Comprehensive Annual
Financial Report
year ending
June 30, 2001
Cover Photograph
Mathew Sumner of the San Mateo County Times took the photograph of the
Redwood City arch with the American flag that is shown on the cover of this
publication. The photograph was featured in the San Mateo County Times on
September 27, 2001.
City of Redwood City
Redwood City, California
Fiscal Year Ended June 30, 2001
Prepared by
City of Redwood City Finance Department
Brian J. Ponty
Director of Finance and Financial Planning
Alison Freeman
Financial Services Manager
Irvin Weinstock - Kyi Khin - Gloria del Rosario
Senior Accountants
Sandy Jennings
Administrative Assistant
Auditors
Maze & Associates
Certified Public Accountants
1931 San Miguel Drive, Suite 200
Walnut Creek, CA 94596
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
CITY OF REDWOOD CITY - REDWOOD CITY, CALIFORNIA
PRINCIPAL OFFICIALS
June 30, 2001
CITY COUNCIL
Ira Ruskin, Mayor............................................................................................ November 2003
Richard Claire, Vice Mayor.............................................................................. November 2003
Jim Hartnett ..................................................................................................... November 2001
Diane Howard ................................................................................................. November 2001
Jeff Ira............................................................................................................. November 2001
Colleen Jordan................................................................................................. November 2003
Barbara Pierce................................................................................................. November 2003
CITY MANAGER
Edward P. Everett
DEPARTMENT DIRECTORS
City Clerk........................................................................................................ Patricia Howe
Community Development Services.................................................................... Bruce Liedstrand
Finance and Financial Planning.......................................................................... Brian Ponty
Fire Chief......................................................................................................... Edward Montez
Human Resources ............................................................................................ Maria Rivera- Peña
Library............................................................................................................. Yvonne Chen
Parks, Recreation and Community Services...................................................... Corinne Centeno
Police Chief..................................................................................................... Carlos Bolanos
Public Works Services..................................................................................... Peter Ingram
CITY ATTORNEY
David E. Schricker
City of Redwood City
P. O. Box 391
Redwood City, California 94064
Telephone: ( 650) 780- 7070
Fax: ( 650) 366- 2447
E- Mail: mail@ redwoodcity. org
City of Redwood City, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2001
TABLE OF CONTENTS
_______________________________________________________________________________
I. INTRODUCTORY SECTION Exhibit Page
Title Page
Names of Principal Officials
Table of Contents
Organization Charts......................................................................................................................... ........ i
GFOA Certificate of Achievement for Excellence in Financial Reporting.................................................... iii
CSMFO Certificate of Outstanding Financial Reporting ............................................................................ iv
Finance Director's Letter of Transmittal..................................................................................................... v
Picture for the Future......................................................................................................................... ...... xix
II. FINANCIAL SECTION
A. Report of Independent Accountants.............................................................................................. 1
B. General Purpose Financial Statements:
Explanatory Comments .................................................................................................... 3
Combined Balance Sheet - All Fund Types and Account Groups.............. 1..................... 4
Combined Statement of Revenues, Expenditures, and Changes
in Fund Balances - All Governmental Fund Types..................................... 2..................... 7
Combined Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget ( GAAP Basis ) and Actual -
General, Special Revenue, Debt Service and Capital Projects Funds
for Which Budgets Were Adopted ........................................................... 3..................... 8
Combined Statement of Revenues, Expenses, and Changes in
Retained Earnings - All Proprietary Fund Types........................................ 4..................... 10
Combined Statement of Cash Flows - Increase ( Decrease) in
Cash and Cash Equivalents - All Proprietary Fund Types.......................... 5..................... 11
Notes to Financial Statements........................................................................................... 13
City of Redwood City, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2001
TABLE OF CONTENTS
_______________________________________________________________________________
Statement/
Schedule Page
C. Combining and Individual Fund and Account Group Statements and Schedules:
General Fund:
Comparative Balance Sheet............................................................................................ A- 1................. 43
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual................................................................................... A- 2................. 44
Schedule of Revenues Compared With Budget ( GAAP Basis) and Actual....................... A- 3................. 45
Schedule of Expenditures Compared With Budget ( GAAP Basis) and Actual.................. A- 4................. 46
Special Revenue Funds:
Combining Balance Sheet............................................................................................... B- 1 ................. 48
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances............ B- 2 ................. 50
Comparative Schedule of Revenues, Expenditures, and Changes
in Fund Balances - Budget ( Non- GAAP) Legal Basis and Actual -
Special Gas Tax Street Improvement Fund ..................................................................... B- 3 ................. 52
Comparative Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( Non- GAAP) Legal Basis and Actual - Transportation Grants Fund.................... B- 4 ................. 53
Comparative Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( Non- GAAP) Legal Basis and Actual - Grants Fund........................................... B- 5 ................. 54
Comparative Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( Non- GAAP) Legal Basis and Actual - Redevelopment Agency Fund................. B- 6 ................. 55
Comparative Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( Non- GAAP) Legal Basis and Actual - Redevelopment Agency -
Low and Moderate Income Housing Fund...................................................................... B- 7 ................. 56
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual - Traffic Safety Fund .................................................. B- 8 ................. 57
Comparative Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( Non- GAAP) Legal Basis and Actual - Transportation Fund............................... B- 9 ................. 58
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual - Seaport Landscape Maintenance Fund..................... B- 10 ............... 59
Comparative Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( Non- GAAP) Legal Basis and Actual - Seaport Centre Maintenance Fund ......... B- 11 ............... 60
City of Redwood City, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2001
TABLE OF CONTENTS
_______________________________________________________________________________
............................................................................................................................... ............................................................................................................................... ................................ Statement/
Schedule Page
Special Revenue Funds ( Continued):
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual - Redwood Shores Maintenance Fund........................ B- 12 ............... 61
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual - Redwood Shores Landscape
Maintenance Fund.......................................................................................................... B- 13 ............... 62
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual - Supplemental Law Enforcement
Services Fund ................................................................................................................ B- 14 ............... 63
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual - Traffic Mitigation Fees Fund .................................... B- 15 ............... 64
Debt Service Funds:
Combining Balance Sheet............................................................................................... C- 1................. 65
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances............ C- 2................. 66
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual -
General Improvement District 1- 64 Reclamation Bonds Fund.......................................... C- 3................. 67
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual -
General Improvement District 1- 64 Facilities Bonds Fund ............................................... C- 4................. 68
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual -
Public Financing Authority Bonds Fund........................................................................... C- 5................. 69
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual -
1997 Tax Allocation Refunding Bonds Fund ................................................................... C- 6................. 70
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual -
1998 Lease Revenue Refunding Bonds Fund .................................................................. C- 7................. 71
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( GAAP Basis) and Actual -
1998 City Hall Lease Revenue Certificates of Participation Fund .................................... C- 8................. 72
City of Redwood City, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2001
TABLE OF CONTENTS
_______________________________________________________________________________
Statement/
Schedule Page
Capital Projects Funds:
Combining Balance Sheet............................................................................................... D- 1................. 73
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances............ D- 2................. 74
Comparative Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( Non- GAAP) Legal Basis and Actual - Facilities Fee Construction Fund............. D- 3................. 76
Comparative Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( Non- GAAP) Legal Basis and Actual - Capital Outlay Fund ............................... D- 4................. 77
Comparative Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( Non- GAAP) Legal Basis and Actual -
Public Financing Authority Series B Construction Fund ................................................... D- 5................. 78
Comparative Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( Non- GAAP) Legal Basis and Actual -
Shores Transportation Improvement District Fund........................................................... D- 6................. 79
Comparative Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget ( Non- GAAP) Legal Basis and Actual -
Pacific Shores Community Facilities District Fund ........................................................... D- 7................. 80
Enterprise Funds:
Combining Balance Sheet............................................................................................... E- 1 ................. 81
Combining Statement of Revenues, Expenses, and Changes in Retained Earnings............. E- 2 ................. 82
Combining Statement of Cash Flows -
Increase ( Decrease) in Cash and Cash Equivalents.......................................................... E- 3 ................. 83
Internal Service Funds:
Combining Balance Sheet............................................................................................... F- 1 ................. 85
Combining Statement of Revenues, Expenses, and Changes in Retained Earnings............. F- 2 ................. 86
Combining Statement of Cash Flows -
Increase ( Decrease) in Cash and Cash Equivalents.......................................................... F- 3 ................. 87
Agency Funds:
Combining Statement of Changes in Assets and Liabilities ............................................... G- 1................. 89
City of Redwood City, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2001
TABLE OF CONTENTS
_______________________________________________________________________________
Statement/
Schedule Page
Account Groups:
Comparative Statement of General Fixed Assets By Sources .......................................... H- 1................. 91
Statement of General Fixed Assets By Program Type ..................................................... H- 2................. 92
Comparative Statement of General Long- Term Obligations ............................................. I- 1 .................. 93
Statement of Changes in General Long- Term Obligations ................................................ I- 2 .................. 94
III. STATISTICAL SECTION Table Page
General Governmental Expenditures by Function or Program -
Last Ten Fiscal Years..................................................................................................... 1 ..................... 95
General Governmental Revenues by Sources - Last Ten Fiscal Years.............................. 2 ..................... 96
Property Tax Levies and Collections - Last Ten Fiscal Years.......................................... 3 ..................... 97
State and Locally Assessed Values of Taxable Property - Last Ten Fiscal Years............. 4 ..................... 98
Property Tax Rates Direct and Overlapping Governments -
Last Ten Fiscal Years..................................................................................................... 5 ..................... 99
Special Assessment Collections - Last Ten Fiscal Years.................................................. 6 ..................... 100
Computation of Legal Debt Margin................................................................................. 7 ..................... 101
Computation of Direct and Overlapping Debt ................................................................. 8 ..................... 102
Revenue Bond Coverage - Last Ten Fiscal Years........................................................... 9 ..................... 103
Construction Values - Last Ten Fiscal Years................................................................... 10 ................... 104
Top Ten Principal Taxpayers.......................................................................................... 11 ................... 105
Demographic Statistics - Last Ten Fiscal Years............................................................... 12 ................... 106
Miscellaneous Statistics.................................................................................................. 13 ................... 107
City of Redwood City
Organization Chart
June 30, 2001
Citizens
City Council
Housing
Rehabilitation Civic Planning Parks and Board Fair Oaks Senior Library
Program Cultural Commission Recreation of Building Community Affairs Board
Loan Commission Commission Review Center Commission
Committee Advisory Board
Board Historic Pride and Child Care Housing and Architectural
of Port Resources Beautification Advisory Human Review
Commissioners Advisory Committee Committee Concerns Committee
Committee Committee
Port City City City Library
Manager Attorney Manager Clerk Director
Assistant
to
City Manager
Parks
Finance Police Fire Public Works Human Recreation & Community
Services Resources Community Development
Services Services
i
City of Redwood City
Finance Department
June 30, 2001
Director of Finance and
Financial Planning
Administrative Information Senior Revenue Senior Financial
Assistant Technology Accountant Services/ Accountant Services
Manager Senior Acct. Manager
Annual Telephone State Utility Billing South Bayside Fixed
Budget Services Reports and Collections Systems Assets
Authority
Annual Host Computer
Financial Hardware & Capital Projects Business License Grant Purchasing
Report Software Accounting
Treasury Wide Area Treasury Parking Payroll Accounts
Management Network Accounting Revenue Collection Payable
Risk Local Area Enterprise Fund Accounts Subdivision
Management Network Accounting Receivable Accounting
General Desktop General Improvement General Ledger
Administration Computer Systems District 1- 64
Redevelopment Labor
Agency Accounting Negotiations
Support
Cost Allocation Plans
ii
v
1017 Middlefield Road
Redwood City, California 94063
Office of Director of Finance Telephone: ( 650) 780- 7070
and Financial Planning Fax: ( 650) 366- 2447
E- mail: mail@ redwoodcity. org
December 8, 2001
Honorable Mayor,
Members of the City Council,
and City Manager
City of Redwood City
Redwood City, California
In accordance with the Charter of the City of Redwood City, we are submitting for your information and
consideration the Comprehensive Annual Financial Report of the City for the fiscal year ended June 30, 2001.
This report has been prepared by the City's Finance Department. The responsibility for both the accuracy of the
printed data and the completeness and fairness of the presentation including all disclosures rests with the City. It
is our opinion that the data presented is accurate in all material respects and that it is presented in a manner
designed to fairly set forth the financial positions and results of operations of the City and its related entities as
measured by the financial activity of their various funds, and that all disclosures necessary for the reader to gain
a full understanding of their financial activities have been included. The financial statements have been prepared
following the guidelines recommended by the Government Finance Officers Association of the United States and
Canada, and the standards adopted by the Governmental Accounting Standards Board. The Government
Finance Officers Association of the United States and Canada ( GFOA) awarded its Certificate of Achievement
for Excellence in Financial Reporting to Redwood City for its 2000 Comprehensive Annual Financial Report.
The California Society Of Municipal Finance Officers ( CSMFO) awarded its Outstanding Financial Reporting
Certificate of Award to Redwood City for the same fiscal year. It is our belief that this report fully conforms to
these high standards.
In accordance with these guidelines, the accompanying report consists of three parts:
I. Introductory Section - Letter of Transmittal, Organization Charts and Names of
Principal Officials, GFOA and CSMFO Certificates of Achievement
II. Financial Section - Auditor's Opinion, Combined Financial Statements, Notes to
Financial Statements followed by Combining and Individual Fund Statements
III. Statistical Section - Presenting ten year historical trends of financial and
non- financial data
This report includes all funds and account groups of Redwood City. Redwood City provides a full range
of services, including police and fire protection, planning and zoning, the construction and maintenance of
highways, streets and infrastructure, water and sewer utilities, information services, recreational activities, and
cultural events. The City Council serves in separate session as the governing bodies of the Redwood City
Redevelopment Agency, the Redwood City Facilities and Infrastructure Authority, and the Public Financing
Authority although these agencies are legal entities apart from the City. Under the City Charter, the City Council
appoints the Board of Port Commissioners who oversee the operations of the Port of Redwood City, which is
considered a department of the City of Redwood City.
vi
ECONOMIC CONDITIONS AND OUTLOOK
Redwood City is located on the west shore of the San Francisco Bay peninsula midway between San Francisco,
25 miles to the north, and San Jose, 17 miles to the south.
Redwood City's unemployment rate as of June 30, 2001 was 2.5% compared to a statewide rate of 5.1%. This
is a modest change over the prior year’s unemployment rates of 1.6% and 5.2%, respectively, and is reflective of
the relative strength of the local economy.
The City's economy is diversified and is not dependent on any single industry or a segment of economic activity.
We have high- technology companies ( Ampex, Harris Corporation/ Farinon Divison, Liquid Audio, 3 DO,
Excite@ Home, Broadvision, Electronic Arts, and Oracle), manufacturing ( Tyco Electronics), biotechnology
( Maxygen, Perclose, and Deltagen), auto dealers ( both domestic and import), building materials, two hospitals
( Kaiser and Sequoia), a University of California extension campus, a community college ( Cañada), a high school
( Sequoia), and a variety of retailers ( Costco, K- Mart, Mervyns, and Target). The Port of Redwood City is the
only deep- water port on the San Francisco Bay south of San Francisco, serving the entire region as a key entry
point for many types of materials contributing to the local economy. Redwood City is also the county seat for
San Mateo County, which results in a high daytime population from people conducting matters at the county
offices and courts. Notwithstanding the economic trend that was evident by the end of the fiscal year, this
diversity of economic activity will help to buffer Redwood City from some of the negative effects, while
positioning the City to be a part of the longer- term economic growth that is certain to occur.
The Pacific Shores project, located adjacent to the Port, completed construction in the fall of 2001. This project
has added 1.5 million square feet of high- end commercial office space to Redwood City and could contain up to
1,000 residential units at some point in the future.
The Speiker Properties project, a 340,000 square- foot office development in Redwood Shores, also completed
construction in the fall of 2001. Town Place Suites, a new 95- suite hotel, should finish construction in the spring
of 2002.
Additionally, 101 residential units were completed during the fiscal year ended June 30, 2001. Most of the
residential construction occurred in the Redwood Shores area.
The 13- acre Franklin Street Mixed Use Project embraces the modern urban design by placing high density
housing near public transit and downtown retail services. Phase 1 of this project broke ground in November
2000, marking the start of construction of a new 206- unit downtown residential community on 4.5 acres. It's
anticipated that the project will be completed in the first quarter of 2002. Phase 2, located on 8.5 acres, will
include at least 300 additional residential units. Phase 2' s anticipated completion date is undetermined. The total
project will also contain roughly 48,000 square feet of new retail/ office space.
The Oracle Corporation, a leading database developer, maintains its world headquarters in Redwood City.
Oracle presently has over 6,500 employees in Redwood City and occupies 1.5 million square feet of commercial
office space. Broadvision, Liquid Audio, Excite@ Home, Electronic Arts, Napster, Informatica, and a number of
other technology companies have also selected Redwood City as the site for their world headquarters.
Overall, we believe this activity is strong evidence that Redwood City is a very attractive area in which to
conduct business and is, at least in part, reflective of the high quality of services furnished by local government.
vii
MAJOR INITIATIVES
Youth Development and Education continues to be a policy goal that commands substantive attention from the
City Council. Accordingly, staff has committed to supporting three different programs to advance this goal:
21st Century Grant - The 21st Century Grant is designed to provide academic, social, and recreation activities
for students who are performing below grade level and are at- risk for potential drug use and/ or gang
involvement. The targeted area in Redwood City is the North Fair Oaks area, which has a large Latino
immigrant population. Many of the students in this area are linguistically isolated, exposed to gang activity, and
score in the bottom quarter of standardized tests. This federal grant pays for the programs, which are designed
to get kids involved, increase school attendance, and improve behavior and grades.
Youth Budget - The Youth Budget Project is a joint effort of the John Gardner Center for Youth and Their
Communities ( Stanford University) and Redwood City leaders who want to better understand how youth
services are currently funded and to gain information for planning in the future. The project profiles the sources
and uses of funds for youth in Redwood City; categorizes how funds are being used by need area, age of youth,
goals, and other dimensions; and identifies who is being served. The information generated will enable Redwood
City and county leaders to address questions about sustainability of programs and how services might change or
be expanded for various populations of young people.
Police Athletic League Facility ( PAL) - The current plans for the PAL building call for a partnership
between PAL, the City, and the school district to build a 13,000 to 15,000 square foot building at Taft School on
land leased to PAL by the school district. The expected cost of the building is estimated to run between 3.1 and
3.5 million dollars. PAL has already raised nearly 2.5 million dollars toward construction of the facility. Two
million dollars of the money raised by PAL comes from a single private donor. Another $ 400,000 comes from
the City in the form of a combined CIP/ CDBG disbursement secured by PAL last year. This year, PAL has
secured another $ 38,000 from CDBG and has been able to raise $ 10,000 privately in unsolicited donations. The
building will house several PAL programs including karate, dance, boxing, and drop- in and homework centers.
PAL also hopes to sign joint use agreements for the building and the rest of the school site with the school district
and the City's Parks, Recreation and Community Services Department.
DEPARTMENT FOCUS
Many experts agree that children who are read stories at a young age perform at a higher level when they enter
school. Unfortunately, a large number of children before the age of five are not exposed to books and learning-related
activities on a regular basis. In response to this need the Library, in collaboration with the Library
Foundation and the Peninsula Community Foundation, began a new program in October 2000 to raise the level of
reading awareness and foster a love of books and libraries in preschool- age children in Redwood City. A Senior
Library Outreach Specialist was recruited with Foundation funds to develop this program under the guidance of
our Youth Services Coordinator. The City will assume the funding for this position in fiscal year 2001/ 02.
The initial goal was to recruit and train 15 volunteers to read to children in day care centers and preschools twice
a month. The outreach specialist has met and exceeded that goal. In June 2001, 19 volunteers were reading at
day care centers and preschools once every week, logging a total of 656 child visits. One of our volunteers reads
in Spanish and another reads primarily in English with some supplemental reading in Spanish. Even facilities that
serve children who speak Spanish have asked to have programs in English. One teacher said she could read to
the kids in Spanish, but that what they needed was someone who could help them learn English. The response to
the program has been overwhelmingly positive.
viii
The response of the volunteers has also been enthusiastic. One man visits patients in Stanford Hospital in nearby
Palo Alto, California every Monday; on Tuesday he reads to six lively two- year- olds. For him, the reading is a
return to the joy of life. Unexpected results of the program have been:
Ÿ The forging of cross- generational bonds between the reader and the children, and in the teen volunteers
who enjoy creating materials for the program because it's for the little kids.
Ÿ Reinforcement for the day care provider that her job is so important that the library sends someone every
week to help her enrich the lives of the children she's caring for.
There are about 135 day care centers and preschools in Redwood City. Our long- term goal is to be able to serve
every one that asks for a volunteer storyteller.
ACCOUNTING SYSTEM AND BUDGETARY CONTROL
The City's accounting records for general government operations are maintained on a modified accrual basis,
with the revenues being recorded when both measurable and available, and expenditures being recorded when
the services or goods are received and the liabilities are incurred. Accounting records for the City's enterprises
are maintained on the accrual basis.
In developing and modifying the City's accounting system, consideration is given to the adequacy of internal
accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance
regarding:
- the safeguarding of assets against loss from unauthorized use or disposition, and
- the reliability of financial records for preparing financial statements and
maintaining accountability for assets.
The concept of reasonable assurance recognizes that:
- the cost of a control should not exceed the benefits likely to be derived, and
- the evaluation of costs and benefits requires estimates and judgments by management.
All internal control evaluations occur within the above framework. We believe that all of the City's internal
accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of
financial transactions.
Budgetary control is maintained at the program level by encumbering estimated purchase amounts prior to the
release of purchase orders to vendors. Purchase orders that result in an overrun of budget balances are not
released until additional appropriations are made available. Open encumbrances are reported as reservations of
fund balance at year- end.
As a recipient of federal, state, and county financial assistance, the City is also responsible for ensuring that an
adequate internal control structure is in place to ensure compliance with applicable laws and regulations related
to those programs. This internal control structure is subject to periodic evaluation by management and the
internal audit staff of the government.
As a part of the City’s single audit, tests are made to determine the adequacy of the internal control structure,
including that portion related to federal financial assistance programs, as well as to determine that the City has
complied with applicable laws and regulations.
ix
As demonstrated by the statements and schedules included in the financial section of this report, the City of
Redwood City continues to meet its responsibility for sound financial management.
REPORTING ENTITY AND ITS SERVICES
Financial information for separate legal entities related to the City including the Redwood City Facilities and
Infrastructure Authority, Redwood City Public Financing Authority, and Redwood City Redevelopment Agency
is blended in the City's financial statements in accordance with Governmental Accounting Standards Board
Statement No. 14.
City Council members, in separate sessions, serve as the governing boards of the Redevelopment Agency, the
Redwood City Facilities and Infrastructure Authority, and the Redwood City Public Financing Authority. The
governing board of the Port of Redwood City does not include City Council members; however, this board is
appointed by the City Council. Whereas the City provides all accounting and administrative services to the
Redwood City Facilities and Infrastructure Authority, Redwood City Public Financing Authority, and
Redevelopment Agency, only treasury services are provided to the Port of Redwood City which, according to
the City Charter, is considered a department of the City.
The general fund of the Redevelopment Agency and the agency’s low and moderate income housing fund are
shown as special revenue funds. The long- term debt of the Redevelopment Agency and the Public Financing
Authority is shown in the long- term debt account groups. Debt service during the year is shown under debt
service funds. The Port of Redwood City is an enterprise activity and is presented as an enterprise fund.
Redwood City is a full service City, which was incorporated in 1867 and became a Charter City in 1929. The
City operates under a council- manager form of government and provides services such as police, fire, recreation
and parks, library, highways and streets, public improvements, planning and zoning, water, port facilities, and
general administrative services. Although the City maintains the sewer lines and pump stations, the sewer plant
and treatment services are provided by the South Bayside System Authority, a Joint Powers Authority of which
Redwood City is an equity holder.
PROPERTY TAX RATES AND ASSESSMENTS
Following the adoption of Proposition 13, an amendment to the State Constitution, the City does not have
authority to levy a property tax rate for general operations of the City. The City of Redwood City shares
property taxes on a formula base from the County of San Mateo tax pool. Redwood City does not have any
general obligation bonds ( for which it could levy property taxes after Proposition 13).
In 1964, Redwood City established General Improvement District 1- 64 for which special assessments continue to
be calculated and collected based on the value of the property in the year in which the assessment installments
are paid.
The City Council, sitting as the Board of Equalization for General Improvement District 1- 64, determines the
assessed values of properties, establishes the tax rate, and levies assessments each year in July. The
assessments are then collected through the County of San Mateo tax collector. The tax rates for 2000/ 01 and
the prior two years are:
2000/ 01 1999/ 00 1998/ 99
GID- 1964 Facilities 0.1466 0.1760 0.2155
GID- 1964 Reclamation 0.1458 0.1985 0.2282
x
APPROPRIATION LIMIT
Article XIIIB of the California State Constitution, which became effective in the 1979/ 80 fiscal year, and which
was modified ( by Proposition 111) in November 1989, establishes, by formula, an appropriation limit for
governmental agencies. Using the appropriations of fiscal year 1978/ 79 as the base year, the limit is modified by
the change in the composite consumer price index, population, and the value of commercial property development
within the City limits during each fiscal year. Article XIIIB also sets the guidelines as to what is to be included in
the appropriation limits.
The appropriation limit for Redwood City for the fiscal year 2000/ 01 is at $ 79,512,328 while the actual
appropriations subject to the limit amounted to $ 50,777,102. The following graph indicates the trend in
appropriations subject to limitation:
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
F/ Y 1998/ 99 F/ Y 1999/ 00 F/ Y 2000/ 01
APPROPRIATION LIMIT
All funds Subject to Appropriation
Limit
Sub. to Limit
Excluding General Improvement and Proprietary Funds
xi
FINANCIAL INFORMATION
General Governmental Revenues
Sales tax, property tax, and utility users tax are the main sources of general operating revenues ( general and
special revenue funds) of the City. During fiscal year 2000/ 01, these three taxes collectively amounted to 54%
of the total general operating revenues.
Property taxes increased 10% compared to 1999/ 00 due to new construction and strengthening property values
associated with an expanding local economy. Sales and other taxes were up 13.2%. This increase was driven
primarily by a 10.6% increase in sales taxes and a 31.4% increase in utility users taxes. The increase in sales
tax is reflective of a vibrant local economy. The increase in utility users tax resulted from an increase in energy
rates. Licenses and permits increased 53.4% largely as a result of a surge in building permit applications for
residential and commercial projects during the year.
Fines and penalties increased 19.3% as a result of more parking citations having been issued in 2000/ 01.
Intergovernmental revenues were up 11.08% over 1999/ 00 due to an increase in motor vehicle in lieu tax and
grant revenues received in 2000/ 01. Developer's contributions were up 325.6% primarily as the result of an
increase in traffic mitigation fees derived from new development and a recently enacted traffic impact fee
ordinance.
Charges for current services increased by 9.7% due to an increase in garbage fees, along with an increase in
fees related to development- related services ( plan checking and subdivision fees).
Other revenues were up 10.7% over the prior year primarily due to funds received related to the Redwood
Shores transportation project.
The following schedule presents a summary of general fund, special revenue funds, debt service funds, and
capital projects funds revenues for the fiscal year ended June 30, 2001 and the percentage of increases and
decreases in relation to the prior year.
Increase/
Percent of
Percent ( Decrease) Increase/
Revenue Source Amount of Total From 1999/ 00 ( Decrease)
$ % $ %
Property Taxes 23,668,395 22.77 2,156,102 10.02
Sales and Other Taxes 33,431,463 32.17 3,896,122 13.19
Licenses and Permits 2,545,236 2.45 886,441 53.44
Fines and Penalties 709,582 .68 114,774 19.30
Uses of Money and Property 8,821,948 8.49 1,911,690 27.66
Net Increase ( Decrease) in
Fair Value of Investments
2,278,674
2.19
2,611,328
785.00
Intergovernmental 16,062,238 15.45 1,601,741 11.08
Developers Contributions 9,092,471 8.75 6,956,057 325.60
Charges for Current Service 5,875,017 5.65 520,129 9.71
Other 1,458,846 1.40 141,230 10.72
Total Revenues 103,943,870 100.00 20,795,614 25.01
xii
The following charts compare revenues from general fund, special revenue funds, debt service funds, and capital
projects funds during the past two fiscal years:
2000/ 01 Revenues
Investments
2.19%
Other
1.40%
Intergvnmtl
15.45%
Developers
Contributions
8.75%
Current Services
5.65%
Uses/ Money/
Property
8.49%
Licenses/
Permits
2.45%
Fines/
Penalties
.68%
Sales/ Other Taxes
32.17%
Property Taxes
22.77%
1999/ 00 Revenues
Investments
( 0.40)%
Developers
Contributions
2.30%
Fines/ Penalties
0.72%
Licenses/ Permits
Uses/ Money/ 1.99%
Property
8.31%
Intergvnmtl
17.66%
Current Services
6.44%
Other
1.58%
Sales/ Other
Taxes
35.53%
Property Taxes
25.87%
xiii
General Governmental Expenditures
Public safety continues to be the largest single program expenditure within the area of general operating ( general
and special revenue funds) expenditures with 41% of the 2000/ 01 general operations, while expenditures for
Leisure, Cultural and Information Services remain as the next largest area at 22% of general operations.
Community development expenditures increased 27.6% due to increased demands for development- related
services ( subdivision engineering, plan checking, and building inspections) along with Redevelopment Agency
costs associated with the conveyance of property for the purpose of construction of affordable housing.
Leisure, Cultural and Information Services expenditures increased 10.2% primarily due to enhanced recreation
programs and increased landscape maintenance.
Policy Development and Implementation increased 10.1% resulting from increased payments for animal control
services.
The 58.4% increase in capital outlay expenditures is attributable primarily to infrastructure projects totaling $ 4.7
million directly related to major street improvements and new development.
The 5.7% decrease in Debt Service is due to the partial refunding of Public Financing Authority Bonds in
1998/ 99 which resulted in lower annual debt service payments in subsequent fiscal years.
The following schedule presents a summary of the general fund, special revenue funds, debt service funds, and
capital projects funds expenditures for the fiscal year ended June 30, 2001 and the percentage of increase and
decrease in relation to prior year amounts:
Increase/ Percent of
Percent ( Decrease) Increase/
Expenditure- Programs Amount of Total from 1999/ 00 Decrease)
$ % $ %
Current
Community Development 10,468,680 12.45 2,261,092 27.55
Human Services 1,033,662 1.23 128,604 14.21
Public Safety 26,713,505 31.78 1,854,711 7.46
Transportation 2,480,750 2.95 344,544 16.13
Environmental Support and Protection 1,035,147 1.23 24,834 2.46
Leisure, Cultural and Information Services 14,191,073 16.88 1,314,508 10.21
Policy Development and Implementation 3,875,339 4.61 354,173 10.06
Capital Outlay 18,184,977 21.63 6,704,962 58.41
Debt Service 6,085,775 7.24 ( 366,415) ( 5.68)
Total Expenditures 84,068,908 100.00 12,621,013 17.66
xiv
The following charts compare the expenditures of general governmental operations by major program during the
past two years ( general, special revenue, debt service, and capital projects funds):
1999/ 00 Expenditures
Leis/ Cultrl/ Info
Svcs
18.02%
Policy Dev/ Impl
4.93%
Capital Outlay
16.07%
Envir
Supp/ Protection
1.41%
Transportation
2.99%
Public Safety
34.79%
Human Svcs
1.27%
Comm Dev
11.49%
Debt Service
9.03%
2000/ 01 Expenditures
Human Svcs
1.23%
Public Safety
31.78%
Transportation
3.13%
Envir
Supp/ Protect
1.05%
Leis/ Cultrl/
Info Svcs
16.88%
Policy Dev/ Impl
4.61%
Capital Outlay
21.63%
Comm Dev
12.45%
Debt Service
7.24%
General Fund Balance
Fund balance in the general fund increased $ 9.6 million from $ 39.5 million to $ 49.1 million. The portion
designated for subsequent year's expenditures increased from $ 22.1 million to $ 27.0 million. The City Council
has formally directed staff to maintain general fund reserves between 15% and 20% of estimated revenues.
Enterprise Funds
Redwood City's enterprise operations consist of four distinct activities: water, sewer, parking, and the Port. The
Port is managed by the Port Commission, which is appointed by the City Council. All City- owned lands at the
Port are under the management of the Port Commission. All rentals collected from this area from private
tenants ($ 1.9 million in 2000/ 01) are used to support the Port activities. Retained earnings for the Port increased
by $ 2.2 million for the fiscal year ended June 30, 2001 to $ 19.8 million.
The City does not operate a water purification plant. Potable water is purchased from the City of San Francisco.
Redwood City owns and operates water pump stations and distribution lines. The City provides water service to
all the residents and commercial customers within the City limits and also provides water service to adjoining
xv
areas within the jurisdiction of the County of San Mateo. As of June 30, 2001, the City had 20,000 water
customers within the City and 2,820 outside the City limits. For the fiscal year ended June 30, 2001, water
enterprise retained earnings increased by $ 3.3 million to $ 27.5 million. Water fund operating revenues increased
$ 558,000 ( 4%) while operating expenses increased $ 1.1 million ( 10%). Net cash generated by operations in
2000/ 01 totaled $ 3.1 million.
The sewer enterprise posted a $ 635,000 ( 6.5%) decrease in operating revenues while operating expenses
increased by $ 100,000 ( 1.2%) over the prior year. Operating income was $ 688,000. Net cash generated by
operations totaled $ 780,000.
Redwood City maintains on- street and off- street parking spaces within the downtown area. The parking fund
had a net operating income of $ 49,700 for the year ending June 30, 2001. Net cash generated by operations was
$ 149,000.
DEBT ADMINISTRATION
At the end of the 2000/ 01 fiscal year, the City of Redwood City had no direct debt outstanding supported by the
general tax rate of the City. The Public Financing Authority Bonds ($ 8,630,000 of principal outstanding as of
June 30, 2001), 1998 Lease Revenue Bonds ($ 10,740,000 of principal as of June 30, 2001), and the City Hall
Lease Revenue Certificates of Participation ($ 11,700,000 of principal outstanding as of June 30, 2001) are
supported by lease payments from general fund revenues. The City is the paying agent for special assessment
bonds ( for which the City has no legal obligations), and has issued voter- approved General Improvement District
Bonds in prior years. Moreover, the City's general fund had an accrued sick leave and vacation liability total of
$ 2,038,062 as of June 30, 2001. The Port is the only enterprise fund with debt outstanding at June 30, 2001. All
of this debt ( capitalized leases, loans, and revenue bonds) was related to the acquisition of capital items and
improvements. The proprietary funds also have accrued sick leave and vacation liabilities.
Detailed information on all long- term liabilities is presented in the Notes to the Financial Statements.
FIDUCIARY FUNDS
The City maintains a fiduciary fund that accounts for tax free employee and employer contributions made under
the provisions of section 125 of the Internal Revenue Code ( cafeteria benefits fund) and for employer
contributions to a retiree medical insurance fund. The City also maintains fiduciary funds, which account for
transactions involving the Seaport Consolidated Assessment District, the Pacific Shores Community Facilities
District, and the Shores Transportation Improvement District.
CASH MANAGEMENT
The City treasurer invests temporarily idle funds in accordance with the state government code and the
investment policy adopted by the City Council. During the year, funds were invested in certificates of deposits of
banks, U. S. agency securities, U. S. government securities, the Local Agency Investment Fund of the State of
California ( LAIF), and the County of San Mateo investment pool. Bond proceeds are invested in the California
Arbitrage Management Program ( CAMP). Total investment earnings during the fiscal year amounted to $ 8.7
million. At the end of fiscal year 2000/ 01, the total investments, including cash with fiscal agents, cash at banks,
and petty cash, stood at $ 182,846,982.
Redwood City's investment objectives are to maintain liquidity and to minimize credit and market risks while
maintaining a competitive yield on its portfolio. Accordingly, deposits were either insured by federal depository
insurance or collateralized.
xvi
GENERAL FIXED ASSETS
The general fixed assets are those assets used in the performance of general governmental functions. General
fixed assets totaled $ 85,086,830 on June 30, 2001. This amount represents accumulated actual costs and is
substantially less than the assets’ replacement value. Infrastructure such as streets, curbs and gutters,
roadways, drainage systems, and similar types of assets are not capitalized. Depreciation is not recognized in
accounting for general fixed assets. Depreciation is calculated only on proprietary fund assets, for which the
straight line depreciation method is employed.
RISK MANAGEMENT AND SELF- INSURANCE FUNDS
In July 1990, the City joined the Bay Cities Joint Powers Insurance Authority to meet its general liability
insurance needs. Bay Cities is a general liability insurance pool consisting of 16 San Francisco Bay Area public
agencies. The pool provides, through reinsurance, $ 1,000,000 of coverage in excess of the City's $ 250,000 self-insurance
retention, claims administration, and loss control support to member agencies. Bay Cities belongs to
the California Affiliated Risk Management Authority ( CARMA) which is an excess liability pool founded by Bay
Cities and two other local government insurance pools. CARMA provides coverage from $ 1,000,001 to
$ 16,000,000. CARMA enters into a reinsurance agreement for the coverage from $ 3,000,001 to $ 16,000,000.
CARMA retains 75% of the risk for the layer from $ 1,000,001 to $ 3,000,000, and reinsures the remaining 25%
with a commercial reinsurer. To minimize accident- related losses, the City employs various risk control
techniques including employee accident prevention training and hazard recognition and mitigation training.
FINANCIAL PERFORMANCE
Compared to last year, the financial performance of the City is as follows:
2001 2000
$ $
Total City Assets 450,272,955 389,229,469
Total Cash and Investments 182,846,982 128,578,252
Total City Equity 343,185,566 291,229,025
Total Annual Revenue for Governmental
and Enterprise Funds
134,702,763
112,401,429
FUTURE PROSPECTS
The Glenborough Project development submittal, currently in the conceptual planning phase, proposes a new
1,300 unit residential community with up to 500,000 square feet of office/ commercial space on 44 acres east of
Highway 101.
Abbot Labs ( pharmaceuticals) has also recently submitted conceptual plans for a one million square foot
office/ manufacturing headquarters development.
The Westpoint Marina Project, located near the Port, could also result in a new 408- slip marina with retail,
restaurants, and marina- related commercial development/ amenities.
xvii
ANNUAL INDEPENDENT AUDIT
The annual audit of the books and financial records of Redwood City was completed by Maze & Associates,
Certified Public Accountants appointed by the City Council. The auditor's opinion letter has been made a part of
this report.
AWARDS
The Government Finance Officers Association of the United States and Canada ( GFOA) awarded a Certificate
of Achievement for Excellence in Financial Reporting to the City of Redwood City for its Comprehensive
Annual Financial Report ( CAFR) for the fiscal year ended June 30, 2000. This is the 14th consecutive year that
Redwood City has received this prestigious award. In order to be awarded a Certificate of Achievement, a
government must publish an easily readable and efficiently organized comprehensive annual financial report.
This report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR
continues to meet the Certificate of Achievement program's requirements and we are submitting it to the GFOA
to determine its eligibility for another certificate.
The City was also awarded the California Society of Municipal Finance Officers ( CSMFO) " Outstanding
Financial Reporting" certificate for its CAFR for the fiscal year ended June 30, 2000. This was the 15th
consecutive award to Redwood City from CSMFO.
ACKNOWLEDGEMENTS
The preparation of this report could not have been achieved without the efficient and dedicated services of the
entire staff of the Finance Department. Special thanks are extended to Alison Freeman for her leadership in
overseeing this process, Irv Weinstock for his diligent and relentless proofreading, both Kyi Khin and Gloria del
Rosario for their important contributions, and to Sandy Jennings for her dedication to assembling and publishing
this document.
I would also like to thank and commend the Redwood City Council and Ed Everett, City Manager, for their
interest and support in planning and conducting the financial operations of the City in a responsible and
progressive manner in the best interests of the residents of Redwood City.
Respectfully submitted,
Brian J. Ponty
Director of Finance and Financial Planning
City of Redwood City
Redwood City, California
City of Redwood City
Comprehensive Annual Financial Report
June 30, 2001
A Picture for the Future
The City of Redwood City is an exceptional organization
and a leader in the Bay Area.
Our creative and dynamic workforce delivers
extraordinary customer service.
Our values continually drive us to push the limits of our imagination.
¨ Providing excellent customer service
We serve the community of Redwood City. We achieve success through a relentless focus on
our customers in a caring and responsive manner.
¨ Valuing employees
The quality of our organization is directly related to the quality and well- being of individuals
in the organization. We respect and care about each other.
¨ Acknowledging our achievements
We are proud of our accomplishments. We acknowledge our mistakes and expect to learn
from them. We celebrate our successes and build on them.
¨ Working as a team
Nothing lasting or worthwhile can be accomplished alone. We are dependent on each other to
achieve excellence.
¨ Accepting accountability and responsibility
We are directly responsible for our individual behaviors and accountable for being fully
committed to the success of the teams in which we participate.
¨ Being decentralized and flexible
Authority to act is vested in those closest to the service delivered. We deliver quality service
and quality products to customers based on their differing needs.
¨ Innovating and being creative
We are committed to continuous improvement and constant learning, and we believe that if we
don’t risk failing we can’t make progress.
¨ Driven by our values
Rules will not override our values of flexibility, accountability, and innovation.
¨ Valuing diversity
Cultural, economic, and environmental diversity strengthens our organization.
¨ Having fun
We take our work seriously, but ourselves lightly.
City of Redwood City
Comprehensive Annual Financial Report
June 30, 2001
3
GENERAL PURPOSE FINANCIAL STATEMENTS
GENERAL PURPOSE FINANCIAL STATEMENTS are intended to provide an
overview and broad perspective of the City’s financial position and operations. These
statements present a summary set of information needed to control and analyze current
operations to determine legal and budgetary limitations and to assist in financial planning.
The following combined statements are presented:
Combined Statements:
Combined Balance Sheet - All Fund Types and Account Groups
Combined Statement of Revenues, Expenditures, and Changes in Fund
Balances - All Governmental Fund Types
Combined Statement of Revenues, Expenditures, and Changes in Fund
Balances - Budget and Actual - General, Special Revenue, Debt Service, and
Capital Projects Fund Types for which budgets are adopted
Combined Statement of Revenues, Expenses, and Changes in Retained
Earnings - All Proprietary Fund Types
Combined Statement of Cash Flows - Increase ( Decrease) in Cash and Cash
Equivalents - All Proprietary Fund Types
CITY OF REDWOOD CITY, CALIFORNIA
COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS
JUNE 30, 2001
WITH COMPARATIVE AMOUNTS AS OF JUNE 30, 2000
Governmental Fund Types Proprietary Fund Types
Special Debt Capital Internal
General Revenue Service Projects Enterprise Service
ASSETS $ $ $ $ $ $
Cash and investments available for operations ( Note 2) 50,618,119 21,477,947 47,222,269 26,759,206 15,702,831
Cash and investments, restricted ( Note 2) 7,408,465 5,990,917
Receivables ( net of allowance for uncollectibles):
Taxes and assessments - current 5,006,560 235,080
Accounts 1,345,667 997,535 2,222 3,148,729 84,225
Loans 4,960,429 1,300,000
Accrued interest 1,389,191 5 95,190 322,014
Due from other governmental agencies 863,177 361,943
Investment in land held for redevelopment ( Note 14) 4,728,839
Inventory of supplies at cost ( Note 1) 398,690 187,978 225,042
Deposits 30
Prepaid expenditures/ expenses 32,664 877 154,004
Fixed assets, net of accumulated depreciation ( Note 3) 73,564,657 2,896,541
Unamortized bond discounts & issue costs 563,881
Investment in sewer authority ( Note 4) 19,312,743
Investment in sewerage capacity rights ( Note 4) 2,198,357
Advances to other funds ( Note 11) 250,700
Amount available in debt service fund
Amount to be provided for general long- term obligations
Total Assets 59,904,768 32,762,685 7,503,655 48,846,505 131,880,472 18,908,639
LIABILITIES
Accounts payable 1,708,022 1,431,281 42,384 2,340,558 5,108,456 276,735
Insurance claims payable ( Note 12) 6,183,890
Accrued payroll 1,797,048
Deposits payable 4,689,528 79,723 182,238
Deferred revenue 520,463 135,099 381,820
Deferred loan revenue 479,042
Accrued sick leave & vacation - current ( Note 1) 2,038,062 530,673 620,492
Advances from other funds 250,700
Revenue bonds payable - current portion ( Note 6) 175,000
Loans/ leases payable - current portion ( Note 6) 20,837
Accrued interest payable 76,933
Due to special assessment district bondholders
General long- term debt ( Note 5)
Proprietary fund long- term debt ( Note 6) 12,639,004
Employee benefits plans payable
Accrued sick leave & vacation - non- current ( Note 1)
Total Liabilities 10,753,123 2,375,845 42,384 2,340,558 19,114,961 7,081,117
EQUITY AND OTHER CREDITS
Contributed capital ( Note 9c) 41,157,269 4,240,413
Investment in general fixed assets
Retained earnings: ( Note 9)
Unreserved 71,608,242 7,587,109
Fund balances: ( Note 9)
Reserved for:
Encumbrances 812,688 2,403,161 15,137 4,431,233
Loans 4,481,387 1,300,000
Land held for redevelopment 4,728,839
Low income housing 2,940,305
Inventory 398,690
Prepaid expenditures 32,664 877
Debt service 7,446,134
Advances to other funds 250,700
General reserve 250,000
Unreserved:
Undesignated 11,733,938
Designated for subsequent year's expenditures 27,008,135 3,140,763 16,089,959
Designated for childcare facility 3,200,000
Designated for capital projects 11,958,075 957,570 24,684,755
Designated for street projects 2,680,768
Designated for Sandpiper Park 2,559,925
Total Equity and Other Credits 49,151,645 30,386,840 7,461,271 46,505,947 112,765,511 11,827,522
Total Liabilities, Equity and Other Credits 59,904,768 32,762,685 7,503,655 48,846,505 131,880,472 18,908,639
See accompanying notes to financial statements
4
Exhibit 1
Fiduciary Totals
Fund Types Account Groups ( Memorandum Only)
General General
Fixed Long- Term
Agency Assets Obligations 2001 2000
$ $ $ $ $
161,780,372 113,401,398
7,667,228 21,066,610 15,176,854
5,241,640 5,470,847
5,578,378 3,478,409
6,260,429 5,300,990
34,911 1,841,311 1,037,201
1,225,120 1,407,471
4,728,839 4,119,862
811,710 802,599
30 590,030
187,545 156,675
85,086,830 161,548,028 155,200,839
563,881 572,778
19,312,743 19,673,045
2,198,357 1,663,793
250,700 433,024
7,446,134 7,446,134 6,676,422
50,231,128 50,231,128 54,067,232
7,702,139 85,086,830 57,677,262 450,272,955 389,229,469
10,907,436 4,335,352
6,183,890 4,924,240
1,797,048 1,673,647
4,951,489 5,430,388
1,037,382 1,479,657
479,042 495,405
3,189,227 2,782,348
250,700 433,024
175,000 170,000
20,837 22,313
76,933 78,269
7,152,658 7,152,658 2,075,077
54,557,852 54,557,852 58,075,173
12,639,004 12,834,842
549,481 549,481 522,228
3,119,410 3,119,410 2,668,481
7,702,139 57,677,262 107,087,389 98,000,444
45,397,682 46,026,190
85,086,830 85,086,830 84,078,535
79,195,351 71,169,744
7,662,219 4,212,368
5,781,387 4,805,585
4,728,839 4,119,862
2,940,305 3,356,955
398,690 398,488
33,541 43,785
7,446,134 6,676,422
250,700 408,746
250,000 250,000
11,733,938 5,043,030
46,238,857 29,948,283
3,200,000
37,600,400 26,136,045
2,680,768 1,848,967
2,559,925 2,706,020
85,086,830 343,185,566 291,229,025
7,702,139 85,086,830 57,677,262 450,272,955 389,229,469
5
City of Redwood City
Comprehensive Annual Financial Report
June 30, 2001
CITY OF REDWOOD CITY, CALIFORNIA Exhibit 2
COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
FOR THE FISCAL YEAR ENDED JUNE 30, 2001
WITH COMPARATIVE AMOUNTS FOR THE FISCAL YEAR ENDED JUNE 30, 2000
Totals
Governmental Fund Types ( Memorandum Only)
Special Debt Capital
General Revenue Service Projects 2001 2000
REVENUES $ $ $ $ $ $
Property taxes/ special assessments 15,403,664 6,236,661 2,028,012 58 23,668,395 21,512,293
Sales and other taxes 33,431,463 33,431,463 29,535,341
Licenses and permits 2,545,236 2,545,236 1,658,795
Fines, forfeitures and penalties 299,612 409,970 709,582 594,808
Uses of money and property 2,833,534 1,228,136 2,712,219 2,048,059 8,821,948 6,910,258
Net increase ( decrease) in fair value of investments 735,731 585,969 145,546 811,428 2,278,674 ( 332,654)
Intergovernmental 8,470,805 7,367,133 224,300 16,062,238 14,460,497
Developers contributions 5,970,056 3,122,415 9,092,471 2,136,414
Charges for current services 5,863,272 11,745 5,875,017 5,354,888
Other 939,937 518,909 1,458,846 1,317,616
Total Revenues 70,523,254 22,328,579 4,885,777 6,206,260 103,943,870 83,148,256
EXPENDITURES
Current operations:
Community development 5,007,510 5,461,170 10,468,680 8,207,588
Human services 1,033,662 1,033,662 905,058
Public safety 26,501,884 211,621 26,713,505 24,858,794
Transportation 175,577 2,305,173 2,480,750 2,136,206
Environmental support and protection 234,247 800,900 1,035,147 1,010,313
Leisure, cultural and information services 14,191,073 14,191,073 12,876,565
Policy development and implementation 3,875,339 3,875,339 3,521,166
Capital outlay 5,499,680 12,685,297 18,184,977 11,480,015
Debt service:
Principal retirement 42,321 3,475,000 3,517,321 3,357,321
Interest and fiscal charges 2,568,454 2,568,454 3,094,869
Total Expenditures 51,019,292 14,320,865 6,043,454 12,685,297 84,068,908 71,447,895
EXCESS ( DEFICIENCY) OF REVENUES
OVER ( UNDER) EXPENDITURES 19,503,962 8,007,714 ( 1,157,677) ( 6,479,037) 19,874,962 11,700,361
OTHER FINANCING SOURCES ( USES)
Operating transfers in ( Note 11) 740,061 1,854,957 1,928,338 8,941,357 13,464,713 12,052,671
Operating transfers ( out) ( Note 11) ( 10,619,480) ( 1,452,301) ( 1,242,066) ( 13,313,847) ( 11,911,796)
Sale of property 2,270 2,270 23,374
Contribution from property owners, bond proceeds 20,106,294 20,106,294
Contribution from property owners 3,416,755 3,416,755
Total Other Financing Sources ( Uses) ( 9,877,149) 402,656 1,928,338 31,222,340 23,676,185 164,249
EXCESS ( DEFICIENCY) OF REVENUES AND
OTHER SOURCES OVER ( UNDER)
EXPENDITURES AND OTHER USES 9,626,813 8,410,370 770,661 24,743,303 43,551,147 11,864,610
Fund balances at beginning of year,
as restated ( Note 1. C.) 39,524,832 21,976,470 6,690,610 21,762,644 89,954,556 78,089,946
Fund balances at end of year 49,151,645 30,386,840 7,461,271 46,505,947 133,505,703 89,954,556
See accompanying notes to financial statements
7
CITY OF REDWOOD CITY, CALIFORNIA
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES- BUDGET ( GAAP BASIS) AND ACTUAL
GENERAL, SPECIAL REVENUE, DEBT SERVICE AND CAPITAL PROJECTS FUNDS
FOR WHICH BUDGETS WERE ADOPTED
FOR THE FISCAL YEAR ENDED JUNE 30, 2001
General Fund Special Revenue Funds
Variance Variance
Favorable Favorable
Budget Actual ( Unfavorable) Budget Actual ( Unfavorable)
REVENUES $ $ $ $ $ $
Property taxes/ special assessments 14,632,080 15,403,664 771,584 5,751,209 6,236,661 485,452
Sales and other taxes 28,191,930 33,431,463 5,239,533
Licenses and permits 1,975,000 2,545,236 570,236
Fines, forfeitures and penalties 278,000 299,612 21,612 312,000 409,970 97,970
Uses of money and property 2,509,692 2,833,534 323,842 335,185 1,228,136 892,951
Net increase ( decrease) in fair value of investments 735,731 735,731 585,969 585,969
Intergovernmental 8,077,756 8,470,805 393,049 10,202,333 7,367,133 ( 2,835,200)
Developers contributions 890,000 5,970,056 5,080,056
Charges for current services 4,806,329 5,863,272 1,056,943 25,000 11,745 ( 13,255)
Other 668,491 939,937 271,446 518,909 518,909
Total Revenues 61,139,278 70,523,254 9,383,976 17,515,727 22,328,579 4,812,852
EXPENDITURES
Current operations:
Community development 5,164,779 5,007,510 157,269 9,613,803 5,461,170 4,152,633
Human services 1,125,581 1,033,662 91,919
Public safety 26,436,707 26,501,884 ( 65,177) 388,025 211,621 176,404
Transportation 175,553 175,577 ( 24) 2,364,580 2,305,173 59,407
Environmental support and protection 234,247 234,247 1,326,961 800,900 526,061
Leisure, cultural and information services 15,402,226 14,191,073 1,211,153
Policy development and implementation 4,309,898 3,875,339 434,559
Debt service:
Principal retirement 42,321 42,321
Interest and fiscal charges
Total expenditures 52,848,991 51,019,292 1,829,699 13,735,690 8,821,185 4,914,505
EXCESS ( DEFICIENCY) OF REVENUES
OVER ( UNDER) EXPENDITURES 8,290,287 19,503,962 11,213,675 3,780,037 13,507,394 9,727,357
OTHER FINANCING SOURCES ( USES)
Operating transfers in ( Note 11) 70,000 740,061 670,061 2,731,805 1,854,957 ( 876,848)
Operating transfers ( out) ( Note 11) ( 10,955,927) ( 10,619,480) 336,447 ( 1,494,110) ( 1,452,301) 41,809
Sale of property 2,270 2,270
Contribution from property owners, bond proceeds
Contribution from property owners
Total Other Financing Sources ( Uses) ( 10,885,927) ( 9,877,149) 1,008,778 1,237,695 402,656 ( 835,039)
EXCESS ( DEFICIENCY) OF REVENUES AND
OTHER SOURCES OVER ( UNDER)
EXPENDITURES AND OTHER USES ( 2,595,640) 9,626,813 12,222,453 5,017,732 13,910,050 8,892,318
Adjustments to budgetary basis :
Capital outlay ( 5,499,680)
Funds not budgeted: GID 1965 Construction,
Civic Construction
Fund balances at beginning of year,
as restated ( Note 1. C.) 39,524,832 21,976,470
Fund balances at end of year 49,151,645 30,386,840
See accompanying notes to the financial statements
8
Exhibit 3
Totals
Debt Service Funds Capital Projects Funds ( Memorandum only)
Variance Variance Variance
Favorable Favorable Favorable
Budget Actual ( Unfavorable) Budget Actual ( Unfavorable) Budget Actual ( Unfavorable)
$ $ $ $ $ $ $ $ $
2,043,141 2,028,012 ( 15,129) 22,426,430 23,668,337 1,241,907
28,191,930 33,431,463 5,239,533
1,975,000 2,545,236 570,236
590,000 709,582 119,582
2,522,878 2,712,219 189,341 200,000 2,040,374 1,840,374 5,567,755 8,814,263 3,246,508
145,546 145,546 808,414 808,414 2,275,660 2,275,660
18,280,089 15,837,938 ( 2,442,151)
967,050 3,122,415 2,155,365 1,857,050 9,092,471 7,235,421
4,831,329 5,875,017 1,043,688
668,491 1,458,846 790,355
4,566,019 4,885,777 319,758 1,167,050 5,971,203 4,804,153 84,388,074 103,708,813 19,320,739
14,778,582 10,468,680 4,309,902
1,125,581 1,033,662 91,919
26,824,732 26,713,505 111,227
2,540,133 2,480,750 59,383
1,561,208 1,035,147 526,061
15,402,226 14,191,073 1,211,153
4,309,898 3,875,339 434,559
3,475,000 3,475,000 3,517,321 3,517,321
3,094,817 2,568,454 526,363 3,094,817 2,568,454 526,363
6,569,817 6,043,454 526,363 73,154,498 65,883,931 7,270,567
( 2,003,798) ( 1,157,677) 846,121 1,167,050 5,971,203 4,804,153 11,233,576 37,824,882 26,591,306
1,995,110 1,928,338 ( 66,772) 7,653,122 8,918,486 1,265,364 12,450,037 13,441,842 991,805
( 1,242,066) ( 1,242,066) ( 12,450,037) ( 13,313,847) ( 863,810)
2,270 2,270
18,955,000 20,106,294 1,151,294 18,955,000 20,106,294 1,151,294
3,416,755 3,416,755 3,416,755 3,416,755
1,995,110 1,928,338 ( 66,772) 26,608,122 31,199,469 4,591,347 18,955,000 23,653,314 4,698,314
( 8,688) 770,661 779,349 27,775,172 37,170,672 9,395,500 30,188,576 61,478,196 31,289,620
( 12,681,780) ( 18,181,460)
254,411 254,411
6,690,610 21,762,644 89,954,556
7,461,271 46,505,947 133,505,703
9
CITY OF REDWOOD CITY, CALIFORNIA Exhibit 4
COMBINED STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN RETAINED EARNINGS
ALL PROPRIETARY FUND TYPES
FOR THE FISCAL YEAR ENDED JUNE 30, 2001
WITH COMPARATIVE AMOUNTS FOR THE FISCAL YEAR ENDED JUNE 30, 2000
Totals
( Memorandum Only)
Internal
Enterprise Service 2001 2000
Operating Revenues: $ $ $ $
Charges for services 28,377,774 10,747,892 39,125,666 36,920,352
Total Operating Revenues 28,377,774 10,747,892 39,125,666 36,920,352
Operating Expenses:
Employee services 4,328,958 4,755,268 9,084,226 8,245,010
Maintenance 993,996 1,596,529 2,590,525 2,382,919
Water purchases 5,148,892 5,148,892 4,930,673
Utilities 536,500 50,584 587,084 544,352
Contractual services 5,738,511 343,948 6,082,459 6,550,475
Supplies and services 4,725,891 1,163,518 5,889,409 4,893,397
Depreciation and amortization 2,014,152 832,359 2,846,511 2,963,214
Insurance and claims 2,774,080 2,774,080 1,605,424
Total Operating Expenses 23,486,900 11,516,286 35,003,186 32,115,464
Operating Income ( Loss) 4,890,874 ( 768,394) 4,122,480 4,804,888
Non- Operating Revenues ( Expenses):
Gain ( loss) on disposal of equipment 5,986 5,986
Property taxes 25,892 25,892 25,565
Contributions 534,564 534,564
Interest income 1,340,855 872,403 2,213,258 2,038,899
Net increase ( decrease) in fair value of investments 423,001 342,290 765,291 ( 129,161)
Interest expense ( 144,909) ( 144,909) ( 160,251)
Legal settlements 27,249 27,249 330,333
Proceeds from exchange of land 29,558 29,558 18,906
Increase ( decrease) in investment in sewer authority ( 360,302) ( 360,302) ( 768,449)
Net Nonoperating Revenues 1,875,908 1,220,679 3,096,587 1,355,842
Net Income ( Loss) Before Operating Transfer 6,766,782 452,285 7,219,067 6,160,730
Operating transfer ( out) ( Note 11) ( 150,866) ( 150,866) ( 140,875)
Net Income ( Loss) 6,766,782 301,419 7,068,201 6,019,855
Item Affecting Contributed Capital
Depreciation 957,406 957,406 948,243
Retained earnings at beginning of year 63,884,054 7,285,690 71,169,744 64,201,646
Retained earnings at end of year 71,608,242 7,587,109 79,195,351 71,169,744
See accompanying notes to financial statements
10
CITY OF REDWOOD CITY, CALIFORNIA Exhibit 5
COMBINED STATEMENT OF CASH FLOWS
INCREASE ( DECREASE) IN CASH AND CASH EQUIVALENTS
ALL PROPRIETARY FUND TYPES
FOR THE FISCAL YEAR ENDED JUNE 30, 2001
WITH COMPARATIVE AMOUNTS FOR THE FISCAL YEAR ENDED JUNE 30, 2000
Totals
( Memorandum Only)
Internal
Enterprise Service 2001 2000
Cash Flows from Operating Activities: $ $ $ $
Cash received from customers 27,596,651 10,726,347 38,322,998 36,955,406
Cash payments to suppliers for goods and services ( 14,974,357) ( 4,834,997) ( 19,809,354) ( 19,494,864)
Cash payments to employees for services ( 4,171,318) ( 4,593,665) ( 8,764,983) ( 8,170,661)
Right of way compensation ( 2,033,948) ( 2,033,948) ( 1,906,562)
Net Cash Provided by Operating Activities 6,417,028 1,297,685 7,714,713 7,383,319
Cash Flows from Noncapital Financing Activities:
Property taxes 25,891 25,891 25,565
Operating transfers out ( 150,866) ( 150,866) ( 140,875)
Net Cash Provided ( Used) by Noncapital Financing Activities 25,891 ( 150,866) ( 124,975) ( 115,310)
Cash Flows from Capital and Related Financing Activities
Acquisition and construction of capital assets ( 4,036,719) ( 404,107) ( 4,440,826) ( 8,713,279)
Legal settlements 27,249 27,249 330,333
Principal retirements ( 192,314) ( 192,314) ( 20,977)
Interest paid ( 146,244) ( 146,244) ( 253,412)
Proceeds from exchange of land 29,558 29,558 18,906
Contributed capital 56,820
Unamortized issuance cost 8,897 8,897 ( 5,241)
Acquisition of sewerage capacity rights ( 56,820)
Proceeds from sale of equipment 48,727 48,727
Net Cash used for Capital and Related Financing Activities ( 4,309,573) ( 355,380) ( 4,664,953) ( 8,643,670)
Cash Flows from Investing Activities:
Interest and dividends on investment 1,340,854 872,403 2,213,257 2,038,899
Net increase ( decrease) in fair value of investments 423,000 342,290 765,290 ( 129,161)
Net Cash Provided ( Used) by Investing Activities 1,763,854 1,214,693 2,978,547 1,909,738
NET CASH FLOWS 3,897,200 2,006,132 5,903,332 534,077
Cash and cash equivalents at beginning of year 28,852,923 13,696,699 42,549,622 42,015,545
Cash and cash equivalents at end of year 32,750,123 15,702,831 48,452,954 42,549,622
Reconciliation of Net Cash Flow from Operating Activities
Operating income ( loss) 4,890,874 ( 768,394) 4,122,480 4,804,888
Adjustments to reconcile operating income ( loss) to net cash
provided by operating activities:
Depreciation and amortization 2,014,152 832,359 2,846,511 2,963,214
Change in assets and liabilities:
Increase ( decrease) in insurance claims payable 1,259,650 1,259,650 27,690
Decrease ( increase) in advances to other funds 24,278 24,278
Decrease ( increase) in accounts receivable ( 771,822) ( 21,545) ( 793,367) ( 360,176)
Decrease ( increase) in inventory/ prepaid expenses/ deposits ( 27,323) ( 22,701) ( 50,024) ( 86,564)
Increase ( decrease) in vacation & sick leave payable 157,641 161,603 319,244 74,349
Increase ( decrease) in accounts payable 111,244 ( 143,287) ( 32,043) ( 168,679)
Increase ( decrease) in accrued liabilities ( 277,594)
Increase ( decrease) in customer deposits 32,131 32,131 31,053
I ncrease ( decrease) in deferred revenue ( 14,147) ( 14,147) 375,138
Total adjustments 1,526,154 2,066,079 3,592,233 2,578,431
Net cash provided by operating activities 6,417,028 1,297,685 7,714,713 7,383,319
See accompanying notes to financial statements
Non- cash financing activity: During the fiscal year the equipment services fund received $ 106,128, the internal services fund received $ 138,986,
and the sewer utility fund received $ 83,784 in fixed assets from other funds. During the fiscal year the Port of Redwood City used short term
financing to purchase fixed assets in the amount of $ 3,458,423.
11
CITY OF REDWOOD CITY
Notes to Financial Statements
13
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The accompanying financial statements include the financial activities of the City of Redwood City, the
Redwood City Redevelopment Agency, Redwood City Facilities and Infrastructure Authority, Redwood
City Public Financing Authority, and the Port of Redwood City. The financial activities presented in the
accompanying financial statements include all funds, account groups, boards, and commissions that are
controlled by the City Council or dependent on City resources based upon budget adoption, taxing
authority, debt obligations secured by the City, or obligations of the City to fund deficits. Except as
described below, no entities have been included or excluded from presentation in the accompanying
financial statements.
The City Council serves in separate session as the governing bodies of the Redwood City Redevelopment
Agency, the Redwood City Facilities and Infrastructure Authority, and the Public Financing Authority,
although these agencies are legal entities apart from the City. Under the City Charter, the City Council
appoints the Board of Port Commissioners who oversee the operations of the Port of Redwood City,
which is considered a department of the City of Redwood City.
The Redwood City Redevelopment Agency, Redwood City Facility and Infrastructure Authority, and
Public Financing Authority are included as component units in the accompanying financial statements. The
financial activities of the foregoing entities have been aggregated and merged ( termed “ blending”) with
those of the City in the accompanying financial statements, as each meets the criteria for inclusion as set
forth in Government Accounting Standards Board Statement No. 14. Information concerning the Bay
Cities Joint Powers Insurance Authority and South Bayside System Authority are presented in the notes to
the financial statements as the City’s relationship to these organizations does not meet the aforementioned
criteria for presenting these organizations as component units.
The Redwood City Redevelopment Agency was established in 1984 by City Council to eliminate blight
within the defined project areas by encouraging and assisting planned development of low income housing
and commercial projects.
Redwood City Facilities and Infrastructure Authority ( RCFISA) was established in 1986 to finance the
construction of certain public facilities such as the Main Fire Station, City Hall, and Main Library. After
acquiring certain properties from the City, RCFISA leased them back to the City. The lease money
provided the funds for the debt service for the Certificates of Participation issued by the RCFISA to
acquire the properties from the City.
The Public Financing Authority was established in 1991 to finance construction of the new Police Facility,
to finance the defeasance of outstanding certificates of participation issued by the RCFISA, and to issue
tax increment bonds on behalf of the Redevelopment Agency.
Component unit financial statements for each of the above entities may be obtained from the City of
Redwood City, P. O. Box 391, Redwood City, CA 94064.
The Port of Redwood City was established under the City Charter as a department of the City and is
managed by the Port Commission of Redwood City, whose members are appointed by the City Council.
This commission is a semi- autonomous body and has full authority to manage the Port. Its financial
system is maintained separately from the City by the Port’s own financial staff. The Port’s Treasurer and
CITY OF REDWOOD CITY
Notes to Financial Statements
14
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)
Legal Counsel are the City’s Finance Director and the City Attorney, respectively. The financial
transactions of the Port are incorporated as an enterprise fund.
B. Basis of Presentation - Fund Accounting
The accounts of the City are organized on the basis of funds and account groups, each of which is
considered a separate accounting entity. The operations of each fund are accounted for with separate
sets of self- balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures
or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds
based upon the purposes for which they are to be spent and the means by which spending activities are
controlled. The various funds are grouped in the financial statements in this report into seven generic fund
types, three broad fund categories, and two account groups as follows:
1. Governmental Fund Types
Governmental funds are those through which most governmental functions of the City are
financed. The acquisition, use and balances of the City’s expendable financial resources and the
related liabilities ( except those accounted for in proprietary funds), are accounted for through
governmental funds. The measurement focus is upon determination of changes in financial
position, rather than upon net income determination. Those funds are maintained on the modified
accrual basis of accounting ( explained further under Basis of Accounting). The following are the
City’s governmental fund types:
General Fund - The general fund is the general operating fund of the City. It is used to account
for all financial resources except those to be accounted for in another fund.
Special Revenue Funds - Special revenue funds are used to account for the proceeds of specific
revenue sources ( other than major capital projects) that are legally restricted to expenditures for
specified purposes. The funds inter alia include service and maintenance type assessment
districts. The property owners within specified boundary lines benefit from the services provided
and are responsible for the cost.
Debt Service Funds - Debt service funds are used to account for the accumulation of resources
and the payment of long- term debt principal, interest, and related costs. The primary revenue
sources are interest earnings on the reserve funds and operating transfers from relevant funds
which support debt service.
Capital Projects Funds - Capital projects funds are used to account for financial resources to be
used for the acquisition or construction of major capital facilities ( other than those financed by
proprietary funds).
2. Proprietary Fund Types
Proprietary funds are accounted for on an economic resources measurement focus. All assets
and all liabilities ( whether current or noncurrent) associated with their activity are included on
their balance sheets. Their reported fund equity ( net total assets) is segregated into contributed
capital and retained earnings components. Proprietary fund measurement focus is upon
determination of net income, financial position, and changes in financial position. The
CITY OF REDWOOD CITY
Notes to Financial Statements
15
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)
generally accepted accounting principles are those applicable to similar businesses in the private
sector and therefore these funds are maintained on the accrual basis of accounting. The following
are the City’s proprietary fund types:
Enterprise Funds - Enterprise funds are used to account for operations that are financed and
operated in a manner similar to private business enterprises where the intent of the City is that the
costs ( expenses, including depreciation) of providing goods or services to the general public on a
continuing basis be financed or recovered primarily through user charges. The acquisition,
maintenance, and improvement of the physical plant facilities required to provide these goods and
services are financed from existing cash revenues, issuance of bonds, and federal and state
grants.
Internal Service Funds - Internal service funds are used to account for the financing of goods,
services, or employee benefits provided by one department or agency to other departments or
agencies of the City, or to other governments on a cost- reimbursement basis.
3. Fiduciary Fund Types
Fiduciary fund types are used to account for assets held by the City in a trustee capacity or as an
agent for individuals, private organizations, other governmental units, and/ or other funds. The City
maintains four funds - Employee Benefit Plans Fund, Seaport Consolidated Bonds Fund, Pacific
Shores Community Facilities District Fund, and the Shores Transportation Improvement District
Fund - as an agent of the bondholders or City employees.
4. Account Groups
The account groups are used to establish accounting controls and accountability for the City’s
general fixed assets and general long- term obligations. The following are the City’s account
groups:
General Fixed Assets Account Group - The General Fixed Assets Account Group is used to
account for all fixed assets owned by the City other than those accounted for in the proprietary
funds and fiduciary funds.
General Long- Term Obligations Account Group - The General Long- Term Obligations Account
Group is used to account for all long- term obligations of the City except those that are accounted
for in the proprietary funds and fiduciary funds.
C. Basis of Accounting
The governmental type funds and agency funds are maintained on the modified accrual basis of
accounting. Under the modified accrual basis of accounting, transactions are recorded in the following
manner:
1. Revenues are recognized at the time they become susceptible to accrual - that is when they both
are measurable and available, even if they are not yet received in cash. During fiscal year
2000/ 01 the City implemented Governmental Accounting Standards Board Statement No. 33,
which addresses the timing of revenue recognition for non- exchange transactions. Non- exchange
transactions, in which the City gives or receives value without directly receiving or giving equal
CITY OF REDWOOD CITY
Notes to Financial Statements
16
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)
value in exchange, include taxes, grants, entitlements, and donations. On an accrual basis,
revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed.
Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all
eligibility requirements have been satisfied.
As a result of implementing Governmental Accounting Standards Board Statement No. 33, the
City restated and increased prior year's revenues and therefore fund balance as follows: general
fund $ 3,722,531; special gas tax special revenue fund $ 143,343; transportation special revenue
fund $ 14,949.
2. Expenditures are recognized when liability is incurred, if measurable, except for payments on
general obligation bonds, special assessment bonds ( for which the City has limited obligations), and
interest thereon, which are recognized when due. Accumulated vacation and sick leave not
expected to be paid within the next 12 months are recorded in general long- term obligations.
Special reporting treatment is applied to governmental fund inventories to indicate that they do not
represent “ available spendable resources” even though they are a component of net current assets. Such
amounts are offset by Fund Balance Reserved for Inventory.
The accrual basis of accounting is followed in all proprietary funds. Under the accrual basis of
accounting, revenues are recognized when earned and expenses are recorded when incurred.
The revenues of the two utilities ( water and sewer), which are based upon service rates authorized by the
City Council, are determined by bi- monthly cyclical billings to customers. Earned revenues are accrued
and reported in the financial statements with the exception of unbilled services at year- end.
Internal service funds focus on the measurement of “ cost of service” and “ capital maintenance.”
Interdepartmental work orders are generally billed when the service is completed.
General fixed assets are recorded at cost with no depreciation being recognized. Depreciation is
recognized in enterprise and internal service funds.
All proprietary funds follow those Financial Accounting Standards Board statements issued before
November 30, 1989 which do not conflict with Governmental Accounting Standards Board statements.
D. Combined Statements
The “ Memorandum Only” captions on the combined statements’ “ Totals” column means that totals are
presented for overview informational purposes only, and are not intended to present the financial position
or results of operations for the governmental unit as a whole.
E. Budgets and Budgetary Accounting
Formal budgetary integration is employed as a management control device during the year for the general
fund, special revenue funds, debt service funds, and capital projects funds.
CITY OF REDWOOD CITY
Notes to Financial Statements
17
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)
Budgets for the general, special revenue, debt service, and capital projects funds ( except the General
Improvement District 1965 Construction and Civic Construction funds) are adopted on a basis consistent
with generally accepted accounting principles ( GAAP), except for capital outlay in special revenue and
capital projects funds which is budgeted on a project length basis.
The City Manager submits a recommended operating budget in May each year to the City Council for the
fiscal year commencing the following July 1, showing proposed expenditures by programs and the means
of financing them.
The City Council conducts budget study sessions, which are open for public comment, before adopting the
budget. Once the budget is adopted, expenditures may not legally exceed appropriations at program le vel
except when the excess is attributable to a particular activity for which the City has been reimbursed.
This is especially apparent in the Community Development Program where developers reimburse the City
through sub- division fees and environmental impact report fees.
At the request of the department head through the City Manager, the City Council may, by resolution,
transfer appropriations between subprograms and funds, but shall not change total appropriations. Any
increase or decrease to the total appropriations provided for in the budget must be carried through by
ordinance passed by the City Council. The City Manager may authorize the transfer of funds between
object categories within a subprogram as displayed on schedule A- 4 of the Comprehensive Annual
Financial Report. The adoption and administration of the Port of Redwood City budget, unless property
tax revenues are requested, is exclusively under the control of the Board of Port Commissioners.
Budgeted amounts are as originally adopted, or as amended by the City Council during the fiscal year.
Individual amendments were not material in relation to the original appropriations.
All unexpended appropriations lapse at the end of fiscal year. Appropriations for capital projects carried
over or encumbered are reappropriated and carried over in the following year’s budget.
F. Compensated Absences
In compliance with Governmental Accounting Standards Board Statement No. 16, the City has established
a liability for accrued sick leave and vacation in relevant funds. For governmental type funds, the current
liability appears in the respective funds and the long- term liability appears in the long- term obligations
account group. This liability is set up for the current employees at the current rates of pay. An employee
may accumulate vacation up to two years entitlement and sick leave up to 960 or 1,200 hours depending
on the bargaining unit ( Fire Department employees who work 24 hour shifts may accumulate up to 1,920
hours of sick leave). If sick leave and vacation are not used by the employee during the term of
employment, compensation is payable to the employee at the time of retirement. Such compensation is
calculated at the employee’s prevailing rate at the time of retirement or termination. Whereas vacation is
compensated at 100% of accumulated hours, sick leave is compensated at 50% of accumulated hours at
retirement depending upon varying restrictions of the bargaining units. Upon termination only accrued
vacations are compensated. Each year an adjustment to the liability is made based on pay rate changes
and adjustments for the current portion. During 2000/ 01, the long- term liability for compensated absences
increased $ 450,929.
CITY OF REDWOOD CITY
Notes to Financial Statements
18
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)
G. Cash and Cash Equivalents
For the purpose of the statements of cash flows for all proprietary fund types ( enterprise and internal
service funds), the City considers cash equivalents to be all highly liquid investments with a maturity of
three months or less when purchased.
H. Encumbrances
The City uses the encumbrance system as a management control technique to assist in controlling
expenditures. Under this procedure, encumbrances of general, special revenue, and capital project funds
representing purchase orders, contracts, and other commitments are reported as reservations of fund
balances at year- end.
I. Inventories
Inventories are stated at moving average cost. The cost is recorded as an expenditure at the time an
individual inventory item is consumed. As inventories must be maintained at a certain level, a reserve for
inventories is set aside in the general fund balances. Consequently, these reserved funds are not available
for appropriation.
General fund inventories consist of stationery, janitorial supplies, electrical supplies, switches, building
maintenance supplies, fertilizers, seeds, and small tools.
Water fund inventory consists of water meters, water pipes, valves and fittings, and small tools.
Equipment services fund inventory consists of tires, batteries, testing equipment, automotive parts, and
small tools.
J. Property Taxes
Property taxes attach as an enforceable lien on property as of January 1, and are collected for a 12 month
period effective July 1 by the San Mateo County tax collector. Taxes are billed once a year in late
October and are payable in two equal installments due by December 10 and April 10 of the following year.
The taxes not paid by those dates are subject to a penalty of 10%.
In September of 1993, the County of San Mateo Board of Supervisors adopted the “ Teeter Plan” for
secured property taxes. Under the Teeter Plan, the state law allows the county to advance to the cities all
property taxes billed, regardless of whether the taxes have been paid. The county then is entitled to keep
all penalties and interest accruing on delinquent taxes. Property taxes on unsecured taxable property are
not affected by this change.
Under Proposition 13, adopted by the voters in a statewide ballot in 1978, assessed value is increased by
the Cost of Living Index, not to exceed 2%, as of January 1 each year, except for those properties that
have changed ownership during the 12 month period since the lien date. City property tax revenues are
recognized when levied to the extent that they result in current receivables.
CITY OF REDWOOD CITY
Notes to Financial Statements
19
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)
K. Unbilled Service Receivables
In the water and sewer utilities, residential customers are billed bi- monthly and all commercial and
industrial customers monthly. Revenue is recorded as billed to customers on a cyclical basis. No accrual
is made for unbilled services. There were no unbilled services in Port, parking, or internal service funds as
of June 30, 2001. There is no accrual for unbilled water services as of June 30, 2001; revenues cannot be
recognized since water meters are not read at such date. Management believes that the revenue from
unbilled services does not have a material effect on total revenue.
L. Revenues Susceptible to Accruals
Revenues accrued include property taxes ( received by the county, but not yet remitted), sales taxes
( received by the state, but not yet remitted), utility users' taxes ( received by utility companies, but not yet
remitted), transient occupancy taxes, interest accrued on investments, rents and concessions due, but not
yet received, and current service charges, billed but not received. Delinquent unsecured property taxes
are not recognized as revenue until they are colle cted.
M. Funds Opened and Closed
The Shores Transportation Improvement District Construction Fund and the Pacific Shores Community
Facilities District Construction Fund were opened in the capital projects funds during the current fiscal
year. The Shores Transportation Improvement District agency fund was also opened during the current
fiscal year.
The Civic Construction capital projects fund was closed during the current fiscal year.
N. Reclassifications
For the year ended June 30, 2001, certain account classifications have been changed to improve financial
statement presentation. For comparative purposes, prior year balances have been reclassified to conform
to the June 30, 2001 presentation.
NOTE 2 - CASH AND INVESTMENTS
A. Investment Policy
Cash balances from all funds are combined and invested to the extent possible pursuant to the City Council
approved Investment Policy and Guidelines and State Government Code. The earnings from these
investments are allocated monthly to each fund based on an average of monthly opening and closing
balances of cash and investments. Investments are stated at fair value. All enterprise fund investments
are considered to be liquid investments for cash flow purposes.
Authorized investments per the City’s investment policy and state government code are:
Certificates of Deposit State of California Local Agency Government Agency Securities
Bankers Acceptances Investment Fund ( LAIF) Treasury Bills and Notes
Commercial Paper County of San Mateo Investment Pool Passbook Savings Accounts
Money Market Funds Money Market Certificates Corporate Notes
CITY OF REDWOOD CITY
Notes to Financial Statements
20
NOTE 2 - CASH AND INVESTMENTS ( Continued)
B. Collateral and Categorization Requirements
All cash deposits in banks are fully insured or collateralized. California state law requires that public fund
deposits be collateralized by either government securities with a value equal to 110% of the deposits or
first trust deed mortgage notes having a value equal to 150%. Per state law each institution must use a
third party ( which may be the institution’s trust department) to hold the pledged collateral in a pool to
secure all the institution’s public fund deposits. The code states that collateral pledged in this manner shall
have the effect of perfecting a security interest in such collateral superior to those of a general creditor.
Thus, collateral for cash is considered to be held in the City’s name. Banks and savings and loans in
California are subject to state- mandated reporting requirements to ensure that the required levels of
control are maintained. The City may waive collateral requirements for deposits, which are fully insured
with each financial institution up to $ 100,000 by the Federal Deposit Insurance Corporation ( FDIC).
The carrying amount of the City’s cash and deposits was $ 6,219,683 and $ 7,186,129 at June 30, 2001 and
2000, respectively. Cash on hand was $ 15,205 and bank balances, before reconciling items, were
$ 7,220,633 at June 30, 2001. Of the total bank balances, $ 386,456 was insured or held by the City or its
agent in the City's name ( Category1) and $ 6,834,177 was collateralized ( Category 2) and no deposits were
classified as Category 3.
Three categories of risk level have been developed by the Government Accounting Standards Board
Statement No. 3 to disclose the risks associated with deposits and investments of public money:
Deposits: Category 1 - insured or collateralized with securities held by the entity or by its agent in
the entity’s name;
Category 2 - collateralized with securities held by the pledging financial institution’s trust
department or agent in the entity’s name;
Category 3 - uncollateralized.
Investments
:
Category 1 - insured or registered, or securities held by entity or its agent in the entity’s
name;
Category 2 - uninsured and unregistered, with securities held by the counterparty’s trust
department or agent in the entity’s name;
Category 3 - uninsured and unregistered, with securities held by the counterparty, or by
its trust department or agent but not in the entity’s name.
The foregoing categorizations do not address the risk of loss due to changes in fair value.
Investments in pools managed by other governments or in mutual funds are not required to be categorized
pursuant to Government Accounting Standards Board Statement No. 3.
CITY OF REDWOOD CITY
Notes to Financial Statements
21
NOTE 2 - CASH AND INVESTMENTS ( Continued)
C. Categorization
Cash and investments, which are carried at fair value, consist of the following at June 30:
2001
Category 1 Category 2 Total 2000
$ $ $ $
Cash and Deposits:
Demand accounts at banks 216,684 5,604,394 5,821,078 6,787,844
Certificates of Deposit 69,390 69,390 69,390
Employee Cafeteria Benefits
Plan deposits in bank
100,000
207,710
307,710
307,390
Cash with fiscal agent 6,300 6,300 6,300
Petty cash 15,205 15,205 15,205
Total 407,579 5,812,104 6,219,683 7,186,129
Categorized Investments:
U. S. Treasury Notes 14,764,196 14,764,196 14,463,432
U. S. Agency Issues 28,744,800 28,744,800 60,058,470
Corporate Bonds 11,832,975 11,832,975
Total 55,341,971 55,341,971 74,521,902
Non- Categorized Investments:
County of San Mateo Investment Pool 24,460,052 14,411,617
California Local Agency Investment Fund 66,703,497 24,683,140
California Arbitrage Management Program 146,092 138,281
Guaranteed Investment Contract 16,270,522 1,543,000
Mutual Funds - U. S. Securities 13,705,165 6,094,200
Total 121,285,328 46,870,238
Total Cash and Investments 55,749,550 5,812,104 182,846,982 128,578,269
The composition of cash and investments as of June 30, 2001 by fund is as follows:
Available
for Operations
Restricted
Total
$ $ $
General Fund 50,618,119 50,618,119
Special Revenue Funds 21,477,947 21,477,947
Capital Projects Funds 47,222,269 47,222,269
Debt Service Funds 7,408,465 7,408,465
Enterprise Funds 26,759,206 5,990,917 32,750,123
Internal Service Funds 15,702,831 15,702,831
Fiduciary Funds 7,667,228 7,667,228
Total 161,780,372 21,066,610 182,846,982
Cash and investments were scheduled to mature as follows at June 30, 2001:
Available immediately $ 126,031,401
Maturities of three years or less 55,272,581
Maturities greater than three years but less than fifteen 1,543,000
Total 182,846,982
CITY OF REDWOOD CITY
Notes to Financial Statements
22
NOTE 2 - CASH AND INVESTMENTS ( Continued)
D. Funds Held by Fiscal Agents
The City had $ 33,629,330 and $ 10,996,943 in cash and investments as of June 30, 2001 and 2000,
respectively, held by trustees or fiscal agents pledged for the payment or security of certain bonds,
certificates of participation, and lease obligations. The California Government Code provides that these
monies, in the absence of specific statutory provisions governing the issuance of bonds, certificates, or
leases, may be invested in accordance with the ordinance, resolutions, or indentures specifying the types of
investments its trustees or fiscal agents may make. In some situations these investments differ from those
permitted by the City investment policy. Included in these investments at June 30, 2001 is a guaranteed
investment contract maturing in fiscal year 2012 authorized in the bond indenture and by City Council prior
to purchase.
E. Marking Investments to Fair Value ( GASB 31)
In fiscal year 1997/ 98, the City adopted Government Accounting Standards Board Statement No. 31,
which requires that the City's investments be carried at fair value instead of cost. Under GASB 31, the
City must adjust the carrying value of its investments to reflect their fair value at each fiscal year end, and
it must include the effects of these adjustments in income for that fiscal year.
GASB 31 applies to all the City's investments, even if they are held to maturity and redeemed at full face
value. Since the City's policy is to hold all investments to maturity, the fair value adjustments required by
GASB 31 result in accounting gains or losses ( called " recognized" gains or losses) which do not reflect
actual sales of the investments ( called " realized" gains or losses). Thus, recognized gains or losses on an
investment purchased at par will now reflect changes in its value at each succeeding fiscal year- end, but
these recognized gains or losses will net to zero if the investment is held to maturity. By following the
requirements of GASB 31, the City is reporting the amount of resources which would actually have been
available if it had been required to liquidate all its investments at any fiscal year- end.
F. State and County Investment Pools
The City is a voluntary participant in the Local Agency Investment Fund ( LAIF) that is regulated by
California Government Code Section 16429 under the oversight of the Treasurer of the State of California.
The City reports its investment in LAIF at the fair value amount provided by LAIF, which at June 30, 2001
was $ 147,975 more than the City’s cost. The balance available for withdrawal is based on the accounting
records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF’s
investment portfolio are collateralized mortgage obligation, mortgage- backed securities, other asset- backed
securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored
enterprises, and corporations.
The City is also a voluntary participant in the San Mateo County Investment Fund ( County Pool) that is
regulated by California Government Code Section 53600 under the oversight of the Treasurer of the
County of San Mateo. The City reports its investment in the County Pool at the fair value amount
provided by the County, which at June 30, 2001 was $ 5,407 less than the City’s cost. The balance
available for withdrawal is based on the accounting records maintained by the County Pool, which are
recorded on an amortized cost basis. Included in the County Pool’s investment portfolio are US Treasury
Notes, Obligations issued by agencies of the United States Government, LAIF, Corporate Notes,
Commercial Paper, collateralized mortgage obligations, mortgage- backed securities, other asset- backed
securities, and floating rate securities issued by federal agencies, government- sponsored enterprises, and
corporations.
CITY OF REDWOOD CITY
Notes to Financial Statements
23
NOTE 3 - FIXED ASSETS
All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not
available. Donated fixed assets are valued at their estimated fair value on the date donated. Assets
acquired by capital leases are capitalized at the net present value of the total lease payments.
General Fixed Assets
No depreciation is provided for general fixed assets.
The general fixed assets in the account group as of June 30, 2001 were as follows:
Asset Type
Beginning
Balance
Additions
Retirements
Ending
Balance
$ $ $ $
Land 11,221,588 11,221,588
Buildings 55,649,837 2,802,736 115,166 58,337,407
Improvements other than
Buildings
11,915,798
11,915,798
Machinery and Equipment 3,193,085 232,518 984,522 2,441,081
Construction in Progress 2,098,227 1,869,819 2,797,090 1,170,956
84,078,535 4,905,073 3,896,778 85,086,830
These assets were distributed among various programs as follows:
Program
Beginning
Balance
Additions
Retirements
Ending
Balance
$ $ $ $
Community Development 874,379 66,603 23,329 917,653
Human Services 40,950 40,950
Public Safety 24,178,838 2,587,247 622,461 26,143,624
Transportation 195,479 22,930 172,549
Environmental Support
and Protection
250,425
4,452
245,973
Leisure, Cultural and
Information Services
36,589,635
378,526
311,172
36,656,989
Policy Development 51,966 2,878 16,785 38,059
Organizational Support 8,037,724 57,609 7,980,115
General Government Buildings 11,760,912 11,760,912
Construction in Progress 2,098,227 1,869,819 2,797,090 1,170,956
84,078,535 4,905,073 3,896,778 85,086,830
Public domain (“ infrastructure”) general fixed assets consisting of certain improvements other than
buildings, such as roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and lighting
systems, are not capitalized with other general fixed assets.
CITY OF REDWOOD CITY
Notes to Financial Statements
24
NOTE 3 - FIXED ASSETS ( Continued)
Proprietary Fund Fixed Assets
Fixed assets in the proprietary funds are capitalized in the fund in which they are utilized.
The changes in proprietary fund fixed assets during the fiscal year are as follows:
Beginning
Balance
Additions
Retirements
Ending
Balance
$ $ $ $
Land:
Water Utility 50,543 50,543
Parking 822,913 822,913
Port of Redwood City 2,571,602 2,571,602
3,445,058 3,445,058
Harbor Improvements 2,672,043 38,103 2,710,146
Buildings:
Water Utility 277,773 277,773
Sewer Utility 229,616 229,616
Parking 4,867,980 4,867,980
Port of Redwood City 3,953,519 3,953,519
9,328,888 9,328,888
Improvements other than Buildings:
Water Utility 43,993,404 2,426,093 46,419,497
Sewer Utility 15,684,890 319,014 16,003,904
Parking 1,178,673 1,178,673
Port of Redwood City 11,849,074 11,849,074
72,706,041 2,745,107 75,451,148
Machinery and Equipment:
Water Utility 1,088,152 71,528 1,159,680
Sewer Utility 753,334 21,264 774,598
Port of Redwood City 336,882 10,423 347,305
Equipment Services 8,986,184 501,572 344,758 9,142,998
Internal Services 926,399 147,649 444,326 629,722
12,090,951 752,436 789,084 12,054,303
Construction in Progress:
Port of Redwood City 7,964,269 4,692,500 12,656,769
Total fixed assets 108,207,250 8,228,146 789,084 115,646,312
Less accumulated depreciation 37,084,946 39,185,114
71,122,304 76,461,198
CITY OF REDWOOD CITY
Notes to Financial Statements
25
NOTE 3 - FIXED ASSETS ( Continued)
Depreciation of all exhaustible fixed assets used by the proprietary funds is charged as an expense against
respective operations. Accumulated depreciation is reported on proprietary fund balance sheets.
Depreciation has been provided over the estimated useful lives using the straight line method. The
estimated useful lives are as follows:
Buildings 20- 50 Years
Improvements 33- 60 Years
Equipment 2- 15 Years
NOTE 4 - INVESTMENT IN SOUTH BAYSIDE SYSTEM AUTHORITY
Redwood City has an investment of $ 19,312,743 in a Joint Powers Authority ( JPA) with the cities of San
Carlos and Belmont and the West Bay Sanitation District. In addition, the City and the Port of Redwood
City have investments of $ 1,798,357 and $ 400,000, respectively, in SBSA capacity rights. This JPA, South
Bayside System Authority ( SBSA), operates and maintains a sewer plant which was jointly constructed
with EPA federal and state grants and contributions from participating entities. The JPA is run by its
board of directors which is comprised of four members. The City Councils of each member city and the
board of the West Bay Sanitation District each select one of their own members to serve on this board.
No member agency has control of SBSA’s budget, finances, or operations. The board acts autonomously
of the respective member agencies.
Audited financial statements are available from South Bayside System Authority, 1400 Radio Road,
Redwood City, CA 94065. The condensed audited financial information of the JPA as of June 30, 2001 is
as follows:
Total assets $ 54,832,940
Total liabilities 1,188,114
Total fund equity 53,644,826
Total operating revenues 8,260,101
Total operating expenses 10,028,992
Total operating income ( loss) ( 1,768,891)
Net income ( loss) 2,349,454
Retained earnings 6,100,165
Contributed capital:
Belmont $ 5,000,585
San Carlos 6,873,599
Redwood City 21,111,097
West Bay Sanitation District 14,559,380
Fixed assets ( net of depreciation) 47,114,863
CITY OF REDWOOD CITY
Notes to Financial Statements
26
NOTE 5 - GENERAL LONG- TERM DEBT
A. Description
Redwood City has no outstanding general obligation bonds. One improvement district has been formed
within the City limits for specific improvements within the boundarie s of the district. General Improvement
District Bonds ( GID 1- 64 Reclamation and Facilities Bonds) are limited general obligations of Redwood
City confined to the district boundary. The following is the list of long- term obligations of the City.
Revenue Bonds:
Public Financing Authority Bonds issued in August 1991 by the Redwood City Public
Financing Authority, a Joint Powers Authority consisting of the City and the Redevelopment
Agency, to prepay certain existing lease obligations of the City and to provide funds for the
construction of a new Police facility. The original amount of $ 26,715,000 ( of which $ 11,280,683
was for the defeasement of the 1986 Revenue Bonds) is due in annual installments of $ 839,231 to
$ 2,391,125 through July 1, 2011. As discussed below a portion of the Bonds were repaid in fiscal
year 1998/ 99.
1998 City Hall Lease Revenue Certificates of Participation - In October 1998, the City
issued $ 11,700,000 of variable rate demand certificates to provide permanent funding for the new
City Hall project that was completed in August 1997. Principal payments will be made over a 23-
year period commencing July 1, 2002. Prior to that date, only interest payments will be made.
1998 Lease Revenue Refunding Bonds - In July 1998, the City issued $ 12,160,000 of bonds to
refund $ 10,995,000 of the 1991 Public Financing Authority bonds. Principal is due in annual
installments of $ 695,000 to $ 1,670,000 through July 15, 2011.
General Improvement District Bonds:
General Improvement District No. 1- 64 Facilities Series Bonds due in annual installments
of $ 26,500 to $ 1,350,000 through July 1, 2008; original amount $ 18,515,000 issued in 1966 for utility
lines and infrastructure improvements in the Redwood Shores area.
General Improvement District No. 1- 64 Land Reclamation Series Bonds due in annual
installments of $ 300,000 to $ 510,000 through July 1, 2008; original amount $ 9,510,000 issued in
1966 for land reclamation in the Redwood Shores area.
Tax Increment Bonds:
1997 Tax Allocation Refunding Bonds issued in July 1997 by the Redwood City
Redevelopment Agency to prepay a loan received by the Agency from the Redwood City Public
Financing Authority. Original amount of $ 15,430,000 due in annual installments of $ 417,805 to
$ 1,525,880 through July 15, 2011.
CITY OF REDWOOD CITY
Notes to Financial Statements
27
NOTE 5 - GENERAL LONG- TERM DEBT ( Continued)
Loans
Redwood City School District Loan entered into by the Redevelopment Agency in 1998 to
finance a portion of the land and buildings located at 2107 Broadway that were acquired for the
purpose of eventually being resold to a developer; original amount of $ 634,815 at 0% interest due
in 15 annual installments of $ 42,321 through 2013.
B. Changes in General Long- Term Obligations
As of June 30, 2001, the City had the following long- term obligations outstanding including the current
portion:
Interest
Rate
Balance
July 1, 2000
Additions
Retirements
Balance
June 30, 2001
Revenue Bonds % $ $ $ $
Public Financing Authority Bonds 4.75- 6.50 9,190,000 560,000 8,630,000
1998 Lease Revenue Refunding Bonds 4.00- 5.00 11,465,000 725,000 10,740,000
1998 City Hall Lease Revenue C. O. P.' s variable 11,700,000 11,700,000
Subtotal 32,355,000 1,285,000 31,070,000
General Improvement District Bonds
Facilities Series 1- 64 5.00- 6.00 7,995,000 860,000 7,135,000
Reclamation Series 1- 64 5.00- 6.00 3,375,000 440,000 2,935,000
Subtotal 11,370,000 1,300,000 10,070,000
Tax Increment Bonds
1997 Tax Allocation Refunding Bonds 3.80- 5.15 13,800,000 890,000 12,910,000
Loans
Redwood City School District Loan 550,173 42,321 507,852
Accrued Sick Leave and Vacation 2,668,481 450,929 3,119,410
Total General Long- Term Debt 60,743,654 450,929 3,517,321 57,677,262
C. Annual Repayment Requirements for General Long- Term Debt
The annual repayment requirements for all fixed rate general long- term debt outstanding as of June 30,
2001, including interest payments, are as follows ( variable rate City Hall Certificates of Participation are
shown separately):
Year Ending
June 30
Public
Financing
Authority
Revenue
Bonds
1- 64
General
Improvement
Bonds
1997 Tax
Allocation
Refunding
Bonds
1998 Lease
Revenue
Refunding
Bonds
Redwood
City
School
District
Loan
Total
$ $ $ $ $ $
2002 1,136,315 1,970,138 1,525,880 1,219,070 42,321 5,893,724
2003 1,136,638 1,949,638 1,525,020 1,218,463 42,321 5,872,080
2004 1,134,063 1,930,150 1,521,450 1,216,063 42,321 5,844,047
2005 1,133,725 1,906,488 1,524,863 1,216,713 42,321 5,824,110
2006 1,130,463 1,888,500 1,520,056 1,215,268 42,321 5,796,608
2007- 2013 6,244,900 2,432,350 9,075,434 7,756,360 296,247 25,805,291
11,916,104 12,077,264 16,692,703 13,841,937 507,852 55,035,860
CITY OF REDWOOD CITY
Notes to Financial Statements
28
NOTE 5 - GENERAL LONG- TERM DEBT ( Continued)
In addition to the long- term debt shown in the table on the previous page, the City issued $ 11,700,000 City
Hall Certificates of Participation for which variable rate interest is calculated weekly. The rate fluctuates
according to market conditions, but is capped at 12%. The average monthly interest paid in fiscal year
2000/ 01 was $ 32,185. Beginning in fiscal year 2002/ 03, principal payments as shown below will be made
in addition to the variable interest payments.
Year Ending June 30
Principal Repayment
City Hall
Certificates of Participation
2003
2004
2005
2006
2007- 2022
$ 395,000
410,000
425,000
445,000
10,025,000
11,700,000
NOTE 6 - PROPRIETARY FUND LONG- TERM DEBT
A. Enterprise Funds Debt
Capitalized Lease:
Capitalized Lease Agreement with AT& T Lucent Technologies in the original principal amount
of $ 10,000 for a new phone system for the Port payable in monthly installments of $ 350 including
interest, through 2002.
Revenue Bonds:
Port of Redwood City 1999 Revenue Bonds due in annual installments of $ 170,000 to
$ 690,000 through 2030. On April 1, 1999, the Port issued bonds in the amount of $ 10,945,000 to
finance improvements to the Port, the majority of which will be expended on cleaning up
hazardous waste remaining at the Port's liquid bulk terminal.
Loans:
Yacht Harbor Rehabilitation Loan from the State of California in the original principal amount
of $ 880,000. The loan is payable in annual installments of principal and interest of $ 53,613 through
the year 2024.
Parking Fund Loan agreement with the civic center construction fund in the original principal
amount of $ 1,300,000 to finance the construction of the parking fund’s downtown parking
structure. Payments are for interest only until funds are available to pay principal. All principal to
be repaid by July 1, 2013. In 2000/ 01, the civic center construction fund was closed, and the loan
receivable was transferred to the capital outlay fund .
CITY OF REDWOOD CITY
Notes to Financial Statements
29
NOTE 6 - PROPRIETARY FUND LONG- TERM DEBT ( Continued)
B. Changes in Proprietary Fund Debt
Interest
Rate
Beginning
Balance
Retirements
Ending
Balance
Enterprise Funds % $ $ $
Capitalized Lease
AT& T Lucent Technologies 15.76 5,027 3,671 1,356
5,027 3,671 1,356
Revenue Bonds
Port of Redwood City - 1999 Series 4.000- 5.250 10,945,000 170,000 10,775,000
10,945,000 170,000 10,775,000
Loans
Yacht Harbor Rehabilitation Loan 4.700 777,128 18,643 758,485
Parking Fund Loan none 1,300,000 1,300,000
2,077,128 18,643 2,058,485
Total 13,027,155 192,314 12,834,841
Less current portion 192,313 195,837
Enterprise Fund Long- Term Debt 12,834,842 12,639,004
C. Annual Repayment Requirements for Proprietary Fund Debt
Year Ending June 30 Revenue
Bonds
Loans
Total
$ $ $
2002 722,745 118,613 841,358
2003 725,570 118,613 844,183
2004 722,800 118,612 841,412
2005 724,535 118,613 843,148
2006 725,535 118,613 844,148
2007- 2024 17,353,994 2,719,976 20,073,970
Total 20,975,179 3,313,040 24,288,219
Fiscal Year Ending
June 30, 2001
Capitalized Lease Agreement
$
2002 1,400
Total minimum lease payments 1,400
Less amounts representing interest ( 44)
Present value of minimum lease payments 1,356
CITY OF REDWOOD CITY
Notes to Financial Statements
30
NOTE 7 - DEBT WITHOUT CITY COMMITMENT
A. Assessment District Bonds
Assessment District Bonds ( 1915 Act) were issued in July 1999 to refund bonds issued in 1990 by the
Seaport Centre and Seaport Boulevard Assessment Districts ( that were issued to refund bonds issued in
1985). The original bonds ( 1985) were issued for the purpose of installing water and sewer systems within
the Seaport Centre area and for improvements and landscaping to Seaport Boulevard. The principal
amount issued in 1999 was $ 9,430,000. The 1999 bond issue also resulted in the consolidation of the two
assessment districts into one district pursuant to the Refunding Act of 1984 for 1915 Improvement Act
bonds. These bonds are obligations of the property owners in this district and are not obligations of the
City, nor has any political subdivision of the State of California pledged its full faith and credit for the
payment of these bonds. The City’s only responsibilities with respect to any delinquent assessment
installments are solely advancing funds from the reserve fund ( established with bond proceeds) to the
redemption fund, to the extent that such funds are available, and instituting foreclosure proceedings. The
City is not required to advance available funds of the City for payment of principal or interest or to
purchase land at a delinquent foreclosure assessment sale. As of June 30, 2001 the outstanding principal
amount was $ 8,560,000. The refunding resulted in a reduction of $ 1,028,138 in total debt service payments
over the next 10 years and an economic gain of $ 622,557.
B. Multifamily Housing Revenue Bonds
To provide for the construction of multifamily housing in Redwood City, the City issued two series of
bonds, the Multifamily Housing Revenue Bonds Series 1985B ( Redwood Shores Apartments Project) and
the Multifamily Housing Revenue Refunding Bonds, Series A 1987 ( Redwood Plaza Project). These
bonds are limited obligations of the City, payable from and secured by pledge of payments under deeds of
trust. The bonds do not constitute indebtedness, liability, or obligation of the City.
As of June 30, 2000, there were two series of Multifamily Housing Revenue Refunding Bonds: Series A
1987, outstanding with an aggregate principal amount of $ 4,265,000; and Multifamily Housing Revenue
Bonds Series 1985B, outstanding with an aggregate principal amount of $ 23,170,000. On October 2, 2000
the Multifamily Housing Revenue Bonds Series 1985B were repaid in full and on October 18, 2000 the
Multifamily Housing Revenue Series A 1987 Bonds were repaid in full. Accordingly, as of June 30, 2001,
there were no Multifamily Housing Revenue Bonds outstanding.
C. Community Facilities District ( Mello- Roos) Bonds
On October 17, 2000, the City issued $ 21,000,000 of Community Facilities District ( CFD) bonds on behalf
of the developer of the Pacific Shores Project to fund various transportation system improvements within
the City's right- of- way that were required as a condition of the development. These bonds are solely
obligations of the property owners in this district and are not obligations of the City, nor has any political
subdivision of the State of California pledged its full faith and credit for the payment of these bonds. The
City’s only responsibilities with respect to any delinquent assessment installments are solely advancing
funds from the reserve fund ( established with bond proceeds) to the redemption fund, to the extent that
such funds are available, and instituting foreclosure proceedings. The City is not required to advance
available funds of the City for payment of principal or interest or to purchase land at a delinquent
foreclosure assessment sale. As of June 30, 2001 the outstanding principal amount was $ 21,000,000.
CITY OF REDWOOD CITY
Notes to Financial Statements
31
NOTE 7 - DEBT WITHOUT CITY COMMITMENT ( Continued)
On January 17, 2001, the City issued $ 5,045,000 of CFD bonds for Shores Transportation Improvement
Project. The proceeds of these bonds are being used to fund various transportation projects that are
required under development agreements with commercial property owners in the Redwood Shores area of
the City. These bonds are solely obligations of the property owners in this district and are not obligations
of the City, nor has any political subdivision of the State of California pledged its full faith and credit for the
payment of these bonds. The City’s only responsibilities wit