TOWN OF MORAGA
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2006
WITH INDEPENDENT AUDITOR’S REPORT
TOWN OF MORAGA
FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2006
TABLE OF CONTENTS
Page
FINANCIAL SECTION:
Independent Auditor's Report on Basic Financial Statements
i
Management's Discussion and Analysis
ii - xi
Basic Financial Statements:
Government- wide Financial Statements
Statement of Net Assets 1
Statement of Activities 2
Fund Financial Statements
Balance Sheet - Governmental Funds 3
Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 4
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to
the Statement of Activities - Governmental Funds 5
Statement of Net Assets - Proprietary Fund 6
Statement of Revenues, Expenses and Changes in Net Assets - Proprietary Fund 7
Statement of Cash Flows - Proprietary Fund 8
Statement of Net Assets - Fiduciary Funds 9
Notes to Basic Financial Statements
10 - 22
Required Supplemental Information
Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Actual -
General Fund 23
Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Actual -
Transportation Measure C Fund 24
Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Park
Dedication Fund 25
Combining Balance Sheets - Other Governmental Funds 26
Combining Statements of Revenues, Expenditures and Changes in Fund Balances - Other
Governmental Funds 27
Supplemental Information
Combining Balance Sheet - Capital Projects Funds 29
Combining Statements of Revenues, Expenditures and Changes in Fund Balances - Capital
Projects Funds 30
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards 31
ROSEVILLE OFFICE SACRAMENTO OFFICE
2901 Douglas Boulevard, Suite 290 2515 Venture Oaks Way, Suite 135
Roseville, CA 95661 Sacramento, CA 95833
TEL 916 774- 4208 TEL 916 929- 0540
FAX 916 774- 4230 FAX 916 929- 0541
PRINCIPALS
Chris A. Mann, CPA , CFP ♦ John R. Urrutia, CPA ♦ Michelle O. Nelson, CPA, CFE, CVA ♦ Christine L. Collins, EA ♦ Kriss Ann Mann, CPA, CCPS
INDEPENDENT AUDITOR'S REPORT
To The Honorable Mayor and Members of the Town Council
Town of Moraga
Town of Moraga, California
We have audited the accompanying basic financial statements of the governmental activities, the business- type
activities, each major fund, and the aggregate remaining fund information of the Town of Moraga ( the Town) as of
and for the year ended June 30, 2006, which collectively comprise the Town's basic financial statements as listed in
the Table of Contents. These basic financial statements are the responsibility of the Town's management. Our
responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America,
and the standards applicable to financial audits contained in Governmental Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business- type activities, each major fund, and the aggregate
remaining fund information of the Town of Moraga as of June 30, 2006, and the respective changes in the financial
position and cash flows, where applicable, thereof and the respective budgetary comparisons listed as part of the
basic financial statements for the year then ended, in conformity with accounting principles generally accepted in
the United States of America.
In accordance with " Government Auditing Standards", we have also issued our report dated December 11, 2006 on
our consideration of the Town of Moraga's internal control over financial reporting and our tests of its compliance
with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting on compliance. That report is
an integral part of an audit performed in accordance with Governmental Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Management's Discussion and Analysis and Required Supplemental Information are supplementary information
required by the Government Accounting Standards Board, but are not a part of the basic financial statements. We
have applied certain limited procedures to this information, principally inquiries of management regarding the
methods of measurement and presentation of this information, but we did not audit this information and we express
no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of the Town of
Moraga taken as a whole. The accompanying supplementary information listed in the table of contents is presented
for purposes of additional analysis and is not a required part of the basic financial statements of the Town of
Moraga. Such information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements
taken as a whole.
The introductory section and statistical section listed in the table of contents were not audited by us and we do not
express an opinion on this information.
Sacramento, CA
December 11, 2006
TOWN OF MORAGA
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2006
ii
INTRODUCTION
As management of the Town of Moraga ( the Town), we offer readers of the Town’s financial statements this
narrative overview and analysis of the financial activities of the Town for the fiscal year ending June 30,
2006.
The management’s discussion and analysis is designed to assist the reader in focusing on significant
financial issues; provide an overview of the Town’s financial activity and any changes in financial position;
explain any material deviations from the financial plan ( approved budget); and identify any issues or
concerns about the Town’s ability to address future challenges.
OVERVIEW
The Town of Moraga’s financial statements for the year ended June 30, 2006 contain the following
elements:
1) Management Discussion and Analysis ( MD& A) is a narrative overview and summary analysis
of the financial activities of the Town for the year ended June 30, 2006.
2) Government- wide financial statements include a Statement of Net Assets and a Statement of
Activities. The Statement of Net Assets presents information on all of the Town’s assets and
liabilities; the Town’s net assets are the difference of assets minus liabilities. The Statement of
Activities summarizes how the Town’s net assets have changed during the year.
3) Fund financial statements which show information in a traditional governmental fund- based
reporting format, corresponding to the manner in which financial activities appear in the Town’s
Operating Budget and Capital Improvements Projects Budget and in the general ledger.
4) The remaining statements provide financial information about activities for which the Town acts
solely as a trustee or agent for the benefit of those outside the government.
TOWN OF MORAGA
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2006
iii
THE TOWN AS A WHOLE
One of the most important questions often asked about the Town’s finances is, “ Is the Town better or worse
off as a result of the year’s activities?” The Statement of Net Assets and the Statement of Activities report
information about the Town as a whole in a way that helps answer this question.
In the Statement of Net Assets and the Statement of Activities, the Town is divided into two kinds of
activities:
♦ Governmental activities: Most of the Town’s basic services are reported here, including police, general
administration, public works, recreation, and planning. While these activities are supported in part by
charges for services and grants, the majority of these activities are financed by property taxes, sales
tax, motor vehicle license fees, franchise fees, and gas tax.
♦ Business- type activities: The only program reported here is the operation of the building at 329 Rheem
Boulevard. It is important to note that in the fiscal year 2006, expenses to operate and maintain the
building exceeded income by $ 77,858 ( see Statement of Activities on page 2 of the Basic Financial
Statements.
The Statement of Net Assets ( page 1 of the Basic Financial Statements) summarizes the Town’s assets and
liabilities, with the difference of the two reported as net assets ( rather than equity). The Statement of Net
Assets is designed to provide information about the financial position of the Town as a whole, including all of
its capital assets and long- term liabilities, on a full accrual basis of accounting similar to the accounting
model used by private sector firms. This statement is a snapshot of the Town’s position at the end of the
fiscal year 2006.
Looking at the Town’s net assets ( the difference between assets and liabilities) is one way to measure the
Town’s financial health. Over time, increases or decreases in the Town’s net assets are an indicator of
whether its financial health is improving or deteriorating. Net assets at June 30, 2006, ($ 32,951,326)
increased $ 279,919 ( 0.8%) from the prior year ($ 32,671,407).
The Town’s total assets of $ 33,808,782, which include current, long- term, and capital assets, exceeded its
liabilities of $ 857,456 at the close of the 2006 fiscal year by $ 32,951,326. Of this amount, $ 3,798,245 was
reported as unrestricted net assets and may be used to meet on- going financial obligations. The liabilities of
$ 857,456 include accounts payable, accrued payroll, accrued compensated absences, and the current and
long- term portions of a note payable.
The Statement of Activities ( page 2 of the Basic Financial Statements) presents information regarding how
the Town’s net assets have changed during the fiscal year. Expenditures are categorized by the Town’s
main functions which include general administration, planning, public safety, public works, streets and
lighting, and parks and recreation. Revenues restricted to funding of specific Town functions are considered
program revenues. For example, the program revenues for parks and recreation are the rental fees that are
charged to users for use of the Town’s various facilities. Revenues not associated with a particular program
are classified as general revenues, which may be used to finance all functions. The Statement of Activities
shows that the main functions of the Town are principally supported by general revenues, such as property
taxes, sales taxes and franchise fees, rather than by program revenues.
TOWN OF MORAGA
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2006
iv
SIGNIFICANT FUNDS
Fund Financial Statements
The fund financial statements ( beginning on page 3 of the Basic Financial Statements) provide detailed
information about the most significant funds. Some funds are required to be established by State law.
However, the Town Council establishes many other funds to help control and manage money for particular
purposes ( e. g. Capital Project Funds) or to meet the legal responsibilities for using certain taxes and federal
or state grants.
♦ Governmental funds: The governmental fund statements provide a detailed short- term view of the
Town’s general operations and the basic services it provides. Governmental fund information helps
determine what financial resources are available in the near future to finance the Town’s programs.
The relationship between governmental activities ( reported in the Statement of Net Assets and the
Statement of Activities) and governmental funds is at the bottom of the fund financial statements ( page
3 of the Basic Financial Statements).
♦ Proprietary funds: These funds make up the business- type activities reported in the Statement of Net
Assets and the Statement of Activities but provide more detail and additional information, such as cash
flows. At this time, the only proprietary fund is the 329 Rheem Blvd Fund.
♦ Fiduciary funds: The Town is the trustee, or fiduciary, for the deposits held for facility rental; engineering
performance bonds; and planning third party payments. All of the Town’s fiduciary activities are
reported in a separate Statement of Fiduciary Net Assets on page 9. We exclude these activities from
the Town’s other financial statements because the Town cannot use these assets to finance its
operations. The Town is responsible for ensuring that the assets reported in these funds are used for
their intended purposes.
General Fund
The General Fund is the Town’s discretionary account and functions as the general operating fund. General
operating revenues, i. e. revenues without spending restrictions, are deposited into this fund. General
operating costs, i. e. personnel, materials, etc., are paid from this fund.
On June 23, 1999, the Town Council adopted resolution # 21- 99 which established that a threshold amount
of $ 1,250,000 be held in the general fund balance. This amount was to be adjusted on an annual basis by
the amount of the consumer price index ( CPI). Any amount in excess of the threshold plus CPI was to be
transferred to the Community Facilities/ Open Space Fund at the time of the audit approval.
On January 28, 2004, the Town Council adopted resolution # 05- 2004 which altered the recipient of General
Fund balance excess from the Community Facilities/ Open Space Fund to the Asset Replacement Fund.
On March 23, 2005, the Town Council adopted resolution # 4- 2005 which stated that once the Asset
Replacement Fund had received $ 724,597.02, the recipient of the general fund balance above the CPI
adjusted threshold would revert back to the Community Facilities/ Open Space Fund. The $ 724,597.02 is
the amount that the Asset Replacement Fund loaned to the Community Facilities/ Open Space Fund for the
purchase of the 329 Rheem Building. As of June 30, 2006, the balance due to the Asset Replacement Fund
is $ 112,274.02.
The amount of the general fund balance reserve, CPI adjusted, to be retained in the general fund as of June
30, 2006, is $ 1,520,595. The audited general fund balance as of June 30, 2006, is $ 1,331,829, falling short
of the required CPI adjusted reserve by $ 188,766. Therefore, there will be no transfer of excess general
fund balance to the Asset Replacement Fund for the fiscal year ending June 30, 2006.
TOWN OF MORAGA
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2006
v
Transportation Measure C Fund
This fund is derived from a half- cent sales tax approved by the voters in 1988 ( Measure C). The amount
received by the Town represents our portion of the 18% of the total monies received by the Contra Costa
Transportation Authority from the Measure C sales tax. The tax was approved for 20 years and will
conclude during the fiscal year 2008/ 2009. Money can be used for transportation purposes and has been
utilized by Moraga for transportation planning and street maintenance.
These revenues are included in the total for sales tax general revenues on the government wide Statement
of Activities, page 2 of the Annual Financial Report.
At the end of fiscal year 2006, Transportation Measure C Fund had a balance of $ 680,591. These monies
were earmarked for the bi- annual paving project to be undertaken in the fiscal year 2007.
Park Dedication Fund
This fund is derived from monies received pursuant to Moraga’s Municipal Code Chapter 8- 62, which
requires payment of park dedication fees in lieu of actual dedication of parkland.
At the end of fiscal year 2006, this fund had a balance of $ 195,019. These monies were earmarked for
projects/ studies to be undertaken in the fiscal year 2007, including the Hacienda Side Entrance,
Development Impact Fees, and the Parks & Recreation Master Plan.
Capital Projects Fund
This includes the Asset Replacement Fund and the Community Facilities/ Open Space Fund.
The Community Facilities/ Open Space Fund was created as the Town Center Fund in the early 1990’ s to set
aside money for the eventual construction of Town owned offices and facilities. At the end of the 2006 fiscal
year, the Community Facilities and Open Space Fund had been fully depleted, having used the $ 213,674
fund balance from the end of fiscal year 2005 on the remodel of the first floor at 329 Rheem Boulevard.
The Asset Replacement Fund was created in 1990- 91 to set aside money to replace assets of the Town
which wear out over time. There is a schedule in each year’s budget which lists the assets that are included
in the program, with details on cost and number of years of expected use. Each year, money is moved to
this fund from the operating budgets of those departments with listed assets and is charged as an operating
expense of the department. The Asset Replacement Fund had a fund balance at the end of fiscal year 2006
of $ 1,075,639.
329 Rheem Boulevard Fund
This is a business type fund, because it has been considered an enterprise operation, and is used to track
the finances of the building at 329 Rheem Boulevard. However, rental income from the building has not
been sufficient to cover the costs associated with it. On page 1 of the Annual Financial Report, the
Statement of Net Assets, the unrestricted net assets of this fund are shown to be a negative $ 491,628.
When the building is unable to sustain itself, financial responsibility for it falls upon the General Fund.
Other Governmental Funds
These funds are summarized on pages 3 and 4 of the Basic Financial Statements and include the Street
Improvements, Gas Tax, Lighting District, Traffic Mitigation, Traffic Safety, Special Gifts, NPDES, Skatepark
Maintenance, and Traffic Congestion Relief Funds. The details for each of these funds can be found on
page 26 of the Required Supplemental Information.
TOWN OF MORAGA
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2006
vi
TRENDS IN REVENUES AND EXPENDITURES
General Fund Property Tax Revenue
Property tax revenue growth is limited by Proposition 13 to a maximum of 2.0% per year for dwellings
without an ownership change. When property changes ownership, the value is reassessed. Often that
reassessment results in an increase in property taxes. However, the new assessed value is now limited to
annual property tax increases of no greater than 2.0%. When there is greater turnover in ownership
combined with development and growth, the Town expects property tax revenue to increase at more than
the 2.0% base rate. When there are fewer turnovers and less development and growth, the Town expects
property tax revenue to increase at closer to the 2.0% base.
Property taxes are calculated at 1.0% of the assessed value of the property. The Town receives only an
average of 5.414% of the 1.0% of assessed value. Therefore, if a dwelling is assessed at $ 1,000,000, the
property tax ( 1.0%) is $ 10,000, and the Town’s share ( 5.414%) is $ 541.40.
Property tax revenues for fiscal year 2006 were 46.7% of total general revenues, which makes it the largest
revenue source for the Town. Therefore, any consideration of the overall health of the Town’s finances must
also include a consideration of the potential for growth and development in the Town. Property tax revenues
for the fiscal year 2006 were $ 2,413,542, and increase of $ 295,708 ( 14.0%) over fiscal year 2005
($ 2,117,834).
General Fund Sales Tax Revenue
General Fund Sales Tax revenues are received in three parts: general sales and use tax, public safety
sales tax, sales and use tax in lieu of motor vehicle license fees. The Town also received $ 245,590 in
Measure C Return to Source sales tax that is not General Fund revenue and is recorded in the
Transportation Measure C Fund. This Measure C sales tax is restricted to use on transportation related
expenditures only.
The following table summarizes sales tax revenue. General Fund sales tax revenue for fiscal year 2006 was
$ 846,412. Measure C sales tax revenues are listed here to bring the total Town sales tax revenue to
$ 1,092,002, the amount reported in the Statement of Activities on page 2 of the Basic Financial Statements.
General Fund Sales Tax Revenue
Sales & Use Tax $ 617,427
Public Safety Sales Tax 54,180
Sales & Use Tax in lieu of Motor Vehicle License Fees 174,805
Total General Fund Sales Tax Revenue $ 846,412
Measure C Return to Source Revenue
Sales & Use Tax – Measure C $ 245,590
Total Town Sales Tax Revenue $ 1,092,002
General Fund sales tax revenues for fiscal year 2006 were 16.4% of total general revenues, which makes it
the second largest revenue source for the Town. Therefore, any consideration of the overall health of the
Town’s finances must also include a consideration of the economic health of the Town itself. General Fund
sales tax revenues for the fiscal year 2006 were $ 846,412, an increase of $ 112,763 ( 15.4%) over fiscal year
2005 ($ 733,649). Retail business in the Town is increasing and the expectation is that it will continue to
increase into fiscal year 2007.
Capital Grant Projects Revenues
Capital grant project revenue was 248.9% greater in fiscal year 2006 ($ 498,330) than in fiscal year 2005
($ 142,839). Funding for these types of projects is expected to vary from year to year as projects change.
TOWN OF MORAGA
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2006
vii
Other General Fund Revenues
Other general fund revenues for fiscal year 2006 totaled $ 1,408,366, or 27.3% of total general revenues.
This is an increase of $ 64,366 ( 4.8%) over fiscal year 2005 ($ 1,344,000).
Overall, general fund revenues rose 19.1% from fiscal year 2005 ($ 4,338,322) to fiscal year 2006
($ 5,166,650).
General Fund Expenditures
Overall, general fund expenditures also increased. Total general fund expenditures for fiscal year 2006
were $ 4,973,974, an increase of 22.4% over fiscal year 2005 general fund expenditures of $ 4,064,427.
Operating expenditures are those included in the departments General Government, Planning, Public
Safety, Public Works, and Parks & Recreation. These expenditures increased 8.7% in fiscal year 2006
($ 4,224,831 versus $ 3,885,790 in fiscal year 2005).
Capital Grant project expenditures also increased significantly in FY06, primarily due to the winter storms.
Not all of the costs associated with the winter storms will be recoverable from Federal Emergency
Management Administration ( FEMA) or Federal Highway Administration ( FHWA). In some cases, the Town
is required to expend matching funds. Expenditures and reimbursements for winter storms will continue into
fiscal year 2007.
Transfers out in fiscal year 2006 increased by 388.0% ($ 423,723 versus $ 86,823 in fiscal year 2005).
Transfers in/ out in the fiscal year 2006 included:
􀂾 $ 160,989 going out to Asset Replacement Fund
􀂾 $ 183,980 going out to 329 Rheem Fund for improvements
􀂾 $ 102,398 going out to 329 Rheem to cover negative cash balance
􀂾 $ - 23,644 coming in from various special revenues funds
􀂾 $ 423,723 Total Transfers In( Out).
The following table provides a two- year comparison of General Fund revenues and expenditures.
General Fund FY05 Actual FY06 Actual $ Change % Change
Revenues
Property taxes 2,117,834 2,413,542 295,708 14.0
Sales taxes 733,649 846,412 112,763 15.4
Other revenues 1,344,000 1,408,366 64,366 4.8
Total Operating Revenues 4,195,483 4,668,320 472,837 11.3
Capital grant projects 142,839 498,330 355,491 248.9
Total Revenues 4,338,322 5,166,650 828,328 19.1
Expenditures
General government 748,305 850,276 101,971 13.6
Planning 346,032 385,915 39,883 11.5
Public safety 1,901,128 2,025,405 124,277 6.5
Public works 220,199 218,417 ( 1,782) ( 0.8)
Parks and recreation 670,126 744,818 74,692 11.1
Total Operating Expenditures 3,885,790 4,224,831 339,041 8.7
Capital grant projects 178,637 749,143 570,506 319.4
Total Expenditures 4,064,427 4,973,974 909,547 22.4
Transfers In( Out) ( 86,823) ( 423,723) ( 336,900) 388.0
Net 187,072 ( 231,047) ( 418,119) ( 223.5)
Beginning Fund Balance 1,375,804 1,562,876 187,072 13.6
Ending Fund Balance 1,562,876 1,331,829 ( 231,047) - 14.8
TOWN OF MORAGA
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2006
viii
The following charts provide a two- year comparison of General Fund revenues and expenditures.
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Property taxes
Sales tax
Franchi se fees
Real property transfer fees
Moto r vehicle license fees
Interest
Fees for services
State and Federal Grants
Other
Town of Moraga
2005 and 2006 General Fund
Revenue Comparison
2004- 2005
2005- 2006
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
General government
Planning
Public safety
Public works
Parks and recreation
Capital Grant Projects
Other
Town of Moraga
2005 and 2006 General Fund
Expenditure Comparison
2004- 2005
2005- 2006
TOWN OF MORAGA
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2006
ix
Government Wide Revenues and Expenditures
Governmental Activities revenues in the fiscal year 2006 ($ 6,098,255) exceeded fiscal year 2005
($ 5,300,310) by a total of $ 797,945 or an increase of 15.1%. Governmental Activities expenses in fiscal
year 2006 ($ 6,244,856) exceeded fiscal year 2005 ($ 5,232,961) by a total of $ 1,011,895 or an increase of
19.3%. Revenues are growing 4.2% slower than expenditures.
Expenses for the total Governmental Activities include General Fund operating expenditures, Capital
Improvements Expenditures and depreciation expense, which is listed by function on page 18 in the Notes
to the Financial Statements.
The following tables provide a two year comparison of the Statement of Net Assets and the Statement of
Activities. These statements include all governmental funds of the Town. The change in Net Assets for the
Governmental Activities was a decrease from $ 67,349 at the end of fiscal year 2005 to a negative $ 146,601
at the end of fiscal year 2006, which is a total decrease of $ 213,950.
Town of Moraga
Statement of Net Assets
Increase
June 30, 2005 June 30, 2006 ( Decrease)
Governmental Activities
Current Assets 4,983,263 4,491,603 ( 491,660)
Non- current Assets 325,000 325,000 -
Capital Assets 25,257,472 25,608,615 351,143
Total Assets 30,565,735 30,425,218 ( 140,517)
Current Liabilities 344,790 371,427 26,637
Long- term Liabilities 175,856 155,303 ( 20,553)
Total Liabilities 520,646 526,730 6,084
Investments in capital 25,257,472 25,608,615 351,143
Unrestricted 4,787,617 4,289,873 ( 497,744)
Government Net Assets 30,045,089 29,898,488 ( 146,601)
Business- type Activities
Current Assets ( 16,661) ( 160,902) ( 144,241)
Non- current Assets - - -
Capital Assets 2,813,681 3,544,466 730,785
Total Assets 2,797,020 3,383,564 586,544
Current Liabilities 170,702 82,466 ( 88,236)
Long- term Liabilities - 248,260 248,260
Total Liabilities0 170,702 330,726 160,024
Investments in capital 2,813,681 3,544,466 730,785
Unrestricted ( 187,363) ( 491,628) ( 304,265)
Business Net Assets 2,626,318 3,052,838 426,520
TOTAL NET ASSETS 32,671,407 32,951,326 279,919
TOWN OF MORAGA
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2006
x
Governmental Activities:
􀂾 Current assets decreased $ 491,660 due, in large part, to a decrease in cash. Four of the five
major funds experienced a negative change in fund balance. ( See page 4 of the fund financial
statements.) More cash is being spent than is being received.
􀂾 Capital assets increased $ 351,143 primarily due to an increase in construction in progress.
Business- type Activities:
􀂾 Capital assets increased $ 730,785 due to the remodel of the first floor facilities at 329 Rheem.
􀂾 Long- term liability increased $ 248,260 due to the loan for the completion of the remodel of the first
floor facilities at 329 Rheem.
Town of Moraga
Statement of Activities
Increase
Governmental Activities June 30, 2005 June 30, 2006 ( Decrease)
Revenues
General Revenues
Property Taxes 2,166,604 2,551,775 385,171
Sales Taxes 733,649 1,092,002 358,353
Franchise Taxes 459,640 533,628 73,988
Motor Vehicle License Fees 78,883 128,595 49,712
Other General Revenues 402,000 646,232 244,232
Transfers 8,750 ( 480,952) ( 489,702)
Program Revenues: -
Charges for Services 401,783 723,385 321,602
Operating Grants and Contribution 957,301 532,344 ( 424,957)
Capital Grants and Contribution 91,700 371,246 279,546
Total Revenues 5,300,310 6,098,255 797,945
Expenses
General Administration 814,865 1,078,312 263,447
Planning 346,032 400,498 54,466
Public Safety 1,946,308 1,974,900 28,592
Public Works 305,664 677,217 371,553
Parks & Recreation 717,873 1,136,680 418,807
Streets & Lighting 1,102,219 977,249 ( 124,970)
Total Expenses 5,232,961 6,244,856 1,011,895
Change in Net Assets 67,349 ( 146,601) ( 213,950)
Net Assets-- Beginning 29,977,740 30,045,089 67,349
Net Assets-- Ending 30,045,089 29,898,488 ( 146,601)
Business- type Activities
Revenues
General Revenues
Transfers ( 8,750) 504,378 513,128
Program Revenues
Charges for services 87,028 108,242 21,214
Total Revenues 78,278 612,620 534,342
Expenses
Rental Property-- 329 Rheem Blvd 143,592 186,100 42,508
Total Expenses 143,592 186,100 42,508
Change in Net Assets ( 65,314) 426,520 491,834
Net Assets-- Beginning 2,691,632 2,626,318 ( 65,314)
Net Assets-- Ending 2,626,318 3,052,838 426,520
TOTAL NET ASSETS 32,671,407 32,951,326 279,919
Governmental Activities:
􀂾 Operating and Capital Grants and Contributions will vary from year to year depending upon what
grant opportunities exist.
Business- type Activities:
􀂾 The 329 Rheem Building has been largely supported by transfers in from other funds.
TOWN OF MORAGA
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2006
xi
SUMMARY
In this document we have attempted to provide the reader with a narrative overview and analysis of the
financial statements for the Town for the fiscal year ending June 30, 2006. We would encourage the
readers to examine not only this MD& A but also the Basic Financial Statements and the Supplemental
Information which follows.
This financial report is designed to provide a general overview of the Town’s finances for all those with
interest in the government’s finances. Questions concerning any information provided in this report or
requests for additional financial information should be directed to:
Town of Moraga
Finance Department
2100 Donald Drive
P. O. Box 188
Moraga, CA 94556
TOWN OF MORAGA
STATEMENT OF NET ASSETS
JUNE 30, 2006
Governmental
Activities
Business- type
Activities
Total
ASSETS
Current assets:
Cash and cash equivalents ( Note 3)
$ 3,314,758 $ - $ 3,314,758
Accounts receivable
920,596 - 920,596
Accrued interest receivable
55,800 26 55,826
Prepaid assets
39,376 - 39,376
Internal Balances
160,928 ( 160,928) -
Other
1 4 5 - 1 4 5
Noncurrent assets:
Secured note receivable ( Note 7)
325,000 - 325,000
Capital assets ( Note 4)
Land and construction in progress 9,379,837 841,755 10,221,592
Other capital assets, net of accumulated depreciation 16,228,778 2,702,711 18,931,489
Total capital assets 25,608,615 3,544,466 29,153,081
Total Assets $ 30,425,218 $ 3,383,564 $ 33,808,782
LIABILITIES
Current liabilities:
Accounts payable & accrued liabilities 315,718 1,530 317,248
Accrued payroll 55,709 276 55,985
Refundable deposits - 5,620 5,620
Note payable - current ( Note 5) - 75,040 75,040
Noncurrent liabilities:
Accrued compensated absences 155,303 - 155,303
Notes Payable - long- term ( Note 5) - 248,260 248,260
Total Liabilities $ 526,730 $ 330,726 $ 857,456
NET ASSETS
Invested in capital assets, net of related debt
25,608,615 3,544,466 29,153,081
Unrestricted
4,289,873 ( 491,628) 3,798,245
Total Net Assets
29,898,488 3,052,838 32,951,326
Total Liabilities and Net Assets $ 30,425,218 $ 3,383,564 $ 33,808,782
The accompanying notes are an integral part of these financial statements.
1
TOWN OF MORAGA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2006
Program Revenues
Net Revenue ( Expense)
and Changes in Net Assets
Functions/ Programs
Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions
Govern- mental
Activities
Business-type
Activities
Total
PRIMARY GOVERNMENT
Governmental activities:
General Administration
$ 1,078,312 $ - $ - $ - $ ( 1,078,312)$ - $ ( 1,078,312)
Planning
400,498 381,002 - - ( 19,496) - ( 19,496)
Public safety
1,974,900 116,496 119,139 - ( 1,739,265) - ( 1,739,265)
Public works
677,217 - 245,382 - ( 431,835) - ( 431,835)
Streets and lighting
977,249 - 167,823 371,246 ( 438,180) - ( 438,180)
Parks and recreation
1,136,680 225,887 - - ( 910,793) - ( 910,793)
Total governmental activities 6,244,856 723,385 532,344 371,246 ( 4,617,881) - ( 4,617,881)
Business- type activities:
Rental property 186,100 108,242 - - - ( 77,858) ( 77,858)
Total business- type
activities 186,100 108,242 - - - ( 77,858) ( 77,858)
Total primary government $ 6,430,956 $ 831,627 $ 532,344 $ 371,246 $ ( 4,617,881) $ ( 77,858) $ ( 4,695,739)
General revenues:
Taxes:
Property taxes $ 2,551,775 $ - $ 2,551,775
Sales taxes 1,092,002 - 1,092,002
Franchise taxes 533,628 - 533,628
Motor vehicle in- lieu 128,595 - 128,595
Gas Tax 277,814 - 277,814
Transfer tax 126,823 - 126,823
Interest 124,348 - 124,348
Other
114,494 - 114,494
Sale of property
2,753 - 2,753
Transfers ( Note 6)
( 504,378) 504,378 -
Transfer to Fiduciary Fund ( Note 6)
23,426 - 23,426
Total general revenues and transfers
4,471,280 504,378 4,975,658
Change in net assets
( 146,601) 426,520 279,919
Net assets - beginning 30,045,089 2,626,318 32,671,407
Net assets - ending $ 29,898,488 $ 3,052,838 $ 32,951,326
The accompanying notes are an integral part of these financial statements.
2
TOWN OF MORAGA
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2006
General
Fund
Transportation
Measure C Fund
Park
Dedication
Fund
Capital
Projects
Fund
Other
Governmental
Funds
Total
Governmental
Funds
ASSETS
Cash and cash equivalents
$ 383,341 $ 436,507 $ 255,121 $ 1,087,465 $ 1,152,324 $ 3,314,758
Accounts receivable
651,350 245,590 - - 23,656 920,596
Interest receivable
7,204 4,505 2,672 9,107 32,312 55,800
Prepaid expenses
39,376 - - - - 39,376
Note receivable
325,000 - - - - 325,000
Due from other funds
160,928 - - - - 160,928
Other deposits
145 - - - - 145
Total Assets $ 1,567,344 $ 686,602 $ 257,793 $ 1,096,572 $ 1,208,292 $ 4,816,603
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable and accrued
expenses $ 179,806 $ 6,011 $ 62,774 $ 20,933 $ 46,194 $ 315,718
Accrued payroll 55,709 - - - - 55,709
Total liabilities 235,515 6,011 62,774 20,933 46,194 371,427
FUND BALANCES
Unrestricted fund balance 1,331,829 680,591 195,019 1,075,639 1,162,098 4,445,176
Total liabilities and fund
balances $ 1,567,344 $ 686,602 $ 257,793 $ 1,096,572 $ 1,208,292
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds,
net of accumulated depreciation of $ 15,362,133.
25,608,615
Long term liabilities are not due and payable in the current period and therefore are not reported in the funds:
Compensated absences ( 155,303)
Net assets of governmental activities $ 29,898,488
The accompanying notes are an integral part of these financial statements.
3
TOWN OF MORAGA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2006
General Fund
Transportation
Measure C
Fund
Park
Dedication
Fund
Capital
Projects
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Revenues
Taxes and assessments
$ 3,853,095 $ 245,590 $ - $ - $ 611,952 $ 4,710,637
Intergovernmental
584,534 - - - 319,056 903,590
Interest
30,880 10,396 9,822 34,748 38,502 124,348
Fines, forfeitures and
penalties
14,053 - - - 60,674 74,727
Charges for services
646,619 - 2,039 - - 648,658
Other revenue
37,469 - 4,700 69,962 2,363 114,494
Total Revenues
5,166,650 255,986 16,561 104,710 1,032,547 6,576,454
Expenditures
Current Operations
General Administration 844,613 8,735 - - - 853,348
Planning 385,916 5,065 - - 12,997 403,978
Public safety 2,025,405 - - - - 2,025,405
Public works 218,414 - - - 376,300 594,714
Streets and lighting - 87,311 - - 305,565 392,876
Parks and recreation 821,112 - 27,627 - 24,000 872,739
Capital Outlay 678,514 97,200 77,553 80,202 540,023 1,473,492
Total expenditures 4,973,974 198,311 105,180 80,202 1,258,885 6,616,552
Revenues over ( under)
expenditures
192,676 57,675 ( 88,619) 24,508 ( 226,338) ( 40,098)
Other financing sources
( uses)
Transfers in 6,082 - - 160,989 - 167,071
Transfers out ( 160,989) - - - ( 6,082) ( 167,071)
Transfers to Enterprise Fund ( 286,378) - - ( 218,000) - ( 504,378)
Transfers from Fiduciary Fund 14,809 - 8,617 - - 23,426
Gain on sale of property 2,753 - - - - 2,753
Total other financing
sources
( 423,723) - 8,617 ( 57,011) ( 6,082) ( 478,199)
Net change in fund balance ( 231,047) 57,675 ( 80,002) ( 32,503) ( 232,420) ( 518,297)
Fund balances, beginning 1,562,876 622,916 275,021 1,108,142 1,394,518 4,963,473
Fund balances, ending $ 1,331,829 $ 680,591 $ 195,019 $ 1,075,639 $ 1,162,098 $ 4,445,176
The accompanying notes are an integral part of these financial statements.
4
TOWN OF MORAGA
RECONCILIATION OF THE
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
TO THE STATEMENT OF ACTIVITIES - GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2006
Reconciliation of the change in fund balances - total governmental funds to the change in net
a s s e t s o f g o v e r n m e n t a l a c t i v i t i e s :
Net change in fund balance - total governmental funds
$ ( 5 1 8 , 2 9 7 )
Governmental funds report capital outlays as expenditures while governmental activities report
depreciation as expense to allocate those expenditures over the life of the assets:
Capital assets purchases capitalized
1,404,119
Depreciation expense
( 1,052,976)
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:
Accrued compensated absences 20,553
Change in net assets of governmental activities $ ( 146,601)
The accompanying notes are an integral part of these financial statements.
5
TOWN OF MORAGA
STATEMENT OF NET ASSETS
PROPRIETARY FUND
JUNE 30, 2006
Business- type
Activities 329
Rheem Office
Building Fund
ASSETS
Current Assets
Interest Receivable
$ 26
Total Current Assets
26
Fixed assets
Land
841,755
Building
2,840,861
Less: Accumulated depreciation ( 138,150)
Total Fixed Assets 3,544,466
Total Assets $ 3,544,492
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities 1,530
Accrued payroll 276
Interfund payable 160,928
Refundable deposits 5,620
Note payable - current 75,040
Total Current Liabilities 243,394
Noncurrent Liabilities
Note payable - Long- term 248,260
Total Liabilities $ 491,654
NET ASSETS:
Invested in capital assets
3,544,466
Unrestricted
( 491,628)
Total net assets
3,052,838
Total liabilities and net assets $ 3,544,492
The accompanying notes are an integral part of these financial statements.
6
TOWN OF MORAGA
STATEMENT OF REVENUE, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2006
Business- type
Activities 329
Rheem Office
Building Fund
OPERATING REVENUES
Building rental
$ 107,848
Interest
56
Other
3 3 8
Total Operating Revenue
1 0 8 , 2 4 2
OPERATING EXPENSES
Salaries 17,215
Benefits 4,226
Utilities 24,893
Maintenance 26,537
Property taxes 8,702
Interest 7,235
Contractual services 10,631
Legal 14,857
Office and communications 370
Auto mileage 241
Depreciation 71,193
Total Operating Expenses 186,100
Operating Income ( Loss) ( 77,858)
TRANSFERS IN 504,378
Change in net assets 426,520
Total Net Assets - Beginning of Year
2 , 6 2 6 , 3 1 8
Total Net Assets - End of Year
$ 3,052,838
The accompanying notes are an integral part of these financial statements.
7
TOWN OF MORAGA
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2006
Business- type
Activities
329 Rheem
Office
Building Fund
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Building rentals
$ 107,848
Cash receipts
338
Cash paid to employees
( 21,717)
Cash paid to vendors
( 9 6 , 0 9 0 )
Net cash used in operating activities ( 9,621)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of capital assets ( 801,978)
Net cash used in investing activities ( 801,978)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Note Payable 408,060
Payments on Note Payable ( 84,131)
Due to other funds 102,398
Transfers in 401,980
Net cash provided by financing activities 828,307
N e t i n c r e a s e i n c a s h a n d c a s h e q u i v a l e n t s 1 6 , 7 0 8
Cash and cash equivalents at beginning of period
( 1 6 , 7 0 8 )
Cash and cash equivalents at end of period $ -
Operating income ( before transfers) $ ( 77,858)
Adjustments to reconcile operating income to net cash used in operating
activities:
Depreciation expense 71,193
Changes in assets and liabilities:
Decrease in interest receivable 21
( Decrease) in refundable deposits ( 925)
( Decrease) in accounts payable ( 1,699)
( Decrease) accrued payroll ( 353)
Net cash used in operating activities $ ( 9,621)
The accompanying notes are an integral part of these financial statements.
8
TOWN OF MORAGA
STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2006
Agency
Funds
AS S E T S
Accounts receivable
$ 122,871
Total Assets
$ 122,871
LIABILITIES
Cash awaiting deposit
$ 14,394
Accounts payable
71,884
Deposits in trust 36,593
Total Liabilities $ 122,871
The accompanying notes are an integral part of these financial statements.
9
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Moraga was incorporated November 1974. The Town operates under a Council- Manager form of government and
provides the following services: Public safety ( police), highways and streets, health and social services, culture- recreation, public
i m p r o v e m e n t s , p l a n n i n g a n d z o n i n g , a n d g e n e r a l a d m i n i s t r a t i v e s e r v i c e s .
A. The Reporting Entity
The financial statements of the Town of Moraga have been prepared in conformity with general accepted accounting principles
( GAAP). The Governmental Accounting Standards Board ( GASB) is responsible for establishing GAAP for state and local
governments through its pronouncements ( Statements and Interpretations). Governments are also required to follow the
pronouncements of the Financial Accounting Standards Board ( FASB) issued through November 30, 1989 ( when applicable)
that do not conflict with or contradict GASB pronouncements. Although the Town has the option to apply FASB pronouncements
issued after that date to its business- type activities and enterprise funds, the Town has chosen not to do so. The accounting
and reporting framework and the more significant accounting policies are discussed in subsequent subsections of this Note.
B. Basis of Presentation
The Town's basic financial statements are prepared in conformity with accounting principles generally accepted in the United
States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing
accounting and financial reporting standards followed by governmental entities in the United States of America.
These statements require that the financial statements described below be presented.
Government- wide Financial Statements:
The statement of net assets and statement of activities display information about the reporting government as a whole. They
include the activities of the overall Town government except for fiduciary activities. Eliminations have been made to minimize
the double counting of internal activities. The statements distinguish between governmental and business- type activities of the
Town. The Town's net assets are reported in three parts - invested in capital assets, net of related debt; restricted net assets;
and unrestricted net assets. The Town first utilizes restricted resources to finance qualifying activities. Governmental activities
generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business- type activities
are financed in whole or in part by fees charged to external parties for goods or services.
The statement of activities presents a comparison between direct expenses and program revenues for each segment of the
business- type activities of the Town and for each function of the Town's governmental activities. Direct expenses are those that
are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program
revenues include ( a) charges paid by the recipients of goods or services offered by the programs, ( b) grants and contributions
that are restricted to meeting the operational needs of a particular program and ( c) fees, grants and contributions that are
restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues,
including all taxes, are presented as general revenues.
Fund Financial Statements:
The fund Financial statements provide information about the Town's funds, including fiduciary funds. Each fund is accounted for
by providing a separate set of self- balancing accounts that constitute assets, liabilities, fund equity, revenues, and
expenditures/ expenses. Funds are organized into five major funds within the governmental and proprietary categories. A fund
is considered major if it is the primary operating fund of the Town or meets the following criteria:
( a) Total assets, liabilities, revenues, or expenditures/ expenses of that individual governmental or proprietary fund are at
least 10 percent of the corresponding total for all funds that category or type; and
( b) Total assets, liabilities, revenues, or expenditures/ expenses of the individual governmental fund or proprietary fund are
at least five percent of the corresponding total for all governmental and proprietary funds combined.
All remaining governmental funds are aggregated and reported as nonmajor funds in a single column, regardless of their fund
type.
10
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
The funds of the financial reporting entity are described below:
Governmental funds
General Fund
The General Fund is the primary operating fund of the Town and is always classified as a major fund. It is used to account for all
activities except those legally or administratively required to be accounted for in other funds.
Special Revenue Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to
expenditures for certain purposes.
Capital Project Fund
The Capital Project Fund is used to account for financial resources used for the acquisition or construction of major capital
projects other than those financed by enterprise funds.
Debt Service Fund
The Debt Service Fund accounts for the accumulation of financial resources for the payment of interest and principal of the
general long- term debt to the Town other than debt service payments made by enterprise funds.
Proprietary funds
Enterprise ( Business Type) Fund
Enterprise funds are used to account for the business- like activities provided to the general public. These activities are financed
primarily by user charges and the measurement of financial activity focuses on net income measurement similar to the private
sector.
Fiduciary funds ( not included in governmental- wide statements)
Agency Fund
Agency Funds are clearing type funds for the collection of taxes or deposits held in trust, on behalf of individuals, private
organizations and other governments. The funds are custodial in nature ( assets equal liabilities) and do not involve
measurement of results of operations.
Major Funds
The City reported the following major governmental funds in the accompanying financial statements:
General Fund - The Town's primary operating fund. It accounts for all financial resources of the general government, except
those required to be accounted for in another fund.
Transportation Measure C Fund - The fund is derived from a half- cent sales tax approved by the voters in 1988 ( Measure C).
Money can be used for transportation purposes and has been utilized by Moraga for transportation planning and street
maintenance.
Park Dedication Fund - The fund is derived from monies received pursuant to Moraga's Municipal Code Chapter 8- 62, which
requires payment of park dedication fees in lieu of actual dedication of parkland.
Capital Projects Fund - The fund used to account for major capital improvement projects under Town Management.
11
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
C. Measurement Focus and Basis of Accounting
Measurement Focus
On the government- wide Statement of Net Assets and the Statement of Activities, both governmental and business- like activities
are presented using the economic resources measurement focus as defined in item b. below.
In the fund financial statements, the " current financial resources" measurement focus or the " economic resources" measurement
focus is used as appropriate:
a. All Governmental Funds are accounted for using a " current financial resources" measurement focus. With this
measurement focus, only current assets and current liabilities generally are included on their balance sheets. Their
operating statements present sources and uses of available spendable financial resources during a given period. These
funds use fund balance as their measure of available spendable financial resources at the end of the period.
b. All Proprietary Funds utilize an " economic resources" measurement focus. The accounting objectives of this measurement
focus are the determination of operating income, changes in net assets ( or cost recovery), financial position, and cash
flows. All assets and all liabilities ( whether current or noncurrent) associated with the operation of these funds are
reported. Proprietary fund equity is classified as net assets.
c. Agency funds are not involved in the measurement of results of operations; therefore, measurement focus is not applicable
to them.
Basis of Accounting
In the government- wide Statement of Net Assets and Statement of Activities, both governmental and business- like activities are
presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned
and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets
and liabilities resulting from exchange and exchange- like transactions are recognized when the exchange takes place.
In the fund financial statements, governmental funds and agency funds are presented on the modified accrual basis of
accounting. Under this modified accrual basis of accounting, revenues are recognized when " measurable and available".
Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current
period or soon enough thereafter to pay current liabilities. The Town defines available to be within 60 days of year- end.
Expenditures ( including capital outlay) are recorded when the related fund liability is incurred, except for general obligation bond
principal and interest which are reported when due. Governmental capital asset acquisitions are reported as expenditures in
governmental funds. Proceeds for governmental long- term debt and acquisitions under capital leases are reported as other
financing sources.
Those revenues susceptible to accrual include taxes, intergovernmental revenues, interest and charges for services.
Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant
agreements, the Town may fund certain programs with a combination of cost- reimbursement grants, categorical block grants,
and general revenues. Thus, both restricted and unrestricted net assets are available to finance program expenditures. The
Town's policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.
Certain indirect costs are included in program expenses reported for individual functions and activities.
The Town follows Statements and Interpretations of the Financial Accounting Standards Board and its predecessors that were
issued on or before November 30, 1989, in accounting for its business- type activities, which do not conflict with Government
Accounting Standards Board Pronouncements.
Non- exchange transactions, in which the Town gives or receives value without directly receiving or giving equal value in
exchange, include property taxes, grants, entitlements, and donations. On the accrual basis, revenue from property taxes is
recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in
the fiscal year in which all eligibility requirements have been satisfied.
12
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
Property tax revenue is recognized in the fiscal year for which the tax and assessment is 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. Secured and unsecured property taxes
are levied on January 1.
Secured property tax is due in two installments, on November 1 and February 1, becomes a lien on those dates and becomes
delinquent on December 10 and April 10, respectively. Unsecured property tax is due on July 1, and becomes delinquent on
August 31.
The term " unsecured" refers to taxes on personal property other than real estate, land and buildings. These taxes are secured
by liens on the property being taxed. Property tax revenues are recognized by the City in the fiscal year they are assessed.
All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized
when earned and expenses are recorded when the liability is incurred or economic asset used.
D. Cash and Cash Equivalents
Cash and investments
The City maintains a cash and investments pool that is available for use by all funds. Each fund type's portion of this pool is
displayed on the combined balance sheet as cash and investments. Investments held at June 30, 2006 with original maturities
greater than one year are stated at fair value. Fair value is estimated based on quoted market prices at year end. All
investments not required to be stated at fair value are stated at cost or amortized cost.
For purposes of the statement of cash flows, the proprietary funds consider all highly liquid investments with a maturity of three
months or less and pooled cash when purchased to be cash equivalents.
E. Accounts and Interest Receivable
In the government- wide statements, receivables consist of all revenues earned at year- end and not yet received. Receivables
are recorded in the financial statements net of any allowance for doubtful accounts. Any doubtful accounts at June 30, 2006,
were not considered material. Major receivable balances for the governmental activities include sales and use taxes, franchise
taxes, grants, police fines and other fees. Business- type activities report utilities and interest earnings as their major
receivables.
In the fund financial statements, material receivables in governmental funds include revenue accruals such as sales tax,
franchise tax, and grants and other similar intergovernmental revenues since they are usually both measurable and available.
Nonexchange transactions collectible but not available are deferred in the fund financial statements in accordance with modified
accrual, but not deferred in the government- wide financial statements in accordance with the accrual basis. Interest and
investment earnings are recorded when earned only if paid within 60 days since they would be considered both measurable and
available. Proprietary fund material receivables consist of all revenues earned at year- end and not yet received. Utility accounts
receivable and interest earnings compose the majority of proprietary fund receivables. Any doubtful accounts at June 30, 2006,
were not considered material.
F. Prepaid Expenses and Supplies
Supplies are valued at cost. Supplies of the General Fund consist of expendable supplies held for consumption. The cost is
recorded as an expenditure in the General Fund at the time individual items are consumed. Reported General Fund prepaid
supplies are equally offset by a fund balance reserve which indicates that they do not constitute available spendable resources
even through they are a component of net current assets. Enterprise Fund supplies consist primarily of items held for internal
use.
13
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
G. Fixed Assets
The accounting treatment over property, plant and equipment depends on whether the assets are used in governmental fund
operations or proprietary fund operations and whether they are reported in the government- wide or fund financial statements.
In the government- wide financial statement, fixed assets with an historical cost over $ 1,000 are accounted for as capital assets.
All fixed assets are valued at historical cost, or estimated historical cost if actual is unavailable, except for donated fixed assets
which are recorded at their estimated fair value at the date of donation. Estimated historical cost was used to value the majority
of the assets.
With the implementation of GASB Statement 34, the City has recorded all its public domain ( infrastructure) capital assets, which
include streets, bridges, roads, storm drains, and parks.
Depreciation of all exhaustible fixed assets is recorded as an allocated expense in the Statement of Activities, with accumulated
depreciation reflected in the Statement of Net Assets. Depreciation is provided over the assets' estimated useful lives using the
straight- line method of depreciation. The range of estimated useful lives by type of asset is as follows:
Buildings, Grounds, Improvements 40 - 50 years
Equipment 5 years
Infrastructure 7- 100 years
Fund Financial Statements
In the fund financial statements, fixed assets used in governmental fund operations are accounted for as capital outlay
expenditures of the governmental fund upon acquisition. Fixed assets used in proprietary fund operations are accounted for the
same as in the government- wide statements.
H. Accumulated Compensated Absences
Compensated absences are comprised of unused vacation leave and compensatory time off, which are accrued as earned. No
compensation is payable for sick leave. The Town's liability for compensated absences is determined annually. The portion
expected to be permanently liquidated is recorded in the governmental funds and are recorded as fund liabilities. The long- term
portion is recorded in the statement of net assets.
I. Interfund Transactions
Following is a description of the four basic types of interfund transactions made during the year and the related accounting
policies:
1. Quasi- external charges for current services - transactions for services rendered or facilities provided. These transactions
are recorded as revenues in the receiving fund and expenditures in the disbursing fund.
2. Reimbursements ( expenditure transfers) - transactions to reimburse a fund for specific expenditures incurred for the
benefit of another fund. These transactions are recorded as expenditures in the disbursing fund and a reduction of
expenditures in the receiving fund.
3. Residual equity transfers - transactions recording equity contributions and distributions between funds. The receiving fund
records such transactions as an addition to fund balance, if it is a Governmental Fund, or a capital contribution, if it is a
Proprietary Fund. The disbursing fund records the transfer as a reduction of fund balance, retained earnings, or
contributed capital.
4. Operating Transfers - all other interfund transactions which allocate resources from one fund to another fund. These
transactions are recorded as operating transfers in and out.
14
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
J. Equity Classifications
Government- wide Statements
Net Assets are the excess of all the Town's assets over all its liabilities, regardless of fund. Net Assets are divided into three
categories under GASB Statement 34. These categories apply only to Net Assets, which is determined at the Government- wide
level, and are described below:
a. Invested in capital assets, net of related debt - Consists of capital assets including restricted capital assets, net of
accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings
that are attributable to the acquisition, construction, or improvement of those assets.
b. Restricted net assets - Consists of net assets with constraints placed on the use either by ( 1) external groups such as
creditors, grantors, contributors, or laws or regulations of other governments; or ( 2) law through constitutional provisions
or enabling legislation.
c. Unrestricted net assets - All other net assets that do not meet the definition of " restricted" or " invested in capital assets,
net of related debt".
Fund Statements
Governmental fund equity is classified as fund balance. Fund balance is further classified as reserved and unreserved, with
unreserved further split between designated and undesignated. Proprietary fund equity is classified the same as in the
government- wide statements.
Reserve for encumbrances represents the portion of fund balance set aside for open purchase orders.
Reserves for supplies, advances, land held for redevelopment, and notes and loans receivable are the portions of fund balances
set aside to indicate these items do not represent available, spendable resources even though they are an asset of the Fund.
Reserve for debt service is the portion of fund balance legally restricted for the payment of principal and interest on long- term
liabilities.
K. Grant Funding
Under the terms of grant agreements, the Town 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. The Town's policy is to first apply cost- reimbursement grant resources
to such programs, followed by general revenues.
L. Operating Revenues
Operating revenues for proprietary funds are those that result from providing services and producing and delivering goods and/ or
services. It also includes all revenue not related to capital and related financing, noncapital financing or investing activities.
NOTE 2: EXCESS OF EXPENDITURES OVER APPROPRIATIONS
During fiscal year 2006, there were no funds that had an excess of expenditures over appropriations.
15
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 3: CASH AND INVESTMENTS
Cash and investments are carried at fair value and are categorized as follows at June 30, 2006:
Cash and Cash Equivalents:
California Local Agency Investment Fund ( Pooled)
$ 3,098,932
Cash in Banks
215,426
Petty Cash
400
Total cash and cash equivalents
$ 3 , 3 1 4 , 7 5 8
Reconciliation of cash and equivalents to financial statements:
Cash and Cash
Equivalents
General Fund
$ 383,341
Other Major Funds 691,628
Capital Project Funds 1,087,465
Other Governmental Funds 1,152,324
Total $ 3,314,758
Cash Deposits
At June 30, 2006, the carrying amount of the Town’s deposits was $ 215,426. and bank balances before reconciling items were
$ 574,000 ( before deducting outstanding checks). The total amount of which was collateralized or insured with securities held by
the pledging financial institutions in the Town’s name as discussed in the following.
The California Government Code requires California banks, savings and loan associations to secure the Town’s cash deposits
by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of the 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 Town’s name.
According to California law, the market value of pledged securities with banking institutions must equal at least 110% of the
Town’s cash deposits. California law also allows institutions to secure Town deposits by pledging first deed mortgage notes
having a value of 150% of the Town’s total cash deposits. The Town may waive collateral requirements for cash deposits, which
are fully insured up to $ 100,000 by the FDIC. The Town, however, has not waived the collateralization requirements.
The Town follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents
under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated on a quarterly
basis to the various funds based on average daily cash and investments balances. Interest income from cash and investments
with fiscal agents is credited directly to the related fund.
The Town maintains a cash deposit and investment pool that is available for use by all funds. It is not used for the retirement
plan or the deferred compensation plan.
Town Authorized Investments
Under provisions of the Town’s current investment policy, and in accordance with the California Government Code ( Title 5,
Division 2, Part I, Chapter 4, Article I), the Town may invest its deposits in the following types of investments:
• The State of California Local Agency Investment Fund (“ LAIF”)
• Money market funds investing solely in instruments of the United States
• Government ( Government Money Funds)
• United States Treasury bill, notes and bonds
• U. S. Government insured bank deposits within the $ 100,000 limit per institution.
Investments shall be made with a maximum maturity limit of a two- year term. The Town’s criteria for selecting investments are:
• Safety – To insure that no loss of Town funds occurs.
• Yield – To obtain the maximum investment return possible, with the constraints of investment vehicles limited
to total safety of funds.
• Minimize idle funds – To maximize the percent of total funds invested and minimize idle funds held in non-interest
bearing accounts.
16
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 3 : CASH AND INVESTMENTS ( CONTINUED)
• Liquidity – To provide adequate cash flow liquidity to meet expenditure needs of Town programs and projects.
The Town follows the practice of pooling cash and investments of all funds. Interest income from pooled cash and investments
is allocated to the General Fund except where required by law, in which case interest is allocated to other funds based upon the
fund's proportionate ratio of balances to total pooled cash. Investment income shall not be credited to individual reserve
accounts, except where required by law.
The Town’s investments with Local Agency Investment Fund ( LAIF) at June 30, 2006, included a portion of the pooled funds
invested as Structured Notes and Asset – Backed Securities. These investments include the following:
Structured Notes are debt securities ( other than asset- backed securities) whose cash flow characteristics ( coupon rate,
redemption amount, or stated maturity) depends upon one or more indices and/ or that have embedded forwards or
options.
Assets- Backed Securities, the bulk of which are mortgage- backed securities, entitle their purchasers to receive a share of
the cash flows from the pool of assets such as principal and interest repayments from a pool of mortgages ( such as
Collateralized Mortgage Obligations) or credit card receivables.
Because the Town's investments are in securities of the U. S. Government or its agencies, the disclosures for interest rate risk,
credit risk and foreign currency risk are not applicable.
The Town does not enter into reverse repurchase agreements.
Investment income was $ 124,404 for the year ended June 30, 2006. There is no material unrealized gain/ loss on the fair
market value of Town investments for the year- ended June 30, 2006 as would be required by GASB Statement No. 31,
Accounting and Financial Reporting for Investments.
17
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4: CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2006, was as follows:
Governmental activities:
Balance
July 1, 2005
Additions
Dispositions
Balance
June 30, 2006
Capital assets
Land and easements
$ 9,101,664 $ 60,532 $ - $ 9,162,196
Buildings & improvements
1,141,636 13,400 - 1,155,036
Infrastructure:
Roadway & related
24,170,585 560,470 - 24,731,055
Storm drains
2,950,993 9,767 - 2,960,760
Parks & recreation
1,471,464 433,225 - 1,904,689
Equipment & furniture
652,719 186,652 - 839,371
Construction in progress
77,568 202,075 ( 62,003) 217,640
Winter Storms - - - -
Total governmental funds assets 39,566,629 1,466,121 ( 62,003) 40,970,747
Accumulated Depreciation
Buildings & improvements 522,053 23,101 - 545,154
Infrastructure:
Roadway & related 11,025,062 740,464 - 11,765,526
Storm drains 1,799,808 45,349 - 1,845,157
Parks & recreation 511,343 76,188 - 587,531
Equipment & furniture 450,891 167,874 - 618,765
Total accumulated depreciation 14,309,157 1,052,976 - 15,362,133
Governmental activities capital assets, net $ 25,257,472 $ 413,145 $ - $ 25,608,614
Business- type activities:
Balance
July 1, 2005 Additions Dispositions
Balance
June 30, 2006
Capital assets
Land and easements - 329 Rheem $ 841,755 $ - $ - $ 841,755
Buildings & improvements - 329 Rheem 1,890,560 950,302 - 2,840,862
Construction in Progress 148,322 - ( 148,322) -
Total Business Type Funds Assets
2,880,637 9 5 0 , 3 0 2 ( 1 4 8 , 3 2 2 ) 3,682,617
Accumulated Depreciation
Building and Improvements - 329 Rheem 66,957 71,194 - 138,151
Total Accumulated Depreciation 66,957 71,194 - 138,151
Business- type capital assets, net $ 2,813,680 $ 879,108 $ ( 148,322) $ 3,544,466
Depreciation was charged to functions based on their usage of the related assets as follows:
Governmental Activities:
General Administration $ 19,553
Planning 4,466
Public safety 97,825
Public Works 101,793
Streets and lighting 452,886
Parks and recreation 376,453
Total governmental activities depreciation expense $ 1,052,976
Business- type Activities:
329 Rheem facility $ 71,194
Total business- type activities depreciation expense $ 71,194
18
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 5: LONG- TERM DEBT
Governmental Activities
The following is a summary of long- term debt transactions related to governmental activities of the Town of the year ended June
3 0 , 2 0 0 6 :
Balance
July 1, 2005
Additions
Retirements
Balance
June 30, 2006
Compensated Absences
$ 175,856 $ - $ 20,553 $ 155,303
Governmental activities long- term liabilities
$ 1 7 5 , 8 5 6 $ - $ 2 0 , 5 5 3 $ 1 5 5 , 303
The liability for compensated absences is the accrued liability for earned but unused vacation with will be paid to employees
upon separation for the Town's service.
Business- type activities
The Town signed a promissory note for $ 408,060 in connection with the 329 Rheem Boulevard renovation project in December
2005. Principal and interest on the note at 4.910% are due semi- annually for five years in June and December. The following is
a summary of long- term debt transactions related to business- type activities of the Town for the year ended June 30, 2006.
Balance
July 1, 2005 Additions Reductions
Balance
June 30, 2006
Current
Portion
Note payable $ - $ 408,060 $ ( 84,760) $ 323,300 $ 75,040
Business- type activities
long - term liabilities $ - $ 408,060 $ ( 84,760) $ 323,300 $ 75,040
Future annual payments on the note payable are as follows:
For the Year Ending,
June 30 Principal Interest
2007
$ 75,040
$ 14,953
2008
78,770
11,223
2009
82,690
7,307
2010 86,800 3,196
Total $ 323,300 $ 36,679
19
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 6: INTERFUND TRANSACTIONS
Interfund transfers for the year- ended June 30, 2006 were as follows:
Transfer from the Gas Tax Fund to the General Fund for expenses related to the
corliss sidewalk grant.
$ 6,082
Transfer from the General Fund to repay the Asset Replacement Fund.
160,989
Total Governmental Interfund Transfers
$ 167,071
Transfer from the Capital Projects Fund to to the Proprietary Fund for the purchase
of fixed asset additions.
$ 218,000
Transfer from the General Fund to the Proprietary Fund for the purchase of fixed
asset additions.
183,980
Transfer from the General Fund to the Proprietary Fund to cover negative cash
balance 102,398
Total Proprietary Interfund Transfers $ 504,378
Transfer from the Fiduciary Fund to the General Fund for support related to
Sanders Ranch, Camino Mga Easement and Junior Women's Club Egghunt. $ 14,809
Transfer from the Fiduciary Fund to the Park Dedication Fund for the Skatepark. 8,617
Total Fiduciary Interfund Transfers $ 23,426
NOTE 7: RELATED PARTY RECEIVABLE
The Town provided a loan to the City Manager for the purchase of property. The loan is secured by the deed of trust on the
property. The loan is a variable interest rate loan with principal and the remaining portion of interest due at maturity. The note
receivable is $ 325,000 at June 30, 2006.
N O T E 8 - L A M O R I N D A F E E A N D F I N A N C I N G A U T H O R I T Y
The Town of Moraga entered into a Joint Powers Agreement with the Cities of Lafayette and Orinda, to administer an adopted
sub- regional transportation and traffic impact fee for the Lamorinda region under the authority of the Contra Costa County half
cent sales tax measure adopted in 1988. The fees collected under the Authority from new construction is used to mitigate
increased traffic in the region.
Condensed audited financial statements of the Lamorinda Fee and Financing Authority at June 30, 2006 are as follows.
Complete financial statements of the JPA are available at the Town of Moraga office.
Total Assets $ 379,222
Total Liabilities $ -
Total revenue $ 60,920
Total expenditures $ 1,595
Change in Net Assets $ 59,325
Total Net Assets $ 379,222
20
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 9: RETIREMENT PLANS
Public Employee Retirement System ( PERS) - A defined benefit plan
The Town contributes to the California Public Employee’s Retirement System (“ CalPERS”), and agent multiple- employer public
employee retirement system that acts as a common investment and administrative agent for participating public entities within
the State of California. The Town's employees participate in the separate Safety ( police) and Miscellaneous ( all other) Employee
Plans. This is the first year that the Town participated in the separate Safety Employee Plan. Therefore an actuarial valuation
will not be performed until June 30, 2007. Annual pension cost and funded status of the Safety Plan are unavailable until the
2007 valuation. Eligible employees who retire at or after age 55, with a minimum of five years of credited service, are entitled to
a monthly retirement benefit based upon compensation, years of credited service and retirement age. CalPERS also provides
limited death, disability and survivor benefits. Benefit provisions and all other requirements are established by State statute and
Town ordinances. Copies of CalPERS annual financial report may be obtained from their office at 400 P Street, Sacramento,
CA 95814.
Funding Policy –
Participating employees are required to contribute seven percent of their salary to CalPERS. The Town historically has paid 4%
of the 7% employee required portion per resolution 14 – 98. Effective January 19, 2001, the Town adopted a resolution to pay
5% of the 7% of the employee required contribution. In the addition, the Town’s contract with CalPERS was amended to provide
membership for part- time employees, which has been part of the Social Security System.
The Plans' provisions and benefits in effect for the year ended June 30, 2006, are summarized as follows:
Safety Plan Miscellaneous Plan
Benefit vesting schedule 5 years of service 5 years of service
Benefit payments Monthly for life Monthly for life
Retirement age 55 55
Required employer contribution rates 21.893% 7.646%
Actuarially required contributions $ 180,479 $ 144,437
Annual Pension Cost –
The required contributions were determined as part of the June 30, 2005 actuarial valuation using the entry age actuarial cost
method. The actuarial assumptions included: ( a) 7.75% investment rate of return ( net of administrative expenses); ( b) projected
annual salary increases of 3.25% to 14.45% that vary by age, duration of service, and the type of employment; and ( c) a merit
scale varying by duration of employment coupled with an assumed annual inflation component of 3.00% and an annual
production growth of .25%. The actuarial value of CalPERS assets was determined using techniques that smooth the effects of
short- term volatility in the market value of investments over a 15 year period ( smooth market value). If CalPERS unfunded
actuarial accrued liability exceeds that actuarial value of the plan assets, then the amortization payment of the total unfunded
liability may not be lower than the payment calculated over a 30 year amortization period.
Miscellaneous Plan:
Plan’s Risk Pool History of Funded Status and Funding Progress
Valuation Date
Accrued
Liabilities Actuarial Assets
Unfunded
Liabilities ( UL) Funded Ratio
Annual Covered
Payroll
UL As a % of
Payroll
June 30, 2003 2,596,966,545 2,372,879,034 224,087,511 91.4% 725,020,458 30.9%
June 30, 2004 2,746,095,668 2,460,944,656 285,151,012 89.6% 743,691,970 38.3%
June 30, 2005 2,891,460,651 2,588,713,000 302,747,651 89.5% 755,046,679 40.1%
Most recent data available.
21
TOWN OF MORAGA
NOTES TO THE FINANCIAL STATEMENTS
NOTE 10: RISK MANAGEMENT
Insurance coverage
The Town purchases its insurance through Municipal Pooling Authority ( MPA), formerly Contra Coast Municipal Risk
M a n a g e m e n t I n s u r a n c e A u t h o r i t y ( “ C C M R M I A ” )
The following is a summary of coverage:
Participating Cities' Total
Coverage
Deductible ( Town
Portion)
All risk fire and property
$ 1,000,000,000
$ 5,000
Boiler and machinery
$ 90,000,000
$ 5,000
Liability
$ 19,000,000
$ 10,000
Auto- physical damage
$ 250,000
$ 2,000
Worker's compensation $ 145,000,000 $ 0
The total coverage includes the Town’s deductible, the portion underwritten by MPA and the portion underwritten by other
insurance companies.
Management believed such coverage is sufficient to preclude any significant uninsured losses to the Town. Settled claims have
not exceeded this insurance coverage in any of the past three fiscal years.
NOTE 11: CONTINGENT LIABILITIES AND COMMITMENTS
The Town has received federal and state grants for specific purposes that are subject to review and audit by the federal and
state government. Although such audits could result in expenditure disallowances under grant terms, any required
reimbursements are not expected to be material.
22
TOWN OF MORAGA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2006
Original
Budget
Amended
Budget
Actual
Amounts
Variance with
Final Budget
Positive
( Negative)
Revenues
Property taxes and assessments
$ 2,202,559 $ 2,343,306 $ 2,413,542 $ 70,236
Sales tax
929,433 854,805 846,412 ( 8,393)
Franchise fees
321,000 294,000 337,722 43,722
Real property transfer fees
130,000 128,500 126,823 ( 1,677)
Motor vehicle in- lieu
100,400 158,096 115,421 ( 42,675)
Planning and permits 297,500 356,873 439,403 82,530
Recreation fees 40,000 40,000 ( 125) ( 40,125)
Homeowners' property tax relief 16,800 - 16,822 16,822
Interest 18,548 20,981 30,880 9,899
Property rentals 163,555 161,955 166,161 4,206
Police services 22,600 26,020 38,944 12,924
July 4th Donations 17,000 17,000 16,126 ( 874)
C. O. P. S. AB 3229 100,000 100,000 100,000 -
State and Federal Grants 394,924 1,429,432 498,330 ( 931,102)
Other 14,160 18,160 20,189 2,029
Total revenues 4,768,479 5,949,128 5,166,650 ( 782,478)
Expenditures
General government 740,144 733,767 850,276 116,509
Planning 386,509 376,085 385,915 9,830
Public safety 1,869,565 1,986,008 2,025,405 39,397
Public works 186,752 270,813 218,417 ( 52,396)
Parks and recreation 832,728 772,135 744,818 ( 27,317)
Capital Grant Projects 728,019 1,539,755 673,696 ( 866,059)
Other 291,204 236,704 75,447 ( 161,540)
T o t a l e x p e n d i t u r e s 5 , 0 3 4 , 9 2 1 5 , 9 1 5 , 2 6 7 4 , 9 7 3 , 9 7 4 ( 9 4 1 , 5 7 6 )
Revenues over ( under) expenditures
( 2 6 6 , 4 4 2 ) 3 3 , 8 6 1 1 9 2 , 6 7 6 1 5 9 , 0 9 8
Other financial sources ( uses)
Operating transfers out - - ( 447,367) ( 447,367)
Operating transfers in - - 20,891 20,891
Gain on sale of asset - - 2,753 2,753
Total other financial sources ( uses) - - ( 423,723) ( 423,723)
Revenues over ( under) expenditures,
net of of other financial sources ( uses) ( 266,442) 33,861 ( 231,047) ( 264,625)
Fund balance, beginning of year 1,562,876 1,562,876 1,562,876 1,562,876
Fund balance, end of year $ 1,296,434 $ 1,596,737 $ 1,331,829 $ 1,298,251
23
TOWN OF MORAGA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
TRANSPORTATION MEASURE C FUND
FOR THE YEAR ENDED JUNE 30, 2006
Original
Budget
Amended
Budget Actual Variance
Revenues
Sales Tax - Measure C
$ 424,500 $ 245,590 $ 245,590 $ -
Interest - Measure C
6,000 6,000 10,396 4,396
Total revenues
4 3 0 , 5 0 0 2 5 1 , 5 9 0 2 5 5 , 9 8 6 4 , 3 9 6
Expenditures
Contract Services - SWAT
8,800 8,800 8,735 ( 65)
Contract Services
- 5,065 5,065 -
Street Improvements - Measure C
97,200 332,200 97,200 ( 235,000)
Traffic Studies - Reauthorize - - 41,912 41,912
Traffic Studies - RTS 211,000 50,000 45,399 ( 4,601)
Total expenditures 317,000 396,065 198,311 ( 197,754)
Revenues over ( under) expenditures 113,500 ( 144,475) 57,675 202,150
Fund balance, beginning of year 622,916 622,916 622,916 622,916
Fund balance, end of year $ 736,416 $ 478,441 $ 680,591 $ 825,066
24
TOWN OF MORAGA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
PARK DEDICATION FUND
FOR THE YEAR ENDED JUNE 30, 2006
Original
Budget
Amended
Budget Actual Variance
Revenues
Park Dedication Fees
$ 2,039 $ 2,039 $ 2,039 $ -
Interest - Park Dedication
9,000 9,000 9,822 822
Commons Patio Bricks
4,000 4,000 4,700 700
Total revenues
1 5 , 0 3 9 1 5 , 0 3 9 1 6 , 5 6 1 1 , 5 2 2
Expenditures
Capital Outlay - Other
27,400 27,400 16,610 ( 10,790)
Commons Patio
594 400 411 11
Hacienda Side Entrance 84,000 121,000 60,532 ( 60,468)
Parks & Recreation Master Plan 60,000 60,000 27,627 ( 32,373)
Commons Bridge project - 14,466 - ( 14,466)
Total expenditures 171,994 223,266 105,180 ( 118,086)
Revenues over ( under) expenditures ( 156,955) ( 208,227) ( 88,619) 119,608
Other financial sources ( uses)
Operating transfers in - - 8,617 8,617
Revenues over ( under) expenditures,
net of of other financial sources ( uses) ( 156,955) ( 208,227) ( 80,002) 128,225
Fund balance, beginning of year 275,021 275,021 275,021 275,021
Fund balance, end of year $ 118,066 $ 66,794 $ 195,019 $ 403,246
25
TOWN OF MORAGA
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2006
Street
Improve-ment
Gasoline
Tax
Lighting
District
Traffic
Mitigation
Traffic
Safety
Special
Gifts
National
Pollution
Discharge
Elimination
System
District
Skatepark
Maintenance
Traffic
Congestion Total
ASSETS
Cash and equivalents
$ 303,542 $ 212,248 $ 145,013 $ 15,552 $ 34,153 $ 1,487 $ 363,521 $ 23,712 $ 53,096 $ 1,152,324
Accounts receivable
16,915 - - - 6,741 - - - - 23,656
Interest receivable
2,975 1,950 1,479 186 364 - 3,557 231 21,570 32,312
Total assets
$ 3 2 3 , 4 3 2 $ 2 1 4 , 1 9 8 $ 1 4 6 , 4 9 2 $ 1 5 , 7 3 8 $ 4 1 , 2 5 8 $ 1 , 4 8 7 $ 3 6 7 , 0 7 8 $ 2 3 , 9 4 3 $ 7 4 , 6 6 6 $ 1 , 2 0 8 , 2 9 2
LIABILITIES AND FUND
BALANCES
Liabilities:
Accounts payable 11,450 13,040 5,257 4,784 - - 11,663 - - 46,194
Total liabilities 11,450 13,040 5,257 4,784 - - 11,663 - - 46,194
Fund balances 311,982 201,158 141,235 10,954 41,258 1,487 355,415 23,943 74,666 1,162,098
Total Liabilities
and Fund Balances $ 323,432 $ 214,198 $ 146,492 $ 15,738 $ 41,258 $ 1,487 $ 367,078 $ 23,943 $ 74,666 $ 1,208,292
26
TOWN OF MORAGA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2006
Street
Improve-ment
Gasoline
Tax
Lighting
District
Traffic
Mitigation
Traffic
Safety
Special
Gifts
National
Pollution
Discharge
Elimination
System
District
Skatepark
Maintenance
Traffic
Congestion Total
REVENUES
Taxes and assessment
$ 195,905 $ 277,814 $ 138,233 $ - $ - $ - $ - $ -
$ - $ 611,952
Intergovernmental
- - - - - - 245,382 -
73,674 319,056
Interest
10,298 7,271 4,668 764 1,020 - 13,489 -
992 38,502
Fines, forfeitures and penalties
- - - 2,898 57,776 - - -
- 60,674
Other revenue
- - - - - 1,487 - 876
- 2,363
Total revenues
206,203 285,085 142,901 3,662 58,796 1,487 258,871 876
74,666 1,032,547
EXPENDITURES
Current operations:
General administration - - - - - - - - - -
Planning - - - 12,997 - - - - - 12,997
Public safety - - - - - - - - - -
Public works - 32,579 - - - - 343,721 - - 376,300
Streets and lighting 54,915 107,286 143,364 - - - - - - 305,565
Parks and recreation - 21,466 - - - - - 2,534 - 24,000
Capital outlay 98,515 372,409 4,819 - 45,627 - 18,653 - - 540,023
Total expenditures 153,430 533,740 148,183 12,997 45,627 - 362,374 2,534 - 1,258,885
Revenues over ( under) expenditures 52,773 ( 248,655) ( 5,282) ( 9,335) 13,169 1,487 ( 103,503) ( 1,658) 74,666 ( 226,338)
Other financing sources ( uses)
Operating transfers out - ( 6,082) - - - - - - - ( 6,082)
Operating transfers in - - - - - - - - - -
- ( 6,082) - - - - - - - ( 6,082)
Net change in fund balance
52,773 ( 254,737) ( 5,282) ( 9,335) 13,169 1,487 ( 103,503) ( 1,658)
74,666 ( 232,420)
Fund balances - beginning
259,209 455,895 146,517 20,289 28,089 - 458,918 25,601
- 1,394,518
Fund balances - ending
$ 311,982 $ 201,158 $ 141,235 $ 10,954 $ 41,258 $ 1,487 $ 355,415 $ 23,943
$ 74,666 $ 1,162,098
27
OTHER SUPPLEMENTARY INFORMATION
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TOWN OF MORAGA
COMBINING BALANCE SHEET
CAPITAL PROJECTS FUNDS
AS OF JUNE 30, 2006
Community
Facilities/ Open
Space Fund
Asset Replacement
Fund Total
Assets
Cash and equivalents
$ - $ 1,087,465 $ 1,087,465
Interest receivable
233 8,874 9,107
Internal balances
- - -
Total assets
$ 2 3 3 $ 1 , 0 9 6 , 3 3 9 $ 1 , 0 9 6 , 5 7 2
Liabilities and fund balances
Accounts payable
- 20,933 20,933
Internal balances
2,126 ( 2,126) -
Fund balances ( 1,893) 1,077,532 1,075,639
Total liabilities and fund balances $ 233 $ 1,096,339 $ 1,096,572
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TOWN OF MORAGA
COMBINING STATEMENT OF REVENUES, EXPENDITURE, AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUNDS
AS OF JUNE 30, 2006
Community
Facilities/ Open
Space Fund
Asset Replacement
Fund Total
Revenues
Interest income
$ 2,433 $ 32,315 $ 34,748
Other revenue
- 69,962 69,962
Total revenues
2 , 4 3 3 1 0 2 , 2 7 7 1 0 4 , 7 1 0
Expenditures
Capital equipment
- 80,202 80,202
Total expenditures
- 8 0 , 2 0 2 8 0 , 2 0 2
Revenues over ( under) expenditures 2,433 22,075 24,508
Other financial sources
Transfers in - 160,989 160,989
Total other financial sources - 160,989 160,989
Revenues over expenditures, net of other financial
sources ( 215,567) 183,064 ( 32,503)
Fund balance, beginning of year 213,673 894,468 1,108,141
Fund balance, end of year $ ( 1,893) $ 1,077,532 $ 1,075,639
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ROSEVILLE OFFICE SACRAMENTO OFFICE
2901 Douglas Boulevard, Suite 290 2515 Venture Oaks Way, Suite 135
Roseville, CA 95661 Sacramento, CA 95833
TEL 916 774- 4208 TEL 916 929- 0540
FAX 916 774- 4230 FAX 916 929- 0541
PRINCIPALS
Chris A. Mann, CPA , CFP ♦ John R. Urrutia, CPA ♦ Michelle O. Nelson, CPA, CFE, CVA ♦ Christine L. Collins, EA ♦ Kriss Ann Mann, CPA, CCPS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER
MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
" GOVERNMENT AUDITING STANDARDS"
To the Town Council
Town of Moraga, California
We have audited the accompanying financial statements of the governmental activities and the business- type
activities, each major fund, and the aggregate remaining fund information of the Town of Moraga's, as of and for the
year ended June 30, 2006, which collectively comprise the Town of Moraga basic financial statements and have
issued our report thereon dated December 11, 2006. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial audits
contained in " Government Auditing Standards", issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Town of Moraga's internal control over financial reporting in
order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements
and not to provide an opinion on the internal control over financial reporting. Our consideration of the internal control
over financial reporting would not necessarily disclose all matters in the internal control that might be material
weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low level the risk that misstatements caused by error or
fraud in amounts that would be material in relation to the financial statements being audited may occur and not be
detected within a timely period by employees in the normal course of performing their assigned functions. We noted
no matters involving the internal control over financial reporting and its operation that we consider to be material
weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town of Moraga's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts,
and grant agreements, noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance or other matters that are required to be reported under " Government Auditing
Standards".
This report is intended solely for the information and use of the Town Council and management, and is not intended
to be and should not be used by anyone other than these specified parties.
Sacramento, CA
December 11, 2006