,244,488
LIABILITIES
Accounts payable $ 1,451,720
Due to others 20,792,768
Total liabilities $ 22,244,488
See accompanying notes to the basic financial statements.
34
CITY OF ANTIOCH
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2006
35
NOTE 1 - THE FINANCIAL REPORTING ENTITY
( a) Reporting Entity
The City of Antioch, California ( the " City"), operates under the Council- Manager form of government and
provides the following services: police, highways and streets, sanitation, health services, culture-recreation,
public improvements, planning and zoning, general administration services, water, and
redevelopment through the Antioch Development Agency.
The governmental reporting entity consists of the City ( Primary Government) and its component units.
Component units are legally separate organizations for which the City is financially accountable or other
organizations whose nature and significant relationship with the City are such that exclusion would cause
the City's financial statements to be misleading or incomplete. Financial accountability is defined as the
appointment of a voting majority of the component unit's board, and ( 1) either the City's ability to impose
its will on the organization or ( ii) there is potential for the organization to provide a financial benefit to or
impose a financial burden on the City.
The basic financial statements include blended component units. The blended 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 primary government.
For financial reporting purposes, the City's basic financial statements include all financial activities that
are controlled by or are dependent upon actions taken by the City's Council. The financial statements of
the individual component units may be obtained by writing to the City of Antioch, Finance Department,
P. O. Box 5007, Antioch, CA 94531- 5007.
( b) Blended Component Units
Antioch Development Agency
The Antioch Development Agency ( Agency) was created to prepare and implement plans for
improvement, rehabilitation and development of certain areas within the City. The Agency and the City
have a financial and operational relationship, which requires that the Agency's basic financial statements
be blended into the City's basic financial statements. The Agency's Board consists exclusively of all five
members of the City Council.
Antioch Public Financing Authority
The Antioch Public Financing Authority ( APFA) was formed for the purpose of financing the Water
Treatment Plant Expansion, the Police Facilities Projects and other infrastructure improvements. The
APFA and the City have a financial and operational relationship, which requires that the APFA's financial
statements be blended into the City's financial statements. The APFA's Board consists exclusively of all
five members of the City Council.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
( a) Basis of Presentation
Government- wide Financial Statements
The statement of net assets and statement of activities display information about the primary government
( the City) and its component units. These statements include the financial activities of the overall
government, except for fiduciary activities. Eliminations have been made to minimize the double counting
of internal activities. These statements distinguish between the governmental and business- type
activities of the City. Governmental activities, which normally are supported by taxes and
intergovernmental revenues and other nonexchange transactions, are reported separately from business-type
activities, which rely to a significant extent on fees charged to external parties.
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
36
The statement of activities presents a comparison between direct expenses and program revenues for
each segment of the business- type activities of the City and for each function of the City's governmental
activities. Direct expenses are those that are specifically associated with a program or function; and,
therefore, are clearly identifiable to a particular function. Program revenues include 1) fees, fines and
charges paid by the recipients of goods or services offered by the programs and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a particular program.
Revenues that are not classified as program revenues, including all taxes, are presented instead as
general revenues.
Fund Financial Statements
The fund financial statements provide information about the City's funds, including fiduciary funds and
blended component units. Separate statements for each fund category - governmental, proprietary and
fiduciary - are presented. The emphasis of fund financial statements is on major governmental and
enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds
are separately aggregated and reported as nonmajor funds.
Proprietary funds distinguish operating revenues and expenses and nonoperating items. Operating
revenues and expenses generally result from providing services in connection with the fund's principal
ongoing operations. The principal operating revenues of the City's enterprise and internal service funds
are charges for customer services including: water and sewer charges, marina and water park fees,
equipment maintenance and usage fees, and support charges. Operating expenses for enterprise funds
and internal service funds include the cost of services, administrative expenses and depreciation on
capital assets. All other revenues and expenses not meeting this definition are reported as nonoperating
revenues and expenses.
The City reports the following major governmental funds:
• The General Fund is used to account for all of the general revenues of the City not specifically
levied or collected for other City funds and the related expenditures. The General Fund accounts for all
financial resources of the City which are not accounted for in another fund. For the City, the General
Fund includes such activities as general government, public works, public safety, parks and recreation
and community development.
• The Housing and Community Development Fund accounts for grant funds received from the
Federal government for the purpose of developing viable urban communities.
• The Low and Moderate Income Housing Fund was established by the Antioch Development
Agency to account for tax allocations set aside for the purpose of increasing or improving the City's
supply of low or moderate income housing.
• The Capital Improvement Fund records all revenues, expenditures, assets and liabilities
associated with City capital projects. It accounts for resources used to construct or acquire capital assets
and make capital improvements
• Sierra- Crete Fund - The E. I. du Pont Nemours Corporation manufactured an artificial rock road
base material called " Sierra- Crete". The company promoted this material as a good alternative to
traditional rock for street base and sold it to a number of paving contractors. Several streets were
constructed in Antioch using this material. It turned out that Sierra- Crete caused a number of problems,
including corrosion of city underground utilities and premature cracking and wear of the asphalt surface.
The City sued DuPont, the paving contractors and various subdividers which had installed the material.
In all, there were 19 defendants in the case brought by Antioch. The parties settled the case, with the
defendants defining the total amount to be paid to the City, but the amount per defendant to be kept
confidential and known only to the City's trustee/ litigation counsel. This trustee established a trust
account for receipt of the settlement funds, and when all funds were paid in to satisfy the settlement, all
funds and interest were then forwarded to the City.
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
37
• The ADA Project # 1 Fund was established by the Antioch Development Agency to account for
acquisition, demolition and construction of Development Agency Project Area # 1 of the City of Antioch.
Financing is provided by property tax increments and bond proceeds.
The City reports the following major enterprise funds:
• The Water Fund accounts for the operation of the City's water utility, a self- supporting activity,
which provides services on a user charge basis to residences and businesses.
• The Sewer Fund accounts for the maintenance of the City's sewer lines and related facilities. It is
a self- supporting activity, which provides services on a user charge basis to residences and businesses.
• The Marina Fund accounts for the operation of the City's Marina Complex, which includes renting
berths and fueling boats to the public.
• Prewett Water Park – This fund accounts for the operation of the Prewett Water Park, an aquatic
recreational park.
The City reports the following additional fund types:
• Internal Service Funds account for the maintenance and replacement of vehicles and equipment;
the City's warehouse and central stores operation; the operation, maintenance, and replacement of office
equipment used by City departments; costs incurred for printing/ reproduction services and mailing
services for all City departments; the City's liability for compensated absences; the treasury and
investment functions of the City; the charges against each department for its share of the costs of
operations for the Finance Department; charges for workers' compensation expenses; charges for post
retirement medical benefits and charges for loss control, on a cost- reimbursement basis.
• Agency Funds account for assets held by a governmental unit in the capacity of agent for
individuals, other governmental agencies and nonpublic organizations.
( b) Measurement Focus, Basis of Accounting
The government- wide, proprietary and fiduciary fund financial statements are reported using the
economic resources measurement focus. The government- wide and proprietary fund financial
statements are reported using the accrual basis of accounting. Revenues are recorded when earned and
expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take
place. Nonexchange transactions, in which the City gives ( or receives) value without directly receiving ( or
giving) equal value in exchange, include property and sales tax, grants, entitlements and donations. On
an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are
levied. Revenues from sales tax are recognized when the underlying transactions take place. Revenues
from grants, entitlements and donations are recognized in the fiscal year in which all eligibility
requirements have been satisfied.
Governmental funds are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Under this method, revenues are recognized when measurable
and available. Property and sales taxes, interest, certain state and federal grants and charges for
services are accrued when their receipt occurs within sixty days after the end of the accounting period so
as to be both measurable and available. Expenditures are generally recorded when a liability is incurred,
as under accrual accounting. However, debt service expenditures, as well as expenditures related to
claims and judgments are recorded only when payment is due. General capital assets acquisitions are
reported as expenditures in governmental funds. Proceeds of general long- term debt and capital leases
are reported as other financing sources.
Under the terms of grant agreements, the City funds certain programs by a combination of specific cost-reimbursement
grants, categorical block grants and general revenues. Thus, when program expenses
are incurred, there are both restricted and unrestricted net assets available to finance the program. It is
the City's policy to first apply cost- reimbursement grant resources to such programs, followed by
categorical block grants, and then by general revenues. With respect to the gas tax fund, it is the City's
policy to first apply revenues other than the gas tax itself to expenditures incurred within that program.
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
38
Private- sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in both the government- wide and enterprise fund financial statements to the extent
that those standards do not conflict with or contradict guidance of the Governmental Accounting
Standards Board ( GASB). Governments also have the option of following subsequent private- sector
guidance for their business- type activities and enterprise funds, subject to the same limitation. The City
has elected not to follow subsequent private- sector guidance.
( c) Internal Investment Pool
The City maintains an internal investment pool that is available for use by all funds. Investments in non-participating
interest earning contracts ( including guaranteed investment contracts) are reported at cost,
and all other investments at fair value. Fair value is determined annually and is based on current market
prices. The method of allocating interest earned on pooled deposits and investments among funds is
based on average cash balances.
For purposes of the accompanying statement of cash flows, the enterprise and internal service funds
consider all highly liquid investments with a maturity of three months or less when purchased, and their
equity in the cash and investment pool to be cash equivalents.
( d) Receivables
During the course of normal operations, the City carried various receivable balances for taxes, interest,
services, loan, utilities and special assessments. Accounts receivables are shown net of an allowance for
doubtful accounts of $ 74,526 in the General Fund and $ 163,383 in the Water Enterprise Fund.
( e) Materials, Parts and Supplies
Material, parts and supplies are valued at average cost. Material, parts and supplies recorded in the
internal service funds consist of expendable supplies for consumption. The cost is recorded as an
expense at the time individual inventory items are consumed. Material, parts and supplies recorded in
the Marina Enterprise Fund consists primarily of merchandise held for resale to the public.
( f) Loans Receivable
For the purposes of the governmental funds financial statements, expenditures related to long- term loans
arising from loan subsidy programs are charged to operations upon funding and the loans are recorded
with an offset to a deferred revenue account. The balance of the long- term loans receivable includes
loans that may be forgiven if certain terms and conditions of the loans are met. For purposes of the
government- wide financial statements, long- term loans are not offset by deferred revenue accounts.
( g) Land Held for Redevelopment
The City purchases parcels of land for redevelopment in order to develop or redevelop properties within
the redevelopment areas. Such land parcels are accounted for as investments on the statement of net
assets at the lower of cost, or net realizable value. Net realizable value is determined at the date of a
disposition and development agreement is being executed.
( h) Bond Issuance Costs, Original Issue Discounts and Premiums and Refunding of Debt
In the government- wide financial statements and the proprietary fund financial statements, long- term debt
and other long- term obligations are reported as liabilities in the applicable governmental activities,
business- type activities, or proprietary fund statement of net assets. Bond premiums and discounts, as
well as issuance costs, are deferred and amortized over the life of the bonds. Bonds payable are
reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred
charges and are amortized on a straight- line basis over the term of the related debt.
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
39
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. Issuance costs, whether or not withheld from the
actual debt proceeds received are reported as debt service expenditures.
Gains or losses occurring from advance refundings, completed subsequent to June 30, 1993, are
deferred and amortized into expense for both business- type activities and proprietary funds. For
governmental activities, they are deferred and amortized into expense if they occurred subsequent to
June 30, 2001.
( i) Capital Assets
Capital assets ( including infrastructure) are recorded at historical cost or at estimated historical cost if
actual historical cost is not available. Contributed capital assets are valued at their estimated fair market
value on the date contributed. Capital assets include public domain ( infrastructure) general capital assets
consisting of certain improvements including roads, bridges, water/ sewer, lighting systems, drainage
systems, and flood control. The City defines capital assets as assets with an estimated useful life in
excess of one year and an initial, individual cost of $ 1,000 for assets acquired prior to June 30, 2001, and
individual cost of $ 5,000 for assets acquired after June 30, 2001.
Capital assets used in operations are depreciated or amortized ( assets under capital leases) using the
straight- line method over the lesser of the capital lease period or their estimated useful lives in the
government- wide statements and proprietary funds.
The estimated useful lives are as follows:
Infrastructure 20 to 50 years
Water and Sewer Pipes 75 years
Structures and Improvements 10- 30 years
Equipment 5- 20 years
Vehicles 5- 15 years
Maintenance and repairs are charged to operations when incurred. Betterments and major
improvements, which significantly increase values, change capacities or extend useful lives, are
capitalized. Upon sale or retirement of capital assets, the cost and related accumulated depreciation are
removed from the respective accounts and any resulting gain or loss is included in the results of
operations.
( j) Property Taxes and Special Assessments Revenue
Revenue is recognized in the fiscal year for which the tax and assessment are levied. The County of
Contra Costa levies, bills and collects property taxes and special assessments for the City; under the
County's " Teeter Plan", the County remits the entire amount levied and handles all delinquencies,
retaining interest and penalties.
Taxes are levied for each fiscal year on taxable real and personal property situated in the County. The
levy is based on the assessed values as of the preceding January 1st, which is also the lien date.
Property taxes on the secured roll are due in two installments: November 1st and February 1st and
become delinquent after December 10th and April 10th, respectively. Supplemental property taxes are
levied based on changes in assessed values between the date of real property sales or construction
completion and the preceding assessment date. The additional supplemental property taxes are prorated
from the first day of the month following the date of such occurrence. Property taxes on the unsecured
roll are due on the lien date ( January 1), and become delinquent if unpaid by August 31st.
Special assessment districts are established in various parts of the City to provide improvements to
properties located in those districts. Properties are assessed for the cost of improvements; these
assessments are payable over the term of the debt issued to finance the improvements.
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
40
( k) Accumulated Compensated Absences
The City accrues the cost for compensated absences ( vacation, sick leave and comp time) when they are
earned. City employees have a vested interest in accrued vacation time and all vacation hours will
eventually either be used or paid by the City. Generally, employees earn and use their current vacation
hours with a small portion being accrued or unused each year. As this occurs, the City incurs an
obligation to pay for these unused hours. Sick leave benefits do not vest and no liability is recorded.
( l) Interfund Transactions
Interfund transactions are reflected as either loans, services provided, reimbursements or transfers.
Loans are reported as receivables and payables as appropriate, are subject to elimination upon
consolidation and are referred to as either " due to/ from other funds" ( i. e., the current portion of interfund
loans) or " advances to/ from other funds" ( i. e., the noncurrent portion of interfund loans). Any residual
balances outstanding between the governmental activities and the business- type activities are reported in
the government- wide financial statements as " internal balances". Advances between funds, as reported
in the fund financial statements, are offset by a fund balance reserve account in applicable governmental
funds to indicate that they are not available for appropriation and are not available financial resources.
Services provided, deemed to be at market or near market rates, are treated as revenues and
expenditures/ expenses. Reimbursements are when one fund incurs a cost, charges the appropriate
benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are
treated as transfers. Transfers within governmental or proprietary funds are netted as part of the
reconciliation to the government- wide presentation.
( m) Estimates
The preparation of basic financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
( n) Implementation of New GASB Pronouncements
In 2006, the City adopted new accounting standards in order to conform to the following Governmental
Accounting Standards Board Statement:
GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for
Insurance Recoveries – The Statement establishes accounting and financial reporting standards for
impairment of capital assets. A capital asset is considered impaired when its service utility has declined
significantly and unexpectedly. This Statement also clarifies and establishes accounting requirements for
insurance recoveries.
Statement No. 44, Economic Condition Reporting: The Statistical Section ( Amendment of NCGA
Statement 1) – The Statement establishes the objectives of the statistical section and the five categories
of information it contains: financial trends information, revenue capacity information, debt capacity
information, demographic and economic information, and operating information.
GASB Statement No. 46, Net Assets Restricted by Enabling Legislation – The Statement addresses
selected issues and amends GASB Statement No. 34, Basic Financial Statements and Management’s
Discussion and Analysis for State and Local Governments. The Statement enhances the usefulness and
comparability of net asset information and clarifies the meaning of legal enforceability. The Statement
also specifies accounting and financial reporting requirements for restricted net assets.
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
41
GASB Statement No. 47, Accounting for Termination Benefits – The Statement provides accounting
guidance for state and local governmental employers regarding benefits ( such as early retirement
incentives and severance benefits) provided to employees that are terminated. The Statement requires
recognition of the cost of involuntary termination benefits in the period in which a government becomes
obligated to provide benefits to terminated employees.
NOTE 3 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
( a) Deficit Fund Balances
The funds listed below had fund balance deficits at June 30, 2006
Capital Projects Funds:
Antioch Development Agency Project Area # 1 $( 1,152,329)
Internal Service Fund:
Stores $( 83,993)
The deficit in the Antioch Development Agency Project Area Capital Projects Fund is expected to be
cured by future property tax increments. During the next fiscal year, the Stores Internal Service Fund will
be closed into the General Fund, curing this deficit.
( b) Expenditures in Excess of Budget
Expenditures in the funds below exceeded appropriations by the amounts indicated, largely because
budgets were not revised for higher than anticipated capital outlays or other unexpected expenditures.
Sufficient resources were available to finance these expenditures, primarily in the form of higher revenues
and transfers than expected or from available fund balance.
Appropriated
Final Budget
Actual
Expenditures
Excess
General Fund $ 38,243,987 $ 39,295,311 $( 1,051,324)
Nonmajor Special Revenue Funds:
Civic Arts 155,848 156,007 $( 159)
Park In Lieu 1,204,843 1,205,733 ( 890)
Downtown Maintenance District 54,501 58,862 ( 2,361)
Park 1A Maintenance District 71,945 75,712 ( 3,767)
East Lone Tree SLLMD 2 537 ( 535)
Local Law Enforcement Block Grant 50 89 ( 39)
Street Impact Fund 20 88 ( 68)
Traffic Safety 110 153 ( 43)
Nonmajor Capital Projects Funds:
ADA Project Area # 4 531,708 532,074 ( 366)
Hillcrest Assessment District # 26 142,970 143,409 ( 439)
Hillcrest Bridge District 1,500 1,829 ( 329)
Highway 4 Bridge Benefit District 600 695 ( 95)
Residential Development Allocation 138,740 152,286 ( 13,546)
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
42
NOTE 4 - CASH AND INVESTMENTS
( a) Cash and Investment Balances
The City has the following cash and investments at June 30, 2006:
Cash and investments:
Deposits in banks $ 4,634,823
U. S. Government securities 16,268,905
U. S. Government agencies 50,617,724
Medium- term corporate notes 22,472,049
Money market 487,383
California Local Agency Investment Fund 7,407,953
Total cash and investments $ 101,888,837
Restricted cash and investments:
California Asset Management Program 3,093,962
Guaranteed investment contracts 17,335,325
Money market 4,977,149
Repurchase agreements 422,750
Total restricted cash and investments 25,829,186
Total $ 127,718,023
Cash and investments are presented on the Statement of Net Assets as follows at June 30, 2006:
Government- Wide
Statement of
Net Assets
Fiduciary Funds
Statement of
Assets and
Liabilities
Total
Cash and investments $ 97,927,717 $ 3,961,120 $ 101,888,837
Restricted cash and investments 8,244,037 17,585,149 25,829,186
Total $ 106,171,754 $ 21,546,269 $ 127,718,023
The City's dependence on property tax receipts, which are received semi- annually, requires it to maintain
significant cash reserves to finance operations during the remainder of the year. The City pools cash
from all sources and all funds, except amounts required to be held with fiscal agents, so that it can be
safely invested at maximum yield and liquidity. Investment income is allocated among funds on the basis
of average month- end cash balances.
Restricted cash and investments at June 30, 2006, was $ 25,829,186, which was held by trustees or fiscal
agents. These funds may only be used for specific capital outlay or for the payment of certain bonds or
tax allocation bonds, and have been invested only as permitted by State statutes or applicable City
ordinance, resolution or bond indentures.
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
43
( b) Cash Deposits
The carrying amount of the City's cash deposits was $ 4,634,823 at June 30, 2006. The bank balance at
June 30, 2006, was $ 4,918,692, which was fully insured and/ or was collateralized with securities held by
the pledging financial institutions in the City's name as described in the following paragraph.
The California Government Code requires California banks and savings and loan associations to secure
the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in
this manner shall have the effect of perfecting a security interest in such collateral superior to those of a
general creditor. Thus, collateral for cash deposits is considered to be held in the City's name. The
market value of pledged government securities must equal at least 110% of the City's cash deposits.
California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes
having a value of 150% of the City's total cash deposits. The City has waived collateral requirements for
cash deposits, which are fully insured up to $ 100,000 by the Federal Deposit Insurance Corporation or
Savings Association Insurance Fund.
( c) Investments
The City's investment policy, bond indentures and Section 53601 of the California Government Code
allow the City to invest in the following types of investments:
Securities of the U. S. Government or its agencies
Certificates of Deposit
Bankers' Acceptances
Commercial Paper
Investment Grade Medium Term Corporate Notes
Repurchase Agreements
Local Agency Investment Fund Deposits
Insured Savings Accounts or Money Market Accounts
Guaranteed Investment Contracts
Mutual funds as permitted by the Code
The City did not enter into reverse repurchase agreements during the year ended June 30, 2006.
At June 30, 2006, the City's investment position in the State of California Local Agency Investment Fund
( LAIF) was $ 7,407,953. The total amount invested by all public agencies in LAIF at that day was
$ 63,366,260,064. Of that amount, 97.433% is invested in nonderivative financial products and 2.567% in
structured notes and asset- backed securities. The Local Investment Advisory Board ( Board) has
oversight responsibility for LAIF. The Board consists of five members as designated by State Statute.
The value of the pool shares in LAIF, which may be withdrawn, is determined on an amortized cost basis,
which is different than the fair value of the City's position in the pool. Information is not available on
whether the mutual funds in which the City has invested used, held or wrote derivative products during
the fiscal year ended June 30, 2006.
As of June 30, 2006, the City's investment in the California Asset Management Program ( CAMP) pool
was $ 3,093,962. The total amount invested by all public agencies in CAMP at that date was
$ 908,375,223. A board of five trustees who are officials or employees of public agencies has oversight
responsibility for CAMP. The value of the pool shares in CAMP, which may be withdrawn, is determined
on an amortized cost basis, which is different than the fair value of the City's position in the pool.
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
44
( d) Interest Rate Risk
As a means of limiting its exposure to fair value losses arising from interest rates, the City's investment
policy limits investments to a maximum maturity of five years. At June 30, 2006, the City had the
following investment maturities:
Investment Maturities ( In Years)
Investment Type Fair Value Less than 1 1 to 2 2 to 3
U. S. Government securities $ 16,268,905 $ 1,065,080 $ 15,203,825 -
U. S. Government agencies 50,617,724 11,569,524 23,435,436 15,612,764
Medium- term corporate notes 22,472,049 9,968,398 2,466,250 10,037,401
California Local Agency Investment Fund 7,407,953 7,407,953 - -
Money market 487,383 487,383 - -
Total $ 97,254,014 $ 30,498,338 $ 41,105,511 $ 25,650,165
( e) Credit Risk
State law limits investments in commercial paper and corporate bonds to the top two ratings issued by
nationally recognized statistical rating organizations ( NRSROs). It is the City's policy to limit its
investments in these investment types to the top rating issued by NRSROs, including raters Standard &
Poor's and Moody's Investor's Service. At June 30, 2006, the City's credit risks, expressed on a
percentage basis, were as follows:
Credit Quality Distribution for Securities with Credit Exposure
As A Percentage of Total Investments
Investment Type
S& P's Credit
Rating
% of
Investments
U. S. Government securities TSY 16.73%
U. S. Government agencies AAA 52.05%
Medium- term corporate notes AAA 4.86%
Medium- term corporate notes A+ 3.51%
Medium- term corporate notes AA- 4.48%
Medium- term corporate notes A- 1+ 5.13%
Medium- term corporate notes A- 1 5.12%
California Local Agency Investment Fund Not Rated 7.62%
Money market Not Rated 0.50%
Total 100.00%
( f) Custodial Credit Risk
For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the
City will not be able to recover the value of its investments or collateral securities that are in the
possession of an outside party. None of the City's investments were subject to custodial credit risk.
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
45
NOTE 5 - INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
( a) Current Balances
Current balances are expected to be repaid in the normal course of business during the following fiscal
year. The City’s current balances represent loans to cover temporary shortages of cash in individual
funds. The composition of interfund balances as of June 30, 2006, is as follows:
Due From
Other Funds
Due to Other Funds General Fund
Housing and Community Development Fund $ 31,607
Nonmajor Governmental Funds 897,893
Internal Service Funds 896,614
Total $ 1,826,114
( b) Advances From/ To Other Funds
Advance To Other Funds
Major Funds
Advance From
Other Funds
Low and Moderate
Income Housing
Water Enterprise
ADA Project Area # 1 $ 3,662,849
Internal Service Fund $ 266,820
The Water Enterprise Fund has receivables due for working capital loans.
At June 30, 2006, the Low and Moderate Income Housing Fund has a receivable due from Antioch
Development Agency Project Area # 1 in the amount of $ 3,662,849. The Agency Project Areas are
required by the Health and Safety Code to annually set aside 20% of tax increment revenues for low and
moderate housing development. Project Area # 1 was formed prior to the year this requirement was
established. The Agency began repaying the unfunded set- aside in fiscal year 1997. During the fiscal
year ended June 30, 2001, the Agency adopted a formal deficit elimination plan for the Low and Moderate
Income Housing Fund. As part of this plan, the Agency agreed to pay $ 25,000 per year from fiscal year
2000- 01 through 2015- 16, $ 1,500,000 in fiscal year 2016- 17 and $ 1,812,849 in fiscal year 2017- 18. The
Agency made principal payments totaling $ 25,000 during fiscal year 2005- 06.
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
46
( c) Transfers to/ from Other Funds
Transfers are indicative of funding for capital projects, lease payments or debt service, subsidies of
various City operations and re- allocations of special revenues. The following schedule briefly
Low and
Moderate Capital Nonmajor Prewett
General Income Improvement Governmenta Water Sewer Marina Water Park Internal
Fund Fund Fund Funds Enterprise Enterprise Enterprise Enterprise Service Total
General Fund $ - $ - $ 1,357,406 $ 976,213 $ - $ - $ - $ 267,000 $ 21,454 $ 2,622,073
Low and Moderate
Income Fund 57,000 - - - - - - - - 57,000
Capital Improvement - - - 26,442 26,442 - - - - 52,884
Sierra Crete 210,000 - - - - - - - - 210,000
ADA Project Area # 1 50,000 891,991 - 2,115,696 - - 250,000 - - 3,307,687
Nonmajor:
Governmental Funds 1,545,571 424,646 - 1,250,746 - - - - - 3,220,963
Water Enterprise 969,000 - - 366,710 - - - - - 1,335,710
Sewer Enterprise 178,000 - - 117,180 - - - - - 295,180
Marina Enterprise - - - 11,151 - - - - - 11,151
Internal Service 21,164 - - 4,050 6,991 1,443 1,008 383 48,749 83,788
Total $ 3,030,735 $ 1,316,637 $ 1,357,406 $ 4,868,188 $ 33,433 $ 1,443 $ 251,008 $ 267,383 $ 70,203 $ 11,496,436
Transfers In
Major Fund Major Fund
Transfers Out
NOTE 6 - LOANS RECEIVABLE
The composition of the City's governmental activities loans receivable as of June 30, 2006, is as follows:
Rental and Housing Rehabilitation Loans $ 2,469,511
Job Development Incentive Loans 98,244
Multi- unit Rental Rehabilitation Loans:
West Rivertown Apartments/ Eden Housing Project 5,041,686
Terrace Glen Project 1,692,633
Pinecrest Apartment Project 1,009,498
Rivertown Senior Housing 242,750
Hillcrest Terrace Project 1,124,671
Habitat for Humanity 379,861
Lone Tree Golf Course 1,196,220
Other loans 194,827
Total governmental activities $ 13,449,901
( a) Rental and Housing Rehabilitation Loans
The City administers rental and home improvement revolving loan funds using federal Community
Development Block Grant ( CDBG) and redevelopment funds. The program provides below market rate
loans, secured by deeds of trust, to eligible participants for rental and housing rehabilitation. Although
payments for most loans are amortized over an established payment schedule, some loans allow for
deferred payment of accrued interest and principal until the homeowner's property is sold or transferred,
primarily for seniors and very low- income families. Repayments received from the outstanding loans are
used to make additional rental and housing rehabilitation loans. Outstanding balances at June 30, 2006,
are $ 2,469,511.
CITY OF ANTIOCH
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2006
47
( b) Job Development Incentive Loans
The City administers job development incentive revolving loan funds using federal CDBG funds. The
program provides below market rate loans, secured by an irrevocable letter of credit, to eligible
participants in order to create and retain jobs in the City. Principal and interest on these loans are
deferred for four years and forgiven at the rate of 25% of the principal amount plus accrued interest per
year provided the agreed- upon jobs are in place. Partial fulfillment at the end of four years will result in a
prorated amount owing in proportion to the percentage of jobs retained and created as agreed. The loans
accrue at the
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| Title | Financial Report. 2005-2006. |
| Description | Harvested from the web on 8/13/07 |
| Transcript | CITY OF ANTIOCH, CALIFORNIA Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2006 Prepared By Department of Finance City of Antioch Comprehensive Annual Financial Report Table of Contents Page INTRODUCTORY SECTION Letter of Transmittal ............................................................................................................................... ................................ i Elected Officials and Administrative Personnel .................................................................................................................. v Organizational of City Governments ............................................................................................................................... ... vi Location/ Area Map............................................................................................................................ ................................... vii GFOA Certificate of Achievement for Excellence in Financial Reporting...................................................................... viii CSMFO Certificate of Award for Outstanding Financial Reporting................................................................................ ix FINANCIAL SECTION Independent Auditors’ Report ............................................................................................................................... ............... 1 Management Discussion and Analysis....................................................................................................................... ......... 3 Basic Financial Statements: Government – Wide Financial Statements: Statement of Net Assets ............................................................................................................................... ............ 15 Statement of Activities and Changes in Net Assets .............................................................................................. 16 Major Governmental Funds: Governmental Fund Financial Statements: Balance Sheet.......................................................................................................................... ............................ 22 Reconciliation of the Governmental Funds Balance Sheet to the Government – Wide Statement of Net Assets................................................................................... 25 Statement of Revenues, Expenditures and Changes in Fund Balances and Changes in Fund Balances ..................................................................................................................... 26 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government – Wide Statement of Activities and Changes in Net Assets ................................................................................... 28 Proprietary Fund Financial Statements: Statement of Net Assets ............................................................................................................................... ..... 30 Statement of Revenues, Expenses and Changes in Net Assets .................................................................... 31 Statement of Cash Flows.......................................................................................................................... ......... 32 Fiduciary Fund Financial Statements: Statement of Fiduciary Funds Assets and Liabilities..................................................................................... 34 Notes to Basic Financial Statements..................................................................................................................... ....... 35 Required Supplementary Information ............................................................................................................................... 59 City of Antioch Comprehensive Annual Financial Report Table of Contents Page SUPPLEMENTARY INFORMATION: Budgetary Comparison Schedule: Capital Improvement Fund – Major Fund ............................................................................................................. 70 Sierra Crete Fund – Major Fund .............................................................................................................................. 71 ADA Project Area # 1 Capital Project Fund – Major Fund ................................................................................... 72 Non- Major Governmental Funds: Combining Balance Sheet ............................................................................................................................... ......... 73 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................................................................................................................ 74 Non- Major Special Revenue Funds: Combining Balance Sheet ............................................................................................................................... ......... 78 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................................................................................................................ 82 Budgetary Comparison Schedule: Delta Fair Property Special Revenue Fund ..................................................................................................... 86 Recreation Programs Special Revenue Fund .................................................................................................. 87 Animal Control Special Revenue Fund ........................................................................................................... 88 Gas Tax Special Revenue Fund......................................................................................................................... 89 Civic Arts Special Revenue Fund ..................................................................................................................... 90 Park in Lieu Special Revenue Fund ................................................................................................................. 91 Senior Bus Special Revenue Fund .................................................................................................................... 92 Abandoned Vehicle Special Revenue Fund.................................................................................................... 93 Traffic Signal Fee Special Revenue Fund ........................................................................................................ 94 Assets Forfeitures Special Revenue Fund ....................................................................................................... 95 Measure C Growth Management Program Special Revenue Fund............................................................. 96 Child Care Special Revenue Fund.................................................................................................................... 97 Tidelands Assembly Bill- 1900 Special Revenue Fund................................................................................... 98 Lonetree Maintenance District Special Revenue Fund.................................................................................. 99 Downtown Maintenance District Special Revenue Fund ........................................................................... 100 Almondridge Maintenance District Special Revenue Fund ....................................................................... 101 Hillcrest Maintenance District Special Revenue Fund ................................................................................ 102 Park 1A Maintenance District Special Revenue Fund................................................................................. 103 City Wide 2A Maintenance District Special Revenue Fund ....................................................................... 104 East Lone Tree SLL Maintenance District Special Revenue Fund ............................................................. 105 Administration Maintenance District Special Revenue Fund .................................................................... 106 Solid Waste Reduction AB 939 Special Revenue Fund................................................................................ 107 Pollution Elimination Special Revenue Fund ............................................................................................... 108 Auxiliary Property Special Revenue Fund.................................................................................................... 109 Supplemental Law Enforcement Special Revenue Fund ............................................................................ 110 Local Law Enforcement Block Grant Special Revenue Fund ..................................................................... 111 Street Impact Special Revenue Fund.............................................................................................................. 112 Traffic Safety Special Revenue Fund.............................................................................................................. 113 Non- Major Debt Service Funds: Combining Balance Sheet ............................................................................................................................... ....... 116 Combining Statement of Revenues, Expenditures and Changes in Fund Balances....................................... 117 City of Antioch Comprehensive Annual Financial Report Table of Contents Page SUPPLEMENTARY INFORMATION, CONTINUED: Non- Major Capital Projects Funds: Combining Balance Sheet ............................................................................................................................... ....... 120 Combining Statement of Revenues, Expenditures and Changes in Fund Balances....................................... 122 Budgetary Comparison Schedule: ADA Project Area # 2 Capital Projects Fund................................................................................................. 125 ADA Project Area # 3 Capital Projects Fund................................................................................................. 126 ADA Project Area # 4 Capital Projects Fund................................................................................................. 127 ADA Project Area # 4.1 Capital Projects Fund.............................................................................................. 128 Prewett Community Park Capital Projects Fund......................................................................................... 129 Hillcrest District # 26 Capital Projects Fund.................................................................................................. 130 Lone Diamond Capital Projects Fund............................................................................................................ 131 Hillcrest Bridge District Capital Projects Fund............................................................................................. 132 Highway 4 Bridge District Capital Projects Fund ........................................................................................ 133 Residential Development Allocation Capital Projects Fund....................................................................... 134 Internal Service Funds: Combining Statement of Net Assets ..................................................................................................................... 136 Combining Statement of Revenues, Expenses and Changes in Net Assets..................................................... 138 Combining Statement of Cash Flows.................................................................................................................... 140 Agency Funds: Combining Statement of Changes in Assets and Liabilities .............................................................................. 144 STATISTICAL SECTION ( Unaudited) Net Assets by Component – Last Five Fiscal Years........................................................................................................... 148 Changes in Net Assets – Last Five Fiscal Years ................................................................................................................. 149 Fund Balances of Governmental Funds – Last Four Fiscal Years.................................................................................... 151 Changes in Fund Balances of Governmental Funds – Last Five Fiscal Years................................................................ 152 Governmental Activities Tax Revenues By Source – Last Ten Fiscal Years – General Fund....................................... 153 Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ........................................ 154 Principal Property Taxpayers FY 2005- 06 Compared to FY 1996- 97............................................................................... 155 Property Tax Rates – Last Ten Fiscal Years ........................................................................................................................ 156 Property Tax Levies and Collections – Last Ten Fiscal Years .......................................................................................... 157 Ratios of Outstanding Debt by Type – Last Nine Fiscal Years ........................................................................................ 158 Direct and Overlapping Debt ............................................................................................................................... ............... 159 Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years ............................................................................ 160 Legal Debt Margin Information – Last Ten Fiscal Years .................................................................................................. 161 Pledged- Revenue Coverage – Last Ten Fiscal Years......................................................................................................... 163 Demographic and Economic Statistics – Last Ten Fiscal Years ....................................................................................... 164 Principal Employers – Current Year and Four Years Ago ............................................................................................... 165 Operating Indicators by Function – Last Five Fiscal Years .............................................................................................. 166 Full Time City Employee by Function – Last Two Fiscal Years ...................................................................................... 167 Capital Asset Statistics by Function – Last Five Fiscal Years ........................................................................................... 168 i Office of the City Manager Phone 925.779- 7011 P. O. Box 5007, Antioch, CA 94531- 5007 Fax 925.779- 7054 December 15, 2006 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Antioch: State law requires that every general- purpose local government publish within six months of the close of each fiscal year a complete set of audited financial statements. This report is published to fulfill that requirement for the fiscal year ended June 30, 2006. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free on any material misstatements. Caporicci & Larson, Certified Public Accountants, have issued an unqualified (“ clean”) opinion on the City of Antioch’s financial statements for the year ended June 30, 2006. The independent auditor’s report is presented as the first component of the financial section of this report. Management’s discussion and analysis ( MD& A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD& A complement this letter of transmittal and should be read in conjunction with it Profile of the Government The City of Antioch, incorporated in 1872, is located in the western part of the state and is the third largest city in Contra Costa County. California State Highway 4, connecting San Francisco- Oakland with Stockton and Central Valley points, bisects the City. Connecting with this freeway east of Antioch is State Highway 160, running north to Sacramento, across the Nejedly Bridge, offering access to Solano County and the Sacramento area. The City of Antioch currently occupies a land area of 29 square miles and serves a population of 100,950. The City of Antioch receives property taxes levied on real and personal properties located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which it has done from time to time. The City of Antioch has operated under the Council- Manager form of government since 1872. Policy-making and legislative authority are vested in a City Council consisting of the Mayor and four other Council members. The four Council members are elected to four- year overlapping terms. The Mayor, who sits on the Council, is elected directly by the people and serves a term of four years. The City Clerk and City Treasurer are also elected for terms of four years. The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring both the City Manager and City Attorney. The Antioch’s City Manager is responsible for carrying out the policies and ordinances of the City Council and all management functions of the City including the budget, delivery of services, hiring of all Department Directors, and implementation of capital projects. The City of Antioch provides a wide range of municipal services, including police protection; recreational activities, community and economic development, street improvements and maintenance services, parks maintenance, water; sewer; general administrative and support services. The City does not provide fire services. ii The annual budget serves as the foundation for the City of Antioch’s financial planning and control. All departments of the City of Antioch are required to submit requests for appropriation to the City Manager by April 1. The City Manager uses these requests as the starting point for developing a proposed budget. The City Manager then presents the proposed budget to the City Council for review prior to June 30. The City Council is required to hold public hearings on the proposed budget and to adopt a final budget by no later than June 30, the close of the City of Antioch’s fiscal year. The appropriated budget is prepared by fund, function ( e. g. public safety), and department ( e. g., police). Department managers may make transfers of appropriations within a department. The level of budgetary control, that is, the level at which expenditures cannot legally exceed the appropriated amount, is established at the individual fund level. Expenditures above the appropriated amount require the special approval of the City Council. Local economy. Local projects that are pending that will help improve and enrich the City of Antioch include the widening of Highway 4 to Hillcrest, delivery of eBART service to eastern Contra Costa County and revitalization of the Rivertown area. Rivertown revitalization projects are planned to design and build mixed- use commercial and residential projects in the downtown and waterfront areas of the City of Antioch. Antioch continues to experience growth in retail and employment sectors. Major retail projects in recent years include the Slatten Ranch Regional Shopping Center on Lone Tree Way with approximately 500,000 sq. ft. fully leased retail space. Growth is also strong in the office/ employment sector with over 500,000 sq. ft. of new office and R& D space either approved or under construction. The largest single project in the City is a new hospital being built by Kaiser Permanente on a 75- acre site off of Deer Valley Road. This 150- bed medical facility includes over 600,000 sq. ft. of medical office and hospital space, and is scheduled to open in November of 2007. The region, Contra Costa County, which includes the City of Antioch, has a civilian unemployment rate of 4.8% while the City’s unemployment rate is 4.6%. There is a trend toward slowing residential growth. Antioch’s population has grown 10.6% since 2000 while the overall Contra Costa County population has grown 7.7% Long- term financial planning: Growth in General Fund expenditures has leveled off to meet the growth in revenues in the current year. This is a result of significant efforts to curb expenditure growth and reverse the deficit spending trend of recent years. Job development and expansion of the City’s retail sales tax base are important factors of Antioch’s economic health. Property and sales tax revenues within the City continue to rise as the State economy also improves. The City has increased its efforts to attract companies with high- paying jobs and employment within the City is estimated to be approximately 20,000 jobs and growing. . The City Council recognizes the importance of maintaining a serviceable network of local and regional roads. Like most cities in the State, it is dependent on a combination of local, State and federal revenue to support that work. An analysis of the current condition of all roads in Antioch along with a recommendation regarding the level at which the roads can be maintained in the long term is continuing from the last fiscal year. When completed, this analysis will include options for funding the long- term maintenance of the City’s roads. In addition to the City’s roads, water processing and distribution facilities, sidewalks, parks, medians, trails, open space, sanitary sewers, storm water sewers, street lights, traffic signals, fiber optic cabling, marina, Prewett Water Park and public buildings provide the framework and infrastructure that contributes to Antioch’s quality of life. The better maintained and adequately sized they are, the greater the opportunity for commerce, health, recreation and mobility within the community. Budgets include contributions toward the maintenance of these facilities and staff continues to look for new opportunities for funding of maintenance and replacement of infrastructure. The most fundamental expectation of any community is public safety for its people and their property. An adequately staffed, well- trained and equipped police department is one of the keys to meeting that expectation. Historically, the Police Department has accounted for the most significant expenditure of General Fund revenues. In the current year, four new sworn officer positions were added. iii Strategies for increasing revenues and reducing expenditures in the General Fund are under continuous development and review. Along these lines, a cost allocation and fee study was completed this year and the recommendations were adopted by the City Council for implementation on July 1, 2006. Cash management policies, practices and performance: Cash temporarily idle during the year was invested in certificates of deposit, obligations of the U. S. Treasury, commercial paper, corporate bonds, money market funds, and the State Treasurer’s investment pool ( LAIF). The maturities of the investments range from 30 days to 3.5 years. The investment portfolio performance since inception has been 4.76%. Investment income includes both appreciation and depreciation in the fair value of investments. Changes in fair value, however, do not necessarily represent trends that will continue; nor is it always possible to realize such amounts, especially in the case of temporary changes in the fair value of investments that the government intends to hold to maturity. Risk management. The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City reports all of its risk management activities in its General Fund and in the Government- Wide Financial Statements. The City participates in the Municipal Pooling Authority ( MPA), a joint powers agency ( risk-sharing pool) established to provide an independently managed self- insurance program for members. The purpose of MPA is to spread the adverse effect of losses among the member agencies and to purchase excess insurance as a group, thereby reducing its expense. The City contributes its pro rata share of anticipated losses to a pool administered by MPA. Should actual losses among participants be greater than the anticipated losses, the City will be assessed its pro rata share of that deficiency. Conversely, if the actual losses are less than anticipated, the City will be refunded its pro rata share of the excess. MPA has also purchased excess property damage coverage through various commercial carriers. Pension and other postemployment benefits. All permanent employees of the City of Antioch are eligible to participate in the Public Employees’ Retirement Fund ( the Fund) of CALPERS. The fund is an agent multiple- employer defined benefit plan that acts as a common investment and administrative agent for various local and state governmental agencies within the State of California. The Fund provides retirement, disability and death benefits based on the employee’s years of service, age and final compensation. Employees vest after five years of service and may receive retirement benefits at the age of 50 for public safety personnel or age 55 for miscellaneous employees. These benefit provisions and all other requirements are established by State statute and City ordinance. Public safety employees and all other employees have an obligation to contribute 9% and 8% of their salary to CALPERS, respectively. The City pays the entire 9% for sworn and the entire 8% for non- sworn public safety employees; and 7% of the 8% for all others. The City is required to contribute at an actuarially determined rate. The contribution requirements of the plan members are established by State statute, and the employer contribution rate is established and may be amended by CALPERS. The City of Antioch also provides postretirement health benefits for certain retirees. At the end of the current fiscal year, there were one hundred twenty- five retired employees eligible to receive these benefits. Some City employees and their surviving spouses are eligible for postemployment health care benefits under the provisions of their bargaining agreements. These costs are funded on a current, or pay- as- you- go, basis. In the current year, the City is not required by GAAP to report a liability in the financial statements in connection with an employer’s obligation to provide these benefits. In future years, however, the City will be required by GASB 45 to report the liability in the financial statements and to report its adopted plan for paying the current and future liability, whether pay- as- you- go, fully prefunded or something in between. Additional information on the City of Antioch’s pension arrangements and postemployment benefits can be found in the notes to the basic financial statements. iv Awards and Acknowledgements The Government Finance Officers Association ( GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Antioch for its comprehensive annual financial report ( CAFR) for the fiscal year ended June 30, 2005. This was the seventeenth consecutive year that the government has received this prestigious award. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized CAFR that satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the finance department, particularly Dawn Merchant, Jo Castro, and Janan Roybal. I would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor and the City Council for their unfailing support for maintaining the highest standards of professionalism in the financial management of the City of Antioch. Respectfully submitted, James M. Jakel Dee Brookshire City Manager Finance Director v CITY OF ANTIOCH COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2006 ELECTED OFFICIALS AND ADMINISTRATIVE PERSONNEL JUNE 30, 2006 ELECTED OFFICIALS Donald P. Freitas, Mayor Brian Kalinowski, Mayor Pro- Tem Jim Davis, Council Member Arne Simonsen, Council Member James W. Conley, Council Member Donna Conley, City Treasurer L. Jolene Martin, City Clerk ADMINISTRATIVE PERSONNEL City Manager James M. Jakel Chief of Police Mark Moczulski City Attorney Lynn Tracy Nerland Director of Community Development/ City Engineer Joseph G. Brandt Director of Public Works Phil Harrington Personnel Director Deborah McHenry Finance Director Dee Brookshire Assistant Finance Director Dawn Merchant Director of Information Services Bill Gegg vi vii Location Map Area Map viii ix x This page intentionally left blank. CITY OF ANTIOCH Management's Discussion and Analysis For the Fiscal Year Ended June 30, 2006 3 As management of the City of Antioch, we offer readers of the City of Antioch’s financial statements this narrative overview and analysis of the financial activities of the City of Antioch for the fiscal year ended June 30, 2006. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages i- ix of this report. Financial Highlights • The assets of the City of Antioch exceeded its liabilities at the close of the most recent fiscal year by $ 500,985,549 ( net assets). Of this amount, $ 76,757,609 ( unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens and creditors. • The government’s total net assets increased by $ 14,184,316 due mainly to donated capital contributions and higher than anticipated revenues. • As of the close of the current fiscal year, the City of Antioch’s governmental funds reported ending fund balances of $ 57,587,591, an increase of $ 4,348,779 in comparison with the prior year. • At the end of the current fiscal year, unreserved fund balance for the General Fund was $ 8,685,831, or 26.9% of total General Fund expenditures, and 20.9% of total General Fund revenues. • The City of Antioch's total long- term obligations for governmental activities decreased by $ 2,182,406 and total long- term obligations for business- type activities decreased by $ 1,871,245. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Antioch’s basic financial statements. The City of Antioch’s basic financial statements comprise three components: 1) government- wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government- wide financial statements. The government- wide financial statements are designed to provide readers with a broad overview of the City of Antioch’s finances, in a manner similar to a private- sector business. The statement of net assets presents information on all of the City of Antioch’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Antioch is improving or deteriorating. The statement of activities presents information showing how the government’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods ( e. g., uncollected taxes and earned but unused vacation leave). Both of the government- wide financial statements distinguish functions of the City of Antioch that are principally supported by taxes and intergovernmental revenues ( governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges ( business- type activities). The governmental activities of the City of Antioch include general government, public works, public safety, parks and recreation and community development. The business- type activities of the City of Antioch include water and sewer utilities; a marina and a water park facility. The government- wide financial statements include not only the City of Antioch itself ( known as the primary government), but also a legally separate development agency and a legally separate public financing authority. Financial information for these component units is blended with the financial information presented for the primary government itself. The government- wide financial statements can be found on pages 13- 17 of this report. CITY OF ANTIOCH Management's Discussion and Analysis, Continued For the Fiscal Year Ended June 30, 2006 4 Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Antioch, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. All of the funds of the City of Antioch can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. 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 financial statements, governmental funds financial statements focus on near- term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near- term financing requirements. Because the focus of governmental funds is narrower than that of the government- wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government- wide financial statements. By doing so, readers may better understand the long- term impact of the government’s near- term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Antioch maintains fifty- five individual funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the general fund, two special revenue funds ( Housing and Community Development and Low and Moderate Income Housing) and two capital projects funds ( Capital Improvement and ADA Project # 1) all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The governmental fund financial statements can be found on pages 21- 28 of this report. The City of Antioch adopts an annual appropriated budget for its general fund and its major special revenue funds. A budgetary comparison schedule has been provided for the general fund and major special revenue funds to demonstrate compliance with this budget. Proprietary funds. The City of Antioch maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business- type activities in the government- wide financial statements. The City of Antioch uses enterprise funds to account for its Water, Sewer, Marina and Prewett Water Park funds. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of Antioch’s various functions. The City of Antioch uses internal service funds to account for its vehicle repair and replacement, stores, office equipment replacement, printing and mailing, , cash management, financial services, post employment medical benefits and loss control functions. Because all of these services predominantly benefit governmental rather than business- type functions, they have been included within governmental activities in the government- wide financial statements. Proprietary funds provide the same type of information as the government- wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water, Sewer, Marina and Prewett Water Park funds. The Water, Sewer, Marina and Prewett Water Park funds are considered to be major funds of the City of Antioch. All internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The proprietary fund financial statements can be found on pages 29- 32 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government- wide financial statements because the resources of those funds are not available to support the City of Antioch’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The fiduciary fund financial statements can be found on page 34 of this report. CITY OF ANTIOCH Management's Discussion and Analysis, Continued For the Fiscal Year Ended June 30, 2006 5 Notes to the basic financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government- wide and fund financial statements. The notes to the financial statements can be found on pages 35- 58 of this report. Government- wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City of Antioch, assets exceeded liabilities by $ 500,985,549 at the close of the most recent fiscal year. By far the largest portion of the City of Antioch’s net assets ( 77%) reflects its investment in capital assets ( e. g., infrastructure ( including water and sewer pipes), land, structures and improvements and equipment), less any related debt used to acquire those assets that are still outstanding. The City of Antioch uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Antioch’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. Governmental Activities Business- type Activities TOTAL 2006 2005 2006 2005 2006 2005 Current and other assets $ 89,008,509 $ 84,300,440 $ 39,863,339 $ 39,531,673 $ 128,871,848 $ 123,832,113 Capital assets 303,495,619 302,833,522 136,351,521 132,411,026 439,847,140 435,244,548 Total assets 392,504,128 387,133,962 176,214,860 171,942,699 568,718,988 559,076,661 Current and other liabilities 7,631,120 8,748,901 3,057,147 3,376,172 10,688,267 12,125,073 Long- term obligations 46,021,121 47,626,288 11,024,051 12,524,067 57,045,172 60,150,355 Total liabilities 53,652,241 56,375,189 14,081,198 15,900,239 67,733,439 72,275,428 Net assets: Invested in capital assets, net of related debt 257,714,933 257,474,830 125,698,699 119,886,959 383,413,632 377,361,789 Restricted 37,170,025 34,636,282 3,644,283 3,628,964 40,814,308 34,636,282 Unrestricted 43,966,929 38,647,661 32,790,680 32,526,537 76,757,609 74,803,162 Total net assets $ 338,851,887 $ 330,758,773 $ 162,133,662 $ 156,042,460 $ 500,985,549 $ 486,801,233 An additional portion of the City of Antioch’s net assets ( 8%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($ 76,757,609) may be used to meet the government’s ongoing obligations to citizens and creditors. The government’s total net assets increased by $ 14,184,316 due mainly to donated capital contribution from Black Diamond Knolls, Dallas Ranch, Mira Vista Hills, and Los Vinedos developments. At the end of the current fiscal year, the City of Antioch is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its business- type activities. Current and other assets increased $ 5,039,735 primarily due to receiving the motor vehicle license repayment and increased property tax revenue. Current and other liabilities decreased $ 1,436,806 due to fewer accounts payable related to capital projects. Long- term obligations decreased $ 3,105,183 due to scheduled debt service payments. Governmental and Business- Type Activities. Governmental activities increased the City of Antioch’s net assets by $ 8,093,114. There was an increase of $ 6,091,202 in net assets reported in connection with the City of Antioch's business- type activities. CITY OF ANTIOCH Management's Discussion and Analysis, Continued For the Fiscal Year Ended June 30, 2006 6 CITY OF ANTIOCH'S CHANGE IN NET ASSETS Governmental Activities Business- type Activities Total 2006 2005 2006 2005 2006 2005 Revenue: Program revenues: Charges for services $ 8,732,356 $ 9,108,069 $ 24,853,038 $ 23,530,167 $ 33,585,394 $ 32,638,236 Operating grants and contributions 5,609,086 5,705,714 - - 5,609,086 5,705,714 Capital grants and contributions 4,088,162 19,409,247 4,928,958 10,547,566 9,017,120 29,956,813 General revenues: Property taxes 15,911,568 14,074,199 - - 15,911,568 14,074,199 Sales tax 11,070,795 10,945,310 - - 11,070,795 10,945,310 Motor vehicle in lieu 9,038,846 5,968,731 - - 9,038,846 5,968,731 Other 9,256,776 8,134,944 1,102,777 1,462,650 10,359,553 9,597,594 Total revenues 63,707,589 73,346,214 30,884,773 35,540,383 94,592,362 108,886,597 Expenses: General government 6,560,335 7,510,008 - - 6,560,335 7,510,008 Public works 14,253,790 15,348,590 - - 14,253,790 15,348,590 Public safety 22,721,128 20,941,238 - - 22,721,128 20,941,238 Parks and recreation 3,941,634 3,628,462 - - 3,941,634 3,628,462 Community development 6,845,858 7,969,389 - - 6,845,858 7,969,389 Interest on long- term debt 2,380,505 2,438,330 - 2,380,505 2,438,330 Water - - 17,827,122 18,042,622 17,827,122 18,042,622 Sewer - - 2,899,700 3,331,322 2,899,700 3,331,322 Marina - - 1,133,447 1,092,121 1,133,447 1,092,121 Prewett Water Park - - 1,844,528 1,708,346 1,844,528 1,708,346 Total expenses 56,703,249 57,836,017 23,704,797 24,174,411 80,408,046 82,010,428 Increase in net assets before transfers 7,004,340 15,510,197 7,179,976 11,365,972 14,184,316 26,876,169 Transfers 1,088,774 1,207,520 ( 1,088,774) ( 1,207,520) - - Increase in net assets 8,093,114 16,717,717 6,091,202 10,158,452 14,184,316 26,876,169 Net assets – July 1, 2005 330,758,773 314,041,056 156,042,460 145,884,008 486,801,233 459,925,064 Net assets – June 30, 2006 $ 338,851,887 $ 330,758,773 $ 162,133,662 $ 156,042,460 $ 500,985,549 $ 486,801,233 Governmental activities. General Fund and Antioch Development Agency property tax revenues increased due to higher assessed valuations ( assessed valuation is $ 8,460,221,139, a 12.93% increase over the prior year). Capital grants and contributions decreased due to settlement monies received for Sierra- Crete litigation received in the prior year. Business- type activities. Business- type activities increased the City of Antioch’s net assets by $ 6,091,202, accounting for growth in the government’s net assets. The capital grants and contributions increased net assets by $ 3,138,400 due to infrastructure donations. Financial Analysis of the Government’s Funds As noted earlier, the City of Antioch uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the City of Antioch’s governmental funds is to provide information on near- term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Antioch’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of Antioch’s governmental funds reported combined ending fund balances of $ 57,587,591, an increase of $ 4,348,779 in comparison with the prior year. About 64% of this total amount ($ 37,066,470) constitutes unreserved fund balance, which is available for spending at the government’s discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1) to liquidate contracts and purchase orders of the prior period ($ 4,052,537), 2) to pay debt service ($ 3,966,710), 3) to pay for construction ($ 8,220,635) or 4) for a variety of other restricted purposes ($ 4,281,239). CITY OF ANTIOCH Management's Discussion and Analysis, Continued For the Fiscal Year Ended June 30, 2006 7 The following table presents the amount of revenues from various sources as well as increases or decreases from the prior year. Revenues Classified by Source Governmental Funds FY 2005/ 06 FY 2004/ 05 Increase ( Decrease) Revenue by Source Amount Percent of Total Amount Percent of Total Amount Percent of Change Taxes $ 42,675,112 67.7% $ 37,293,374 56.3% $ 5,381,738 ( 166.1%) Licenses and permits 1,684,075 2.7% 1,762,792 2.7% ( 78,717) 2.4% Fines and penalties 375,963 0.6% 392,442 0.6% ( 16,479) 0.5% Investment income and rentals 1,990,784 3.2% 1,546,966 2.3% 443,818 ( 13.7%) Revenue from other agencies 4,456,520 7.1% 4,062,668 6.1% 393,852 ( 12.2%) Current service charges 5,360,553 8.5% 5,736,968 8.7% ( 376,415) 11.6% Special assessment revenue 2,698,717 4.3% 2,379,246 3.6% 319,471 ( 9.6%) Other 3,768,458 5.9% 13,076,275 19.7% ( 9,307,817) 287.1% Total $ 63,010,182 100.0% $ 66,250,731 100.0% ($ 3,240,549) 100.0% The following provides an explanation of revenues by source that changed significantly over the prior year. • Taxes increased during the fiscal year. Most of this increase is the result of increased property taxes due to increases in assessed valuation for homes as well as commercial and industrial property and new home sales. • Other revenues decreased primarily due to settlement monies received from Sierra- Crete litigation in the prior year. The following table presents the amount of expenditures by function as well as increases or decreases from the prior year. Expenditures by Function Governmental Funds FY 2005/ 06 FY 2004/ 05 Increase ( Decrease) Expenditures by Function Amount Percent of Total Amount Percent of Total Amount Percent of Change Current General government $ 7,433,986 12.4% $ 5,992,872 10.4% $ 1,441,114 59.8% Public works 7,586,222 12.7% 8,747,586 15.3% ( 1,161,364) ( 48.2%) Public safety 22,412,949 37.5% 20,209,026 35.2% 2,203,923 91.5% Parks and recreation 3,560,286 5.9% 3,251,345 5.7% 308,941 12.8% Community development 8,901,843 14.9% 8,939,139 15.6% ( 37,296) ( 1.5%) Capital outlay 6,139,849 10.3% 6,853,081 11.9% ( 713,232) ( 29.6%) Debt service 3,728,627 6.3% 3,363,710 5.9% 364,917 15.2% Total $ 59,763,762 100.0% $ 57,356,759 100.00% $ 2,407,003, 100.0% The following provides an explanation of the expenditures by function that changed significantly over the prior year. • Public works expenditures decreased primarily due to less monies being spent on capital projects. • Public safety - the increase can be attributed primarily to an increase in personnel costs. The General Fund is the chief operating fund of the City of Antioch. At the end of the current fiscal year, unreserved fund balance of the General Fund was $ 8,685,831, while total fund balance was $ 8,733,843. As a measure of the General Fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 22.1% of total General Fund expenditures, while total fund balance represents 22.2% of that same amount. The fund balance of the City of Antioch's general fund increased by $ 2,493,017 during the current fiscal year. Key factors in this increase are revenues received earlier than anticipated and the City’s decision to no longer fund compensated absences. CITY OF ANTIOCH Management's Discussion and Analysis, Continued For the Fiscal Year Ended June 30, 2006 8 Proprietary funds. The City of Antioch’s proprietary funds provide the same type of information found in the government- wide financial statements, but in more detail. Unrestricted net assets of the Water Fund at the end of the year amounted to $ 28,151,036 and those of the Sewer Fund amounted to $ 4,430,530. Unrestricted net assets of the Marina Fund at the end of the year amounted to $ 361,885 and unrestricted net assets of the Prewett Water Park Fund amounted to $ 36,783. The total growth increase/( decrease) in net assets for each fund was $ 3,739,939, $ 3,304,340, ($ 111,343), and ($ 728,388), respectively. Other factors concerning the finances of these four funds have already been addressed in the discussion of the City of Antioch’s business- type activities. General Fund Budgetary Highlights Differences between the final amended budget and the actual results resulted in a ($ 1,058,578) variance from appropriations and can be briefly summarized as follows: • $ 717,836 over budget in general government activities due to closing the Compensated Absences Internal Service Fund during the fiscal year. The General Fund contributed $ 950,000 to this fund to close it out. • $ 324,290 under budget for public works because of reduced park maintenance expenses and salary and benefit savings due to vacancies in the street maintenance division. • $ 851,641 over budget for public safety due to the position vacancy factor not being adjusted in the revised budget. • $ 189,675 under budget for community development due to salary and benefit savings from vacancies. • $ 21,604 overrun for Parks and Recreation due to underbudgeted expenditures of donated funds. • $ 25,792 under budget for capital outlay. • $ 7,254 over budget for transfers. Capital Asset and Debt Administration Capital assets. The City of Antioch’s investment in capital assets for its governmental and business- type activities as of June 30, 2006, amounts to $ 439,847,140 ( net of accumulated depreciation). This investment in capital assets includes land, infrastructure ( including water and sewer pipes), structures and improvements, and equipment. The total net increase in the City of Antioch’s investment in capital assets for the current fiscal year was $ 4,602,592. Major capital asset events during the current fiscal year included the following: • A variety of street construction projects in new residential developments and widening and expansion projects for existing streets began; construction in progress for governmental activities as of the end of the current fiscal year had reached $ 10,380,563. • Various building and system additions and improvements were completed in the Water, Sewer, Marina and Prewett Water Park funds at a cost of $ 3,567,709. • Acceptance of donated infrastructure at an estimated value of $ 5,871,219. For government- wide financial statement presentation, all depreciable capital assets were depreciated from acquisition date to the end of the current fiscal year. Fund financial statements record capital asset purchases as expenditures. CITY OF ANTIOCH Management's Discussion and Analysis, Continued For the Fiscal Year Ended June 30, 2006 9 Capital assets for the governmental and business- type activities are presented below to illustrate changes from the prior year. Governmental Activities Business- type Activities Total 2006 2005 2006 2005 2006 2005 Increase/ Decrease Land $ 13,155,342 $ 13,140,011 $ 3,558,467 $ 3,558,467 $ 16,713,809 $ 16,698,478 $ 15,331 Construction in Progress 10,380,564 13,747,085 13,874,788 10,017,547 24,255,352 23,764,632 490,720 Infrastructure 251,650,969 252,952,599 91,109,306 89,380,027 342,760,275 342,332,626 427,649 Structures and Improvements 25,090,801 19,298,067 27,249,651 28,858,714 52,340,452 48,156,781 4,183,671 Equipment 3,217,943 3,695,760 559,309 596,271 3,777,252 4,292,031 ( 514,779) Total $ 303,495,619 $ 302,833,522 $ 136,351,521 $ 132,411,026 $ 439,847,140 $ 435,244,548 $ 4,602,592 Construction Commitments. Among the significant construction commitments were $ 1.9 million toward street projects and approximately $ 17 million for the Water Treatment Plant Expansion. Additional information on the City of Antioch's capital assets can be found in Note 7 on page 49. Long- term debt. At the end of the current fiscal year, the City of Antioch had total debt outstanding of $ 54,790,601. Of this amount, $ 36,730,000 represents bonds secured solely by specified revenue sources ( i. e., revenue bonds), $ 13,840,000 represents tax allocation bonds, $ 4,043,396 represents loans payable and $ 177,205 comprises a capital lease obligation. The City of Antioch’s total long- term obligations for governmental activities decreased by $ 2,182,406, and total long- term obligations for business- type activities decreased by $ 1,871,245 during the current fiscal year. In October 2002, Standard and Poor’s changed the ratings on the Antioch Public Financing Authority Lease Revenue Bonds Series 2002 B to AAA from A. In April 2003, the Authority received a rating of AAA from Standard & Poor’s for its Water Revenue Refunding Bonds, Series 2003. These ratings reflect Standard & Poor’s assessment of the likelihood of repayment of principal and interest based on the bond insurance policy the Authority provided. State statutes limit the amount of general obligation debt a governmental entity may issue to 15% of its total assessed valuation. The current debt limitation for the City of Antioch is $ 1,269,033,170. The City of Antioch has no outstanding general obligation debt. Additional information on the City of Antioch’s long- term debt can be found in note 8 on pages 50- 52 of this report. Economic Factors and Next Year’s Budget • The unemployment rate for the City of Antioch is currently 5.3%, which is a decrease of 0.9% from a year ago. This is comparable to the state’s average unemployment rate of 5.4% and the national average rate of 5.4%. • The occupancy rate of the City’s two main business districts is approximately 90%. • Inflationary trends in the region compare favorably to national indices. All of these factors were considered in preparing the City of Antioch’s budget for the 2006- 2007 fiscal year. The impact of the State budget on Antioch was unknown at the time the budget was prepared. During the current fiscal year, unreserved fund balance in the general fund increased by $ 2,611,589. The City of Antioch has appropriated $ 31,046 of the unreserved fund balance for spending in the 2006- 2007 fiscal year budget. CITY OF ANTIOCH Management's Discussion and Analysis, Continued For the Fiscal Year Ended June 30, 2006 10 Requests for Information This financial report is designed to provide a general overview of the City of Antioch’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Finance Director, City of Antioch, P. O. Box 5007, Antioch, CA 94531- 5007. BASIC FINANCIAL STATEMENTS 11 This page intentionally left blank. 12 GOVERNMENT- WIDE FINANCIAL STATEMENTS 13 This page intentionally left blank. 14 City of Antioch Statement of Net Assets June 30, 2006 Governmental Business- Type Activities Activities Total ASSETS Cash and investments $ 64,083,648 33,844,069 $ 97,927,717 Receivables ( net): Accounts 1,617,077 2,126,148 3 ,743,225 Taxes 2,661,952 - 2 ,661,952 Interest 9 29,275 7 ,589 936,864 Materials, parts and supplies 231,846 1 5,817 247,663 Internal balances ( 77,266) 77,266 - Prepaid items 30,771 12,695 43,466 Restricted cash and investments, held by fiscal agents 4,599,754 3 ,644,283 8,244,037 Loans receivable 13,449,901 - 1 3,449,901 Deferred bond issuance costs 880,127 135,472 1,015,599 Investment in land held for development 601,424 - 601,424 Capital assets: Nondepreciable 2 3,535,906 17,433,255 4 0,969,161 Depreciable, net 2 79,959,713 118,918,266 398,877,979 Total assets 3 92,504,128 176,214,860 568,718,988 LIABILITIES Accounts payable 3,514,522 2,501,999 6 ,016,521 Accrued payroll 5 06,552 107,122 613,674 Interest payable 1,050,479 2 74,772 1,325,251 Deposits 2,343,231 7 4,939 2,418,170 Unearned revenue 2 16,336 9 8,315 314,651 Long- term obligations: Due within one year 1 ,419,534 1,978,151 3 ,397,685 Due beyond one year 4 4,601,587 9,045,900 5 3,647,487 Total liabilities 53,652,241 14,081,198 67,733,439 NET ASSETS Invested in capital assets, net of related debt 257,714,933 125,698,699 383,413,632 Restricted for: Debt service 2,916,231 3,644,283 6 ,560,514 Housing 19,067,564 - 1 9,067,564 Public safety 3 34,862 - 334,862 Public and capital facilities 6 ,785,959 - 6,785,959 Roads 8,065,409 - 8,065,409 Total restricted net assets 37,170,025 3 ,644,283 4 0,814,308 Unrestricted net assets 43,966,929 32,790,680 7 6,757,609 Total net assets $ 3 38,851,887 $ 162,133,662 $ 500,985,549 See accompanying notes to the basic financial statements. Primary Government 15 City of Antioch Statement of Activities For the Fiscal Year Ended June 30, 2006 Charges Operating Capital for Grants and Grants and Functions / Programs Expenses Services Contributions Contributions Primary government: Governmental activities: General government $ 6 ,560,335 $ 5 0,263 $ 200,323 $ - Public works 14,253,790 1,179,537 3,465,421 4 ,088,162 Public safety 2 2,721,128 1,336,167 503,363 - Parks and recreation 3,941,634 2,541,284 395,283 - Community development 6,845,858 3,625,105 1,044,696 - Interest on long- term liabilities 2 ,380,505 - - - Total governmental activities 56,703,249 8,732,356 5,609,086 4 ,088,162 Business- type activities: Water 1 7,827,122 19,364,293 - 2 ,535,168 Sewer 2,899,700 3,901,971 - 2 ,393,790 Marina 1,133,447 762,502 - - Prewett Water Park 1 ,844,528 824,272 - - Total business- type activities 2 3,704,797 24,853,038 - 4 ,928,958 Total primary government $ 80,408,046 $ 33,585,394 $ 5,609,086 $ 9 ,017,120 General Revenues: Taxes: Property taxes Transient lodging tax Franchise Business license taxes based on gross receipts Property transfer taxes Sales and use tax Other Motor vehicle in lieu Park in lieu Investment income not restricted to specific programs Other Transfers Total general revenues and transfers Change in net assets Net assets - beginning of year Net assets - end of year Program Revenues See accompanying notes to the basic financial statements 16 Governmental Business- Type Activities Activities Total $ ( 6,309,749) $ - $ ( 6,309,749) ( 5,520,670) - ( 5,520,670) ( 20,881,598) - ( 20,881,598) ( 1,005,067) - ( 1,005,067) ( 2,176,057) - ( 2,176,057) ( 2,380,505) - ( 2,380,505) ( 38,273,645) - ( 38,273,645) - 4,072,339 4,072,339 - 3,396,061 3,396,061 - ( 370,945) ( 370,945) - ( 1,020,256) ( 1,020,256) - 6,077,199 6,077,199 ( 38,273,645) 6,077,199 ( 32,196,446) 15,911,568 - 1 5,911,568 326,977 - 326,977 2,409,707 - 2,409,707 1,194,249 - 1 ,194,249 874,604 - 874,604 11,070,795 - 1 1,070,795 - 288,060 288,060 9,038,846 - 9,038,846 586,072 - 586,072 1,521,539 814,717 2 ,336,256 2,343,628 - 2,343,628 1,088,774 ( 1,088,774) - 46,366,759 14,003 4 6,380,762 8,093,114 6,091,202 1 4,184,316 330,758,773 156,042,460 486,801,233 $ 338,851,887 $ 162,133,662 $ 500,985,549 Net ( Expense) Revenue and Changes in Net Assets 17 This page intentionally left blank. 18 MAJOR GOVERNMENTAL FUNDS General Fund - The General Fund is used to account for all of the general revenues of the City not specifically levied or collected for other City funds and the related expenditures. The General Fund accounts for all financial resources of the City which are not accounted for in another fund. For the City, the General Fund includes such activities as general government, public works, public safety, parks and recreation and community development. Housing and Community Development Fund - This fund accounts for grant funds received from the Federal government for the purpose of developing viable urban communities. Low and Moderate Income Housing Fund - This fund was established by the Antioch Development Agency to account for tax allocations set aside for the purpose of increasing or improving the City's supply of low or moderate income housing. Capital Improvement Fund - This fund records all revenues, expenditures, assets and liabilities associated with City capital projects. It accounts for resources used to construct or acquire capital assets and make capital improvements. Sierra- Crete Fund - The E. I. du Pont Nemours Corporation manufactured an artificial rock road base material called " Sierra- Crete". The company promoted this material as a good alternative to traditional rock for street base and sold it to a number of paving contractors. Several streets were constructed in Antioch using this material. It turned out that Sierra- Crete caused a number of problems, including corrosion of city underground utilities and premature cracking and wear of the asphalt surface. The City sued DuPont, the paving contractors and various subdividers which had installed the material. In all, there were 19 defendants in the case brought by the City. The parties settled the case, with the defendants defining the total amount to be paid to the City, but the amount per defendant to be kept confidential and known only to the City's trustee/ litigation counsel. This trustee established a trust account for receipt of the settlement funds, and when all funds were paid in to satisfy the settlement, all funds and interest were then forwarded to the City. ADA Project Area # 1 Fund was established by the Antioch Development Agency to account for acquisition, demolition and construction of Development Agency Project Area # 1 of the City of Antioch. Financing is provided by property tax increments and bond proceeds. 19 This page intentionally left blank. 20 GOVERNMENTAL FUND FINANCIAL STATEMENTS 21 City of Antioch Balance Sheet Governmental Funds June 30, 2006 Capital Projects Funds Housing and Low and Community Moderate Capital General Fund Development Income Housing Improvement ASSETS Cash and investments $ 7,956,413 $ 6 1,302 $ 2,140,875 $ 271,178 Receivables ( net): Accounts 502,306 112,480 2 7,084 414,569 Taxes 2,265,540 - - - Interest - - - - Due from other funds 1,826,114 - - - Prepaid items 15,346 - - - Restricted cash and investments - - - - Loans receivable 1,196,220 3,928,166 8 ,255,688 - Advances to other funds - - 3,662,849 - Investment in land held for redevelopment - - - - Total assets $ 13,761,939 $ 4,101,948 $ 1 4,086,496 $ 685,747 LIABILITIES Accounts payable $ 1,223,281 $ 7 9,643 $ 275,044 $ 268,674 Accrued payroll 403,197 633 - - Deposits 2,135,120 - - 2 00 Due to other funds - 31,607 - - Unearned revenue 1,196,220 3,928,166 8 ,255,688 - Compensated absences 70,278 - - - Advances from other funds - - - - Total liabilities 5,028,096 4,040,049 8 ,530,732 268,874 FUND BALANCES Reserved for: Advances to other funds - - 3,662,849 - Construction - - - - Petty cash and prepaid items 16,966 - - - Encumbrances 31,046 - - 537,813 Land held for redevelopment - - - - Debt services - - - - Unreserved, reported in: General fund 8 ,685,831 - - - Special revenue funds - 61,899 1,892,915 - Capital project funds - - - ( 120,940) Total fund balances 8,733,843 6 1,899 5,555,764 416,873 Total liabilities and fund balances $ 13,761,939 $ 4,101,948 $ 1 4,086,496 $ 685,747 Special Revenue Funds See accompanying notes to the basic financial statements. 22 Non- major Sierra ADA Governmental Crete Project # 1 Funds Total $ 11,457,140 $ 1,928,347 $ 2 9,852,516 $ 53,667,771 - - 490,112 1 ,546,551 - - 396,412 2 ,661,952 - - 24,837 24,837 - - - 1,826,114 - - 1 20 1 5,466 - - 4 ,599,754 4,599,754 - - 69,827 1 3,449,901 - - - 3,662,849 - 601,424 - 6 01,424 $ 11,457,140 $ 2,529,771 $ 3 5,433,578 $ 82,056,619 $ 1 5,913 $ 15,662 $ 1 ,458,920 $ 3 ,337,137 - 64 5 5,902 459,796 - 3 ,525 204,386 2 ,343,231 - - 897,893 9 29,500 - - 286,163 1 3,666,237 - - - 70,278 - 3,662,849 - 3,662,849 1 5,913 3,682,100 2,903,264 2 4,469,028 - - - 3,662,849 - - 8 ,220,635 8,220,635 - - - 16,966 - 328,859 3 ,154,819 4,052,537 - 601,424 - 6 01,424 - - 3 ,966,710 3,966,710 - - - 8,685,831 - - 1 4,251,236 16,206,050 11,441,227 ( 2,082,612) 2 ,936,914 1 2,174,589 11,441,227 ( 1,152,329) 3 2,530,314 57,587,591 $ 11,457,140 $ 2,529,771 $ 3 5,433,578 $ 82,056,619 Capital Projects Funds 23 This page intentionally left blank. 24 City of Antioch Reconciliation of the Governmental Funds Balance Sheet to the Government- Wide Statement of Net Assets - Governmental Activities June 30, 2006 $ 57,587,591 Capital assets used in governmental activities are not current financial resources. Therefore they were not reported in the Governmental Funds Balance Sheet. 300,797,262 Loans receivables are not available to pay for current- period expenditures and therefore are reported as deferred revenue in the fund financial statements. 13,449,901 Bond issuance costs are an expenditure in the governmental funds but are capitalized and amortized over the life of the bonds in the government- wide financial statements. 880,127 Internal service funds are used by management to charge the costs of vehicle repair and maintenance, stores, office equipment and replacement, printing and mail service, compensated absences, cash management, financial services, and post employment medical benefits to individual funds. The assets and liabilities are included in governmental activities in the statement of net assets. 12,957,072 Certain liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the governmental fund financial statements: Long- term debt: Due in one year ( 1,331,132) Due in more than one year ( 44,438,455) Accrued interest payable ( 1,050,479) Total long- term liabilities ( 46,820,066) $ 338,851,887 - See accompanying notes to the basic financial statements. Amounts reported for governmental activities in the Statement of Net Assets were different because: Net Assets of Governmental Activities Fund Balances - Total Governmental Funds 25 City of Antioch Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2006 Capital Projects Funds Housing and Low and General Community Moderate Capital Fund Development Income Housing Improvement REVENUES: Taxes $ 33,847,312 $ - $ - $ - Licenses & permits 1,684,075 - - - Fines and penalties 207,425 - - - Investment income and rentals 304,266 6 ,007 39,998 54,856 Revenue from other agencies 257,839 949,279 - 432,734 Current service charges 2,818,280 - - 7 6,698 Special assessment revenue - - - - Other 2 ,260,469 141 1 00,685 260,025 Total revenues 41,379,666 955,427 140,683 824,313 EXPENDITURES: Current: General government 7 ,433,234 - - - Public works 5,330,070 - - 429,219 Public safety 2 1,466,904 - - - Parks and recreation 44,531 - - - Community development 4,985,614 924,870 1,381,657 - Capital outlay 3 4,958 325,133 - 963,197 Debt service: Principal retirement - - - - Interest and fiscal charges - - - - Total expenditures 39,295,311 1,250,003 1 ,381,657 1,392,416 REVENUES OVER ( UNDER) EXPENDITURES 2,084,355 ( 294,576) ( 1,240,974) ( 568,103) OTHER FINANCING SOURCES ( USES): Transfers in 3,030,735 - 1,316,637 1 ,357,406 Transfers ( out) ( 2,622,073) - ( 57,000) ( 52,884) Total other financing sources ( uses) 408,662 - 1,259,637 1 ,304,522 Net change in fund balances 2,493,017 ( 294,576) 18,663 736,419 FUND BALANCES: Beginning of year 6 ,240,826 356,475 5,537,101 ( 319,546) End of year $ 8,733,843 $ 6 1,899 $ 5,555,764 $ 416,873 Special Revenue Funds See accompanying notes to the basic financial statements. 26 Non- major Sierra ADA Governmental Crete Project # 1 Funds Total $ - $ 4,459,956 $ 4,367,844 $ 4 2,675,112 - - - 1,684,075 - - 168,538 3 75,963 250,038 2 3,253 1 ,312,366 1 ,990,784 - - 2 ,816,668 4,456,520 - - 2 ,465,575 5,360,553 - - 2 ,698,717 2,698,717 2,995 226 1,143,917 3 ,768,458 253,033 4,483,435 1 4,973,625 63,010,182 - - 7 52 7,433,986 156,983 - 1,669,950 7 ,586,222 - - 946,045 2 2,412,949 - - 3 ,515,755 3,560,286 - 476,745 1 ,132,957 8,901,843 - 151,231 4 ,665,330 6,139,849 - - 1 ,376,517 1,376,517 - - 2 ,352,110 2,352,110 156,983 627,976 1 5,659,416 59,763,762 9 6,050 3,855,459 ( 685,791) 3 ,246,420 - - 4,868,188 1 0,572,966 ( 210,000) ( 3,307,687) ( 3,220,963) ( 9,470,607) ( 210,000) ( 3,307,687) 1 ,647,225 1 ,102,359 ( 113,950) 547,772 961,434 4 ,348,779 11,555,177 ( 1,700,101) 3 1,568,880 53,238,812 $ 11,441,227 $ ( 1,152,329) $ 3 2,530,314 $ 57,587,591 Capital Projects Funds 27 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government- Wide Statement of Activities - Governmental Activities $ 4,348,779 Governmental funds report acquisition of capital assets as part of capital outlay as expenditures. However, in the Government- Wide Statement of Activities, the cost of those assets were allocated over their estimated useful lives as depreciation expense. Capital outlay 6,139,849 Depreciation, net of internal service funds depreciation of $ 874,906 ( 7,692,862) In the Statement of Activities, capital assets donated to the City are reported as general revenue, whereas in the governmental funds, capital assets donated do not increase financial resources. Thus, the change in net assets differs from the change in fund balances by the value of the asset donated. 2,732,819 In the Statement of Activities, only the gain ( loss) on the sale or disposal of capital assets in reported, whereas in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balances by the cost of the asset sold. ( 59,000) Interest on deferred loans in the Statement of Activities do not provide current financial resources and are not reported as revenues in the funds. 211,616 Repayment of loans is reported as a revenue in governmental funds, and thus, has the effect of increasing fund balance because current financial resources have been received. For the City as a whole, however, the loan payments reduce the receivables in the Statement of Net Assets and do not result as a revenue in the Statement of Activities. The City's loan receivable was reduced because loan payments were received. ( 683,589) Cash received to fund the compensated absences balances in the governmental funds financial statements is recorded as revenue. However, on the government- wide statements this amount is offseted by the compensated absences liabilities. ( 1,793,705) Governmental funds report expenditures pertaining to the establishment of certain deferred revenue related to long- term loans made. These deferred credits are not reported on the Statement of Net Assets and, therefore, the corresponding expense is not reported on the Statement of Activities. 2,411,836 Bonds issuance cost are expensed on the fund statements. However, in the government- wide statement of activities, the bonds issuance cost are allocated over the life of the bonds. This amount represent the current year amortization of the bond issuance cost. ( 35,790) Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long- term liabilities in the Statement of Net Assets. Lease revenue bonds 180,000 Tax allocation bonds 850,000 Capital lease obligations 346,517 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. In addition, interst on long- term debt is not recognized under the modified accrual basis of accounting until due, rather than as it accrues. Change in long- term claims liability 11,099 Amortization of debt premium 10,377 Amortization of debt discount ( 4,337) Amortization of advance refunding difference ( 56,321) Change in accrued interest payable 21,886 Internal service funds are used by management to charge the costs of certain activities to individual funds. The net expense of certain activities of the internal service funds is reported with governmental activities. 1,153,940 Change in Net Assets of Governmental Activities $ 8 ,093,114 See accompanying notes to the basic financial statements. City of Antioch For the Fiscal Year Ended June 30, 2006 Amounts reported for governmental activities in the Statement of Activities are different because: Net Change in Fund Balances - Total Governmental Funds 28 PROPRIETARY FUND FINANCIAL STATEMENTS Water Fund – This fund accounts for the operation of the City’s water utility, a self- supporting activity which provides services on a user charge basis to residences and businesses. Sewer Fund – This fund accounts for the maintenance of the City’s sewer lines and related facilities. It is a self-supporting activity which provides services on a user charge basis to residences and businesses. Marina Fund – This fund accounts for the operation of the City’s Marina, which includes renting berths and fueling boats. Prewett Water Park – This fund accounts for the operation of the Prewett Water Park, an aquatic recreational park. 29 City of Antioch Statement of Fund Net Assets Proprietary Funds June 30, 2006 Governmental Activities Internal Prewett Service Water Sewer Marina Water Park Total Funds ASSETS Current assets: Cash and investments $ 2 8,774,970 $ 4 ,261,644 $ 5 49,770 $ 2 57,685 $ 3 3,844,069 $ 1 0,415,877 Accounts receivables, net 1 ,744,687 2 95,692 7 9,931 5 ,838 2 ,126,148 7 0,526 Interest receivables 7 ,589 - - - 7 ,589 9 04,438 Materials, parts and supplies - - 1 5,817 - 1 5,817 2 31,846 Prepaid items 1 1,345 - 1 ,350 - 1 2,695 1 5,305 Deferred charges 1 35,472 - - - 1 35,472 - Restricted cash and investments 3 ,644,283 - - - 3 ,644,283 - Total current assets 3 4,318,346 4 ,557,336 6 46,868 2 63,523 3 9,786,073 1 1,637,992 Noncurrent assets: Advances to other funds 2 66,820 - - - 2 66,820 - Capital assets: Nondepreciable: Land 1 ,002,231 1 4,553 4 69,953 2 ,071,730 3 ,558,467 - Construction in progress 6 ,826,780 6 ,865,612 1 82,396 - 1 3,874,788 - Depreciable: Water and sewer pipes 5 3,307,616 5 2,376,495 - - 1 05,684,111 - Structures and improvements 2 8,849,603 2 00,090 9 ,686,345 1 4,659,621 5 3,395,659 7 0,436 Vehicles and equipment 2 ,896,487 1 40,529 1 37,082 3 00,961 3 ,475,059 1 0,208,458 Less accumulated depreciation ( 25,400,390) ( 7,934,214) ( 4,540,330) ( 5,761,629) ( 43,636,563) ( 7,580,537) Total capital assets 6 7,482,327 5 1,663,065 5 ,935,446 1 1,270,683 1 36,351,521 2 ,698,357 Total assets 1 02,067,493 5 6,220,401 6 ,582,314 1 1,534,206 1 76,404,414 1 4,336,349 LIABILITIES Current liabilities: Accounts payable 2 ,350,553 5 4,024 3 2,860 6 4,562 2 ,501,999 1 77,385 Accrued payroll 5 6,672 1 7,664 4 ,519 2 8,267 1 07,122 4 6,756 Interest payable 1 07,982 - 1 66,790 - 2 74,772 - Deposits 1 4,834 2 5 4 0,648 1 9,432 7 4,939 - Due to other funds - - - - - 8 96,614 Deferred revenue - - - 9 8,315 9 8,315 - Compensated absences - due within one year 2 5,981 5 ,509 4 ,017 1 ,616 3 7,123 1 8,124 Water revenue bonds - due within one year 1 ,829,918 - - - 1 ,829,918 - Marina loans payable - due within one year - - 1 11,110 - 1 11,110 - Total current liabilities 4 ,385,940 7 7,222 3 59,944 2 12,192 5 ,035,298 1 ,138,879 Noncurrent liabilities: Compensated absences - due in more than one year 2 33,825 4 9,584 3 6,149 1 4,548 3 34,106 1 63,132 Advances from other funds - - - - - 2 66,820 Water reveune bonds - due in more than one year 4 ,779,508 - - - 4 ,779,508 - Marina loans - due in more than one year - - 3 ,932,286 - 3 ,932,286 - Total noncurrent liabilities 5 ,013,333 4 9,584 3 ,968,435 1 4,548 9 ,045,900 4 29,952 Total liabilities 9 ,399,273 1 26,806 4 ,328,379 2 26,740 1 4,081,198 1 ,568,831 NET ASSETS Invested in capital assets, net of related debt 6 0,872,901 5 1,663,065 1 ,892,050 1 1,270,683 1 25,698,699 2 ,698,357 Restricted for debt service 3 ,644,283 3 ,644,283 Unrestricted 2 8,151,036 4 ,430,530 3 61,885 3 6,783 3 2,980,234 1 0,069,161 Total net assets $ 9 2,668,220 $ 5 6,093,595 $ 2 ,253,935 $ 1 1,307,466 1 62,323,216 $ 1 2,767,518 ( 189,554) Net assets of business- type activities $ 1 62,133,662 Business- type Activities - Enterprise Funds Some amounts reported for business- type activities in the statement of net assets are different because certain internal service fund assets and liabilities are included with business- type activities. See accompanying notes to the basic financial statements 30 City of Antioch Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds For the Fiscal Year Ended June 30, 2006 Governmental Activities Internal Prewett Service Water Sewer Marina Water Park Total Funds OPERATING REVENUES: Charges for services $ 19,364,293 $ 3,901,971 $ 762,502 $ 824,272 $ 24,853,038 $ 8,552,175 Other revenue 202,615 48,482 14,254 22,709 288,060 1,088,651 Total operating revenues 19,566,908 3,950,453 776,756 846,981 25,141,098 9,640,826 OPERATING EXPENSES: Wages and benefits 3,257,728 973,457 322,723 792,078 5,345,986 3,911,512 Utilities 1,445,432 - 29,585 122,507 1,597,524 - Contractual services 7,740,885 970,496 54,485 174,701 8,940,567 1,917,296 Tools and supplies 3,108,372 157,392 153,251 169,419 3,588,434 1,329,463 Depreciation 1,831,031 713,584 384,016 555,824 3,484,455 874,906 Repairs and maintenance 152,944 17,380 9,569 36,194 216,087 816,821 Total operating expenses 17,536,392 2,832,309 953,629 1,850,723 23,173,053 8,849,998 OPERATING INCOME ( LOSS) 2,030,516 1,118,144 ( 176,873) ( 1,003,742) 1,968,045 790,828 NONOPERATING REVENUES ( EXPENSES): Gain ( loss) from sale of capital assets - - - - - 33,085 Investment income 712,579 86,143 8,024 7,971 814,717 230,266 Investment ( expense) ( 236,047) - ( 182,351) - ( 418,398) - Total nonoperating revenues ( expenses) 476,532 86,143 ( 174,327) 7,971 396,319 263,351 INCOME ( LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS 2,507,048 1,204,287 ( 351,200) ( 995,771) 2,364,364 1,054,179 Capital contribution - developer 1,368,900 1,769,500 - - 3,138,400 - Capital contribution - connection fees 1,166,268 624,290 - - 1,790,558 - Transfers in 33,433 1,443 251,008 267,383 553,267 70,203 Transfers ( out) ( 1,335,710) ( 295,180) ( 11,151) - ( 1,642,041) ( 83,788) CHANGE IN NET ASSETS 3,739,939 3,304,340 ( 111,343) ( 728,388) 6,204,548 1,040,594 NET ASSETS: Beginning of year 88,928,281 52,789,255 2,365,278 12,035,854 11,726,924 End of year $ 92,668,220 $ 56,093,595 $ 2,253,935 $ 11,307,466 $ 12,767,518 ( 113,346) Change in net assets of business- type activities $ 6,091,202 See accompanying notes to tbe basic financial statements. Business- type Activities - Enterprise Funds Some amounts reported for business- type activities in the statement of activities are different because the net revenue ( expense) of certain internal service funds is reported with business- type activities. 31 City of Antioch Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2006 Governmental Activities Non- major Internal Prewett Service Water Sewer Marina Water Park Total Funds CASH FLOWS FROM OPERATING ACTIVITIES: Cash receipt from customers $ 1 9,468,736 $ 3 ,951,355 $ 7 41,554 $ 8 72,869 $ 2 5,034,514 $ 9 ,588,181 Cash paid to suppliers for goods and services ( 11,897,878) ( 1,901,193) ( 332,518) ( 489,923) ( 14,621,512) ( 4,993,372) Cash paid to employees for services ( 2,987,428) ( 910,936) ( 282,221) ( 787,687) ( 4,968,272) ( 6,037,487) Net cash provided by ( used in) operating activities 4 ,583,430 1 ,139,226 1 26,815 ( 404,741) 5 ,444,730 ( 1,442,678) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Interfund lending receipts ( 88,231) - - - ( 88,231) - Interfund lending payment - - - - - 1 ,204,439 Transfers in 3 3,433 1 ,443 2 51,008 2 67,383 5 53,267 4 8,749 Transfers ( out) ( 1,335,710) ( 295,180) ( 11,151) - ( 1,642,041) ( 83,788) Net cash provided by ( used in) noncapital financing activities ( 1,390,508) ( 293,737) 2 39,857 2 67,383 ( 1,177,005) 1 ,169,400 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Capital asset additions ( 2,448,216) ( 1,704,331) ( 134,003) - ( 4,286,550) ( 401,658) Capital contributions 1 ,166,268 6 24,290 - - 1 ,790,558 - Proceeds from sale of capital assets - - - - - 4 0,000 Principal paid on bonds ( 1,785,000) - ( 106,327) - ( 1,891,327) - Interest paid on bonds ( 229,608) - ( 186,737) - ( 416,345) - Net cash provided by ( used in) capital and related financing activities ( 3,296,556) ( 1,080,041) ( 427,067) - ( 4,803,664) ( 361,658) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received 7 09,024 8 6,143 8 ,024 7 ,971 8 11,162 ( 26,105) Net cash provided by ( used in) investing activities 7 09,024 8 6,143 8 ,024 7 ,971 8 11,162 ( 26,105) Net change in cash and cash equivalents 6 05,390 ( 148,409) ( 52,371) ( 129,387) 2 75,223 ( 661,041) CASH AND CASH EQUIVALENTS: Beginning of year 3 1,813,863 4 ,410,053 6 02,141 3 87,072 3 7,213,129 1 1,076,918 End of year $ 3 2,419,253 $ 4 ,261,644 $ 5 49,770 $ 2 57,685 $ 3 7,488,352 $ 1 0,415,877 RECONCILIATION OF OPERATING INCOME ( LOSS) TO NET CASH PROVIDED BY ( USED IN) OPERATING ACTIVITIES: Operating income ( loss) $ 2 ,030,516 $ 1 ,118,144 $ ( 176,873) $ ( 1,003,742) $ 1 ,968,045 $ 7 90,828 Adjustments to reconcile operating income ( loss) to cash flows from operating activities: Depreciation 1 ,831,031 7 13,584 3 84,016 5 55,824 3 ,484,455 8 74,906 Decrease ( increase) in: Accounts receivable ( 86,788) 9 02 ( 34,723) 1 3,291 ( 107,318) ( 52,645) Materials, parts, and supplies - - 5 ,642 - 5 ,642 1 2,830 Prepaid items 8 84 4 5 - 3 ,391 4 ,320 ( 3,089) Increase ( decrease) in: Accounts payable 5 48,871 ( 755,970) ( 91,270) 9 ,507 ( 288,862) ( 939,533) Accrued payroll 1 0,494 7 ,428 3 36 ( 11,773) 6 ,485 5 ,840 Deposits ( 11,384) - ( 479) 1 ,367 ( 10,496) - Deferred revenue - - - 1 1,230 1 1,230 - Accrued compensated absences 2 59,806 5 5,093 4 0,166 1 6,164 3 71,229 ( 2,131,815) Net cash provided by ( used in) operating activities $ 4 ,583,430 $ 1 ,139,226 $ 1 26,815 $ ( 404,741) $ 5 ,444,730 $ ( 1,442,678) SUPPLEMENTAL DISCLOSURE OF NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES: Contributions of capital assets from ( to) the general government $ - $ - $ - $ - $ - $ 2 1,454 Capital assets contributed by developers 1 ,368,900 1 ,769,500 - - 3 ,138,400 - Total noncash capital and related financing activities $ 1,368,900 $ 1,769,500 $ - $ - $ 3,138,400 $ 2 1,454 Business- type Activities - Enterprise Funds See accompanying notes to the basic financial statements. 32 FIDUCIARY FUND FINANCIAL STATEMENTS 33 City of Antioch Statement of Fiduciary Fund Assets and Liabilities Agency Funds June 30, 2006 ASSETS Cash and investments $ 3,961,120 Accounts receivable 21 Assessment receivable 366,382 Interest receivable 318,779 Prepaids 13,037 Restricted cash and investments 17,585,149 Total assets $ 22,244,488 LIABILITIES Accounts payable $ 1,451,720 Due to others 20,792,768 Total liabilities $ 22,244,488 See accompanying notes to the basic financial statements. 34 CITY OF ANTIOCH Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2006 35 NOTE 1 - THE FINANCIAL REPORTING ENTITY ( a) Reporting Entity The City of Antioch, California ( the " City"), operates under the Council- Manager form of government and provides the following services: police, highways and streets, sanitation, health services, culture-recreation, public improvements, planning and zoning, general administration services, water, and redevelopment through the Antioch Development Agency. The governmental reporting entity consists of the City ( Primary Government) and its component units. Component units are legally separate organizations for which the City is financially accountable or other organizations whose nature and significant relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. Financial accountability is defined as the appointment of a voting majority of the component unit's board, and ( 1) either the City's ability to impose its will on the organization or ( ii) there is potential for the organization to provide a financial benefit to or impose a financial burden on the City. The basic financial statements include blended component units. The blended 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 primary government. For financial reporting purposes, the City's basic financial statements include all financial activities that are controlled by or are dependent upon actions taken by the City's Council. The financial statements of the individual component units may be obtained by writing to the City of Antioch, Finance Department, P. O. Box 5007, Antioch, CA 94531- 5007. ( b) Blended Component Units Antioch Development Agency The Antioch Development Agency ( Agency) was created to prepare and implement plans for improvement, rehabilitation and development of certain areas within the City. The Agency and the City have a financial and operational relationship, which requires that the Agency's basic financial statements be blended into the City's basic financial statements. The Agency's Board consists exclusively of all five members of the City Council. Antioch Public Financing Authority The Antioch Public Financing Authority ( APFA) was formed for the purpose of financing the Water Treatment Plant Expansion, the Police Facilities Projects and other infrastructure improvements. The APFA and the City have a financial and operational relationship, which requires that the APFA's financial statements be blended into the City's financial statements. The APFA's Board consists exclusively of all five members of the City Council. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( a) Basis of Presentation Government- wide Financial Statements The statement of net assets and statement of activities display information about the primary government ( the City) and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business- type activities of the City. Governmental activities, which normally are supported by taxes and intergovernmental revenues and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees charged to external parties. CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 36 The statement of activities presents a comparison between direct expenses and program revenues for each segment of the business- type activities of the City and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function; and, therefore, are clearly identifiable to a particular function. Program revenues include 1) fees, fines and charges paid by the recipients of goods or services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented instead as general revenues. Fund Financial Statements The fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Separate statements for each fund category - governmental, proprietary and fiduciary - are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are separately aggregated and reported as nonmajor funds. Proprietary funds distinguish operating revenues and expenses and nonoperating items. Operating revenues and expenses generally result from providing services in connection with the fund's principal ongoing operations. The principal operating revenues of the City's enterprise and internal service funds are charges for customer services including: water and sewer charges, marina and water park fees, equipment maintenance and usage fees, and support charges. Operating expenses for enterprise funds and internal service funds include the cost of services, administrative expenses and depreciation on capital assets. All other revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. The City reports the following major governmental funds: • The General Fund is used to account for all of the general revenues of the City not specifically levied or collected for other City funds and the related expenditures. The General Fund accounts for all financial resources of the City which are not accounted for in another fund. For the City, the General Fund includes such activities as general government, public works, public safety, parks and recreation and community development. • The Housing and Community Development Fund accounts for grant funds received from the Federal government for the purpose of developing viable urban communities. • The Low and Moderate Income Housing Fund was established by the Antioch Development Agency to account for tax allocations set aside for the purpose of increasing or improving the City's supply of low or moderate income housing. • The Capital Improvement Fund records all revenues, expenditures, assets and liabilities associated with City capital projects. It accounts for resources used to construct or acquire capital assets and make capital improvements • Sierra- Crete Fund - The E. I. du Pont Nemours Corporation manufactured an artificial rock road base material called " Sierra- Crete". The company promoted this material as a good alternative to traditional rock for street base and sold it to a number of paving contractors. Several streets were constructed in Antioch using this material. It turned out that Sierra- Crete caused a number of problems, including corrosion of city underground utilities and premature cracking and wear of the asphalt surface. The City sued DuPont, the paving contractors and various subdividers which had installed the material. In all, there were 19 defendants in the case brought by Antioch. The parties settled the case, with the defendants defining the total amount to be paid to the City, but the amount per defendant to be kept confidential and known only to the City's trustee/ litigation counsel. This trustee established a trust account for receipt of the settlement funds, and when all funds were paid in to satisfy the settlement, all funds and interest were then forwarded to the City. CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 37 • The ADA Project # 1 Fund was established by the Antioch Development Agency to account for acquisition, demolition and construction of Development Agency Project Area # 1 of the City of Antioch. Financing is provided by property tax increments and bond proceeds. The City reports the following major enterprise funds: • The Water Fund accounts for the operation of the City's water utility, a self- supporting activity, which provides services on a user charge basis to residences and businesses. • The Sewer Fund accounts for the maintenance of the City's sewer lines and related facilities. It is a self- supporting activity, which provides services on a user charge basis to residences and businesses. • The Marina Fund accounts for the operation of the City's Marina Complex, which includes renting berths and fueling boats to the public. • Prewett Water Park – This fund accounts for the operation of the Prewett Water Park, an aquatic recreational park. The City reports the following additional fund types: • Internal Service Funds account for the maintenance and replacement of vehicles and equipment; the City's warehouse and central stores operation; the operation, maintenance, and replacement of office equipment used by City departments; costs incurred for printing/ reproduction services and mailing services for all City departments; the City's liability for compensated absences; the treasury and investment functions of the City; the charges against each department for its share of the costs of operations for the Finance Department; charges for workers' compensation expenses; charges for post retirement medical benefits and charges for loss control, on a cost- reimbursement basis. • Agency Funds account for assets held by a governmental unit in the capacity of agent for individuals, other governmental agencies and nonpublic organizations. ( b) Measurement Focus, Basis of Accounting The government- wide, proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus. The government- wide and proprietary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the City gives ( or receives) value without directly receiving ( or giving) equal value in exchange, include property and sales tax, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales tax are recognized when the underlying transactions take place. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Property and sales taxes, interest, certain state and federal grants and charges for services are accrued when their receipt occurs within sixty days after the end of the accounting period so as to be both measurable and available. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to claims and judgments are recorded only when payment is due. General capital assets acquisitions are reported as expenditures in governmental funds. Proceeds of general long- term debt and capital leases are reported as other financing sources. Under the terms of grant agreements, the City funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the City's policy to first apply cost- reimbursement grant resources to such programs, followed by categorical block grants, and then by general revenues. With respect to the gas tax fund, it is the City's policy to first apply revenues other than the gas tax itself to expenditures incurred within that program. CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 38 Private- sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government- wide and enterprise fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board ( GASB). Governments also have the option of following subsequent private- sector guidance for their business- type activities and enterprise funds, subject to the same limitation. The City has elected not to follow subsequent private- sector guidance. ( c) Internal Investment Pool The City maintains an internal investment pool that is available for use by all funds. Investments in non-participating interest earning contracts ( including guaranteed investment contracts) are reported at cost, and all other investments at fair value. Fair value is determined annually and is based on current market prices. The method of allocating interest earned on pooled deposits and investments among funds is based on average cash balances. For purposes of the accompanying statement of cash flows, the enterprise and internal service funds consider all highly liquid investments with a maturity of three months or less when purchased, and their equity in the cash and investment pool to be cash equivalents. ( d) Receivables During the course of normal operations, the City carried various receivable balances for taxes, interest, services, loan, utilities and special assessments. Accounts receivables are shown net of an allowance for doubtful accounts of $ 74,526 in the General Fund and $ 163,383 in the Water Enterprise Fund. ( e) Materials, Parts and Supplies Material, parts and supplies are valued at average cost. Material, parts and supplies recorded in the internal service funds consist of expendable supplies for consumption. The cost is recorded as an expense at the time individual inventory items are consumed. Material, parts and supplies recorded in the Marina Enterprise Fund consists primarily of merchandise held for resale to the public. ( f) Loans Receivable For the purposes of the governmental funds financial statements, expenditures related to long- term loans arising from loan subsidy programs are charged to operations upon funding and the loans are recorded with an offset to a deferred revenue account. The balance of the long- term loans receivable includes loans that may be forgiven if certain terms and conditions of the loans are met. For purposes of the government- wide financial statements, long- term loans are not offset by deferred revenue accounts. ( g) Land Held for Redevelopment The City purchases parcels of land for redevelopment in order to develop or redevelop properties within the redevelopment areas. Such land parcels are accounted for as investments on the statement of net assets at the lower of cost, or net realizable value. Net realizable value is determined at the date of a disposition and development agreement is being executed. ( h) Bond Issuance Costs, Original Issue Discounts and Premiums and Refunding of Debt In the government- wide financial statements and the proprietary fund financial statements, long- term debt and other long- term obligations are reported as liabilities in the applicable governmental activities, business- type activities, or proprietary fund statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and are amortized on a straight- line basis over the term of the related debt. CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 39 In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. Issuance costs, whether or not withheld from the actual debt proceeds received are reported as debt service expenditures. Gains or losses occurring from advance refundings, completed subsequent to June 30, 1993, are deferred and amortized into expense for both business- type activities and proprietary funds. For governmental activities, they are deferred and amortized into expense if they occurred subsequent to June 30, 2001. ( i) Capital Assets Capital assets ( including infrastructure) are recorded at historical cost or at estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair market value on the date contributed. Capital assets include public domain ( infrastructure) general capital assets consisting of certain improvements including roads, bridges, water/ sewer, lighting systems, drainage systems, and flood control. The City defines capital assets as assets with an estimated useful life in excess of one year and an initial, individual cost of $ 1,000 for assets acquired prior to June 30, 2001, and individual cost of $ 5,000 for assets acquired after June 30, 2001. Capital assets used in operations are depreciated or amortized ( assets under capital leases) using the straight- line method over the lesser of the capital lease period or their estimated useful lives in the government- wide statements and proprietary funds. The estimated useful lives are as follows: Infrastructure 20 to 50 years Water and Sewer Pipes 75 years Structures and Improvements 10- 30 years Equipment 5- 20 years Vehicles 5- 15 years Maintenance and repairs are charged to operations when incurred. Betterments and major improvements, which significantly increase values, change capacities or extend useful lives, are capitalized. Upon sale or retirement of capital assets, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in the results of operations. ( j) Property Taxes and Special Assessments Revenue Revenue is recognized in the fiscal year for which the tax and assessment are levied. The County of Contra Costa levies, bills and collects property taxes and special assessments for the City; under the County's " Teeter Plan", the County remits the entire amount levied and handles all delinquencies, retaining interest and penalties. Taxes are levied for each fiscal year on taxable real and personal property situated in the County. The levy is based on the assessed values as of the preceding January 1st, which is also the lien date. Property taxes on the secured roll are due in two installments: November 1st and February 1st and become delinquent after December 10th and April 10th, respectively. Supplemental property taxes are levied based on changes in assessed values between the date of real property sales or construction completion and the preceding assessment date. The additional supplemental property taxes are prorated from the first day of the month following the date of such occurrence. Property taxes on the unsecured roll are due on the lien date ( January 1), and become delinquent if unpaid by August 31st. Special assessment districts are established in various parts of the City to provide improvements to properties located in those districts. Properties are assessed for the cost of improvements; these assessments are payable over the term of the debt issued to finance the improvements. CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 40 ( k) Accumulated Compensated Absences The City accrues the cost for compensated absences ( vacation, sick leave and comp time) when they are earned. City employees have a vested interest in accrued vacation time and all vacation hours will eventually either be used or paid by the City. Generally, employees earn and use their current vacation hours with a small portion being accrued or unused each year. As this occurs, the City incurs an obligation to pay for these unused hours. Sick leave benefits do not vest and no liability is recorded. ( l) Interfund Transactions Interfund transactions are reflected as either loans, services provided, reimbursements or transfers. Loans are reported as receivables and payables as appropriate, are subject to elimination upon consolidation and are referred to as either " due to/ from other funds" ( i. e., the current portion of interfund loans) or " advances to/ from other funds" ( i. e., the noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and the business- type activities are reported in the government- wide financial statements as " internal balances". Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not available financial resources. Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/ expenses. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers within governmental or proprietary funds are netted as part of the reconciliation to the government- wide presentation. ( m) Estimates The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. ( n) Implementation of New GASB Pronouncements In 2006, the City adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statement: GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries – The Statement establishes accounting and financial reporting standards for impairment of capital assets. A capital asset is considered impaired when its service utility has declined significantly and unexpectedly. This Statement also clarifies and establishes accounting requirements for insurance recoveries. Statement No. 44, Economic Condition Reporting: The Statistical Section ( Amendment of NCGA Statement 1) – The Statement establishes the objectives of the statistical section and the five categories of information it contains: financial trends information, revenue capacity information, debt capacity information, demographic and economic information, and operating information. GASB Statement No. 46, Net Assets Restricted by Enabling Legislation – The Statement addresses selected issues and amends GASB Statement No. 34, Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments. The Statement enhances the usefulness and comparability of net asset information and clarifies the meaning of legal enforceability. The Statement also specifies accounting and financial reporting requirements for restricted net assets. CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 41 GASB Statement No. 47, Accounting for Termination Benefits – The Statement provides accounting guidance for state and local governmental employers regarding benefits ( such as early retirement incentives and severance benefits) provided to employees that are terminated. The Statement requires recognition of the cost of involuntary termination benefits in the period in which a government becomes obligated to provide benefits to terminated employees. NOTE 3 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY ( a) Deficit Fund Balances The funds listed below had fund balance deficits at June 30, 2006 Capital Projects Funds: Antioch Development Agency Project Area # 1 $( 1,152,329) Internal Service Fund: Stores $( 83,993) The deficit in the Antioch Development Agency Project Area Capital Projects Fund is expected to be cured by future property tax increments. During the next fiscal year, the Stores Internal Service Fund will be closed into the General Fund, curing this deficit. ( b) Expenditures in Excess of Budget Expenditures in the funds below exceeded appropriations by the amounts indicated, largely because budgets were not revised for higher than anticipated capital outlays or other unexpected expenditures. Sufficient resources were available to finance these expenditures, primarily in the form of higher revenues and transfers than expected or from available fund balance. Appropriated Final Budget Actual Expenditures Excess General Fund $ 38,243,987 $ 39,295,311 $( 1,051,324) Nonmajor Special Revenue Funds: Civic Arts 155,848 156,007 $( 159) Park In Lieu 1,204,843 1,205,733 ( 890) Downtown Maintenance District 54,501 58,862 ( 2,361) Park 1A Maintenance District 71,945 75,712 ( 3,767) East Lone Tree SLLMD 2 537 ( 535) Local Law Enforcement Block Grant 50 89 ( 39) Street Impact Fund 20 88 ( 68) Traffic Safety 110 153 ( 43) Nonmajor Capital Projects Funds: ADA Project Area # 4 531,708 532,074 ( 366) Hillcrest Assessment District # 26 142,970 143,409 ( 439) Hillcrest Bridge District 1,500 1,829 ( 329) Highway 4 Bridge Benefit District 600 695 ( 95) Residential Development Allocation 138,740 152,286 ( 13,546) CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 42 NOTE 4 - CASH AND INVESTMENTS ( a) Cash and Investment Balances The City has the following cash and investments at June 30, 2006: Cash and investments: Deposits in banks $ 4,634,823 U. S. Government securities 16,268,905 U. S. Government agencies 50,617,724 Medium- term corporate notes 22,472,049 Money market 487,383 California Local Agency Investment Fund 7,407,953 Total cash and investments $ 101,888,837 Restricted cash and investments: California Asset Management Program 3,093,962 Guaranteed investment contracts 17,335,325 Money market 4,977,149 Repurchase agreements 422,750 Total restricted cash and investments 25,829,186 Total $ 127,718,023 Cash and investments are presented on the Statement of Net Assets as follows at June 30, 2006: Government- Wide Statement of Net Assets Fiduciary Funds Statement of Assets and Liabilities Total Cash and investments $ 97,927,717 $ 3,961,120 $ 101,888,837 Restricted cash and investments 8,244,037 17,585,149 25,829,186 Total $ 106,171,754 $ 21,546,269 $ 127,718,023 The City's dependence on property tax receipts, which are received semi- annually, requires it to maintain significant cash reserves to finance operations during the remainder of the year. The City pools cash from all sources and all funds, except amounts required to be held with fiscal agents, so that it can be safely invested at maximum yield and liquidity. Investment income is allocated among funds on the basis of average month- end cash balances. Restricted cash and investments at June 30, 2006, was $ 25,829,186, which was held by trustees or fiscal agents. These funds may only be used for specific capital outlay or for the payment of certain bonds or tax allocation bonds, and have been invested only as permitted by State statutes or applicable City ordinance, resolution or bond indentures. CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 43 ( b) Cash Deposits The carrying amount of the City's cash deposits was $ 4,634,823 at June 30, 2006. The bank balance at June 30, 2006, was $ 4,918,692, which was fully insured and/ or was collateralized with securities held by the pledging financial institutions in the City's name as described in the following paragraph. The California Government Code requires California banks and savings and loan associations to secure the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name. The market value of pledged government securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City's total cash deposits. The City has waived collateral requirements for cash deposits, which are fully insured up to $ 100,000 by the Federal Deposit Insurance Corporation or Savings Association Insurance Fund. ( c) Investments The City's investment policy, bond indentures and Section 53601 of the California Government Code allow the City to invest in the following types of investments: Securities of the U. S. Government or its agencies Certificates of Deposit Bankers' Acceptances Commercial Paper Investment Grade Medium Term Corporate Notes Repurchase Agreements Local Agency Investment Fund Deposits Insured Savings Accounts or Money Market Accounts Guaranteed Investment Contracts Mutual funds as permitted by the Code The City did not enter into reverse repurchase agreements during the year ended June 30, 2006. At June 30, 2006, the City's investment position in the State of California Local Agency Investment Fund ( LAIF) was $ 7,407,953. The total amount invested by all public agencies in LAIF at that day was $ 63,366,260,064. Of that amount, 97.433% is invested in nonderivative financial products and 2.567% in structured notes and asset- backed securities. The Local Investment Advisory Board ( Board) has oversight responsibility for LAIF. The Board consists of five members as designated by State Statute. The value of the pool shares in LAIF, which may be withdrawn, is determined on an amortized cost basis, which is different than the fair value of the City's position in the pool. Information is not available on whether the mutual funds in which the City has invested used, held or wrote derivative products during the fiscal year ended June 30, 2006. As of June 30, 2006, the City's investment in the California Asset Management Program ( CAMP) pool was $ 3,093,962. The total amount invested by all public agencies in CAMP at that date was $ 908,375,223. A board of five trustees who are officials or employees of public agencies has oversight responsibility for CAMP. The value of the pool shares in CAMP, which may be withdrawn, is determined on an amortized cost basis, which is different than the fair value of the City's position in the pool. CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 44 ( d) Interest Rate Risk As a means of limiting its exposure to fair value losses arising from interest rates, the City's investment policy limits investments to a maximum maturity of five years. At June 30, 2006, the City had the following investment maturities: Investment Maturities ( In Years) Investment Type Fair Value Less than 1 1 to 2 2 to 3 U. S. Government securities $ 16,268,905 $ 1,065,080 $ 15,203,825 - U. S. Government agencies 50,617,724 11,569,524 23,435,436 15,612,764 Medium- term corporate notes 22,472,049 9,968,398 2,466,250 10,037,401 California Local Agency Investment Fund 7,407,953 7,407,953 - - Money market 487,383 487,383 - - Total $ 97,254,014 $ 30,498,338 $ 41,105,511 $ 25,650,165 ( e) Credit Risk State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations ( NRSROs). It is the City's policy to limit its investments in these investment types to the top rating issued by NRSROs, including raters Standard & Poor's and Moody's Investor's Service. At June 30, 2006, the City's credit risks, expressed on a percentage basis, were as follows: Credit Quality Distribution for Securities with Credit Exposure As A Percentage of Total Investments Investment Type S& P's Credit Rating % of Investments U. S. Government securities TSY 16.73% U. S. Government agencies AAA 52.05% Medium- term corporate notes AAA 4.86% Medium- term corporate notes A+ 3.51% Medium- term corporate notes AA- 4.48% Medium- term corporate notes A- 1+ 5.13% Medium- term corporate notes A- 1 5.12% California Local Agency Investment Fund Not Rated 7.62% Money market Not Rated 0.50% Total 100.00% ( f) Custodial Credit Risk For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. None of the City's investments were subject to custodial credit risk. CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 45 NOTE 5 - INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS ( a) Current Balances Current balances are expected to be repaid in the normal course of business during the following fiscal year. The City’s current balances represent loans to cover temporary shortages of cash in individual funds. The composition of interfund balances as of June 30, 2006, is as follows: Due From Other Funds Due to Other Funds General Fund Housing and Community Development Fund $ 31,607 Nonmajor Governmental Funds 897,893 Internal Service Funds 896,614 Total $ 1,826,114 ( b) Advances From/ To Other Funds Advance To Other Funds Major Funds Advance From Other Funds Low and Moderate Income Housing Water Enterprise ADA Project Area # 1 $ 3,662,849 Internal Service Fund $ 266,820 The Water Enterprise Fund has receivables due for working capital loans. At June 30, 2006, the Low and Moderate Income Housing Fund has a receivable due from Antioch Development Agency Project Area # 1 in the amount of $ 3,662,849. The Agency Project Areas are required by the Health and Safety Code to annually set aside 20% of tax increment revenues for low and moderate housing development. Project Area # 1 was formed prior to the year this requirement was established. The Agency began repaying the unfunded set- aside in fiscal year 1997. During the fiscal year ended June 30, 2001, the Agency adopted a formal deficit elimination plan for the Low and Moderate Income Housing Fund. As part of this plan, the Agency agreed to pay $ 25,000 per year from fiscal year 2000- 01 through 2015- 16, $ 1,500,000 in fiscal year 2016- 17 and $ 1,812,849 in fiscal year 2017- 18. The Agency made principal payments totaling $ 25,000 during fiscal year 2005- 06. CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 46 ( c) Transfers to/ from Other Funds Transfers are indicative of funding for capital projects, lease payments or debt service, subsidies of various City operations and re- allocations of special revenues. The following schedule briefly Low and Moderate Capital Nonmajor Prewett General Income Improvement Governmenta Water Sewer Marina Water Park Internal Fund Fund Fund Funds Enterprise Enterprise Enterprise Enterprise Service Total General Fund $ - $ - $ 1,357,406 $ 976,213 $ - $ - $ - $ 267,000 $ 21,454 $ 2,622,073 Low and Moderate Income Fund 57,000 - - - - - - - - 57,000 Capital Improvement - - - 26,442 26,442 - - - - 52,884 Sierra Crete 210,000 - - - - - - - - 210,000 ADA Project Area # 1 50,000 891,991 - 2,115,696 - - 250,000 - - 3,307,687 Nonmajor: Governmental Funds 1,545,571 424,646 - 1,250,746 - - - - - 3,220,963 Water Enterprise 969,000 - - 366,710 - - - - - 1,335,710 Sewer Enterprise 178,000 - - 117,180 - - - - - 295,180 Marina Enterprise - - - 11,151 - - - - - 11,151 Internal Service 21,164 - - 4,050 6,991 1,443 1,008 383 48,749 83,788 Total $ 3,030,735 $ 1,316,637 $ 1,357,406 $ 4,868,188 $ 33,433 $ 1,443 $ 251,008 $ 267,383 $ 70,203 $ 11,496,436 Transfers In Major Fund Major Fund Transfers Out NOTE 6 - LOANS RECEIVABLE The composition of the City's governmental activities loans receivable as of June 30, 2006, is as follows: Rental and Housing Rehabilitation Loans $ 2,469,511 Job Development Incentive Loans 98,244 Multi- unit Rental Rehabilitation Loans: West Rivertown Apartments/ Eden Housing Project 5,041,686 Terrace Glen Project 1,692,633 Pinecrest Apartment Project 1,009,498 Rivertown Senior Housing 242,750 Hillcrest Terrace Project 1,124,671 Habitat for Humanity 379,861 Lone Tree Golf Course 1,196,220 Other loans 194,827 Total governmental activities $ 13,449,901 ( a) Rental and Housing Rehabilitation Loans The City administers rental and home improvement revolving loan funds using federal Community Development Block Grant ( CDBG) and redevelopment funds. The program provides below market rate loans, secured by deeds of trust, to eligible participants for rental and housing rehabilitation. Although payments for most loans are amortized over an established payment schedule, some loans allow for deferred payment of accrued interest and principal until the homeowner's property is sold or transferred, primarily for seniors and very low- income families. Repayments received from the outstanding loans are used to make additional rental and housing rehabilitation loans. Outstanding balances at June 30, 2006, are $ 2,469,511. CITY OF ANTIOCH Notes to the Basic Financial Statements, Continued For the Fiscal Year Ended June 30, 2006 47 ( b) Job Development Incentive Loans The City administers job development incentive revolving loan funds using federal CDBG funds. The program provides below market rate loans, secured by an irrevocable letter of credit, to eligible participants in order to create and retain jobs in the City. Principal and interest on these loans are deferred for four years and forgiven at the rate of 25% of the principal amount plus accrued interest per year provided the agreed- upon jobs are in place. Partial fulfillment at the end of four years will result in a prorated amount owing in proportion to the percentage of jobs retained and created as agreed. The loans accrue at the |
| PDI.Date.Issued | 2006 |
| PDI.Title | Financial Report. 2005-2006. |
| OCLC number | 243780897 |
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