CITY OF ALAMEDA, CALIFORNIA

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED JUNE 30, 2007

PREPARED BY THE

FINANCE DEPARTMENT

CITY OF ALAMEDA, CALIFORNIA

Comprehensive Annual Financial Report

For the Year Ended June 30, 2007

Table of Contents

Page

INTRODUCTORY SECTION

Table of Contents....................................................................................................................... ................................. i

Letter of Transmittal ............................................................................................................................... ................... v

Principal Officer’s...................................................................................................................... ............................ xvii

Organizational Chart.......................................................................................................................... ................... xviii

Location Map ............................................................................................................................... ........................ xix

GFOA Certificate of Achievement for Excellence in Financial Reporting ............................................................ xx

FINANCIAL SECTION

Independent Auditor’s Report on Basic Financial Statements .............................................................................. 1

Management’s Discussion and Analysis.................................................................................................................. 3

Basic Financial Statements:

Government- wide Financial Statements:

Statement of Net Assets .......................................................................................................................... 23

Statement of Activities..................................................................................................................... ...... 24

Fund Financial Statements:

Governmental Funds:

Balance Sheet.......................................................................................................................... ............ 28

Reconciliation of Governmental Funds - Fund Balances with Governmental Net Assets................ 31

Statement of Revenues, Expenditures, and Changes in Fund Balance .............................................. 32

Reconciliation of the Net Change in Fund Balances – Governmental Funds

with the Change in Governmental Net Assets ............................................................................... 34

CITY OF ALAMEDA, CALIFORNIA

Comprehensive Annual Financial Report

For the Year Ended June 30, 2007

Table of Contents

Page

FINANCIAL SECTION ( Continued)

Statement of Revenues, Expenditures, and Changes in

Fund Balances – Budget and Actual:

General Fund ............................................................................................................................... . 35

West End Community Improvement Project Special Revenue Fund.......................................... 36

Business and Waterfront Improvement Project Area Special Revenue Fund ............................. 37

Alameda Point Improvement Project Area Special Revenue Fund ............................................. 38

FISC Lease Revenue Special Revenue Fund................................................................................ 39

Alameda Reuse and Redevelopment Area Special Revenue Fund.............................................. 40

Home Repayment Special Revenue Fund .................................................................................... 41

Theatre/ Parking Structure Project Special Revenue Fund ........................................................... 42

Proprietary Funds:

Statement of Net Assets ...................................................................................................................... 44

Statement of Revenues, Expenses and Changes in Fund Net Assets................................................. 45

Statement of Cash Flows..................................................................................................................... 46

Fiduciary Funds:

Statement of Fiduciary Net Assets................................................................................................. 48

Statement of Changes in Fiduciary Net Assets.............................................................................. 49

Notes to Basic Financial Statements................................................................................................. 51

CITY OF ALAMEDA, CALIFORNIA

Comprehensive Annual Financial Report

For the Year Ended June 30, 2007

Table of Contents

Page

FINANCIAL SECTION ( Continued)

Supplemental Information:

Major Governmental Funds Other Then the General Fund and Special Revenue Funds:

Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:

Capital Projects Fund .................................................................................................................. 108

Non- major Governmental Funds:

Balance Sheet.......................................................................................................................... ....... 116

Statement of Revenues, Expenditures, and Changes

in Fund Balances....................................................................................................................... 124

Schedule of Revenues, Expenditures, and Changes

in Fund Balances- Budget and Actual......................................................................................... 132

Internal Service Funds

Combining Statement of Net Assets ................................................................................................. 156

Combining Statement of Revenues, Expenses and

Changes in Fund Net Assets ........................................................................................................ 158

Combining Statement of Cash Flows................................................................................................ 160

Fiduciary Funds

Combining Balance Sheet – Pension Trust Funds ............................................................................. 164

Combining Statement of Changes in Fiduciary Net Assets – Pension Trust Funds ......................... 165

Agency Funds - Statement of Changes in Assets and Liabilities ...................................................... 166

STATISTICAL SECTION

Net Assets by Component - Last Five Fiscal Years................................................................................. 169

Changes in Net Assets - Last Five Fiscal Years....................................................................................... 170

Fund Balances of Governmental Funds - Last Five Fiscal Years............................................................ 172

CITY OF ALAMEDA, CALIFORNIA

Comprehensive Annual Financial Report

For the Year Ended June 30, 2007

Table of Contents

Page

STATISTICAL SECTION ( Continued)

Changes in Fund Balance of Governmental Funds – Last Five Fiscal Years ......................................... 173

Assessed and Estimated Actual Value of Taxable Property

- Last Ten Fiscal Years ............................................................................................................................ 174

Property Tax Rates - All Direct and Overlapping Governments - Last Ten Fiscal Years...................... 175

Principal Property Tax Payers – Current Year and One Year Ago ......................................................... 176

Property Tax Levies and Collections – Last Ten Fiscal Years................................................................ 177

Ratio of Outstanding Debt by Type – Last Ten Fiscal Years .................................................................. 178

Ratio of General Bonded Debt Outstanding............................................................................................. 179

Computation of Direct and Overlapping Debt ......................................................................................... 180

Computation of Legal Bonded Debt Margin............................................................................................ 181

Sewer Fund Debt Coverage – Last Ten Fiscal Years .............................................................................. 182

Bonded Debt Pledged Revenue Coverage,

CIC Revenue Bond and Tax Allocation Bonds - Last Ten Fiscal Years .......................................... 183

Demographic and Economic Statistics - Last Ten Fiscal Years .............................................................. 184

Principal Employers – Current Year and Nine Years Ago ...................................................................... 185

Full- Time Equivalent City Government Employees

by Function – Last Ten Fiscal Years.................................................................................................. 186

Operating Indicators by Function/ Program – Last Ten Fiscal Years ...................................................... 188

Capital Asset Statistics by Function/ Program – Last Ten Fiscal Years .................................................. 192

Honorable Mayor, Members of the City Council and December 4, 2007

Citizens of the City of Alameda, California

The City is required to undergo an annual single audit in conformity with the provisions

of the Single Audit Act Amendments of 1996 and the U. S. Office of Management and

Budget’s circular A- 133, Audits of States, Local Governments and Nonprofit

organizations. Information related to this single audit, including a schedule of federal

expenditures of federal awards, the independent auditor’s reports on internal controls

and compliance with applicable laws and regulations, and a schedule of findings and

questioned costs are included in a separately issued single audit report.

The financial reporting entity ( the government) includes all the funds of the primary

government ( i. e., the City of Alameda as legally defined), as well as all of its component

units. Component units are legally separate entities for which the primary government

is financially accountable.

The City provides a broad range of services including police and fire protection,

construction and maintenance of streets, parks, storm drains and other infrastructure,

recreational and cultural activities, including a golf complex comprised of two 18- hole

championship and one 9- hole executive golf courses, and human services programs.

The City owns and operates its own electric and telecommunications utility serving the

needs of all residents. It also manages franchises for solid waste and cable television.

Certain infrastructure construction and community development activities are provided

through a legally separate redevelopment agency. Housing assistance is provided

through a housing authority. The City Council sits as the Community Improvement

Commission and it functions, in essence, as a department of the City. Many major

public services delivered within the City’s boundaries, including water, wastewater,

education, regional parks, and public transportation, are provided by other agencies.

The City of Alameda is not financially accountable for the operations of the franchises or

these government agencies.

Blended component units, although legally separate entities, are, in substance, part of

the primary government’s operations and are included herein as part of the primary

government. Accordingly, the Community Improvement Commission, which redevelops

blighted areas; the Alameda Reuse and Redevelopment Authority, which is responsible

for returning Alameda Point, the former Alameda Naval Air Station, to civilian use; and

Alameda Public Financing Authority, which assists with the financing of public projects

are reported as funds of the primary government in the Special Revenue, Capital

Project, and Debt Service funds.

Alameda Power & Telecom and the Alameda Housing Authority are reported as

discretely presented component units in this Report, which means their financial

transactions and balances are reported in separate columns. Separate component unit

financial statements may be obtained from Alameda Power & Telecom, 2000 Grand

Honorable Mayor, Members of the City Council and December 4, 2007

Citizens of the City of Alameda, California

Street, Alameda, CA 94501 and the Housing Authority of Alameda, 701 Atlantic

Avenue, Alameda, CA 94501. All other component unit financial statements may be

obtained from the City of Alameda, 2263 Santa Clara Avenue, Room 220, Alameda, CA

94501.

Generally accepted accounting principles require 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). This letter of transmittal is

designed to complement the MD& A and should be read in conjunction with it. The

City’s MD& A can be found immediately following the report of the independent auditors.

Profile of the Government

The City of Alameda, incorporated April 19, 1854, is located on Alameda Island in San

Francisco Bay. The City of Alameda contains 22.7 square miles and serves a

population of 75,254. According to the 2000 Census, there are 41,148 ( 57%) white

residents, 4,488 ( 6%) black residents, 484 ( 0.7%) American Indian residents, 18,894

( 26%) Asians, 434 ( 0.6%) Native Hawaiian and other Pacific Islanders, 2,380 ( 3.3%)

residents of other race and 4,431 ( 6%) residents of two or more races.

Almost 50 percent of Alameda residents are in the younger adult through middle age

group ( 25 – 54 years). This implies that we have a strong workforce, and that quality

family services ( parks, schools, retail) are in high demand. The percentage of adults

over 60 has increased slightly from 1990, indicating that we continue to be in need of

quality senior services and health care. The biggest change in population from the

1990 Census is, as expected, the drop in military residents due to the closure of the

naval air station.

During the last four years, growth in the City has begun to slowly increase as a result of

potential base conversion and redevelopment. The City budget has stabilized during

the same period. Decreases in business- related revenues, loss of revenues to the

State, and other cost increases have forced moderate cost containment in all City

services. The City faces resource shortfalls in near term future budgets. Cost

containment, economic development and fee increases have helped with the resource

problem, but new resources will be needed to continue current service levels and

restore essential public safety and maintenance services.

The City is a charter city. Like other charter cities, the City has limited ability to set tax

rates. The State Constitution establishes a maximum rate for property tax and limits the

growth of assessed value. The property tax collected is allocated among the

jurisdictions in the City’s tax rate areas based on criteria established by the State

Honorable Mayor, Members of the City Council and December 4, 2007

Citizens of the City of Alameda, California

Legislature. The rates and tax base of the City’s two other major general taxes, sales

tax and vehicle license in lieu fees ( VLF), are also controlled by the State Legislature or

Constitution, rather than the City Council.

Increases of existing local taxes and any new taxes require voter approval. Taxes used

for general purposes are subject to approval by a simple majority of voters, while taxes

levied for specific purposes require a two- thirds majority of voters, as do property tax

levies used to pay for debt issued to build capital assets. In November 2000, Alameda

voters approved an additional tax levy to build a new public library and update the two

branch libraries. The bonds were issued in March 2003.

Assessments have varying requirements for voter approval ranging from approval

through Council action unless challenged by a majority protest to two- thirds voter

approval, with voting rights apportioned based on the amount of the assessment. In

addition, fees for facilities and services are subject to requirements that they not be set

at levels that exceed the reasonable costs of providing services. As a result, fund

balances generated by differences between fee revenue and related expenses are

retained and designated for services and facilities that benefit fee payers.

The City has operated under the council- manager form of government since it was

chartered in 1916. Policy- making and legislative authority are vested in a five- member

governing council consisting of the Mayor and four Councilmembers. The City Council

is responsible, among other things, for passing ordinances, adopting the budget,

approving the Mayor’s nominees to commissions, and hiring the City’s manager,

attorney and clerk.

The City Council is elected on a non- partisan basis. Councilmembers serve four- year

staggered terms, with two Councilmembers elected every two years. The Mayor is

elected to serve a four- year term. The Mayor and Councilmembers are elected at large

and all are subject to two- term limits.

The City Manager is responsible for carrying out the policies and ordinances of the City

Council, for overseeing the day- to- day operations of the City, and for appointing the

heads of the various departments.

The annual budget, the capital budget, financial policies governing reserves, long- term

debt, fee supported services, and the budget resolutions serve as the foundation for the

City’s financial planning and control. Departments submit operating appropriation

requests in accordance with the City Manager’s instructions by February of each year.

The City Manager makes recommendations to the City Council regarding the following

Honorable Mayor, Members of the City Council and December 4, 2007

Citizens of the City of Alameda, California

year’s budget in May and, after public discussion and evaluation of the City Manager’s

recommendations, the City Council adopts the annual budget in June of each year.

The City Council delegates budget authority at the fund level. The City Manager is

authorized to transfer appropriations between departments within funds and to limit

expenditures in response to under- collection of estimated revenues. Transfers of

appropriations between funds require City Council approval. Budget- to- actual

comparisons are provided as part of the required supplementary information in this

report for the general fund and each major governmental fund for which the City Council

has adopted an annual budget.

The City Council reviews reports of budget results at the end of the first quarter, at mid-year,

and at the end of the third quarter. The ongoing review and long- range planning

focus for financial management provides numerous opportunities to identify and

respond to changes in revenues and expenditures and in community priorities.

Factors Affecting Financial Condition

We believe the information presented in the financial statement is best understood

when it is considered from the broader perspective of the context within which the City

of Alameda operates.

Risk and Volatility in Funding Sources Collected or Allocated by the State

During the last thirty years, the City has lost its ability to set tax rates without voter

approval and the State of California has diverted local revenues to offset its own budget

problems. Over the past 15 years, the State’s budgeting practices have negatively

impacted the City’s resources, resulting in a loss of revenues in excess of $ 74.9 million

to the City and its agencies. For example, the cumulative effect of the State imposed

shifts of local government revenues to the Educational Revenue Augmentation Fund

( ERAF) over the past several years has been a $ 53.4 million reduction in the General

fund and a $ 2.4 million decrease in the Community Improvement Commission funds.

However, in 2004, a series of actions approved by the voters resulted in structuring

stability into the State’s process of allocating and distributing local government revenue

sources. In March 2004, the voters approved Proposition 57, the California Economic

Recovery Bond Act. Legislative provisions implementing this initiative provided for a

swap of ¼ cent of local sales tax to be used by the State to repay the bonds effective

July 1, 2004. The plan consists of 1) a reduction of local sales tax by ¼ cent in tandem

with a new ¼ cent increase in the State rate to fund fiscal recovery bond repayment; 2)

repayment of the lost sales tax revenues to cities with additional local property tax

Honorable Mayor, Members of the City Council and December 4, 2007

Citizens of the City of Alameda, California

previously allocated to local schools; and 3) repayment of the lost property tax revenues

to local schools with state general fund monies. This “ triple flip” is constitutionally

prohibited from exceeding the period necessary to repay the Economic Recovery

Bonds.

Intergovernmental revenue is that revenue subject to the control of another government.

It is more volatile and subject to more restrictions on its use than other general

revenues, especially locally authorized and collected taxes. Where the State has

provided full or partial compensation for reducing traditional local revenue sources and

where that compensation is material, the mitigating payment from the State is disclosed

separately in the financial statements. These mitigation payments are particularly

vulnerable to reduction when the State faces serious budget problems. In addition,

unlike revenues affected by economic fluctuation, intergovernmental revenues, once

reduced by legislative action, are less likely to return to prior levels.

Local Economy

During the last four years, the business economy has been growing at a minimal rate.

Despite only moderate effects in consumer retail and a remarkably strong residential

housing market, the business moderation has not significantly lifted the local economy.

Residential home values have grown and nonresidential property values in Alameda

have not declined. Assessed value growth in Alameda has been below the County

average.

We can expect a less than moderate performance in 2007/ 08. As the national economy

experiences contraction as a result of housing starts and consumer confidence falling,

the City will maintain a very moderate growth rate. Retail development at Alameda

Towne Center ( formerly South Shore Center), the opening of the restored Historic

Alameda Theater, Cineplex and Civic Center Garage, as well as smaller projects

throughout the community will help maintain economic stability in Alameda.

Following are major new developments in the City of Alameda:

Bayport/ Alameda Landing

Catellus and Warmington Homes, in conjunction with the Housing Authority, will develop

a total of 586 units of residential housing in the Bayport project; 437 market- rate single-family

homes, 48 below market duet townhouses and 62 units of low and very low-income

affordable rental housing. The development brings nearly 90 acres of dormant

naval land into civilian use. The development includes an 11- acre community park, four

mini parks, and a K- 8 elementary school.

Honorable Mayor, Members of the City Council and December 4, 2007

Citizens of the City of Alameda, California

With the exception of the homes reserved for affordable housing, initial offering prices

were from the mid $ 600,000 to the mid $ 800,000. The current phase is being offered at

$ 800,000 to $ 1.1 million. As of June 30, 2007, roughly 344 homes have sold, including

39 of the 48 moderately priced duplexes. The total assessed value of the residential

project will be approximately $ 400 million. Full build out of the project is expected to be

completed by 2008.

Alameda Landing is a mixed- use project. It will provide an additional 300 residential

units of which 25 percent are affordable units. It will also provide 300,000 square feet of

retail space, 400,000 square feet of office space, parks, open space and associated

infrastructure.

Wilver “ Willie” Stargel Way ( former Tinker Avenue Extension)

This capital improvement project is a required mitigation resulting from the original

Catellus Mixed- Use EIR and is a key public roadway/ infrastructure improvement

required for continued redevelopment of the FISC, Alameda Point, and the entire west

side of Alameda. The original alignment has been modified to address state safety and

operational concerns. CalTrans has approved the revised Project Report and modified

alignment and plans, specifications and engineering for construction are underway. A

financing plan is also being developed which will be required for acquisition and

construction.

Bridgeside Shopping Center

The City purchased the Bridgeside Shopping Center and sold it to Regency Centers, a

shopping center developer, in 2003. The redevelopment of this 108,000 square foot

shopping center is complete. The Center hosts retail and office space as well as a gas

station and car wash. Nob Hill Grocery Store held its grand opening on February 21,

2007. The Center is currently about 80% leased.

Alameda Towne Centre ( South Shore Shopping Center)

The retail center is re- tenanting and renovating its facilities, including an expansion of

approximately 112,757 square feet. The estimated value of the completed project is

$ 30 to $ 40 million. Newly announced tenants are TJMax, Old Navy, Bed Bath and

Beyond and Borders Books.

Honorable Mayor, Members of the City Council and December 4, 2007

Citizens of the City of Alameda, California

Downtown Historic Theatre, Cineplex, and Parking Garage

The City will aid in the restoration of the historic Alameda Theater in conjunction with a

new seven- screen Cineplex and will construct a new Civic Center parking garage to

meet the goals of the Downtown Vision Plan and Economic Development Strategic

Plan. The Historic Alameda Theater and Cineplex will operate functionally as one 8-

screen movie theater and will only be accessed by patrons through the Historic

Alameda Theater’s main entrance. The 345- space garage will be located adjacent to

the Cineplex along Oak Street and provide parking for the movie theater, as well as the

surrounding civic center area and Park Street Business District.

The Community Improvement Commission adopted plans and specifications and

authorized a call for bids. The Commission authorized the value- engineering of the

design- build proposals for both the Historic Theatre renovation and the parking garage.

Contracts were executed and work begun in the fall of 2006. Work remains on budget

and on schedule for a March 2008 opening.

New Alameda Free Library

The library was completed on time and under budget. The grand opening was held on

November 2, 2006. The State grant was successfully closed. The Library Board has

begun the master planning process for the branch libraries improvements. The new

Library has become a central meeting place and activity center for Alamedans of all

ages.

SUMMARY OF MAJOR PRIVATE PROJECTS

The Waterfront/ Harbor Bay Business Park

SRM Associates has 35 acres of entitled land remaining at the Waterfront for future

commercial development. One of the most recent transactions involved moving Peet’s

Coffee and Tea Inc.’ s roasting operations from another community to Alameda in a new

build- to- suit project. The new $ 24 million, 134,000 square foot facility opened in April

2007.

Ettore Products Company, the creator of the t- shaped squeegee for cleaning windows,

recently completed the construction of its new, 90,000 square foot headquarters. The

new facility employs roughly 80 people.

Honorable Mayor, Members of the City Council and December 4, 2007

Citizens of the City of Alameda, California

SRM Associates completed construction and sold four flexible, light industrial buildings

to the following companies: Donsuemor Inc., Santa Clara Systems, Bron Tapes, and

Berkland Baptist Church. These buildings, totaling 86,000 square feet are located next

to Ettore. SRM is now completing construction for Phase II of this project, which

consists of seven light industrial buildings, ranging in size from 7,000 to 33,000 square

feet. Three of the seven buildings are currently in contract with the close of escrow

expected by December 2007.

The Venture Commerce Center at Harbor Bay recently sold out its Phase I project of 15

privately owned business properties— commonly called commercial condos. The

commercial condos range in size from about 1,300 to 3,200 square feet. Most of the

properties include two- story offices on the front side and an unusually high 21- foot clear

height " Flex Area" in the rear. The Flex Area is commonly used for additional offices

( often with commercial acoustic ceilings installed), research and development,

warehousing, distribution, light manufacturing, high tech operations and other

applications. Venture Commerce recently finished construction of Phase II of the

project, consisting of 24 similarly sized condos.

Hampton Inn and Suites

Hampton Inn and Suites is building a three- story, 105- room hotel at Harbor Bay

Business Park. Building permits have been issued and construction is underway. The

project is expected to be completed by mid- 2008.

Overall, the outlook for the City of Alameda is positive in terms of its local economy and

this outlook is shared by investors in the community as demonstrated in the major

capital improvements that are underway.

OTHER EVENTS

CalPERS

The California Public Employees’ Retirement System ( CalPERS) implemented a

normalization process precluding rates from exceeding a minimum percentage

established by the CalPERS board. Future rates will be temporized by this

normalization process so that rates will neither increase excessively nor decrease to

zero. Rate notifications for the successive two fiscal years show increases of less than

one percent.

Honorable Mayor, Members of the City Council and December 4, 2007

Citizens of the City of Alameda, California

State Budget

Borrowings from cities by the State are limited now by Constitutional amendment. A

restructuring of jail booking fees resulted in a loss of revenues of approximately

$ 150,000. This restructured fee was agreed among the law enforcement community

and the legislature.

Budget Activities

The City Council adopted a budget that increased General Fund spending in fiscal year

2006/ 07 by 10.9 percent. Actual expenditures increased 5.3 percent over the prior year.

These increases included a one- time use of equipment reserves for a Managed Vehicle

Replacement program and increased staffing for operational effectiveness.

Long- term Financial Planning

The City Council has continued to focus attention on the long- term benefits of

recruitment of consumer retail uses to balance the City’s business to business sales tax

base, and development of a pedestrian oriented urban center in the City’s Central

Business District. Development Services staff have worked closely with landowners,

developers, and retailers to increase retail uses throughout the City.

Cash Management and Policies

Cash temporarily idle during the year was invested in obligations of the U. S. Treasury

and agencies of the federal government, corporate notes, municipal obligations and the

State Treasurer’s investment pool. During the 2006/ 07 fiscal year, more of the portfolio

was invested in U. S. Treasury notes, Callable Federal Agency Notes, and Corporate

Notes. These changes in sector distribution occurred as market conditions changed in

order to achieve the benchmark return. Credit quality was maintained. Approximately

72 percent of the portfolio remains in the 1 to 3 year maturity, which is the point of best

relative value in the present market. The overall return for the managed composite

portfolio since inception of the program was 3.33 percent. This compares favorably to

the Merrill Lynch benchmark earnings of 2.97 percent. At each quarter end, the

portfolio managers have affirmed that there have been no investments in companies

that produce or manufacture cigarettes, alcohol or gambling products.

Risk Management

The City of Alameda uses a program of self- insurance to reduce its workers’

compensation and liability claim costs. The City employs a risk manager and staff,

Honorable Mayor, Members of the City Council and December 4, 2007

Citizens of the City of Alameda, California

supplemented by professional claims administration firms, to minimize losses. The City

participates in two multi- agency joint powers authorities to provide excess insurance

coverage-- one for liability coverage and one for workers’ compensation coverage. The

joint powers authorities and the City rely on estimates prepared by professional

actuaries to set aside funds adequate to meet potential losses. Excess coverage

provided by the joint powers authorities cover claims in excess of $ 500,000 for general

liability claims and claims in excess of $ 250,000 for workers’ compensation claims.

Additional information on the City’s risk management activity can be found in Note 6 of

the notes to the financial statements.

Pension and Other Post- employment Benefits

The City provides pension and medical benefits for its public safety and non- safety

employees through two contracts with CalPERS. The contracts include benefit levels

that the City has negotiated with its employee units and for which it has executed

contract amendments with CalPERS. The plans also include some benefit levels

approved by the State Legislature without contract amendments and funding

mechanisms approved by the CalPERS Board of Administration. The City’s contracts

are not part of a larger pool and the City is responsible for making contributions needed

to fund benefits when employee contributions are not adequate. In the past, City

contributions have ranged from 0% to 34% of qualifying payroll costs.

Safety employees have been covered by PERS since December 1990. Prior to that

date, the City provided the following retirement plans for police and fire retirees:

Plan 1079: This is a single employer defined benefit pension plan for police and fire

department employees entering service prior to January 1, 1953. On June

30, 2007, there were 47 remaining plan participants and all are retired

employees or their beneficiaries.

Plan 1082: This is also a single employer defined benefit pension plan covering police

and fire department employees entering service after January 1, 1953.

There are now only 2 remaining participants in the plan, as all active

participants transferred to the PERS plan.

The City provides an alternative retirement program for its part time employees through

the Public Agency Retirement System ( PARS).

The City also provides postretirement benefits for certain retirees based on the

provisions of labor agreements in effect at the date of the employees’ retirement.

Coverage for healthcare is provided through Public Employees Medical Health Care Act

Honorable Mayor, Members of the City Council and December 4, 2007

Citizens of the City of Alameda, California

( PEMHCA). For miscellaneous employees, the City pays the PEMHCA minimum

premium only for healthcare benefits. For Safety employees, the City pays the full

PEMHCA premium for retiree and spouse healthcare benefits, and the full cost for

retiree and spouse dental benefits. A more detailed description of plan benefits is

provided in Footnote 9. At the end of 2006/ 07, there were approximately 250 retired

employees eligible to receive these benefits, which are financed on a pay- as- you go

basis. Generally accepted accounting principles do not currently require governments

to report a liability in the financial statements in connection with an employer’s obligation

to provide these benefits. However, new accounting and reporting standards governing

these benefits have been issued and the City has conducted an actuarial study of these

post- employment benefits in order to quantify costs and liabilities. A funding plan will be

considered by the City Council during fiscal year 2007/ 08. Additional information on the

City’s pension arrangements and post- employment benefits can be found in Note 9 in

the notes to the financial statements.

Awards and acknowledgements

The Government Finance Officers Association ( GFOA) awarded a certificate of

Achievement for Excellence in Financial Reporting to the City for its comprehensive

annual financial report ( CAFR) for the fiscal year ended June 30, 2006. This was the

17th consecutive year that the City has received this prestigious award. In order to be

awarded a Certificate of Achievement, the City published an easily readable and

efficiently organized CAFR. This report satisfied both GAAP and legal requirements. A

Certificate of Achievement is valid for one year only. We believe our current CAFR

continues to meet the Certificate of Achievement Program’s requirements and we are

submitting it to the GFOA to determine its eligibility for another certificate.

The preparation of this report would not have been possible without the efficient and

dedicated services of the entire staff of the Finance Department and many others

throughout the organization. We would like to express our appreciation to all the

members of the many departments who assisted and contributed to the preparation of

this report. We also want to thank the partners and staff of our auditors for their

assistance and support during the preparation of the Annual Report.

Respectfully submitted,

Juelle- Ann Boyer

Chief Financial Officer

PRINCIPAL OFFICERS

CITY OF ALAMEDA

JUE 30, 2007

CITY COUNCIL

Mayor

Vice Mayor

Councilmember

Councilmember

Councilmember

Beverly Johnson

Lena Tam

Marie Gilmore

Frank Matarrese

Doug deHaan

COUNCIL APPOINTEES

City Manager

City Attorney

City Clerk

Debra Kurita

Teresa Highsmith

Lara Weisiger

ELECTED OFFICIALS

Auditor

Treasurer

Kevin R. Kearey

Kevin Kennedy

APPOINTED OFFICIALS

Assistant City Manager

Chief of Police

Chief Financial Officer

Acting Fire Chief

Human Resources Director

Librar Director

Planning & Building Director

Public Works Director

Recreation/ arks Director

General Manager, Alameda Power and Telecom

Housing Authority Executive Director

Development Services Director

Interim General Manager - Golf Complex

Acting Information Technology Director

David Brandt

Walter Tibbet

Juelle- Ann Boyer

James Reed

Karen Wilis

Jane Chisaki

Cathy Woodbury

Matthew T. Naclerio

Dale Lilard

Girish Balachandran

Michael T. Pucci

Leslie Little

Dale Lilard

Leon King

XVll

Certificate of

Achievement

for Excellence

in Financial

Reporting

Presented to

City of Alameda

California

For its Comprehensive Anual

Financial Report

for the Fiscal Year Ended

June 30, 2006

A Certficate of Achievement for Excellence in Financial

Reportg is presented by the Governent Finance Offcers

Association of the United States and Canada to

governent unts and public employee retiement

systems whose comprehensive anual ficial

reports ( CAFRs) achieve the highest

standards in governent accountig

and fiancial reportg.

President

Executive Director

lifornia Society of

JVunicipal Jinance Officers

Certificate of Award

Excellence in Operating Budgeting 2006-

Presented to

City of Alameda

This certficate recognizes Excellent Achievement in Operational Budgetng and reflects an outstanding budget

document and the underlying budgeting process through which the budget is implemented.

March 6, 2007

c6. Budgetig & Financial Management

Mark Alvarado

CSMFO President

Dedicated to Excellence in Municipal Financial Management

xxi

MAZE &

ASSOCIATES

INDEPENDENT AUDITOR'S REPORT

ACCOUNTANCY CORPORATION

3478 Buskirk Ave. Suite 215

Pleasant Hil, Caliornia 94523

( 925) 930- 0902 FAX ( 925) 930- 0135

maze ( fmazeassociates. com

www. mazeassociates. com

Honorable Mayor, City Council, and City Auditor

City of Alameda, California

We have audited the financial statements of the governental activities, the business- type activities, the discretely presented

component unit of the Alameda Power and Telecom, each major fund, and the aggregate remaining fud information of the

City of Alameda, California as of and for the year ended June 30, 2007, which collectively comprise the City' s basic

financial statements as listed in the table of contents. These financial statements are the responsibility of the City'

management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit

the component unit financial statements of the Housing Authority of the City of Alameda, California, which represent 6. 18%

and 13.05% of the assets and revenues of the reporting entity and 6.84% and 4.98% of capital assets and long- term

obligations, respectively. These component unit financial statements were audited by another auditor, whose report thereon

has been furnished to us. Our opinion, insofar as it relates to the amounts included for this entity, is based solely on the

report of this other auditor.

We conducted our audit in accordance with generally accepted auditing stadards in the United States of America and the

standards for financial audits contained in Government Auditing Standards issued by the Comptroller General of the United

States. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the basic

financial statements are free of material misstatement. An audit includes examining on a test basis evidence supporting the

amounts and disclosures in the basic fmancial statements. An audit also includes assessing the accounting principles used

and significant estimates made by management, as well as evaluating the overall financial statement presentation.

believe that our audit and the report of the other auditor provide a reasonable basis for our opinion.

In our opinion, based on our audit and the report of the other auditor, the basic financial statements referred to above present

fairly in all material respects the respective financial position of the governental activities, the business- tye activities, the

discretely presented component units, each major fund, and the aggregate remaining fund information of the City of

Alameda, California at June 30, 2007, and the respective changes in financial position and cash flows, where applicable

thereof and the respective budgetary comparisons listed as part of the basic financial statements for the year then ended, in

conformity with accounting principles generally accepted in the United States of America.

In accordance with Governent Auditing Standards, we have also issued reports dated October 3 2007 on our consideration

of the City of Alameda internal control structure and on its compliance with laws and regulations.

Management' s Discussion and Analysis is not a required par of the basic financial statements but is supplementary

information required by the Governent Accounting Stadards Board. We have applied certain limited procedures, which

consisted principally of inquiries of management regarding the methods of measurement and presentation of the required

supplementary information. However, we did not audit this information and we express no opinion on it.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The

supplemental information listed in the Table of Contents is presented for purposes of additional analysis and is not a

required part of the basic financial statements of the City of Alameda. Such information has been subjected to the

auditing procedures applied in our audit of the basic financial statements and in our opinion is fairly stated in all material

respects in relation to the basic financial statements taken as a whole.

The introductory section and statistical section listed in the table of contents were not audited by us and we do not

express an opinion on this information.

October3 2007 1YCl

e- '*) lMO

A Professional Corporation

City of Alameda. California

CITY OF ALAMEDA, CALIFORNIA

MANAGEMENT' S DISCUSSION AND ANALYSIS

FOR THE FISCAL YEAR ENDED JUNE 30, 2007

This part of the City of Alameda s annual financial report presents management's

overview and analysis of the City s financial activities and performance for the fiscal

year ended June 30, 2007. The information presented here should be considered in

conjunction with additional information presented in the transmittal letter in the

Introductory Section at the front of this report, and the City s financial statements , which

follow.

FINANCIAL HIGHLIGHTS

The assets of the City of Alameda exceeded its liabilities at the close of the

2006/ 07 fiscal year by $ 313 593 645 ( net assets). Of this amount, $ 33 087,465 is

unrestricted and represents assets available for future uses.

The City total net assets increased by $ 17 702 738 as a result of revenues

exceeding expenditures primarily attributable to increases in property taxes and

investment earnings, and from capital improvement projects additions to capital

assets during the year.

As of June 30 2007, the City s governmental funds reported combined ending fund

balances of $ 100 183 328. Approximately 39% of this total amount is reserved to

indicate that it is not available for new spending because it has already been

committed. The remaining amount constitutes unreserved fund balance that is

available for spending, and has been designated for a variety of specific future

uses.

At the end of the 2006/ 07 fiscal year, the unreserved fund balance of the General

Fund stood at $ 16 171 215. This portion is designated by City Council policy for

costs associated with economic uncertainties.

The City s total long- term debt increased by $ 1 347,414 attributable to the addition

of the Federal Housing & Urban Development Section 108 loan partially funding the

Civic Center parking garage , offset by $ 2. 9 million in debt retirement.

Finance Department

2263 Santa Clara Avenue, Room 220

Alameda, California 94501- 4477

510.747.4881 . Fax 510.747.4890. TDD 510. 522.7538

- 0 Printed on Recycled Paper

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the City of

Alameda’s basic financial statements. The City’s basic financial statements consist of

three components: 1) government- wide financial statements, 2) fund financial

statements, and 3) notes to the financial statements. This report also contains other

supplementary information including combining statements in addition to the basic

financial statements.

Government- wide Financial Statements

The government- wide financial statements consist of a Statement of Net Assets and a

Statement of Activities. These statements are designed to provide readers with a broad

overview of the City’s finances, in a manner similar to a private- sector business. They

provide information about the activities of the City as a whole and present a longer- term

view of the City’s finances.

The Statement of Net Assets presents information on all of the City’s assets and

liabilities, with the difference between the two reported as net assets. Over time,

increases or decreases in net assets may serve as a useful indicator of whether the

financial position of the City is improving or deteriorating.

The Statement of Activities presents information showing how the City’s net assets

changed during the most recent fiscal year. All changes in net assets are reported as

soon as the underlying event giving rise to the change occurs, regardless of the timing

of related cash flows. Thus, revenues and expenses are reported in this statement for

some items that will only result in cash flows in future fiscal periods ( e. g., uncollected

taxes, and earned but unused vacation and other compensated leave).

In the government- wide financial statements, the City’s activities are reported in three

categories:

• Governmental Activities – including most of the City’s services such as public

safety, public works and recreation and parks. Property and other taxes, and

state subventions finance most of these activities.

• Business- type activities – the City charges fees to customers for use of the golf

complex, the sewer system and the ferry service.

• Discretely Presented Component Units – The Housing Authority and Alameda

Power & Telecom are legally separate reporting entities but are important

because the City is financially accountable for them.

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources

that have been segregated for specific activities or objectives. The City of Alameda, like

other state and local governments, uses fund accounting to ensure and demonstrate

compliance with finance- related legal requirements. For governmental activities, these

statements tell how these services were financed in the short- term, as well as what

remains for future spending. Fund financial statements also report the City’s operations

in more detail than the government- wide statements by providing information about the

City’s most significant funds. All of the funds of the City of Alameda can be divided into

three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds. Governmental funds are used to account for essentially the same

functions reported as governmental activities in the government- wide financial

statements. However, unlike the government- wide financial statements, governmental

fund financial statements focus on near- term inflows and outflows of spendable

resources, as well as on the balances of spendable resources available at the end of

the fiscal year. This information may be useful in evaluating a government’s near- term

financial requirements.

Because the focus of governmental funds is narrower than that of the government- wide

financial statements, it is useful to compare the information presented for governmental

funds with similar information presented for governmental activities in the government-wide

financial statements. By doing so, readers may better understand the long- term

impact of the government’s near- term financing decisions. Both the governmental fund

balance sheet and the governmental fund statement of revenues, expenditures, and

changes in fund balances provide a reconciliation to assist the reader with this

comparison between governmental funds and governmental activities.

The City of Alameda maintains sixty- seven individual governmental funds. Information

is presented in the governmental fund balance sheet and the governmental fund

statement of revenues, expenditures, and changes in fund balances for the following

funds that are considered to be major funds:

• General Fund

• West End Community Improvement Project Area

• Business Waterfront Improvement Project Area

• Alameda Point Improvement Project Area

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

• FISC Lease Revenue

• Alameda Reuse and Redevelopment Authority

• Theater/ Parking Structure Project

• HOME Repayment

• Capital Improvement Projects

• Other Governmental Funds

Data from the other governmental funds are combined into a single, aggregated

presentation. Individual fund data for each of these non- major governmental funds is

provided in the form of combining statements elsewhere in this report.

The City adopts an annual appropriated budget for all funds. Budgetary comparison

statements have been provided as required supplementary information to demonstrate

compliance with the budget.

The basic governmental fund financial statements can be found on pages 27- 42 of this

report.

Proprietary funds. The major proprietary funds the City uses are Ferry Services, Golf

Course and Sewer Services. These are used to account for operations financed and

operated in a manner similar to a private business.

Proprietary funds provide the same type of information as the government- wide financial

statements, but with more detail. The fund financial statement provides separate

information for the Ferry Services, Golf Course and Sewer Services.

The basic proprietary fund financial statements can be found on pages 43- 46 of this

report.

Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit

of parties outside the government. Fiduciary funds are not reflected in the government-wide

financial statements because the resources of those funds are not available to

support the City’s own programs. The accounting used for these funds is much like that

used for governmental funds. These funds are reported in a separate statement of

fiduciary net assets.

The basic fiduciary fund financial statements can be found on pages 47- 49 of this

report.

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Notes to the Financial Statements

The notes provide additional information that is essential to a full understanding of the

data provided in the government- wide and fund financial statements. The notes to the

financial statements follow the basic financial statements and can be found on pages

51- 105 of this report.

Other Information

In addition to the basic financial statements and accompanying notes, this report also

presents certain required supplementary information. This information includes

budgetary comparison schedules and can be found on pages 107- 108 of this report.

The combining statements referred to earlier in connection with non- major

governmental funds and internal service funds are presented immediately preceding the

required supplementary information on pages 109- 166 of this report.

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

GOVERNMENT- WIDE FINANCIAL ANALYSIS

Net assets may serve over time as a useful indicator of a government’s financial

position. In the case of the City of Alameda, assets exceeded liabilities by

$ 313,593,645 at the close of fiscal 2007. In comparison, last year assets exceeded

liabilities by $ 295,890,907. Information about net assets is presented in the summary

table below:

Summary of Net Assets

June 30, 2007 and 2006

( dollars in thousands)

Governmental Activities Business- Type Activities Total

2007 2006 2007 2006 2007 2006

Current and other Assets $ 130,446 $ 136,438 $ 20,707 $ 21,931 $ 151,153 $ 158,368

Capital Assets 272,351 244,086 51,006 51,141 323,358 295,227

Total Assets $ 402,798 $ 380,523 $ 71,713 $ 73,072 $ 474,511 $ 453,596

Long- term Liabilities 114,645 112,795 9,033 9,535 123,677 122,330

Other Liabilities 36,308 33,991 932 1,384 37,240 35,375

Total Liabilities $ 150,952 $ 146,786 $ 9,965 $ 10,919 $ 160,917 $ 157,705

Net Assets:

Invested in Capital Assets,

Net of Debt 158,717 149,627 41,974 41,606 200,690 191,233

Restricted 79,816 102,723 - 1,145 79,816 103,869

Unrestricted 13,313 ( 18,612) 19,775 19,402 33,087 789

Total Net Assets $ 251,846 $ 233,738 $ 61,748 $ 62,153 $ 313,594 $ 295,891

The largest portion of the City’s net assets ( 63%) reflects its investment in capital assets

( e. g., land, buildings, machinery and equipment) less any related outstanding debt used

to acquire those assets. The City uses these capital assets to provide services to the

community. The increase this year of $ 9.5 million from FY06 is comprised of an

increase in capital assets net of depreciation of $ 28 million partially offset by $ 18.5

million in related debt. The $ 28 million in asset additions reflects construction in

progress on the Civic Center parking garage and historic theater renovation, Bayport

housing and park construction, street resurfacing, Fire, Police and other vehicle and

equipment acquisitions, street and sidewalk repairs, Lincoln Middle School Safe Route

to Schools traffic improvements, and other capital improvement projects, net of

accumulated depreciation and capital asset retirements related to Bridgeside shopping

center and library construction.

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

The amount of net assets invested in capital assets, net of related debt, is reported as a

distinct component of net assets because this amount is not available for future

spending. In addition, although the City’s investment in its capital assets is reported net

of related debt, the resources needed to repay this debt must be provided from other

sources because the capital assets themselves cannot be used to liquidate these

liabilities.

Restricted net assets, the portion of the City’s net assets ( 32%) subject to restrictions on

how they may be used, decreased $ 24 million this year primarily due to the progress of

the projects mentioned above in Net Assets Invested in Capital Assets Net of Debt from

FY06 compared to FY07. As capital work in progress is completed, the restricted

assets are reclassified to capital assets and the year- over- year amounts primarily reflect

shifts between asset categories.

Unrestricted net assets, the portion of the City’s nets assets ( 5%) available for use,

largely reflects the changes due to year- over- year shifts between asset categories

related to the capital assets projects mentioned above, while about $ 8 million is

attributable to property tax and investment earnings revenue above expenditures.

Current and other assets decreased $ 7.2 million largely reflecting a decrease of $ 11

million in cash and investments due primarily to the construction in progress activity and

additions to capital assets mentioned above, partially offset by an increase of $ 3.4

million in loans receivable related to a loan agreement for renovation of the Historic

Alameda Theater and development of a new multiplex cinema, and loans for

construction or improvement in low- to- moderate income housing.

Current liabilities increased a total of $ 1.9 million reflecting increases in Compensated

Absences. This increase is the result of salary increases as well as an overlap in the

transition from a method of awarding annual vacation at the beginning of the year to

pay- period accrual for four of eight bargaining units. These increases were partially

offset by lower accrued payroll and accounts payable.

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Summary of Changes in Net Assets

June 30, 2007 and 2006

( dollars in thousands)

Governmental

Activities

Business- Type

Activities Total

2007 2006 2007 2006 2007 2006

Revenues

Program revenues

Charges for Services $ 30,571 $ 30,272 $ 9,911 $ 9,112 $ 40,482 $ 39,384

Operating Grants & Contributions 14,350 16,571 1,991 2,279 16,341 18,850

Capital Grants and Contributions 11,063 15,576 11,063 15,576

General revenues

Property Taxes 26,138 21,332 26,138 21,332

Incremental property taxes 12,267 11,178 12,267 11,178

Special assessments 2,668 851 2,668 851

Sales Taxes 4,967 4,581 4,967 4,581

Other Taxes 20,065 22,130 20,065 22,130

Motor Vehicle in Lieu fees 5,480 5,983 5,480 5,983

Investment earnings 5,898 2,696 1,004 646 6,902 3,342

Other 346 1,216 147 258 492 1,474

Total Revenues $ 133,812 $ 132,386 $ 13,053 $ 12,295 $ 146,865 $ 144,681

Program Expenses

General government $ 20,160 $ 17,986 $ 20,160 $ 17,986

Police services 25,633 25,256 25,633 25,256

Fire services 23,912 20,521 23,912 20,521

Public Works 4,466 5,374 4,466 5,374

Development services 22,987 14,094 22,987 14,094

Culture and Recreation 7,730 7,115 7,730 7,115

Housing and community services 5,802 3,395 5,802 3,395

Interest on long- term debt 6,308 5,918 6,308 5,918

Ferry Services 3,275 3,479 3,275 3,479

Golf Course 4,646 4,508 4,646 4,508

Sewer Services 4,244 3,756 4,244 3,756

Total Expenses $ 116,998 $ 99,659 $ 12,164 $ 11,743 $ 129,162 $ 111,402

Change in net assets before transfers $ 16,814 $ 32,727 $ 888 $ 552 $ 17,703 $ 33,279

Transfers, net 1,294 407 ( 1,294) ( 407) - -

Change in net assets 18,108 33,134 ( 405) 145 17,703 33,279

Beginning Net Assets 233,738 200,604 62,153 62,008 295,891 262,612

Ending Net Assets $ 251,846 $ 233,738 $ 61,748 $ 62,153 $ 313,594 $ 295,891

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

The City’s total net assets increased by $ 17.7 million as a result of revenues exceeding

expenditures primarily attributable to increases in property taxes and investment

earnings, and from additions to capital assets from progress on capital improvement

projects over the year.

Property taxes ( 23%), investment earnings ( 105%), incremental property taxes ( 10%),

and charges for current services ( 3%) contributed to the overall increase in revenues.

Program expenses increased overall: the largest increases were in Development

Services ( 63%), largely reflecting community improvement and redevelopment projects,

as well as salary adjustments. Housing and Community Services ( 71%) reflects

increased Community Development Block Grant projects in- progress, salary

adjustments, and other project activity. Increases in the Fire department ( 17%) are due

to pension and other post- employment benefits, overtime, salary increases, and

payments to Alameda County for Emergency Medical Services contract charges.

General Government ( 15%) primarily reflects increased salary and benefits.

Expense and Program Revenue - Governmental Activities

2007

Revenue Expense

General Government $ 13,934,230 $ 20,160,089

Police 767,538 25,632,978

Fire 6,916 23,911,788

Public Works 14,721,022 4,465,955

Development Services 14,413,905 22,986,738

Culture and Recreation 8,793,552 7,730,394

Housing and Community Services 3,347,377 5,802,261

Interest on long- term debt - 6,307,727

$ 55,984,540 $ 116,997,930

Expenses and Program Revenues - Governmental Activities

$-

$ 5

$ 10

$ 15

$ 20

$ 25

$ 30

General

Government

Police Fire Public

Works

Development

Services

Culture and

Recreation

Housing and

Community

Services

Interest on

long- term

debt Millions

Revenue

Expense

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Revenues by Source- Governmental Activities

2007

Charges for Services 30,570,941

Operating Grants and Contributions 14,350,320

Capital Grants and Contributions 11,063,279

Property Taxes 41,072,398

Sales Taxes 4,967,130

Other Taxes 31,442,378

Grants & Contributions not restricted to specific programs -

Other ( incl transfers) 1,639,446

$ 135,105,892

Revenues by Source- Governmental Activities

23%

11%

8%

30%

4%

23%

0%

Charges for Services 1%

Operating Grants and Contributions

Capital Grants and Contributions

Property Taxes

Sales Taxes

Other Taxes

Grants & Contributions not restricted to

specific programs

Other ( incl transfers)

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Business- type activities

0

1

2

3

4

5

6

Ferry

Services

Golf Course Sewer

Services

Millions

Revenue

Expense

Expense and Program Revenue

Business- type Activity

2007

Revenue Expense

Ferry Services $ 1,982,765 $ 3,274,613

Golf Course 4,226,898 4,645,595

Sewer Services 5,692,296 4,244,145

$ 11,901,959 $ 12,164,353

Revenues by Source

Business- type Activities

2007

Charges for Services 9,911,444

Operating Grants and Contributions 1,990,515

Unrestricted Investment Earnings 1,004,169

Other ( incl transfers) ( 1,146,999)

11,759,129

14%

8%

7%

71%

Charges for Services

Operating Grants and

Contributions

Unrestricted Investment

Earnings

Other ( incl transfers)

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Proprietary Funds

These activities decreased the City’s net assets by $ 405,224 overall. Key elements of

this decrease are as follows:

Ferry Services. Net assets of the Ferry Services Fund at June 30, 2007, were

$ 8,928,671 consisting primarily of capital assets of $ 8,896,730. Grants and transfers of

$ 2.7 million comprise the bulk of funding for Ferry services, with charges for service,

interest income and other miscellaneous income bringing total revenues to $ 2.8 million

for the year. Operating expenses, including depreciation of $ 433,749, totaled $ 3.3

million resulting in a net decrease in assets of $ 433,524.

Golf Course. Net assets of the Golf Course Fund at June 30, 2007, were $ 5,897,801

comprised of net assets invested in capital assets, net of related debt of $ 3,744,695,

and unrestricted assets of $ 2,153,106 available to fund operations. Golf Course

revenues totaled $ 4,444,503 generated primarily from user fees. Operating expenses

totaled $ 4,628,981 including depreciation. The Fund also transferred out $ 457,236 to

the General Fund and Internal Service Funds for services provided, resulting in a

$ 641,714 decrease in net assets. Changes in management, operations, and increased

user fees were implemented during the latter part of the year to address operating

deficit challenges for the Golf Enterprise Fund, with strategic long- term options still

under consideration.

Sewer Services. Net assets of the Sewer Service Fund at June 30, 2007, were

$ 46,921,659 consisting primarily of net assets invested in capital assets, net of related

debt of $ 29,332,143. The remaining $ 17,589,516 was available to fund operations.

The Sewer Services fund generated income of $ 2,313,532 before transfers of

$ 1,643,518 to the General Fund, Capital Improvement Projects, and Internal Service

Funds for services provided, for a net change in assets of $ 670,014.

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Financial Analysis of the Government’s Funds

As noted earlier, the City of Alameda uses the fund accounting methodology to ensure

and demonstrate compliance with finance- related legal requirements.

Governmental funds. The focus of the City of Alameda’s governmental funds is to

provide information on near- term inflows, outflows, and balances of spendable

resources. Such information is useful in assessing the City of Alameda’s financing

requirements. In particular, unreserved fund balance may serve as a useful measure of

a government’s net resources available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the City of Alameda’s governmental funds

reported combined ending fund balances of $ 101,183,328, a decrease of $ 7,312,678

attributable to capital asset improvements such as street resurfacing, construction in

progress on various projects, including the Civic Center parking garage, and vehicle and

equipment replacements for Public Safety and other service function vehicles.

Approximately $ 45 million or 45% of the combined ending fund balance constitutes

unreserved, undesignated fund balance, which is available for spending at the

government’s discretion. Approximately 39% of total fund balance is reserved to

indicate that it is not available for new spending because it has already been committed

to liquidate contracts and purchase orders of the prior period, to pay debt service. The

remaining 16% is unreserved but designated for specific future uses.

The general fund is the chief operating fund of the City of Alameda. At the end of the

current fiscal year, unreserved, undesignated fund balance of the general fund was

$ 16,133,443, while the total fund balance, including restricted resources, was

$ 22,783,083. As a measure of the general fund’s liquidity, it may be useful to compare

both unreserved fund balance and total fund balance to total fund expenditures.

Unreserved, undesignated fund balance represents 21% of total general fund

expenditures, while total fund balance represents 30% of that same amount.

The fund balance of the City of Alameda’s general fund decreased $ 1,790,643 from the

prior year primarily as a result of the City Council’s decision to use reserves to address

deferred maintenance and equipment replacement, e. g. street resurfacing and Police

and Fire vehicle replacements.

The debt service funds have total fund balances of $ 11,278,959 reserved for the

payment of debt service. The aggregate net decrease in fund balances during the

current year in the debt service funds was $ 94,119, reflecting interest and principal

payments in excess of transfers in, tax revenues, and interest earned on balances.

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Proprietary Funds. The City of Alameda’s proprietary funds provide the same type of

information found in the government- wide financial statements, but in more detail.

Unrestricted net assets as a percent of total net assets by fund: Ferry, 0.36%; Golf,

37%; Sewer, 38%.

Internal Service Funds. The Internal Service Funds net asset deficit reflects Worker’s

Compensation Insurance Fund’s future claims liabilities maturing over five to ten years.

The Risk Management Fund net asset deficit reflects the City Council’s decision to

initiate litigation in the case of City of Alameda v. Alameda Belt Line Railroad. The

outcome has been successful and repayment will occur in future years. Other Internal

Service Funds have net assets which partially offset these deficits.

General Fund Budgetary Highlights

During the year there was a $ 4,318,246 or 6% increase in appropriations between the

original and final amended budget. Following are the main components contributing to

the increase:

Program/ Category

Contributing

% of Budget

Increase

Fire Department $ 2,422,957 11% 56%

Police Department 1,160,505 5% 27%

Capital Outlay 402,043 21% 9%

Public Works 348,109 4% 8%

General Government 234,669 3 5%

All Others Combined ( 250,037) - 3% - 6%

Total Change in Final Amended Budget $ 4,318,246 6% 100%

Change in Final

Budget from Original

Budget

Increases were possible because of additional anticipated revenues and other financing

sources, including increased property tax, investment earnings and use of reserves to

finance capital improvements.

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

The City of Alameda’s investment in capital assets for its governmental and business-type

activities as of June 30, 2007, amounts to $ 323 million ( net of accumulated

depreciation), an increase of approximately $ 28 million over the prior year. Investment

in capital assets includes land, buildings and systems improvements, machinery and

equipment, park facilities and streets.

Major additions during the fiscal year reflect construction in progress on the Civic Center

parking garage and theater renovation, Bayport housing and park construction, and

infrastructure and traffic safety improvements.

Capital Assets ( net of depreciation)

($ 000)

Governmental Activities Business- type Activities Total

2007 2006 2007 2006 2007 2006

Land 4,921 4,921 177 177 5,098 5,098

Buildings and

systems 137,263 113,643 660 736 137,923 114,379

Infrastructure 62,458 54,424 38,158 37,760 100,616 92,183

Construction in

Progress 59,530 64,091 306 42 59,837 64,133

Machinery and

equipment 8,179 7,007 345 390 8,524 7,397

Other Improvements - - 11,359 12,037 11,359 12,037

Total $ 272,351 $ 244,086 $ 51,006 $ 51,141 $ 323,358 $ 295,227

Additional information about the City’s capital assets can be found in Note 5, pages 74-

78 of this report.

Long- term Debt

At the end of 2006/ 07, the City had $ 124 million in outstanding debt. Outstanding debt

includes $ 68 million in tax increment notes issued for redevelopment purposes, $ 18.8

million in certificates of participation and $ 10.1 million in general obligation bonds.

Following is a summary schedule of outstanding debt. For detailed information please

see Note 7, on pages 79- 88.

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

Outstanding Debt ($ 000s)

Governmental Activities Business- type Activities Total

2007 2006 2007 2006 2007 2006

Certificates of Participation $ 15,290 $ 15,960 $ 3,545 $ 3,785 $ 18,835 $ 19,745

Revenue Bonds 14,995 15,110 - - 14,995 15,110

Tax Allocation Bonds 68,010 68,700 - - 68,010 68,700

General Obligation Bonds 10,135 10,300 - - 10,135 10,300

HUD Section 108 Loan 4,000 - - - 4,000 -

Installment Purchase Obligations 1,565 2,030 340 255 1,905 2,285

State Loans 650 695 5,147 5,495 5,797 6,190

Total $ 114,645 $ 112,795 $ 9,033 $ 9,535 $ 123,677 $ 122,330

Summary of Long- Term Debt. The City of Alameda’s total debt increased 1% during

the current fiscal year. The major addition to debt in 2006/ 07 was a $ 4 million loan from

the Department of Housing and Urban Development for construction of the Civic Center

Garage Project, to be repaid from grant and parking garage revenues through 2027.

Retirement of other issues of $ 2.9 million partially offset additions resulting in a net

increase of $ 1.3 million.

Additional information on the City of Alameda’s long- term debt can be found in Note 7

on pages 79- 88 of this report.

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS

At the time these financial statements were prepared and audited, the City was aware of

the following existing circumstances that could significantly affect its financial health in

the future:

• At the end of fiscal year 2007, there are salary increase agreements in place with 5

major employee associations. These labor agreements provide for 2 to 4 percent or

$ 1,387,875 during the ensuing fiscal year. Contract negotiations are in progress or

will begin in January 2008 with four remaining employee associations. The

outcomes of these negotiations are not known.

• The City offers post- employment health benefits to its retirees. The type and value

of this benefit is bargained benefit. Miscellaneous employees receive the minimum

payment required by the Public Employees Medical Coverage Health Agreement

( PEMCHA) whereas the Safety employees receive the full cost of the PEMCHA

provided health insurance and Dental insurance for themselves and their spouse. In

January 2007, the City had prepared an actuarial study of these benefits and their

future costs. Based on a 4.5 percent return and a 30 year period, the actuarial

accrued liability is $ 75.4 million.

• Alameda Point and its final conveyance from the Navy to the City will have an impact

on the future economic development of the City. The timing of the development

process as compared to regular business cycles may have great importance.

• The need to address the funding for unfunded capital improvements continues.

The following economic conditions were considered in preparing the Fiscal Year 2007-

2008 Budget:

• The CPI ( Consumer Price Index) is expected to remain around 2 percent for 2007-

2008

• Energy prices and the slow growth in home sales will add to the sluggish growth in

the east bay area

• The Unemployment rate was 4.1 percent, which is below the State’s rate of 5

percent

These indicators were taken into account when adopting the general fund budget for

fiscal year 2007/ 2008. Revenues and other resources in the general fund are projected

to be $ 80.8 million, an increase of 4.8% over the budget for 2006/ 2007. About one

quarter of revenues are estimated to come from Property Taxes. They are estimated to

increase by seven percent over the prior year’s estimate.

City of Alameda, California

Management’s Discussion and Analysis

For the Fiscal Year Ended June 30, 2007

In response to the stagnant economic conditions that the City of Alameda faces, the

City’s focus will be on preserving basic services and sustaining maintenance of

infrastructure and public facilities. Prudent budgeting and reserve policies will enable

the City to manage through this period of changing economics. Cost containment and

economic development will help with the resource issues, but new resources will be

needed to continue current service levels and essential public safety and maintenance

services.

REQUEST FOR INFORMATION

This comprehensive Annual Financial Report is designed to provide a general overview

of the City of Alameda’s finances for all those with an interest in the City’s finances. For

the convenience of the public, a copy of this report is posted on the City’s website

( www. ci. alameda. ca. us). Questions concerning any of the information provided in this

report or requests for additional financial information should be addressed to the City’s

Chief Financial Officer, Juelle- Ann Boyer, at 2263 Santa Clara Avenue, Room 220,

Alameda, California, 94501.

CITY OF ALAMEDA, CALIFORNIA

STATEMENT OF NET ASSETS

AND STATEMENT OF ACTIVTIES

The Statement of Net Assets reports the difference between the City' s total assets and the City' s total

liabilities, including all the City' s capita! assets and all its long- term obligations. The Statement of Net Assets

summarizes the financial position of all the City' s Governental Activities in a single column, and the

fmancial position of all the City' s Business- Type Activities in a single column; these colums are followed by

a Total column that presents the financial position of the entire City. This colum is followed by two

individual colums, wruch display each discretely presented component unt.

The City' s Governental Activities include the activities of its General Fund, along with all its Special

Revenue, Capital Projects and Debt Service Funds. Since the City' s Internal Service Funds service these

Funds primarly, their activities are consolidated with Governental Activities, after eliminating inter- fud

transactions and balances. The City' s Business- tye Activities include all its Enterprise Fund activities.

The Statement of Activities reports increases and decreases in the City' s net assets. It presents the City'

expenses first, listed by program, and follows these with the expenses of its business- tye activities. Program

revenues- that is, revenues which are generated directly by these programs- are then deducted from program

expenses to arive at the net expense of each governental and business- tye program. The City' s general

revenues are then listed in the Governental Activities, Business- tye Activities, or discretely presented

component unit columns, as appropriate, and the Change in Net Assets is computed and reconciled with the

Statement of Net Assets.

Both these Statements include the financial activities of the City, the blended component units: Community

Improvement Commission of the City of Alameda, the Alameda Public Financing Authority, the City of

Alameda Police and Fire Retirement System Pension Plans l079 and 1082 , and the Alameda Reuse and

Redevelopment Authority, which are legally separate but are component units of the City because they are

controlled by the City, which is financially accountable for the activities of these entities. The balances and

the activities of the discretely presented component units of the City of Alameda Power and Telecom and the

Housing Authority ofthe City of Alameda are included in these statements as separate columns.

This Page Left Intentionally Blank

CITY OF ALAMEDA

STATEMENT OF NET ASSETS

JU 30, 2007

Pri Governent Com onent Units

Governental Business- Type Housing Power &

Activities Activities Tota Authori Telecom

ASSETS

Cash and cash equivalents ( Note 2) $ 77 730 104 $ 19 505 336 $ 97 235 440 $ 11 020 159 $ 27 658 729

Restricted cash and investments ( Note 2) 960 993 961 039 567 969 671 304

Accounts receivable 901 315 4 J6 715 9,318 030 994 641 697

Interest receivable 261,708 261,708 128 851 189 000

Internal balances ( Note 3) ( 230 787) 230,787

Due from other governments 744 166 744 166 125 130

Loans receivable ( Note 4) 14,277 811 277 811 243 109 265 559

Materials, pars and supplies 102 204 102 204 8,296 482 159

Prepaids, deposits and bond discounts 801 148 451 691 252 839 841 616 638

Share of certain NCP A projects

and reserve ( Note 12) 424 997

Capital assets ( Note 5):

Non- depreciable 451 815 483 318 935 133 962 853 217 319

Depreciable, net of accumulated depreciation 207 899 634 522 936 258 422 570 065 640 373 144

Management fee buyout 544 000

T otal Assets 402 797 907 713 033 474 510 940 258 842 167 084 546

LIABILITS

Accounts payable 261 003 278 947 539 950 315,491 3,302 460

Accrued payroll 957 406 235 009 641 75,482

Interest payable 730,173 154 291 884 464 176 428 898 111

Claims payable ( Note 11) 060 423 060 423

Deferred revenue 652 671 193 079 845,750

Refundable deposits 752 233 2,752 258 385 537 569 840

Due to other agencies 023 716 023 716 480

Loans payable ( Note 6) 739,197 739,197

Compensated absences ( Note II):

Current 945 322 148 673 093 995 133 403 628,121

Long- term 105 462 104 966 210 428 77,297

Net pension obligation ( Note 10) 000 000

Long- term debt ( Note 7):

Due within one year 2,773 116 808 882 581 998 299 334 357 509

Due in more than one year 111 871 671 223 804 120 095 475 16,784 972 187 491

Purchased power balancing account ( Note I) 345 618

Total Liabilities 150 952 393 964 902 160 917 295 262 424 102 289 150

NET ASSETS ( Note 9)

Invested in capital assets, net of related debt 158,716 508 973 568 200 690 076 944 187 559 258

Restrcted for:

Capital projects 430 271 430 271 499 918

Debt servce 278 959 278 959

Redevelopment projects 127,741 27,127,741

Special revenue projects 979,133 979 133

NCPA projects and reserve 18,424 997

Total Restrcted Net Assets 816 104 816 104 499 918 18,424 997

Unrestricted 312 902 774 563 087 465 552,313 811,141

Total Net Assets $ 251 845 514 $ 61,748 $ 313 593 645 $ 23 996 418 $ 64,795,396

See accompanying notes to fInancial statements

CITY OF ALAMDA

STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUE 30, 2007

Functions/ Programs

Primary Government:

Governmental Activities:

General government

Police

Fire

Public works

Development services, planning and bu

Culture and recreation

Housing and community services

Interest on long- term debt

Total Governmental Activities

Business- tye Activities:

Ferr services

Golf course

Sewer services

Total Business- tye Activities

Total Primar Governent

Component Units:

Housing Authority

Power & Telecom

Total Component Units

General revenues:

Taxes:

Propert taxes

Incremental property tax

Urban runoff special assessments

Sales taxes

Utility users tax

Transfer tax

Other taxes

Motor vehicle in- beu, unrestricted

Use of money and properties

Miscellaneous

Transfers ( Note 3)

Total general revenues and transfers

Change in Net Assets

Beginning Net Assets

Ending Net Assets

Expenses

$ 20 160 089

632 978

911 788

465 955

986 738

730 394

802 261

6,307 727

116 997 930

274 613

645 595

244 145

164 353

$ 129 162 283

$ 25 890 669

267 230

$ 89 157 899

Charges for

Services

$ 13 697 081

179 212

1,488 380

265, 740

940 528

570 941

726

226 422

667 296

911 444

$ 40 482 385

368 311

552 680

$ 63 920 991

Program Revenues

Operating

Grants and

Contrbutions

$ 237 149

588 326

916

529 401

041 942

619 209

327 377

350 320

965 039

476

000

990 515

$ 16 340 835

$ 27 623 882

$ 27 623 882

See accompanying notes to financial statements

Capital

Grants and

Contributions

$ 10 703 241

106 223

233 815

000

063 279

$ 11 063 279

Governmental

Activities

Net ( Expense) Revenue and

Changes in Net Assets

Primary Government

Business- type

Activities Total

Net ( Expense) Revenue and

Changes in Net Assets

Component Units Housing Power & Authority Telecom

($ 6 225 859)

( 24 865 440)

( 23 904 872)

255 067

572 833)

063 158

454 884)

307 727)

( 61 013 390)

($ 6 225 859)

( 24 865 440)

( 23 904 872)

255 067

572 833)

063 158

454 884)

307 727)

( 61 013 390)

($ 1 291 848)

( 418 697)

448 151

291 848)

( 418 697)

448 151

( 61 013,390)

( 262 394)

( 262 394)

( 262 394)

( 61 275 784)

101 524

101 524

($ 2 714 550)

714 550)

137 534 137 534

266 563 266 563

668 301 668 301

967 130 967 130

8,702,1 0 1 702,1 0 1

177 736 177 736

184 959 184 959

479 921 479 921

897 661 004 169 901 830 496 214 308 658

345 906 146 541 492 447

293 540 ( 1,293 540

121 352 ( 142 830 978,522 496 214 308 658

107 962 ( 405 224) 702 738 597 738 ( 405 892)

233 737 552 153 355 295 890 907 398 680 201 288

$ 251 845 514 $ 61 748 131 $ 313 593 645 $ 23 996 418 $ 64 795,396

This Page Left IntentionalJy Blank

CITY OF ALAMDA, CALIFORNIA

FUND FINANCIA STATEMENTS

MAJOR GOVERNMENTAL FUNDS

The fuds described below were determined to be Major Funds by the City in fiscal 2007. Individual non-major

funds may be found in the Supplemental Information section.

GENERAL FUND

The General Fund is used for all general revenues of the City not specifically levied or collected for other City

fuds and the related expenditues. The general fud accounts for all financial resources of the City wilch are not

accounted for in another fud.

WEST END COMMUNITY IMPROVEMENT PROJECT AREA SPECIAL REVENUE FUND

This fud accounts for the tax increment proceeds and associated redevelopment project costs for the West End

Community Improvement Project.

BUSINESS AND WATERFRONT IMROVEMENT PROJECT ARA SPECIA REVENUE FUND

Ths fud accounts for the tax increment proceeds and associated redevelopment project costs for the Business

and Waterfont Improvement Project.

ALAMDA POINT IMROVEMENT PROJECT ARA SPECIA REVENUE FUND

Ths fud accounts for the ta increment proceeds and associated redevelopment project costs for the proposed

Alameda Point Improvement Project.

FISC LEASE REVENUE SPECIAL REVENUE FUND

This fund accounts for revenue from the Fleet Industral Supply Center ( FISC) lease and related capita

improvement expenditues.

ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY SPECIAL REVENUE FUND

This fud accounts for the lease and rental activities , as well as the general operations associated with the reuse of

the Alameda Naval Base.

THEATRE/ P ARG STRUCTUR PROJECT SPECIA REVENUE FUND

Tils fud accounts for fuding resources and expenditues for the reconstrction of the Historic Alameda Theater

and the constrction of the multi- story Civic Center Garage.

HOME REPAYMENT SPECIAL REVENUE FUND

This fud accounts for County disbursed HOME funds for HOME eligible activities in the City.

CAPITAL IMROVEMENT PROJECTS FUND

Tils fund accounts for monies for major capital improvement projects not provided for in one of the other capital

projects fuds.

CITY OF ALAMEDA

GOVERNMNTAL FUNDS

BALANCE SHEET

JU 30, 2007

West End Business and

Community Waterfront Alameda Point

Improvement Improvement Improvement FISC Lease

Project Area Project Area Project Area Revenue

General ecial Revenue ecial Revenue ecial Revenue ecial Revenue

ASSETS

Casb and casb equivalents ( N ote 2) $ 14 414 486 034 827 306 053 $ 509 392 $ 847 170

Resnicted casb and investents ( Note 2) 000 281 530

Accounts receivable 343 081 822 558 320 2,497 191 310

Interest receivable 258 103

Due from other fuds ( N ote 3) 445 565

Advances to other fuds ( Note 3) 658 995

Due from other govenuents

Loans receivable ( Note 4) 446 204 632 390 590 800

Prepaids and deposits 544 441

Total Assets $ 27 116 875 $ 10 984 569 $ 10 455 173 $ 511 889 038 480

LIABILITIES

Accounts payable 526 445 144 042 $ 609 381 $ 240 386 $ 147 283

Accrued payroll 801 197 493 386 576 146

Due to other fuds ( N ote

Due to other agencies 023 716

Advances from other fuds ( Note 3) 258 995 400 000

DefeITed revenue 646 266 632 390 590 800

Refudable deposits 322 112 735

Loans payable ( Note 6) 739 197

T ota Liabilities 4296 020 783 925 235 283 503 957 383 361

FUND BALANCES ( Note 9)

Fund balance

Reserved for:

Capital improvement

Debt service

Low and moderate income housing 798 683 947 261 320 813

Prepaids, loans receivable

and advances to other fuds 649 640

Unreserved.

Designated for:

Capital improvements

Special Revenue Funds

Capital Projects Funds

Undesignated, Reported in:

General Fund 171 215

Special Revenue Funds 401 961 272 629 312 881) 344 881)

Capital Projects Funds

Toral Fund Balances ( Deficits) 820 855 200 644 219 890 ( 992 068) 344 881)

Total Liabilities and Fund Balances $ 27 116 875 $ 10 984 569 $ 10 455 173 $ 511 889 038 480

See accompanyig notes to fiancial statements

Alameda

Reuse and

Redevelopment Theater/ Parking HOME Capital Other Tota

Authority Strcture Project Repayment Improvement Governmental Governmental

ecial Revenue ecial Revenue ecial Revenue Projects Funds Funds

$ 9.583.970 904.2' 5 542 645 $ 29 686 935 $ 76 829 693

814 397 919 601 939 465 960 993

140 662 $ 593 651 862 771 478 695 625

605 261,708

445 565

658 995

744 166 744 166

800 000 401 691 406 726 277 811

095 732 640 173

724 632 $ 11 518 612 402 284 858 274 $ 49 903 941 $ 133 514 729

$ 312 975 037 288 $ 483 082 $ 553 371 054 253

987 781 379 948 945

369 785 369 785

023 716

300 000 958 995

800 000 401 691 3,413 130 484 277

557 318 815 044 937 246 778 752 233

739 197

185 280 652 332 401 691 422 109 467 443 331 401

237 894 237 894

11,278 959 278 959

228 373 295 130

987 474 637 114

436 165 7,436 165

833 432 833 432

394 997 I ,394 997

171 215

539 352 866 280 593 7,237 576 660 629

237 793 237 793

539 352 866 280 593 436 165 45,436 498 100 183 328

724 632 $ 11 518 612 402 284 858 274 $ 49 903 941 $ 133 514 729

This Page Left Intentionally Blan

CITY OF ALAMEDA

Reconciliation of

GOVERNMENTAL FUNDS

--

FUND BALANCES

with

GOVERNMENTAL NET ASSETS

JUE 30, 2007

Total fund balances reported on the governmental funds balance sheet

Amounts reported for Governmental Activities in the Statement of Net Assets

are different from those reported in the Governmental Funds above because ofthe following:

CAPITAL ASSETS

Capital assets used in Governmental Activities are not current assets or financial

resources and therefore are not reported in the Governmental Funds.

ALLOCATION OF INTERNAL SERVICE FUN NET ASSETS

Internal service funds are not governental funds. However, they are used by management to

charge the costs of certain activities, such as insurance, central servces and maintenance

to individuaJ governmental funds. The net current assets ofthe Internal Service Funds are therefore

included in Governmental Activities in the following line items in the Statement of Net Assets.

Cash and investments

Accounts receivable

Prepaids and deposits

Capital assets

Internal balances

Accounts payable

Accrued payroll

Claims payable

Long- term debt

ACCRUAL OF NON- CURRNT REVENUES AND EXPENSES

Revenues which are deferred on the Fund Balance Sheets because they are not available

currently are taken into revenue in the Statement of Activities.

LONG- TERM ASSETS AND LIABILITIES

The assets and liabilities below are not due and payable in the curent period and therefore

are not reported in the Funds:

Interest payable

Net pension obligation

Long- term debt

Compensated absences

NET ASSETS OF GOVERNNTAL ACTIVITIES

See accompanying notes to financial statements

$ 100 183 328

271 549 844

900 411

205 690

160 975

801 605

( 6 567)

( 206 750)

461 )

060 423)

( 562 395)

831 606

730 173)

( 80 000)

( 114 082 392)

( 10 050 784)

$ 251 845 514

CITY OF ALAMEDA

GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE

FOR THE YEAR ENDED JU 30, 2007

West End Business and

Community Waterfont Alameda Point

Improvement Improvement Improvement FISC Lease

Project Area Project Area Project Area Revenue

General ecial Revenue ecial Revenue ecial Revenue ecial Revenue

REVENUES

Property taxes $ 21 050 628 033 710 848 874 383 979

Other local taxes 24,435 752 596 554

Licenses and permts 269 513

Revenues iTm other agencies 920,739 827 512 769

Charges for CUTen! services 690 872 850

Fines and forfeitues 813,381

Use of money and propert 408 311 737 713 315 138 823 J, 81 094

Affordable housing fee

Other 142 038 687 900 264 675

Total Revenues 67,731 234 795 250 448 466 408 802 970 388

EXPENDITURES

CUTent:

General governent 959 510 341 153 334 320 220,370

Police 244 920

Fire 634 196

Public works 205 167

Development sen, ices, planning and building 543 549 938 362

Culture and recreation 895,407

Housing and community services 727 037 1,352 727 327 344

Capital outlay 568 247 698 863 478 129

Debt service:

Pricipal 222 117 137 500 500

Interesl and fiscal charges 204 137 694 363 540 216 112

Total Expenditues 71,318 317 344 082 735,773 623 254 632 603

EXCESS ( DEFICIENCY) OF REVENUES

OVER EXPENDITURES 587 083) 451 168 712 693 785 548 ( 1,662 2 I 5)

OTIR FINANCING SOURCES ( USES)

Proceeds fiom issuance ofloan

Proceeds fiom sale of propert 838

Transfers in ( Note 3) 623 244 528 942,430

Transfers ( out) ( Note 3) 801 870) ( 11 336 179) ( 1,333 745) ( 761 125) ( 1,937 J1)

Total Other Financing Sources ( Uses) 834 212 ( 11 334 651) 333 745) ( 761 125) 005 319

NET CHANGE IN FUD BALANCES ( 1,752 871) 883 483) 378 948 423 ( 656 896)

BEGINNING FUND BALANCES ( DEFICITS) 573 726 084 127 840 942 ( 1,016 491) 687 985)

ENDING FUND BALANCES ( DEFICITS) $ 22 820 855 200 644 219 890 ($ 992 068) ($ 6 344 881)

See accompanying notes to financial statements

Alameda

Reuse and

Redevelopment HOME TheaterlParking Capital Other Total

Authority Repayment Structure Project Improvement Governmental Governmental

ecial Revenue ecial Revenue ecial Revenue ects Funds Funds

621 548 $ 39 938 739

093 245 125 55J

350 281 863

$ 284 221 $ 258 700 378 612 418 325 29,797 193

834 458 159 896 952 910

J79,2J2 992 593

405 154 $ 81 626 469 505 232 . J 04 806 615 662 083

J58,747 J58 747

141 000 644 517 278 774

875 209 626 728 205 675 818 473 455 J31 188 453

906 876 762 229

244 920

634 196

687 391 892 558

901 265 16,129 232 512 408

726 527 621 934

033 3,761,448 249 589

995 444 623 532 667 913

256 530 250 918 623

164 566 772 319 291 962

901,65 033 149 396 002 266 008,343 143,796 332

973 944 593 ( 15 421 191) 326 448) 465,1 12 ( 12 607 879)

000 000 000 000

188 026

211 047 287,471 406 546 8,386 272 858 538

108 872) ( 1,469 462) ( 17 839 999) ( 41 588,363)

897 825) 287 471 937 084 441 539) 295 201

076. 1 19 593 866 280 389 364) 976 427) 312 678)

463 233 825 529 412 925 107 496 006

539 352 $ 593 866 280 436 165 $ 45 436,498 $ 100 183 328

CITY OF ALAMEDA

Reconciliation of the

NET CHANGE IN FUND BALANCES - GOVERNMENTAL FUNS

with the change in

GOVERNMENTAL NET ASSETS

FOR THE YEAR ENDED JUE 30, 2007

The schedule below reconciles the Net Changes in Fund Balances reported on the Governental Funds Statement of

Revenues, Expenditures and Changes in Fund Balance, which measures only changes in curent assets and curent

liabilities on the modified accrual basis, with the Change in Net Assets of Governental Activities reported in the

Statement of Activities , which is prepared on the ful accrual basis.

NET CHAGE IN FUN BALANCES - TOTAL GOVERNNTAL FUNS

Amounts reported for governental activities in the Statement of Activities

are different because of the followig:

CAPITAL ASSETS TRSACTIONS

Governental Funds report capital outlays as expenditues. However, in the Statement of Activities the cost of

those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.

The capital outlay expenditues are therefore added back to fud balance

Other capitalized expenditues are therefore added back to fud balance

Depreciation expense is deducted from fud balance

( Depreciation expense is net of internal servce fud depreciation

of $ 1 06 375 which has already been allocated to serviced fuds)

Net retirements of capital assets are deducted from fud balance

LONG TERM DEBT PROCEEDS AN PAYMNTS

Bond proceeds provide current fInancial resources to governental fuds, but issuing debt increases long- ten

liabilities in the Statement of Net Assets. Repayment of bond principal is an expenditue in the governental

funds . but in the Statement of Net Assets the repayment reduces long- term liabilities.

Proceeds from the issuance of debt are deducted from fund balance

Repayment of debt principal is added back to fud balance

ACCRUAL OF NON- CURNT ITEMS

The amounts below included in the Statement of Activities do not provide or ( require) the use of curent financial

resources and therefore are not reported as revenue or expenditues in governental fuds ( net change):

Deferred revenue

Interest payable

Net pension obligation

Compensated absences

ALLOCA TI0N OF INRNAL SERVICE FUN ACTIV

Internal Service Funds are used by management to charge the costs of certain activities, such as equipment

acquisition, maintenance, and insurance to individual fuds. The portion of the net revenue ( expense)

of these lnternal Servce Funds arising out of their transactions with governental fuds is reported

with governental activities , because they service those activities.

Change in Net Assets - Al1Internal Service Funds

CHANGE IN NET ASSETS OF GOVERNNTAL ACTIITIES

See accompanying notes to fmancial statements

($ 7 312 678)

589 506

056 212

224 036)

( 3,199 235)

( 4 000 000)

918 623

339 089

( 79 626)

428 000

178 890)

( 1,229 003)

$ 18 107 962

CIT OF ALAMEDA

GENERA FUN

STATEMENT OF REVENUS, EXPENDITUS

AND CHANGES IN FUN BALANCE

BUDGET AND ACTUAL

FOR THE YEAR ENDED JU 30, 2007

Original Final Actual

Variance with

Final Budget

Positive

( Negative)

Budgeted Amounts

REVENUES:

Propert taxes $ 20 883 496 $ 20 883 495 $ 21 050 628 $ 167

Other local taxes 888 463 388 467 435 752 ( 952 715)

Licenses and permits 467 253 617 253 269 513 ( 347 740)

Revenues from other agencies 152 630 739 974 920 739 ( 819 235)

Charges for curent services 979 799 524 761 690 872 ( 833 889)

Fines and forfeitues 731 850 731 850 813 381 531

Use of money and property 862 440 862 666 408 311 ( 454 355)

Other revenue 142 038 142 038

Total Revenues 965 931 748 466 731 234 017 232)

EXPENDITURES:

Current:

Genera) government 129 237 363 906 959 510 404 396

Police 509 350 669 855 244 920 424 935

Fire 819 312 242 269 634,196 608 073

Public works 939 002 287, III 205 167 081 944

Planing and building 390 149 017 661 543 549 474 112

Culture and recreation 067 093 121 242 895 407 225 835

Capital outlay 891 104 293 147 568 247 724 900

Debt service:

Principal 137 347 207 366 222 11 7 ( 14 751)

Interest and fIscal charges 145 428 204 ( 34 776)

Total Expenditures 894 739 212 985 71,318 317 894 668

NET CHANGE IF FUND REVENUES ( 928 808) 464 519) 587 083) 877 436

OTHER FINANCING SOURCES ( USES)

Transfers in 345 618 292 176 623 244 668 932)

Transfers ( out) 026 716) ( 10 790 627) 801 870) 988 757

Sale of capita assets 293 838 455)

Total other fmancing sources ( uses) ( 681 098) 477 158 834 212 311 370

NET CHANGE IN FUND BALANCE 609 906) 941 677) 752 871) 188 806

Beginning fund balance 573 726 573 726 573 726

Ending fund balance $ 22 963 820 $ 16 632 049 $ 22 820 855 188 806

See accompanying notes to fInancial statements

CITY OF ALAMEDA

WEST END COMMUITY IMROVEMENT PROJECT ARA

SPECIA REVENU FUND

STATEMENT OF REVENUS, EXPENDITURS

AND CHANGES IN FUN BALANCE

BUDGET AND ACTUAL

FOR THE YEAR ENDED JU 30, 2007

Variance with

Bud eted Amounts Final Budget

Positive

Ori inal Final Actual ( N e ative

REVENUES:

Propert taxes 252 870 320 090 033 710 ($ 286 380)

Revenues from other agencies 827 827

Use of money and propert 737 713 737 713

Total Revenues 252 870 320 090 795 250 475,160

EXPENDITURES:

Current:

General government 751 082 4,180 035 341 153 838 882

Housing and community services 750 000 727 037 963

Capital outlay 698 ( 698)

Debt service:

Principal retiements 137 500 137 500

Interest and fiscal charges 137 694 137 694

Total Expenditues 751 082 205 229 4,344 082 861 147

EXCESS ( DEFICIENCY) OF REVENUS

OVER EXPENDITURES 501 788 114 861 451 168 336 307

OTHER FINANCING SOURCES ( USES)

Transfers in 250 000 528 528

Transfers ( out) ( 3,372 030) ( 23 196 077) ( 11 336 179) 859 898

Total other financing sources ( uses) 122 030) ( 23 196 077) ( 11 334 651) 861 426

NET CHANGE IN FUND BALANCE ($ 620 242) ($ 23 081 216) 883 483) $ 13 197 733

Beginning fund balance 084 127

Ending fund balance 200 644

See accompanying notes to financial statements

CITY OF ALAMEDA

BUSINESS AND WATERFRONT IMPROVEMENT PROJECT AREA

SPECIAL REVENUE FUN

STATEMENT OF REVENUES, EXPENDITURS

AND CHANGES IN FUN BALANCE

BUDGET AND ACTUAL

FOR THE YEAR ENDED JU 30, 2007

Varance with

Bud eted Amounts Final Budget

Positive

Ori inal Final Actual ( Ne ative)

REVENUES:

Property taxes 290 408 163 619 848 874 $ 685 255

Other taxes 469 749 596 554 126 805

Use of money and property 291 315 138 252 847

Charges for services 600 000 687 900 900

Other 700 000 700 000 ( 700 000

Total Revenues 990 408 995 659 448 466 452 807

EXPENDITUS:

Current:

General governeht 869 277 965 246 334 320 630 926

Housing and community services 433 943 352 727 216

Capital outlay 000 122 863 259

Debt service:

Principal retirements 500 500

Interest and fiscal charges 364 363

Total Expenditures 885 277 462 175 735 773 726 402

EXCESS ( DEFICIENCY) OF REVENUS

OVER EXPENDITURES 105 131 533 484 712 693 179 209

OTHER FINANCING SOURCES ( USES)

Transfers in 369 606 ( 369 606)

Transfers ( out) 698 514) ( 1,703 380) ( 1,333 745) 369,635

Total other financing sources ( uses) 698 514) ( 1,333 774) ( 1,333 745)

NET CHANGE IN FUND BALANCE $ 406 617 $ 199 710 378 948 $ 3,179 238

Beginning fund balance 840 942

Ending fund balance 219 890

See accompanying notes to fmancial sttements

CITY OF ALAMEDA

ALAMDA POINT IMPROVEMENT PROJECT ARA

SPECIA REVENDE FUN

STATEMENT OF REVENDES, EXPENDITURS

AN CHAGES IN FUN BALANCE

BUDGET AND ACTUAL

FOR THE YEAR ENDED JU 30, 2007

Budgeted Amounts

REVENUS:

Propert taxes

Use of money and property

Origial Final

$ 325 145 383 294

541

Total Revenues 325 145 387 835

EXPENDITURES:

Current:

General government

Housing and community services

Debt service:

Interest and fIscal charges

128 729

955

263 500

327 344

768

Total Expenditures 196 684 628 612

EXCESS ( DEFICIENCY) OF REVENUS

OVER EXPENDITUS 128 461 759 223

OTHR FINANCING SOURCES ( USES)

Transfers in

Transfers ( out)

100 000

( 785 780)

100 000

( 118 915)

Total other financing sources ( uses) ( 18 915) ( 685 780)

NET CHANGE IN FUND BALANCE $ 109 546 $ 73 443

Beginning fund balance ( defIcit)

Ending fund balance ( deficit)

See accompanying notes to financial statements

Actual

383 979

823

408 802

220 370

327 344

540

623 254

785 548

( 761,25)

( 761,125)

423

( 1,016 491)

($ 992 068)

Variance with

Final Budget

Positive

( Negative)

$ 685

282

967

130

( 37 772)

358

325

( 100 000)

655

( 75,345)

($ 49 020)

CITY OF ALAMEDA

FISC LEASE REVENUE

SPECIAL REVENU FUND

STATEMENT OF REVENUS, EXPENDITURES

AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

FOR THE YEAR ENDED JU 30, 2007

Original Final Actual

Variance with

Final Budget

Positive

( N egative)

Budgeted Amounts

REVENUES:

Propert tax

Revenues from other agencies

Charges for current services

Use of money and propert

Other

Total Revenues

165 811 ($ 1 165 811)

$ 10 664 205 498 394 512 769 985 625)

620 115 620 115 850 ( 608 265)

775 000 775 000 181 094 406 094

386 787 386 787 264 675 ( 122 112)

446 107 446,1 07 970 388 475 719)

EXPENDITURES:

Current:

DeveJopment services, planning and buiJding

Capital outlay

Debt service:

Interest and fIscal charges 875 512

149 247 938 362 210 885

531 217 478,129 088

144 000 216 112 ( 72 112)

824 464 632 603 4,191 861

( 1,378 357) ( 1,662 215) ( 283 858)

000 942 430 927 430

( 850 874) ( 1,937 111 086 237)

( 835 874) 005 319 841 193

214 231 ( 656 896) 557 335

687 985

($ 6 344 881)

318 813

Total Expenditures 194 325

EXCESS ( DEFICIENCY) OF REVENUES

OVER EXPENDITURS 251 782

OTHER FINANCING SOURCES ( USES)

Transfers in

Transfers ( out) ( 503 916)

Total other fmancing sources ( uses) ( 503 916)

NET CHANGE IN FUND BALANCE 747 866

Beginning fund balance

Ending fund balance

See accompanying notes to financial statements

CITY OF ALAMDA

ALAMDA REUSE AN REDEVELOPMENT ARA

SPECIAL REVENU FUN

STATEMENT OF REVENUS, EXPENDITURES

AN CHANGES IN FUN BALANCE

BUDGET AND ACTUAL

FOR THE YEAR ENDED JU 30, 2007

Budgeted Amounts

Original Final

REVENUES:

Revenue from other agencies

Charges for current services

Use of money and propert

Other

$ 10 869 808 $ 10 869 808

Total Revenues 869 808 869 808

EXPENDITURS

Current:

Development services , planning and building 712 585 011 819

712 585 011 819

1,157 223 857 989

Total Expenditures

EXCESS ( DEFICIENCY) OF REVENUS

OVER EXPENDmJS

OTIR FINANCING SOURCES ( USES)

Transfers in

Transfers ( out) 927 985) 678 643)

927 985) 678 643)

($ 1 770 762) ($ 1 820 654)

Total other fInancing sources ( uses)

NET CHANGE IN FUND BALANCE

Beginning fund balance

Ending fund balance

See accompanying notes to fInancial statements

90 I ,265 110 554

90 I ,265 2,110 554

973 944 115 955

211 047 211 047

( 2,108 872) 569 771

( l , 897 825) 780 818

076 119 896 773

463 233

539 352

Actual

$ 284 221

834

405 154

141 000

II , 875,209

Variance with

Final Budget

Positive

( Negative)

$ 284 22J

834

535 346

141 000

005 401

CITY OF ALAMEDA

HOME REPAYMENT

SPECIA REVENUE FUN

STATEMENT OF REVENUES, EXPENDITURES

AND CHAGES IN FUN BALANCE

BUDGET AND ACTUAL

FOR THE YEAR ENDED JU 30, 2007

Budgeted Amounts

Original Final

REVENUES.

Use of money and propert $ 81 033

Total Revenues 033

EXPENDITURS.

Current

Development services, planning and building $ 305 371 033

Total Expenditures 305,371 033

NET CHANGE IN FUN BALANCE ( 305 371)

Beginning fund balance

Ending fund balance

See accompanying notes to fInancial statements

Actual

$ 81 626

626

033

033

$ 593

Variance with

Final Budget

Positive

( Negative) .

$ 593

593

593 $ 593

( 19 672 305) ( 19 672,305) ( 15 421 191)

027 015 027 015 000 000

676 254 729 994 156 013

946 260 131 458

19,703 269 703 269 287 471

$ 30 964 $ 30 964 866 280

CITY OF ALAMDA

THEA TER/ ARG STRUCTURE PROJECT

SPECIA REVENUE FUN

STATEMENT OF REVENUS, EXPENDITURES

AND CHAGES IN FUN BALANCE

BUDGET AND ACTUAL

FOR THE YEAR ENDED JUNE 30, 2007

Budgeted

Original Final

REVENUES:

Propert tax

Revenue from other agencies

Use of money and propert

129 878

139 878 010 000

817 817

158 695 158 695

831 000 831 000

Total Revenues

EXPENDITURES:

Development services, planning and building

Debt service:

Interest and fiscaJ charges

Total Expenditues 831 000 831 000

EXCESS ( DEFICIENCY) OF REVENUES

OVER EXPENDITUS

OTHER FINANCING SOURCES ( USES)

Proceeds from issuance of loan

Transfers in

Transfers in from the City

Total other fInancing sources ( uses)

EXCESS ( DEFICIENCY) OF REVENUES AND OTHER

SOURCES OVER EXPENDITURS AND OTHER USES

Beginning fund balance

Ending fund balance

See accompanying notes to fInancial statements

Actual

$ 258 700

469 505

728 205

129 232

164

149 396

866 280

Variance with

Final Budget

Positive

( Negative)

($ 1 129 878)

751 300)

450 688

430 490)

701 768

( 20 164)

1 I , 681 ,604

251 114

027 015

426 019)

185 198)

584 202)

835 316

CITY OF ALAMDA, CALIFORN

MAJOR PROPRIETARY FUNS

Proprietar funds account for City operations financed and operated in a marer similar to a private

business enterprise. The intent of the City is that the cost of providing goods and services be financed

primarily through user charges.

FERRY SERVICES

This fund accounts for alJ financial transactions relating to the City' s ferr services including but not limited

to the contractual payments to the operators and ferr vessel acquisition and maintenance.

GOLF COURSE

The City operates two IS- hole and one 9- hole municipal golf courses. This fud accounts for all financial

transactions relating to these golffacilities, including but not limited to operations and maintenance.

SEWER SERVICES

The City operates its own sewer system and this fud accounts for all fmancial transactions relating to ths

municipal activity including, but not limited to operations, maintenance, fiancing and related debt services

biling and collection.

CITY OF ALAMEDA

PROPRITARY FUNS

STATEMENT OF NET ASSETS

JUE 30, 2007

Business- type Activities- Ente rise Funds Governenta

Activities-

Sewer Internal Service

Services Go If Course Services Totals Funds

ASSETS

Current Assets

Cash and cash equivalents ( Note 2) 249,275 $ 17 256 061 $ 19 505 336 $ 900 411

Accounts receivable $ 130 244 047 277 424 416 715 205 690

Materials, parts and supplies 102 204 102 204

Prepaids, deposits and bond discounts 798 447 893 451 691 160 975

Tota Current Assets 130 244 364 324 981 378 475 946 267 076

Noncurrent Assets

Resticted cash and investents ( Note 2)

Advances to other fuds ( Note 300 000 300 000

Capital assets ( Note 5):

Non- depreciable 460 118 200 483 318

Depreciable, net 896 730 624 878 001,328 522 936 801 605

Total Non- current assets 896 730 384 996 024 574 306 300 801 605

Total Assets 026 974 6,749 320 005 952 782 246 068 681

LIABILITIES

Curent Liabilities:

Accounts payable 065 148 062 101 820 278 947 206 750

Claims payable ( Note 11) 060 423

Accrued payroll 367 868 52,235 461

Interest payable 154 291 154 291

Due to other fuds ( N ote 3) 69,213 213 567

Deferred revenue 193 079 193 079

Refudable deposits

Compensated absences ( Note II) 134 710 118 929 253 639

Long- term debt - current ( Note 7) 201 362 607 520 808 882 192 821

Total Current Liabilities 303 712 580 999,428 810 311 475 022

Long- term debt - noncurrent ( Note 7) 138 939 084 865 223 804 369 574

Total Liabilities 303 851 519 084 293 034 115 844 596

NET ASSETS ( Note 9)

Invested in capital assets

net of related debt 896 730 744 695 332 143 973 568 432 031

Unrestricted 941 153 106 589 516 19,774 563 207 946

Total Net Assets ( Deficit) $ 8,928 671 897 80 I $ 46 921 659 $ 61 748 131 ($ 5 775 915

See accompanying notes to fInancial statements

OPERATING REVENUS

Charges for services

Miscellaneous

Total Operating Revenues

OPERATING EXPENSES

General, administrative and selling

Wages and benefits

Insurance

Contractual servi ces

Depreciation

Supplies and maintenance

Total Operating Expenses

Operating income ( Loss)

NONOPERATING REVENUS ( EXPENSES)

Operating grants and contributions

interest income

Rent and other

Interest, fiscal charges and lease ( expense)

Total Nonoperating Revenues ( Expenses)

Income ( Loss) Before Contrbuti ons and Transfers

Transfers in ( Note 3)

Transfers ( out) ( Note 3)

Change in net assets

BEGINING NET ASSETS ( DEFICITS)

ENDING NET ASSETS ( DEFICITS)

CITY OF ALAMEDA

PROPRIET AR Y FUNS

STATEMENT OF REVENU, EXPENSES

AND CHANGES IN FUN NET ASSETS

FOR TH YEAR ENDED JU 30, 2007

Business- tye Activities- Enterprise Funds

Sewer

Services Golf Course Services

$ J7 726 226 422 667 296

401 43,317 823

101 127 269 739 687,119

$ 59 210 339 574 658 438

375 794 538 622

596 695 959 028 690, J 06

433,749 352 805 959 172

177 111 601 780 119 751

266,765 628 981 966 089

165 638) ( 359 242) 721 030

965 039 476 000

225 117 491 845 558

895

848) ( 16 6J4) ( 278 056)

957 416 142,248 592 502

( 1,208 222) ( 216 994) 313 532

774 698 516

( 457 236) ( 1,643 518)

( 433 524) ( 641 714) 670 014

362 195 539 515 251 645

928 671 897 801 $ 46 921 659

See accompanying notes to financial statements

Totas

911 444

146 541

057 985

057 222

914 416

245 829

1,745 726

898 642

861 835

( 1, 803 850)

990 515

963 274

895

( 302 518)

692,166

888 316

807 214

100,754)

( 405 224)

153 355

$ 61,748 13 1

Governental

Activities-

Internal Servce

Funds

647 056

647 056

553 144

651 346

428 027

686 196

J 06 375

485 273

910 361

( 1,263 305)

413

( 39 476)

937

( 1,252 368)

266

( 75 901 )

( 1,229 003)

546 912)

($ 5 775 915)

CITY OF ALAMDA

PROPRITARY FUNDS

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE , 2007

Business- e Activities- Ente rise Funds

Governental

Activities-

Sewer Internal Servce

Servces Golf Course Servces Totals Funds

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from ( payments to) customers ($ 29 1 J7) 264 523 693 480 928 886 504 457

Payments to suppliers 667 301) ( 1,535 885) ( 1,246 647) 449 833) ( 4,3 99 397)

Payments to employees ( 59 210) 672 510) 150 959) 882 679) ( 707 266)

Claims paid 760 022

Cash Flows from Operatig Activities 755 628) 128 295 874 403 626 362 228

CASH FLOWS FROM NONCAPIT AL

FINANCING ACTIVITES

Operating grants and connibutions 986 063 476 000 011 539

Interfd payments 490 490 567

Transfers in 774 698 516 807 214 365

Transfers ( out) ( 457 236 ( 1,643 518 100 754

Cash Flows from Noncapital Financing Activities 763 251 ( 424 244 618 518 720 489 932

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITES

Acquisition of capital assets , net ( 254 836) ( 1,355 791) 610 627) ( 149 550)

Proceeds from capital debt 200 609 200 609

Pricipal payments on capital debt ( 114 996) ( 588 054) ( 703 050) ( 334 859)

Interest paid 848 614) ( 376 919 401 381 476

Cash Flow s from Capital and Related Financing Activities 848 085 837 320 764) 514 449 ( 523 885

CASH FLOWS FROM INVESTING ACTIVITS

Resnicted investments 145 425 1,145 425

Interest income 225 117 491 845 558 963 274 413

Rent and other 895 895

Cash Flows from Investing Activities 225 158 386 990 983 149 594 413

Net Cash Flows ( 395 567) 347 575 ( 47 992) ( 1,805 768)

Cash and investments at beginning of period 644 842 908 486 J 9 553 328 706 179

Cash and investments at end of period 249 275 $ 17 256 061 $ 19 505 336 $ 900 411

Reconciliation of Operatig Income ( Loss) to Cash Flows

from Operatig Activities:

Operatig income ( loss) ($ 3 165 638) ($ 359 242) 721 030 ($ 1 803 850) ($ 1 263,305)

Adjustments to reconcile operating income to cash flows

from operatig activities:

Depreciation 433 749 352 805 959 172 745 726 106 375

Change in assets and liabilties:

Accounts receivable and refudable deposits 030 244) ( 1,418) 6,361 ( 125 301) ( 142 599)

Materials, par and supplies ( 25 13) ( 25 132)

Prepaids and deposits 118 642 658 161,300 972)

Due from other governents

Deposits 798) 798)

Accounts payable ( 12 137) 896 ( 479 448) ( 461 689) ( 213 444)

Claims payable 157 105

Accrued payron 435 574 009 612

DefeITed revenue 159 159

Compensated absences 37,423 527 950

Cash Flows from Operatig Activities ($ 2 755 628 $ 56 128 295 874 $ 403 626 ($ 1 362 228)

See accompanying notes to fiancial statements

CITY OF ALAMDA, CALIFORN

FIDUCIAY FUNS

Trust funds are used to account for assets held by the City as a trstee agent for individuals, private

organizations , and other governents. The financial activities of these funds are excluded from the Entity-wide

financial statements, but are presented in separate Fiduciar Fund fmancial statements.

Pension Trust Funds are used to account for the resources accumulated by the City for the payment of

pension benefits on behalf of retirees in the City' s pension plans.

Agency Funds are used to account for assets held by the City as an agent for individuals, private

organizations, and other governents.

CITY OF ALAMEDA

FIDUCIARY FUNDS

STATEMENT OF FIDUCIARY NET ASSETS

JUNE 30, 2007

Trust

Funds

ASSETS

Restricted cash and investments ( Note 2)

Accounts receivable

Total Assets

LIAILITIES

Refundable deposits

Due to members

Due to assessment districts

Total Liabilities

NET ASSETS

Reserved for:

Employees' pension benefits

Total Net Assets

See accompanying notes to fInancial statements

Agency

Funds

$ 51,366 818

162 166

528 984

139 641

386 509

002 834

$ 51 528 984

CITY OF ALAMEDA

FIDUCIARY FUNS

STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS

FOR THE FISCAL YEAR ENDED JU 30, 2007

Pension

Trust

Funds

ADDITONS

Employer contributions 062 594

Total Additions 062 594

DEDUCTIONS

Retirements and other benefits

Contractual services

057,157

437

Total Deductions 062 594

CHANGE IN NET ASSETS

NET ASSETS ( DEFICIT), BEGINING OF YEAR

NET ASSETS , END OF YEAR

See accompanying notes to fInancial statements

This Page Left Intentionally Blank

CITY OF ALAMEDA

Notes to Basic Financial Statements

NOTE 1- SUMY OF SIGNIFICANT ACCOUNTING POLICIES

The City of Alameda, California occupies the island of Alameda in the San Francisco Bay. The City

operates under the Council- Manager form of governent and provides the following services: public safety

( police and fie), highways and streets, sanitation, development services, public improvements, planing

and zoning and general administration services.

Reporting Entity

The City is governed by a five- 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.

These fmancial statements present the governent and its component units, entities for which the

governent is considered to be fmancially accountable. Blended component units, although legal1y

separate entities are, in substance, par of the governent's operations and so data from these units are

combined with data of the primar governent. Each discretely presented component unit, on the other

hand, is reported in a separate colum in the basic financial statements to emphasize it is legally separate

from the governent.

PRIMAY GOVERNENT

The financial statements of the primar governent of the City of Alameda include the activities of the City

as well as the Community Improvement Commission of the City of Alameda, Alameda Public Finance

Authority, the City of Alameda Police and Fire Retirement System Pension Plans 1079 and 1082, and the

Alameda Reuse and Redevelopment Authority all of which are controlled by and dependent on the City.

While these are separate legal entities, their fmancial activities are integral to those of the City. Their

fmancial activities have been aggregated and merged ( termed " blending ) with those of the primar

governent of the City in the accompanying fmancial statements.

BLENDED COMPONENT UNTS

The Community Improvement Commission of the City of Alameda was established to assist in the

clearance and rehabilitation of City areas determined to be in a declining condition. The Commission has

the same governing board as the City, all accounting and administrative functions are performed by City

staff and the Commission receives advances from the City to finance operations. The financial activities of

the Commission have been included in the West End Community Improvement Project Area, Business and

Waterfront Improvement Project Area, Alameda Point Improvement Project Area Special Revenue Funds

and Community Improvement Commission Subordinate Tax Allocation Bonds, Community Improvement

Commission 2003 Tax Allocation Bonds BWIP, and Community Improvement Commission 2003 Tax

Allocation Bonds Debt Service Funds.

The Alameda Public Financing Authority is a separate governent entity whose purose is to assist with

the fmancing or refmancing of certain public capital facilities within the City. The Authority has the power

to purchase bonds issued by any local agency at public or negotiated sale and may sell such bonds to public

or private purchasers at public or negotiated sale. The Authority is controlled by the City and has the same

governing body as the City, which also performs all accounting and administrative fuctions for the

Authority. The fmancial activities of the Authority are included in the Community Improvement

Commission Subordinate Tax Allocation Bonds, and Community Facility District Special Tax Bonds Debt

Service Funds.

CIT OF ALAMDA

Notes to Basic Financial Statements

NOTE 1 - SUMMAY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)

The Alameda Reuse and Redevelopment Authority ( AR) is a separate governent entity whose

purose is to assure the effective transition of the Alameda Naval Air Station from federal ownership to

local ownership. The AR is responsible for the development of an Interi Reuse Strategy, takg title to

base lands, and implementation of the Community Reuse Plan. The AR is recognized by the Deparent

of Defense as the responsible entity for submitting and completing the Community Reuse Plan for the 1997

decommissioning of the Naval Air Station. The Authority is controlled by the City and has the same

governing body as the City, which also performs all accounting and administrative functions for the

Authority. The financial activities of the Authority are included in the Alameda Reuse and Redevelopment

Authority Special Revenue, Debt Service and Capital Projects Funds.

DISCRETELY PRESENTED COMPONENT UNITS

The two component units below are legally separate from the City. However, City Council appoints the

members of their governing boards, approves their budgets and, in the case of the Housing Authority of the

City of Alameda, provides financial assistance.

The Housing Authority of the City of Alameda, California was established to provide housing for the

City' s low- and- moderate- income residents. The fiancial activities of the Authority have been included

discretely in the Housing Authority Component Unit colums of the Statement of Net Assets and Statement

of Activities.

Alameda Power and Telecom ( Alameda P& T), was established to provide electricity to the City of

Alameda. The Charer was amended in 1998 to allow provision of telecommunications services as well.

The financial activities of the Alameda P& T are discretely included in the Alameda P& T Component Unit

columns ofthe Statement of Net Assets and Statement of Activities.

Component unit financial statements for the Housing Authority may be obtained from the Housing

Authority of Alameda, 701 Atlantic Avenue, Alameda, CA 94501. Component unit fiancial statements for

the Alameda P& T may be obtained from the City of Alameda Power & Telecom, 2000 Grand Street

Alameda, CA 9450 I. Component unit financial statements for all other component units may be obtained

from the City of Alameda, Finance Deparent, 2263 Santa Clara, Alameda, CA 94501.

Basis of Presentation

The City' s Basic Financial Statements are prepared in conformity with accounting principles generally

accepted in the United States of America. The Government Accounting Standards Board is the

acknowledged standard setting body for establishing accounting and financial reporting standards

followed by governental entities in the U. S.

These Standards require that the fmancial statements described below be presented.

Government- wide Statements: The Statement of Net Assets and the Statement of Activities display

information about the primar governent, the City and its blended component units. These statements

include the financial activities of the overall City governent, except for fiduciar activities.

Eliminations have been made to minimize the double counting of internal activities. These statements

distinguish between the governmental and business- type activities of the City. Governmental activities

generally are financed through taxes, intergovernmental revenues, and other non exchange transactions.

Business- type activities are financed in whole or in part by fees charged to external paries.

CITY OF ALAMEDA

Notes to Basic Financial Statements

NOTE 1 - SUMMAY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)

The Statement of Activities presents a comparison between direct expenses and program revenues for

each segment of the business- type activities of the City and for each fuction of the City' s governmental

a