CITY OF SAN LEANDRO, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2004
PREPARED BY: City of San Leandro – Finance Department
Jesse Baloca, Finance Director
City of San Leandro
Comprehensive Annual Financial Report
For the year ended June 30, 2004
Table of Contents
i
INTRODUCTORY SECTION
Table of Contents ............................................................................................................................... ...................... i
Letter of Transmittal.................................................................................................................... ............................ v
Government Finance Officers Association ( GFOA) Award .................................................................................... x
Principal Officers ............................................................................................................................... .................... xi
Organizational Chart ............................................................................................................................... .............. xii
Location Map. ............................................................................................................................... ....................... xiii
FINANCIAL SECTION
Independent Auditors’ Report .............................................................................................................................. 1
Management’s Discussion and Analysis............................................................................................................... 3
Basic Financial Statements:
Government- Wide Financial Statements:
Statement of Net Assets ..................................................................................................................... 19
Statement of Activities and Changes in Net Assets........................................................................... 20
Fund Financial Statements:
Government Funds Financial Statements:
Balance Sheet.......................................................................................................................... .......... 26
Reconciliation of the Governmental Funds Balance Sheet
to the Government- Wide Statement of Net Assets...................................................................... 29
Statement of Revenues, Expenditures and Changes in Fund Balances ............................................. 30
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Government- Wide
Statement of Activities and Changes in Net Assets .................................................................... 32
Proprietary Funds Financial Statements:
Statement of Net Assets ..................................................................................................................... 34
Statement of Revenues, Expenses and Changes in Net Assets.......................................................... 35
Statement of Cash Flows ................................................................................................................... 36
Fiduciary Fund Financial Statement:
Statement of Fiduciary Net Assets – Agency Funds ......................................................................... 38
City of San Leandro
Comprehensive Annual Financial Report
For the year ended June 30, 2004
Table of Contents, Continued
ii
FINANCIAL SECTION, Continued
Basic Financial Statements, Continued:
Index to Notes to Basic Financial Statements................................................................................................. 39
Notes to Basic Financial Statements............................................................................................................... 41
Required Supplementary Information:
Budget and Budgetary Accounting
Statement of Revenue, Expenditures and Changes in Fund Balances – Budget and Actual –
Major Fund – General Fund................................................................................................................ 79
Pension Plans Schedule of Funding Progress .................................................................................................. 80
Supplementary Information:
Non- Major Governmental Funds:
Combining Balance Sheet ......................................................................................................................... 86
Combining Statement of Revenue, Expenditures and Changes in Fund Balances.................................... 90
Schedule of Revenue, Expenditures and Changes in Fund Balances –
Budget and Actual – Major Funds:
San Leandro Public Financing Authority Debt Service Fund...................................................... 93
Redevelopment Agency Debt Service Fund ................................................................................ 94
Schedule of Revenue, Expenditures and Changes in Fund Balances –
Budget and Actual – Non- Major Funds:
Street/ Traffic Improvements Special Revenues Fund .................................................................. 95
Park Development Fee Special Revenue Fund ............................................................................ 96
Parking Special Revenue Fund .................................................................................................... 97
Special Gas Tax Special Revenue Fund....................................................................................... 98
Cherrywood Maintenance District Special Revenue Fund .......................................................... 99
Traffic Congestion Relief Special Revenue Fund ...................................................................... 100
Measure B ACTIA Paratransit Special Revenue Fund .............................................................. 101
Heron Bay Special Revenue Fund.............................................................................................. 102
Special State Grants Special Revenue Fund............................................................................... 103
CDBG Special Revenue Fund.................................................................................................... 104
HOME Special Revenue Fund ................................................................................................... 105
Special Assessment District Debt Service Fund ........................................................................ 106
Non- Major Enterprise Funds:
Combining Statement of Net Assets........................................................................................................ 108
Combining Statement of Revenues, Expenses, and Changes in Retained Earnings ............................... 109
Combining Statement of Cash Flows ...................................................................................................... 110
City of San Leandro
Comprehensive Annual Financial Report
For the year ended June 30, 2004
Table of Contents, Continued
iii
FINANCIAL SECTION, Continued
Supplementary Information, Continued:
Internal Service Funds:
Combining Statement of Net Assets........................................................................................................ 112
Combining Statement of Revenues, Expenses and Changes in Net Assets ............................................ 113
Combining Statement of Cash Flows ...................................................................................................... 114
Fiduciary Fund Financial Statements:
Combining Statement of Fiduciary Net Assets – Agency Funds ............................................................. 116
Combining Statement of Changes in Assets and Liabilities – Agency Funds ......................................... 117
STATISTICAL SECTION
General Governmental Revenues by Source - Last Ten Fiscal Years ........................................................... 119
General Governmental Expenditures by Function - Last Ten Fiscal Years................................................... 120
Property Tax Levies and Collections – Last Ten Fiscal Years ...................................................................... 121
Assessed and Estimated Actual Value of Taxable Property -
Last Ten Fiscal Years .............................................................................................................................. 122
Property Tax Rates - All Direct and Overlapping Governments -
Last Ten Fiscal Years .............................................................................................................................. 123
Computation of Direct and Overlapping Debt............................................................................................... 124
San Leandro Housing Finance Corporation Revenue Bond Coverage
Last Ten Fiscal Years .............................................................................................................................. 125
Demographic Statistics - Last Ten Fiscal Years ............................................................................................ 126
Property Values, Construction and Bank Deposits – Last Ten Fiscal Years ................................................. 127
Special Assessment Billings and Collections - Last Ten Fiscal Years .......................................................... 128
Computation of Legal Debt Margin............................................................................................................... 129
Principal Taxpayers ............................................................................................................................... ....... 130
Statistical Profiles ............................................................................................................................... .......... 131
November 10, 2004
Honorable Mayor and Members of the City Council
City of San Leandro
San Leandro, CA 94577
Dear Mayor and Members of the City Council:
It is with pleasure to submit for your information the Comprehensive Annual Financial Report
( CAFR) of the City of San Leandro for the fiscal year ended June 30, 2004. Responsibility for
both the accuracy of the data and the completeness and fairness of the presentation, including all
disclosures, rests with the City’s management. To the best of my knowledge and belief, the
enclosed data is accurate in all material respects and is reported in a manner designed to present
fairly the financial position and results of operations of the various activities of the City of San
Leandro ( City). All disclosures necessary to enable the reader to gain an understanding of the
City’s financial activities have been included.
The City’s Charter requires an annual audit by an independent audit firm selected by the City
Council of the books of account and financial records and reports of the City and that the City
publish a complete set of audited financial statements after the close of each fiscal year. This
report is published to fulfill this requirement for the fiscal year ended June 30, 2004.
The CAFR consists of three sections and includes the following information:
1. Introductory Section – Includes the Letter of Transmittal with comments on the
operations of the City, a list of principal City officials, the City’s organizational chart; a
map to identify the City’s location within the San Francisco Bay Area, and the
Government Finance Officers Association of the United States Certificate of
Achievement for Excellence in Financial Reporting for the fiscal year ending June 30,
2003.
2. Financial Section - The basic financial statements include management’s discussion and
analysis, government- wide financial statements, fund financial statements, notes to the
basic financial statements, and required supplementary information as well as the
auditors’ report on the financial statements and schedules.
3. Statistical Section - Includes selected financial and demographic information, which is
generally presented on a multi- year basis and is unaudited.
vi
This report presents management’s representations concerning the finances of the City.
Consequently, management assumes full responsibility for the completeness and reliability of all
of the information presented in this report. To provide a reasonable basis for making these
representations, management of the City has established a comprehensive internal control
framework that is designed both to protect the City’s assets from loss, theft or misuse and to
compile sufficient reliable information for the preparation of the City’s financial statements in
conformity with generally accepted accounting principles ( GAAP). Because the costs of internal
controls should not outweigh the benefits, the City’s comprehensive framework of internal
controls has been designed to provide reasonable rather than absolute assurance that the financial
statements will be free from material misstatement.
Caporicci and Larson, CPA’s, a public accounting firm fully licensed and qualified to perform
audits of local governments within the State of California, has audited the City’s basic financial
statements. The goal of the independent audit was to provide reasonable assurance that the basic
financial statements of the City for the fiscal year ended June 30, 2004, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements; assessing the accounting principles used
and significant estimates made by management; and evaluating the overall financial statement
presentation. The independent auditors concluded, based upon the audit, that there was a
reasonable basis for rendering an unqualified opinion that the City’s basic financial statements for
the fiscal year June 30, 2004, are fairly presented in conformity with accounting principles
generally accepted in the United States. The independent auditor’s report is presented as the first
component of the financial section of this report.
The independent audit of the financial statements of the City of San Leandro was part of a
federally mandated Single Audit designed to meet the special needs of Federal grantor agencies.
The standards governing Single Audit engagements require the independent auditor to report not
only the fair presentation of the financial statements, but also on the audited government’s
internal controls and compliance with legal requirements, with special emphasis on internal
controls and legal requirements involving the administration of Federal awards. These reports are
available in the City’s separately issued Single Audit Report.
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statement in the form of Management’s Discussion and Analysis
( MD& A). The MD& A compliments this letter of transmittal and should be read in conjunction
with it. The City’s MD& A can be found immediately following the report of the independent
auditors in the financial section of the CAFR.
THE REPORTING ENTITY
The City of San Leandro was incorporated in 1872 and is one of the oldest communities in the
San Francisco Bay Area. The City occupies fifteen square miles between the cities of Oakland
and Hayward and is bordered on the west by the San Francisco Bay. San Leandro offers its
80,000 plus residents the quiet charm and character of a community that has been established for
more than 130 years. Once an agricultural community, the City has been successful in attracting
significant industrial, manufacturing and retail development to the area.
vii
The City functions under a Mayor- Council- Manager form of government and is governed by a
seven- member council elected by City residents. Municipal services provided include public
safety; highways and streets; recreation, library and cultural services; health services; public
improvements; planning and zoning and general administrative services.
As of June 30, 2004 there were no discretely reportable component units. The City’s blended
component units include: operations of the San Leandro Redevelopment Agency, the San
Leandro Parking Authority, the San Leandro Public Financing Authority, the San Leandro
Economic Development Agency, and the enterprise operation of the San Leandro Housing
Finance Corporation.
The CAFR for the year ending June 30, 2004 provides a financial account of those activities,
organizational elements, and City functions for which the City Council provides policy direction
and general oversight. It presents financial information on the activities of the City of San
Leandro itself and the component units of the City upon which the City Council is authorized to
impose its will. The operating nature of the City’s component units determines how they are
reported in the financial statements. The activities of component units that provide financial
benefit or create financial burden for the City are blended within the City’s general financial
statements. Component units that have no discernable financial impact upon the City are
presented separately. The scope of the City Council’s power and influence includes, but is not
limited to the following:
• The authority to establish and modify operating and capital budgets
• The power to appoint voting members to other governing authorities
• The power to appoint the City Manager and City Attorney
• The ability to plan and direct operations
• The authority to veto, modify, and overrule decisions
Another significant example of control is the nature of financial interdependency between the
various City funds. Manifestations of financial interdependency include taking responsibility for
financing deficits, being entitled to operating surpluses, and giving implied guarantees (“ moral
responsibility”) for debt obligations.
The City Council is required to adopt a final budget through the passage of a resolution by no
later than June 30th, the close of the fiscal year, following a public hearing process conducted to
obtain taxpayer comments. This annual budget serves as the foundation for the City of San
Leandro’s financial planning and control. The budget is prepared by fund, function ( e. g., public
safety) and department ( e. g., police). The legal level of budgetary control is at the fund level.
The City Manager is authorized to transfer budgeted amounts between departments and line
items within any fund; however, any revisions which alter the total expenditures of any fund must
be approved by the City Council. Transfers between funds must be approved by the City
Council. All appropriations lapse at year- end, unless otherwise authorized by the City Council
and the City Manager, except for capital improvement funds for which appropriations endure
until the project is completed.
viii
ECONOMIC CONDITION OF THE CITY
The City of San Leandro has a diverse and strong economy with its business community
comprised of a diverse collection of business ranging from neighborhood coffeehouses and fine
restaurants, large food processing centers, and regional shopping opportunities, to cutting edge
technology. While the economic base had dramatically changed from its agricultural early years,
San Leandro continues to expand on its sound business base with new developments such as the
Marina Boulevard Auto Mall and the newly remodeled Bayfair Mall.
The City of San Leandro continues to experience declining revenues, which has been a trend
since September 11, 2001, at a time when the costs of providing service are also significantly
increasing. Not only are the ongoing costs of providing services to the community increasing,
but also costs associated with employee benefits are skyrocketing. For example, worker’s
compensation, health insurance and retirement costs have all risen during this same time period.
In addition to economic challenges, California local governments have experienced and will
continue to experience future take- aways from the State as one of their avenues for offsetting its
operating budget deficits.
The City’s management team has addressed and continues to address the budget challenges
facing San Leandro. A combination of budget balancing approaches such as attrition planning,
identification of service efficiencies, use of one- time reserves, and implementation of new
revenue enhancements ( e. g., 911 Fee) have been implemented. The City will continue to monitor
and evaluate these approaches to balancing its budget and make changes accordingly to ensure
the success of the City’s financial operations with respect to the services provided. At fiscal year
end, the City’s general fund maintains reserves available for emergencies and economic
uncertainties of $ 13.2 million or 19.3% of the City’s fiscal year 2004- 05 adopted budget. This is
a $ 3.2 million increase over fiscal year ending June 30, 2003, which includes a $ 2 million loan
repayment from the redevelopment agency. Through continuing conservative financial
management practices, the City of San Leandro looks to the future with great optimism.
CASH MANAGEMENT
The City maintains a cash and investment pool for all City Funds. The City Treasurer invests
City funds in accordance with the Investment Policy adopted annually by the City Council. The
objectives of the policy are legality, safety, liquidity and yield. The policy addresses the credit
quality of issuing financial institutions and the types of investments permitted by the California
Government Code. Permitted City investments include obligations of the U. S. Treasury and its
agencies and instrumentalities, commercial paper, banker’s acceptances, high quality medium-term
corporate notes, repurchase agreements, reverse repurchase agreements, certificates of
deposit, high quality mutual funds, and the State Treasurer’s Local Agency Investment Fund.
Additional information on the City’s cash management can be found in Note 2 of the notes to the
financial statements.
RISK MANAGEMENT
The City maintains a program of commercial insurance combined with self- insurance for
substantially all of its governmental operations, except for major construction projects and
ix
contractor- supplied services. In such circumstances, insurance to protect the City is provided by
each contractor. The City is a member of the Local Agency Workers’ Compensation Excess Joint
Powers Authority ( LAWCX). The City is also a member of California Joint Powers Risk
Management Authority ( CJPRMA), which provides annual general liability coverage in an
aggregate up to $ 25 million. Additional information on the City’s risk management activity can
be found in the notes to the financial statements.
CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada ( GFOA) has
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of San
Leandro for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2003.
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 this
comprehensive annual financial report for fiscal year 2004 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. For the first time, the City will is also submitting this document
to the California Society of Municipal Finance Officers ( CSMFO) with the hopes of an additional
achievement certification.
ACKNOWLEDGMENTS
This CAFR represents the culmination of numerous hours of hard work expended by the
dedicated staff in the Accounting Division of the Finance Department. In particular, I would like
to express appreciation to Mary McCarthy, Christine Galvin, and Clarence Youngs whose
support and dedication made the timeliness of the report possible. Furthermore, I would like to
thank Caporicci & Larson, CPA’s for their professional assistance and cooperation. Finally, I
want to thank John Jermanis, City Manager, Ed Schilling, Assistant City Manager, and the City
Council Finance Committee for their continued interest and support in planning and conducting
the City’s financial operations in a responsible and progressive manner.
Respectfully submitted,
Jesse S. Baloca
Finance Director
xi
PRINCIPAL OFFICERS
CITY OF SAN LEANDRO
For Fiscal Year Ended June 30, 2004
CITY COUNCIL
Mayor Shelia Young
Vice Mayor Orval “ OB” Badger
Councilmember Bob Glaze
Councilmember Surlene G. Grant
Councilmember Glenda Nardine
Councilmember Tony Santos
Councilmember Bill Stephens
COUNCIL APPOINTEES
City Manager John J. Jermanis
City Attorney Jayne W. Williams
APPOINTED OFFICIALS
Assistant City Manager Edward G. Schilling
City Clerk Marian Handa
Police Chief Joseph W. Kitchen
Community Development Director Hanson Hom
Finance Director Jesse Baloca
Library Services Director David Bohne
Recreation and Human Services Director Carolyn Knudtson
Human Resources Director Justinian Caire
Engineering – Transportation Director Uchenna Udemezue
Public Works Services Director Robert Rockett
Alameda
Contra Costa
Santa Clara
San Mateo
San Francisco
Marin
Sonoma Napa Solano
San Francisco Bay
Alamo
Pinole
Orinda
Novato
Newark
Moraga
Albany
Vallejo
Oakland
Hayward
Fremont
Concord
Clayton
Benicia
Belmont
Ashland
Alameda
Stanford
Richmond
Piedmont
Pacifica Millbrae
Martinez
Larkspur
Danville
Berkeley
San Ramon
San Pablo
San Mateo
San Bruno
Lafayette
Daly City
Bay Point
Union City
San Rafael
San Carlos
Menlo Park
El Cerrito
Burlingame
San Lorenzo
LeSanandro
San Anselmo
Mill Valley
Foster City
Walnut Creek
Redwood City
Hillsborough
Pleasant Hill
Mountain View
Half Moon Bay North Fair Oaks
South San Francisco
Tamalpais- Homestead Valley
East Palo Alto
Palo Alto
Castro Valley
Hercules
5 2.5 0 5
Miles
BASIC FINANCIAL STATEMENTS
GOVERNMENT- WIDE FINANCIAL STATEMENTS
City of San Leandro
Statement of Net Assets
June 30, 2004
Governmental Business- Type
Activities Activities Total
ASSETS
Current assets:
Cash and investments - ( Note 2) $ 26,708,942 $ 18,561,405 $ 4 5,270,347
Restricted cash and investments - ( Note 2)
Cash and investments 27,489,086 $ - 27,489,086
Cash and investments with fiscal agent 16,395,944 1,396,339 17,792,283
Unrestricted receivables:
Property taxes 179,785 - 179,785
Accounts 5,708,999 1,069,897 6,778,896
Federal, State, and local grants 1,005,671 - 1,005,671
Interest 12,517 52,589 65,106
Special assessments 21,292 199,023 220,315
Restricted receivables 5,977,808 - 5,977,808
Short- term internal balances ( Note 5) 309,372 ( 309,372) -
Inventory and prepaid items 84,851 - 84,851
Other assets: 1,146,139 1,146,139
Total current assets 85,040,406 20,971,027 1 06,011,433
Noncurrent assets:
Loans receivable ( Note 3) 7,319,052 6,053,280 13,372,332
Notes receivable ( Note 4) 2,135,863 - 2,135,863
Long- term internal balances 8,713,772 ( 8,713,772) -
Capital assets ( Note 6):
Non Depreciable 31,903,278 2,253,733 34,157,011
Depreciable 393,944,116 15,668,838 4 09,612,954
Less accumulated depreciation ( 100,727,567) ( 8,477,401) ( 109,204,968)
Capital assets, net 325,119,827 9,445,170 3 34,564,997
Total noncurrent assets 343,288,514 6,784,678 3 50,073,192
Total assets 428,328,920 27,755,705 4 56,084,625
LIABILITIES
Current liabilities:
Accounts payable and accruals:
Restricted 1,022,041 954,149 1,976,190
Unrestricted 2,433,975 - 2,433,975
Interest payable 831,704 - 831,704
Deferred revenue ( Note 9):
Restricted 1,597,524 12,565 1,610,089
Unrestricted 1,278,505 - 1,278,505
Other liabilities
Restricted 2,853,459 901,012 3,754,471
Unrestricted 937,489 - 937,489
Compensated absences payable - due within one year ( Note 8) 225,271 100,432 325,703
Claims and judgments payable - due within one year ( Note 11) 1,510,956 - 1,510,956
Long- term debt - due within one year ( Note 7) 2,600,732 263,801 2,864,533
Total current liabilities 15,291,656 2,231,959 17,523,615
Noncurrent liabilities:
Deposits - restricted 20,000 64,479 84,479
Compensated absences payable - due in more than one year ( Note 8) 3,874,032 344,100 4,218,132
Claims and judgments payable - due in more than one year ( Note 11) 8,793,689 - 8,793,689
Long- term debt - due in more than a year ( Note 7) 70,838,859 9,447,178 80,286,037
Total noncurrent liabilities 83,526,580 9,855,757 93,382,337
Total liabilities 98,818,236 12,087,716 1 10,905,952
NET ASSETS
Invested in capital assets, net of related debt 282,335,707 9,445,171 2 91,780,878
Restricted for:
Capital projects 35,351,914 - 35,351,914
Debt service 5,467,844 - 5,467,844
Special projects 3,570,056 - 3,570,056
Total restricted 44,389,814 - 44,389,814
Unrestricted 2,785,163 6,222,818 9,007,981
$ 329,510,684 $ 15,667,989 $ 3 45,178,673
See accompanying Notes to Basic Financial Statements.
Total net assets
19
City of San Leandro
Statement of Activities and Changes in Net Assets
For the year ended June 30, 2004
Indirect Operating Capital
Expenses Charges for Grants and Grants and
Functions/ Programs Expenses Allocation Services Contributions Contributions Total
Primary government:
Governmental activities:
General government $ 2 5,952,060 $ ( 421,773) $ 3 ,437,546 $ 4 4,113 $ 9 35,530 $ 4 ,417,189
Public safety 3 3,391,010 2 3,304 1 ,979,654 4 80,455 5 19,072 2 ,979,181
Engineering and transportation 7 ,249,552 3 42,539 6 47,107 1 ,707,057 8 ,575,473 1 0,929,637
Recreation and culture 1 0,697,237 2 3,304 1 ,935,111 3 57,806 1 ,073,797 3 ,366,714
Community development 9 ,180,169 3 2,626 1 ,734,741 8 ,373,917 1 0,217 1 0,118,875
Interest on long- term debt 4 ,217,408 - - - - -
Total governmental activities 9 0,687,436 - 9 ,734,159 1 0,963,348 1 1,114,089 3 1,811,596
Business- type activities:
Water Pollution Control Plant 7 ,759,280 - 8 ,530,652 - - 8 ,530,652
Marina 1 ,910,506 - 1 ,721,631 - - 1 ,721,631
San Leandro Housing Finance
Corporation 6 00,094 - - - - -
Storm Water Utility 1 ,030,222 - 1 ,074,565 - - 1 ,074,565
Environmental Services 1 ,235,675 - 6 44,644 - - 6 44,644
Golf Course - - - - - -
Total business- type activities 1 2,535,777 - 1 1,971,492 - - 1 1,971,492
Total primary government $ 1 03,223,213 $ - $ 2 1,705,651 $ 1 0,963,348 $ 1 1,114,089 $ 4 3,783,088
General revenues and transfers:
Taxes:
Property taxes
Sales taxes
Motor vehicle license fees
Other taxes
Total taxes
Investment earnings
Miscellaneous
Transfers
Total general revenues and transfers
Change in net assets
Net assets - beginning of year, as restated ( Note 15)
Net assets - end of year
See accompanying Notes to Basic Financial Statements.
Program Revenues
20
Governmental Business- Type
Activities Activities Total
$ ( 21,113,098) $ - $ ( 21,113,098)
( 30,435,133) - ( 30,435,133)
3 ,337,546 - 3 ,337,546
( 7,353,827) - ( 7,353,827)
9 06,080 - 9 06,080
( 4,217,408) - ( 4,217,408)
( 58,875,840) - ( 58,875,840)
- 7 71,372 7 71,372
- ( 188,875) ( 188,875)
- ( 600,094) ( 600,094)
- 4 4,343 4 4,343
- ( 591,031) ( 591,031)
- - -
- ( 564,285) ( 564,285)
( 58,875,840) ( 564,285) ( 59,440,125)
1 5,456,837 - 1 5,456,837
2 0,089,952 - 2 0,089,952
3 ,705,763 - 3 ,705,763
1 8,555,145 2 82,372 1 8,837,517
5 7,807,697 2 82,372 5 8,090,069
2 ,033,764 7 95,829 2 ,829,593
2 ,750,995 4 44,232 3 ,195,227
( 79,051) 7 9,051 -
6 2,513,405 1 ,601,484 6 4,114,889
3 ,637,565 1 ,037,199 4 ,674,764
3 25,873,119 1 4,630,790 3 40,503,909
$ 3 29,510,684 $ 1 5,667,989 $ 3 45,178,673
Net ( Expense) Revenue
and Changes in Net Assets
21
FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
GOVERNMENTAL FUND FINANCIAL STATEMENTS
Measure B - This fund accounts for the City's share of proceeds of a one- half cent sales tax increase originally
approved by the voters in November 1986. The program is administered by the Alameda County Transportation
Authority. The tax provides funds for eight specific projects within Alameda County including major freeway
improvements and a major rail extension.
The General Fund - Accounts for all general revenues of the City not specifically levied or collected for other City
funds and the related expenditures. The General Fund accounts for all financial resources of a governmental unit which
are not accounted for in other funds.
San Leandro Public Financing Authority Debt Service Fund - Accounts for certificates of participation issued in 1993
for the Seismic Retrofit Project. The debt will be repaid through receipt of tax increment in future years and includes a
sale and leaseback agreement between the City of San Leandro and the San Leandro Community Redevelopment
Agency. This fund also accounts for Certificates of Participation issued for the library and fire stations seismic retrofit.
The debt will be paid back pursuant to lease agreements between the City of San Leandro and the San Leandro Public
Finance Authority.
Capital Improvement Projects Capital Projects Fund - Accounts for monies for major capital improvement projects
not provided for in one of the other capital projects funds.
Redevelopment Agency Capital Projects Fund - Accounts for the planning and implementation of the City’s
Redevelopment Plan for the three Project Areas located within the City’s boundaries.
Redevelopment Agency Low/ Moderate Housing Capital Projects Fund - Accounts for the 20% tax increment revenue
set aside legally designated for low and moderate income housing and neighborhood improvement programs.
25
City of San Leandro
Balance Sheet
Governmental Funds
June 30, 2004
San Leandro Capital
Public Financing Improvement
Authority Projects
General Debt Service Measure B Capital Projects
ASSETS
Cash and investments $ 12,276,275 $ 60,780 $ 3,096 $ 7,666,071
Cash and investments with fiscal agent - 2,807,339 - 2,786,968
Receivables:
Property taxes 179,785 - - -
Accounts 5,137,940 - 3,880 5,270
Federal, State, and local grants - - 3,356,385 -
Interest 12,517 - - -
Special Assessment 21,292 - - -
Sales tax - Measure B - - 332,295 -
Loans - - - -
Notes 2,135,863 - - -
Due from other governments - - - -
Due from other funds 1,951,456 - - -
Other assets 1,090 - 1,072,200 72,600
Advances to other funds 16,686,379 - - -
Total assets $ 38,402,597 $ 2,868,119 $ 4,767,856 $ 10,530,909
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and accruals $ 2,153,591 $ - $ 252,580 $ 354,673
Deposits payable - - - -
Deferred revenue 1,278,505 - - -
Due to other funds - - 1,571,210 -
Other liabilities 98,974 - 1,072,200 244,835
Advances from other funds - - - -
Compensated absences payable 210,739 - - -
Total liabilities 3,741,809 - 2,895,990 599,508
Fund Balances:
Reserved for:
Encumbrances 309,871 - 544,688 3,223,274
Advances to other funds 16,686,379 - - -
Long- term notes/ loans receivables 2,135,863 - - -
Debt service - 2,868,119 - -
Capital projects 6,708,127
Unreserved:
Designated:
Unrealized gain / ( loss) on investments - - - -
Internship program 50,000 - - -
Major emergencies 5,000,000 - - -
Economic uncertainty 7,971,760 - - -
Fire equipment acquisition 1,549,727 - - -
Computer purchase program 225,000 - - -
Utility users rebate - - - -
Capital projects 114,998 - - -
Asset seizure 371,697 - - -
Unreserved, undesignated, reported in:
General Fund 245,493
Special revenue funds - - 1,327,178 -
Total fund balances 34,660,788 2,868,119 1,871,866 9,931,401
Total liabilities and fund balances $ 38,402,597 $ 2,868,119 $ 4,767,856 $ 10,530,909
See accompanying Notes to Basic Financial Statements.
Major Funds
26
Redevelopment
Redevelopment Agency Low/ Non- Major
Agency Moderate Housing Governmental
Capital Projects Capital Projects Funds Total
$ 12,475,364 $ 2,871,980 $ 6,997,549 $ 42,351,115
8,627,878 - 2,173,759 16,395,944
270,650 62,930 - 513,365
25,736 4,514 218,634 5,395,974
- - 1,181,574 4,537,959
5,747 171,818 105,727 295,809
- - 1,241,453 1,262,745
- - - 332,295
2,879,539 4,325,270 1,208,264 8,413,073
- - - 2,135,863
- - - -
- 97,073 - 2,048,529
- - 249 1,146,139
- - - 16,686,379
$ 24,284,914 $ 7,533,585 $ 13,127,209 $ 101,515,189
$ 156,833 $ 67,746 $ 230,070 $ 3,215,493
10,000 10,000 - 20,000
2,885,286 4,497,088 2,910,879 11,571,758
- - 70,874 1,642,084
1,886,664 - 488,275 3,790,948
7,066,246 - - 7,066,246
- - - 210,739
12,005,029 4,574,834 3,700,098 27,517,268
474,620 437,120 1,179,504 6,169,077
- 97,073 - 16,783,452
- - - 2,135,863
- - 2,819,733 5,687,852
11,805,265 2,424,558 121,641 21,059,591
- - - -
- - - 50,000
- - - 5,000,000
- - - 7,971,760
- - - 1,549,727
- - - 225,000
- - - -
- - 300,000 414,998
- - - 371,697
245,493
- - 5,006,233 6,333,411
12,279,885 2,958,751 9,427,111 73,997,921
$ 24,284,914 $ 7,533,585 $ 13,127,209 $ 101,515,189
Major Funds
27
City of San Leandro
Reconciliation of the Governmental Funds Balance Sheet
to the Government- Wide Statement of Net Assets
June 30, 2004
Total Fund Balances - Total Governmental Funds $ 73,997,921
Amounts reported for governmental activities in the Statement of Net Assets were reported differently
because:
Capital assets used in governmental activities are not current financial resources and therefore are not
reported in the Governmental Funds Balance Sheet.
Non depreciable assets ( Land and construction in progress) 31,903,282
Depreciable buildings, property, equipment and infrastructure, net 289,778,991
Total capital assets 321,682,273
Interest payable on long- term debt does not require current financial resources. Therefore, interest
payable was not reported as a liability in Governmental Funds Balance Sheet. ( 831,704)
Internal service funds are used by management to charge the costs of certain activities to individual
funds. The assets and liabilities of the internal service funds are included in governmental activities in
the Government- Wide Statement of Net Assets. 4,227,183
Recognition of deferred revenue 7,601,708
Long- term liabilities are not due and payable in the current period. Therefore, they were not reported in
the Governmental Funds Balance Sheet. The long- term liabilities were adjusted as follows:
Long- term debt - current portion ( net) ( 2,600,732)
Long- term debt - non- current portion ( net) ( 70,838,859)
Compensated absences - non- current portion ( 3,727,106)
Total long- term liabilities ( 77,166,697)
Net Assets of Governmental Activities $ 329,510,684
See accompanying Notes to Basic Financial Statements.
29
City of San Leandro
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the year ended June 30, 2004
San Leandro Capital
Public Financing Improvement Redevelopment
Authority Projects Agency
General Debt Service Measure B Capital Projects Capital Projects
REVENUES:
Property and other taxes $ 47,003,728 $ - $ - $ - $ 5,794,559
Licenses and permits 3,446,434 - - - -
Fines and forfeitures 704,309 - - - -
Service charges 2,741,538 - 46,632 93,531 -
Intergovernmental 4,258,717 - 4,298,205 - -
Use of money and property 1,704,349 2,491,965 ( 2,101) - 237,080
Interdepartmental charges 1,750,728 - - - -
Other 2,517,308 - 24,630 667,103 215,135
Total revenues 64,127,111 2,491,965 4,367,366 760,634 6,246,774
EXPENDITURES:
Current:
General government 10,566,006 - - 1,440,556 -
Public safety 33,148,705 - - 117,670 -
Engineering and transportation 2,407,949 - 3,950,413 1,281,752 -
Recreation and culture 11,175,151 - - 1,760,900 -
Community development 4,817,774 - - 396,366 2,788,645
Debt service:
Principal - 750,000 - - 845,716
Interest and fees - 2,028,596 - - 60,000
Total expenditures 62,115,585 2,778,596 3,950,413 4,997,244 3,694,361
REVENUES OVER ( UNDER) EXPENDITURES 2,011,526 ( 286,631) 416,953 ( 4,236,610) 2,552,413
OTHER FINANCING SOURCES ( USES):
Proceeds from the sale of bonds - - - - -
Transfers in 427,914 - 819,375 3,536,603 4,870,000
Transfers ( out) ( 6,183,107) - ( 478,612) - ( 2,591,457)
Total other financing sources ( uses) ( 5,755,193) - 340,763 3,536,603 2,278,543
REVENUES AND OTHER FINANCING
SOURCES OVER ( UNDER) EXPENDITURES
AND OTHER FINANCING USES ( 3,743,667) ( 286,631) 757,716 ( 700,007) 4,830,956
FUND BALANCES:
Beginning of year 38,404,455 3,154,750 1,114,150 10,631,408 7,448,929
Prior period restatements - - - - -
Beginning of year, as restated 38,404,455 3,154,750 1,114,150 10,631,408 7,448,929
End of year $ 34,660,788 $ 2,868,119 $ 1,871,866 $ 9,931,401 $ 12,279,885
See accompanying Notes to Basic Financial Statements.
Major Funds
30
Major Funds
Redevelopment
Agency Low/ Non- Major
Moderate Housing Governmental
Capital Projects Funds Total
$ 1,560,886 $ 685,929 $ 55,045,102
- 417,007 3,863,441
- - 704,309
- 1,656 2,883,357
- 5,728,899 14,285,821
95,552 262,625 4,789,470
- - 1,750,728
183,287 542,158 4,149,621
1,839,725 7,638,274 87,471,849
- 601,250 12,607,812
- 745,963 34,012,338
- 6,161,912 13,802,026
- 1,526,869 14,462,920
1,068,503 866,747 9,938,035
- 940,024 2,535,740
- 1,807,541 3,896,137
1,068,503 12,650,306 91,255,008
771,222 ( 5,012,032) ( 3,783,159)
- 5,500,000 5,500,000
67,895 5,311,471 15,033,258
- ( 5,893,092) ( 15,146,268)
67,895 4,918,379 5,386,990
839,117 ( 93,653) 1,603,831
2,119,634 9,520,764 72,394,090
- - -
2,119,634 9,520,764 72,394,090
$ 2,958,751 $ 9,427,111 $ 73,997,921
31
City of San Leandro
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Government- Wide Statement of Activities and Changes in Net Assets
For the year ended June 30, 2004
Net Change in Fund Balances - Total Governmental Funds $ 1,603,831
Governmental activities in the Statement of Activities and changes in Net Assets were reported differently
because:
Governmental funds report capital outlay as expenditures. However, in the Government- Wide Statement of
Activities and Changes in Net Assets, the cost of those assets is allocated over their estimated useful lives
as depreciation expense. This is the amount of capital assets recorded in the current period. 12,578,290
Depreciation expense on capital assets is reported in the Government- Wide Statement of Activities and
Changes in Net Assets, but they do not require the use of current financial resources. Therefore,
depreciation expense is not reported as expenditures in governmental funds. ( 14,964,649)
Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term
liabilities in the Government- Wide Statement of Net Assets. ( 5,500,000)
Recognition of deferred revenue 7,601,710
Bond discount on issuance of debt is an adjustment to the expenditures in governmental funds, but the
discount reduces long- term liabilities in the Government- Wide Statement of Net Assets. In the Government
Wide Statement of Net Assets the discount is amortized over the period of the outstanding debt. ( 4,107)
Bond premium on issuance of debt is an expenditures in governmental funds, but the premium increases
long- term liabilities in the Government- Wide Statement of Net Assets. In the Government- Wide Statement
of Net Assets the premium is amortized over the period of the outstanding debt. 10,556
Repayment of bond Principal is an expenditure in governmental funds, but the repayment reduces long-term
liabilities in the Government - Wide Statement of Net Assets. 2,535,740
Payroll expense on compensated absences is reported in the Government- Wide Statement of Activities and
Changes in Net Assets, but they do not require the use of current financial resources. Therefore,
compensated absences expense is not reported as expenditures in governmental funds. ( 215,047)
Interest expense on long- term debt is reported in the Government- Wide Statement of Activities and
Changes in Net Assets, but does not require the use of current financial resources. Therefore, interest
expense was not reported as expenditures in governmental funds. The following amount represents the
change in accrued interest from the prior year. ( 327,720)
Internal service funds are used by management to charge the costs of certain activities, such as insurance
and fleet management, to individual funds. The net revenue of the internal service funds is reported with
governmental activities. 318,961
Change in Net Assets of Governmental Activities $ 3,637,565
See accompanying Notes to Basic Financial Statements.
32
Internal Service Funds - These funds are used to account for special activities and services performed by a designated
City department for other departments on a cost reimbursement basis.
PROPRIETARY FUND FINANCIAL STATEMENTS
Water Pollution Control Plant - This fund accounts for the City’s sewers which protect public health and preserve
water quality through the collection, treatment and disposal of the community’s wastewater and wastewater solids.
Shoreline - The City operates various recreational facilities which include golf and marina berthing as well as
providing food service facilities for the general public in an area connected to the San Francisco Bay.
San Leandro Housing Finance Corporation - This fund operates the City’s home financing program through the sale
of revenue bonds and other financing mechanisms.
33
City of San Leandro
Statement of Net Assets
Proprietary Funds
June 30, 2004
Governmental
Water San Leandro Non- Major Activities
Pollution Housing Finance Enterprise Internal
Control Plant Shoreline Corporation Funds Total Service Funds
ASSETS
Current assets:
Cash and investments $ 1 5,151,123 $ 1 ,771,317 $ - $ 1 ,638,965 $ 1 8,561,405 $ 1 1,846,913
Restricted cash and investments - - 1 ,396,339 - 1 ,396,339 -
Receivables:
Accounts 7 45,109 2 11,000 - 1 13,788 1 ,069,897 5 67,925
Interest - - 5 2,589 - 5 2,589 -
Special assessment 1 66,432 - - 3 2,591 1 99,023 -
Other assets 1 ,145 - - - 1 ,145 -
Inventory - - - - - 8 4,851
Total current assets 1 6,063,809 1 ,982,317 1 ,448,928 1 ,785,344 2 1,280,398 1 2,499,689
Noncurrent assets:
Loans receivable - - 6 ,053,280 - 6 ,053,280 -
Capital assets:
Non- Depreciable 1 ,980,599 2 73,133 - - 2 ,253,732 -
Depreciable 9 ,699,304 5 ,969,535 - - 1 5,668,839 7 ,587,639
Less accumulated depreciation ( 6,100,154) ( 2,377,247) - - ( 8,477,401) ( 4,150,085)
Total capital assets, net 5 ,579,749 3 ,865,421 - - 9 ,445,170 3 ,437,554
Total noncurrent assets 5 ,579,749 3 ,865,421 6 ,053,280 - 1 5,498,450 3 ,437,554
Total assets 2 1,643,558 5 ,847,738 7 ,502,208 1 ,785,344 3 6,778,848 1 5,937,243
LIABILITIES
Current liabilities:
Accounts payable 740,112 1 75,692 - 3 8,345 9 54,149 2 40,523
Deferred revenue - - - 1 2,565 1 2,565 -
Due to other funds - 2 41,358 6 8,014 - 3 09,372 -
Due to other agencies - - 9 01,012 - 9 01,012 -
Claims and juddgements - due in one year - - - - - 1 ,510,956
Compensated absences - due in one year 24,931 3 ,382 - 7 2,119 1 00,432 1 4,531
Notes payable - due in one year - 1 33,802 - - 1 33,802 -
Bonds payable - due in one year - - 1 30,000 - 1 30,000 -
Total current liabilities 7 65,043 5 54,234 1 ,099,026 1 23,029 2 ,541,332 1 ,766,010
Noncurrent liabilities:
Deposits payable 3 ,000 6 1,479 - - 6 4,479 -
Advances from other funds - 8 ,713,771 - - 8 ,713,771 1 ,003,434
Claims and judgements - due in more than one year - - - - - 8 ,793,689
Compensated absences - due in more than one year 2 52,079 3 4,199 - 5 7,822 3 44,100 1 46,927
Notes Payable - due in more than one year - 3 ,402,177 - - 3 ,402,177 -
Bonds payable - due in more than one year - - 6 ,045,000 - 6 ,045,000 -
Total noncurrent liabilities 2 55,079 1 2,211,626 6 ,045,000 5 7,822 1 8,569,527 9 ,944,050
Total liabilities 1 ,020,122 1 2,765,860 7 ,144,026 1 80,851 2 1,110,859 1 1,710,060
NET ASSETS
Invested in capital assets, net of related debt 5 ,579,750 3 ,865,421 - - 9 ,445,171 -
Unrestricted 1 5,043,686 ( 10,783,543) 3 58,182 1 ,604,493 6 ,222,818 4 ,227,183
Total net assets $ 2 0,623,436 $ ( 6,918,122) $ 3 58,182 $ 1 ,604,493 $ 1 5,667,989 $ 4 ,227,183
See accompanying Notes to Basic Financial Statements.
Major Enterprise Funds
34
City of San Leandro
Statement of Revenues, Expenses, and Changes in Net Assets
Proprietary Funds
For the year ended June 30, 2004
Governmental
Water San Leandro Non- Major Activities
Pollution Housing Finance Enterprise Internal
Control Plant Shoreline Corporation Funds Total Service Funds
OPERATING REVENUES:
Charges for services $ 8,036,338 $ 1,018,462 $ - $ 1,400,742 $ 10,455,542 12,594,602
Licenses and permits 94,302 - - 269,116 363,418 -
Rents and concessions - 673,393 - - 673,393 -
Other operating revenues 400,012 29,776 - 49,351 479,139 510,158
Total operating revenues 8,530,652 1,721,631 - 1,719,209 11,971,492 13,104,760
OPERATING EXPENSES:
Salaries and benefits 3,039,571 442,129 - 1,276,544 4,758,244 2,471,641
Contractual and other services 2,744,703 470,191 161,479 408,632 3,785,005 7,590,783
Materials and supplies 524,531 78,039 - 42,482 645,052 1,162,156
Depreciation 241,684 117,063 - - 358,747 455,390
Other operating costs 1,208,791 285,209 22,666 538,239 2,054,905 1,042,183
Total operating expenses 7,759,280 1,392,631 184,145 2,265,897 11,601,953 12,722,153
OPERATING INCOME ( LOSS) 771,372 329,000 ( 184,145) ( 546,688) 369,539 382,607
NONOPERATING REVENUES ( EXPENSES):
Property and other taxes - 282,372 - - 282,372 -
Intergovernmental - 4,045 - 440,187 444,232 -
Investment income 222,006 10,422 547,014 16,387 795,829 ( 97,606)
Interest expense - ( 517,875) ( 415,949) - ( 933,824) -
Total nonoperating revenues ( expenses) 222,006 ( 221,036) 131,065 456,574 588,609 ( 97,606)
INCOME ( LOSS) BEFORE
OPERATING TRANSFERS 993,378 107,964 ( 53,080) ( 90,114) 958,148 285,001
OPERATING TRANSFERS:
Transfers in - - - 410,096 410,096 33,960
Transfers out ( 61,827) ( 8,642) - ( 260,576) ( 331,045) -
Total operating transfers ( 61,827) ( 8,642) - 149,520 79,051 33,960
Change in net assets 931,551 99,322 ( 53,080) 59,406 1,037,199 318,961
NET ASSETS:
Beginning of the year, as restated 19,691,885 ( 7,017,444) 411,262 1,545,087 14,630,790 3,908,222
End of the year $ 20,623,436 $ ( 6,918,122) $ 358,182 $ 1,604,493 $ 15,667,989 $ 4,227,183
See accompanying Notes to Basic Financial Statements.
Major Enterprise Funds
35
City of San Leandro
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2004
Governmental
Water San Leandro Non- Major Activities
Pollution Housing Finance Enterprise Internal
Control Plant Shoreline Corporation Funds Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers/ other funds $ 8 ,676,470 $ 3 ,475,716 $ - $ 1 ,671,518 $ 1 3,823,704 1 3,463,854
Cash payments or receipts to/ from other funds ( 1,350,590) - 9 8,406 - ( 1,252,184) -
Cash payments to suppliers for goods and services ( 2,845,014) ( 933,490) ( 184,145) ( 1,031,434) ( 4,994,083) ( 7,423,072)
Cash payments to employees for services ( 2,987,054) ( 441,143) - ( 1,227,845) ( 4,656,042) ( 2,588,855)
Net cash provided ( used) by operating activities 1 ,493,812 2 ,101,083 ( 85,739) ( 587,761) 2 ,921,395 3 ,451,927
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Property and other taxes received - - - - - -
Intergovernmental revenue received - - - 4 40,187 4 40,187 -
Repayment or receipt of advances to or from other funds - ( 8,642) - - ( 8,642) ( 145,032)
Transfers in from other funds - - - 4 10,096 4 10,096 3 3,960
Transfers out to other funds ( 61,827) ( 8,642) - ( 260,576) ( 331,045) -
Net cash provided ( used) by noncapital financing activities ( 61,827) ( 17,284) - 5 89,707 5 10,596 ( 111,072)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Retirement of long- term debt - ( 134,193) ( 130,000) - ( 264,193) -
Acquisition or disposal of fixed assts ( 1,915,717) ( 273,133) - - ( 2,188,850) ( 978,968)
Interest payments on bonds and notes payable - ( 517,875) ( 415,949) - ( 933,824) -
Net cash provided ( used) by capital and
related financing activates ( 1,915,717) ( 925,201) ( 545,949) - ( 3,386,867) ( 978,968)
CASH FLOWS FROM INVESTING ACTIVITIES:
Changes in loans and notes receivable - - 1 03,435 - 1 03,435 -
Interest received 2 20,406 1 0,422 5 47,014 1 6,388 7 94,230 ( 97,606)
2 20,406 1 0,422 6 50,449 1 6,388 8 97,665 ( 97,606)
Net increase ( decrease) in cash and cash equivalents ( 263,326) 1 ,169,020 1 8,761 1 8,334 9 42,789 2 ,264,281
CASH AND CASH EQUIVALENTS:
Beginning of year 1 5,414,449 6 02,297 1 ,377,578 1 ,620,631 1 9,014,955 9 ,582,632
End of year $ 1 5,151,123 $ 1 ,771,317 $ 1 ,396,339 $ 1 ,638,965 $ 1 9,957,744 $ 1 1,846,913
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Operating income ( loss) $ 7 71,372 $ 3 29,000 $ ( 184,145) $ ( 546,688) $ 3 69,539 3 82,607
Adjustments to reconcile operating income ( loss) to net
cash provided ( used) by operating activities:
Depreciation 2 41,684 1 17,063 - - 3 58,747 4 51,913
Changes in assets and liabilities:
Accounts receivable ( 179,991) ( 12,849) - ( 67,181) ( 260,021) 2 64,504
1 74,315 - - ( 14,004) 1 60,311
Inventory - - - - - 1 0,175
Other assets 9 38 - - 9 25 1 ,863 -
Accounts payable 4 75,135 ( 197,639) - 1 3,948 2 91,444 ( 211,160)
Claims and judgements - - - - - 2 ,569,486
Deposits - - - - -
Deferred revenue - 8 1,206 ( 4,280) 7 6,926 -
Due to other funds - 1 ,865,508 1 7,200 - 1 ,882,708 -
Compensated absences 1 0,359 - 2 9,519 3 9,878 ( 15,598)
Total adjustments 7 22,440 1 ,772,083 9 8,406 ( 41,073) 2 ,551,856 3 ,069,320
Net cash provided ( used) by operating activities $ 1 ,493,812 $ 2 ,101,083 $ ( 85,739) $ ( 587,761) $ 2 ,921,395 $ 3 ,451,927
See accompanying Notes to Basic Financial Statements.
Major Enterprise Funds
Special assessment receivable
Net cash provided ( used) by investing activities
36
FIDUCIARY FUND FINANCIAL STATEMENTS
Agency Funds are custodial in nature ( assets equal liabilities) and do not involve measurement of results of operations.
They are used to account for assets held in an agency capacity for others and therefore cannot be used to support the
City's programs.
37
City of San Leandro
Statement of Fiduciary Net Assets
Fiduciary Funds
June 30, 2004
Agency
Funds
ASSETS
Cash and investments $ 1,468,239
Cash and investments with fiscal agents 924,043
Accounts receivable 217,834
Special assessments receivable 12,721
Total assets $ 2,622,837
LIABILITIES
Accounts payable $ 8,709
Deposits payable 1,325,074
Due to bondholders 1,289,054
Total liabilities $ 2,622,837
See accompanying Notes to Basic Financial Statements.
38
City of San Leandro
Index to Notes to Basic Financial Statements
For the year ended June 30, 2004
39
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES ........................................................................................ 41
A. Financial Reporting Entity ............................................................................................................................. 41
B. Basis of Presentation, Measurement Focus and Basis of Accounting............................................................ 42
C. Recognition of Interest Liability .................................................................................................................... 44
D. Use of Restricted and Unrestricted Net Assets............................................................................................... 44
E. Cash, Cash Equivalents and Investments ....................................................................................................... 44
F. Inventory ............................................................................................................................... ........................ 45
G. Capital Assets......................................................................................................................... ....................... 45
H. Long Term Debt ............................................................................................................................... ............. 46
I. Compensated Absences....................................................................................................................... .......... 46
J. Property Taxes.......................................................................................................................... ..................... 46
K. Post Employment Benefits Other than Pensions ............................................................................................ 47
L. New Funds and Closed Funds........................................................................................................................ 47
M. Use of Estimates...................................................................................................................... ...................... 47
N. Net Assets......................................................................................................................... ............................. 47
O. Implementation of New GASB Pronouncements........................................................................................... 47
P. Deferred Revenue........................................................................................................................ .................. 48
NOTE 2 - CASH AND INVESTMENTS................................................................................................................. 48
A. Cash Deposits....................................................................................................................... ......................... 48
B. Investments.................................................................................................................... ................................ 49
C. Credit Risk........................................................................................................................... .......................... 49
D. Summary of Cash and Investments ................................................................................................................ 50
E. Investment in Local Agency Investment Fund............................................................................................... 51
F. Summary of Investments to Maturity............................................................................................................. 51
NOTE 3 – LOANS RECEIVABLE..................................................................................................................... .... 53
NOTE 4 - NOTES RECEIVABLE..................................................................................................................... ..... 53
NOTE 5 - INTERFUND TRANSACTIONS........................................................................................................... 54
A. Fund Financial Statements - Interfund Receivables and Payables ................................................................. 54
B. Fund Financial Statements - Long Term Advances ....................................................................................... 54
C. Fund Financial Statements - Transfers ........................................................................................................... 55
NOTE 6 – CAPITAL ASSETS......................................................................................................................... ....... 56
A. Government- Wide Financial Statements........................................................................................................ 56
B. Fund Financial Statements ............................................................................................................................. 58
NOTE 7 - LONG- TERM DEBT OBLIGATIONS ................................................................................................. 59
A. Governmental Activities Long- Term Debt .................................................................................................... 59
B. Long- Term Debt of Business- Type and Proprietary Funds ........................................................................... 67
C. Debt Covenants and Restrictions ................................................................................................................... 69
City of San Leandro
Index to Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
40
NOTE 8 – COMPENSATED ABSENCES.............................................................................................................. 69
NOTE 9 – DEFERRED REVENUE ........................................................................................................................ 70
A. Government- Wide Financial Statements........................................................................................................ 70
B. Fund Financial Statements ............................................................................................................................. 70
NOTE 10 – OTHER REQUIRED FUND DISCLOSURES................................................................................... 71
NOTE 11 - INSURANCE...................................................................................................................... ................... 71
NOTE 12 - EXPENDITURES IN EXCESS OF APPROPRIATIONS................................................................. 73
NOTE 13 - COMMITMENTS AND CONTINGENCIES..................................................................................... 73
A. Downtown Plaza Shopping Center MOREA ................................................................................................. 73
B. Century Theaters Reimbursement and Performance Agreement ................................................................... 73
C. Others ............................................................................................................................... ............................. 73
NOTE 14 - EMPLOYEE RETIREMENT PLANS ................................................................................................ 74
NOTE 15 - RESTATEMENT OF PRIOR PERIOD BALANCES ....................................................................... 75
A. Government- Wide Financial Statements........................................................................................................ 75
B. Business- Type Activities Statements ............................................................................................................. 75
NOTE 16 – CHANGE IN APPLICATION OF INDIRECT ALLOCATION OF REVENUES AND
EXPENDITURES ............................................................................................................................... ..................... 75
City of San Leandro
Notes to Basic Financial Statements
For the year ended June 30, 2004
41
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of San Leandro, California, ( City) have been prepared in conformity with
generally accepted accounting principles ( GAAP) as applied to governmental agencies. The Governmental Accounting
Standards Boards ( GASB) is the accepted standard setting body for establishing governmental accounting and
financial reporting principles. The more significant of the City’s accounting policies are described below.
A. Financial Reporting Entity
The City of San Leandro, California ( City) was incorporated in 1872 and is situated between the cities of Oakland and
Hayward in the East Bay of the San Francisco Bay Area. The City operates under the Mayor- Council- Manager form
of government created by charter in 1978 and provides the following services: public safety ( police, fire, disaster
preparedness and hazardous waste disposal), highways and streets, sanitation, health services, public improvements,
planning and zoning and general administration services.
The City is governed by a seven- member council elected by City residents. The City is legally separate and fiscally
independent, which means it can issue debt, set and modify budgets and fees and sue or be sued. The accompanying
general purpose financial statements include the financial activities of the City, the primary government, and its
component units.
Component units are legally separate organizations for which the elected officials of the primary government are
financially accountable. In addition, component units can be other organizations for which the primary government’s
exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.
The following is a brief review of the blended component units included in the accompanying basic financial
statements of the City in which the City Council functions as the governing board:
The Redevelopment Agency of the City of San Leandro ( Agency) was established to assist in the clearance and
rehabilitation of City areas determined to be in a declining condition. The Agency has all accounting and
administrative functions performed by City staff and the Agency receives advances from the City to finance
operations. The financial activities of the Agency have been included in the Redevelopment Agency and Low and
Moderate Income Housing Capital Projects Funds in the accompanying basic financial statements.
The San Leandro Housing Finance Corporation ( Corporation) was established to provide housing for the
City’s low and moderate income residents. The financial activities of the Corporation have been included as the
San Leandro Housing Finance Corporation Enterprise Fund in the accompanying basic financial statements.
The City of San Leandro Parking Authority ( Parking Authority) was established to issue debt for downtown
parking structures and lots. The financial activities are accounted for in the Parking Authority Debt Service Fund
in the accompanying basic financial statements.
The San Leandro Public Financing Authority ( Financing Authority) was established to issue debt for the
Seismic Retrofitting capital project and other community related financing programs. The financial activities are
accounted for in the San Leandro Public Financing Authority Debt Service Fund and the Seismic Retrofit Capital
Projects Fund in the accompanying basic financial statements.
San Leandro Economic Development Agency ( Development Agency) was created to issue debt and provide for
development activities within City limits, which includes lending services to local businesses. The activities of
this agency are accounted for in the Economic Development Agency Capital Projects Fund in the accompanying
basic financial statements.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
42
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES, Continued
A. Financial Reporting Entity, Continued
The above component units are included in the City’s basic financial statements using the blended method since the
governing body of these component units are substantially the same as the governing body of the City and these
component units provide services entirely to the City. Discretely presented component units are reported in a separate
column in the basic financial statements to emphasize that they are legally separate from the City. The City does not
have any component units that are discretely presented. Complete financial statements for each of the above
component units may be obtained from the City’s Finance Department.
B. Basis of Presentation, Measurement Focus and Basis of Accounting
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity.
The operations of each fund are accounted for with a separate set 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.
Government– Wide Financial Statements
The City’s government– wide financial statements include a Statement of Net Assets and a Statement of Activities and
Changes in Net Assets. These statements present summaries of governmental and business- type activities for the City,
the primary government, accompanied by a total column. Fiduciary activities of the City are not included in these
statements.
These basic financial statements are presented on an “ economic resources” measurement focus and the accrual basis
of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets and related infrastructure
assets and long- term liabilities, are included in the accompanying Statement of Net Assets. The Statement of
Activities presents changes in net assets. Under the accrual basis of accounting, revenues are recognized in the period
in which they are earned while expenses are recognized in the period in which the liability is incurred.
Certain types of transactions are reported as program revenues for the City and are presented in the following three
categories:
• Charges for services
• Operating grants and contributions
• Capital grants and contributions
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund activities,
payables and receivables. All internal balances in the Statement of Net Assets have been eliminated except those
representing balances between the governmental activities and the business- type activities, which are presented as
internal balances and eliminated in the total primary government column. ( In the Statement of Activities, internal
service fund transactions have been eliminated.) However, those transactions between governmental and business- type
activities have not been eliminated. The following interfund activities have been eliminated:
• Due to/ from other funds
• Advances to/ from other funds
• Transfers in/ out
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
43
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES, Continued
B. Basis of Accounting and Measurement Focus, Continued
Government– Wide Financial Statements, Continued
The City applies all applicable GASB pronouncements ( including all NCGA Statements and Interpretations currently
in effect) as well as the following pronouncements issued on or before November 30, 1989, to the business- type
activities, unless those pronouncements conflict with or contradict GASB pronouncements: Financial Accounting
Standards Board ( FASB)
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and
Changes in Fund Balances for all major governmental funds and non- major funds aggregated. An accompanying
schedule is presented to reconcile and explain the differences in net assets as presented in these statements to the net
assets presented in the government- wide financial statements. The City has presented all major funds that met the
applicable criteria.
All governmental and expendable trust funds are accounted for on a spending or “ current financial resources”
measurement focus. Accordingly, only current assets and current liabilities generally are included on the balance
sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases ( revenues and other
financial sources) and decreases ( expenditures and other financial uses) in net current assets. Under the modified
accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable
and available to finance expenditures of the current period.
Revenues are recorded when received in cash, except those revenues subject to accrual ( generally 60 days after year-end)
are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the
City, are property taxes, charges for services, federal and state grants, sales tax, and interest. Expenditures are
recognized in the accounting period in which the related fund liability is incurred.
Deferred revenues arise when potential revenues do not meet both the “ measurable” and “ available” criteria for
recognition in the current period. Deferred revenues also arise when the government receives resources before it has a
legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent
periods when both revenue recognition criteria are met or when the government has a legal claim to the resources, the
deferred revenue is removed from the balance sheet and revenue is recognized.
The Reconciliation of the Fund Financial Statements to the Government- Wide Financial Statements is provided to
explain the differences created by the integrated approach of GASB Statement No. 34.
Proprietary Fund Financial Statements
Proprietary fund financial statements include a Statement of Net Assets, a Statement of Revenues, Expenses and
Change in Net Assets, and a Statement of Cash Flows for all proprietary funds.
A separate column representing internal service funds is also presented in these statements. However, internal service
balances and activities have been combined with the governmental activities in the government- wide financial
statements.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
44
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES, Continued
B. Basis of Accounting and Measurement Focus, Continued
Proprietary Fund Financial Statements, Continued
Proprietary funds are accounted for using the “ economic resources” measurement focus and the accrual basis of
accounting. Accordingly, all assets and liabilities ( whether current or noncurrent) are included on the Statement of Net
Assets. The Statement of Revenues, Expenses and Changes in Net Assets presents increases ( revenues) and decreases
( expenses) in total net assets. Under the accrual basis of accounting, revenues are recognized in the period in which
they are earned while expenses are recognized in the period in which liability is incurred.
Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the
fund. All other revenues are reported as nonoperating revenues. Operating expenses are those expenses that are
essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.
Fiduciary Fund Financial Statements
Fiduciary fund financial statements normally include a Statement of Net Assets and a Statement of Changes in
Fiduciary Net Assets. The City's fiduciary funds represent agency funds. Agency funds are custodial in nature ( assets
equal liabilities) and do not involve measurement of results of operations. As a result, a statement of Changes in
Fiduciary Net Assets in not presented in this report.
C. Recognition of Interest Liability
In the government- wide financial statements, interest payable of long- term debt is recognized as the liability is
incurred for governmental fund types and proprietary fund types.
In the fund financial statements, proprietary fund types recognize the interest payable when the liability is incurred.
D. Use of Restricted and Unrestricted Net Assets
When an expense is incurred for purposes for which both restricted and unrestricted net assets are available, the City’s
policy is to apply restricted net assets first.
E. Cash, Cash Equivalents and Investments
The City pools cash and investments from all sources, except the fiscal agent cash and investments, for the purpose of
increasing income through investment activities. Interest income on investments is allocated on the basis of average
month- end cash and investment balances in each fund. Cash and cash equivalents represent cash and investments and
restricted cash and investments with an original maturity term of three months or less. Pooled cash and investments
allocated to proprietary fund types are considered cash and cash equivalents since specific investments held in the
City’s pooled cash and investments are not allocated to each fund.
The City invests in the California Local Agency Investment Fund (“ LAIF”), which is part of the Pooled Money
Investment Account operated by the California State Treasurer. LAIF funds are invested in high quality money market
securities and are managed to insure the safety of the portfolio. A portion of LAIF’s investments are in structured
notes and asset- backed securities. As of June 30, 2004 LAIF had invested 1.603% of its funds in such securities.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
45
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES, Continued
E. Cash, Cash Equivalents and Investments, Continued
LAIF determines fair value on its investment portfolio based on market quotations for these securities where market
quotations are readily available, and on amortized cost or best estimate for those securities where market value is not
readily available.
In accordance with GASB Statement No. 31, highly liquid money market investments with maturities of one year or
less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is
used as fair value for those securities for which market quotations are readily available.
F. Inventory
Inventory is held for consumption and is valued at average cost. Internal service fund supplies consist of materials and
supplies for the various City vehicles ( tires, batteries, etc.) and building maintenance, which are used for replacement
parts for vehicle service and to maintain City buildings. Information management service inventory consists of
postage for department use and a monthly count is performed to adjust this account to actual at the appropriate month-end.
G. Capital Assets
Capital assets are valued at historical cost or estimated historical cost if actual historical cost was not available.
Donated fixed assets are valued at their estimated fair market value on the date donated. City policy has set the
capitalization threshold for reporting capital assets at $ 5,000. Depreciation is recorded on a straight- line basis over
estimated useful lives of the assets as follows:
Buildings 50 years
Improvements other than buildings 20 years
Machinery and equipment 5- 20 years
Licensed Vehicles 7 years
Infrastructure 20- 50 years
In June 1999, the GASB issued Statement No. 34 which requires the inclusion of infrastructure capital assets in local
governments’ basic financial statements. In accordance with GASB Statement No. 34, the City included all
infrastructure into the 2003- 04 Basic Financial Statements.
The City defines infrastructure as the basic physical assets that allow the City to function. The assets include streets,
sewer, and park lands. Each major infrastructure system can be divided into subsystems. For example the street
system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, landscaping and land.
These subsystems were not delineated in the basic financial statements. The appropriate operating department
maintains information regarding the subsystems.
Interest accrued during capital assets construction, if any, is capitalized for the business- type and proprietary funds as
part of the asset cost.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
46
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES, Continued
G. Capital Assets, Continued
For all infrastructure systems, the City elected to use the Basic Approach as defined by GASB Statement No. 34 for
infrastructure reporting. Original costs were developed in one of three ways: ( 1) historical records; ( 2) standard unit
costs appropriate for the construction/ acquisition date; or ( 3) present cost indexed by a reciprocal factor of the price
increase from the construction/ acquisition date to the current date. The accumulated depreciation, defined as the total
depreciation from the date of construction/ acquisition to the current date on a straight line, un- recovered cost method
was computed using industry accepted life expectancies for each infrastructure subsystem. The book value was then
computed by deducting the accumulated depreciation from the original cost.
H. Long- Term Debt
Government- Wide Financial Statements
Long- term debt and other financed obligations are reported as liabilities in the appropriate activities.
Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using
the effective interest method. Bonds Payable are reported net of the applicable premium or discount. Issuance costs
are reported as deferred charges.
Fund Financial Statements
The fund financial statements do not present long- term debt but are shown in the Reconciliation of the Governmental
Funds Balance Sheet to the Government- Wide Statement of Net Assets.
I. Compensated Absences
Government- Wide Financial Statements
For governmental and business- type activities, compensated absences are recorded as incurred and the related
expenses and liabilities are reported.
Fund Financial Statements
In governmental funds, compensated absences are recorded as expenditures in the years paid, as it is the City’s policy
to liquidate any unpaid compensated absences at June 30 from future resources, rather than currently available
financial resources. In proprietary funds, compensated absences are expensed to the various funds in the period they
are earned, and such fund’s share of the unpaid liability is recorded as a long- term liability of the fund.
J. Property Taxes
Property taxes are levied/ liened on July 1 based on March 1 assessed valuation and are payable in two installments,
becoming delinquent on December 10 and April 10. The Alameda County Tax Collector bills and collects property
taxes and allocates a portion to the City as billed. Property tax revenues are recognized in the fiscal year for which the
taxes have been levied, provided they become available. In January, 1994, the City elected to continue collection of
interest and penalties on delinquent taxes and recognizes these revenues when available. Available means when due or
past due and collected within the current period, or expected to be collected soon thereafter, and to be used to pay
liabilities of the current period.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
47
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES, Continued
K. Post Employment Benefits Other Than Pensions
The City provides post- retirement medical and dental benefits to all employee groups through the age of 65 as required
by current association and management agreements. The City records premium payments on a “ pay- as- you- go” basis.
During the year ended June 30, 2004, the City paid $ 574,385 in medical and dental premiums on behalf of 126
participants.
L. New Funds and Closed Funds
During 2003- 2004, the City did not add or close any funds.
M. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires City
management to make estimates and assumptions that affect certain amounts and disclosures. Accordingly, actual
results could differ from those estimates.
N. Net Assets
Government- Wide Financial Statements
In the government- wide financial statements, net assets are classified in the following categories:
Invested in Capital Assets, Net of Related Debt – This amount consists of capital assets net of accumulated
depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the
assets.
Restricted Net Assets – This amount is restricted by external creditors, grantors, contributors, or laws or
regulations of other governments.
Unrestricted Net Assets – This amount is all net assets that do not meet the definition of “ invested in capital assets,
net of related debt” or “ restricted net assets.”
Fund Financial Statements
Reservation of fund balances of governmental funds and retained earnings of proprietary funds are created to either
satisfy legal covenants, including State laws, that require a portion of the fund equity be segregated or identify the
portion of the fund equity not available for future expenditures.
O. Implementation of New GASB Pronouncements
In 2004, the City adopted new accounting standards in order to conform to the following Governmental Accounting
Standards Board Statements:
• GASB Statement No. 39, Determining Whether Certain Organizations Are Component Units- an
amendment of GASB Statement No. 14
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
48
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES, Continued
O. Implementation of New GASB Pronouncements, Continued
GASB Statement No. 39 amends Statement 14 to provide additional guidance to determine whether certain organizations
for which the primary government is not financially accountable should be reported as component units based on the nature
and significance of their relationship with the primary government.
P. Deferred Revenue
In the Government- Wide Financial Statements, deferred revenue is recognized for transactions for which revenue has not
yet been earned. Typical transactions recorded as deferred revenues in the Government- Wide Financial Statements are
long- term loans receivable and prepaid charges for services.
In the Fund Financial Statements, deferred revenue is recorded when transactions have not yet met the revenue recognition
criteria based on the modified accrual basis of accounting. The City records deferred revenue for transactions for which
revenues have not been earned, or for which funds are not available to meet current financial obligations. Typical
transactions for which deferred revenue is recorded are grants received but not yet earned or available, interest on interfund
advances receivable, long- term assessments and long- term loans receivable.
NOTE 2 - CASH AND INVESTMENTS
The City maintains a cash and investment pool, which includes cash balances and authorized investments of all funds,
which the City Treasurer invests to enhance interest earnings. The pooled interest earned is allocated to the funds
based on average daily cash and investment balance in these funds.
A. Cash Deposits
The carrying amount of the City’s cash deposits were $ 10,524,209 at June 30, 2004. Bank balances before reconciling
items were $ 10,888,340 at that date, the total amount of which was insured or collateralized with securities held by the
pledging financial institutions in the City’s name as discussed below.
The California Government Code requires California banks and savings and loan associations to secure the City’s cash
deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of
perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is
considered to be held in the City's name.
The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows
institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total
cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $ 100,000 by the
Federal Deposit Insurance Corporation. The City, however, has not waived the collateralization requirements.
The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal
agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated on an
accounting period basis to the various funds based on the period- end cash and investment balances. Interest income from
cash and investments with fiscal agents is credited directly to the related fund.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
49
NOTE 2 - CASH AND INVESTMENTS, Continued
B. Investments
Under the provisions of the City’s investment policy, and in accordance with California Government Code, the
following investments were authorized:
Securities of the U. S. Government or its agencies
Medium- term corporate notes or bonds
Certificates of deposit
Bankers acceptances
Commercial paper
California Local Agency Investment Fund
Passbook savings account demand deposits
Repurchase agreements
Mutual funds investing in securities of the U. S. Government or its agencies.
In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for
External Investments Pools, the City reported its investments at fair value and the unrealized loss on investments
amounted to $ 279,585 for the fiscal year ended June 30, 2004.
C. Credit Risk
GASB Statement No. 3 requires that deposits and investments be classified by credit risk.
Classification of deposits and investments by credit risk are as follows:
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 - Deposits which are uninsured or uncollateralized.
Investments
Category 1 - Insured or registered or securities held by the 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.
Investments Not Subject to Categorization - Investments in the California Local Agency Investment Fund ( LAIF)
are not categorized, as GASB No. 3 does not require categorization of investment pools managed by another
agency. Certain fiscal agent investments are not categorized because the underlying assets are open- ended mutual
funds. Guaranteed investment contracts are not categorized because they are direct contractual investments and
are not securities. All such investments are not required to be categorized under interpretive guidelines issued by
the GASB.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
50
NOTE 2 - CASH AND INVESTMENTS, Continued
D. Summary of Cash and Investments
The following is a summary of pooled cash and investments, including restricted cash and investments at June 30,
2004:
Fund Financials
Fiduciary Funds
Governmental Business- Type Statement of
Activities Activities Total Net Assets Total
Cash and Investments $ 54,198,028 $ 18,561,405 $ 72,759,433 $ 1 ,468,239 $ 74,227,672
Restricted Cash and
Investments $ 16,395,944 $ 1,396,339 $ 17,792,283 $ 9 24,043 $ 18,716,326
Government- Wide Statement of Net Assets
Deposits and investments held by the City at June 30, 2004, are summarized below:
Not Subject to Fair
1 2 Categorization Value
City Treasury:
Demand Deposits:
Cash deposit $ 1 0,524,209 $ - $ - $ 1 0,524,209
Certificate of deposit - 9 5,000 - 9 5,000
Total Demand Deposits 1 0,524,209 9 5,000 - 1 0,619,209
Investments:
Securities of U. S. government agencies - 1 6,952,856 - 1 6,952,856
Mutual Funds - - 2 90,252 2 90,252
Local Agency Investment Fund:
City - - 4 6,331,812 4 6,331,812
Redevelopment Agency - - 3 3,543 3 3,543
Total Investments - 1 6,952,856 4 6,655,607 6 3,608,463
Total City Treasury 1 0,524,209 1 7,047,856 4 6,655,607 7 4,227,672
Restricted Cash and Investments:
Held by fiscal agents - - 1 8,716,326 1 8,716,326
Total Cash and Investments $ 1 0,524,209 $ 1 7,047,856 $ 6 5,371,933 $ 9 2,943,998
Category
The City had no Category 3 cash and investments.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
51
NOTE 2 - CASH AND INVESTMENTS, Continued
E. Investments in Local Agency Investment Fund
The City invests in Local City Investment Fund ( LAIF), a State of California external investment pool. LAIF
determines fair value on its investment portfolio based on market quotations for those securities where market
quotations are readily available and based on amortized cost or best estimate for those securities where market value is
not readily available.
The City valued its investments in LAIF as of June 30, 2004, at the fair value. The fair value is calculated by
multiplying the account balance with LAIF times a fair value factor of .998384177 which is determined by LAIF. This
fair value factor was determined by dividing all LAIF participants’ total aggregate amortized cost by total aggregate
fair value.
The City’s investments with Local Agency Investment Funds ( LAIF) at June 30, 2004, included a portion of the pool
funds invested in Structured Notes and Asset- Backed Securities. These investments included the following:
• Structured Notes are debt securities ( other than asset- backed securities) whose cash- flow characteristics
( coupon rate, redemption amount, or stated maturity) depend on one or more indices and/ or that have
embedded forwards or options.
• Asset- backed Securities, the bulk of which are mortgage- backed securities, entitle their purchasers to receive a
share of the cash flows from a pool of assets such as principal and interest repayments from a pool of
mortgages ( such as CMOs) or credit card receivables.
As of June 30, 2004, LAIF had invested 1.603% of the pool investment fund in derivatives and similar transactions.
F. Summary of Investments to Maturity
Investments held in the City Treasury grouped by maturity date at June 30, 2004, are shown below:
Maturity Fair Value
Current to one year $ 48,690,310
One to two years 7,923,989
Two to six years 6,994,164
Total $ 63,608,463
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
52
NOTE 3 – LOANS RECEIVABLE
At June 30, 2004, the City had the following loans receivable reported in its Fund Financial Statements:
Governmental Funds:
Special Revenue Funds:
Non Major Funds:
Community Development Block Grant $ 4 64,391
HOME Fund 7 00,000
Capital Projects Funds:
Redevelopment Agency 2 ,879,539
Redevelopment Agency Low/ Mod Housing 4 ,325,270
Non Major Funds:
Economic Development Agency 4 3,873
Total Governmental Funds $ 8 ,413,073
Less: RDA Capital $ ( 205,285)
Less: RDA Low- Moterate ( 888,736)
Total Government- wide Financials $ 7 ,319,052
Proprietary Funds:
San Leandro Housing Finance Corporation $ 6 ,053,280
Total Proprietary Funds $ 6 ,053,280
At June 30, 2004, the City was owed, in its Community Development Bock Grant Special Revenue Fund, $ 464,391 for
various housing assistance loans made by the City. The terms of repayment vary. Because the notes do not meet the
City’s availability criteria for revenue recognition, the City has deferred the revenue related to these loans. Revenue is
recognized in the year of repayment. In the Government- wide Financial Statements both the receivable and deferred
revenue were eliminated.
At June 30, 2004, the City was owed, in its HOME Special Revenue Fund, $ 700,000 for housing assistance loans made
by the City to Citizens’ Housing Corporation. The terms of repayment vary. Because the note does not meet the
City’s availability criteria for revenue recognition, the City has deferred the revenue related to this loan. Revenue is
recognized in the year of repayment. Loan is secured by trust deeds. In the Government- wide Financial Statements
both the receivable and deferred revenue were eliminated.
At June 30, 2004, the City was owed, in its Redevelopment Agency Capital Projects Fund, $ 2,879,539 which includes
( 1) a loan to Creekside Associates, LLC; ( 2) a loan made to Merced Property for property improvements; ( 3) loan
made to the Batarse Family Trust to fund improvements in the redevelopment project area; ( 4) loan made to Kil Hoon
Jung; ( 5) loan made to Alfredo & Helen Esquivel; and ( 6) $ 106,358 for the Bayfair Mall tax increment from Alameda
County. Because the notes do not meet the City’s availability criteria for revenue recognition, the City has deferred the
revenue related to these loans. Loans are secured by trust deeds. In the Government- wide Financial Statement, both the
receivable and the deferred revenue were eliminated.
At June 30, 2004, the City was owed, in its Redevelopment Agency Low and Moterate Housing Capital Projects Fund,
$ 4,325,270 which includes ( 1) loans made to the City property owners who meet the HUD requirements for financial
assistance for property improvements and first time home buyer loans; ( 2) a loan made to Ruth Rogers and Sara
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
53
NOTE 3 – LOANS RECEIVABLE, Continued
Bagwell; ( 3) a loan made to Eden Housing, Inc.; ( 4) a loan made to San Leandro Senior Housing; and ( 5) for a loan
made to Citizens’ Housing Corporation for property improvements. Because the note does not meet the City’s
availability criteria for revenue recognition, the City has deferred the revenue related to this loan. Revenues are
recognized in the year of repayment. Loans are secured by trust deeds. In the Government- wide Financial Statements,
both the receivable and the deferred revenue were eliminated.
At June 30, 2004, the City was owed, in its Economic Development Agency Capital Projects Fund, $ 43,873 for loans
made to City business owners for property improvements. Because the note does not meet the City’s availability
criteria for revenue recognition, the City has deferred the revenue related to this loan. Revenue is recognized in the
year of repayment. Loans are secured by trust deeds. In the Government- wide Financial Statements, both the
receivable and the deferred revenue were eliminated.
At June 30, 2004, the City’s San Leandro Housing Finance Corporation Enterprise Fund was owed $ 6,053,280 for
financing a 142 unit multifamily housing project. The principal and interest on this note is due monthly through 2025
with interest at 10.25%. Principal and interest received from the note receivable will be used to provide debt service
on the mortgage revenue bonds issued to finance the project. This loan receivable is also reported in the business- type
activities of the Government- wide Financial Statements.
NOTE 4- NOTES RECEIVABLE
At June 30, 2004, the City had the following notes receivable:
Governmental Activities:
General Fund:
Refuse Operations Note $ 2 ,135,863
Total $ 2 ,135,863
At June 30, 2004, the City was owed, in its General Fund, $ 2,135,863 for the sale of the refuse operations in February
2000. The principal and interest on this note is due monthly through 2015 with interest at 7.00%. Because the notes are
not “ available” as a resource to meet expenditures of the current year, the City has reserved its fund balance related to
these loans. All loans are secured by trust deeds.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
54
NOTE 5 - INTERFUND TRANSACTIONS
Fund Financial Statements
A. Interfund Receivables and Payables
At June 30, 2004, the City had the following short- term receivables and payables:
General
Fund Total
Measure B $ 1,571,210 $ 1,571,210
Non- major Governmental Funds 70,874 70,874
Enterprise Funds:
Shoreline 241,358 241,358
San Leandro Housing Finance Corporation 68,014 68,014
Total $ 1,951,456 $ 1,951,456
Due To Other Funds
Due From
Other Funds
The City has recorded due from/ due to all funds requiring cash at June 30, 2004. The short- term loans will
be repaid during fiscal year 2004- 05.
B. Long- Term Advances
Long- term advances to be repaid out of future earnings or charges at June 30, 2004, consisted of:
Non- major
Governmental
General Funds Total
Redevelopment Agency $ 6,969,173 $ 97,073 $ 7 ,066,246
Enterprise Funds:
Shoreline 8,713,772 - 8 ,713,772
Internal Service Fund 1,003,434 - 1,003,434
Total $ 16,686,379 $ 97,073 $ 16,783,452
Advances From
Advances To
The City Council authorized various loans to the Agency for operating and capital improvement purposes. The terms
of the loans are indefinite. Interest accrues annually at the rate of 6%. The balance as of June 30, 2004, was
$ 7,066,246.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
55
NOTE 5 - INTERFUND TRANSACTIONS, Continued
B. Long- Term Advances, Continued
The City Council authorized loans to the Shoreline Enterprise Fund for capital improvements at the Marina and Golf
Course. The loans are to be paid over 30 years with an annual interest accrual rate of 5%. Principal payments are made
annually provided the fund has sufficient resources. The balance as of June 30, 2004 was $ 4,053,480 and $ 4,660,292
for the Marina and the Golf Course respectively, for a total of $ 8,713,722.
The City Council authorized a loan to the Information Management Services fund for computer equipment
replacement. The loan is to be paid over 10 years and accrues interest annually at the rate of 6%. The balance as of
June 30, 2004, was $ 1,003,434.
C. Transfers
Transfers during the fiscal year ended June 30, 2004, comprised the following:
Governmental Funds
Redevelopment Redevelopment Redevelopment Non- major Water Non- major
Agency Agency Agency Governmental Pollution Enterprise
General Capital Projects Debt Service Low/ Moterate Housing Funds Control Plant Marina Funds Total
General $ - $ - $ - $ - $ 419,272 $ - $ 8,642 $ - $ 427,914
Redevelopment
Agency - - 4,870,000 - - - - - 4,870,000
Capital Improvement
Projects 3 ,305,939 - - - 230,664 - - - 3,536,603
Redevelopment
Agency - 2 ,003,562 67,895 - - - - 2,071,457
Non- major
Governmental Funds 2 ,755,515 5 20,000 - - 851,768 - - - 4,127,283
Non- major
Enterprise Funds 8 7,693 - - - - 61,827 2 60,576 410,096
Internal Service Fund 3 3,960 - - - - - - 33,960
Total $ 6 ,183,107 $ 2 ,523,562 $ 4,870,000 $ 67,895 $ 1,501,704 $ 61,827 $ 8,642 $ 2 60,576 $ 15,477,313
Transfers Out
Transfers In
Enterprise Funds
The City Council authorized transfers from the General Fund Capital Improvement Project reserve to the Capital
Improvement Project Fund for various capital improvements approved in the 2003- 04 Adopted Budget and
amendments. The amount authorized was $ 3,536,603.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
56
NOTE 5 - INTERFUND TRANSACTIONS, Continued
C. Transfers
The City Council authorized a transfer from the Redevelopment Agency Debt Service Fund to the Redevelopment
West San Leandro/ MacArthur Boulevard Fund in accordance with the West San Leandro/ MacArthur Boulevard
Redevelopment Project Tax Allocation Bonds Series 2004 issuance. The bond issue authorized $ 4,870,000 to be used
to fund certain redevelopment activities of benefit to property within the Agency’s West San Leandro Redevelopment
Project Area.
NOTE 6 – CAPITAL ASSETS
A. Government- Wide Financial Statements
At June 30, 2004 the City’s capital assets consisted of the following:
Governmental Business- Type
Activities Activities Total
Non- depreciable assets:
Land $ 17,310,226 $ - $ 17,310,226
Construction in Progress 14,593,054 2,253,732 16,846,786
Total non- depreciable assets 31,903,280 2,253,732 34,157,012
Depreciable assets:
Buildings 48,130,011 9,873,141 58,003,152
Improvements 4,697,150 113,416 4,810,566
Machinery and Equipment 5,140,089 3,896,916 9,037,005
Licensed Vehicles 5,384,351 63,597 5,447,948
Infrastructure:
Park Irrigation Systems 3,339,000 3,339,000
Medians Irrigation 2,848,650 - 2,848,650
Roadway 212,061,497 - 212,061,497
Sidewalk 74,895,578 - 74,895,578
Curb and Gutter 37,447,790 - 37,447,790
Underground Piping and Storm Drain - 1,721,769 1,721,769
393,944,116 15,668,839 409,612,955
Less accumulated depreciation ( 100,727,567) ( 8,477,401) ( 109,204,968)
Total depreciable assets, net 293,216,549 7,191,438 300,407,987
Total capital assets $ 325,119,829 $ 9,445,170 $ 334,564,999
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
57
NOTE 6 – CAPITAL ASSETS, Continued
A. Government- Wide Financial Statements, Continued
The following is a summary of capital assets for governmental activities:
Balance Prior Period Balance
July 1, 2003 Additions Deletions Adjustments June 30,2004
Non- Depreciable Assets:
Land $ 17,054,819 $ 676,876 $ - $ ( 421,469) $ 1 7,310,226
Construction In Progress 15,873,808 11,568,247 ( 11,294,277) ( 1,554,726) 1 4,593,052
Total Non- Depreciable Assets 32,928,627 12,245,123 ( 11,294,277) ( 1,976,195) 3 1,903,278
Depreciable Assets:
Buildings 38,141,206 8,899,771 - 1,089,034 4 8,130,011
Improvements 4,697,150 - - - 4 ,697,150
Machinery and equipment 4,951,265 188,824 - - 5 ,140,089
Licensed Vehicles 4,861,189 971,117 ( 447,955) - 5 ,384,351
Infrastructure 328,045,613 2,546,902 - - 3 30,592,515
Total Depreciable Assets 380,696,423 12,606,614 ( 447,955) 1,089,034 3 93,944,116
Accumulated Depreciation:
Buildings ( 5,762,072) ( 3,669,573) - - ( 9,431,645)
Improvements ( 3,765,499) - - - ( 3,765,499)
Machinery and equipment ( 2,737,580) ( 153,518) - - ( 2,891,098)
Licensed Vehicles ( 3,172,078) ( 422,639) 451,432 - ( 3,143,285)
Infrastructure ( 70,321,732) ( 11,174,308) - - ( 81,496,040)
Total Accumulated
Depreciation ( 85,758,961) ( 15,420,038) 451,432 - ( 100,727,567)
Depreciable Assets, Net 294,937,462 ( 2,813,424) 3,477 1,089,034 2 93,216,549
Total Governmental Activities
Capital Assets, Net $ 327,866,089 $ 9,431,699 $ ( 11,290,800) $ ( 887,161) $ 3 25,119,827
Governmental activities depreciation expenses for capital assets for the year ended June 30, 2004 are as follows:
General Government $ 14,106,112
Public Safety 223,009
Transportation 343,774
Recreation and Human services 735,585
Community Development 11,558
Total Depreciation Expense $ 15,420,038
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
58
NOTE 6 – CAPITAL ASSETS, Continued
A. Government- Wide Financial Statements, Continued
The following is a summary of capital assets for business- type activities:
Balance Balance
July 1, 2003 Additions Deletions Adjustments June 30, 2004
Non- Depreciable Assets:
Construction in Progress $ - 1,995,708 $ ( 761,563) $ 1,019,588 $ 2,253,733
Total Non- Depreciable Assets
- 1,995,708 ( 761,563) 1,019,588 2,253,733
Depreciable Assets:
Buildings $ 9,403,855 $ 469,286 $ - $ - $ 9,873,141
Improvements 113,416 - - - 113,416
Machinery and equipment 3,767,286 129,629 - - 3,896,915
Licensed Vehicles - 63,597 - - 63,597
Infrastructure 1,429,493 292,276 - - 1,721,769
Total Depreciable Assets 14,714,050 954,788 - - 15,668,838
Accumulated Depreciation:
Buildings ( 4,500,304) ( 175,323) - - ( 4,675,627)
Improvements ( 113,416) - - - ( 113,416)
Machinery and equipment ( 3,048,789) ( 159,219) - - ( 3,208,008)
Licensed Vehicles - - - - -
Infrastructure ( 456,145) ( 24,205) - - ( 480,350)
Total Accumulated Depreciation ( 8,118,654) ( 358,747) -
-
( 8,477,401)
Total Business- Type Activities
Capital Assets, Net $ 6,595,396 $ 2,591,749 $ ( 761,563) $ 1,019,588 $ 9,445,170
Business- type activities depreciation expenses for capital assets for the year ended June 30, 2004 are as follows:
Water Pollution Control Plant $ 241,684
Shoreline 117,063
Total Depreciation Expense $ 358,747
B. Funds Financial Statements
The Funds Financial Statements do not present General Government Capital Assets but are shown in the
Reconciliation of the Governmental Funds Balance Sheet to the Government- Wide Statement of Net Assets.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
59
NOTE 7 - LONG- TERM DEBT
A. Governmental Activities Long- Term Debt
Summary of changes in governmental activities long- term debt for the year ended June 30, 2004, was as follows:
Balance Balance Due within Due in more
July 1, 2003 Additions Retirements June 30, 2004 one year than one year
Bonded Debt:
Special Assessment Debt
with City Commitment $ 1 ,265,000 $ - $ ( 220,000) $ 1 ,045,000 2 30,000 $ 8 15,000
1999 Library and
Fire Station COP 2 5,560,000 - ( 460,000) 2 5,100,000 4 80,000 2 4,620,000
2001 Certificates of
Participation 4 ,890,000 - ( 125,000) 4 ,765,000 1 30,000 4 ,635,000
2002 Tax
Allocation Bonds 1 5,935,000 - - 1 5,935,000 3 05,000 1 5,630,000
2003 Certificates of
Participation 1 2,550,000 - ( 290,000) 1 2,260,000 3 15,000 1 1,945,000
2004 Tax
Allocation Bonds - 5 ,500,000 - 5 ,500,000 - 5 ,500,000
Total Bonded Debt 6 0,200,000 5 ,500,000 ( 1,095,000) 6 4,605,000 1 ,460,000 6 3,145,000
Bayfair Mall Debt
with Agency Commitment 2 ,900,000 - ( 250,000) 2 ,650,000 3 00,000 2 ,350,000
Bayfair Mall Tax Increment Repay-ment
with Agency Commitment 1 ,035,070 - ( 345,024) 6 90,046 3 45,022 3 45,024
Owner Participation Agreements
with Agency Commitment 4 ,862,061 - ( 845,716) 4 ,016,345 4 13,324 3 ,603,021
HUD 108 Guarantee
Notes 1 ,000,000 - - 1 ,000,000 6 3,000 9 37,000
Total General Long- Term
Obligations $ 6 9,997,131 $ 5 ,500,000 $ ( 2,535,740) $ 7 2,961,391 $ 2 ,581,346 $ 7 0,380,045
Less unamortized:
Discount $ ( 102,678) $ - $ 4 ,107 ( 98,571) ( 4,107) $ ( 94,464)
Premium 5 87,327 1 2,937 ( 23,493) 5 76,771 2 3,493 5 53,278
Total General Long- Term
Obligations, net $ 7 0,481,780 $ 5 ,512,937 $ ( 2,555,126) $ 7 3,439,591 $ 2 ,600,732 $ 7 0,838,859
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
60
NOTE 7 - LONG- TERM DEBT, Continued
A. Governmental Activities Long- Term Debt, Continued
Special Assessment Debt With City Commitment
Special assessment districts are established in various parts of the City to provide improvements to properties located
in those districts. Properties are assessed for the cost of improvements; these assessments are payable over the term of
the debt issued to finance the improvements. The total amount of the assessment is recorded as a receivable and a
deferred revenue at the time the related debt is issued, and reduced as assessments are collected. The City is obligated
to be the purchaser of last resort or to advance available City funds to repay this debt in the event of default by any of
these districts. These funds are paid from special assessment revenues levied on the property owners in each
assessment district. At June 30, 2004, all these districts were in compliance with the repayment and other
requirements of their respective debt issues.
Special assessment debt with City commitment is comprised of the following issues:
Interest Maturity Balance Balance
Rate Date July 1, 2003 Retirements June 30, 2004
139th Avenue 6.3- 7.6% 9/ 2/ 2005 $ 1 25,000 $ ( 40,000) $ 85,000
Davis Street 4.6- 7.2% 10/ 1/ 2009 9 00,000 ( 105,000) 795,000
Marina Boulevard 6.25- 7.5% 10/ 1/ 2005 2 40,000 ( 75,000) 165,000
Total $ 1 ,265,000 $ ( 220,000) $ 1,045,000
At June 30, 2004, future debt service requirements for the Special assessment debt with City commitment were as
follows:
For the Year
Ending
June 30, Principal Interest Total
2005 2 30,000 66,596 2 96,596
2006 2 50,000 49,338 2 99,338
2007 1 30,000 35,776 1 65,776
2008 1 35,000 26,441 1 61,441
2009 1 45,000 16,416 1 61,416
2009- 2013 1 55,000 5,593 1 60,593
Total $ 1,045,000 $ 200,160 $ 1 ,245,160
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
61
NOTE 7 - LONG- TERM DEBT, Continued
A. Governmental Activities Long- Term Debt, Continued
1999 Library and Fire Stations Certificates of Participation
On November 1, 1999, the City issued $ 26,000,000 principal amount of 1999 Library and Fire Station Certificates of
Participation ( 1999 COPs). The purpose of the 1999 COPs was to finance improvements to the City’s main library and
community center building, acquisition and construction of two new fire stations and certain public improvements.
The 1999 COPs bear interest rates ranging from 4.15% to 5.75% and are payable semiannually on each May 1 and
November 1. Principal payments are payable annually on November 1. The debt is secured and payable from General
Fund revenues.
At June 30, 2004, future debt service requirements for the 1999 Library and Fire Stations Certificates of Participation
were as follows:
For the Year
Ending
June 30, Principal Interest Total
2005 480,000 1,375,130 1,855,130
2006 500,000 1,353,810 1,853,810
2007 520,000 1,330,980 1,850,980
2008 545,000 1,306,479 1,851,479
2009 570,000 1,280,270 1,850,270
2010- 2014 3,305,000 5,936,418 9,241,418
2015- 2019 4,290,000 4,485,562 8,775,562
2020- 2024 5,650,000 3,931,143 9,581,143
2025- 2029 7,475,000 1,629,406 9,104,406
2030- 2033 1,765,000 50,744 1,815,744
Total $ 25,100,000 $ 22,679,942 $ 47,779,942
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
62
NOTE 7 - LONG- TERM DEBT, Continued
A. Governmental Activities Long- Term Debt, Continued
2001 Certificates of Participation
In 2001, the City issued $ 5,020,000 principal amount of 2001 Certificates of Participation ( 2001 COPs). The purpose of
the 2001 COPs was to assist the Redevelopment Agency of the City finance redevelopment activities within the Joint
Project Area of the City. The 2001 COPs bear interest rates ranging from 2.10% to 5.10% and are payable semiannually
on each June 1 and December 1. Principal payments are payable annually on December 1. The certificates evidence
fractional interest of the owners in lease payments to be made by the City for use and occupancy of the City corporation
yard and are additionally secured and payable from the property tax increment revenues from the Joint Project Area
within the City.
At June 30, 2004, future debt service requirements for the 2001 Certificates of Participation were as follows:
For the Year
Ending
June 30, Principal Interest Total
2005 1 30,000 2 16,785 3 46,785
2006 1 35,000 2 13,138 3 48,138
2007 1 35,000 2 09,054 3 44,054
2008 1 40,000 2 04,513 3 44,513
2009 1 45,000 1 99,416 3 44,416
2010- 2014 8 20,000 9 04,436 1 ,724,436
2015- 2019 1 ,020,000 7 00,370 1 ,720,370
2020- 2024 1 ,295,000 4 12,463 1 ,707,463
2025- 2027 9 45,000 7 3,823 1 ,018,823
Total debt service $ 4 ,765,000 $ 3 ,133,998 $ 7 ,898,998
2002 Tax Allocation Bonds
In fiscal year 2004 the City’s Redevelopment Agency issued $ 15,935,000 principal amount of Tax Allocations Bonds
( 2002 TABs) to refund the City’s 1993 Tax Allocation Bonds ( 1993 TABs) used to finance the redevelopment
activities within the Plaza Project Area ( which have been completed) and to finance new redevelopment projects as set
forth in the Redevelopment Plan. The bonds consist of serial bonds that mature annually through 2018 in amounts
ranging from $ 305,000 to $ 860,000 and term bonds maturing in 2020 in the amount of $ 1,200,000, 2025 in the amount
of $ 2,355,000 and 2032 in the amount of $ 3,520,000. Interest rates vary from 2.90% to a maximum of 6% and are
payable semiannually on September 1 and March 1. The debt is secured and payable from the property tax increment
revenues from the Joint Project Area within the City.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
63
NOTE 7 - LONG- TERM DEBT, Continued
A. Governmental Activities Long- Term Debt, Continued
2002 Tax Allocation Bonds, Continued
The refunding of the outstanding 1993 TABs resulted in a present value loss of $ 70,679 or 1.1% of the principal amount
of the refunded bonds. The nominal economic loss was necessary in order to raise the $ 8,015,000 of new money that was
generated through the financing. Because of a prohibitively high additional bonds test on the 1993 TABs ( 225%) it was
necessary to refund the outstanding bonds in order to most efficiently raise the new money. According to the analysis
completed by the City’s financial advisor, the Agency raised $ 321,000 more through using the refunding than they could
have raised using a subordinate lien new money only issue.
At June 30, 2004, future debt service requirements for the 2002 Tax Allocation Bonds were as follows:
For the Year
Ending
June 30, Principal Interest Total
2005 3 05,000 8 60,783 1 ,165,783
2006 3 15,000 8 51,241 1 ,166,241
2007 3 30,000 8 40,018 1 ,170,018
2008 3 45,000 8 26,581 1 ,171,581
2009 5 25,000 8 07,700 1 ,332,700
2010- 2014 3 ,035,000 3 ,629,683 6 ,664,683
2015- 2019 3 ,935,000 2 ,714,216 6 ,649,216
2020- 2024 2 ,580,000 1 ,716,997 4 ,296,997
2025- 2029 2 ,520,000 9 97,608 3 ,517,608
2029- 2033 2 ,045,000 2 37,750 2 ,282,750
Total deb t service $ 1 5,935,000 $ 1 3,482,577 $ 2 9,417,577
2003 Certification of Participation
In 2003, the City issued $ 12,550,000 principal amount of 2003 Certificates of Participation ( 2003 COPs). The purpose of
the 2003 COPs was to refund the City’s 1993 COPs and raise capital funds for a new aquatics center. The 2003 COPs
bear interest rates ranging from 2.5% to 5.00% and are payable semiannually on each June 1 and December 1. Principal
payments are payable annually on June 1. The COPs evidence fractional interests of the owners in lease payments to be
made by the City for use and occupancy of the San Leandro City Hall.
The 2003 COPs resulted in a present value of savings of $ 1,166,751 or 11.75% of the refunded bonds. Through a five-year
extension of debt service on the outstanding COPs, the city was able to generate $ 2,750,000 of capital improvement
funds and a slight reduction in the annual debt service payment.
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
64
NOTE 7 - LONG- TERM DEBT, Continued
A. Governmental Activities Long- Term Debt, Continued
2003 Certification of Participation, Continued
At June 30, 2004, future debt service requirements for the 2003 Certificates of Participation were as follows:
For the Year
Ending
June 30, Principal Interest Total
2005 3 15,000 5 61,225 8 76,225
2006 3 20,000 5 53,350 8 73,350
2007 3 30,000 5 45,350 8 75,350
2008 3 40,000 5 37,100 8 77,100
2009 3 50,000 5 26,900 8 76,900
2010- 2014 1 ,935,000 2 ,440,000 4 ,375,000
2015- 2019 2 ,445,000 1 ,935,250 4 ,380,250
2020- 2024 3 ,120,000 1 ,259,250 4 ,379,250
2025- 2028 3 ,105,000 3 97,750 3 ,502,750
Total deb t service $ 1 2,260,000 $ 8 ,756,175 $ 2 1,016,175
2004 Tax Allocation Bonds
In 2004, the City issued $ 5,500,000 principal amount of 2004 Tax Allocation Bonds ( 2004 TABs). The purpose of the
2004 TABs was to assist the Redevelopment Agency of the City finance redevelopment activities within the West San
Leandro/ MacArthur Boulevard Redevelopment Project Area of the City. The 2004 TABs bear interest rates ranging from
5.00% to 5.75% and are payable semiannually on each March 1 and September 1. Principal payments are payable
annually on September 1. The debt is secured and payable from the tax increment revenues from the West San
Leandro/ MacArthur Boulevard Redevelopment Project area within the City.
At June 30, 2004, future debt service requirements for the 2004 Tax Allocation Bonds were as follows:
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
65
NOTE 7 - LONG- TERM DEBT, Continued
A. Governmental Activities Long- Term Debt, Continued
For the Year
Ending
June 30, Principal Interest Total
2005 2 15,858 2 15,858
2006 3 04,740 3 04,740
2007 3 04,740 3 04,740
2008 3 04,740 3 04,740
2009 9 5,000 3 02,033 3 97,033
2010- 2014 5 55,000 1 ,420,518 1 ,975,518
2015- 2019 7 30,000 1 ,245,350 1 ,975,350
2020- 2024 9 35,000 1 ,029,823 1 ,964,823
2025- 2034 3 ,185,000 1 ,099,353 4 ,284,353
Total debt service $ 5 ,500,000 $ 6 ,227,155 $ 1 1,727,155
Bay Fair Mall Debt with Agency Commitment
On June 15, 1998, the City committed $ 4,000,000 to renovate the Bayfair Mall. This debt with City commitment is at
0% interest and has installments ranging between $ 200,000 and $ 400,000 per year over a 15 year period beginning in
July 1998. The debt is secured and payable from Community Redevelopment Agency revenues
At June 30, 2004, future debt service requirements for the Bay Fair Mall Debt with City Commitment were as follows:
For the Year
Ending
June 30, Principal Total
2005 3 00,000 3 00,000
2006 3 00,000 3 00,000
2007 3 00,000 3 00,000
2008 3 00,000 3 00,000
2009 3 00,000 3 00,000
2010- 2014 1 ,150,000 1 ,150,000
Total debt service $ 2 ,650,000 $ 2 ,650,000
City of San Leandro
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2004
66
NOTE 7 - LONG- TERM DEBT, Continued
A. Governmental Activities Long- Term Debt, Continued
Bay Fair Mall Tax Increment Repayment with Agency Commitment
San Leandro Joint Project Area included a Bay Fair Mall commercial complex in its Assessed Value Base ( AVB)
calculations. The owner of the Mall appealed the assessment, and got relief in AVB because of economic downturn,
closure of businesses and drastic drop in its revenues. This resulted in a decrease in tax increment revenue for the
Agency. As a result, the Agency requested to exclude the Mall from its AVB calculations, and agreed to pay back excess
tax increments received over five years from Community Redevelopment Agency Revenues. Such indebtedness is
$ 690,046 and will be paid back to the County within the next two years. The Agency is entitled to recover $ 106,358 paid
to various pass- through Agencies in the prior years. The pass- through amount of $ 106,358 was accounted for as deferred
revenue.
Owner Participation Agreements with Agency Commitment
The Agency entered into the following agreements which represent contingency liabilities for the Agency:
Ford Motor Company $ 2 ,659,027
Argonaut Holding ( General Motors) 7 35,544
Batarse Family Trust Disposition and Development 3 90,000
F. H. Dailey Chevrolet 2 1,774
Amin Concord LLC 2 10,000
$ 4 ,016,345
1. Ford Motor Company Owner Participation Agreement - The agreement requires the Agency to make annual
payment equivalent to 50% of the sales tax generated above a base of $ 277,000 by the sale of vehicles as part of
the Ford Store San Leandro development. The amount due is $ 2,659,027 to be paid over several years depending
on the volume of auto sales at no interest.
2. Argonaut Holding ( General Motors) Owner Participation Agreement - The agreement requires the Agency
to make annual payments equivalent to 50% of the sales tax generated by the sale of vehicles as part of the
GM/ Pontiac GMC development. The amount due is $ 735,544 to be paid over several years depending on the
volume of auto sales at no interest.
3. Batarse Family Trust Disposition and Development Agreement – The agreement requires the Agency to
make annual payments equivalent to 50% of the sales tax generated by the sale of vehicles as part of the
development of a proposed Saturn dealership. The amount due is $ 390,000 to be paid over several years
depending on the volume of auto sales at no interest.
4. F. H. Dailey Chevrolet Owner Participation Agreement – The agreement requires the Agency to make 36
monthly payments of $ 21,774 as part of the Chevrolet Truck dealership development. The remaining balance is
approximately $ 21,774.
5. Amin Concord LLC Owner Participation Agreement - The agreement requires the Agency to make 15 annual
payments of $ 14,000 commencing in fiscal year 2003- 2004 totaling $ 210,000, for architectural upgrades and
additional l