City of Brentwood

COMPREHENSIVE ANNUAL

FINANCIAL REPORT

FISCAL YEAR ENDED

JUNE 30, 2003

Prepared by: Finance Department

CITY OF BRENTWOOD

708 THIRD STREET, BRENTWOOD CALIFORNIA 94513

City of Brentwood

COMPREHENSIVE ANNUAL FINANCIAL REPORT

City of Brentwood – 2002/ 03 CAFR i

TABLE OF CONTENTS

INTRODUCTORY SECTION

Page

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

Certificate of Achievement – GFOA ............................................................................................................................... ........................................ iv

Certificate of Award – CSMFO.......................................................................................................................... ....................................................... v

List of Principal Officials ............................................................................................................................... .......................................................... vi

City Organizational Chart ............................................................................................................................... ...................................................... vii

City Community Services Location Map ............................................................................................................................... ............................... viii

City of Brentwood Parks Map ............................................................................................................................... ................................................. ix

Letter of Transmittal ............................................................................................................................... .................................................................. x

FINANCIAL SECTION

INDEPENDENT AUDITOR’S 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

Governmental Fund Financial Statements

Balance Sheet – Governmental Funds ............................................................................................................................... .............................. 21

Reconciliation of the Governmental Funds Balance Sheet to the

Government- Wide Statement of Net Assets ............................................................................................................................... ..................... 22

Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds................................................................. 23

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 ........................................................................... 24

City of Brentwood

COMPREHENSIVE ANNUAL FINANCIAL REPORT

City of Brentwood – 2002/ 03 CAFR ii

TABLE OF CONTENTS ( CONTINUED)

Page

Proprietary Fund Financial Statement

Statement of Net Assets ............................................................................................................................... ................................................. 25

Statement of Revenues, Expenses and Changes in Fund Net Assets ................................................................................................................. 26

Statement of Cash Flows ............................................................................................................................... ................................................. 27

Fiduciary Fund Financial Statements

Statement of Fiduciary Net Assets ............................................................................................................................... ..................................... 29

Notes to the Basic Financial Statements

Index of Notes to the Basic Financial Statements..................................................................................................................... ........................ 31

REQUIRED SUPPLEMENTARY INFORMATION

Budgetary Information ............................................................................................................................... ........................................................... 75

Budgetary Comparison Schedule, General Fund ............................................................................................................................... ..................... 76

Budgetary Comparison Schedule, Thoroughfares ............................................................................................................................... ................... 77

Defined Benefit Pension Plan ............................................................................................................................... ................................................. 78

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

Non- Major Governmental Funds

Combining Balance Sheet ............................................................................................................................... ..................................................... 79

Combining Statement of Revenues, Expenditures and Changes in Fund Balances ....................................................................................... 83

Internal Service Funds

Combining Statement of Net Assets ............................................................................................................................... ....................................... 87

Combining Statement of Activities and Changes in Net Assets ............................................................................................................................. 88

Combining Statement of Cash Flows ............................................................................................................................... ..................................... 89

General Fund - Combining Financial Statements Governmental Activities by Fund Type

Balance Sheet – General Fund ............................................................................................................................... ............................................... 91

Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual - General Fund ........................................................ 92

Special Revenue Funds

Combining Balance Sheet ............................................................................................................................... ....................................................... 93

City of Brentwood

COMPREHENSIVE ANNUAL FINANCIAL REPORT

City of Brentwood – 2002/ 03 CAFR iii

TABLE OF CONTENTS ( CONTINUED)

Page

Combining Statement of Revenues, Expenditures and Changes in Fund Balances................................................................................................ 95

Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual ............................................................ 97

Debt Service Funds

Combining Balance Sheet ............................................................................................................................... ................................................... 103

Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................................................................................ 104

Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual ........................................................... 105

Capital Projects Funds

Combining Balance Sheet.......................................................................................................................... .......................................................... 109

Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................................................................................ 111

Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual ......................................................... 113

STATISTICAL SECTION ( Unaudited)

Reference Page

General Governmental Expenditures by Function....................................................................................................................... .......... Table 1 ...... S- 1

General Governmental Revenues by Source ............................................................................................................................... .......... Table 2....... S- 2

General Governmental Tax Revenues by Source ............................................................................................................................... ... Table 3....... S- 3

General Property Tax Levies & Collections ............................................................................................................................... ........... Table 4....... S- 4

Assessed and Estimated Actual Value of Taxable Property ................................................................................................................... Table 5....... S- 5

Property Tax Rates – All Direct and Overlapping Governments............................................................................................................ Table 6....... S- 6

Special Assessment Tax Revenue........................................................................................................................ .................................. Table 7....... S- 7

Computation of Legal Debt Margin......................................................................................................................... .............................. Table 8....... S- 8

Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita ..................................................................... Table 9....... S- 9

Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures....................... Table 10..... S- 10

Computation of Direct and Overlapping Debt........................................................................................................................... .......... Table 11..... S- 11

Revenue Bond Coverage....................................................................................................................... ............................................... Table 12..... S- 12

Demographic Statistics ............................................................................................................................... ......................................... Table 13..... S- 13

Property Value and Construction Activity....................................................................................................................... .................... Table 14..... S- 14

Largest Property Taxpayers ............................................................................................................................... ................................. Table 15..... S- 15

Miscellaneous Statistical Information.................................................................................................................... .............................. Table 16..... S- 16

City of Brentwood

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City of Brentwood

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City of Brentwood

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LIST OF PRINCIPAL OFFICIALS

CITY OFFICIALS

Brian Swisher........................................................................................................................ ................................................................................ Mayor

Annette Beckstrand..................................................................................................................... ................................................................. Vice- Mayor

Ana Gutierrez...................................................................................................................... ................................................................. Council Member

Bill Hill ............................................................................................................................... ................................................................. Council Member

Pete Petrovich ............................................................................................................................... ....................................................... Council Member

ADMINISTRATIVE STAFF

John Stevenson...................................................................................................................... .................................................................... City Manager

Karen Stein ............................................................................................................................... ................................................. Assistant City Manager

Dennis Beougher....................................................................................................................... ................................................................ City Attorney

Craig Bronzan ............................................................................................................................... ................................. Director of Parks & Recreation

Mike Davies......................................................................................................................... ................................................................... Chief of Police

Karen Diaz ............................................................................................................................... ........... City Clerk / Director of Administrative Services

Pamela Ehler ............................................................................................................................... ............... Director of Finance & Information Systems

Bailey Grewal ............................................................................................................................... ........................................................... City Engineer

Mitch Oshinsky....................................................................................................................... ............................ Director of Community Development

Howard Sword ............................................................................................................................... ....................... Director of Economic Development

Paul Zolfarelli ............................................................................................................................... ........................................ Director of Public Works

City of Brentwood

COMPREHENSIVE ANNUAL FINANCIAL REPORT

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City of Brentwood

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City of Brentwood

COMPREHENSIVE ANNUAL FINANCIAL REPORT

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City of Brentwood

COMPREHENSIVE ANNUAL FINANCIAL REPORT

City of Brentwood – 2002/ 03 CAFR xi

October 31, 2003

The Honorable Mayor and City Council Members

City of Brentwood

Brentwood, California 94513

Dear Mayor Swisher and Members of the City Council:

I am pleased to submit the Comprehensive Annual Financial Report ( CAFR) for the City of Brentwood, California for the fiscal year ended June

30, 2003. This is the second year that the City’s Finance Department has prepared this report using the new reporting requirements as prescribed

by GASB Statement No. 34. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all

disclosures, rests with the City. To the best of City Staff’s knowledge and belief, the enclosed data are accurate in all material respects and are

reported in a manner designed to fairly present the financial position and results of operations of the various entities of the City of Brentwood. All

disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included.

In addition to fund- by- fund financial information currently presented in the City’s financial statements, we are now including government- wide

financial statements. The government- wide financial statements include a Statement of Net Assets that provides the total net assets of the City

including infrastructure and the Statement of Net Activities that shows the cost of providing government services. These statements have been

prepared using the accrual basis of accounting versus the modified accrual method used in the fund financial statements. A reconciliation report is

provided as a key to understanding the changes between the two reporting methods. In addition, the new reporting model includes an emphasis on

the City’s major funds as shown in the Governmental Fund Statements. These new statements combined with other information are further

analyzed in a new narrative section called Management’s Discussion and Analysis ( MD& A). The MD& A provides “ financial highlights” and

interprets the financial reports by analyzing trends and by explaining changes, fluctuations and variances in the financial data. In addition, the

MD& A is intended to disclose any known significant events or decisions that affect the financial condition of the City.

City Hall - 708 Third Street, Brentwood, California 94513- 1396 Phone: ( 925) 516- 5400 Fax: ( 925) 516- 5401

Public Works – 22- 1 Elkins Way, Brentwood, California 94513- 1396 Phone: ( 925) 516- 6000 Fax: ( 925) 516- 5497

Community Development – 104 Oak Street, Brentwood, California 94513- 1396 Phone: ( 925) 516- 5405 Fax: ( 925) 516- 5407

Police Department – 100 Chestnut Street, Brentwood, California 94513- 1306 Phone: ( 925) 634- 6911 Fax: ( 925) 516- 5247

Parks and Recreation – 740 Third Street, Brentwood, California 94513- 1396 Phone: ( 925) 516- 5444 Fax: ( 925) 516- 5445

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xi

The Comprehensive Annual Financial Report ( CAFR) is prepared in accordance with accounting principles generally accepted in the United States

of America as promulgated by the Governmental Accounting Standards Board ( GASB).

This report is presented in three sections as follows:

1. INTRODUCTORY SECTION - Letter of Transmittal with comments on the operations of the City, the City’s organizational chart

and a list of principal public officials and administrative personnel;

2. FINANCIAL SECTION - Basic Financial Statements and Required Supplementary Information - The Basic Financial

Statements include Management’s Discussion and Analysis, Government- Wide Financial Statements, Fund Financial Statements,

Notes to the Financial Statements and Required Supplementary Information, as well as the Auditors’ Report on the financial

statements and schedules. The City of Brentwood also includes an additional Supplementary Section that contains the Combining

Fund Financial Statements and is not a required section of the report; and

3. STATISTICAL SECTION – Selected financial and demographic information, generally presented on a multi- year basis.

REPORTING ENTITY

In addition to reporting directly for the City operations, two component units, the Brentwood Redevelopment Agency and Brentwood Joint Powers

Financing Authority, have been included in the primary reporting entity and are treated as blended component units.

The Brentwood Redevelopment Agency ( the “ Agency”) was established pursuant to the State of California Health and Safety Code, Section

33000, entitled “ Community Redevelopment Law” and on August 20, 1981 the City Council became the governing board of the Brentwood

Redevelopment Agency. The Agency was formed for the purpose of preparing and carrying out plans for improvement, rehabilitation and

redevelopment of blighted areas within the territorial limits of the City of Brentwood. The funds of the Agency have been included in the

governmental activities in the financial statements.

The Brentwood Joint Powers Financing Authority ( the “ Authority”) is a joint powers authority organized under Section 6500 et seq. of the

California Government Code on March 14, 1995 between the City and the Agency for the purpose of acting as a vehicle for various financing

activities of the City and the Agency. The Authority’s Board of Directors is the Brentwood City Council. The primary purpose of the Authority is

to render financial assistance to the City and the Agency by issuing debt and financing the construction of public facilities.

Blended component units, although legally separate entities are, in substance, part of the government’s operations and so data from these units are

combined with data of the primary government. Each of the blended components has a June 30 year- end date for accounting purposes.

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xii

Bay Area

Accounting for all of the City’s activities is centralized under the Finance Department. The department has been delegated the responsibility for

maintaining the integrity of the City’s recorded financial data. In fulfilling this responsibility, the Finance Department has prepared the

accompanying financial statements. In our professional judgment, these statements fairly and accurately reflect the financial position of the City

and the results of its operations.

This financial report includes all of the City’s funds and account groups. The City provides a full range of services. These services include police

services, public works, economic development, planning, building, engineering and inspection services, parks and recreation, and general

administrative services. The City also operates a public water and wastewater utility, as well as refuse collection, which includes disposal and a

recycling program.

BACKGROUND

The City of Brentwood was incorporated in 1948 as a general law city under the laws of the State of

California. Brentwood is located halfway between the cities of San Francisco and Sacramento at the

eastern portion of Contra Costa County. The City is governed by a five ( 5) member City Council, under the

Council – Manager form of government. As of June 30, 2003, the City has a current population of

approximately 33,364 and encompasses approximately 13.73 square miles.

FINANCIAL DATA

Providing reliable financial information requires the establishment of accounting records adequately supported by systems of internal control. The

City’s management is responsible for establishing and maintaining an internal control structure designed to ensure that the City’s assets are

protected from loss, theft, or misuse. They must also ensure that adequate accounting data is compiled to allow for the preparation of financial

statements in conformity with accounting principles generally accepted in the United States of America. The internal control structure is designed

to provide reasonable assurance that these objectives are met, while recognizing that this assurance is not absolute. The concept of reasonable

assurance recognizes that: ( 1) the cost of a control should not exceed the benefits likely to be derived; and ( 2) the valuation of costs and benefits

requires estimates and judgments by management. City administration believes the existing internal control systems are adequate to provide this

reasonable assurance that City assets are safeguarded against loss and that financial records are reliable for preparing financial statements and

maintaining accountability for assets. Furthermore, the City received the second “ Unqualified” Audit this past year.

The accompanying financial statements have been examined by Vavrinek, Trine, Day and Co., LLP, Certified Public Accountants. The firm was

engaged by the City Council to render an opinion on the City’s financial statements in accordance with auditing standards generally accepted in

the United States of America.

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xiii

The City Council is responsible for:

1. Assuring that City administration fulfills its responsibilities in the preparation of the financial statements; and

2. Engaging the certified public accountants with whom the City Council reviews the scope of the audits and the accounting principles to be

applied in financial reporting.

To ensure complete independence, Vavrinek, Trine, Day and Co., LLP has full and free access to meet with the City Council to discuss the results

of their assessment of the adequacy of internal accounting controls and the quality of financial reporting.

The City also maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in

the annual appropriated budget approved by the City Council. Activities of the general fund, special revenue funds, debt service funds, enterprises

and capital projects funds are included in the annual appropriated budget, except the Bypass Authority, Mark Roos Drainage Credit, Street

Improvement Projects, Capital Improvement 2001, Capital Projects and the Capital Improvement Financing Programs. The level of budgetary

control is established at the fund level. The City also maintains an encumbrance accounting system as one technique for accomplishing budgetary

control.

These budgets reflect an organization whose top priorities continue to be:

• Provide and build public facilities

• Provide and maintain an adequate public infrastructure

• Plan and manage growth to maintain and enhance our small town character

• Enhance and promote Brentwood’s economic vitality

• Provide friendly customer service

The Operating Budget maintains a stable financial environment for the City of Brentwood. The decisions made in the budget process emphasize

the City Council’s goals and objectives. Staff will continue to pursue all means available to achieve the City’s Mission Statement:

The City of Brentwood is dedicated to creating, maintaining and enhancing a well- planned community

that is friendly, safe and healthy for everyone.

Mission Statement Adopted January 5, 2001.

The City’s accounting records are maintained on the Accrual Basis, or Modified Accrual Basis, as appropriate. Budgets are prepared and

expenditures recorded at the object of expenditure level. A thorough explanation of the City’s funds as of June 30, 2003, and the results of each

fund’s operation for the year, are presented in the financial section of this report.

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xiv

BRENTWOOD TODAY

Fiscal Year 2002/ 03 saw positive economic news for the City of Brentwood with growth in population, residential construction, sales and median

family home prices, and rapidly accelerating commercial/ industrial development as follows:

􀂾 Population increased over last year by 5.92%

􀂾 Single family home construction increased over last year by 20.69% ( 1,160 permits issued in 2001/ 02; 1,400 permits issued in

2002/ 03)

􀂾 New Home sales – 1,188

􀂾 Existing home sales - 861

􀂾 Median price for existing homes is $ 342,750, up 16.19% from FY 2001/ 02

􀂾 Median price for new homes is $ 394,500, up 12.23% from FY 2001/ 02

􀂾 462,000 square feet of retail shopping center space under construction

Number of Single Family Units Built vs. Value of Construction

0

200

400

600

800

1,000

1,200

1,400

1,600

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

Fiscal Year Ending

Units

$-

$ 50,000,000

$ 100,000,000

$ 150,000,000

$ 200,000,000

$ 250,000,000

$ 300,000,000

Value ( in Millions)

Number of Units

Valuation

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xv

ECONOMIC CONDITION AND OUTLOOK

Until recently, Brentwood was a small rural agricultural community and is one of the fastest growing cities in California. The need for housing in

the Bay Area in the early 1990’ s prompted Brentwood’s growth at a rate of 10% to 18% per year. The City’s population has increased steadily

over the last fiscal year as predicted, and the development of single- family homes, commercial sites and infrastructure reflects the increase in this

expanding population.

The City issued 1,400 building permits for single- family homes during the fiscal year ending June 30, 2003. To keep up with the growth demands,

infrastructure was also at a high level with several projects at various stages of design, construction or completion for the year.

There was significant progress in Brentwood’s economic development during Fiscal Year 2002/ 03. Prior planning efforts materialized in the

construction of several commercial projects that will provide our residents convenient goods and services and local jobs. This commercial growth

is fueled by the maturation of the socio- economic demographic of our far- east county sub- region, defined as lands in Contra Costa County to the

south and east of Somersville Road in Antioch. Approximately 180,700 people reside in the area with a median annual household income of

$ 70,000 in the City of Brentwood. This represents a critical mass of population and disposable income that will attract an estimated 1,200,000

square feet of retail space within the next year. A survey of Brentwood’s residents indicates that the far- east county population is highly trained

and educated providing an available workforce for business activities. The median value of housing in the sub- region is $ 271,430 providing an

affordable housing stock with certain areas providing executive homes in the $ 600,000 plus price range.

Sand Creek Crossing, a 260,000 square foot commercial center, is complete and will offer

the far- east county population shopping opportunities that have not been present in the

region. Lone Tree Plaza, a 454,000 square foot commercial center, Lone Tree Center, an

180,000 square foot commercial center and three neighborhood centers totaling 220,000

square feet are in various stages of construction and will be complete by the end of FY

2003. These six projects, totaling 1,114,000 square feet, will generate approximately

$ 3,000,000 in sales tax when complete.

Brentwood is blessed with a vital, thriving and charming historical Downtown. Recent

businesses that have located in the district have included restaurants, unique retail and

personal services. These types of business activity provide a tenant mix that cannot be

found in typical suburban shopping centers and anchor classic Downtown settings. The

vacancy rate is an enviable 0%. This atmosphere provides a pleasant backdrop to

successful concerts in the park and street festivals.

The Office / R& D / Flex- Tech Industrial sector increased significantly with the construction of four new projects totaling 135,000 square feet.

Leasing and sales of these projects has been very brisk with the latest real estate assessment indicating less than 3% vacancy in this sector.

Sand Creek Crossing

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xvi

The Sunset Industrial Complex, a 28- acre medium industrial project that will be sold to multiple end- users, is in its final stages of construction.

Interest in the complex is significant and it appears there are more businesses wanting to locate here than can be accommodated. Preliminary

estimates indicate that the complex will accommodate approximately 14 businesses.

The Economic Development Department also advanced two important capital improvement projects. A 17,000 square foot campus for Los

Medanos College was completed and occupied in September 2001 providing a full AA degree curriculum for our residents. Five hundred full time

equivalent students were served in the second year of operation at the Campus. The City also constructed an adjacent 17,000 square foot Business

and Technology Incubator to provide an affordable workplace for our resident entrepreneurs. Currently, the Incubator has twenty- four start- up

business tenants.

FUTURE OUTLOOK

Far East County communities, located along the State Route 4 corridor, have all experienced significant residential growth over the last ten years.

Many Bay Area residents have sought more affordable housing options than were provided in the inner Bay Area. As the region has grown, the

Far East County has transformed from a primarily industrial and agricultural sub- region to a series of bedroom communities for employment

centers in the Bay Area, including San Francisco, the Silicon Valley, the Tri- Valley,

and Contra Costa County. For the City of Brentwood, the shift has, for the most

part, been from an agricultural community to a bedroom community.

Employment growth has occurred in conjunction with resident growth, though

primarily in resident- serving industry sectors, including retail and certain service

sectors. A few new firms have stepped in to replace the “ basic industry” role of

agriculture in exporting goods and services beyond the local area, catalyzing the

generation of new wealth in the City. Building to support this trend is expected to

continue with 150,000 square feet of new Office / R& D / Flex- Tech Industrial

construction anticipated to occur in the next year.

Professional services are also increasing the quality of life for Brentwood residents.

John Muir Medical, a fully entitled medical office project, will be constructing a

three- story 110,000 square foot medical facility and helicopter pad in Phase I of

their development in 2004.

The adoption of the Residential Growth Management Program ( RGMP) on July 6, 2001 aids in regulating Brentwood’s growth. The intent of

the RGMP is to limit new housing approvals to 650 units per year in order to align our residential growth to coincide with future infrastructure.

The RGMP also ensures compliance with our fair share of regional housing set by the Association of Bay Area Governments ( ABAG), and

ensures growth at a deliberate and well- planned pace.

Artist Rendering – John Muir Medical

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xvii

The Affordable Housing Program was adopted September 9, 2003, and will provide the following future conditions:

• Creates affordable housing by constructing 10% of all new dwelling units as affordable housing for very- low and low income households.

• Will provide affordable housing options for workforce while reducing congestion on regional roadways by eliminating commutes.

• Units must remain affordable for 45 years for ownership units, 55 years for rentals.

• Units must be integrated into each neighborhood and must be built with the same quality, fit and finish as market rate units.

Alternatives to construction of affordable units include dedication of vacant land, conversion of market rate units to affordable units, dedication of

affordable units to the City and in- lieu fees ( fees sufficient to build the required units).

DEVELOPMENT

COMPLETED PROJECTS:

• The City completed and opened five ( 5) new neighborhood parks ( Balfour- Guthrie, Berkshire, Miwok, Rolling Hills and Walnut).

• The Youth Commission completed Phase I of their Youth Master Plan – a Teen Crisis Referral card that was distributed to Edna Hill

Middle School, Bristow Middle School and Liberty High School.

• The Arts Commission hosted the first annual “ Day in the Park” Art and Wine Festival in October. This event attracted approximately

5,000 people.

• The Arts Commission hosted quarterly art shows/ exhibits at the Brentwood Education &

Technology Center.

• The City’s tree nursery doubled in size with the addition of 500 new seedlings being planted.

The City has planted the trees with the assistance of community volunteers and will raise the

trees for future planting in public areas.

• The City assisted a doctoral candidate that lives and works in the East Bay in the completion

of his dissertation research that involved a study which surveyed staff and volunteers from the

Parks and Recreation Department. The dissertation was titled “ Organizational Leadership’s

Influence on Social Capital Accumulation Through Community based Volunteer Programs”.

• The Parks and Recreation Department entered into a contract with a local business to provide

vending machine services at Sunset Park Athletic Complex, Brentwood Family Aquatic

Complex, the Skate Park, Apple Hill Park, Community Center, Council Chambers, and

Soroptimist Square.

• The City laid out the ground work for the merger of PAL ( Police Activities League) into the City of Brentwood Parks and Recreation

Department. The merger was effective July 1, 2003.

• The merger of last years nine Wednesday night with the four Friday night Concerts in the Park evolved this year into eleven total concerts

on Friday nights with two of the acts as headliners and the remaining as local Bay Area talent. This venture was accepted by the

community with great response and enjoyment of the musical arts.

City of Brentwood Tree Nursery

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xviii

Creekside Park

• Greenleaf Mapping and Control Systems was hired to perform water audits on all landscaped areas that the City maintains. They also

provided digitized maps of the same area.

• City staff and MCE Corporation have developed a computerized landscape inspection form. This form, used on hand- held PDAs, is used

on all landscaped areas maintained by our landscape contractor and City staff.

• The Parks Services Manager and Recreation Services Manager have established regular monthly liaison meetings with Brentwood Union

School District to coordinate joint use of City and School District Facilities.

• The City of Brentwood hired West Coast Arborists to inventory all City maintained trees. This inventory is updated as any work is

performed on any of these trees.

• The Second Street parking lot was completed, adding a total of 52 parking spaces for downtown parking, reducing congestion for

businesses, City employees and residents.

• Completion of annual Pavement Management Program. This project consists of surveying roadways every three years and then

reconstructing, overlaying, surface and crack sealing various roads each year. The City’s pavement management software selects those

streets that are most cost effective to do preventive maintenance on for the year.

• Sand Creek Road Central - Construction of the central section of Sand Creek Road from the Highway 4 Bypass to Minnesota Avenue is

completed. Completion of this project will improve access to the commercial areas of the City from the Highway 4 Bypass by providing a

major east- west connector.

• Continued enhancement of the Geographic Information System ( GIS) program, providing more information to the City and to our

residents.

• Updated the Water, Wastewater and Non- Potable Water Master Plans.

• Brentwood Boulevard and Almond Street sewer and water improvements completed.

CURRENT PROJECTS / PROJECTS UNDER CONSTRUCTION

• Several neighborhood parks are starting construction for opening in the 2003/ 2004 fiscal year. These parks include Oak Meadow, Heron

Park, and Black Gold Park. In addition, various pocket parks will open throughout new developments in the Northwest Quadrant area.

• Construction of the expansion of Sunset Park Athletic Complex is underway. The

expansion will increase the current 10- acre site to 37.8 acres and will include a four-field

softball complex, two baseball fields, three full- size soccer fields, and one

competition soccer field. An equestrian staging area, children’s play area and two

concession stands will provide for a wide range of multi- use opportunities.

• Design has been completed and the Balfour Road Park is out to bid. This park will

include a group picnic area, sand volleyball court, a children’s play area, and a

restroom arrayed around a large plaza that has been designed to accommodate a

wide range of public functions. This park will also have competition bocce ball

courts with oyster shell surfacing and a large area of open turf.

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xix

• The City is working with Liberty Union High School District on four joint- use community projects: Renovation of the Liberty Union

High School football field into a year- round surface/ all weather track; construction of a 50- meter pool at Heritage High School;

construction of a joint- use gymnasium at Heritage High School; and provision of underground conduit for future sports lighting of athletic

fields at Heritage High School.

• Public works started construction of a 10,000+ square foot building at 325 Sunset Road that will house the

purchasing/ receiving/ warehouse and the mechanics shop. Completion date is August 2003. Public Works is moving their headquarters

from 161 Sycamore to Sunset Road with a move in date in August 2003.

• The City started the architectural design for 8,000+ square feet at 120 Oak Street which will be occupied by the City of Brentwood

Engineering Department. Construction will begin in October 2003 with a tentative move in date of February 2004.

• The Senior Club continues to strive towards becoming a non- profit organization and is awaiting approval from the federal agency.

• Brentwood Boulevard Widening from Marsh Creek to the north City limits – The focus of this project is public safety, traffic flow and

circulation and continues the widening of Brentwood Boulevard with two lanes in each direction. This project also consists of the bridge

widening over Marsh Creek.

• Lone Tree Way – Union Pacific Undercrossing – This project will construct a grade separation underpass consisting of six travel lanes

crossing under the Union Pacific Railroad. This project will drastically increase public safety by creating a grade separation crossing of

the railroad, instead of the present at- grade crossing.

• Lone Tree Way Widening from 400 feet west of O’Hara Avenue to Brentwood Boulevard– This project will improve traffic safety and

reduce congestion along Lone Tree Way by widening the roadway to two lanes in each direction and installing left- turn lanes.

• Sunset Industrial Complex - Construction began in the Summer of 2002 for the City’s first major redevelopment effort. It is intended to

relocate heavy industrial uses from Brentwood Boulevard to a more appropriate location. This includes annexing the area into the

Redevelopment Area and coordination with solid waste, a relocated corporation yard, the Wastewater Treatment Plant and a 37.8 acre

sports part. This project will increase available industrial land, upgrade the Brentwood Boulevard streetscape by removing industrial users

and increase the Redevelopment Agency’s tax increment flow.

• Sunset Road Realignment - Sunset Road will be realigned in a due east- west direction along the north side of the EBMUD Aqueduct to

intersect with Brentwood Boulevard at the Grant Street signal. The project includes the construction of a bridge over Marsh Creek, water

and non- potable water and fiber optic line improvements.

• Sand Creek Road East - Construction of the eastern section of Sand Creek Road from Minnesota Avenue to Brentwood Boulevard. At its

completion, it will provide another major east- west corridor for traffic circulation in the City. It will connect the Highway 4 Bypass to the

existing Highway 4 ( Brentwood Boulevard).

• The City is currently involved in providing a new police station that will accommodate the growth and needs of the City.

• The City is currently involved in the design and construction planning of a new City Hall.

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xx

FINANCING FUTURE INFRASTRUCTURE

CAPITAL IMPROVEMENT FINANCING PROGRAMS: Capital Improvement Financing Programs ( CIFP) are a mechanism through which the City

and the Development Community cooperate to fund and construct major Master Planned and Sub- Master Planned infrastructure ( roads, water and

wastewater lines, regional drainage facilities, etc.). The City is able to obtain very low interest rates through its outstanding financial reputation

and bonds are sold using the participating Developer’s property as the collateral. There is no risk involved for the City as a 3 to 1 value to lien

ratio is used to determine the amount of bonds to be sold. As the properties develop, the bonds are repaid by the new property owner over a 30-

year period.

The most recent CIFP the City has funded was CIFP 2002- 1. Items to be constructed or funded through CIFP 2002- 1 are: Lone Tree Way

Segments 1 and 2, Fairview Avenue reconstruction and realignment, Master Planned storm drain facilities along the Lone Tree Way Corridor,

Sycamore Avenue extension, Minnesota Avenue improvement and the extension of Garin Parkway. The total amount of the bond sale was

$ 16,585,000.

DEPARTMENT REVIEW

In the CITY MANAGER’S office, the City’s Administrative functions are expanding to fill the ever- growing needs of the community. The

establishment of an Assistant City Manager is the result of the City recognizing the needs in these areas. The Assistant City Manager will

oversee the Human Resources Division, provide staff assistance to various City Council Subcommittees, oversight of the franchise agreements,

and work on special projects assigned by the City Manager and the City Council. The Assistant City Manager will also serve as a communications

liaison for the City and its citizens. The overriding goal of the department is to secure and strengthen the long- term economic vitality of the City,

while securing a small town atmosphere for our residents.

The CITY CLERK’S office completed the Laserfiche update for the Agenda Manager. Currently in progress is an update to the Website with the

addition of a Web Link to the City Council and RDA agendas. The City Clerk’s office is also spearheading a Workflow Suite implementation that

allows for the tracking of all projects on a global level. In addition, the City Clerk staff developed strategies for updating and converting the filing

system for the City’s permanent and vital records located in the vault. This allows for the safekeeping and easy retrieval of documents. The City

has also introduced new conveniences for its residents through establishing passport application and processing services at City Hall.

The CITY ATTORNEY has been consulted on numerous issues that could have results in claims, disputes, mediation, or litigation. In an attempt

to resolve issues before they reach the need for dispute resolution, the City has employed an in- house attorney to better respond to these possible

issues. As of June 30, 2003, the City has had ten cases filed against it and three claims. These cases are being vigorously defended by the City.

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xxi

During the past year, the City Attorney has acted with other department heads to provide opinions concerning new development fees, respond to

claims, resolve challenges to various city projects, and daily operating issues. The City expects to continue to employ an in- house counsel to

better provide daily legal advice and opinion concerning on- going city projects, operations and compliance with statutory procedures.

The FINANCE DEPARTMENT compiled and developed the City’s second CAFR. The 2001/ 02 CAFR was a monumental task as it served two

purposes – an amplification of the understanding of the City’s financial status under the new reporting requirements as prescribed by GASB

Statement No. 34, and a savings in the preparation and publishing of the report for the second time. The 2001/ 02 CAFR received the California

Society of Municipal Finance Officer’s Certificate of Award for Outstanding Financial Reporting and the Government Finance Officers

Association Certificate of Award for Excellence in Financial Reporting. The CAFR has become a very useful document made available to

residents and interested parties.

Annual budgets and Capital Improvement Program budgets are prepared to enable the City to plan, comply with the legal limit that the City can

expend on funds, monitor the flow of resources, and to allow end of period evaluations for reporting to the legislative bodies. Through a concerted

effort of gathering and verifying facts, the Finance Department continues to compile reliable data for the Legislative body, for the City, and for its

residents. In addition, a Cost Allocation Plan is prepared annually to present an analysis of the

computation of overhead charges for City- wide and department programs. It also provides the

framework for computing specific user fees and charges such as Building, Electrical, Plumbing

and Mechanical Permit fees; Engineering, Police, Parks & Recreation, Utility Billing, Facilities,

Business Tax and Administration Fees; Water, Solid Waste, Wastewater and Solid Waste

Enterprise Rates to name a few.

In an effort to minimize the cost and the time required to produce annual Budgets and the

Comprehensive Annual Financial Report, the Finance Department has created its own

publishing center – streamlining the gathering of data for the reports and utilizing current

manpower and equipment to produce these extensively detailed reports. The result of this

publishing center is a start to finish product created entirely in house, including the processing of

CDs on all adopted documents.

The City amended its fifty- four year old Business License Tax and Regulations, as set forth in Ordinance No. 707. Measure D was passed by

General Vote on November 5, 2002, and subsequent adoption by Council. The new tax ordinance allows the City’s business license fee and

regulations to be comparable to adjacent cities, provide for an equitable basis and rate, require all businesses to pay a business license fee, and

provide a consistent general fund revenue for such vital services as police services.

The City of Brentwood has contracted with an outside service to assist in the preparation of a 10 year fiscal model. The City will develop a

strategic plan for the next ten years that will enable us to continue our long run of fiscal health. The initial tasks have been to provide assistance to

representatives within all the departments to improve accuracy within the individual departmental projections. These projections will relate

City of Brentwood Community Center

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xxii

alternative economic and marketing input scenarios so as to enable the core team and Council to consider the short term and the long term

implications of alternatively likely economic and growth futures.

Finance continues to be a facilitator in the formation and administration of all Lighting and Landscape Districts, Assessment Districts and the new

Community Facilities District. Bond documentation was completed on refunding CIFP 98- 1, 99- 1 ( a savings of over $ 1.9 million in new funds for

infrastructure) and on CIFP 2002- 1. Bond closing for RDA, Roadway & Tech Center was completed at $ 3.2 million. Annual bond disclosure was

completed on CIFP 2001, 2001 General Obligation Bond and Water and Sewer Bond.

The Information Systems Division of the Finance Department continues to keep the City’s technology up to date by providing regular software

updates such as PC upgrades to Windows 2000 and upgrading the server to Windows 2000 domain. Information Systems has also installed anti-spam

hardware and software and an internet monitoring appliance. Fiber optics are being installed throughout the City that connects City

buildings and increases the wireless speed five fold.

Information Systems continues to maintain a center that makes state of the art equipment available, which is the City’s Business Technology

Center that houses a Usability Lab to be used by businesses to test their products. The lab features a state- of- the- art technology system designed to

attract Bay Area companies and is available for collegiate courses.

The City makes available via the internet our City Budgets and CAFRs. An E- Commerce site has been added where people will be able to register

and pay for Parks & Recreation classes on line. In addition, anyone can now subscribe to the current agendas, watch live Council meetings on the

Web and access past and current Council agendas and meetings. The City of Brentwood website features City Council items, RDA, Boards and

Commissions, City Department and General Information. Very helpful items have been incorporated into the website, including Road Conditions,

Capital Improvement projects, Web page information translated into Spanish, Public Notices, Children’s Place, Municipal codes, a Map room

guided by our GIS system, the City temperature and helpful links to local, community, state and federal sites. The City has automated its way of

processing service requests by making them accessible on line.

Internally, computer service requests are transmitted instantly. More importantly, work service requests for residents for Parks and Maintenance,

Public Works and Utility Billing are now available over the Internet and transmitted to the intended department rather quickly. Work service

requests are tended to in the most efficient time possible. Further, the new hire process has now been automated through our intranet and e- mail

system, allowing for completion of all new hire information and workstation set up prior to the employee coming on board. An on- line office

supply ordering system is in progress. The Finance Department is also currently looking for a new computer accounting package.

The City Information Systems Communications Policy is currently under review, scheduled for council approval toward year end. This will be the

first comprehensive policy of this nature that will cover computers, e- mail, voice mail and all other aspects of City- related communications.

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xxiii

The Utility Billing Division of the Finance Department accomplished two major goals in the

2002/ 03 Fiscal Year. The utility billing process was converted into four cycles per month

whereby billing is broken down by zone and payment is due 25 days following the billing date.

This new cycle has enhanced customer service levels, allowing for the timely generation of bills

and payment processing. In addition, Utility Billing has now implemented formal payment

arrangements for water/ sewer/ garbage bills in situations where water will be or has been

disconnected due to financial hardship. The customer is required to complete and sign specific

payment arrangements and is required to bring the account current within 6 months. Payment

arrangements can only occur once in a 12- month period. No further penalties will be incurred on

the past- due charges during the repayment period, but the customer is required to keep their

current charges up to date while re- paying the past- due amount.

The Grants Division of the Finance Department submitted 15 grant proposals in this fiscal year totaling $ 5,441,986. Ten grant proposals were

awarded, totaling $ 1,739,490, which were used for roadway landscaping, Parks & Recreation projects, Waste Management, Traffic Congestion

Relief and Safety. Future plans call for the expansion of the City’s grant writing efforts that will increase to citywide from what has been an

engineering effort for infrastructure. The challenge for this grant writing effort is not to lose the very successful infrastructure effort while

expanding the scope.

The BRENTWOOD POLICE DEPARTMENT continues its commitment to deliver high quality law enforcement services to a growing community.

Community programs include Neighborhood Watch, Red Ribbon Week, Vacation Watch, Tell- A- Cop, R. A. V. E., Operation Identification, and the

Community Identification Program.

Every other year the police department presents the “ Every Fifteen Minutes” program to 11th and 12th grade students. The two- day presentation

involves the “ staging” of a drunken driving fatal collision which takes students through the dramatized consequences of drinking and driving.

Program participants include students, parents, teachers, public safety personnel and medical service providers.

Responding to emergency calls for service remains a high priority. In addition to the typical police car, officers may also be assigned to either

foot, bicycle or off- road motorcycle patrol. Three motorcycle officers are assigned to traffic enforcement including commercial vehicles and

collision prevention. A SWAT team has been established to respond to critical incidents.

Implementing and keeping current on new technologies has allowed the Department to become more efficient in its operations and service to the

public. Detectives are using new technologies, such as “ computer forensics,” to investigate Internet and other computer- related crimes.

The Police Department actively collaborates and participates with outreach groups on a variety of issues including domestic violence, gang

involvement, hate crimes, substance abuse, victim assistance, mental illness and the homeless.

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xxiv

Youth activities focus on giving kids positive direction and mentoring. The Police Activities League ( PAL) continues to grow and expand their

program variety. The Brentwood Police Explorer Scouting program offers teenagers an opportunity to be involved in their community, work with

officers and explore a career in law enforcement.

The Police Department continues to grow and evolve to meet the needs of our community. Personnel have been added and trained to provide

faster service for Livescan, child safety seat installations and processing counter requests. The recruitment of top quality police applicants to our

City has been extremely effective through the use of innovative hiring incentives that encourage officers to work and live in Brentwood.

The Police Department is also active in county- wide emergency service groups including the Office of Emergency Services Operation Area Group

and the Homeland Security Grant law enforcement sub- committee.

The Police Department is open to the public on weekdays from 8: 30 AM to 8: 00 PM. Public information pamphlets and resource brochures are

available in the police station lobby.

The ENGINEERING DEPARTMENT continues its commitment to plan, engineer and ensure the highest quality infrastructure to the residents of

Brentwood. To meet the challenge of the growing demand for infrastructure, the Engineering Department pursued an aggressive approach to

expedite the construction of major roadways, water storage and distribution and sanitary sewer collection treatment facilities. With available

limited revenue sources of the City and grants through State and Federal programs, over $ 28 million was invested in the City’s roadway, sewer

and water systems.

The Engineering Department also works cooperatively with the development community to secure innovative financing for infrastructure ahead of

the developments. Final maps, grading plans, roadway, sewer and water improvement plans were approved for 1,332 residential lots over the past

year.

The Building Division of the COMMUNITY DEVELOPMENT DEPARTMENT continued to bring a

number of major commercial projects online through plan check and construction inspection this

year, including the Sand Creek Crossing Shopping Center with TJ Maxx, Homegoods, Raley's,

Ross, Home Concepts Furniture, Starbucks, Hawaiian Barbeque, and many other stores in that

center. Construction continued on the Walnut Business Park and the Town Center Office Park,

bringing several new office buildings online. New commercial construction included a health club

on Guthrie Lane, new office buildings and mini- storage on Sand Creek Road, a new Safeway

shopping center on Balfour at Fairview, the Walgreen’s Center, and the Donahue & Shriber

Regional Shopping Center including Home Depot, Kohl’s, Michaels, SportMart, Petco and Linen

& Things. Three major church projects are also in the process of being constructed - Golden Hills,

Resurrection Ministry, and Immaculate Heart. Two golf club houses are also being constructed. Sand Creek Business Center

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xxv

Commercial construction accounted for $ 18,442,953.20 in construction valuation.

All of the commercial Building Division activity is in addition to plan check and inspection of 1,400 new homes this past year. We also issued

permits for 228 new pools. That works out to one new pool per workday. For the fiscal year 2002/ 03 2,634 permits were issued with a

construction valuation of $ 294,446,335.

In addition, the Building Division has increased the level of neighborhood preservation activities through code enforcement and the City wide

trash drop off at the transfer station.

In fiscal year 2002/ 2003, the PARKS AND RECREATION DEPARTMENT ended up with 142.66

usable park acres built or in design with expected dedication of an additional 15.46 acres in fiscal

year 2003/ 04. The Parks and Recreation Department continues to work with both the Brentwood

Union School District and Liberty Union High School District on joint- use facilities and will be

modifying and updating the joint- use agreement in fiscal year 2003/ 2004. The year 2002 saw the

first annual “ Day in the Park” Art and Wine Festival hosted by the City of Brentwood Arts

Commission. Staff and members of the Arts Commission worked hard to put together this

successful event for the nearly 5,000 people that attended. It is anticipated that this event will

continue to grow each year. The Arts Commission hosted quarterly shows at the Brentwood

Education and Technology Center. Commissioners worked with local schools to enable students

to go to the site to see the Diego Rivera art exhibit, providing some art enrichment in the youth of

our community. The Youth Commission completed Phase I of the Youth Master Plan. A “ Teen

Crisis Referral” card was created and distributed to middle and high school students. The Senior

Citizens Club was formed with the assistance of the recreation staff to help provide input and direction to the department as to the issues and needs

of the growing senior population.

In 2002, the Parks and Recreation Department received two Awards of Excellence from the California Park and Recreation Society ( CPRS).

Awards received were for the “ Best Single Brochure” and “ Facility Design for the Skate Park”.

The DEPARTMENT OF PUBLIC WORKS is comprised of six Divisions: Solid Waste, Water Production and Distribution, Street Maintenance,

Fleet Maintenance, Wastewater Treatment, which became its own division in 2002, and an Administration Division which provides support to

each of the other Divisions.

Originally established by the City of Brentwood nine years ago, the Solid Waste Enterprise Fund provides refuse collection for all residents within

the City limits. While the Solid Waste Division continues to operate within a healthy enterprise funding, needs assessments and rate studies have

not been conducted in the past. A study is currently underway to identify long- term needs in the Division. Also, a rate study will be implemented

Brentwood Family Aquatic Complex

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xxvi

to ensure that the enterprise is appropriately funded. The projected rates will support the current and future costs of the Division including

expanding the capacity of the Transfer Station to accommodate residential drop off.

The City of Brentwood’s Municipal Water System supplies approximately 90 million gallons of potable water to the community per month.

Current and immediate future potable water needs are met through municipal wells and purchased water. There is a significant potential for

reducing water demand by utilizing the reclaimed water from the Wastewater Treatment Plant. Staff will be investigating new well sites along

with improving agreements with surface water purveyors to ensure future peak water demands are met. Staff is currently implementing a

Supervisory Control and Data Acquisition ( SCADA) program to the water distribution section. This computer controlled program will ensure

reliable and consistent water supply by monitoring water use, remotely controlling pumping demands and providing reliable data for preventative

maintenance work.

The Street Maintenance Division is responsible for asphalt repair and replacement including emergency repairs, sidewalk repairs and curb and

gutter replacements. The Street Maintenance Division is also responsible for street sweeping, sign production and replacement, pavement marking

and storm drain maintenance. The costs associated with this division continue to see increases. These increases are primarily from preventative

maintenance costs associated with the growth of our City. To help offset the costs, staff is implementing programs that will reduce these costs.

Included in this is the new thermo plastic pavement marking equipment. This will increase the life span of legends and lines from eight months to

six years.

The Fleet Maintenance Division has been handles preventative maintenance and repairs for the majority of the City of Brentwood fleet. In FY

2003/ 04, regularly scheduled maintenance was performed on the 120 vehicles owned by the City. The current cost for the maintenance and repairs

is approximately $ 85 an hour. Staff recently relocated to a new maintenance facility that is improving operational efficiencies. The City is also

utilizing a number of electric vehicles to help reduce combustion engine emissions.

The Wastewater Division is operating the newly completed $ 40 million tertiary treatment

facility. Utilizing state- of- the- art process control, this facility has the capacity to process up to

4.5 mgd for beneficial reuse in irrigation throughout the City. Current average dry weather

daily flow is 2.3 mgd. Funded through user and development fees, this facility ensures

adequate treatment of the City of Brentwood’s wastewater. Staff has recently implemented a

Sewer Lateral Maintenance Program that assists residents with maintenance, repair and/ or

replacement of the property owner’s lateral from their property line to the main line. Each

resident is billed $ 1.00 per month for this service. It is anticipated that this new enterprise will

be self sufficient in two years.

Staff completed, and City Council adopted, a comprehensive rate study that ensures the

Treatment Plant is operating with sufficient funds to cover expenses. In Fiscal year 2003/ 04, a

review of this rate study will be conducted to ensure the rates are maintaining sufficient

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xxvii

enterprise funding. Also associated with the Wastewater Enterprise Fund is collection system maintenance. The current plan calls for the entire

collection system to be cleaned once a year. Additionally, staff will be recommending the purchase of specialized video- based equipment to assist

in determining the condition of the sanitary system.

During the fiscal year 2002/ 03, the Brentwood REDEVELOPMENT AGENCY participated in several projects and programs in order to achieve the

goals and objectives outlined in the Redevelopment Plans and Implementation Plan. The accomplishments associated with these projects and

programs are described below.

• The Agency funded sewer line improvements for health and safety purposes along Brentwood Boulevard and Almond Street for the benefit of

eleven households and two commercial properties.

• The Agency funded the construction of 52 additional parking spaces on Second Street in the Downtown District to facilitate both the

expansion of existing businesses and the attraction of new businesses. The Agency also funded bike racks and additional security lighting for

the Second Street parking lot.

• Sand Creek and Gregory Ranch, a 40- acre commercial, residential, hotel and restaurant mixed- use development, was facilitated by the

Agency’s agreement to reimburse $ 1.5M to the developer for assistance towards the roadway improvement costs. The development will

provide 856 jobs, annual sales tax of $ 43,000 and transient occupancy tax of $ 130,300, as well as return the Agency’s investment of $ 1.5M in

less than eight years due to the increased tax increment generated by the project. As of August 2003, three of the nine office buildings are

complete and occupied, construction of the mini- storage component has

commenced, roadway improvements are nearly complete and the site improvements

for the 120 town home component have been started.

• The Agency completed a lot line adjustment of two parcels it owns on the corner of

Oak Street and Walnut Boulevard. The Agency is considering the development

potential of assembling its two parcels with one privately owned parcel to the south,

for a total assemblage of approximately 4.4 acres. The development could

potentially consist of retail and/ or restaurants and could serve as a gateway to the

downtown area.

• Staff completed a Downtown Parking Structure Study to assess the design

alternatives, construction costs and financial feasibility of a retail/ parking structure

in the downtown area. The parking structure would house approximately 30,000

square feet of retail and restaurant space on the first floor, with three levels of

parking above. A second phase study is currently underway to narrow and focus the

conclusions of the first study, facilitate site selection, fine tune construction and land assemblage costs and revise the design options. EIR and

Phase I site assessment studies will commence shortly.

• The Agency’s Project Area Committee has stayed active in reviewing redevelopment housing activities and staying advised of general

redevelopment projects.

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xxviii

• In October 2002, the Agency adopted a Business Relocation Assistance Program for eligible businesses currently located within the Merged

Redevelopment Project Areas and interested in voluntary relocation to Sunset Industrial Complex. It is hoped that the program will act as a

catalyst in the removal of existing blighted conditions and to facilitate reuse and revitalization of the area.

• As part of the Business Relocation Assistance Program, staff completed negotiations with Brentwood Ready Mix to relocate from North

Brentwood Boulevard to the Sunset Industrial Complex. To facilitate the success and completion of the Sunset Industrial Complex, the

Agency partially funded its infrastructure in the amount of $ 3M.

• The Agency also continued its relationship with the Brentwood Chamber of Commerce by contributing $ 35,000 to the Chamber’s Marketing

Program. The mission of the marketing program is to increase the economic viability of Brentwood by investing in existing businesses,

attracting new businesses to Brentwood and emphasizing the quality of business and community life in Brentwood.

• The Agency has also developed a multi- year economic strategic plan for the Downtown Area. Interviews of stakeholders, analysis of sales

information and retail data collection is currently underway to help formulate an economic strategic plan for the

Brentwood Boulevard Corridor Area in North Brentwood.

• In January 2003, an analysis and study to determine the feasibility of adding territory along the Lone Tree Way

corridor to the North Brentwood Project Area was performed. The findings concluded that while the survey area

exhibited physical and economic blight factors necessary to create a new project area, the current development in

the area is alleviating blighting conditions by private enterprise acting alone.

• A disposition and development agreement was approved by the Agency in November 2002. The development of

nine high- density, single family residential units on the Agency- owned, one- acre lot at 159 Sycamore Avenue is

currently being negotiated. The developer of the Casitas Del Sol development is required to design a marketing

and resale program that gives preference to residents and workers of Brentwood. This high density project will

provide another housing product at a market price not currently available in the City of Brentwood’s

predominately single family housing stock.

• A disposition and development agreement was approved by the Agency in November 2002 for a $ 575,000

contribution from the Agency’s Housing Set Aside Fund for the development of Sycamore Place II, a 40- unit, very low income, senior

housing development that will mirror an existing and successful complex in Brentwood. The non- profit owner/ operator also secured

commitments from HUD and Contra Costa County HOME programs.

• The Agency conditioned Sycamore Square, a single- family housing development in the North Brentwood Project Area, to produce eight

inclusionary housing units. To comply with a portion of this condition, the developer and Agency staff are working together to rehab an

existing triplex in the Merged Redevelopment Project Area.

• In June 2003, the Agency approved a reimbursement agreement for the development of eight residential units in the Brentwood Project Area,

of which two units shall remain affordable to lower income households for no less than 55 years.

• Other ongoing affordable housing projects that are requesting Agency financial assistance include Habitat for Humanity’s Fairview Project,

Mercy Housing’s Villa Amador Apartments, Affordable Housing Development Corporation’s Arbor Ridge Apartments and Terra Nova’s

Brentwood Senior Commons.

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xxix

• To further its mission in the upcoming 2003- 2004 year, the Agency will continue with its commercial, retail and industrial development

programs, business assistance programs, public improvement and facilities programs and the assistance and participation in the expansion and

improvement of the supply of very low, low and moderate income housing.

Risk Management

The City has initiated a limited risk management program for workers’ compensation and general liability. As part of this comprehensive plan,

resources are being accumulated in a fund balance reserve to meet potential losses. In addition, various risk control techniques, including

employee accident prevention training, have been implemented during the year to minimize accident- related losses. Effective with the renewal of

excess insurance policies on July 1, 2002, third- party coverage is currently maintained for workers’ compensation and risk liability claims up to

$ 350,000. Risk liability coverage is currently maintained and provides coverage in three tiers:

$ 1 million with 18 cities in primary insurance pool, with a $ 5,000 deductible;

$ 2 million excess $ 1 million in an excess self- insurance pool with 135 members;

Through the excess pool, CARMA , we have reinsurance to $ 15 million. This is with Am Re and would be $ 12 million plus $ 3 million.

Total liability coverage is $ 15 million, subject to a $ 10,000 deductible.

Independent Audit

The Government Code of the State of California requires general law cities, such as the City of Brentwood, to have its financial statements audited

by an independent certified public accountant. Accordingly, this year’s audit was completed by the accounting firm of Vavrinek, Trine, Day and

Co., LLP. In addition to meeting the requirements set forth in state statutes, the audit also was designed to meet the requirements of the Federal

Single Audit Act of 1984 and related OMB Circular A- 133. The auditor’s report on the general purpose financial statements is included in the

financial section hereof. The examination relating to the single audit was found to be under the limit and not needed for fiscal year 2002/ 03.

Certificate of Achievement

The Government Finance Officers Association ( GFOA) and California Society of Municipal Finance Officers ( CSMFO) both offer a recognition

program for public entities to determine whether the City conforms to the highest level of governmental accounting and financial reporting

standards. Its attainment represents a significant accomplishment by a government and its management. If a city qualifies, a Certificate of

Achievement is awarded for a period of one year.

GFOA and CSMFO awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Brentwood for its Comprehensive

Annual Financial Report for the fiscal year ended June 30, 2002, the City’s second CAFR. The Certificate of Achievement is a prestigious

national award recognizing conformance with the highest standards for preparation of state and local government financial reports.

City of Brentwood

Letter of Transmittal

City of Brentwood – 2002/ 03 CAFR xxx

Acknowledgements

I wish to thank the City Council for providing clear policy direction and goals that have been used to prepare this comprehensive annual financial

report. I would also like to express my appreciation to all City of Brentwood staff members who have taken the time to participate in the

development of the report. A great deal of effort and attention to detail has gone into the preparation of this document, representing many hours of

work by staff members throughout the organization. These dedicated members assisted and contributed to its preparation. Special recognition is

given to the Finance Department staff, and specifically Denise Davies, Gail Leech, Patti Bowden, Brian Kelleher, Pat Meyer and Liz Ybarra.

Their efforts made it possible to improve the quality of the information being reported to the citizens, the City Council, and other users on a much

timelier basis. Appreciation is also expressed to the Mayor, the City Council, and the City Manager for their interest and support in planning and

conducting the financial activities of the City in a responsible and responsive manner.

The City of Brentwood has a bright future ahead because of its committed elected leadership combined with the talents and ingenuity of the

individuals within this organization. One of the key components in securing this future is through a well- planned, long- term fiscal strategy, based

upon economic development that will generate high paying, long- term employment opportunities, new and stable sales tax revenue sources and

improved intergovernmental relations. City Council and staff have taken steps to plan and implement this long- term strategy.

Though the challenges are great, the City is firmly committed to meeting each and every challenge that comes our way. This comprehensive

annual financial report is the next step towards meeting those challenges. By continuing to follow the financial policy set forth by the City

Council, the City of Brentwood will deliver the highest level of service permitted by the available resources.

Respectfully submitted,

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John Stevenson Pamela Ehler

City Manager City Treasurer

Director of Finance and Information Systems

City of Brentwood – 2002/ 03CAFR Page 1

INDEPENDENT AUDITORS' REPORT

To the Honorable Mayor and

Members of the City Council

City of Brentwood, California

We have audited the accompanying basic financial statements of the governmental activities, the business- type activities, each major fund, and the

aggregate remaining fund information of the City of Brentwood, California, ( City) as of and for the year ended June 30, 2003, which collectively

comprise the City’s basic financial statements as listed in the table of contents. These basic financial statements are the responsibility of the City's

management. Our responsibility is to express an opinion on these basic financial statements based on our audit.

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

financial audits contained in Government Auditing Standards, issued by the Comptroller of the United States. Those standards require that we

plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit

includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing

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

We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the

governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of Brentwood,

California, as of June 30, 2003, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended

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

City of Brentwood – 2002/ 03 CAFR Page 2

In accordance with Government Auditing Standards, we have also issued our report dated October 30, 2003 on our consideration of the City’s

internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That

report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this

report in considering the results of our audit.

The Required Supplementary Information, including Management’s Discussion and Analysis and budgetary comparison information, as listed in

the table of contents, is not a required part of the basic financial statements, but is supplementary information required by the Governmental

Accounting Standards Board. This Required Supplementary Information is the responsibility of the management of the City. We have applied

certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the

supplementary information. However, we did not audit the information and accordingly, we do not express an opinion.

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

fund financial statements and schedules listed in the table of contents are presented for purpose of additional analysis and are not a required part of

the basic financial statements of the City. These financial statements and schedules are also the responsibility of the management of the City.

Such additional information has been subjected to the auditing procedures applied in our audit of the basic financial statements, and in our opinion,

is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. The scope of our audit did not

include the introductory section and statistical schedules listed in the table of contents and we do not express an opinion on them.

Pleasanton, California

October 30, 2003

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood – 2002/ 03 CAFR Page 3

This discussion and analysis of the City of Brentwood’s financial performance provides an overview of the City’s financial activities

for the fiscal year ended June 30, 2003. Please read it in conjunction with the accompanying transmittal letter, the basic financial

statements and the accompanying notes to those financial statements.

FINANCIAL HIGHLIGHTS

􀂃 The total assets of the City exceeded its liabilities at the close of the most recent fiscal year by $ 363.9 million. Of this amount,

$ 43.6 million may be used to meet the City’s ongoing obligations to citizens and creditors.

􀂃 The City’s total net assets increased $ 74.1 million, primarily due to the completion of projects and acquisition of assets from

developers.

􀂃 As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $ 70.4

million, a decrease of $ 1.4 million net in comparison to the prior year.

􀂃 The City’s total long- term debt increased by $ 3.7 million. The increase is primarily the result of an increase in the State Water

Resources note payable.

􀂃 The City’s Emergency Preparedness Fund has a balance of $ 5 million at year end, which is an increase of $ 3 million from the

prior year.

Overview of the Financial Statements

The financial statements presented herein include all of the activities of the City of Brentwood (“ the City”) and its component units

using the blended approach as prescribed by government accounting standards.

The Government- Wide Financial Statements present the financial picture of the City from the economic resources measurement

focus using the accrual basis of accounting. They present governmental activities and business type activities separately. These

statements include all assets of the City ( including infrastructure) as well as all liabilities ( including long- term debt). Additionally,

certain eliminations have occurred as prescribed by the statement in regards to interfund activity, payables and receivables.

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 4

The Fund Financial Statements include statements for each of the three categories of activities – governmental, business- type and

fiduciary. The governmental activities are prepared using the current financial resources measurement focus and modified accrual

basis of accounting. The business- type activities are prepared using the economic resources measurement focus and the accrual basis

of accounting. The fiduciary activities are agency funds, which only report a balance sheet and do not have a measurement focus.

Reconciliation of the Fund Financial Statements to the Government- Wide Financial Statements is provided to explain the differences

created by the integrated approach.

Government- Wide Financial Statements

The Statement of Net Assets and the Statement of Activities and Changes in Net Assets

The Statement of Net Assets and the Statement of Activities and Changes in Net Assets report information about the City as a whole

and about its activities. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is

similar to the accounting used by most private- sector companies. All of the current year’s revenues and expenses are taken into

account regardless of when cash is received or paid.

These two statements report the City’s net assets and changes in them. Net assets are the difference between assets and liabilities,

which is one way to measure the City’s financial health, or financial position. Over time, increases or decreases in the City’s net

assets are one indicator of whether its financial health is improving or deteriorating. Other factors to consider are changes in the

City’s property tax base and the condition of the City’s roads.

In the Statement of Net Assets and the Statement of Activities and Changes in Net Assets, we separate the City activities as follows:

Governmental Activities – Most of the City’s basic services are reported in this category including the General Government, Public

Safety, Community Development, Engineering, Public Works, Parks and Community Services. Property and sales taxes, user fees,

interest income, franchise fees and state and federal grants finance these activities.

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 5

Business- Type Activities – The City charges a fee to customers to cover all or most of the cost of certain services it provides. The

City’s Wastewater, Solid Waste, Water, Parks and Recreation and City Rental activities are reported in this category.

Fund Financial Statements

The fund financial statements provide detailed information about the most significant funds – not the City as a whole. Some funds are

required to be established by State law and by bond covenants. However, management establishes many other funds to help it control

and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other

money.

Governmental Funds - Most of the City’s basic services are reported in governmental funds, which focus on how money flows into

and out of those funds and the balances left at year- end that are available for spending. These funds are reported using an accounting

method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash.

The governmental fund statements provide a detailed short- term view of the City’s general government operations and the basic

services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be

spent in the near future to finance the City’s programs. The differences of results in the Governmental Fund financial statements to

those in the Government- Wide financial statements are explained in a reconciliation following each Governmental Fund financial

statement.

Proprietary Funds - When the City charges customers for the services it provides – whether outside customers or other units of the

City – these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are

reported in the Statement of Net Assets and the Statement of Revenues, Expenses and Changes in Net Assets. In fact, the City’s

enterprise funds are the same as the business- type activities we report in the government- wide statements but provide more detail and

additional information, such as cash flows, for proprietary funds. We use internal service funds ( the other component of proprietary

funds) to report activities that provide supplies and services for the City’s other programs and activities – such as the City’s

Information Systems, Fleet Maintenance and Equipment Replacement Funds. The Internal Service funds are reported with

governmental activities in the Government- Wide financial statements.

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 6

Reporting the City’s Fiduciary Responsibilities

The City is the trustee, or fiduciary, for certain amounts held on behalf of developers, property owners, and others. The City’s

fiduciary activities are reported in separate Statements of Fiduciary Net Assets. We exclude these activities from the Government-

Wide financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that

the assets reported in these funds are used for their intended purposes.

Notes to the Basic Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in the Government- Wide and

Fund financial statements.

Other Information

In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary

information concerning the City’s progress in funding its obligation to provide pension benefits to its employees, budgetary

comparison schedules for the general fund and each major special revenue fund.

GOVERNMENT- WIDE FINANCIAL ANALYSIS

The net assets for the City as a whole increased 25.57% from $ 289.8 million at June 30, 2002 to $ 363.9 million at June 30, 2003. This

increase of $ 74.1 million comes from the change in net assets as recorded in the Statement of Activities and flows through the

Statement of Net Assets. Program expenses by function, general revenues by major source, excess and/ or deficiency of revenues over

expenses before contributions to fund principal, special, and extraordinary items, and total assets are presented in the Statement of

Activities and Changes in Net Assets.

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 7

2 0 0 3 2 0 0 2 2 0 0 3 2 0 0 2 2 0 0 3 2 0 0 2

Re ve nue s :

Pro g ram Re ve nue s :

Charges for Services $ 13,8 62 ,506 $ 12 ,13 1,112 $ 15,719,56 6 $ 1 2,74 6,9 51 $ 2 9,58 2,0 72 $ 24 ,878 ,06 3

Operating Grants and Revenues 226,570 6 98 ,207 - - 2 26 ,570 69 8,2 07

Capital Grants and Contributions 132,575 163 ,450 - - 13 2,575 16 3,4 50

Ge ne ral R e ve nue s :

Taxes :

Property Taxes 6 ,93 3,9 00 5 ,42 3,13 2 6 80 ,375 532 ,571 7 ,6 14 ,275 5,9 55,70 3

Sales Tax and Gas Taxes 2 ,99 8,9 22 2,6 61,107 - - 2,9 98 ,92 2 2 ,66 1,107

Business License, Franchise Fees, Rentals 668,657 4 9 8,20 2 5,375 3,78 8 674 ,03 2 501,99 0

Pub lic Service Taxes 58 9,2 66 3 9 1,0 88 - - 589 ,26 6 3 91,08 8

M eas ure C - TOT 44 8,4 98 4 49 ,654 - - 4 48 ,49 8 44 9,6 54

Moto r Vehicle Taxes 1,70 2,2 80 1,42 3,12 8 - - 1 ,702 ,28 0 1,4 23 ,12 8

Inves tment Earning s 2,777,9 09 3 ,12 2,319 1,710,9 54 1,2 47,9 35 4,4 88 ,86 3 4,3 70,2 54

Impact Fees 21,965,625 10,72 9,36 1 2 0,2 86 ,877 1 1,4 53,8 97 4 2,2 52,50 2 22 ,18 3,2 58

Capital Contributions 9,572,626 2 0 ,49 1,2 64 20 ,733 ,98 0 1 8,0 90 ,39 4 3 0,3 06 ,60 6 3 8,58 1,6 58

Capital As sets Contrib uted to / from Other Fund s 2,8 85,0 00 - ( 2 ,88 5,00 0) - - -

Miscellaneo us 6 ,470 ,739 1,971,847 - - 6,4 70,73 9 1,9 71,8 47

To t al Re ve nue s 71,23 5,073 60 ,153,8 71 56,2 52,127 44 ,0 75,53 6 12 7,48 7,20 0 104 ,22 9,4 07

Exp e ns e s :

General Government 18 ,32 9,8 99 5,33 1,756 - - 1 8,3 29 ,89 9 5,3 31,756

Pub lic Safety 6 ,750 ,9 4 7 5 ,68 1,46 4 - - 6 ,750,9 47 5 ,6 81,46 4

Community Develo pment 2 ,88 6,102 2 ,9 44,72 2 - - 2,8 86 ,10 2 2 ,94 4,72 2

Eng ineering 1,6 18 ,876 1 ,577,558 - - 1 ,618,8 76 1 ,577,558

Pub lic Wo rks 2 ,94 2,0 88 2 ,78 3,12 3 - - 2,9 42 ,08 8 2 ,783 ,12 3

Parks 806,336 74 4,725 - - 8 06 ,33 6 744 ,725

Community Services 314,293 5 81,152 - - 3 14 ,29 3 58 1,152

Other 1,158,9 86 2 ,8 05,06 1 - - 1 ,158 ,98 6 2 ,80 5,06 1

Interest on Long- Term Debt 2,018,870 2 ,78 9,90 3 - - 2 ,018,8 70 2 ,789 ,90 3

Wastewater - - 3,4 05,0 73 2,8 13 ,09 1 3,4 05,0 73 2,8 13 ,09 1

So lid Was te - - 3,0 60 ,10 1 2,70 3,8 27 3,0 60 ,10 1 2,70 3,8 27

Water - - 6 ,779,0 73 6,3 94 ,410 6 ,779,0 73 6,3 94 ,410

Parks and Recreation - - 2,8 91,80 9 2 ,749 ,011 2,8 91,80 9 2 ,749 ,011

City Rentals - - 4 29 ,83 3 39 6,0 25 4 29 ,83 3 39 6,0 25

To t al Exp e ns e s 3 6,8 26 ,39 7 2 5,23 9,4 64 16,56 5,88 9 15,056 ,36 4 53,3 92 ,28 6 40 ,29 5,82 8

Increase in Net Assets Before Transfers 34,408,676 3 4,9 14,4 07 3 9,6 86 ,23 8 29 ,019,172 74,0 94 ,914 6 3,9 33 ,579

Transfers 7,349,207 ( 8 70,776 ) ( 7,34 9,2 07) 870 ,776 - -

Increase in Net As sets 4 1,757,8 83 3 4 ,04 3,6 31 32 ,33 7,03 1 2 9,8 89 ,94 8 74,0 94 ,914 6 3,9 33 ,579

Net Assets 7/ 1 as Restated 183,635,212 149 ,591,58 1 10 6,175,68 1 76,2 85,73 3 28 9,8 10 ,89 3 2 25,8 77,314

Net Assets 6 / 30 $ 225,393 ,095 $ 1 8 3,6 35,2 12 $ 13 8,512,712 $ 10 6,175,68 1 $ 36 3,9 05,8 07 $ 289,810,893

Go ve rnment al Ac t ivit ie s B us ine s s - Typ e Ac t ivit ie s To t al Primary Go ve rnment s

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 8

The City’s combined Net Assets for fiscal year ended June 30, 2003 were:

2003 2002 2003 2002 2003 2002

Current and Other Assets $ 97,403,557 $ 8 8,621,577 $ 43,375,591 $ 30,225,305 $ 140,779,148 $ 118,846,882

Capital Assets 184,849,115 1 47,110,926 148,205,105 126,696,981 333,054,220 273,807,907

Total Assets $ 282,252,672 $ 2 35,732,503 $ 191,580,696 $ 156,922,286 $ 473,833,368 $ 392,654,789

Long- Term Liabilities Outstanding $ 39,191,552 $ 3 9,214,503 $ 51,242,460 $ 47,180,897 $ 90,434,012 $ 86,395,400

Current Liabilities 17,668,025 1 2,882,788 1,825,524 3,565,708 19,493,549 16,448,496

Total Liabilities $ 56,859,577 $ 5 2,097,291 $ 53,067,984 $ 50,746,605 $ 109,927,561 $ 102,843,896

Net Assets:

Invested in Capital Assets, Net of Related

Debt $ 144,428,668 $ 1 07,356,555 $ 98,061,398 $ 77,713,543 $ 242,490,066 $ 185,070,098

Restricted 43,163,510 4 7,295,121 34,664,252 27,949,628 77,827,762 75,244,749

Unrestricted 37,800,917 2 8,983,536 5,787,062 512,510 43,587,979 29,496,046

Total Net Assets, Restated $ 225,393,095 $ 1 83,635,212 $ 138,512,712 $ 106,175,681 $ 363,905,807 $ 289,810,893

Governmental Activities Business- Type Activities Total

The City’s net assets from governmental activities increased 22.8% from $ 183.6 million to $ 225.4 million. Invested in Capital assets net of related

debt increased $ 37.1 million due to the completion of projects. Restricted net assets decreased $ 4.1 million overall as a result of the

reclassification of assets as reserved for specific projects and programs.

The City’s net assets from business- type activities increased 30.4% from $ 106.2 million to $ 138.5 million. Invested in Capital assets, net of

related debt increased $ 20.3 million due primarily to the completion of projects. The unrestricted net assets increased by $ 5.3 million as a result of

the reclassification of assets as reserved for specific projects and programs.

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 9

Revenues by Source

Impact Fees

40%

Investment

Earnings

5%

Taxes

25%

Miscellaneous

12%

Capital

Contributions

18%

$-

$ 2,000,000

$ 4,000,000

$ 6,000,000

$ 8,000,000

$ 10,000,000

$ 12,000,000

$ 14,000,000

$ 16,000,000

$ 18,000,000

$ 20,000,000

General Government

Public Safety

Community Development

Engineering

Public Works

Parks

Community Services

Other

Interest

Program Revenues and Expenses

Expenses

Pro g ram Revenues

The cost of all Governmental activities this year was $ 36.8 million. However, as shown in the Statement of Activities, the amount that

the taxpayers ultimately financed for these activities was only $ 22.6 million because some of the cost was paid by those who directly

benefited from the programs ($ 13.9 million), or by other governments and organizations that subsidized certain programs with

operating grants and contributions ($. 2 million) and capital grants and contributions ($. 1 million). Community Development and

Engineering show net revenue of $ 3.2 and $ 2.8 million, respectively, which is the result of this aggressive growth. Overall, the City’s

governmental program revenues were $ 14.2 million. The City paid for the remaining “ public benefit” portion of governmental

activities with $ 13.3 million in taxes ( some of which could only be used for certain programs) and with other revenues, such as

interest and general entitlements.

Total resources available during the year to finance governmental operations were $ 262.2 million consisting of Net Assets at July 1,

2002 of $ 183.6 million, program revenues of $ 14.2 million and general revenues of $ 64.4 million. Total Governmental Activities

during the year were $ 36.8 million; thus Net Assets were increased by $ 41.8 million to $ 225.4 million.

GOVERNMENTAL ACTIVITIES

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 10

$-

$ 1,000,000

$ 2,000,000

$ 3,000,000

$ 4,000,000

$ 5,000,000

$ 6,000,000

$ 7,000,000

Wastewater

Solid Waste

Water

Parks and Recreation

City Rentals

Program Revenues and Expenses

Expenses

Program Revenues

Revenues by Source

Impact Fees

46%

Investment

Earnings

4%

Taxes

2%

Capital

Contributions

48%

BUSINESS TYPE ACTIVITIES

The cost of all Proprietary ( Business- Type) activities this year was $ 16.6 million. As shown in the Statement of Activities and

Changes in Net Assets, the amounts paid by users of the systems were $ 15.7 million. Investment earnings were $ 1.7 million and

Impact Fees and Credits totaled $ 20.3 million.

Total resources available during the year to finance Proprietary Fund ( Business- Type) Activities were $ 155.1 million consisting of Net

Assets at July 1, 2002 of $ 106.2 million, program revenues of $ 15.7 million and general revenues of $ 33.2 million. Total Proprietary

Fund ( Business- Type) Activities during the year were $ 16.6 million; thus Net Assets were increased by $ 32.3 million to $ 138.5

million.

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 11

FINANCIAL ANALYSIS OF THE CITY’S FUNDS

The fund balance at year- end for the City’s General Fund of $ 19,302,492 is an overall increase of $ 10,341,946 over last year,

primarily due to the Community Development and Engineering Funds moving to the General Fund.

The Special Revenue Funds decreased by $ 9,057,600 from the prior year, this primarily attributable to the Community Development

and Engineering Funds moving to the General Fund.

The Capital Projects Funds decreased by $ 2,905,265 from the prior year, this is attributable to the aggressive building program the

City has adopted.

Internal Service Funds show an increase in Net Assets of $ 5,936,903. The City has been able to continue to fully fund all the

replacement funds and increase the Emergency Preparedness Fund by $ 3,000,000.

DEBT ADMINISTRATION

Debt, considered a liability of governmental activities, decreased in FY 2002/ 03 by $ 22,951. Per capita debt outstanding decreased

from $ 1,245 to $ 1,077 per capita compared to the prior fiscal year. Detailed information regarding long- term debt activity can be

found in Notes to the Basic Financials.

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 12

Balance Incurred or Satisfied or Balance

June 30, 2002 Issued Matured June 30, 2003

Governmental Activities

Certificates of Participation $ 5 95,000 $ - $ 2 90,000 $ 3 05,000

Tax Allocation Bonds - - - -

CIP 2001 Revenue Bonds 3 2,080,000 - 4 45,000 3 1,635,000

Capital Improvement Programs - - - -

2002 General Obligation Payable 5 ,999,976 1 98,106 - 6 ,198,082

Capital Leases 1 78,104 3 45,100 1 50,726 3 72,478

Accumulated Compensated Absences 3 61,423 1 ,055,604 7 36,035 6 80,992

Total Governmental Activities $ 39,214,503 $ 1,598,810 $ 1,621,761 $ 39,191,552

Business- Type Activities

Lease Payable 1 96,355 - 4 5,300 1 51,055

Notes Payable 1 ,075,829 - 2 06,297 8 69,532

Note Payable - State Water Resources 3 3,439,743 4 ,273,823 - 3 7,713,566

CCWD Water Entitlement 3 70,901 - 8 4,785 2 86,116

Water and Wastewater Revenue Bonds 1 2,330,000 - 3 10,000 1 2,020,000

Accumulated Compensated Absences 1 38,970 2 46,257 1 83,036 2 02,191

Total Business- Type Activities $ 47,551,798 $ 4,520,080 $ 829,418 $ 51,242,460

Debt of the business- type activities increased by $ 3,690,662 FY 2002/ 03 as a result of the issuance of the State Water Resources loan

for the new Wastewater Treatment Facility.

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 13

CASH MANAGEMENT

The City invests temporarily idle cash in accordance with the Government Code and a formal investment policy approved by the City

Council. This policy limits investments to certain types of instruments and requires that investments must meet established criteria for

safety, liquidity and yield. As of June 30, 2003, investments ( not including investments with fiscal agent) totaled $ 130.6 million of

which $ 56.4 was invested in the California State Local Agency Investment Fund ( LAIF) and $ 74.2 in other investments managed by

Public Financial Management ( PFM). The portfolio managed by Public Financial Management is in full compliance with California

Government Code Section 53601 and the City’s investment policy.

The City’s investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio.

Accordingly, deposits were either insured by federal depository insurance or collateralized, with all collateral held either by the City,

its agent, or a financial institution’s trust department in the City’s name. All investments held by the government during the year and

at June 30, 2003, are classified in the category of lowest credit risk as defined by the Governmental Accounting Standards Board.

To obtain flexibility in cash management, the City employs a pooled cash system ( Reference Note 3 in the Notes to the Basic

Financial Statements). Under the pooled cash concept, the City invests the cash of all funds with maturities planned to coincide with

cash needs. Idle cash is invested in certain eligible securities as constrained by law and further limited by the City’s Investment

Policy. The goals of the City’s Investment Policy are safety, liquidity and yield.

CAPITAL ASSETS

The capital assets of the City are those assets which are used in the performance of the City’s functions including infrastructure assets.

At June 30, 2003, capital assets net of accumulated depreciation of the governmental activities totaled $ 184,849,115 and capital assets

net of accumulated depreciation of the business- type activities totaled $ 148,205,105. Depreciation on capital assets is recognized in

the Government- Wide financial statements. Detailed information regarding Capital Assets can be found in Notes to the Basic

Financials.

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 14

The City has elected to use the depreciation method as allowed by GASB Statement No. 34 for infrastructure reporting.

Original Accumulated Book

Cost Depreciation Value

Capital Assets - Governmental Assets:

Land $ 28,454,974 $ - $ 2 8,454,974

Land Improvements 749,552 2 01,533 548,019

Buildings 7,485,856 1 ,292,594 6,193,262

Infrastructure 135,696,862 27,240,791 108,456,071

Equipment 1,635,106 9 16,129 718,977

Vehicles 4,348,408 2 ,579,074 1,769,334

Work in Progress – CIP 38,708,478 - 3 8,708,478

Total Governmental Assets $ 217,079,236 $ 32,230,121 $ 184,849,115

Capital Assets - Business- Type Assets:

Land $ 414,352 $ - $ 414,352

Land Improvements 1,766,059 6 81,151 1,084,908

Buildings 17,314,400 3,002,859 14,311,541

Infrastructure 136,611,929 8,202,791 128,409,138

Equipment 3,329,366 1 ,920,892 1,408,474

Work in Progress – CIP & Infrastructure 2,007,505 - 2 ,007,505

Intangible Assets 5 97,532 28,345 569,187

Total Business- Type Assets $ 162,041,143 $ 13,836,038 $ 148,205,105

GENERAL FUND BUDGETARY HIGHLIGHTS

Comparing the FY 2002/ 03 original budget ( or adopted) General Fund expenditures of $ 26,673,536 to the final budget amount of

$ 30,948,039 shows a net increase of $ 4,274,503.

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 15

Beginning Balance + Supplemental Changes = Final Budget

$ 26,673,536 + 4,274,503 = $ 30,948,039

Supplemental General Fund budget changes include the following:

• $ 4,102,000 in General Obligation Bond monies transferred to the Police Station Project.

• $ 275,000 transfer to the Parks Enterprise Fund approved at mid- year budget review.

• ($ 102,497) in various budget adjustments approved at mid- year budget review.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES

The key assumptions in the General Fund revenue forecast for fiscal year 2003/ 04 were:

1. The Property Tax revenue estimate of $ 3,664,727 for fiscal year 2003/ 04 is 20% above the 2002/ 03 budgeted amount.

2. Sales Tax revenues are expected to increase by 28%. This increase is forecasted because of an anticipated rise in local

economic activity and new businesses locating in Brentwood.

3. The 20% increase in Franchise Fees is due to population growth and commercial development.

4. Investment earnings will increase an estimated $ 600,000 due to Brentwood’s continued increase in consumer confidence and

exponential growth with new home construction and the addition of several large chain outlets on the frontier.

5. Approximately 1000 new housing units will be constructed.

6. Business License revenues are estimated to increase for fiscal year 2003/ 04 to $ 300,000, which is 182% above the 2002/ 03

budgeted amount. This projected increase is due to the new business license tax that was passed by the voters in November

2002, new businesses that are expected to come to Brentwood and continued code enforcement.

New items specifically addressed in the 2003/ 04 budget were:

Public Safety - The City Council has put Public Safety as one of its priorities and is committed to make Brentwood one of the safest

cities in California. Safe streets and low crime rates attract growth in both residential and business development. FY 2003/ 04

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 16

includes hiring four ( 4) sworn positions. This will bring sworn staffing levels in the Police Department to 56. Additionally, $ 432,000

was budgeted for Fire Department/ EMT service.

Recreational and Cultural - As the population of Brentwood continues to grow, the City is committed to expanding both the park

and recreational programs and facilities to meet the increased need for the constructive use of leisure time. For seniors, the City has

assisted the formation of a non- profit Senior Advisory Board to assist and advise the City in the expansion of senior programs. The

City of Brentwood Youth Commission is moving forward with a number of projects to better inform and serve the needs of the youth

in our community. Continued support for the PAL Program, Dimes- A- Ride, Woman’s Club and the Library were included in the

budget. The City is also committed to the expansion of family activities, which include an expansion of the free Summer Concerts

Under the Stars, held in the City Park on Friday nights, and a joint project with the Brentwood Police Activities League to sponsor two

after school enrichment programs for elementary and middle school students.

Levels of Service - In light of budget pressures stemming from the general economy and looming state takeaways, the City of

Brentwood strived to maintain or surpass its current levels of service. This goal was aided by increasing salaries which will allow the

City to hire and keep quality staff.

Community Development - A comprehensive review and update of the complete Zoning Ordinance is planned to bring it into

conformance with contemporary zoning standards, make it user friendly and to clear up any inconsistencies. A Downtown, Brentwood

Boulevard and Empire Triangle Specific Plan, as directed by the General Plan, was developed to maintain and enhance the vitality of

these areas by establishing comprehensive policies to guide long term use, urban design, parking, development standards and

economic development.

Business License - The City of Brentwood has developed additional revenue from business license tax by citizens passing Measure D,

which increased our tax by moving to gross receipts. This revenue is significant because it is not considered discretionary and

therefore is not subject to state take away.

Retail Expansion - Sand Creek Crossing, a 260,000 square foot community center, is complete and will offer the far- east county

population shopping opportunities that have not been present in the region. Lone Tree Plaza, a 454,000 square foot community center,

Lone Tree Center, an 180,000 square foot community center and three neighborhood centers totaling 220,000 square feet are in

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 17

various stages of construction will be complete in late 2003. These six projects, totaling 1,114,000 square feet, will generate

approximately $ 3,000,000 in sales tax when complete.

Economic Development/ Redevelopment - The budget focuses on the following items:

• Public infrastructure and improvement within the Redevelopment Project Areas

• Support of reinvestment projects in Downtown

• Downtown Parking Study

• Development of multi- level retail/ restaurant/ parking facility at Oak and Walnut

• Implementing the Manufacturing Attraction Program

• Redevelopment Agency housing programs

Facility Development - The current City Hall functions are overcrowded. Two projects are underway to alleviate this problem in the

short- term. The first project is the expansion and renovation of the City Hall facility at 120 Oak Street to accommodate the

Engineering department. The second project is the renovation of the existing City Hall to accommodate the remaining City functions.

In order to provide a permanent City Hall to house all appropriate City functions in an effective and productive environment, the City

is designing and constructing a new City Hall in the vicinity of the existing City Hall.

Emergency Preparedness Fund - FY 2002/ 03 represents the second year the City will have the Emergency Preparedness fund

totaling $ 5,000,000. Having this fund underscores City Council’s continued commitment to be prepared for a critical incident or

catastrophic event in the future.

Vehicle License Fees - This approximately $ 1.9 million revenue source is not safe from State takeaway due to continuing budget

uncertainty on the State level. We are concerned that the State may act further to lower the amount of the fee that local governments

receive. The State makes up the balance of the vehicle license fee from its general fund, thereby trading one of our rather constant

revenue sources for one subject to the impulse of the State legislature. This revenue has been reduced in anticipation of State budget

cuts.

City of Brentwood

Management’s Discussion and Analysis

Fiscal Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR Page 18

CONTACTING THE CITY’S FINANCIAL MANAGMENT

This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the

City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report, separate

reports of the City’s component units or need any additional financial information, contact the Office of Finance at 708 Third Street,

Brentwood, California 94513, phone ( 925) 516- 5415 or e- mail dept- finance@ ci. brentwood. ca. us.

Governmental Business- Type

Activities Activities

ASSETS

Current Assets:

Cash and Investments $ 7 3,706,565 $ 3 9,345,632 $ 113,052,197

Restricted Cash and Investments 2 0,304,912 1 ,064,284 2 1,369,196

Receivables 2 ,405,010 1 ,861,987 4 ,266,997

Prepaids 4 61,259 1 1,289 4 72,548

Land Held for Resale 4 75,811 - 4 75,811

Non- Current Assets:

Deferred Charges - 6 00,240 6 00,240

Long- Term Loans Receivable 50,000 4 92,159 5 42,159

Capital Assets, Net of Accumulated Depreciation 1 46,140,637 1 46,197,600 292,338,237

Work in Progress 3 8,708,478 2 ,007,505 4 0,715,983

Total Assets 2 82,252,672 1 91,580,696 473,833,368

LIABILITIES AND NET ASSETS

Current Liabilities:

Accounts Payable 9 ,870,574 1 ,563,639 1 1,434,213

Other Liabilities 1 27,611 4 5,761 1 73,372

Long- Term Debt Due Within One Year 1 ,570,549 3 ,075,945 4 ,646,494

Deferred Revenue 74,144 6 5,582 1 39,726

Deposits Held 7 ,595,696 1 50,542 7 ,746,238

Compensated Absences Payable 20,429 6 ,066 2 6,495

Non- Current Liabilities Due in More Than One Year:

Bonds Payable 3 7,118,082 1 1,690,000 4 8,808,082

Notes Payable - 3 6,284,467 3 6,284,467

Capital Leases Payable 2 75,807 1 03,318 3 79,125

Compensated Absences Payable 2 06,685 8 2,664 2 89,349

Total Liabilities 5 6,859,577 5 3,067,984 109,927,561

Net Assets:

Investment in Capital Assets, Net of Related Debt 1 44,428,668 9 8,061,398 242,490,066

Restricted for:

Debt Service 3 ,447,008 - 3 ,447,008

Specific Projects and Programs 3 9,716,502 3 4,664,252 7 4,380,754

Unrestricted 3 7,800,917 5 ,787,062 4 3,587,979

Total Net Assets $ 2 25,393,095 $ 1 38,512,712 $ 363,905,807

Total

PRIMARY GOVERNMENT

City of Brentwood

Statement of Net Assets

June 30, 2003

City of Brentwood - 2002/ 03 CAFR See Accompanying Notes to the Basic Financial Statements Page 19

Functions/ Programs Expenses Charges for Service

Operating Grants

and Contributions

Capital Grants and

Contributions Total

Governmental

Activities

Business- Type

Activities Total

Primary Government:

Government Activities

General Government $ 18,329,899 $ 2 ,938,053 $ 4 3,913 $ 1 ,622 $ 2 ,983,588 $ ( 15,346,311) $ - $ ( 15,346,311)

Public Safety 6 ,750,947 3 96,267 1 49,751 1 30,953 6 76,971 ( 6,073,976) - ( 6,073,976)

Community Development 2 ,886,102 6 ,071,912 - - 6 ,071,912 3,185,810 - 3 ,185,810

Engineering 1 ,618,876 4 ,451,413 - - 4 ,451,413 2,832,537 - 2 ,832,537

Public Works 2 ,942,088 4 ,861 - - 4 ,861 ( 2,937,227) - ( 2,937,227)

Parks 8 06,336 - 3 2,906 - 3 2,906 ( 773,430) - ( 773,430)

Community Services 3 14,293 - - - - ( 314,293) - ( 314,293)

Other 1 ,158,986 - - - - ( 1,158,986) - ( 1,158,986)

Interest on Long- Term Debt 2 ,018,870 - - - - ( 2,018,870) - ( 2,018,870)

Total Governmental Activities 36,826,397 1 3,862,506 2 26,570 1 32,575 1 4,221,651 ( 22,604,746) - ( 22,604,746)

Business- Type Activities

Wastewater 3 ,405,073 3 ,618,959 - - 3 ,618,959 - 2 13,886 2 13,886

Solid Waste 3 ,060,101 4 ,243,126 - - 4 ,243,126 - 1 ,183,025 1 ,183,025

Water 6 ,779,073 6 ,528,611 - - 6 ,528,611 - ( 250,462) ( 250,462)

Parks and Recreation 2 ,891,809 6 68,503 - - 6 68,503 - ( 2,223,306) ( 2,223,306)

City Rentals 4 29,833 6 60,367 - - 6 60,367 - 2 30,534 2 30,534

Total Business- Type Activities 16,565,889 1 5,719,566 - - 1 5,719,566 - ( 846,323) ( 846,323)

Total Primary Government $ 53,392,286 $ 2 9,582,072 $ 2 26,570 $ 1 32,575 $ 2 9,941,217 ( 22,604,746) ( 846,323) ( 23,451,069)

General Revenues:

Taxes:

Property Taxes 6,933,900 6 80,375 7 ,614,275

Sales Tax and Gas Taxes 2,998,922 - 2 ,998,922

Business Licenses, Franchise Fees, Rental 668,657 5 ,375 6 74,032

Public Services Taxes 589,266 - 5 89,266

Measure C, TOT 448,498 - 4 48,498

Motor Vehicle Taxes 1,702,280 - 1 ,702,280

Investment Earnings 2,777,909 1 ,710,954 4 ,488,863

Contributions - Impact Fees and Credits 21,965,625 2 0,286,877 4 2,252,502

Capital Asset Contributions 9,572,626 2 0,733,980 3 0,306,606

Capital Assets Contributed To/ From Other Funds 2,885,000 ( 2,885,000) -

Miscellaneous 6,470,739 - 6 ,470,739

Transfers 7,349,207 ( 7,349,207) -

Total General Revenues and Transfers 64,362,629 3 3,183,354 9 7,545,983

Change in Net Assets 41,757,883 3 2,337,031 7 4,094,914

Net Assets - Beginning of Year, Restated 183,635,212 1 06,175,681 2 89,810,893

Net Assets - End of Year $ 225,393,095 $ 1 38,512,712 $ 363,905,807

Primary Government

Program Revenues Net ( Expenses) Revenues and Changes in Net Assets

City of Brentwood

Statement of Activities and Changes in Net Assets

For Year Ended June 30, 2003

City of Brentwood - 2002/ 03 CAFR See Accompanying Notes to the Basic Financial Statements Page 20

Other Total

General Capital Governmental Governmental

Fund Thoroughfares Projects Funds Funds

ASSETS

Current Assets:

Cash and Investments $ 25,658,442 $ - $ 19,329,396 $ 19,892,652 $ 64,880,490

Restricted Cash and Investments - - - 20,304,912 20,304,912

Receivables 1,421,009 1,127,733 25,217 566,919 3,140,878

Prepaids 454,599 - 3,702 725 459,026

Due from Other Funds 307,386 - - 2,105,918 2,413,304

Land Held for Resale - - - 475,811 475,811

Non- Current Assets:

Long- Term Loans Receivable 50,000 - - - 50,000

Total Assets $ 27,891,436 $ 1,127,733 $ 19,358,315 $ 43,346,937 $ 91,724,421

LIABILITIES AND FUND BALANCES

Current Liabilities:

Accounts Payable and Accrued Liabilities $ 924,138 $ 35,727 $ 6,118,594 $ 2,738,143 $ 9,816,602

Due to Other Funds - 2,105,918 - 307,386 2,413,304

Other Liabilities - - 127,611 - 127,611

Deferred Revenue 73,803 1,124,941 - 111,716 1,310,460

Deposits Held 7,574,696 - - 21,000 7,595,696

Compensated Absences Payable 16,307 - 2,533 550 19,390

Total Liabilities 8,588,944 3,266,586 6,248,738 3,178,795 21,283,063

Fund Balances:

Reserved for:

Prepaids 454,599 - 3,702 725 459,026

Land Held for Resale - - - 475,811 475,811

Debt Service - - - 3,447,008 3,447,008

Specific Projects and Programs - - 13,105,875 25,675,790 38,781,665

Unreserved, Reported in:

General Fund 18,847,893 - - - 18,847,893

Special Projects - - - 118,862 118,862

Capital Projects - ( 2,138,853) - 10,449,946 8,311,093

Total Fund Balances 19,302,492 ( 2,138,853) 13,109,577 40,168,142 70,441,358

Total Liabilities and Fund Balances $ 27,891,436 $ 1,127,733 $ 19,358,315 $ 43,346,937 $ 91,724,421

City of Brentwood

Balance Sheet

June 30, 2003

Governmental Funds

City of Brentwood - 2002/ 03 CAFR See Accompanying Notes to the Basic Financial Statements Page 21

Total Fund Balances - Total Governmental Funds $ 70,441,358

Amounts reported for Governmental Activities in the Statement of Net Assets are different because:

Capital assets used in governmental activities are not current financial resources and therefore are not reported in the

Governmental Funds Balance Sheets. 182,838,525

Internal Service Funds are used by management to charge costs of certain activities, such as data processing and

fleet management, 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. 10,718,202

The long- term assets are not available to pay for current- period expenditures and, therefore are deferred in the funds. 431,814

Long- term liabilities are not due and payable in the current period and therefore they are not reported in the

Governmental Funds Balance Sheet. ( 39,036,804)

Net Assets of Government Activities $ 225,393,095

City of Brentwood

Reconciliation of the Governmental Funds Balance Sheet

to the Government- Wide Statement of Net Assets

June 30, 2003

City of Brentwood - 2002/ 03 CAFR See Accompanying Notes to the Basic Financial Statements Page 22

Other Total

General Capital Governmental Governmental

Fund Thoroughfares Projects Funds Funds

REVENUES

Taxes $ 6,407,430 $ - $ - $ 4,232,990 $ 10,640,420

Licenses 124,823 - - - 124,823

Permits and Fines 9,354,198 - - - 9,354,198

Uses of Money and Property 1 ,289,592 13,629 - 1,258,524 2,561,745

Intergovernmental 1,816,406 43,913 - 536,132 2 ,396,451

Franchises 428,731 - - - 428,731

Charges for Other Services 531,791 - - - 531,791

Charges to Other Funds 3,922,881 - - - 3,922,881

Fees and Other Revenues 778,571 11,739,850 3,836,042 9 ,988,747 26,343,210

Total Revenues 2 4,654,423 11,797,392 3,836,042 16,016,393 56,304,250

EXPENDITURES

Current:

General Government 3,041,315 - 2,357,966 9 ,427,428 14,826,709

Public Safety 7,419,111 - - 117,320 7,536,431

Community Development 2,631,597 - - 1,012,776 3,644,373

Engineering 1,767,688 - - - 1,767,688

Pub