Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2005
San Leandro, California
CITY OF SAN LEANDRO, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2005
PREPARED BY: City of San Leandro – Finance Department
Jesse Baloca, Finance Director
City of San Leandro
Comprehensive Annual Financial Report
For the year ended June 30, 2005
Table of Contents
i
INTRODUCTORY SECTION
Table of Contents ............................................................................................................................... ...................... i
Letter of Transmittal.................................................................................................................... ............................ v
Government Finance Officers Association ( GFOA) Award .................................................................................... x
California Society of Municipal Finance Officers ( CSMFO) Award ..................................................................... xi
Principal Officers ............................................................................................................................... ................... xii
Organizational Chart ............................................................................................................................... ............. xiii
Location Map. ............................................................................................................................... ....................... xiv
FINANCIAL SECTION
Independent Auditors’ Report .............................................................................................................................. 1
Management’s Discussion and Analysis............................................................................................................... 3
Basic Financial Statements:
Government- Wide Financial Statements:
Statement of Net Assets ..................................................................................................................... 19
Statement of Activities and Changes in Net Assets........................................................................... 20
Fund Financial Statements:
Government Funds Financial Statements:
Balance Sheet.......................................................................................................................... .......... 26
Reconciliation of the Governmental Funds Balance Sheet
to the Government- Wide Statement of Net Assets...................................................................... 29
Statement of Revenues, Expenditures and Changes in Fund Balances ............................................. 30
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Government- Wide
Statement of Activities and Changes in Net Assets .................................................................... 32
Proprietary Funds Financial Statements:
Statement of Net Assets ..................................................................................................................... 34
Statement of Revenues, Expenses and Changes in Net Assets.......................................................... 35
Statement of Cash Flows ................................................................................................................... 36
Fiduciary Fund Financial Statement:
Statement of Fiduciary Net Assets – Agency Funds ......................................................................... 38
City of San Leandro
Comprehensive Annual Financial Report
For the year ended June 30, 2005
Table of Contents, Continued
ii
FINANCIAL SECTION, Continued
Basic Financial Statements, Continued:
Index to Notes to Basic Financial Statements................................................................................................. 39
Notes to Basic Financial Statements............................................................................................................... 41
Required Supplementary Information:
Budget and Budgetary Accounting
Statement of Revenue, Expenditures and Changes in Fund Balances – Budget and Actual –
Major Fund – General Fund................................................................................................................ 83
Major Fund – Measure B .................................................................................................................... 84
Pension Plans Schedule of Funding Progress .................................................................................................. 85
Supplementary Information:
Non- Major Governmental Funds:
Combining Balance Sheet ......................................................................................................................... 90
Combining Statement of Revenue, Expenditures and Changes in Fund Balances.................................... 94
Schedule of Revenue, Expenditures and Changes in Fund Balances –
Budget and Actual – Non- Major Funds.............................................................................................. 98
Non- Major Enterprise Funds:
Combining Statement of Net Assets........................................................................................................ 116
Combining Statement of Revenues, Expenses, and Changes in Net Assets ........................................... 117
Combining Statement of Cash Flows ...................................................................................................... 118
Internal Service Funds:
Combining Statement of Net Assets........................................................................................................ 120
Combining Statement of Revenues, Expenses and Changes in Net Assets ............................................ 121
Combining Statement of Cash Flows ...................................................................................................... 122
Fiduciary Fund Financial Statements:
Combining Statement of Fiduciary Net Assets ........................................................................................ 124
Combining Statement of Changes in Assets and Liabilities – Agency Funds ......................................... 126
STATISTICAL SECTION
General Governmental Revenues by Source - Last Ten Fiscal Years ........................................................... 129
General Governmental Expenditures by Function - Last Ten Fiscal Years................................................... 130
Property Tax Levies and Collections – Last Ten Fiscal Years ...................................................................... 131
Assessed and Estimated Actual Value of Taxable Property -
City of San Leandro
Comprehensive Annual Financial Report
For the year ended June 30, 2005
Table of Contents, Continued
iii
Last Ten Fiscal Years .............................................................................................................................. 132
Property Tax Rates - All Direct and Overlapping Governments -
Last Ten Fiscal Years .............................................................................................................................. 133
Computation of Direct and Overlapping Debt............................................................................................... 134
San Leandro Housing Finance Corporation Revenue Bond Coverage
Last Ten Fiscal Years .............................................................................................................................. 135
Demographic Statistics - Last Ten Fiscal Years ............................................................................................ 136
Property Values, Construction and Bank Deposits – Last Ten Fiscal Years ................................................. 137
Special Assessment Billings and Collections - Last Ten Fiscal Years .......................................................... 138
Computation of Legal Debt Margin............................................................................................................... 139
Principal Taxpayers ............................................................................................................................... ....... 140
Statistical Profiles ............................................................................................................................... .......... 141
THIS PAGE WAS INTENTIONALLY LEFT BLANK
December 19, 2005
Honorable Mayor and Members of the City Council
City of San Leandro
San Leandro, CA 94577
Dear Mayor and Members of the City Council:
It is with pleasure to submit for your information the Comprehensive Annual Financial Report
( CAFR) of the City of San Leandro for the fiscal year ended June 30, 2005. Responsibility for
both the accuracy of the data and the completeness and fairness of the presentation, including all
disclosures, rests with the City’s management. To the best of my knowledge and belief, the
enclosed data is accurate in all material respects and is reported in a manner designed to present
fairly the financial position and results of operations of the various activities of the City of San
Leandro ( City). All disclosures necessary to enable the reader to gain an understanding of the
City’s financial activities have been included.
The City’s Charter requires an annual audit by an independent audit firm selected by the City
Council of the books of account and financial records and reports of the City and that the City
publish a complete set of audited financial statements after the close of each fiscal year. This
report is published to fulfill this requirement for the fiscal year ended June 30, 2005.
The CAFR consists of three sections and includes the following information:
1. Introductory Section – This section includes this transmittal letter, a list of principal City
officials, the City’s organizational chart; a map identifying the City’s location within the
San Francisco Bay Area, and the most recent achievement certificates awarded to the City
for its excellence in financial reporting.
2. Financial Section - The basic financial statements include management’s discussion and
analysis, government- wide financial statements, fund financial statements, notes to the
basic financial statements, and required supplementary information as well as the
auditors’ report on the financial statements and schedules.
3. Statistical Section - Includes selected financial and demographic information, which is
generally presented on a multi- year basis and is unaudited.
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This report presents management’s representations concerning the finances of the City.
Consequently, management assumes full responsibility for the completeness and reliability of all
of the information presented in this report. To provide a reasonable basis for making these
representations, management of the City has established a comprehensive internal control
framework that is designed both to protect the City’s assets from loss, theft or misuse and to
compile sufficient reliable information for the preparation of the City’s financial statements in
conformity with generally accepted accounting principles ( GAAP). Because the costs of internal
controls should not outweigh the benefits, the City’s comprehensive framework of internal
controls has been designed to provide reasonable rather than absolute assurance that the financial
statements will be free from material misstatement.
Vavrinek, Trine, Day and Company, LLP, a public accounting firm fully licensed and qualified to
perform audits of local governments within the State of California, has audited the City’s basic
financial statements. The goal of the independent audit was to provide reasonable assurance that
the basic financial statements of the City for the fiscal year ended June 30, 2005, are free of
material misstatement. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements; assessing the accounting
principles used and significant estimates made by management; and evaluating the overall
financial statement presentation. The independent auditors concluded, based upon the audit, that
there was a reasonable basis for rendering an unqualified opinion that the City’s basic financial
statements for the fiscal year June 30, 2005, are fairly presented in conformity with accounting
principles generally accepted in the United States. The independent auditor’s report is presented
as the first component of the financial section of this report.
The independent audit of the financial statements of the City of San Leandro was part of a
federally mandated Single Audit designed to meet the special needs of Federal grantor agencies.
The standards governing Single Audit engagements require the independent auditor to report not
only the fair presentation of the financial statements, but also on the audited government’s
internal controls and compliance with legal requirements, with special emphasis on internal
controls and legal requirements involving the administration of Federal awards. These reports are
available in the City’s separately issued Single Audit Report.
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statement in the form of Management’s Discussion and Analysis
( MD& A). The MD& A compliments this letter of transmittal and should be read in conjunction
with it. The City’s MD& A can be found immediately following the report of the independent
auditors in the financial section of the CAFR.
THE REPORTING ENTITY
The City of San Leandro was incorporated in 1872 and is one of the oldest communities in the
San Francisco Bay Area. The City occupies fifteen square miles between the cities of Oakland
and Hayward and is bordered on the west by the San Francisco Bay. San Leandro offers its
approximately 81,500 residents the quiet charm and character of a community that has been
established for more than 130 years. Once an agricultural community, the City has been
successful in attracting significant industrial, manufacturing and retail development to the area.
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The City functions under a Mayor- Council- Manager form of government and is governed by a
seven- member council elected by City residents. Municipal services provided include public
safety; highways and streets; recreation, library and cultural services; health services; public
improvements; planning and zoning and general administrative services.
As of June 30, 2005 there were no discretely reportable component units. The City’s blended
component units include: operations of the San Leandro Redevelopment Agency, the San
Leandro Parking Authority, the San Leandro Public Financing Authority, the San Leandro
Economic Development Agency, and the enterprise operation of the San Leandro Housing
Finance Corporation.
The CAFR for the year ending June 30, 2005 provides a financial account of those activities,
organizational elements, and City functions for which the City Council provides policy direction
and general oversight. It presents financial information on the activities of the City of San
Leandro itself and the component units of the City upon which the City Council is authorized to
impose its will. The operating nature of the City’s component units determines how they are
reported in the financial statements. The activities of component units that provide financial
benefit or create financial burden for the City are blended within the City’s general financial
statements. Component units that have no discernable financial impact upon the City are
presented separately. The scope of the City Council’s power and influence includes, but is not
limited to the following:
• The authority to establish and modify operating and capital budgets
• The power to appoint voting members to other governing authorities
• The power to appoint the City Manager and City Attorney
• The ability to plan and direct operations
• The authority to veto, modify, and overrule decisions
Another significant example of control is the nature of financial interdependency between the
various City funds. Manifestations of financial interdependency include taking responsibility for
financing deficits, being entitled to operating surpluses, and giving implied guarantees (“ moral
responsibility”) for debt obligations.
The City Council is required to adopt a final budget through the passage of a resolution by no
later than June 30th, the close of the fiscal year, following a public hearing process conducted to
obtain taxpayer comments. This annual budget serves as the foundation for the City of San
Leandro’s financial planning and control. The budget is prepared by fund, function ( e. g., public
safety) and department ( e. g., police). The legal level of budgetary control is at the fund level.
The City Manager is authorized to transfer budgeted amounts between departments and line
items within any fund; however, any revisions which alter the total expenditures of any fund must
be approved by the City Council. Transfers between funds must be approved by the City
Council. All appropriations lapse at year- end, unless otherwise authorized by the City Council
and the City Manager, except for capital improvement funds for which appropriations endure
until the project is completed.
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ECONOMIC CONDITION OF THE CITY
The City of San Leandro has a diverse and strong economy with its business community
comprised of a diverse collection of business ranging from neighborhood coffeehouses and fine
restaurants, large food processing centers, and regional shopping opportunities, to cutting edge
technology. While the economic base had dramatically changed from its agricultural early years,
San Leandro continues to expand on its sound business base with new developments such as the
Marina Boulevard Auto Mall and the newly remodeled Bayfair Mall.
Although the City of San Leandro experienced overall growth with its major revenues, operating
costs have exceeded current revenue growth. As a result, the City ended the fiscal year with a
slight General Fund operating deficit. During the past year, the City experienced a return of sales
tax growth and anticipates conservative growth next fiscal year. This growth is contrary to the
declines previously experienced since September 2001. This past fiscal year, the City was also
successful implementing its new 911 Fee, which is anticipated to generate close to $ 2.2 million
and provide partial cost recovery of the City’s 911 communication/ dispatch operations center.
However, with the failure of the November 4, 2004 Public Safety Parcel Tax measure, other
alternatives are necessary for filling what the City considers a structural gap. In fiscal year 2004-
05, approximately $ 1 million in fire equipment replacement reserves were used to partially offset
the revenues that would have been generated by the public safety parcel tax.
The City’s management team clearly understands that an ongoing structural challenge exists
where expenditures exceed current revenues. The City will continue to research and develop
solutions to address the current budget challenges facing San Leandro. A combination of budget
balancing approaches will be most likely be proposed in the new fiscal year and include
submitting for voter approval a proposal to increase the City’s current business license tax rate,
identifying service efficiencies and potential service reductions, utilizing one- time reserves, and
proposing other possible revenue enhancements. The City will continue to monitor and evaluate
these approaches to balancing its budget and make changes accordingly to ensure the success of
the City’s financial operations with respect to the services provided. At fiscal year end, the City’s
general fund maintains reserves available for emergencies and economic uncertainties of $ 12.5
million or at 17.6% of fiscal year 2004- 05 General Fund expenditures. This decline of $ 504k
from prior fiscal year ending June 30, 2003 is in addition to the use of fire equipment replacement
reserves mentioned earlier. Available General Fund reserves are projected to fall to $ 8.8 million
or 12% of operating expenditures by June 30, 2006. Through diligent planning and conservative
financial management practices, the City of San Leandro looks to the future with great optimism.
CASH MANAGEMENT
The City maintains a cash and investment pool for all City Funds. The City Treasurer invests
City funds in accordance with the Investment Policy adopted annually by the City Council. The
objectives of the policy are legality, safety, liquidity and yield. The policy addresses the credit
quality of issuing financial institutions and the types of investments permitted by the California
Government Code. Permitted City investments include obligations of the U. S. Treasury and its
agencies and instrumentalities, commercial paper, banker’s acceptances, high quality medium-term
corporate notes, repurchase agreements, reverse repurchase agreements, certificates of
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deposit, high quality mutual funds, and the State Treasurer’s Local Agency Investment Fund.
Additional information on the City’s cash management can be found in Note 2 of the notes to the
financial statements.
RISK MANAGEMENT
The City maintains a program of commercial insurance combined with self- insurance for
substantially all of its governmental operations, except for major construction projects and
contractor- supplied services. In such circumstances, insurance to protect the City is provided by
each contractor. The City is a member of the Local Agency Workers’ Compensation Excess Joint
Powers Authority ( LAWCX). The City is also a member of California Joint Powers Risk
Management Authority ( CJPRMA), which provides annual general liability coverage in an
aggregate up to $ 25 million. Additional information on the City’s risk management activity can
be found in the notes to the financial statements.
CERTIFICATE OF ACHIEVEMENT
The City of San Leandro was awarded the Certificate of Achievement for Excellence in Financial
Reporting for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2004
from both the Government Finance Officers Association of the United States and Canada
( GFOA) and the California Society of Municipal Finance Officers ( CSMFO). In order to be
awarded a Certificate of Achievement, a government must publish an easily readable and
efficiently organized Comprehensive Annual Financial Report. This report must satisfy both
generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that this
comprehensive annual financial report for fiscal year 2005 continues to meet the Certificate of
Achievement Program’s requirements and we are submitting it both the GFOA and CSMFO to
determine its eligibility for another certificate.
ACKNOWLEDGMENTS
This CAFR represents the culmination of numerous hours of hard work expended by the
dedicated staff in the Accounting Division of the Finance Department. In particular, I would like
to express appreciation to Carla Rodriguez, Christine Galvin, Clarence Youngs, and Sally Perez
whose support and dedication made the timeliness of the report possible. Furthermore, I would
like to thank Vavrinek, Trine, Day, and Company for their professional assistance and
cooperation. Finally, I want to thank John Jermanis, City Manager, Steve Hollister, Assistant
City Manager, and the City Council Finance Committee for their continued interest and support
in planning and conducting the City’s financial operations in a responsible and progressive
manner.
Respectfully submitted,
Jesse S. Baloca
Finance Director
CITY OF SAN LEANDRO, CALIFORNIA
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2005
3
Management of the City of San Leandro ( the “ City”) provides this Management Discussion and
Analysis of the City’s Comprehensive Annual Financial Report ( CAFR) for readers of the City’s
financial statements. This narrative overview and analysis of the financial activities of the City
is for the fiscal year ended June 30, 2005. We encourage readers to consider this information in
conjunction with the additional information that is furnished in the letter of transmittal found in
the preceding Introductory Section, and with the City’s basic financial statements and the
accompanying notes to those financial statements.
FINANCIAL HIGHLIGHTS
• The assets of the City exceeded its liabilities at fiscal year ending June 30, 2005 by $ 343
million. Of this amount, $ 285.4 million are capital assets, net of related debt, $ 41.9 million
is for restricted uses as specified by entities outside of the City government, and $ 15.6
million was reported as “ unrestricted net assets” and may be used to meet the government’s
ongoing obligations to citizens and creditors.
• The City’s total net assets decreased by almost $ 2.1 million.
• At the close of the current fiscal year, the City’s governmental funds reported total ending
fund balances of $ 72.6 million, a decrease of $ 1.4 million from the prior year.
• At the end of the fiscal year, the General Fund balance was $ 32.8 million, a decrease of $ 1.9
million from the prior year. This decrease primarily reflects $ 1.5 million in negative net
operations and $ 340 thousand in transfers to support a capital improvement project.
• At fiscal year end, the City’s general fund maintains reserves available for emergencies and
economic uncertainties of $ 12.5 million. This is a $ 500 thousand decrease from fiscal year
ending June 30, 2004. Reserves for fire equipment replacement ended the year at $ 796
thousand, a decrease from $ 1.5 million ending June 30, 2005.
• The City’s long- term debt decreased by $ 5.9 million during the current fiscal year. The
decrease primarily reflects the net reduction of $ 6.2 million from retired 1993 Mortgage
Revenue Refunding Bonds, $ 2.8 million in normal debt amortization, and the addition of $ 3
million in new capital lease proceeds.
OVERVIEW OF THE BASIC FINANCIAL STATEMENTS
Management’s Discussion and Analysis is intended to serve as an introduction to the City’s basic
financial statements. The City’s basic financial statements are comprised of three components:
government- wide financial statements; fund financial statements; and notes to the financial
statements. This report also contains other supplementary information in addition to the basic
financial statements themselves.
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Government- wide Financial Statements
The government- wide financial statements are designed to provide readers with a broad
overview of the City’s finances, in a manner similar to statements of a private- sector business.
They are comprised of the Statement of Net Assets and Statement of Activities and Changes in
Net Assets.
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 and Changes in Net Assets presents information showing how the
government’s net assets changed during the 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 the
related cash flows. Thus revenues and expenses are reported in this statement for some items
that will only result in cash flows in future fiscal periods ( e. g. uncollected taxes and earned but
unused vacation leave).
The government- wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenue ( governmental activities) from other functions
that are intended to recover all or a significant portion of their costs through user fees and
charges ( business- type activities).
Both of the above financial statements have separate sections for three different types of
programs or activities. These three types of activities are:
Governmental Activities - The activities in this section are mostly supported by taxes and charges
for services. The governmental activities of the City include General Government, Public
Safety, Engineering & Transportation, Recreation and Culture, Library and Community
Development.
Business- Type Activities – These functions normally are intended to recover all or a significant
portion of their costs through user fees and charges to external users of goods and services. The
business- type activities of the City include Water Pollution Control Plant, Environmental
Services, Shoreline Enterprise, Storm Water Utility, and San Leandro Housing Finance
Corporation.
Discretely Presented Component Units - The City of San Leandro has no discretely presented
component units to report upon.
The government- wide financial statements can be found on pages 19 through 21 of this report.
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, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance- related
legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.
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The fund financial statements provide detailed information about each of the City’s most
significant funds, called Major Funds. The concept of Major Funds, and the determination of
which are major funds, was established by GASB Statement 34 and replaces the concept of
combining like funds and presenting them in total. Instead, each Major Fund is presented
individually, with all Non- major Funds summarized and presented in a single column. Further
detail on the Non- major funds is presented on pages 87 through 113 of this report.
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
balances of spendable resources available at the end of the fiscal year. Such information may be
useful in evaluating a government’s near- term financial capacity.
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 government 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
facilitate this comparison between governmental funds and governmental activities. These
reconciliations are presented on the page immediately following each governmental fund
financial statement.
The City has 25 governmental funds, of which 5 are considered major funds for presentation
purposes. Each major fund is presented separately in the governmental fund balance sheet and in
the governmental fund statement of revenues, expenditures, and changes in fund balances. The
City’s 5 major funds are - the General Fund, Measure B Fund, Redevelopment Agency Capital
Projects Fund, Capital Improvement Projects Capital Project Fund, and the Redevelopment
Agency Low/ Moderate Housing Capital Projects Fund. Data from the other 20 governmental
funds are combined into a single, aggregated presentation. The basic governmental fund
financial statements can be found on pages 25 through 31 of this report.
Proprietary Funds - The City maintains two different types of proprietary funds - enterprise
funds and internal service funds. Enterprise funds are used to report the same functions
presented as business- type activities in the government- wide financial statements. The City uses
an enterprise fund to account for its Water Pollution Control Plant, Environmental Services,
Shoreline Enterprise, Storm Water Utility, and the San Leandro Housing Finance Corporation.
Internal service funds are used to accumulate and allocate costs internally among the City’s
various functions. The City uses internal service funds to account for its fleet of vehicles,
facilities, insurance services and its information systems. Because these services predominantly
benefit governmental rather than business- type functions, they have been included within
governmental activities in the governmental- wide financial statements.
Proprietary funds provide the same type of information as the government- wide financial
statements, only in more detail. Like the government- wide financial statements, proprietary fund
financial statements use the accrual basis of accounting. There is no reconciliation needed
between the government- wide financial statements for business- type activities and the
proprietary fund financial statements.
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The basic proprietary fund financial statements can be found on pages 33 through 36 of this
report.
Fiduciary Funds – Fiduciary funds, which consist solely of trust and agency 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 fiduciary funds statement of net assets
can be found on page 38.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to a
full understanding of the data provided in the government- wide and fund financial statements.
The notes to the financial statements can be found on pages 39 through 80 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents
certain required supplemental information. This information includes budgetary comparison
schedules, as well as more detailed information about the City’s participation in the California
Public Employees Retirement System ( CALPERS) defined benefit pension plan. The combining
statements referred to in connection with non- major governmental funds and internal service
funds are presented immediately following the required supplemental information.
GOVERNMENT- WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve, over time, as a useful indicator of a government’s
financial position. In the case of the City of San Leandro, combined net assets ( government and
business type activities) totaled $ 343 million at the close of the fiscal year ending June 30, 2005.
As shown below, the largest portion of the City’s net assets, $ 285.4 million or 83.2%, reflects its
investment in capital assets ( e. g. land, streets, sewers, buildings, machinery, and equipment) less
any related outstanding debt used to acquire those assets. The City uses these capital assets to
provide services to citizens; consequently, these assets are not available for future spending.
Although the City investment in its capital assets is reported net of related debt, it should be
noted that the resources needed to repay this debt must be provided from other sources, since the
capital assets themselves cannot be used to liquidate these liabilities.
An additional $ 41.9 million ( 12.2%) of the City’s net assets represent resources that are subject
to external restrictions on how they may be used. The remaining balance of unrestricted net
assets, $ 15.6 million ( 4.6%) may be used to meet the government’s ongoing obligations to
citizens and creditors.
A summary of the government- wide statement of Net Assets is as follows:
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City of San Leandro
Net Assets at June 30, 2005
( in thousands)
2005 2004 2005 2004 2005 2004
Current Assets $ 8 8,822 $ 8 5,040 $ 2 0,674 $ 2 0,971 $ 1 09,497 $ 1 06,011
Non- Current Assets 1 6,636 1 8,169 ( 8,566) ( 2,660) 8 ,071 1 5,509
Capital Assets 3 16,165 3 25,120 1 4,040 9 ,445 3 30,205 3 34,565
Total assets 421,623 428,329 26,149 27,756 447,772 456,085
Current and other liabilities 17,557 15,291 1,990 2,232 19,547 17,523
Long- term liabilities 81,495 83,527 3,712 9,856 85,207 93,383
Total liabilities 99,052 98,818 5,702 12,088 104,754 110,906
Net assets:
Invested in capital assets,
net of related debt 2 71,399 2 82,336 1 4,040 9 ,445 2 85,439 2 91,781
Restricted 4 1,927 42,559 4 1,927 4 2,559
Unrestricted 9 ,246 4 ,616 6 ,407 6 ,223 1 5,653 1 0,839
Total net assets $ 3 22,571 $ 3 29,511 $ 2 0,447 $ 1 5,668 $ 3 43,018 $ 3 45,179
Governmental Activities Business- Type Activities Total
Changes in Net Assets
The City’s net assets decreased by $ 2.1 million from the prior fiscal year. Revenues decreased
by almost $ 6.8 million and expenses remained relatively flat, increasing by only $ 74 thousand
from the prior fiscal year. The City also restated its prior year net asset balance by increasing its
business type assets close to $ 3.6 million and decreasing its governmental assets by a like
amount. The prior year restatement resulting in a overall zero net change and is the result of
reclassifying ownership of business type assets that were previously recorded as governmental
assets. Please refer to Note 14 in the basic notes to the financial statements for additional detail
of the prior year adjustment.
Governmental Activities
Government activities decreased the City’s net assets by almost $ 3.4 million. Overall,
Governmental revenues decreased by $ 7.7 million or 8.2% from the prior fiscal year. Although
general revenues increased by almost $ 1.8 million or 2.8%, operating and capital grants and
contributions decreased by $ 10.6 million. Reduced Motor vehicle license fee ( VLF) revenues
reflect the States permanent lowering of the VLF from 2% to 0.65%, and the States replacement
of the City’s portion of reduced VLF revenues with property tax.
Expenditures remained relatively flat declining slightly by $ 781 thousand, which is less than 1%
of all governmental revenues. Expenditures primarily reflect across the board expenditure
reductions in an effort to offset the rising cost of operations as compared to the lesser growth of
current revenues.
Business Type Activities
Net assets for business- type activities were $ 20.4 million, an increase of $ 1.2 million from the
prior fiscal year. Total revenues for business- type activities were $ 14.4 million, which is an
increase of $ 951 thousand over the prior fiscal year. Revenue increase primarily reflects growth
in program revenue service charges, which increased by $ 1.4 million as a result of increased
Water Pollution Control Plant revenues of $ 800 thousand and increased Shoreline rents and
concessions revenue of $ 644 thousand. Total expenses for the business- type activities were
$ 13.4 million during the current year 2005 and remained relatively flat with exception of the
8
Shoreline’s sediment removal project. Expenses are related to Water Pollution Control Plant
services, Marina and Golf Course activities, Storm Water Utility services, Environmental
Services, and debt payments made through the San Leandro Housing Finance Corporation.
A summary of the government- wide statement of Changes in Net Assets follows:
City of San Leandro
Changes in Net Assets
Year Ended June 30,2005
( in thousands)
2005 2004 2005 2004 2005 2004
Revenues
Program revenues:
Charges for Services $ 10,900 $ 9,734 $ 13,361 $ 11,972 $ 24,261 $ 21,706
Operating grants and contributions 2,470 10,963 2,470 10,963
Capital grants and contributions 8,944 11,114 8,944 11,114
General revenues:
Property taxes 18,884 15,457 18,884 15,457
Sales tax 20,705 20,090 20,705 20,090
Other taxes 19,830 18,555 213 282 20,043 18,837
Motor Vehicle License Fees 530 3,706 530 3,706
Investment Earnings 2,507 2,034 577 796 3,084 2,830
Miscellaneous 1,921 2,751 294 444 2,215 3,195
Total Revenues 86,691 94,404 14,445 13,494 101,136 107,898
Expenses
General Government 22,166 25,530 22,166 25,530
Public safety 35,819 33,414 35,819 33,414
Engineering & Transportation 9,006 7,592 9,006 7,592
Recreation and Culture 11,687 10,721 11,687 10,721
Community Development 7,462 9,213 7,462 9,213
Interest on Long- Term Debt 3,766 4,217 3,766 4,217
Water Pollution Control 7,468 7,759 7,468 7,759
Shoreline 3,026 1,911 3,026 1,911
San Leandro Housing Finance Corp 669 600 669 600
Storm Water Utility 1,056 1,030 1,056 1,030
Environmental Services 1,172 1,236 1,172 1,236
Total Expenses 89,906 90,687 13,391 12,536 103,297 103,223
Excess( deficiency) of revenues
over expenses before transfer ( 3,215) 3,717 1,054 958 ( 2,161) 4,675
Transfer ( 147) ( 79) 147 79
Increase in net assets ( 3,363) 3,638 1,201 1,037 ( 2,161) 4,675
Beginning net assets 325,933 325,873 19,246 14,631 345,179 340,504
Ending net assets $ 322,570 329,511 $ 20,447 $ 15,668 343,018 $ 345,179
Prior Period Adjustment ( 3,578) 3,578
Beginning net assets, restated $ 325,933 $ 19,246
Governmental Activities Business- Type Activities Total
FINANCIAL ANALYSIS OF INDIVIDUAL FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with
finance- related legal requirements.
9
Governmental Funds
The focus of the City’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’s
financial 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 June 30, 2005, the City’s governmental funds reported combined ending fund balances of
$ 72.6 million. Approximately, $ 22.8 million of this amount constitutes unreserved fund balance,
which is available for spending at the government’s discretion. The remainder of fund balance is
reserved to indicate that it is not available for spending because it has already been legally
committed.
The following are major funds that either qualified under the reporting criteria or were
considered to be important to financial statement users:
General Fund - The general fund is the primary operating fund of the City. At the end of the
current fiscal year, unreserved ( designated and undesignated) fund balance of the general fund
was $ 13.9 million, while total fund balance reached $ 32.8 million, which was a decline of $ 1.9
million from the prior fiscal year. As a measure of the general fund’s liquidity, it may be useful
to compare both unreserved fund balance and total fund balance to total fund expenditures.
Unreserved fund balance represents 19.7% of total general fund expenditures including transfers
out, while total fund balance represents 46.4% of that same amount.
The City’s management also designates unreserved fund balance to a particular function, project
or activity. Fund balance may also be designated for purposes beyond the current year.
However, designated fund balance is available for appropriation at any time. Of the $ 13.9
million General Fund unreserved fund balance, 100% is designated for a specific purpose. The
most significant designations are $ 7.4 million earmarked for economic uncertainty, $ 5 million
earmarked for major emergencies, and $ 796 thousand earmarked for fire equipment acquisitions.
The City had no unreserved and undesignated fund balance at year- end June 30, 2004.
Measure B Fund – The Measure B Paratransit Fund accounts for the City’s share of proceeds of
a one- half cent sales tax increase originally approved by the voters in November 1986 to provide
funds for AC transit and paratransit operations. The program is administered by the Alameda
County Transportation Authority. At the end of fiscal year 2005, the total fund balance was
almost $ 1.3 million, which is a decrease of $ 600 thousand from the prior fiscal year.
Capital Improvements Projects Capital Projects Fund - The Capital Improvement Projects
Capital Project Fund was established to account for major capital improvement projects. At the
end of fiscal year 2005, the reserved fund balance was $ 9.8 million and unreserved fund balance
was $ 820 thousand. Reserved fund balance primarily reflects $ 3.5 million in year end
encumbrances and $ 6.3 million of remaining debt proceeds from the City’s 2003 Certificates of
Participation issuance to fund the Aquatics Complex project and 2005 lease purchase to fund the
City’s Computer Aided Dispatch and Records Management System ( CAD/ RMS) project.
Redevelopment Agency Capital Improvement Fund - The Redevelopment Agency is
responsible for the planning and implementation of the City’s Redevelopment Plan for the three
Project Areas established under the Community Redevelopment Law. The Agency’s operations
are funded primarily by the issuance of debt, which is expected to be repaid out of property tax
10
increment revenue generated by increases in property assessed values in the redevelopment
project areas. The reserved fund balance at the end of fiscal year was close to $ 12.1 million.
Redevelopment Agency Low/ Moderate Housing Capital Projects Fund - The
Redevelopment Agency Low/ Moderate Housing Capital Projects Fund was established to
account for the 20% tax increment revenue set aside and legally designated for low and moderate
income housing and neighborhood improvements. At the end of fiscal year 2005, the unreserved
fund balance was close to $ 3.9 million, an increase of $ 900 thousand over the prior year.
Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government- wide
financial statements but in more detail.
The total net assets of the enterprise funds increased by $ 1.2 and primarily reflect and increase in
Water Pollution Control Plant service charges and increased Shoreline rents and concessions
revenue. Unrestricted net assets of internal service funds at June 30, 2005 amounted to $ 9.3
million and primarily reflect reduced workers compensation and general liability settlement as
compared to the previous fiscal year.
Water Pollution Control Plant Enterprise Fund – The Water Pollution Control Plant
Enterprise fund was established to account for the City’s sewers, which protect public health and
preserve water quality through collection, treatment and disposal of the community’s wastewater
and wastewater solids. As of June 30, 2005, the fund’s net assets totaled $ 22.7 million, of which
$ 6.7 million was invested in capital assets and $ 16 million was unrestricted.
Shoreline Enterprise Fund - The Shoreline Enterprise Fund was established in 2002- 03 to
combine the Marina Enterprise Fund and the Golf Course Enterprise Fund. This fund accounts
for the operation of recreational berthing and food service facilities and the golf course for use by
the general public. As of June 30, 2005, the fund’s net assets totaled ($ 3.7) million. The fund
had a deficit fund balance of ($ 11.1) million in the unrestricted portion of the net assets. The
deficit has accumulated over the years and reflects the transfer of golf course assets in 2003
pursuant to the City’s lease with American Golf Company. The deficit will be eliminated
through cost containment and revenue enhancement.
San Leandro Housing Finance Corporation – The San Leandro Housing Finance Corporation
was established to account for the operation of the City’s home financing program through the
sale of revenue bonds and other financing mechanisms. The balance of the 1993 Mortgage
Revenue Refunding Bonds, close to $ 6.2 million, was paid during fiscal year 2004- 05.
GENERAL FUND BUDGETARY HIGHLIGHTS
The final amended general fund expenditure budget totaled $ 73.9 million, which is an increase of
$ 2.1 million over the original adopted budget.
Significant amendments to the fiscal year 2004- 05 budget primarily includes $ 1.4 million in
prior year outstanding encumbrances and approved carryovers of unspent budget from the prior
fiscal year, a $ 100 thousand appropriation in hand gun tax revenues to support youth violence
11
prevention programs, and transfers that support various new contracts and non- general fund
program shortages.
The following is a summary of the General Fund budget and actual for the current fiscal year.
Variance with
final budget
Actual positive/
Adopted Final ( budget basis) ( negative)
Revenue
Property and other taxes $ 51,970.6 $ 50,795.6 $ 52,496.9 $ 1,701.3
Licenses and permits 4,080.5 4,080.5 3 ,461.5 ( 619.0)
Fines and forfeitures 620.0 620.0 6 86.0 66.0
Service charges 2,887.5 4,062.5 3 ,907.7 ( 154.8)
Intergovernmental 2,064.3 2,068.3 1 ,082.3 ( 986.0)
Use of money and property 2,103.4 2,103.4 1 ,938.6 ( 164.8)
Interdepartment charges 1,675.1 1,675.1 1 ,675.1 -
Other 318.8 325.6 2 62.3 ( 63.3)
Total Revenues 65,720.1 65,731.0 65,510.4 ( 220.5)
Expenditures
General government 10,459.6 10,607.8 10,837.9 ( 230.1)
Public safety 38,205.4 38,732.0 37,266.0 1,466.0
Engineering and transportation 7,835.6 8,011.2 4,859.8 3,151.4
Recreation and culture 8,834.9 9,162.8 10,496.8 ( 1,334.0)
Community development 3,136.8 3,230.4 2,946.7 283.7
Total Expenditures 68,472.3 69,744.2 66,407.1 3,337.0
Total excess ( deficiency of revenues)
over expenditures ( 2,752.2) ( 4,013.2) ( 896.6) 3,116.5
Other financing sources ( uses)
Lease proceeds 3,000.0 3,048.3 3,048.3
Transfers in 187.2 187.2
Transfers out ( 3,408.1) ( 4,204.7) ( 4,204.7) -
Total other financing sources ( uses) ( 408.1) ( 969.2) ( 969.2) -
Net change in fund balance ($ 3,160.3) ($ 4,982.5) ($ 1,865.9) $ 3,116.5
CITY OF SAN LEANDRO
Summary Analysis of General Fund Budget, Fiscal Year 2004- 05
( in thousands)
Budget Amounts
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City’s investment in capital assets for its governmental and business type activities as of
June 30, 2005, amounts to $ 330.2 million ( net of accumulated depreciation), which is a reduction
of $ 4.4 million. Investment in capital assets includes land, buildings, improvements, machinery
and equipment, infrastructure and construction in progress. Infrastructure assets are items that
are normally immovable and of value only to the City such as roads, bridges, streets and
sidewalks, drainage systems, lighting systems and similar items.
12
The following is a summary of the City’s capital assets:
City of San Leandro
Capital Assets ( net of depreciation)
Year Ended June 30,2005
( in thousands)
2005 2004 2005 2004 2005 2004
Land $ 14,439 $ 17,310 $ 3,578 $ 0 $ 18,017 $ 17,310
Buildings 4 0,627 38,698 5,012 5,198 45,639 43,896
Improvements other than buildings 9 32 932 0 0 932 932
Machinery and equipment 2 ,320 2,249 604 689 2,924 2,938
Licensed Vehicles 2 ,370 2,241 54 64 2,424 2,305
Infrastructure 2 39,336 249,097 1,210 1,241 240,546 250,338
Construction in progress 1 6,141 14,593 3,582 2,253 19,724 16,846
Capital assets, net $ 316,165 $ 325,120 $ 14,040 $ 9,445 $ 330,205 $ 334,565
Governmental Activities Business- Type Activities Total
During the fiscal year, the City discovered land listed as a governmental activity but actually
owned by the City’s Golf and Marina Enterprise. As a result, $ 3.6 million was added to
business- type land to reflect the transfer of ownership. Capital asset additions in the buildings
category primarily reflect $ 2.8 million in improvements to the West Estudillo Museum for $ 1.9
million; Main Library Bookstore and Floresta Park Restroom improvements; and a Police locker
room renovation project. Capital assets also reflect $ 13 million in annual depreciation.
Additional information on the City’s capital assets can be found on Note 6 on the notes to the
financial statements.
Debt Administration
At the end of the current fiscal year, the City’s total long- term debt outstanding is $ 76.7 million,
a decrease of $ 5.9 million from the prior fiscal year. This net decrease primarily reflects the
retirement of 1993 Mortgage Revenue Refunding Bonds ($ 6.2 million in business- type activities)
and new lease proceeds in the amount of $ 3 million to fund the City’s ( CAD/ RMS) project. The
City continues to have no outstanding general obligation debt. Additional information on the
City’s long- term debt obligations can be found in Note 7 of the notes to the financial statements.
The following is a summary of the City’s outstanding debt:
City of San Leandro
Outstanding Debt
Year Ended June 30,2005
( in thousands)
2005 2004 2005 2004 2005 2004
Revenue bonds and notes $ 21,945 $ 22,480 $ 6,175 $ 21,945 $ 28,655
( backed by specific tax and fee revenues)
Certificates of participation 41,200 42,125 41,200 42,125
Other loans 10,180 8,356 3,402 3,536 13,582 11,892
Total $ 73,325 $ 72,961 $ 3,402 $ 9,711 $ 76,727 $ 82,672
Governmental Activities Business- Type Activities Total
13
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
Fiscal year 2004- 05 was a year where revenues exceeded the cost of operations by ($ 1.9) million
in the General Fund and by ($ 1.4) million for all governmental fund activities. As anticipated,
the regional and local economy appears to have stabilized and began to show signs of sales tax
stability towards during the second half of the fiscal year. Moderate improvements are
anticipated in 2005- 06 but at a rate that continues to lag behind the nation and even southern
California economy. As a result of low interest rates, the strong housing sales market continued
to generate growth in property tax revenues and brought one- time transfer tax revenues that
exceeded original expectations. The City also implemented a new Emergency Communications
Access Fee ( 911 Fee) effective January 1, 2005. The new 911 Fee generated close to $ 1.2
million during the fiscal year and is projected to raise approximately $ 2.2 million annually.
During fiscal year 2004- 05, these additional revenues were viewed as an offset to the unfortunate
failure of Measure DD, the City’s November 2004 proposed Public Safety Parcel Tax, which
was anticipated to generate $ 3.5 million annually to offset the rising costs of police and fire
operations.
With the added passage of Proposition 1A, the City was obligated to a two- year $ 1.2 million
revenue takeaway beginning fiscal year 2004- 05. For the long- term, the Proposition was highly
supported by local governments since it also prevents the State from taking and using local tax
dollars, unless borrowed under specific conditions. Overall, operating revenues remained
relatively flat for the City’s governmental funds ending the year $ 591 thousand or 0.7% above
prior year revenues while expenditures increased by $ 1.1 million or 1.2%. Fiscal year general
fund revenues increased over prior year revenues by $ 1.4 million or 2.1% while expenditures
increased by $ 4.3 million or 6.9% over the prior year.
With the added safeguard against local revenue takeaway and moderate recovery of the
economy, the City of San Leandro anticipates future revenue stability. However, under current
conditions the City will continue to be challenged with an ongoing structural imbalance of
approximately $ 3.1 million going into fiscal year 2005- 06. With the current cost of operations
increasing at a rate greater than current revenue growth, it’s unlikely that the City can just grow
out of its current structural imbalance situation without an additional revenue source,
program/ service reductions or a combination of both. For fiscal year 2005- 06, the City has
implemented a “ hold- the- line” policy, which limits any increase to operating expenditures with
the exception of mandated cost increases ( e. g. salary step, retirement, health care, etc.). The City
will also continue to defer investment in areas such as general fund capital improvements
support, major street repair and reconstruction, and asset replacements.
In an effort to achieve balance with current revenues against the greater cost of ongoing
obligations, two new revenue enhancement solutions will be evaluated for proposal during fiscal
year 2005- 06. An increase to the City’s current business license tax structure will be proposed as
a June 2005 ballot measure with the potential of generating an additional $ 2 million in general
fund revenues. An increase to the City’s emergency medical services ( EMS) tax structure will
also be evaluated with the potential of generating approximately $ 900 thousand in new general
fund revenues. In 2005- 06, the City will continue to draw upon available economic uncertainty
reserves. At the end of the fiscal year, the City maintains reserves available for emergencies and
economic uncertainties of $ 12.5 million, or 17.6% of its fiscal year 2004- 05 general fund
operating expenditure budget, as compared to Council’s 20% recommended reserve policy.
14
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City’s finances for all of its
citizens, taxpayers, customers, investors and creditors. Questions concerning any of the
information provided in this report or requests for additional information should be addressed to
the City of San Leandro, Finance Department, 835 East 14th Street, San Leandro, CA 94577.
15
xii
PRINCIPAL OFFICERS
CITY OF SAN LEANDRO
For Fiscal Year Ended June 30, 2005
CITY COUNCIL
Mayor Shelia Young
Vice Mayor Orval “ OB” Badger
Councilmember Surlene G. Grant
Councilmember Glenda Nardine
Councilmember Tony Santos
Councilmember Joyce R. Starosciak
Councilmember Bill Stephens
COUNCIL APPOINTEES
City Manager John J. Jermanis
City Attorney Jayne W. Williams
APPOINTED OFFICIALS
Assistant City Manager Stephen Hollister
City Clerk Marian Handa
Police Chief Joseph W. Kitchen
Community Development Director Hanson Hom
Finance Director Jesse Baloca
Library Services Director David Bohne
Recreation and Human Services Director Carolyn Knudtson
Human Resources Director Justinian Caire
Engineering – Transportation Director Uchenna Udemezue
Public Works Services Director Michael Bakaldin
Alameda
Contra Costa
Santa Clara
San Mateo
San Francisco
Marin
Sonoma Napa Solano
San Francisco Bay
Alamo
Pinole
Orinda
Novato
Newark
Moraga
Albany
Vallejo
Oakland
Hayward
Fremont
Concord
Clayton
Benicia
Belmont
Ashland
Alameda
Stanford
Richmond
Piedmont
Pacifica Millbrae
Martinez
Larkspur
Danville
Berkeley
San Ramon
San Pablo
San Mateo
San Bruno
Lafayette
Daly City
Bay Point
Union City
San Rafael
San Carlos
Menlo Park
El Cerrito
Burlingame
San Lorenzo
LeSanandro
San Anselmo
Mill Valley
Foster City
Walnut Creek
Redwood City
Hillsborough
Pleasant Hill
Mountain View
Half Moon Bay North Fair Oaks
South San Francisco
Tamalpais- Homestead Valley
East Palo Alto
Palo Alto
Castro Valley
Hercules
5 2.5 0 5
Miles
CITY OF SAN LEANDRO, CALIFORNIA
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2005
3
Management of the City of San Leandro ( the “ City”) provides this Management Discussion and
Analysis of the City’s Comprehensive Annual Financial Report ( CAFR) for readers of the City’s
financial statements. This narrative overview and analysis of the financial activities of the City
is for the fiscal year ended June 30, 2005. We encourage readers to consider this information in
conjunction with the additional information that is furnished in the letter of transmittal found in
the preceding Introductory Section, and with the City’s basic financial statements and the
accompanying notes to those financial statements.
FINANCIAL HIGHLIGHTS
• The assets of the City exceeded its liabilities at fiscal year ending June 30, 2005 by $ 343
million. Of this amount, $ 285.4 million are capital assets, net of related debt, $ 41.9 million
is for restricted uses as specified by entities outside of the City government, and $ 15.6
million was reported as “ unrestricted net assets” and may be used to meet the government’s
ongoing obligations to citizens and creditors.
• The City’s total net assets decreased by almost $ 2.1 million.
• At the close of the current fiscal year, the City’s governmental funds reported total ending
fund balances of $ 72.6 million, a decrease of $ 1.4 million from the prior year.
• At the end of the fiscal year, the General Fund balance was $ 32.8 million, a decrease of $ 1.9
million from the prior year. This decrease primarily reflects $ 1.5 million in negative net
operations and $ 340 thousand in transfers to support a capital improvement project.
• At fiscal year end, the City’s general fund maintains reserves available for emergencies and
economic uncertainties of $ 12.5 million. This is a $ 500 thousand decrease from fiscal year
ending June 30, 2004. Reserves for fire equipment replacement ended the year at $ 796
thousand, a decrease from $ 1.5 million ending June 30, 2005.
• The City’s long- term debt decreased by $ 5.9 million during the current fiscal year. The
decrease primarily reflects the net reduction of $ 6.2 million from retired 1993 Mortgage
Revenue Refunding Bonds, $ 2.8 million in normal debt amortization, and the addition of $ 3
million in new capital lease proceeds.
OVERVIEW OF THE BASIC FINANCIAL STATEMENTS
Management’s Discussion and Analysis is intended to serve as an introduction to the City’s basic
financial statements. The City’s basic financial statements are comprised of three components:
government- wide financial statements; fund financial statements; and notes to the financial
statements. This report also contains other supplementary information in addition to the basic
financial statements themselves.
4
Government- wide Financial Statements
The government- wide financial statements are designed to provide readers with a broad
overview of the City’s finances, in a manner similar to statements of a private- sector business.
They are comprised of the Statement of Net Assets and Statement of Activities and Changes in
Net Assets.
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 and Changes in Net Assets presents information showing how the
government’s net assets changed during the 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 the
related cash flows. Thus revenues and expenses are reported in this statement for some items
that will only result in cash flows in future fiscal periods ( e. g. uncollected taxes and earned but
unused vacation leave).
The government- wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenue ( governmental activities) from other functions
that are intended to recover all or a significant portion of their costs through user fees and
charges ( business- type activities).
Both of the above financial statements have separate sections for three different types of
programs or activities. These three types of activities are:
Governmental Activities - The activities in this section are mostly supported by taxes and charges
for services. The governmental activities of the City include General Government, Public
Safety, Engineering & Transportation, Recreation and Culture, Library and Community
Development.
Business- Type Activities – These functions normally are intended to recover all or a significant
portion of their costs through user fees and charges to external users of goods and services. The
business- type activities of the City include Water Pollution Control Plant, Environmental
Services, Shoreline Enterprise, Storm Water Utility, and San Leandro Housing Finance
Corporation.
Discretely Presented Component Units - The City of San Leandro has no discretely presented
component units to report upon.
The government- wide financial statements can be found on pages 19 through 21 of this report.
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, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance- related
legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.
5
The fund financial statements provide detailed information about each of the City’s most
significant funds, called Major Funds. The concept of Major Funds, and the determination of
which are major funds, was established by GASB Statement 34 and replaces the concept of
combining like funds and presenting them in total. Instead, each Major Fund is presented
individually, with all Non- major Funds summarized and presented in a single column. Further
detail on the Non- major funds is presented on pages 87 through 113 of this report.
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
balances of spendable resources available at the end of the fiscal year. Such information may be
useful in evaluating a government’s near- term financial capacity.
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 government 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
facilitate this comparison between governmental funds and governmental activities. These
reconciliations are presented on the page immediately following each governmental fund
financial statement.
The City has 25 governmental funds, of which 5 are considered major funds for presentation
purposes. Each major fund is presented separately in the governmental fund balance sheet and in
the governmental fund statement of revenues, expenditures, and changes in fund balances. The
City’s 5 major funds are - the General Fund, Measure B Fund, Redevelopment Agency Capital
Projects Fund, Capital Improvement Projects Capital Project Fund, and the Redevelopment
Agency Low/ Moderate Housing Capital Projects Fund. Data from the other 20 governmental
funds are combined into a single, aggregated presentation. The basic governmental fund
financial statements can be found on pages 25 through 31 of this report.
Proprietary Funds - The City maintains two different types of proprietary funds - enterprise
funds and internal service funds. Enterprise funds are used to report the same functions
presented as business- type activities in the government- wide financial statements. The City uses
an enterprise fund to account for its Water Pollution Control Plant, Environmental Services,
Shoreline Enterprise, Storm Water Utility, and the San Leandro Housing Finance Corporation.
Internal service funds are used to accumulate and allocate costs internally among the City’s
various functions. The City uses internal service funds to account for its fleet of vehicles,
facilities, insurance services and its information systems. Because these services predominantly
benefit governmental rather than business- type functions, they have been included within
governmental activities in the governmental- wide financial statements.
Proprietary funds provide the same type of information as the government- wide financial
statements, only in more detail. Like the government- wide financial statements, proprietary fund
financial statements use the accrual basis of accounting. There is no reconciliation needed
between the government- wide financial statements for business- type activities and the
proprietary fund financial statements.
6
The basic proprietary fund financial statements can be found on pages 33 through 36 of this
report.
Fiduciary Funds – Fiduciary funds, which consist solely of trust and agency 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 fiduciary funds statement of net assets
can be found on page 38.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to a
full understanding of the data provided in the government- wide and fund financial statements.
The notes to the financial statements can be found on pages 39 through 80 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents
certain required supplemental information. This information includes budgetary comparison
schedules, as well as more detailed information about the City’s participation in the California
Public Employees Retirement System ( CALPERS) defined benefit pension plan. The combining
statements referred to in connection with non- major governmental funds and internal service
funds are presented immediately following the required supplemental information.
GOVERNMENT- WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve, over time, as a useful indicator of a government’s
financial position. In the case of the City of San Leandro, combined net assets ( government and
business type activities) totaled $ 343 million at the close of the fiscal year ending June 30, 2005.
As shown below, the largest portion of the City’s net assets, $ 285.4 million or 83.2%, reflects its
investment in capital assets ( e. g. land, streets, sewers, buildings, machinery, and equipment) less
any related outstanding debt used to acquire those assets. The City uses these capital assets to
provide services to citizens; consequently, these assets are not available for future spending.
Although the City investment in its capital assets is reported net of related debt, it should be
noted that the resources needed to repay this debt must be provided from other sources, since the
capital assets themselves cannot be used to liquidate these liabilities.
An additional $ 41.9 million ( 12.2%) of the City’s net assets represent resources that are subject
to external restrictions on how they may be used. The remaining balance of unrestricted net
assets, $ 15.6 million ( 4.6%) may be used to meet the government’s ongoing obligations to
citizens and creditors.
A summary of the government- wide statement of Net Assets is as follows:
7
City of San Leandro
Net Assets at June 30, 2005
( in thousands)
2005 2004 2005 2004 2005 2004
Current Assets $ 8 8,822 $ 8 5,040 $ 2 0,674 $ 2 0,971 $ 1 09,497 $ 1 06,011
Non- Current Assets 1 6,636 1 8,169 ( 8,566) ( 2,660) 8 ,071 1 5,509
Capital Assets 3 16,165 3 25,120 1 4,040 9 ,445 3 30,205 3 34,565
Total assets 421,623 428,329 26,149 27,756 447,772 456,085
Current and other liabilities 17,557 15,291 1,990 2,232 19,547 17,523
Long- term liabilities 81,495 83,527 3,712 9,856 85,207 93,383
Total liabilities 99,052 98,818 5,702 12,088 104,754 110,906
Net assets:
Invested in capital assets,
net of related debt 2 71,399 2 82,336 1 4,040 9 ,445 2 85,439 2 91,781
Restricted 4 1,927 42,559 4 1,927 4 2,559
Unrestricted 9 ,246 4 ,616 6 ,407 6 ,223 1 5,653 1 0,839
Total net assets $ 3 22,571 $ 3 29,511 $ 2 0,447 $ 1 5,668 $ 3 43,018 $ 3 45,179
Governmental Activities Business- Type Activities Total
Changes in Net Assets
The City’s net assets decreased by $ 2.1 million from the prior fiscal year. Revenues decreased
by almost $ 6.8 million and expenses remained relatively flat, increasing by only $ 74 thousand
from the prior fiscal year. The City also restated its prior year net asset balance by increasing its
business type assets close to $ 3.6 million and decreasing its governmental assets by a like
amount. The prior year restatement resulting in a overall zero net change and is the result of
reclassifying ownership of business type assets that were previously recorded as governmental
assets. Please refer to Note 14 in the basic notes to the financial statements for additional detail
of the prior year adjustment.
Governmental Activities
Government activities decreased the City’s net assets by almost $ 3.4 million. Overall,
Governmental revenues decreased by $ 7.7 million or 8.2% from the prior fiscal year. Although
general revenues increased by almost $ 1.8 million or 2.8%, operating and capital grants and
contributions decreased by $ 10.6 million. Reduced Motor vehicle license fee ( VLF) revenues
reflect the States permanent lowering of the VLF from 2% to 0.65%, and the States replacement
of the City’s portion of reduced VLF revenues with property tax.
Expenditures remained relatively flat declining slightly by $ 781 thousand, which is less than 1%
of all governmental revenues. Expenditures primarily reflect across the board expenditure
reductions in an effort to offset the rising cost of operations as compared to the lesser growth of
current revenues.
Business Type Activities
Net assets for business- type activities were $ 20.4 million, an increase of $ 1.2 million from the
prior fiscal year. Total revenues for business- type activities were $ 14.4 million, which is an
increase of $ 951 thousand over the prior fiscal year. Revenue increase primarily reflects growth
in program revenue service charges, which increased by $ 1.4 million as a result of increased
Water Pollution Control Plant revenues of $ 800 thousand and increased Shoreline rents and
concessions revenue of $ 644 thousand. Total expenses for the business- type activities were
$ 13.4 million during the current year 2005 and remained relatively flat with exception of the
8
Shoreline’s sediment removal project. Expenses are related to Water Pollution Control Plant
services, Marina and Golf Course activities, Storm Water Utility services, Environmental
Services, and debt payments made through the San Leandro Housing Finance Corporation.
A summary of the government- wide statement of Changes in Net Assets follows:
City of San Leandro
Changes in Net Assets
Year Ended June 30,2005
( in thousands)
2005 2004 2005 2004 2005 2004
Revenues
Program revenues:
Charges for Services $ 10,900 $ 9,734 $ 13,361 $ 11,972 $ 24,261 $ 21,706
Operating grants and contributions 2,470 10,963 2,470 10,963
Capital grants and contributions 8,944 11,114 8,944 11,114
General revenues:
Property taxes 18,884 15,457 18,884 15,457
Sales tax 20,705 20,090 20,705 20,090
Other taxes 19,830 18,555 213 282 20,043 18,837
Motor Vehicle License Fees 530 3,706 530 3,706
Investment Earnings 2,507 2,034 577 796 3,084 2,830
Miscellaneous 1,921 2,751 294 444 2,215 3,195
Total Revenues 86,691 94,404 14,445 13,494 101,136 107,898
Expenses
General Government 22,166 25,530 22,166 25,530
Public safety 35,819 33,414 35,819 33,414
Engineering & Transportation 9,006 7,592 9,006 7,592
Recreation and Culture 11,687 10,721 11,687 10,721
Community Development 7,462 9,213 7,462 9,213
Interest on Long- Term Debt 3,766 4,217 3,766 4,217
Water Pollution Control 7,468 7,759 7,468 7,759
Shoreline 3,026 1,911 3,026 1,911
San Leandro Housing Finance Corp 669 600 669 600
Storm Water Utility 1,056 1,030 1,056 1,030
Environmental Services 1,172 1,236 1,172 1,236
Total Expenses 89,906 90,687 13,391 12,536 103,297 103,223
Excess( deficiency) of revenues
over expenses before transfer ( 3,215) 3,717 1,054 958 ( 2,161) 4,675
Transfer ( 147) ( 79) 147 79
Increase in net assets ( 3,363) 3,638 1,201 1,037 ( 2,161) 4,675
Beginning net assets 325,933 325,873 19,246 14,631 345,179 340,504
Ending net assets $ 322,570 329,511 $ 20,447 $ 15,668 343,018 $ 345,179
Prior Period Adjustment ( 3,578) 3,578
Beginning net assets, restated $ 325,933 $ 19,246
Governmental Activities Business- Type Activities Total
FINANCIAL ANALYSIS OF INDIVIDUAL FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with
finance- related legal requirements.
9
Governmental Funds
The focus of the City’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’s
financial 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 June 30, 2005, the City’s governmental funds reported combined ending fund balances of
$ 72.6 million. Approximately, $ 22.8 million of this amount constitutes unreserved fund balance,
which is available for spending at the government’s discretion. The remainder of fund balance is
reserved to indicate that it is not available for spending because it has already been legally
committed.
The following are major funds that either qualified under the reporting criteria or were
considered to be important to financial statement users:
General Fund - The general fund is the primary operating fund of the City. At the end of the
current fiscal year, unreserved ( designated and undesignated) fund balance of the general fund
was $ 13.9 million, while total fund balance reached $ 32.8 million, which was a decline of $ 1.9
million from the prior fiscal year. As a measure of the general fund’s liquidity, it may be useful
to compare both unreserved fund balance and total fund balance to total fund expenditures.
Unreserved fund balance represents 19.7% of total general fund expenditures including transfers
out, while total fund balance represents 46.4% of that same amount.
The City’s management also designates unreserved fund balance to a particular function, project
or activity. Fund balance may also be designated for purposes beyond the current year.
However, designated fund balance is available for appropriation at any time. Of the $ 13.9
million General Fund unreserved fund balance, 100% is designated for a specific purpose. The
most significant designations are $ 7.4 million earmarked for economic uncertainty, $ 5 million
earmarked for major emergencies, and $ 796 thousand earmarked for fire equipment acquisitions.
The City had no unreserved and undesignated fund balance at year- end June 30, 2004.
Measure B Fund – The Measure B Paratransit Fund accounts for the City’s share of proceeds of
a one- half cent sales tax increase originally approved by the voters in November 1986 to provide
funds for AC transit and paratransit operations. The program is administered by the Alameda
County Transportation Authority. At the end of fiscal year 2005, the total fund balance was
almost $ 1.3 million, which is a decrease of $ 600 thousand from the prior fiscal year.
Capital Improvements Projects Capital Projects Fund - The Capital Improvement Projects
Capital Project Fund was established to account for major capital improvement projects. At the
end of fiscal year 2005, the reserved fund balance was $ 9.8 million and unreserved fund balance
was $ 820 thousand. Reserved fund balance primarily reflects $ 3.5 million in year end
encumbrances and $ 6.3 million of remaining debt proceeds from the City’s 2003 Certificates of
Participation issuance to fund the Aquatics Complex project and 2005 lease purchase to fund the
City’s Computer Aided Dispatch and Records Management System ( CAD/ RMS) project.
Redevelopment Agency Capital Improvement Fund - The Redevelopment Agency is
responsible for the planning and implementation of the City’s Redevelopment Plan for the three
Project Areas established under the Community Redevelopment Law. The Agency’s operations
are funded primarily by the issuance of debt, which is expected to be repaid out of property tax
10
increment revenue generated by increases in property assessed values in the redevelopment
project areas. The reserved fund balance at the end of fiscal year was close to $ 12.1 million.
Redevelopment Agency Low/ Moderate Housing Capital Projects Fund - The
Redevelopment Agency Low/ Moderate Housing Capital Projects Fund was established to
account for the 20% tax increment revenue set aside and legally designated for low and moderate
income housing and neighborhood improvements. At the end of fiscal year 2005, the unreserved
fund balance was close to $ 3.9 million, an increase of $ 900 thousand over the prior year.
Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government- wide
financial statements but in more detail.
The total net assets of the enterprise funds increased by $ 1.2 and primarily reflect and increase in
Water Pollution Control Plant service charges and increased Shoreline rents and concessions
revenue. Unrestricted net assets of internal service funds at June 30, 2005 amounted to $ 9.3
million and primarily reflect reduced workers compensation and general liability settlement as
compared to the previous fiscal year.
Water Pollution Control Plant Enterprise Fund – The Water Pollution Control Plant
Enterprise fund was established to account for the City’s sewers, which protect public health and
preserve water quality through collection, treatment and disposal of the community’s wastewater
and wastewater solids. As of June 30, 2005, the fund’s net assets totaled $ 22.7 million, of which
$ 6.7 million was invested in capital assets and $ 16 million was unrestricted.
Shoreline Enterprise Fund - The Shoreline Enterprise Fund was established in 2002- 03 to
combine the Marina Enterprise Fund and the Golf Course Enterprise Fund. This fund accounts
for the operation of recreational berthing and food service facilities and the golf course for use by
the general public. As of June 30, 2005, the fund’s net assets totaled ($ 3.7) million. The fund
had a deficit fund balance of ($ 11.1) million in the unrestricted portion of the net assets. The
deficit has accumulated over the years and reflects the transfer of golf course assets in 2003
pursuant to the City’s lease with American Golf Company. The deficit will be eliminated
through cost containment and revenue enhancement.
San Leandro Housing Finance Corporation – The San Leandro Housing Finance Corporation
was established to account for the operation of the City’s home financing program through the
sale of revenue bonds and other financing mechanisms. The balance of the 1993 Mortgage
Revenue Refunding Bonds, close to $ 6.2 million, was paid during fiscal year 2004- 05.
GENERAL FUND BUDGETARY HIGHLIGHTS
The final amended general fund expenditure budget totaled $ 73.9 million, which is an increase of
$ 2.1 million over the original adopted budget.
Significant amendments to the fiscal year 2004- 05 budget primarily includes $ 1.4 million in
prior year outstanding encumbrances and approved carryovers of unspent budget from the prior
fiscal year, a $ 100 thousand appropriation in hand gun tax revenues to support youth violence
11
prevention programs, and transfers that support various new contracts and non- general fund
program shortages.
The following is a summary of the General Fund budget and actual for the current fiscal year.
Variance with
final budget
Actual positive/
Adopted Final ( budget basis) ( negative)
Revenue
Property and other taxes $ 51,970.6 $ 50,795.6 $ 52,496.9 $ 1,701.3
Licenses and permits 4,080.5 4,080.5 3 ,461.5 ( 619.0)
Fines and forfeitures 620.0 620.0 6 86.0 66.0
Service charges 2,887.5 4,062.5 3 ,907.7 ( 154.8)
Intergovernmental 2,064.3 2,068.3 1 ,082.3 ( 986.0)
Use of money and property 2,103.4 2,103.4 1 ,938.6 ( 164.8)
Interdepartment charges 1,675.1 1,675.1 1 ,675.1 -
Other 318.8 325.6 2 62.3 ( 63.3)
Total Revenues 65,720.1 65,731.0 65,510.4 ( 220.5)
Expenditures
General government 10,459.6 10,607.8 10,837.9 ( 230.1)
Public safety 38,205.4 38,732.0 37,266.0 1,466.0
Engineering and transportation 7,835.6 8,011.2 4,859.8 3,151.4
Recreation and culture 8,834.9 9,162.8 10,496.8 ( 1,334.0)
Community development 3,136.8 3,230.4 2,946.7 283.7
Total Expenditures 68,472.3 69,744.2 66,407.1 3,337.0
Total excess ( deficiency of revenues)
over expenditures ( 2,752.2) ( 4,013.2) ( 896.6) 3,116.5
Other financing sources ( uses)
Lease proceeds 3,000.0 3,048.3 3,048.3
Transfers in 187.2 187.2
Transfers out ( 3,408.1) ( 4,204.7) ( 4,204.7) -
Total other financing sources ( uses) ( 408.1) ( 969.2) ( 969.2) -
Net change in fund balance ($ 3,160.3) ($ 4,982.5) ($ 1,865.9) $ 3,116.5
CITY OF SAN LEANDRO
Summary Analysis of General Fund Budget, Fiscal Year 2004- 05
( in thousands)
Budget Amounts
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City’s investment in capital assets for its governmental and business type activities as of
June 30, 2005, amounts to $ 330.2 million ( net of accumulated depreciation), which is a reduction
of $ 4.4 million. Investment in capital assets includes land, buildings, improvements, machinery
and equipment, infrastructure and construction in progress. Infrastructure assets are items that
are normally immovable and of value only to the City such as roads, bridges, streets and
sidewalks, drainage systems, lighting systems and similar items.
12
The following is a summary of the City’s capital assets:
City of San Leandro
Capital Assets ( net of depreciation)
Year Ended June 30,2005
( in thousands)
2005 2004 2005 2004 2005 2004
Land $ 14,439 $ 17,310 $ 3,578 $ 0 $ 18,017 $ 17,310
Buildings 4 0,627 38,698 5,012 5,198 45,639 43,896
Improvements other than buildings 9 32 932 0 0 932 932
Machinery and equipment 2 ,320 2,249 604 689 2,924 2,938
Licensed Vehicles 2 ,370 2,241 54 64 2,424 2,305
Infrastructure 2 39,336 249,097 1,210 1,241 240,546 250,338
Construction in progress 1 6,141 14,593 3,582 2,253 19,724 16,846
Capital assets, net $ 316,165 $ 325,120 $ 14,040 $ 9,445 $ 330,205 $ 334,565
Governmental Activities Business- Type Activities Total
During the fiscal year, the City discovered land listed as a governmental activity but actually
owned by the City’s Golf and Marina Enterprise. As a result, $ 3.6 million was added to
business- type land to reflect the transfer of ownership. Capital asset additions in the buildings
category primarily reflect $ 2.8 million in improvements to the West Estudillo Museum for $ 1.9
million; Main Library Bookstore and Floresta Park Restroom improvements; and a Police locker
room renovation project. Capital assets also reflect $ 13 million in annual depreciation.
Additional information on the City’s capital assets can be found on Note 6 on the notes to the
financial statements.
Debt Administration
At the end of the current fiscal year, the City’s total long- term debt outstanding is $ 76.7 million,
a decrease of $ 5.9 million from the prior fiscal year. This net decrease primarily reflects the
retirement of 1993 Mortgage Revenue Refunding Bonds ($ 6.2 million in business- type activities)
and new lease proceeds in the amount of $ 3 million to fund the City’s ( CAD/ RMS) project. The
City continues to have no outstanding general obligation debt. Additional information on the
City’s long- term debt obligations can be found in Note 7 of the notes to the financial statements.
The following is a summary of the City’s outstanding debt:
City of San Leandro
Outstanding Debt
Year Ended June 30,2005
( in thousands)
2005 2004 2005 2004 2005 2004
Revenue bonds and notes $ 21,945 $ 22,480 $ 6,175 $ 21,945 $ 28,655
( backed by specific tax and fee revenues)
Certificates of participation 41,200 42,125 41,200 42,125
Other loans 10,180 8,356 3,402 3,536 13,582 11,892
Total $ 73,325 $ 72,961 $ 3,402 $ 9,711 $ 76,727 $ 82,672
Governmental Activities Business- Type Activities Total
13
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
Fiscal year 2004- 05 was a year where revenues exceeded the cost of operations by ($ 1.9) million
in the General Fund and by ($ 1.4) million for all governmental fund activities. As anticipated,
the regional and local economy appears to have stabilized and began to show signs of sales tax
stability towards during the second half of the fiscal year. Moderate improvements are
anticipated in 2005- 06 but at a rate that continues to lag behind the nation and even southern
California economy. As a result of low interest rates, the strong housing sales market continued
to generate growth in property tax revenues and brought one- time transfer tax revenues that
exceeded original expectations. The City also implemented a new Emergency Communications
Access Fee ( 911 Fee) effective January 1, 2005. The new 911 Fee generated close to $ 1.2
million during the fiscal year and is projected to raise approximately $ 2.2 million annually.
During fiscal year 2004- 05, these additional revenues were viewed as an offset to the unfortunate
failure of Measure DD, the City’s November 2004 proposed Public Safety Parcel Tax, which
was anticipated to generate $ 3.5 million annually to offset the rising costs of police and fire
operations.
With the added passage of Proposition 1A, the City was obligated to a two- year $ 1.2 million
revenue takeaway beginning fiscal year 2004- 05. For the long- term, the Proposition was highly
supported by local governments since it also prevents the State from taking and using local tax
dollars, unless borrowed under specific conditions. Overall, operating revenues remained
relatively flat for the City’s governmental funds ending the year $ 591 thousand or 0.7% above
prior year revenues while expenditures increased by $ 1.1 million or 1.2%. Fiscal year general
fund revenues increased over prior year revenues by $ 1.4 million or 2.1% while expenditures
increased by $ 4.3 million or 6.9% over the prior year.
With the added safeguard against local revenue takeaway and moderate recovery of the
economy, the City of San Leandro anticipates future revenue stability. However, under current
conditions the City will continue to be challenged with an ongoing structural imbalance of
approximately $ 3.1 million going into fiscal year 2005- 06. With the current cost of operations
increasing at a rate greater than current revenue growth, it’s unlikely that the City can just grow
out of its current structural imbalance situation without an additional revenue source,
program/ service reductions or a combination of both. For fiscal year 2005- 06, the City has
implemented a “ hold- the- line” policy, which limits any increase to operating expenditures with
the exception of mandated cost increases ( e. g. salary step, retirement, health care, etc.). The City
will also continue to defer investment in areas such as general fund capital improvements
support, major street repair and reconstruction, and asset replacements.
In an effort to achieve balance with current revenues against the greater cost of ongoing
obligations, two new revenue enhancement solutions will be evaluated for proposal during fiscal
year 2005- 06. An increase to the City’s current business license tax structure will be proposed as
a June 2005 ballot measure with the potential of generating an additional $ 2 million in general
fund revenues. An increase to the City’s emergency medical services ( EMS) tax structure will
also be evaluated with the potential of generating approximately $ 900 thousand in new general
fund revenues. In 2005- 06, the City will continue to draw upon available economic uncertainty
reserves. At the end of the fiscal year, the City maintains reserves available for emergencies and
economic uncertainties of $ 12.5 million, or 17.6% of its fiscal year 2004- 05 general fund
operating expenditure budget, as compared to Council’s 20% recommended reserve policy.
14
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City’s finances for all of its
citizens, taxpayers, customers, investors and creditors. Questions concerning any of the
information provided in this report or requests for additional information should be addressed to
the City of San Leandro, Finance Department, 835 East 14th Street, San Leandro, CA 94577.
15
BASIC FINANCIAL STATEMENTS
GOVERNMENT- WIDE FINANCIAL STATEMENTS
City of San Leandro
Statement of Net Assets
June 30, 2005
Governmental Business- Type
Activities Activities Total
ASSETS
Current assets:
Cash and investments ( Note 2) $ 5 3,673,292 $ 1 9,782,637 $ 7 3,455,929
Restricted cash and investments ( Note 2)
Cash and investments with fiscal agent 2 1,707,783 1 3,250 2 1,721,033
Unrestricted receivables:
Property taxes 6 69,646 - 6 69,646
Accounts 5 ,937,106 1 ,081,423 7 ,018,529
Interest 2 81,945 4 1 2 81,986
Special assessments 9 84,784 3 4,478 1 ,019,262
Restricted receivables 4 ,686,475 4 ,686,475
Short- term internal balances ( Note 5) 2 37,595 ( 237,595) -
Inventory and prepaid items 8 8,751 - 8 8,751
Other assets 5 55,084 2 00 5 55,284
Total current assets 8 8,822,461 2 0,674,434 1 09,496,895
Noncurrent assets:
Loans receivable ( Note 3) 6 ,058,733 - 6 ,058,733
Notes receivable ( Note 4) 2 ,011,794 - 2 ,011,794
Long- term internal balances 8 ,565,772 ( 8,565,772) -
Capital assets ( Note 6):
Non Depreciable 3 0,580,124 7 ,160,127 3 7,740,251
Depreciable 3 98,970,954 1 5,731,334 4 14,702,288
Less accumulated depreciation ( 113,386,378) ( 8,851,199) ( 122,237,577)
Capital assets, net 3 16,164,700 1 4,040,262 3 30,204,962
Total noncurrent assets 3 32,800,999 5 ,474,490 3 38,275,489
Total assets 4 21,623,460 2 6,148,924 4 47,772,384
LIABILITIES
Current liabilities:
Accounts payable and accruals:
Restricted 7 57,756 8 84,595 1 ,642,351
Unrestricted 4 ,576,033 - 4 ,576,033
Interest payable 7 79,986 - 7 79,986
Unearned revenue ( Note 9): -
Restricted 9 50,274 9 27,713 1 ,877,987
Unrestricted 2 ,128,328 - 2 ,128,328
Other liabilities:
Restricted 1 ,048,299 - 1 ,048,299
Unrestricted 2 ,882,639 - 2 ,882,639
Compensated absences payable - due within one year ( Note 8) 2 32,408 3 8,005 2 70,413
Claims and judgments payable - due within one year ( Note 11) 1 ,214,901 - 1 ,214,901
Long- term debt - due within one year ( Note 7) 2 ,987,234 1 39,823 3 ,127,057
Total current liabilities 1 7,557,858 1 ,990,136 1 9,547,994
Noncurrent liabilities:
Deposits 1 0,000 6 1,368 7 1,368
Compensated absences payable - due in more than one year ( Note 8) 3 ,804,665 3 87,843 4 ,192,508
Claims and judgments payable - due in more than one year ( Note 11) 6 ,884,442 - 6 ,884,442
Long- term debt - due in more than a year ( Note 7) 7 0,796,150 3 ,262,354 7 4,058,504
Total noncurrent liabilities 8 1,495,257 3 ,711,565 8 5,206,822
Total liabilities 9 9,053,115 5 ,701,701 1 04,754,816
NET ASSETS
Invested in capital assets, net of related debt 2 71,398,035 1 4,040,265 2 85,438,300
Restricted for:
Capital projects 3 4,584,337 - 3 4,584,337
Debt service 5 ,799,826 - 5 ,799,826
Special projects 1 ,542,470 - 1 ,542,470
Total restricted 4 1,926,633 - 4 1,926,633
Unrestricted 9 ,245,677 6 ,406,958 1 5,652,635
$ 3 22,570,345 $ 2 0,447,223 $ 3 43,017,568
See accompanying Notes to Basic Financial Statements.
Total net assets
19
City of San Leandro
Statement of Activities and Changes in Net Assets
For the year ended June 30, 2005
Indirect Operating Capital
Expenses Charges for Grants and Grants and
Functions/ Programs Expenses Allocation Services Contributions Contributions Total
Primary government:
Governmental activities:
General government $ 2 2,165,562 $ ( 151,960) $ 3 ,553,813 $ - $ 9 04,444 $ 4 ,458,257
Public safety 3 5,819,441 - 3 ,146,732 2 05,803 6 92,600 4 ,045,135
Engineering and transportation 9 ,006,428 1 02,090 6 10,953 1 ,936,722 6 ,035,656 8 ,583,331
Recreation and culture 1 1,687,118 1 ,587 1 ,866,019 3 27,800 1 ,282,800 3 ,476,619
Community development 7 ,461,502 4 8,283 1 ,722,304 - 2 8,636 1 ,750,940
Interest on long- term debt 3 ,766,213 - - - - -
Total governmental activities 8 9,906,264 - 1 0,899,821 2 ,470,325 8 ,944,136 2 2,314,282
Business- type activities:
Water Pollution Control Plant 7 ,467,822 - 9 ,306,736 - - 9 ,306,736
Marina 3 ,025,760 - 2 ,379,343 - - 2 ,379,343
San Leandro Housing Finance
Corporation 6 69,147 - - - - -
Storm Water Utility 1 ,056,165 - 1 ,048,228 - - 1 ,048,228
Environmental Services 1 ,171,903 - 6 26,282 - - 6 26,282
Golf Course - - - - - -
Total business- type activities 1 3,390,797 - 1 3,360,589 - - 1 3,360,589
Total primary government $ 1 03,297,061 $ - $ 2 4,260,410 $ 2 ,470,325 $ 8 ,944,136 $ 3 5,674,871
General revenues and transfers:
Taxes:
Property taxes
Sales taxes
Motor vehicle license fees ( unrestricted)
Other taxes
Total taxes
Investment earnings
Miscellaneous
Transfers
Total general revenues and transfers
Change in net assets
Net assets - beginning of year, as restated ( Note 14)
Net assets - end of year
See accompanying Notes to Basic Financial Statements.
Program Revenues
20
Governmental Business- Type
Activities Activities Total
$ ( 17,555,345) $ - $ ( 17,555,345)
( 31,774,306) - ( 31,774,306)
( 525,187) - ( 525,187)
( 8,212,086) - ( 8,212,086)
( 5,758,845) - ( 5,758,845)
( 3,766,213) - ( 3,766,213)
( 67,591,982) - ( 67,591,982)
- 1 ,838,914 1 ,838,914
- ( 646,417) ( 646,417)
- ( 669,147) ( 669,147)
- ( 7,937) ( 7,937)
- ( 545,621) ( 545,621)
- - -
- ( 30,208) ( 30,208)
( 67,591,982) ( 30,208) ( 67,622,190)
1 8,883,832 - 1 8,883,832
2 0,704,782 - 2 0,704,782
5 30,076 - 5 30,076
1 9,830,479 2 13,520 2 0,043,999
5 9,949,169 2 13,520 6 0,162,689
2 ,506,853 5 77,242 3 ,084,095
1 ,920,545 2 93,756 2 ,214,301
( 147,114) 1 47,114 -
6 4,229,453 1 ,231,632 6 5,461,085
( 3,362,529) 1 ,201,424 ( 2,161,105)
3 25,932,874 1 9,245,799 3 45,178,673
$ 3 22,570,345 $ 2 0,447,223 $ 3 43,017,568
Net ( Expense) Revenue
and Changes in Net Assets
21
FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
GOVERNMENTAL FUND FINANCIAL STATEMENTS
Measure B - This fund accounts for the City's share of proceeds of a one- half cent sales tax increase originally
approved by the voters in November 1986. The program is administered by the Alameda County Transportation
Authority. The tax provides funds for eight specific projects within Alameda County including major freeway
improvements and a major rail extension.
The General Fund - Accounts for all general revenues of the City not specifically levied or collected for other City
funds and the related expenditures. The General Fund accounts for all financial resources of a governmental unit which
are not accounted for in other funds.
Capital Improvement Projects Capital Projects Fund - Accounts for monies for major capital improvement projects
not provided for in one of the other capital projects funds.
Redevelopment Agency Capital Projects Fund - Accounts for the planning and implementation of the City’s
Redevelopment Plan for the three Project Areas located within the City’s boundaries.
Redevelopment Agency Low/ Moderate Housing Capital Projects Fund - Accounts for the 20% tax increment revenue
set aside legally designated for low and moderate income housing and neighborhood improvement programs.
25
City of San Leandro
Balance Sheet
Governmental Funds
June 30, 2005
Capital
Improvement Redevelopment
Projects Agency
General Measure B Capital Projects Capital Projects
ASSETS
Cash and investments $ 12,560,508 $ - $ 5,030,557 $ 10,649,673
Cash and investments with fiscal agent - - 6,274,227 10,555,287
Receivables:
Property taxes - - - 656,884
Accounts 4,950,026 14,609 5,482 2,740
Federal, State, and local grants - 3,292,087 - -
Interest 5,368 - - 457
Special Assessment 27,281 - - -
Sales tax - Measure B - 468,895 - -
Loans - - - 1,691,828
Notes 2,011,794 - - -
Due from other funds 2,576,765 - - -
Other assets 2,800 376,000 13,200 162,564
Advances to other funds 16,384,646 - - -
Total assets $ 38,519,188 $ 4,151,591 $ 11,323,466 $ 23,719,433
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and accruals $ 3,274,639 $ 312,708 $ 509,973 $ 198,346
Deposits payable - - - 10,000
Unearned revenue 2,128,328 - - 1,692,285
Due to other funds - 2,189,689 - -
Other liabilities 117,462 376,000 183,950 2,765,177
Advances from other funds - - - 6,969,174
Compensated absences payable 218,887 - - -
Total liabilities 5,739,316 2,878,397 693,923 11,634,982
Fund Balances:
Reserved for:
Encumbrances 446,728 1,273,194 3,535,666 3,423,583
Advances to other funds 16,384,646 - - -
Long- term notes/ loans receivables 2,011,794 - - -
Capital Projects - - 6,274,227 8,660,868
Debt service - - - -
Unreserved:
Designated:
Internship program 50,000 - - -
Major emergencies 5,000,000 - - -
Economic uncertainty 7,452,986 - - -
Fire equipment acquisition 795,970 - - -
Computer purchase program 225,000 - - -
Capital projects 14,998 - 819,650 -
Asset seizure 397,750 - - -
Unreserved, undesignated, reported in:
Special revenue funds - - - -
Total fund balances 32,779,872 1,273,194 10,629,543 12,084,451
Total liabilities and fund balances $ 38,519,188 $ 4,151,591 $ 11,323,466 $ 23,719,433
See accompanying Notes to Basic Financial Statements.
Major Funds
26
Redevelopment
Agency Low/ Non- Major
Moderate Housing Governmental
Capital Projects Funds Total
$ 3,958,176 $ 6,998,162 $ 39,197,076
- 4,878,269 21,707,783
12,762 - 669,646
3,365 382,185 5,358,407
- 925,493 4,217,580
206,315 69,805 281,945
- 957,503 984,784
- - 468,895
4,275,790 1,125,097 7,092,715
- - 2,011,794
- - 2,576,765
520 - 555,084
- - 16,384,646
$ 8,456,928 $ 15,336,514 $ 101,507,120
$ 83,102 $ 651,882 $ 5,030,650
- - 10,000
4,482,105 2,145,176 10,447,894
- 149,481 2,339,170
- 488,324 3,930,913
- - 6,969,174
- - 218,887
4,565,207 3,434,863 28,946,688
22,384 1,920,164 10,621,719
- - 16,384,646
- - 2,011,794
- - 14,935,095
- 5,799,826 5,799,826
- - 50,000
- - 5,000,000
- - 7,452,986
- - 795,970
- - 225,000
3,869,337 153,223 4,857,208
- - 397,750
- 4,028,438 4,028,438
3,891,721 11,901,651 72,560,432
$ 8,456,928 $ 15,336,514 $ 101,507,120
27
City of San Leandro
Reconciliation of the Governmental Funds Balance Sheet
to the Government- Wide Statement of Net Assets
June 30, 2005
Total Fund Balances - Total Governmental Funds $ 72,560,432
Amounts reported for governmental activities in the Statement of Net Assets were reported differently
because:
Capital assets used in governmental activities are not current financial resources and therefore are not
reported in the Governmental Funds Balance Sheet.
Non depreciable assets ( Land and construction in progress) 30,580,124
Depreciable buildings, property, equipment and infrastructure, net 282,042,861
Total capital assets 312,622,985
Interest payable on long- term debt does not require current financial resources. Therefore, interest
payable was not reported as a liability in Governmental Funds Balance Sheet. ( 779,986)
Internal service funds are used by management to charge the costs of certain activities to individual
funds. The assets and liabilities of the internal service funds are included in governmental activities in
the Government- Wide Statement of Net Assets. 9,282,942
Recognition of unearned revenue 6,335,310
Long- term liabilities are not due and payable in the current period. Therefore, they were not reported in
the Governmental Funds Balance Sheet. The long- term liabilities were adjusted as follows:
Long- term debt - current portion ( net) ( 2,987,234)
Long- term debt - non- current portion ( net) ( 70,796,150)
Compensated absences - non- current portion ( 3,667,954)
Total long- term liabilities ( 77,451,338)
Net Assets of Governmental Activities $ 322,570,345
See accompanying Notes to Basic Financial Statements.
29
City of San Leandro
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the year ended June 30, 2005
Capital Redevelopment
Improvement Redevelopment Agency Low/
Projects Agency Moderate Housing
General Measure B Capital Projects Capital Projects Capital Projects
REVENUES:
Property and other taxes $ 52,496,870 $ - $ - $ 5,451,289 $ 1,737,912
Licenses and permits 3,461,515 - - - -
Fines and forfeitures 685,984 - - - -
Service charges 3,907,698 62,582 191,634 - -
Intergovernmental 1,082,312 4,062,282 - - -
Use of money and property 1,938,616 19,371 39,952 408,488 84,206
Interdepartmental charges 1,675,142 - - - -
Other 262,305 17,290 412,155 1,382,296 347,041
Total revenues 65,510,442 4,161,525 643,741 7,242,073 2,169,159
EXPENDITURES:
Current:
General government 10,837,857 - 28,042 - -
Public safety 37,265,968 - 909,317 - -
Engineering and transportation 4,859,786 4,760,197 1,127,864 - -
Recreation and culture 10,496,840 - 1,173,915 - -
Community development 2,946,685 - 149,204 4,027,486 1,100,109
Debt service:
Principal - - - 317,048 63,000
Interest and fees - - - 418,151 73,080
Total expenditures 66,407,136 4,760,197 3,388,342 4,762,685 1,236,189
REVENUES OVER ( UNDER) EXPENDITURES ( 896,694) ( 598,672) ( 2,744,601) 2,479,388 932,970
OTHER FINANCING SOURCES ( USES):
Issuance of capital lease 3,048,260 - - - -
Transfers in 187,236 - 3,503,260 - -
Transfers ( out) ( 4,219,718) - ( 60,517) ( 2,674,822) -
Total other financing sources ( uses) ( 984,222) - 3,442,743 ( 2,674,822) -
NET CHANGE IN FUND BALANCES ( 1,880,916) ( 598,672) 698,142 ( 195,434) 932,970
FUND BALANCES:
Beginning of year 34,660,788 1,871,866 9,931,401 12,279,885 2,958,751
End of year $ 32,779,872 $ 1,273,194 $ 10,629,543 $ 12,084,451 $ 3,891,721
See accompanying Notes to Basic Financial Statements.
Major Funds
30
Non- Major
Governmental
Funds Total
$ 488,470 $ 60,174,541
872,266 4,333,781
- 685,984
1,656 4,163,570
3,784,812 8,929,406
3,037,467 5,528,100
- 1,675,142
174,742 2,595,829
8,359,413 88,086,353
201,672 11,067,571
333,026 38,508,311
3,485,252 14,233,099
1,670,321 13,341,076
659,060 8,882,544
2,105,023 2,485,071
3,346,085 3,837,316
11,800,439 92,354,988
( 3,441,026) ( 4,268,635)
- 3,048,260
3,047,571 6,738,067
( 124) ( 6,955,181)
3,047,447 2,831,146
( 393,579) ( 1,437,489)
12,295,230 73,997,921
$ 11,901,651 $ 72,560,432
31
City of San Leandro
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Government- Wide Statement of Activities and Changes in Net Assets
For the year ended June 30, 2005
Net Change in Fund Balances - Total Governmental Funds $ ( 1,437,489)
Governmental activities in the Statement of Activities and changes in Net Assets were reported differently
because:
Governmental funds report capital outlay as expenditures. However, in the Government- Wide Statement of
Activities and Changes in Net Assets, the cost of those assets is allocated over their estimated useful lives
as depreciation expense. This is the amount of capital assets recorded in the current period. 6,928,016
Depreciation expense on capital assets is reported in the Government- Wide Statement of Activities and
Changes in Net Assets, but they do not require the use of current financial resources. Therefore,
depreciation expense is not reported as expenditures in governmental funds. ( 12,409,496)
Proceeds from Capital Leases provide current financial resources to governmental funds, but issuing debt
increases long- term liabilities in the Government- Wide Statement of Net Assets. ( 3,048,260)
Adjustment of unearned revenue from prior year ( 1,069,465)
Bond discount on issuance of debt is an adjustment to the expenditures in governmental funds, but the
discount reduces long- term liabilities in the Government- Wide Statement of Net Assets. In the Government
Wide Statement of Net Assets the discount is amortized over the period of the outstanding debt. ( 4,107)
Bond premium on issuance of debt is an expenditures in governmental funds, but the premium increases
long- term liabilities in the Government- Wide Statement of Net Assets. In the Government- Wide Statement
of Net Assets the premium is amortized over the period of the outstanding debt. 23,494
Repayment of bond Principal is an expenditure in governmental funds, but the repayment reduces long-term
liabilities in the Government - Wide Statement of Net Assets. 2,485,071
Payroll expense on compensated absences is reported in the Government- Wide Statement of Activities and
Changes in Net Assets, but they do not require the use of current financial resources. Therefore,
compensated absences expense is not reported as expenditures in governmental funds. 62,230
Interest expense on long- term debt is reported in the Government- Wide Statement of Activities and
Changes in Net Assets, but does not require the use of current financial resources. Therefore, interest
expense was not reported as expenditures in governmental funds. The following amount represents the
change in accrued interest from the prior year. 51,718
Internal service funds are used by management to charge the costs of certain activities, such as insurance
and fleet management, to individual funds. The net revenue of the internal service funds is reported with
governmental activities. 5,055,759
Change in Net Assets of Governmental Activities $ ( 3,362,529)
See accompanying Notes to Basic Financial Statements.
32
Internal Service Funds - These funds are used to account for special activities and services performed by a designated
City department for other departments on a cost reimbursement basis.
PROPRIETARY FUND FINANCIAL STATEMENTS
Water Pollution Control Plant - This fund accounts for the City’s sewers which protect public health and preserve
water quality through the collection, treatment and disposal of the community’s wastewater and wastewater solids.
Shoreline - The City operates various recreational facilities which include golf and marina berthing as well as
providing food service facilities for the general public in an area connected to the San Francisco Bay.
San Leandro Housing Finance Corporation - This fund operates the City’s home financing program through the sale
of revenue bonds and other financing mechanisms.
33
City of San Leandro
Statement of Net Assets
Proprietary Funds
June 30, 2005
Governmental
Water San Leandro Non- Major Activities
Pollution Housing Finance Enterprise Internal
Control Plant Shoreline Corporation Funds Total Service Funds
ASSETS
Current assets:
Cash and investments $ 1 6,031,950 $ 1 ,201,387 $ 9 01,899 $ 1 ,647,401 $ 1 9,782,637 $ 1 4,476,216
Restricted cash and investments - - 1 3,250 - 1 3,250 -
Receivables:
Accounts 8 83,272 1 49,415 - 4 8,736 1 ,081,423 5 78,699
Interest 4 1 - - - 4 1 -
Special assessment - - - 3 4,479 3 4,479 -
Other assets - 2 00 - - 2 00 -
Inventory - - - - - 8 8,751
Total current assets 1 6,915,263 1 ,351,002 9 15,149 1 ,730,616 2 0,912,030 1 5,143,666
Noncurrent assets:
Capital assets:
Non- Depreciable 3 ,277,585 3 ,882,542 - - 7 ,160,127 -
Depreciable 9 ,761,800 5 ,969,534 - - 1 5,731,334 7 ,941,118
Less accumulated depreciation ( 6,356,890) ( 2,494,309) - - ( 8,851,199) ( 4,399,403)
Total capital assets, net 6 ,682,495 7 ,357,767 - - 1 4,040,262 3 ,541,715
Total noncurrent assets 6 ,682,495 7 ,357,767 - - 1 4,040,262 3 ,541,715
Total assets 2 3,597,758 8 ,708,769 9 15,149 1 ,730,616 3 4,952,292 1 8,685,381
LIABILITIES
Current liabilities:
Accounts payable 630,391 1 59,060 - 9 5,144 8 84,595 3 03,139
Unearned revenue - - 9 15,149 1 2,564 9 27,713 -
Due to other funds - 2 37,595 - - 2 37,595 -
Due to other agencies - - - - - -
Other liabilities - - - - - 2 5
Claims and judgements - due in one year - - - - - 1 ,214,901
Compensated absences - due in one year 25,261 2 ,570 - 1 0,174 3 8,005 1 3,521
Notes payable - due in one year - 139,823 - - 1 39,823 -
Total current liabilities 6 55,652 5 39,048 9 15,149 1 17,882 2 ,227,731 1 ,531,586
Noncurrent liabilities:
Deposits payable 3 ,689 5 7,679 - - 6 1,368 -
Advances from other funds - 8 ,565,773 - - 8 ,565,773 8 49,700
Claims and judgements - due in more than one year - - - - - 6 ,884,442
Compensated absences - due in more than one year 2 55,415 2 9,561 - 1 02,867 3 87,843 1 36,711
Notes Payable - due in more than one year - 3 ,262,354 - - 3 ,262,354 -
Total noncurrent liabilities 2 59,104 1 1,915,367 - 1 02,867 1 2,277,338 7 ,870,853
Total liabilities 9 14,756 1 2,454,415 9 15,149 2 20,749 1 4,505,069 9 ,402,439
NET ASSETS
Invested in capital assets, net of related debt 6 ,682,496 7 ,357,767 - - 1 4,040,263 -
Unrestricted 1 6,000,506 ( 11,103,413) - 1 ,509,867 6 ,406,960 9 ,282,942
Total net assets $ 2 2,683,002 $ ( 3,745,646) $ - $ 1 ,509,867 $ 2 0,447,223 $ 9 ,282,942
See accompanying Notes to Basic Financial Statements.
Major Enterprise Funds
34
City of San Leandro
Statement of Revenues, Expenses, and Changes in Net Assets
Proprietary Funds
For the year ended June 30, 2005
Governmental
Water San Leandro Non- Major Activities
Pollution Housing Finance Enterprise Internal
Control Plant Shoreline Corporation Funds Total Service Funds
OPERATING REVENUES:
Charges for services $ 8,824,511 $ 1,059,192 $ - $ 1,405,653 $ 11,289,356 12,950,804
Licenses and permits 48,237 - - 256,123 304,360 -
Rents and concessions - 1,317,273 - - 1,317,273 -
Other operating revenues 433,988 2,878 - 12,734 449,600 539,688
Total operating revenues 9,306,736 2,379,343 - 1,674,510 13,360,589 13,490,492
OPERATING EXPENSES:
Salaries and benefits 3,425,509 411,683 - 1,210,083 5,047,275 2,805,049
Contractual and other services 1,961,684 1,621,315 127,984 400,902 4,111,885 3,330,678
Materials and supplies 361,793 116,019 - 81,092 558,904 800,993
Depreciation 256,736 117,063 - - 373,799 407,548
Other operating costs 1,462,100 246,284 44,608 535,991 2,288,983 1,108,468
Total operating expenses 7,467,822 2,512,364 172,592 2,228,068 12,380,846 8,452,736
OPERATING INCOME ( LOSS) 1,838,914 ( 133,021) ( 172,592) ( 553,558) 979,743 5,037,756
NONOPERATING REVENUES ( EXPENSES):
Property and other taxes - 213,520 - - 213,520 -
Intergovernmental - - - 293,756 293,756 -
Investment income 283,434 19,850 242,875 31,083 577,242 ( 51,997)
Interest expense - ( 513,396) ( 496,555) - ( 1,009,951) -
Total nonoperating revenues ( expenses) 283,434 ( 280,026) ( 253,680) 324,839 74,567 ( 51,997)
INCOME ( LOSS) BEFORE
TRANSFERS 2,122,348 ( 413,047) ( 426,272) ( 228,719) 1,054,310 4,985,759
TRANSFERS:
Transfers in - 16,355 68,090 312,968 397,413 70,000
Transfers out ( 62,782) ( 8,642) - ( 178,875) ( 250,299) -
Total operating transfers ( 62,782) 7,713 68,090 134,093 147,114 70,000
Change in net assets 2,059,566 ( 405,334) ( 358,182) ( 94,626) 1,201,424 5,055,759
NET ASSETS:
Beginning of the year, as restated 20,623,436 ( 3,340,312) 358,182 1,604,493 19,245,799 4,227,183
End of the year $ 22,683,002 $ ( 3,745,646) $ - $ 1,509,867 $ 20,447,223 $ 9,282,942
See accompanying Notes to Basic Financial Statements.
Major Enterprise Funds
35
City of San Leandro
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2005
Governmental
Water San Leandro Non- Major Activities
Pollution Housing Finance Enterprise Internal
Control Plant Shoreline Corporation Funds Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers/ other funds $ 9,287,482 $ 2,445,978 $ - $ 1,717,659 $ 13,451,119 13,610,406
Cash payments or receipts to/ from other funds ( 1,304,836) ( 248,533) ( 11,548) ( 529,895) ( 2,094,812) -
Cash payments to suppliers for goods and services ( 2,459,762) ( 1,756,427) ( 161,044) ( 425,320) ( 4,802,553) ( 7,686,110)
Cash payments to employees for services ( 3,503,227) ( 421,474) - ( 1,212,940) ( 5,137,641) ( 2,805,784)
Net cash provided ( used) by operating activities 2,019,657 19,544 ( 172,592) ( 450,496) 1,416,113 3,118,512
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Property and other taxes received - 213,520 - - 213,520 -
Intergovernmental revenue received - - - 293,756 293,756 -
Repayment or receipt of advances to or from other funds - ( 151,761) ( 68,014) - ( 219,775) ( 153,734)
Transfers in from other funds - 16,355 68,090 312,968 397,413 70,000
Transfers out to other funds ( 62,782) ( 8,642) - ( 178,875) ( 250,299) -
Net cash provided ( used) by noncapital financing activities ( 62,782) 69,472 76 427,849 434,615 ( 83,734)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Retirement of long- term debt - ( 133,802) ( 6,175,000) - ( 6,308,802) -
Acquisition or disposal of assets ( 1,359,482) ( 31,598) - - ( 1,391,080) ( 353,479)
Interest payments on bonds and notes payable - ( 513,396) ( 496,555) - ( 1,009,951) -
Net cash provided ( used) by capital and
related financing activates ( 1,359,482) ( 678,796) ( 6,671,555) - ( 8,709,833) ( 353,479)
CASH FLOWS FROM INVESTING ACTIVITIES:
Changes in loans and notes receivable - - 14,137 - 14,137 -
Interest received 283,434 19,850 242,875 31,083 577,242 ( 51,997)
283,434 19,850 257,012 31,083 591,379 ( 51,997)
Net increase ( decrease) in cash and cash equivalents 880,827 ( 569,930) ( 6,587,059) 8,436 ( 6,267,726) 2,629,302
CASH AND CASH EQUIVALENTS:
Beginning of year 15,151,123 1,771,317 7,502,208 1,638,965 26,063,613 11,846,913
End of year $ 16,031,950 $ 1,201,387 $ 915,149 $ 1,647,401 $ 19,795,887 $ 14,476,215
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Operating income ( loss) $ 1,838,914 $ ( 133,021) $ ( 172,592) $ ( 553,558) $ 979,743 5,037,756
Adjustments to reconcile operating income ( loss) to net
cash provided ( used) by operating activities:
Depreciation 256,736 117,062 - - 373,798 250,180
Changes in assets and liabilities:
Accounts receivable 28,228 61,585 - 51,935 141,748 ( 10,775)
- - - 11,228 11,228
Inventory - - - - - ( 12,017)
Other assets 1,144 ( 200) - - 944 -
Accounts payable ( 109,720) ( 16,632) - 56,799 ( 69,553) 62,638
Deposits 689 ( 3,800) - - ( 3,111) -
Claims & Judgements - - - - - ( 2,205,302)
Compensated absences 3,666 ( 5,450) - ( 16,900) ( 18,684) ( 3,968)
Total adjustments 180,743 152,565 - 103,062 436,370 ( 1,919,244)
Net cash provided ( used) by operating activities $ 2,019,657 $ 19,544 $ ( 172,592) $ ( 450,496) $ 1,416,113 $ 3,118,512
See accompanying Notes to Basic Financial Statements.
Major Enterprise Funds
Special assessment receivable
Net cash provided ( used) by investing activities
36
FIDUCIARY FUND FINANCIAL STATEMENTS
Agency Funds are custodial in nature ( assets equal liabilities) and do not involve measurement of results of operations.
They are used to account for assets held in an agency capacity for others and therefore cannot be used to support the
City's programs.
37
City of San Leandro
Statement of Fiduciary Net Assets
Fiduciary Funds
June 30, 2005
Agency
Funds
ASSETS
Cash and investments $ 2,143,517
Cash and investments with fiscal agents 932,802
Accounts receivable 5,835
Special assessments receivable 14,727
Total assets $ 3,096,881
LIABILITIES
Accounts payable $ 862,828
Deposits payable 993,059
Due to bondholders 1,240,994
Total liabilities $ 3,096,881
See accompanying Notes to Basic Financial Statements.
38
City of San Leandro
Index to Notes to Basic Financial Statements
For the year ended June 30, 2005
39
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES ........................................................................................ 41
A. Financial Reporting Entity ............................................................................................................................. 41
B. Basis of Presentation, Measurement Focus and Basis of Accounting............................................................ 42
C. Recognition of Interest Liability .................................................................................................................... 45
D. Use of Restricted and Unrestricted Net Assets............................................................................................... 45
E. Cash, Cash Equivalents and Investments ....................................................................................................... 45
F. Inventory ............................................................................................................................... ........................ 46
G. Capital Assets......................................................................................................................... ....................... 46
H. Long Term Debt ............................................................................................................................... ............. 47
I. Compensated Absences....................................................................................................................... .......... 47
J. Property Taxes.......................................................................................................................... ..................... 47
K. Post Employment Benefits Other than Pensions ............................................................................................ 47
L. New Funds and Closed Funds........................................................................................................................ 48
M. Use of Estimates...................................................................................................................... ...................... 48
N. Net Assets......................................................................................................................... ............................. 48
O. Changes in Accounting Principles ................................................................................................................. 48
P. Implementation of New GASB Pronouncements........................................................................................... 48
Q. Unearned Revenue ............................................................................................................................... ......... 49
NOTE 2 - CASH AND INVESTMENTS................................................................................................................. 50
A. Cash Deposits....................................................................................................................... ......................... 50
B. Investments.................................................................................................................... ................................ 50
C. Summary of Cash and Investments ................................................................................................................ 55
NOTE 3 – LOANS RECEIVABLE..................................................................................................................... .... 56
NOTE 4 - NOTES RECEIVABLE..................................................................................................................... ..... 57
NOTE 5 - INTERFUND TRANSACTIONS........................................................................................................... 57
A. Fund Financial Statements - Interfund Receivables and Payables ................................................................. 57
B. Fund Financial Statements - Lo