City of Brentwood

708 Third Street

Brentwood, California

94513

Prepared By

Department of Finance

City of Brentwood – 2000/ 01 CAFR i

City of Brentwood

COMPREHENSIVE ANNUAL FINANCIAL REPORT

TABLE OF CONTENTS

Introductory Section

Reference Page

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

List of Principal Officials...................................................................................................................... ........................................................ ............... v

City Organizational Chart ............................................................................................................................... ............................................. .............. vi

City Community Services Location Map ............................................................................................................................... ...................... ............. vii

City of Brentwood Parks Map ............................................................................................................................... ....................................... ............ viii

Letter of Transmittal ............................................................................................................................... ..................................................... .............. ix

Financial Section

INDEPENDENT AUDITORS’ REPORT ............................................................................................................................... ................ ................ 1

GENERAL PURPOSE FINANCIAL STATEMENTS

Combined Balance Sheet – All Fund Types and Account Groups ............................................................................................ .......................... Exhibit A ........... 3

Combined Statement of Revenues, Expenditures and Changes in Fund Balance – All Governmental Fund Types ............................................. Exhibit B ........... 4

Combined Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Certain Governmental Fund Types.... Exhibit C ........... 5

Combined Statement of Revenues, Expenses and Changes in Retained Earnings – All Proprietary Fund Types................................................. Exhibit D ........... 7

Combined Statement of Cash Flows – All Proprietary Fund Types ...................................................................................................................... Exhibit E ........... 8

Notes to Financial Statement

Note # 1 – Summary of Significant Accounting Policies ............................................................................................................................... ........... ................ 9

Note # 2 – Interfund Receivables and Payables / Stewardship, Compliance and Accountability ............................................................................. .............. 17

Note # 3 – Cash and Investments ............................................................................................................................... ............................................... .............. 20

Note # 4 – Fixed Assets ............................................................................................................................... ............................................................. .............. 26

Note # 5 – Changes in Long- Term Debt ............................................................................................................................... .................................... .............. 28

Note # 6 – Conduit Debt Obligations ............................................................................................................................... ........................................ .............. 37

City of Brentwood – 2000/ 01 CAFR ii

City of Brentwood

COMPREHENSIVE ANNUAL FINANCIAL REPORT

TABLE OF CONTENTS ( CONTINUED)

Reference Page

Note # 7 – Defined Benefit Pension Plan ............................................................................................................................... .................................. .............. 39

Note # 8 – Risk Management ............................................................................................................................... .................................................... .............. 42

Note # 9 – Segment Information for Enterprise Funds ............................................................................................................................... . ............. 43

Note # 10 – Post- Retirement Health Care Benefits ............................................................................................................................... .................................. 44

Note # 11 – RDA North Brentwood Tax Sharing Agreements..................................................................................................................... ............................ 44

Note # 12 – Contingencies.................................................................................................................. ...................................................................................... 44

Note # 13 – New Accounting Pronouncements ............................................................................................................................... ........................................ 46

COMBINING FUND STATEMENTS AND SCHEDULES

General Fund

Balance Sheet ............................................................................................................................... ...................................................................... Exhibit F ......... 49

Statement of Revenues, Expenditures and Changes in Fund Balance................................................................................................................. Exhibit F- 1 ......... 50

Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ................................................................................ Exhibit F- 2 ......... 51

Special Revenue Funds

Combining Balance Sheet.......................................................................................................................... ........................................................... Exhibit G ......... 53

Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................................................................................... Exhibit G- 1 ......... 55

Combining Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual ( Certain Funds) ................................. Exhibit G- 2 ......... 57

Debt Service Funds

Combining Balance Sheet.......................................................................................................................... ........................................................... Exhibit H ......... 63

Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................................................................................... Exhibit H- 1 ......... 64

Combining Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual .......................................................... Exhibit H- 2 ......... 65

Capital Project Funds

Combining Balance Sheet.......................................................................................................................... ............................................................. Exhibit I ......... 67

Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................................................................................. Exhibit I- 1 ......... 68

Combining Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual ( Certain Funds) ................................... Exhibit I- 2 ......... 69

City of Brentwood – 2000/ 01 CAFR iii

City of Brentwood

COMPREHENSIVE ANNUAL FINANCIAL REPORT

TABLE OF CONTENTS ( CONTINUED)

Reference Page

Enterprise Funds

Combining Balance Sheet ............................................................................................................................... ..................................................... Exhibit J ......... 71

Combining Statement of Revenues, Expenses and Changes in Retained Earnings........................................................................................... Exhibit J- 1 ......... 72

Combining Statement of Cash Flows ............................................................................................................................... .................. Exhibit J- 2......... 73

Internal Service Funds

Combining Balance Sheet ............................................................................................................................... ................................................... Exhibit K ......... 75

Combining Statement of Revenues, Expenses and Changes in Retained Earnings.......................................................................................... Exhibit K- 1 ......... 76

Combining Statement of Cash Flows ............................................................................................................................... ............................... Exhibit K- 2 ......... 77

Agency Funds

Combining Balance Sheet ............................................................................................................................... .................................................... Exhibit L ......... 79

Statement of Changes in Assets and Liabilities.................................................................................................................... ............... Exhibit L- 1......... 80

General Fixed Assets Group

Schedules of General Fixed Assets ............................................................................................................................... ..................................... Exhibit M ......... 81

Schedule of General Fixed Assets by Function and Activity .......................................................................................................................... Exhibit M- 1 ......... 82

Schedule of Changes in General Fixed Assets by Function and Activity........................................................................................................ Exhibit M- 2......... 83

General Long- Term Debt Account Group

Schedule of General Long- Term Debt ............................................................................................................................... ................................ Exhibit N ......... 85

Schedule of Bonds Payable ............................................................................................................................... ............................................... Exhibit N- 1 ......... 86

City of Brentwood – 2000/ 01 CAFR iv

City of Brentwood

COMPREHENSIVE ANNUAL FINANCIAL REPORT

TABLE OF CONTENTS ( CONTINUED)

Reference Page

Statistical Section ( Unaudited)

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

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

General Government 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 Government 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 – 2000/ 01 CAFR v

LIST OF PRINCIPAL OFFICIALS

City Officials

Michael A. McPoland, Sr............................................................................................................................. ...................................... Mayor

Pete Petrovich ............................................................................................................................... ............................................ Vice- Mayor

Annette Beckstrand..................................................................................................................... ...................................... Council Member

Wade Gomes.......................................................................................................................... ........................................... Council Member

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

Administrative Staff

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

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

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

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

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

Jon Carlson........................................................................................................................ ....................... Acting Director of Public Works

Larry Shaw........................................................................................................................... ..................................................... Police Chief

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

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

Karen Diaz ............................................................................................................................... .................................................... City Clerk

City of Brentwood – 2000/ 01 CAFR vi

City of Brentwood

COMPREHENSIVE ANNUAL FINANCIAL REPORT

CITY ORGANIZATIONAL CHART

City Attorney

Traffic Safety

B. A. C. U. P. Volunteers

Chaplin

Police Explorers

Police

Streets

Water

Wastewater

Solid Waste

Public Works

Finance

Purchasing

Utility Billing

Information Systems

Redevelopment/ Development

Finance

Development Engineering

Traffic

Construction Inspection

Capital Improvement Program

NPDES

Engineering

Building

Planning

Community Dev.

City Wide Park District

Recreation Enterprise

Park Planning

Landscape

Lighting & Landscape Districts

Village Drive Resource Center

Parks & Recreation

City Clerk

Redevelopment

Economic Development

Human Resources

Facilities Management

Administration

City Manager Boards & Commissions

City Council

Citizens

City of Brentwood – 2000/ 01 CAFR ix

September 30, 2001

The Honorable Mayor and City Council Members

City of Brentwood

Brentwood, California 94513

Dear Mayor McPoland and Members of the City Council:

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

30, 2001. This report was prepared in accordance with auditing standards generally accepted in the United States of America as established by the

Governmental Accounting Standards Board ( GASB).

Background

The City of Brentwood is located halfway between the cities of San Francisco and Sacramento at the eastern end 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, 2001, the City has a

current population of approximately 26,000 and encompasses approximately 13.73 square miles. Brentwood was incorporated in 1948 as a

general law city under the laws of the State of California.

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

Public Works – 161 Sycamore Avenue, Brentwood, California 94513- 1396 Phone: ( 925) 516- 5498 Fax: ( 925) 516- 5497

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

City of Brentwood – 2000/ 01 CAFR x

This report is presented in three sections:

Introductory: The Introductory Section includes this transmittal letter, the City’s organizational chart, maps, table of contents, and a list

of the principal public officials and administrative personnel.

Financial: The Financial Section includes the independent auditor’s report, the general purpose financial statements and related notes

thereto, and the combining and individual fund and account group financial statements and schedules.

Statistical: The Statistical Section includes selected financial and demographic information, generally presented on a multi- year basis.

The Government Finance Officers Association ( GFOA) offers a recognition program for public entities to determine whether the City conforms to

the highest level of financial reporting standards. If a city qualifies, a Certificate of Achievement is awarded for a period of one year. The City

believes this report conforms to Certificate of Achievement program requirements, and the City is submitting it to the GFOA to determine its

eligibility. It is our goal to be awarded this Certificate because it demonstrates that the City conforms to a high level of financial reporting

standards, which may improve the City’s future bond rating with the debt investment community.

Reporting Entity

This report reflects reporting as a single entity for all operations directly associated and controlled by the City. 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. The Brentwood Redevelopment Agency is organized under the State of California Community

Redevelopment Law. The Brentwood Joint Powers Financing Authority is a joint powers authority between the City and the Authority. 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 governments 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.

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

maintaining the integrity of 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, 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.

City of Brentwood – 2000/ 01 CAFR xi

Economic Condition and Outlook

Until recently, Brentwood was a small rural agricultural community. The need for housing in the Bay Area in the early 1990’ s prompted

Brentwood’s growth at a rate of between 10% to 15% 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 an unprecedented 1,483 building permits for single- family homes during the fiscal year ending June 30, 2001. To keep up with

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

year.

Fiscal Year 2000/ 01 saw positive economic news for the City of Brentwood with growth in population, residential construction, sales and median

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

Number of Units vs. Value of New Construction

0

200

400

600

800

1,000

1,200

1,400

1,600

92 93 94 95 96 97 98 99 00 01

Fiscal Year Ending

Units

-

50

100

150

200

250

300

350

Value ( in Millions)

Number of Units Valuation

155

354 390

563 501

864

685

979 888

1483

City of Brentwood – 2000/ 01 CAFR xii

􀂾 Population increased by 9.68%

􀂾 Single family home construction increased by 68.14%

􀂾 New Home sales - 744

􀂾 Existing home sales - 460

􀂾 Median price for existing homes is $ 277,000, up 20%

􀂾 Median price for new homes is $ 325,575, up 19%

􀂾 260,000 square feet of retail shopping center space under

construction

These pictures portray one of the latest additions to the City of

Brentwood’s planned communities. This Subdivision includes a wide

range of family oriented activities including an 18- hole championship golf

course, future clubhouse with restaurant, a park area for play and a large

park including multi- sports facilities at the southwest corner of the

community. ( Pictured left).

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 generally accepted accounting principles. 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

City of Brentwood – 2000/ 01 CAFR xiii

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 first “ Unqualified” Audit this past year. This was due to the Asset Valuation Study that accurately identified all

the City’s assets, thus allowing the auditors to identify those assets. This is the first step toward the City’s requirement of maintaining an up to

date inventory program. The Governmental Accounting Standards Board ( GASB) adopted a number of significant changes now commonly called

GASB 34 or, the “ new accounting model”. Assets must now be valued and capitalized in the new reporting model. Implementation for

Brentwood will begin July 1, 2001.

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.

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, JPA Capital Projects, and the

Capital Improvement Funding 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

City of Brentwood – 2000/ 01 CAFR xiv

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, 2001, and the results of each

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

LOCAL ECONOMY

Retail

Economic Development activity continues to accelerate in the City of Brentwood. National

retailers have recognized a critical mass of 155,000 people in our trade area. Brentwood will

support approximately 1.2 M square feet of new retail space in the next eighteen months. This

will provide convenient goods and services for our residents, reduce regional traffic load and

retain sales tax revenues in our area. Brentwood has several excellent sites properly zoned

with available infrastructure in the epicenter of the trade area and welcomes all interested

parties. The Fiscal Impact of National Retailers located in Brentwood is at least $ 2.50 per

square foot in annual sales tax revenue.

Brentwood’s Central Business District is thriving with a zero vacancy rate. Several new

businesses that have opened in the past two years focus on food, wine, and specialty shopping,

greatly enhancing the Downtown ambience. The newly restored marquee on the Delta Cinema

was funded by the City’s Redevelopment Agency as a public art project and serves as a

historic Downtown landmark.

In an effort to support the City’s Family Aquatic Center and Skate Park, the Economic Development Department embarked on a request for

proposal and qualifications to develop the adjacent corner site with specialty and themed retail shops and restaurants with a ground lease to

generate sufficient funds to offset the operating costs of the park.

City of Brentwood – 2000/ 01 CAFR xv

As the City passed the 25,000- population threshold, major commercial developers as well as nationally recognized retailers took note. The City’s

demographics are attractive to retailers such as Home Depot and Target who are preparing to open stores on Lone Tree Way in late 2002. More

major retailers are proceeding through the entitlement process, which promises to strengthen the already bright economic future for the City.

Commercial / Industrial

Brentwood’s Economic Development Department led the $ 4M adaptive re- use effort to renovate a 34,500 square foot location vacated by Lucky’s

grocery store to accommodate a local Los Medanos College Campus and a Business and Technology Incubator that will open October 1, 2001.

The LMC campus, in conjunction with other educational institutions, will provide our residents a full range of higher educational opportunities

and our local businesses employee training programs. The Business and Technology Center provides high quality office space with a state of the

art voice over Internet protocol network and 3- megabit bandwidth at an affordable cost and a monthly rental term. The Incubator provides start- up

businesses with a place to produce, mature, and increase our basic economy.

Future Outlook – Commercial / Industrial

Brentwood’s vacancy rate for Office, Flex- Tech and Light Industrial space remains below 2%

reflecting a prospering business community. We have approximately 350,000 square feet of approved

projects represented in all three categories. Two of these projects are in construction and two more

will break ground next spring. Growth in the Office, Flex- Tech and Light Industrial categories has a

“ direct” fiscal impact because it creates jobs in the basic economy, bringing new money into the

community through trade and commerce outside our local economy. Basic economy business growth

also has a significant “ indirect” fiscal impact because new money expenditures in the local economy

does not stop with the “ direct” impact. Money that employees and businesses spend in the community

has a multiplier effect by introducing the new money into the local economy. A recent analysis

prepared by McGill Martin Self, Inc. for a proposed project in Brentwood found that every dollar

spent in Brentwood by employees and businesses resulted in $ 1.638 dollars traded in the local

economy.

The Economic Development and Engineering Departments teamed together to manage the

development of the 131.7- acre property the City owns on Sunset Road. The Master Plan includes a

49.2 ac. tertiary Wastewater Treatment Plant, 2.7 ac. Solid Waste Plant, 13.3 ac. Corporation Yard,

37.7 ac. Sports Park and a 28.8 Medium Industrial Park. This multi- use project provides the City with

significant and expandable public works facilities as well as a lighted sports complex. The Medium

Industrial Park provides affordable sites for uses needed by the City but undesirable in most locations.

City of Brentwood – 2000/ 01 CAFR xvi

Commercial development projects continue to thrive and are being built to serve new and existing residents. There are many desirable areas of

interest by commercial developers and builders. Some of these areas include, but are not limited to, the Lone Tree Way and Sand Creek Road

Corridors, Balfour Road, Highway 4, Harvest Park Area, and the Northwest Quadrant adjacent to the Highway 4 Bypass project.

DEVELOPMENT / GROWTH INITIATIVES

Completed Projects:

Brentwood Family Aquatic Complex –

Opened in September, 2000, with 30,000+

participants using the facility in the first year of

operation. The aquatic complex was

recognized by the California Park and

Recreation Society with an Award of

Excellence for Facility Design and is

considered the jewel of the City of Brentwood

Park and Recreation system.

The complex provides recreational swimming, swim lessons, recreational/ competitive swim, lap swim and exercise programs. It is also used as

the home site of the Liberty High School water polo and swim teams. In addition, the complex is available for rental for community events and

hosts a variety of local and regional swim meets and water polo matches on a regular basis.

With the high energy demands necessary to operate this complex, the City is moving forward with many energy saving ideas including by- pass

timers for lights, which will reduce the overall wattage output in the parking lot and consideration of a co- generation plant on site that would

provide electricity and heat for the pool.

City of Brentwood – 2000/ 01 CAFR xvii

First Street Parking Lot - Twenty additional parking spaces were a nice addition to the

downtown area. ( Pictured here).

Brentwood Boulevard Reconstruction - Added an additional travel lane, curb, gutter,

sidewalk, and drainage modifications, which gave a lift to the workability and appeal of this

commercial location between Spruce Street and Central Boulevard/ Sycamore Street.

Marsh Creek Trail Undercrossing - Paving of this trail section made a much- needed

connection under a busy arterial boulevard. This trail is part of the regional trail system and

can now be used all year round for biking, walking, or skating.

Annual Pavement Management Program ( PMP) - As part of the City’s preventative

maintenance program, the streets are surveyed to determine where reconstruction,

overlaying, surface sealing, and crack sealing is needed. Various streets are repaired each

year.

Oak and Third Street Improvements - This intersection, which is located directly adjacent to City Hall, a high school and a bustling downtown,

experiences a great deal of traffic volume. As part of a safety measure this intersection was converted to a four way stop that also includes ADA

( Americans with Disabilities Act) standard curb ramps, planter areas, crosswalks, signage and striping. This project significantly helped to

improve traffic control in this area.

Redevelopment Agency Projects: The Agency approved expenditures of housing set- aside funds, coupled with CDBG funds, for the Utility

Connection Assistance Program. This program provides zero- interest loans to connect water and wastewater lines for low and very low- income

homeowners in nine target areas. Other infrastructure improvements authorized by the Agency included water and wastewater line improvements

for health and safety purposes in Lone Tree Way and Brentwood Boulevard area and also in the Davis Camp area where failure of a substandard

private septic system servicing 17 very- low and low- income households resulted in an emergency condition. The approval of matching funds to

supplement CDBG funds provided thirty new and replacement street lights in the Village Drive neighborhood to eliminate conditions that

jeopardized the health and safety of the residents.

The Agency authorized the purchase of two lots for the construction of 32 additional parking spaces in downtown area to facilitate expansion of

existing businesses and attraction of new businesses. The Agency also approved a grant for the restoration and rehabilitation of certain historical

signs within the downtown area.

The purchase of a one- acre lot at 159 Sycamore Avenue to remove an existing blighted condition is now held for resale and development of a for-sale

town home development to be made available to and occupied by residents and workers of Brentwood.

City of Brentwood – 2000/ 01 CAFR xviii

Lastly, the Agency commenced a plan amendment process to add territory to the North Brentwood Redevelopment Area, commonly referred to

as the Sunset Industrial Complex, to facilitate the reuse of existing light and heavy industrial uses along Brentwood Boulevard in an effort to

eliminate conditions of blight.

Current Projects and Projects Under Construction:

Balfour Road Expansion - One of the projects that resulted from Brentwood’s growth rate is the Balfour Road Expansion. This two- lane country

road was expanded to four lanes from the Highway 4 Bypass to the westerly City limits and completed in July 2001. Completion of this project

will be the first four lane east- west road from one end of the City to the other.

Wastewater Treatment Plant 5MGD Expansion ( pictured right) - This project will

expand the City’s wastewater treatment capabilities from 2 million gallons per day

( mgd) to 5 mgd. This expansion will completely replace the City’s existing plant of

which portions date back to the early 1940’ s with a state of the art facility. This new

facility is currently scheduled for operations beginning July of 2002.

Well # 14 - This project will expand the City’s water production capabilities by

approximately 1.3 million gallons per day. This will provide additional supplies for a

growing City as well as provide reliability for the existing customers. This project is

anticipated to be complete by late 2001.

Zone II Reservoir - This addition of a 2 million gallon reservoir will provide additional

reliability in the City’s water system and ensure that adequate supplies are available for

peak demand times as well as emergencies.

Elevated Tank Repainting - The elevated tank is a Brentwood landmark and

represents a feel for times past. The tank is no longer utilized for water storage but

provides for the housing of wireless communication systems. This landmark can be seen from a great distance and is need of an updated look and

a fresh coat of paint. This project is slated to be complete November 2001.

Fire Station – This is a joint project between the City and the development community. The actual construction is being facilitated by a developer

while administration and coordination activities are provided by the City. This project will continue to ensure that fire safety is provided to the

residents of Brentwood. The new facility is being constructed on Balfour Road just west of the newly constructed Highway 4 Bypass.

City of Brentwood – 2000/ 01 CAFR xix

Highway 4 Bypass – This project is being constructed by the County with funding contributions made from Brentwood and surrounding

communities. The Bypass will connect Highway 4 in the City of Antioch to Vasco Road south of the City of Brentwood. This will alleviate

traffic on the older Delta Highway 4 that runs through Oakley, Brentwood and Byron and provide commuters with a direct route from Antioch to

the Tri- Delta area.

Current Projects in Design:

Sand Creek Road Central Phase I – ( Map Pictured) This project will

connect to the Highway 4 Bypass project improving east- west circulation

throughout the City. In addition to the new roadway that includes median

curbs, asphalt concrete pavement, street lights, potable and non- potable

waterlines, wastewater lines, fiber optic lines, traffic signal and a box

culvert extension of Sand Creek, it also includes a pedestrian undercrossing

for the trail system.

Brentwood Bikeway Project – The widening of Griffith Lane from

Central Boulevard to Griffith Lane will include intersection improvements.

Brentwood Boulevard Parking Lot – The construction of this lot will

provide additional downtown parking in a busy location.

Sunset Industrial Complex – The Sunset Industrial Complex is the City’s

first major Redevelopment effort intended to relocate heavy industrial uses

from Brentwood Boulevard to a more appropriate location as well as

provide additional light and medium industrial development sites. It

consists of approximately 30 acres of land adjacent to the Wastewater Treatment Plant and the Sunset Sports Complex. The project promotes the

City’s efforts to increase the jobs to housing ratio as well as improve the City’s tax base. Design is underway with construction scheduled to

commence the second quarter of 2002.

Northwest Quadrant Infrastructure – The City’s newly annexed northwest quadrant is currently undergoing intensive planning related to both

commercial as well as residential development. Infrastructure, which is virtually non- existent at this time will be financed and constructed through

an acquisition type assessment district. The district will fund approximately $ 30,000,000 worth of infrastructure consisting of roads, wastewater

lines, water lines, storm drains and parks. Construction is scheduled to break ground in the second quarter of 2002 with completion scheduled

concurrently with the opening of several major commercial projects on Lone Tree Way.

City of Brentwood – 2000/ 01 CAFR xx

Future Projects:

An Economic Development Strategic Action Plan prepared by the Department with assistance from Gruen Gruen & Associates was adopted by

the City Council in July 2001. This Plan, which provided fundamental policy direction to the City’s General Plan Update, provides a strategic

approach to growing the City’s basic economy as well as forecasting regional retail demand and Downtown specialty retail opportunities. The

Department will also update the DDS Marketing Demographic Analysis Report in October 2001. This report has been invaluable in providing

national retailers with information from a source they find credible.

The Economic Development Department has been very active in the Inter- Regional Partnership, a State of California Economic Development

Program initiated by former Assemblyman Torlakson. Brentwood was awarded a $ 100K grant by this program in April 2001. The City has also

prepared a joint application with the City of Antioch to be designated as an Opportunity Zone. The fiscal impact of an Opportunity Zone

designation may include cash grants and special status in state programs such as tax

increment financing for infrastructure and first priority for Infrastructure Bank

financing.

New Police Facility – The new police facility is in the early stages of design. This

project will be part of the November 6, ballot as a General Obligation Bond to fund a

large part of the new facility. ( Site pictured).

Sand Creek Road East - This project is the next phase of Sand Creek Road Central and

will improve the east- west circulation throughout the City. In addition to grading,

paving, signing and striping, major portions of this project will include a railroad

crossing, traffic signal, bridge at Marsh Creek, and storm drain improvements.

Redevelopment Agency - To further its mission in the upcoming 2001- 2002 year, the

Agency will continue the identification of commercial, retail, and industrial

development programs, business assistance programs, public improvements and

facilities programs, and the assistance and participation in the expansion and

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

include continuous efforts on the town home development at 159 Sycamore Avenue,

the processing of the plan amendment, and the sponsorship of the Utility Connection Assistance Program.

In September 2001, the Agency authorized the execution and issuance of Capital Improvement Revenue Bonds in the amount of $ 23,000,000 to

finance certain public improvements and to refund an existing outstanding bond. The Agency will consider the level of participation in the Sand

Creek Business Center and Gregory Ranch developments by reimbursing the developer a portion of the costs for roadway improvements, using

a share of the Capital Improvement Revenue Bonds proceeds. Agency staff is currently considering the assemblage of parcels in the downtown

City of Brentwood – 2000/ 01 CAFR xxi

area along with an Agency- owned parcel for a retail and restaurant center and also will embark on a downtown parking study. As part of an

industrial improvement program, the Agency will also consider the level of participation to assist the voluntary relocation of high industrial

uses from the Brentwood Boulevard area to the new Sunset Industrial Park to act as a catalyst in the removal of existing blighted conditions and to

facilitate re- use and revitalization of the area. To facilitate the success of the Sunset Industrial Park, the Agency has committed to partially fund

the realignment of Sunset Road to intersect with Brentwood Boulevard at Grant Street signal. Finally, Christian Church Homes has requested

the Agency’s assistance in constructing a second 40- unit senior apartment complex.

Parks and Recreation: The two main construction efforts are the development of the community skate park, an 18,500+ square foot park

adjacent to the aquatic complex, and the two joint- use community gymnasiums that are being built with Brentwood Union School District and

Liberty Union High School District. The two largest planning efforts are the Balfour Road Park, with eight- plus acres of open space parkland that

will complete the aquatic complex property, and the expansion of Sunset Park Sports complex from 10 acres to 37 acres.

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 2000- 1 where a total of $ 12,740,000 in bonds was sold with a total of seven participating

Developers. These funds were used to construct and/ or improve existing roadways such as Fairview Avenue or construct neighborhood parks such

as the park located just east of Walnut Boulevard.

The city is currently working with the development community to form another CIFP that will fund the major infrastructure required to facilitate

the expected growth in the northwest portion of the City. This CIFP is commonly being referred to as the Northwest Quadrant CIFP or CIFP

2001- 1. It is anticipated that this CIFP will provide the funds necessary to construct the ultimate improvements on Lone Tree Way, Fairview

Avenue realignment, Heidorn Rand Road and possibly Empire Avenue. It is currently established that these improvements will require between

30 and 40 million dollars to construct.

City of Brentwood – 2000/ 01 CAFR xxii

COMMUNITY PROGRAMS

The City’s Administrative functions are expanding to fill the ever- growing needs of the community. The establishment of an Economic

Development Director, full- time Redevelopment Coordinator, and a Project Manager for Economic Development projects are the result of the City

recognizing the needs in these areas. The goal is to secure and strengthen the long- term economic vitality of the City. The City is pioneering the

areas of paperless agendas for Council meetings for the public, staff and City Council, as well as recording meeting minutes and publishing voting

results over the Internet. The City has also introduced new conveniences for its residents through establishing passport application and processing

services at City Hall. 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 City Attorney position was created in March 2000. The growing demand for legal advice has mirrored the city’s growth and associated

demand for more and better government services. The City Attorney provides legal advice to Council members, boards and commissions and

departments on a daily basis as well as prepares a variety of legal documents, such as contracts, ordinances, resolutions and memoranda. The City

Attorney is part of the City’s management team and is pro- active in a collegial team- oriented atmosphere.

The Planning Division of the Community Development Department facilitated multiple Working Group meetings on the General Plan Update,

completing the EIR and concluding two years of incredible work, which will meet the City Council’s goals for job generation and growth

management, with the adoption of the General Plan Update in November of 2001. The Governor’s Office recognized the work on this project as

“ outstanding.” The Department completed an innovative Growth Management Program, and took the John Muir Medical Center project through

the Planning Commission and City Council processes to approval. They successfully adopted, against all odds, a highly regarded and creative

Agricultural Preservation Program. They completed processing the AIG Baker Shopping Center in record- breaking time. Plans for almost 1,450

single- family dwellings were reviewed and approved and 469,515 square feet of commercial projects were taken through the planning process.

Staff also processed five annexations through LAFCO, adding over 1,000 acres to the City’s boundaries.

Parks and Recreation Division, in addition to traditional recreation programs and activities, the City of Brentwood merged with the Brentwood

Community Center/ senior programs of the Delta Community Services, Incorporated to establish a senior services component. This component

includes rental and administrative services for the Brentwood Community Center. The City of Brentwood also merged the Village Drive Resource

Center into the Recreation Division - a center that provides prevention and social services to a large segment of the population. The City of

Brentwood also established the Park and Recreation Commission, the Youth Commission, and the Arts Commission, which are staffed and

supported by the Parks and Recreation Department. These three commissions provide expertise and recommendations to City Council on a wide

range of park, recreation, youth, and cultural issues. In addition, development of a citywide maintenance contract brought parks, roadway

mediums, and lighting and landscape districts under a single department.

City of Brentwood – 2000/ 01 CAFR xxiii

The Brentwood Police Department has adopted a philosophy of community policing and instituted various programs to support that philosophy.

Some of these programs are D. A. R. E., Neighborhood Watch, National Night Out, Red Ribbon Week, Vacation Watch, bicycle helmet program,

and Tell- A- Cop. To support these programs, they work very hard to keep as many officers " on the street" as possible. Unlike some cities,

Brentwood officers respond to every call for service. The Department has not adopted and has no intention of adopting a " mail in" report process.

Two School Resource Officers are co- funded by grants, the school districts and the Police Department. Two officers are assigned to motorcycles

for traffic enforcement and accident prevention. We have implemented a bicycle patrol program, conduct DUI checkpoints, and join with other

agencies on countywide drunk driving abatement programs.

B. A. C. U. P. ( Brentwood Active Citizens Uniformed Patrol) is a volunteer program made up of private citizens who assist the Police Department in

many tasks. They work everyday at the Department in the office, managing the radar trailer deployment program, removing unsightly signs,

reporting graffiti for removal, assisting on special events at assigned traffic posts, and performing minor repairs at the police building.

The Police Chaplain program is an extension of the B. A. C. U. P. Volunteer program. Chaplains volunteer their time to support officers, their

families, and citizens in times of crisis.

Youth activities focus on giving kids positive alternatives to decision making including the PAL program and the Explorer Scout program. Some

children make mistakes and the Youth and Family Services diversion program holds them accountable, but allows juveniles to avoid having a

criminal record by diverting from the criminal justice system.

During the last few years, much time and planning has been put into creating a Community Service Officer program. Civilians are hired, trained,

and deployed to perform many of the non- confrontational tasks that officers have traditionally been assigned. CSO's take minor crime and

accident reports, issue parking citations, remove abandoned vehicles, transport non- violent prisoners, and manage the evidence storage program.

Neighborhood Clean- Up Days – Currently there are eight neighborhood clean- up days staffed by the Community Development Department,

enhancing civic pride in our neighborhoods.

City of Brentwood – 2000/ 01 CAFR xxiv

General Governmental Revenues

The following schedule presents a summary of general, special revenue, debt service, and capital project fund revenues for the fiscal year ended

June 30, 2001, and the amount and percentage of increases and decreases in relation to prior year revenues.

Percent of

Increase Increase

Percent of ( Decrease) ( Decrease)

Revenues Amount Total from 2000 from 2000

Taxes $ 7,311,476 17.18% $ 1,238,691 20.40%

Licenses 61,554 0.14% 8,864 16.82%

Permits and Fines 8,987,674 21.11% ( 712,184) - 12.12%

Uses of Money and Property 3,011,813 7.08% ( 601,475) - 17.14%

Intergovernmental 2,710,186 6.37% 4,795,444 275.89%

Franchises 264,651 0.62% 38,856 17.21%

Charges for other services 513,923 1.21% 418,684 439.61%

Charges to other funds 2,478,056 5.82% 291,623 13.34%

Fees and other revenues 17,229,787 40.47% 8,962,253 108.40%

Total $ 42,569,120 100.00% $ 14,554,923 51.90%

General Governmental Revenues

$ 42,569,120

Taxes

$ 7,311,476

17.18%

Permits and

Fines

$ 8,987,674

21.11%

Licenses

$ 61,554

0.14%

Fees and other

revenues

$ 17,229,787

40.47%

Charges to other

funds

$ 2,478,056

5.82%

Charges for other

services

$ 513,923

1.21%

Franchises

$ 264,651

.62%

Inter-governmental

$ 2,710,186

6.37%

Uses of Money

and Property

$ 3,011,813

7.08%

The City’s overall revenues in Fiscal Year 2000/ 01 increased by $ 14,554,923 or 51.90% from the previous year.

The increase in taxes is primarily due to the increase in sales tax ( 12.01%), transient occupancy tax ( 30.88%) and an increase in property tax

( 23.69%). Permits and Fines have decreased due to the reallocating developer fees from this category to charges for other services. The majority

of this increase in revenues was from additional building permits collected as a result of the record level of development during the year.

City of Brentwood – 2000/ 01 CAFR xxv

General Governmental Expenditures

For Fiscal Year 2000/ 01, expenditures ( by functional classification) in the general, special revenue, debt service, and capital projects funds, were

as follows:

The City’s overall expenditures in Fiscal Year 2000/ 01 increased by $ 4,973,247 or 13.30% from the previous year. The increase is mainly due to

the building of infrastructure, personnel costs, and an increase in settlement claims paid. The increase in general government is due to increases

in personnel costs and settlement claims paid by the City. The increase in public works is due to the increase of contractual maintenance, utilities

and personnel costs. The increase in public safety is due to the increase of personnel costs.

Percent of

Increase Increase

Percent of ( Decrease) ( Decrease)

Expenditures Amount Total from 2000 from 2000

General Government $ 2,809,563 6.63% $ 1,094,215 63.79%

Public Safety 5,384,223 12.71% 1,133,783 26.67%

Planning & Community Development 7,814,860 18.45% ( 2,128,182) - 21.40%

Public Works 2,019,618 4.77% 909,228 81.88%

Parks and Community Services 169,711 0.40% 16,621 10.86%

Other 463,613 1.09% ( 555,777) - 54.52%

Capital Projects 22,130,025 52.24% 4,891,341 28.23%

Debt Service 1,569,785 3.71% ( 387,982) - 19.82%

Total $ 42,361,398 100.00% $ 4,973,247 13.30%

General Government Expenditures

$ 42,361,398

Debt Service

$ 1,569,785

3.71%

Other

$ 463,613

1.09%

Capital Projects

$ 22,130,025

52.24%

Public Works

$ 2,019,618

Parks and 4.77%

Community

Services

$ 169,711

.40%

Planning &

Community

Development

$ 7,814,860

18.45%

General

Government

$ 2,809,563

6.63%

Public Safety

$ 5,384,223

12.71%

City of Brentwood – 2000/ 01 CAFR xxvi

Debt Administration

At June 30, 2001, the City and its component units, the Brentwood Redevelopment Agency and Brentwood Financing Authority, had three debt

issues outstanding as described in the Notes to the Financial Statements. In addition, the City administers debt for six Special Assessment

Districts whose bonds are not obligations of the City.

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, 2001, investments ( not including investments with fiscal agent) totaled $ 70.5 million of which $ 28.5 was invested in the

California State Local Agency Investment Fund ( LAIF) and $ 41.5 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, 2001, are classified in the category of

lowest credit risk as defined by the Governmental Accounting Standards Board.

Enterprise Operations

The City’s enterprise operations are comprised of Wastewater, Water, Solid Waste, Parks and Recreation, and City Rentals Operations. The

Wastewater Enterprise activity is comprised of three programs: Operations, Capital, and Replacement. Wastewater is awaiting the completion

of their new treatment facility that will increase capacity to 5.5 million gallons/ day ( MGD) from its current permitted level of 2.2 MGD.

Expansion is available to over 10 MGD to allow for the expected growth in the City toward build out. As demonstrated in the financial statements

of this report, the wastewater activity, as a whole, remained in sound financial condition for the year ended June 30, 2001. The combined net

income for the Wastewater Enterprise was $ 4,682,133; most of this increase is due to developer fees.

The Water Enterprise ended the year with a net income of $ 1,909,324. The City has aggressively pursued a meter- reading system for the whole

City. The whole service area is now serviced by handheld radio- read meters, providing staff with a fast, efficient and accurate system.

Wastewater and Water rate studies will be conducted during the summer of 2001 for implementation before the end of the year. These rate

studies, once adopted, along with implementation of a SCADA System, should bring the Enterprise budgets under control and predictable.

City of Brentwood – 2000/ 01 CAFR xxvii

The Solid Waste Enterprise has been a real success story for the City. The City took over the service from a private hauler in 1994 and began

providing service with the existing rate structure. The City, while having to provide significant initial capital investment, has provided a superior

level of service and maintained a positive cash flow without increasing its fees in eight years. Solid Waste continues to focus on improving its

efficiency while achieving state- mandated AB939 recycling goals of 50% in the coming years. The Solid Waste Enterprise ended the year with a

net income of $ 566,663.

Fiscal year 2000/ 01 was the second fiscal year for the department of Parks and Recreation, a department that was established on July 31, 1999.

The California Park and Recreation Society recognized the department with three Awards of Excellence: for development of the Youth

Commission Logo, the design of the Family Aquatic Complex, and the “ Team R & R” marketing program. “ Team R & R” also received a special

Creating Community Award of Distinction for its innovation and community awareness, one of only three awards given throughout the State of

California. This operation ended the year with a net income of $ 6,346,250. Most of this is due to developer fees.

The City Rental Enterprise administers the daily operations of the newly constructed Brentwood Technology Center. At year end the net income

is ($ 30,514), due to the building of the Technology Center. Rental income started August 2001.

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 May 1, 2001, and July 1, 2001, 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:

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

$ 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.

City of Brentwood – 2000/ 01 CAFR xxviii

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 2000/ 01.

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, Brenda Cappello, and Gail Leech. 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 more timely 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.

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

Sincerely,

Pamela Ehler

Director Finance and Information Systems

City of Brentwood – 2000/ 01 CAFR Page 1

INDEPENDENT AUDITORS' REPORT

To the Honorable Mayor and

Members of the City Council

City of Brentwood, California

We have audited the accompanying general purpose financial statements of the City of Brentwood, California, as of and for the year ended June

30, 2001, as listed in the table of contents. These general purpose financial statements are the responsibility of the City's management. Our

responsibility is to express an opinion on these general purpose 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 general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City

of Brentwood, California, as of June 30, 2001, and the results of its operations and the cash flows of its proprietary funds for the year then ended in

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

City of Brentwood – 2000/ 01 CAFR Page 2

In accordance with Government Auditing Standards, we have also issued our report dated September 24, 2001 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.

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

individual fund and account group financial statements and schedules listed in the foregoing table of contents are presented for purpose of

additional analysis and are not a required part of the general purpose 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 general purpose financial statements, and in our opinion, is fairly stated in all material respects when considered in relation to the

general purpose financial statements taken as a whole. The scope of our audit did not include the supplemental statistical section listed in the table

of contents and we do not express an opinion on them.

Vavrinek, Trine, Day & Co., LLP

Pleasanton, California

September 24, 2001

Exhibit A

FIDUCIARY

FUND TYPES ACCOUNT GROUP

Special Debt Capital Internal General Fixed General Long-

General Revenue Service Projects Enterprise Service Agency Assets Term Debt 2001 2000

ASSETS AND OTHER DEBITS

Cash and investments ( Note # 3) $ 1 0,019,633 $ 26,426,677 $ 547,189 $ 8,559,925 $ 17,904,855 $ 1 ,759,366 $ - $ - $ - $ 65,217,645 $ 42,169,568

Restricted cash and investments ( Note # 3) - - 768,470 13,868,882 1,815,788 - 14,314,130 - - 30,767,270 32,054,975

Receivables 595,657 469,323 4,265 37,177 1,451,635 41,388 162,271 - - 2,761,716 2,114,313

Prepaids 222,233 - - - - - - - - 222,233 320,268

Due from other funds ( Note # 2) 33,201 - - - - - - - - 33,201 -

Land held for resale - - - 475,811 - - - - - 475,811 227,698

Advances - 479,434 - - 1,854,760 - - - 2,334,194 2,334,194

Notes receivable - - - - 3,024,744 - - - - 3,024,744 834,132

Deferred charges - - - - 769,674 - - - - 769,674 2,500,000

Fixed assets, net of accumulated depreciation ( Note # 4) - - - - 87,988,925 303,007 - 107,714,754 - 196,006,686 63,860,483

Amount Currently Available for Retirement of Genera

Long Term Debt - - - - - - - - 1,238,750 1,238,750 962,194

Amount to be provided for Retirement of General

Long Term Debt ( Note # 5) - - - - - - - - 11,392,088 11,392,088 12,185,929

Total Assets and Other Debits $ 1 0,870,724 $ 2 7,375,434 $ 1 ,319,924 $ 22,941,795 $ 1 14,810,381 $ 2 ,103,761 $ 1 4,476,401 $ 107,714,754 $ 1 2,630,838 $ 314,244,012 $ 159,563,754

LIABILITIES

Due to other funds ( Note # 2) $ - $ - $ - $ - $ 33,201 $ - $ - $ - $ - $ 33,201 $ 53,729

Accounts Payable 660,748 85,563 74,124 1,345,922 3,422,903 56,910 181,495 - - 5,827,665 2,339,098

Other Liabilities - 124,558 7,050 608,131 386,226 8,184 - - - 1,134,149 -

Current Maturities on Long- Term Debt ( Note # 5) - - - - 448,880 - - - - 448,880 1,036,446

Deferred Revenue 9,318 104,540 - - 59,382 - - - - 173,240 588,001

Deposits held 6,327,652 - - - 5,203 - 23,389 - - 6,356,244 6,260,375

Accumulated compensated absences - - - - - - - - 595,353 595,353 487,837

Due to bondholders - - - - - - 14,271,517 - - 14,271,517 12,694,995

Bonds and Certificates of Participation payable ( Note # 5) - - - - 12,337,023 - - - 9,425,000 21,762,023 12,463,851

Capital leases payable ( Note # 5) - - - - 189,343 254,937 - - 276,291 720,571 13,700,118

Notes payable - - - - 16,645,750 - - - 2,334,194 18,979,944 2,536,179

Total Liabilities 6,997,718 314,661 81,174 1,954,053 33,527,911 320,031 14,476,401 - 12,630,838 70,302,787 52,160,629

FUND EQUITY AND OTHER CREDITS

Investment in General Fixed Assets - - - - - - - 107,714,754 - 107,714,754 8,028,389

Contributed Capital - - - - 49,744,510 - - - - 49,744,510 39,145,835

Retained Earnings - - - - 31,537,960 1,783,730 - - - 33,321,690 19,472,596

Fund Balances

Reserved

Prepaids 222,233 - - - - - - - - 222,233 320,268

Land held for resale - - - 475,811 - - - - - 475,811 227,698

Debt service - - 1,238,750 - - - - - - 1,238,750 905,906

Long- Term Advances - 479,434 - - - - - - - 479,434 -

Unreserved

Designated

Special projects - 25,509,813 - - - - - - - 25,509,813 14,017,705

Capital projects - - - 16,624,807 - - - - - 16,624,807 21,441,054

Undesignated 3,650,773 1,071,526 - 3,887,124 - - - - - 8,609,423 3,843,674

Total Fund Equity and Other Credits 3,873,006 27,060,773 1,238,750 20,987,742 81,282,470 1,783,730 - 107,714,754 - 243,941,225 107,403,125

Total Liabilities and Fund Equity and Other Credits $ 1 0,870,724 $ 27,375,434 $ 1,319,924 $ 22,941,795 $ 114,810,381 $ 2 ,103,761 $ 14,476,401 $ 107,714,754 $ 12,630,838 $ 314,244,012 $ 159,563,754

City of Brentwood

COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS

June 30, 2001

PROPRIETARY FUND TYPE

TOTAL ( Memorandum only)

( With Comparative Totals for June 30, 2000)

GOVERNMENTAL FUND TYPES

City of Brentwood - 2000/ 01 CAFR The accompanying notes are an integral part of these financial statements. Page 3

Exhibit B

General Special Debt Capital

Fund Revenue Service Projects 2001 2000

REVENUES

Taxes $ 4,550,827 $ 904,267 $ 1,856,382 $ - $ 7,311,476 $ 6,072,785

Licenses 61,554 - - - 61,554 52,690

Permits and fines 156,347 8,831,327 - - 8,987,674 5,876,423

Uses of money and property 715,170 1,136,100 69,845 1,090,698 3,011,813 3,509,121

Intergovernmental 2,410,000 300,186 - - 2,710,186 1,738,177

Franchises 264,651 - - - 264,651 225,795

Charges for other services 142,961 370,962 - - 513,923 95,239

Charges to other funds 2,478,056 - - - 2,478,056 2,186,433

Fees and Other revenues 110,640 15,162,400 - 1,956,747 17,229,787 8,267,534

Total Revenues 10,890,206 26,705,242 1,926,227 3,047,445 42,569,120 28,024,197

EXPENDITURES

Current:

General government 2,431,971 375,804 1,788 - 2,809,563 1,715,348

Public Safety 5,384,223 - - - 5,384,223 4,250,440

Planning and community development 165,388 4,132,460 535,935 2,981,077 7,814,860 9,943,042

Public Works 1,935,914 83,704 - - 2,019,618 1,110,390

Parks and community services 109,182 60,529 - - 169,711 153,090

Other 459,698 - - 3,915 463,613 1,019,390

Capital Outlay 25,382 4,048,544 - 18,056,099 22,130,025 17,238,684

Debt Service

Principal - - 650,183 - 650,183 1,492,921

Interest - - 919,602 - 919,602 464,846

Total Expenditures 10,511,758 8,701,041 2,107,508 21,041,091 42,361,398 37,388,151

REVENUES OVER ( UNDER) EXPENDITURES 378,448 18,004,201 ( 181,281) ( 17,993,646) 207,722 ( 9,363,954)

OTHER FINANCING SOURCES ( USES)

Loan and bond proceeds 25,382 - 403,836 11,887,523 12,316,741 8,842,199

Operating Transfers In 641,510 7,037,651 54,000 10,821,257 18,554,418 9,288,632

Operating Transfers Out ( 909,927) ( 12,349,006) - ( 5,415,980) ( 18,674,913) ( 12,277,998)

Total other Financing Sources ( Uses) ( 243,035) ( 5,311,355) 457,836 17,292,800 12,196,246 5,852,833

REVENUES AND OTHER FINANCING SOURCES OVER

( UNDER) EXPENDITURES AND OTHER FINANCING USES 135,413 12,692,846 276,555 ( 700,846) 12,403,968 ( 3,511,121)

Fund Balance, Beginning of Year 3,737,593 14,367,927 962,195 21,688,588 40,756,303 44,267,424

Fund Balance, End of Year $ 3,873,006 $ 27,060,773 $ 1,238,750 $ 20,987,742 $ 53,160,271 $ 40,756,303

TOTALS

( Memorandum Only)

City of Brentwood

FOR THE FISCAL YEAR ENDED JUNE 30, 2001

( With Comparative Totals for the Fiscal Year Ended June 30, 2000)

COMBINED STATEMENTS OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

ALL GOVERNMENTAL FUND TYPES

GOVERNMENTAL FUND TYPES

City of Brentwood - 2000/ 01 CAFR The accompanying notes are an integral part of these financial statements. Page 4

Exhibit C

1 of 2 Pages

GENERAL FUND CERTAIN SPECIAL REVENUE DEBT SERVICE

Variance Variance Variance

Favorable Favorable Favorable

Budget Actual ( Unfavorable) Budget Actual ( Unfavorable) Budget Actual ( Unfavorable)

REVENUES

Taxes $ 4,429,030 $ 4,550,827 $ 121,797 $ 895,800 $ 904,267 $ 8,467 $ 1,963,000 $ 1,856,382 $ ( 106,618)

Licenses 52,000 61,554 9,554 - - - - - -

Permits and fines 180,200 156,347 ( 23,853) 3,124,500 8,831,327 5,706,827 - - -

Uses of money and property 552,000 715,170 163,170 382,000 925,141 543,141 37,000 69,845 32,845

Intergovernmental 1,996,692 2,410,000 413,308 276,949 300,186 23,237 - - -

Franchises 259,600 264,651 5,051 - - - - - -

Charges for other services 130,000 142,961 12,961 80,000 370,962 290,962 - - -

Charges to other funds 2,324,471 2,478,056 153,585 - - - - - -

Fees and Other revenues 137,700 110,640 ( 27,060) 4,816,941 15,156,109 10,339,168 - - -

Total Revenues 10,061,693 10,890,206 828,513 9,576,190 26,487,992 16,911,802 2,000,000 1,926,227 ( 73,773)

EXPENDITURES

Current:

General government 2,679,167 2,431,971 247,196 362,382 375,804 ( 13,422) - 1,788 ( 1,788)

Public Safety 5,394,172 5,384,223 9,949 - - - - - -

Planning and community development 133,852 165,388 ( 31,536) 5,028,416 4,132,460 895,956 505,000 535,935 ( 30,935)

Public Works 1,946,513 1,935,914 10,599 83,704 83,704 - - - -

Parks and community services 27,159 109,182 ( 82,023) 63,784 60,529 3,255 - - -

Other 632,193 459,698 172,495 - - - - - -

Capital Outlay 25,382 25,382 - 3,656,337 4,048,544 ( 392,207) - - -

Debt Service

Principal - - - - - - 691,774 650,183 41,591

Interest - - - - - - 1,014,478 919,602 94,876

Total Expenditures 10,838,438 10,511,758 326,680 9,194,623 8,701,041 493,582 2,211,252 2,107,508 103,744

REVENUES OVER ( UNDER) EXPENDITURES ( 776,745) 378,448 1,155,193 381,567 17,786,951 17,405,384 ( 211,252) ( 181,281) 29,971

OTHER FINANCING SOURCES ( USES)

Loan and bond proceeds 25,382 25,382 - - - - 317,307 403,836 86,529

Operating Transfers In 563,500 641,510 78,010 4,015,096 7,006,848 2,991,752 53,484 54,000 516

Operating Transfers Out ( 909,927) ( 909,927) - ( 11,542,144) ( 12,349,006) ( 806,862) - - -

Total other financing Sources ( Uses) ( 321,045) ( 243,035) 78,010 ( 7,527,048) ( 5,342,158) 2,184,890 370,791 457,836 87,045

REVENUES AND OTHER FINANCING

SOURCES OVER ( UNDER) EXPENDITURES

AND OTHER FINANCING USES $ ( 1,097,790) 135,413 $ 1,233,203 $ ( 7,145,481) 12,444,793 $ 19,590,274 $ 159,539 276,555 $ 117,016

Fund Balance, Beginning of Year 3,737,593 14,188,822 962,195

Fund Balance, End of Year $ 3,873,006 $ 26,633,615 $ 1,238,750

FOR THE FISCAL YEAR ENDED JUNE 30, 2001

City of Brentwood

COMBINED STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

CERTAIN GOVERNMENTAL FUND TYPES

City of Brentwood - 2000/ 01 preceding The accompanying notes are an integral part of these financial statements. Page 5

Exhibit C

2 of 2 Pages

Total

CERTAIN CAPITAL PROJECT ( Memorandum Only)

Variance Variance

Favorable Favorable

Budget Actual ( Unfavorable) Budget Actual ( Unfavorable)

REVENUES

Taxes $ - $ - $ - $ 7,287,830 $ 7,311,476 $ 23,646

Licenses - - - 52,000 61,554 9,554

Permits and fines - - - 3,304,700 8,987,674 5,682,974

Uses of money and property - 191,177 191,177 971,000 1,901,333 930,333

Intergovernmental - - - 2,273,641 2,710,186 436,545

Franchises - - - 259,600 264,651 5,051

Charges for other services - - - 210,000 513,923 303,923

Charges to other funds - - - 2,324,471 2,478,056 153,585

Fees and Other revenues - 1,956,747 1,956,747 4,954,641 17,223,496 12,268,855

Total Revenues - 2,147,924 2,147,924 21,637,883 41,452,349 19,814,466

EXPENDITURES

Current:

General government - - - 3,041,549 2,809,563 231,986

Public Safety - - - 5,394,172 5,384,223 9,949

Planning and community development 2,636,015 2,419,761 216,254 8,303,283 7,253,544 1,049,739

Public Works - - - 2,030,217 2,019,618 10,599

Parks and community services - - - 90,943 169,711 ( 78,768)

Other - 3,915 ( 3,915) 632,193 463,613 168,580

Capital Outlay 8,552,814 8,548,556 4,258 12,234,533 12,622,482 ( 387,949)

Debt Service

Principal - - - 691,774 650,183 41,591

Interest - - - 1,014,478 919,602 94,876

Total Expenditures 11,188,829 10,972,232 216,597 33,433,142 32,292,539 1,140,603

REVENUES OVER ( UNDER) EXPENDITURES ( 11,188,829) ( 8,824,308) 2,364,521 ( 11,795,259) 9,159,810 20,955,069

OTHER FINANCING SOURCES ( USES)

Loan and bond proceeds 250,000 820,113 570,113 592,689 1,249,331 656,642

Operating Transfers In 8,512,314 10,821,257 2,308,943 13,144,394 18,523,615 5,379,221

Operating Transfers Out ( 543,544) ( 721,238) ( 177,694) ( 12,995,615) ( 13,980,171) ( 984,556)

Total other financing Sources ( Uses) 8,218,770 10,920,132 2,701,362 741,468 5,792,775 5,051,307

REVENUES AND OTHER FINANCING

SOURCES OVER ( UNDER) EXPENDITURES

AND OTHER FINANCING USES $ ( 2,970,059) 2,095,824 $ 5,065,883 $ ( 11,053,791) 14,952,585 $ 26,006,376

Fund Balance, Beginning of Year 5,037,569 23,926,179

Fund Balance, End of Year $ 7,133,393 $ 38,878,764

FOR THE FISCAL YEAR ENDED JUNE 30, 2001

City of Brentwood

COMBINED STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

CERTAIN GOVERNMENTAL FUND TYPES ( Continued)

City of Brentwood - 2000/ 01 CAFR The accompanying notes are an integral part of these financial statements. Page 6

Exhibit D

Enterprise Internal

Funds Service Funds 2001 2000

Operating Revenues

Charges for services $ 9,883,384 $ 1 ,088,776 $ 1 0,972,160 $ 7,969,325

Property tax 381,293 - 3 81,293 312,750

Other income 907,303 - 907,303 580,352

Total Operating Revenues 11,171,980 1,088,776 12,260,756 8,862,427

Operating Expenses

Personnel services 3,787,642 349,148 4,136,790 2,675,079

Repairs and maintenance 1,237,846 27,887 1,265,733 1,647,923

Materials, supplies, and services 7,556,532 70,372 7,626,904 5,127,254

Depreciation and amortization 2,013,415 72,826 2,086,241 1,115,078

Total Operating Expense 14,595,435 520,233 15,115,668 10,565,334

Operating Income ( Loss) ( 3,423,455) 568,543 ( 2,854,912) ( 1,702,907)

Nonoperating Revenue ( Expense)

Other nonoperating expense - ( 1,389,154) ( 1,389,154) -

Other nonoperating revenue - 233,353 233,353 -

Developers fees and credits 17,260,336 - 17,260,336 -

Interest income 1,278,451 50,072 1,328,523 1,180,358

Interest expense ( 839,499) ( 10,048) ( 849,547) ( 933,059)

Total Nonoperating Revenues 17,699,288 ( 1,115,777) 16,583,511 247,299

Income ( Loss) Before Operating Transfers 14,275,833 ( 547,234) 13,728,599 ( 1,455,608)

Operating transfers - in 36,476,763 1,049,964 37,526,727 33,002,735

Operating transfers - out ( 37,278,740) ( 127,492) ( 37,406,232) ( 30,013,369)

Net Income 13,473,856 375,238 13,849,094 1,533,758

Retained Earnings, Beginning of Year 18,064,104 1,408,492 19,472,596 17,938,838

Retained Earnings, End of Year $ 31,537,960 $ 1,783,730 $ 3 3,321,690 $ 19,472,596

TOTALS

( Memorandum Only)

( With Comparative Totals for the Fiscal Year Ended June 30, 2000)

City of Brentwood

COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN

RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES

FOR THE FISCAL YEAR ENDED JUNE 30, 2001

City of Brentwood - 2000/ 01 CAFR The accompanying notes are an integral part of these financial statements. Page 7

Exhibit E

Enterprise Internal

Funds Service Funds 2001 2000

Cash Flows from Operating Activities

Operating Income ( Loss) $ ( 3,423,455) $ 568,543 $ ( 2,854,912) $ ( 1,702,907)

Adjustments to reconcile net income

to net cash provided by operating activities

Depreciation and amortization 2,013,415 72,826 2,086,241 1,115,078

( Increase) decrease in

Interest receivable ( 84,014) 83 ( 83,931) 1,251

Accounts receivable ( 1,082,929) - ( 1,082,929) ( 207,157)

Note receivable ( 1,558,862) - ( 1,558,862) ( 2,310,556)

Advances 1,475,599 - 1,475,599 -

Increase ( decrease) in

Deposits 379,204 - 379,204 ( 110,279)

Accounts payable 1,861,149 129,931 1,991,080 919,787

Net Cash Provided ( Used) by Operating Activities ( 419,893) 771,383 351,490 ( 2,294,783)

Cash Flows from Noncapital Financing Activities

Interest paid on long- term obligations ( 839,499) ( 10,048) ( 849,547) ( 933,059)

Operating transfers in 36,476,763 1,049,964 37,526,727 33,002,735

Operating transfers out ( 37,278,740) ( 127,492) ( 37,406,232) ( 30,013,369)

Equity Transfers and city contributions - - - 7,672,034

Net Cash Provided ( Used) in Noncapital Financing Activities ( 1,641,476) 912,424 ( 729,052) 9,728,341

Cash Flows from Capital and Related Financing Activities

Deferred revenue ( 200,831) - ( 200,831) 49,139

Deferred charges 64,458 - 64,458 ( 76,084)

Proceeds from issuance of debt 13,928,954 - 13,928,954 2,324,094

Principal payments on debt ( 1,377,243) - ( 1,377,243) ( 1,366,686)

Other nonoperating expenses - ( 489,816) ( 489,816) -

Other nonoperating revenues - 160,527 160,527 -

Purchase of property and equipment ( 24,554,258) ( 219,658) ( 24,773,916) ( 15,857,004)

Developers fees collected 17,260,336 - 17,260,336 9,348,174

Net Cash Provided ( Used) in Capital Financing Activities 5,121,416 ( 548,947) 4,572,469 ( 5,578,367)

Cash Flows from Investing Activities

Interest on cash and investments 1,278,451 50,072 1,328,523 1,180,353

Net Increase ( Decrease) in cash and cash equivalents 4,338,498 1,184,932 5,523,430 3,035,544

Cash, Beginning of Year 15,348,944 574,434 15,923,378 12,887,829

Cash, End of Year $ 19,687,442 $ 1 ,759,366 $ 21,446,808 $ 15,923,373

Non cash activity:

Contributed assets $ 1 0,598,675 $ - $ 10,598,675 $ 5,630,167

TOTALS

( Memorandum Only)

( With Comparative Totals for the Fiscal Year Ended June 30, 2000)

City of Brentwood

COMBINED STATEMENT OF CASH FLOWS

ALL PROPRIETARY FUND TYPES

FOR THE FISCAL YEAR ENDED JUNE 30, 2001

City of Brentwood - 2000/ 01 CAFR The accompanying notes are an integral part of these financial statements. Page 8

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 9

NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The City of Brentwood is located halfway between the cities of San Francisco and Sacramento at the eastern end of Contra Costa County. The

City is governed by a five ( 5) member City Council under the Council– Manager form of government and provides the following services: public

safety ( police), highways and streets, sanitation, public improvements, planning and zoning, and general administrative services. The City has a

current population of approximately 26,000, as of June 30, 2001, and encompasses approximately 13.73 square miles. Brentwood was

incorporated in 1948 as a general law city under the laws of the State of California.

At June 30, 2001, the City’s staff comprised 188 full- time employees who were responsible for City provided services. In addition, the City

employs approximately 100 seasonal recreation personnel.

The accounting policies of the City of Brentwood conform to accounting principles generally accepted in the United States of America as

applicable to governments. The Governmental Accounting Standards Board ( GASB) is the accepted standard- setting body for establishing

governmental accounting and financial reporting Principles.

A. Reporting Entity

As required by accounting principles generally accepted in the United States of America, these financial statements present the City of

Brentwood ( the primary government) and its component units, entities for which the government is considered financially accountable. The

City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization or there is a

potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also

considered to be financially accountable for an organization if the organization is fiscally dependent ( i. e., it is unable to adopt its budget, levy

taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as

component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City’s financial

statements to be misleading or incomplete.

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

are combined with data of the primary government. Each of the blended component units discussed below have a June 30, year- end. Each of

the component units listed below meets the above- mentioned criteria.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 10

NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)

Blended Component Units

• Brentwood Redevelopment Agency

The Brentwood Redevelopment Agency ( the Agency) is organized under the State of California Community Redevelopment Law. The

Agency Directors also serve as the City Council. Separate financial statements for the Redevelopment Agency may be obtained from the

City of Brentwood Finance Department.

• Brentwood Joint Powers Financing Authority

The Brentwood Joint Powers Financing Authority ( the Authority) is a joint powers authority between the City and the Authority. 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. Separate financial statements are not required for the Authority, and therefore, are not issued.

B. Fund Accounting

The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity.

The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, fund equity,

revenues and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based

upon the purposes for which they are to be spent and the means by which spending activates are controlled.

The various funds are grouped in the financial statements of this report. Fund types and account groups used by the City are as follows:

Governmental Fund Types

• General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those

required to be accounted for in another fund.

• Special Revenue Funds - Special Revenue Funds are used to account for proceeds of specific revenue sources ( other than major capital

projects) that are legally restricted to expenditures for specified purposes.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 11

NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)

• Capital Projects Funds - Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of

major capital facilities ( other than those financed by Proprietary Funds and Trust Funds).

• Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of long- term debt

principal, interest, and related costs.

Proprietary Fund Types

• Enterprise Funds - Enterprise Funds are used to account for operations ( a) that are financed and operated in a manner similar to private

business enterprises where the intent of the governing body is that the costs, including depreciation, of providing goods or services to the

general public on a continuing basis, be financed or recovered primarily through user charges; or ( b) where the governing body has

decided that periodic determination of revenues earned, expenses incurred, and/ or net income is appropriate for capital maintenance,

public policy, management control, accountability, or other purposes.

• Internal Service Funds – Internal Service Funds account for the financing of goods, services, or facilities provided by one City department

to other City departments on a cost- reimbursement basis.

Fiduciary Fund Type

• Agency Funds - Agency Funds are used to account for assets held by the City in or as an agent for individuals, private organizations, other

governments, and/ or their funds. Agency Funds are custodial in nature ( assets equal liabilities) and do not involve measurement of results

of operations.

Account Groups

• General Fixed Assets – The General Fixed Assets Account Group accounts for recorded fixed assets of the City, other than those

accounted for in the proprietary funds types. Infrastructure ( i. e., streets, road and bridges) is included and depreciation is provided for on a

straight line basis, based on the estimated useful lives of the related assets. All fixed assets are valued at historical cost or estimated

historical cost if actual costs were not available. Donated fixed assets are valued at their estimated fair market value on the date donated.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 12

NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)

• General Long- Term Debt - The accounting and reporting treatment applied to the long- term liabilities associated with a fund are

determined by its measurement focus. All Governmental Funds are accounted for on a spending or “ financial flow” measurement focus.

This means that only current assets and current liabilities are generally included in their balance sheets. Their reported fund balance ( net

of current assets) is considered a measure of “ available spendable resources.” Governmental fund operating statements present increases

( revenues and other financing sources) and decreases ( expenditures and other financing uses) in net current assets. Accordingly, they are

said to present a summary of sources and uses of “ available spendable resources” during a period.

C. Basis of Accounting / Measurement Focus

All governmental funds are accounted for on a spending or financial flow measurement focus, which means that only current assets and

current liabilities are generally included on their balance sheets. Their reported fund balance is their net current assets, which is considered

only to be a measure of available spendable resources. Governmental fund operating statements present a summary of sources and uses of

available spendable resources during a period by presenting increases and decreases in net current assets.

Because of their spending measurement focus, governmental funds exclude fixed assets and non- current liabilities. Instead, these assets and

liabilities are reported in the General Fixed Assets Account Group and the Long- Term Debt Account Group. These account groups measure

only financial position; they are not funds and they do not measure results of operations. They maintain accounting control over the City’s

governmental funds fixed assets and City debt, which will be repaid by governmental funds.

Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they become available. Available means

then due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough

thereafter ( not to exceed 60 days) to be used to pay liabilities of the current period.

Grants, entitlement, or shared revenues recorded in governmental funds are recognized as revenue in the accounting period when they become

susceptible to accrual, i. e., both measurable and available ( modified accrual basis). Grants received before the revenue recognition criteria has

been met are reported as deferred revenue, a liability account. Such resources not received are reported as a receivable if the revenue

recognition criteria has been met.

Special reporting treatments are also applied to governmental fund inventories to indicate that they do not represent “ available spendable

resources” even though they are a component of net current assets. Such amounts are offset by fund balance reserve accounts.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 13

NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)

Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred; principal and

interest on general long- term debt is recognized when due.

Construction period interest costs incurred to bring certain assets to the condition and location necessary for their intended use are not capitalized

as part of the historical cost of acquiring the assets.

All proprietary funds are accounted for on a cost of services or capital maintenance measurement focus. This means that all assets and all

liabilities ( whether current or non- current) associated with their activity are included on their balance sheets. Their reported fund equity ( net total

assets) is segregated into contributed capital and retained earnings components. All proprietary funds are accounted for using the accrual basis of

accounting. Their revenues are recognized when they are earned and become measurable, expenses are recognized when they are incurred.

The City applies, to all proprietary funds, all applicable pronouncements of the Government Accounting Standards Board ( GASB) as well as any

applicable pronouncement of the Financial Accounting Standards Board, the Accounting Principles Board, or any Accounting Research Bulletins

issued on or before November 30, 1989, unless these pronouncements conflict with or contradict GASB pronouncements.

Depreciation of all exhaustible fixed assets used by Proprietary Funds is charged as an expense against their operations. Proprietary fund fixed

assets are reported net of accumulated depreciation on their balance sheets. Depreciation has been provided over the estimated useful lives using

the straight- line method for all classes of fixed assets.

The estimated useful lives for the General Fixed Asset Account Group and the Proprietary Funds are as follows:

Land improvements 20 years

Building and structures 45 years

Machinery and equipment 5 - 20 years

Vehicles 6 years

Infrastructure 65 years

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 14

NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)

D. Budgets and Budgetary Accounting

• General Budget Policies

Formal budgetary integration is employed as a management control device during the year for the General Fund, certain Special Revenue

Funds, Debt Service Funds, and certain Capital Project Funds. See footnote # 2 for those funds not included. The level of budgetary

control is established at the fund level, and adopted on a basis consistent with accounting principles generally accepted in the United

States of America. Expenditures may not exceed budgeted appropriations at the fund level without City Council approval.

Prior to July 1, the budget is legally enacted through passage of a resolution. The City Council periodically reviews the budgets and

adopts supplemental appropriations ( amendments) at the fund level when required. The City Manager is authorized to transfer budgeted

amounts between line items within any department. Budgeted amounts presented in the financial statements are as originally adopted, or

as amended by the City Council. Individual amendments were not material in relation to original appropriations.

All unencumbered and unexpended appropriations lapse at each fiscal year end, and are reappropriated in the ensuing year’s budget.

• Encumbrances

Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of funds are recorded in

order to reserve that portion of the applicable appropriation, is employed in the governmental funds. Open encumbrances are recorded as

reservations of fund balance since the commitments will be paid by subsequent years’ budget appropriations. Encumbrances do not

constitute expenditures or liabilities. Encumbered appropriations are presented to Council each year for reappropriation in the ensuing

year’s budget. There were no encumbrances outstanding in any governmental fund at June 30, 2001.

• Budget Basis of Accounting

Budgets for governmental funds are adopted on a basis consistent with accounting principles generally accepted in the United States of

America. Budgetary comparisons presented for the General, Special Revenue, Capital Project, and Debt Service Funds in this report are

presented on the same basis.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 15

NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)

E. Cash and Investments

• Investments are stated at fair value.

• Cash and Cash Equivalents

For purposes of the statement of cash flows, the City considers all pooled cash and investments as cash and cash equivalents because the

pool is used essentially as a demand deposit account from the standpoint of the proprietary funds.

F. Vacation, Sick Pay, Compensatory Time Off

A total of 11 to 28 vacation days, up to 60 hours of compensatory time off or 80 hours of administrative leave time and 12 days of sick leave

may be accumulated by employees every year. Sick leave is not paid at termination but is used for additional service credits towards

retirement and half ( up to $ 8,000) of accrued sick leave may be cashed in at time of retirement from Brentwood. Under certain restrictive

circumstances, limited amounts of sick leave can be converted to vacation time. Vacation time is only to accumulate up to one and one- half

years of earnings. All employees may elect to receive a lump sum payment of up to 40 hours of accumulated vacation each March and with

Mid- Managers, Department Directors, and the City Manager eligible to elect payment of up to 80 hours in March. Additionally, each October,

employees with five years of service may elect to receive a lump sum payment of up to 40 hours of accumulated vacation time; with Mid-

Manager, Department Directors and the City Manager eligible to elect payment of up to 80 hours.

The City accrues a general long- term liability for the gross amount of all earned but not taken leave for all employees except for sick leave for

those who have terminated by the date of preparation of the financial statements. Because no employees are assigned full time to the

enterprise funds all of the liability is recorded in the General Long- Term Debt Account Group. The total liability is included in the General

Long- Term Debt Account Group because it is anticipated that none of the liability will be liquidated with available financial resources.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 16

NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)

G. Property Tax

Property tax valuation, lien, and levy for secured and unsecured property is March 1 of each year. Fifty percent of secured taxes are due on

November 1 and February 1 of each fiscal year and are delinquent on December 10 and April 10, respectively. Unsecured property taxes are

due on July 1 and delinquent on August 31. Contra Costa County bills and collects the City's property taxes, and the remittance of them to the

City is accounted for in the City's General Fund. City property tax revenues are recognized when levied to the extent that they result in current

receivables. The City receives their full assessment of property tax, and the County retains all delinquent charges.

H. Use of Estimates

In preparing general purpose financial statements in conformity with GAAP, management is required to make estimates and assumptions that

affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the general purpose

financial statements and revenues, expenditures and expenses during the reporting period. Actual results could differ from those estimates.

I. Contributed Capital in Proprietary Fund Types

Contributed capital in proprietary funds represents contributed fixed assets. Contributed in the proprietary funds increased by $ 10,598,675

during the year ended June 30, 2001.

J. Total Columns on Combined Statements - Overview

Total columns on combined statements are captioned “ Memorandum Only” to indicate that they are presented only to facilitate financial

analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with

accounting principles generally accepted in the United States of America. Neither is such data comparable to a consolidation. Interfund

eliminations have not been made in the aggregation of this data.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 17

NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( Continued)

K. Deferred Compensation Plan

City employees may defer a portion of their compensation under a City Sponsored deferred compensation plan created in accordance with

Internal Revenue Code Section 457. Under the plan, participants are not taxed on the deferred portion of their compensation until it is

distributed to them. Distribution may be made only at termination of employment, retirement, death or in emergency as defined by the Plan.

In accordance with GASB 32, the City revised the plan to no longer make the funds available to the City’s general creditors and accordingly,

the City does not report any assets or liabilities associated with this plan in these financial statements.

NOTE # 2 – INTERFUND RECEIVABLES AND PAYABLES / STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

The following Funds have interfund receivables and payable balances as of June 30, 2001:

Due from Due to

Other Funds Other Funds

General Fund $ 33,201 $ -

Enterprise Funds:

City Rentals - 33,201

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 18

NOTE # 2 – INTERFUND RECEIVABLES AND PAYABLES / STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY ( Continued)

These funds are not legally required to adopt budgets as their appropriations are established by the related bond documentation and/ or other legal

agreements.

Capital Project Funds:

Capital Improvement Funding Program 98- 1

Capital Improvement Funding Program 99- 1

Capital Improvement Funding Program 2000- 1

JPA Capital Projects

Special Revenue Funds:

Bypass Authority

Agriculture Conservation

The following fund contains a deficit fund or accumulated deficit balance as of June 30, 2001:

Enterprise Funds:

City Rentals $ 54,496

The City projects that future revenues will offset these accumulated deficits.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 19

NOTE # 2 – INTERFUND RECEIVABLES AND PAYABLES / STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY ( Continued)

The following funds or fund types had expenditures, which exceeded budgeted amounts, for the 2000- 2001 fiscal year.

Budgeted Actual Over Budget

Special Revenue Funds

Vehicle Abatement $ 6,626 $ 7,629 $ ( 1,003)

Thoroughfares 3,028,989 3,548,629 ( 519,640)

North Brentwood Redevelopment Low Income Housing 34,200 48,282 ( 14,082)

Facility Fee Administration - 3,916 ( 3,916)

Debt Service Funds

North Brentwood Redevelopment Project 505,000 532,467 ( 27,467)

ABAG XXVI COP's 317,308 319,096 ( 1,788)

Capital Project Funds

RDA North Brentwood Area 107,500 114,771 ( 7,271)

Street Improvement Projects - 3,915 ( 3,915)

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 20

NOTE # 3 - CASH AND INVESTMENTS

Pooled Deposits:

Demand deposits $ 588,615

Petty cash 4 ,036

Pooled investments 95,392,264

Total Cash and Investments $ 95,984,915

Cash and investments appear on the balance sheet as follows:

Cash and investments $ 65,217,645

Restricted cash and investments 30,767,270

$ 95,984,915

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 21

NOTE # 3 - CASH AND INVESTMENTS ( Continued)

The cash and cash equivalents at June 30, 2001, presented below categorized separately to give an indication of the level of risk assessment with

each deposit.

Bank Balance

Category * Carrying

1 2 3 Total Amount

Categorized

Demand Deposits $ 100,000 $ - $ 1,958,602 $ 2,058,602 $ 5 88,615

Uncategorized

Petty Cash 4 ,036

Total Cash and

Cash Equivalents $ 5 92,651

* These categories are as follows:

Category 1: Insured or collateralized with securities held by the City or by its agent in the City’s name.

Category 2: Collateralized with securities held by the pledging financial institution's trust department or agent in the City’s name.

Category 3: Uncollateralized. This includes any bank balance that is collateralized with securities held by the pledging financial

institution or by its trust department or agent but not in the City’s name.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 22

NOTE # 3 - CASH AND INVESTMENTS ( Continued)

A. Pooled Cash and Non- Negotiable Certificates of Deposit

The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by outside fiscal agents, under

the provisions of bond indentures.

Interest income earned on pooled cash and investments is allocated quarterly to the various funds based on the average month- end balances.

Interest income from cash and investment with fiscal agent are credited directly to the related fund.

B. Authorized Investments

In accordance with Section 53601 of the California Government Code, the City may invest in the following types of investments:

Securities of the U. S. Government, or its agencies

Negotiable Certificates of Deposits

Bankers Acceptances

Commercial Paper

Local Agency Investment Fund ( State Pool) Deposits

Repurchase Agreements

Corporate Medium Term Notes

California Arbitrage Management Program

Shares of Beneficial Interest by Diversified Management Companies

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 23

NOTE # 3 - CASH AND INVESTMENTS ( Continued)

Investments at June 30, 2001, held on behalf of the City of Brentwood are presented below, categorized separately to give an indication of the

level of risk associated with each investment:

Category Reported Fair

1 2 3 Value Value

U. S. Treasury Notes\ Bonds $ 28,716,855 $ - $ - $ 28,716,855 $ 28,738,053

Uncategorized:

Local Agency Investment Fund 4 1,899,252 4 1,992,980

Money Market and Mutual Funds 2 0,655,285 2 0,655,285

Guaranteed Investment Contracts 4 ,120,872 4 ,120,872

$ 95,392,264 $ 95,507,190

These categories are as follows:

Category 1: Insured or registered, or securities held by the City or its agent in the City’s name.

Category 2: Uninsured and unregistered, with securities held by the counter party's trust department or agent in the City’s name.

Category 3: Uninsured and unregistered, with securities held by the counter party or by its trust department or agent but not in the

City’s name.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 24

NOTE # 3 - CASH AND INVESTMENTS ( Continued)

At June 30, 2001, the City had no investments in repurchase agreements. At no time during the fiscal year did the City borrow funds through

use of a reverse- repurchase agreement, even though such transactions are authorized by the City’s investment policy. Investments are stated at

fair value. All investments, held by the City at year- end, had maturities of less than 5 years.

Investment In State Treasurer’s Pool

The Local Agency Investment Fund ( LAIF) is an external investment pool sponsored by the State of California authorized under Section

16429.1,2,3 of the California Government code. The fund is a voluntary program created by statute as an investment alternative for California

local governments and special districts. The fund is administered by the California State Treasurer. The City deposits excess cash in LAIF is

not required to be categorized. The fair value for these deposits was provided by the pool sponsor.

C. Cash and Investments with Fiscal Agent

The City has monies held by trustees or fiscal agents pledged to the payment or security of certain bonds, certificates of participation, and

lease obligations. The California Government Code provides these monies, in the absence of specific statutory provisions governing the

issuance of bonds certificates, or leases, may be invested in accordance with the ordinance, resolutions or indentures specifying the types of

investments its trustees or fiscal agents may make.

D. Fair Value of Investments

Accounting pronouncement GASB Statement 31 generally applies to investments in external investment pools ( State of California LAIF &

county treasury investment pools), investments purchased with maturities greater than one year, mutual funds, and certain investment

agreements. Generally, governmental entities need to report the “ fair value” changes for these investments at year- end and records these gains

or losses in their operating statements.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 25

NOTE # 3 - CASH AND INVESTMENTS ( Continued)

Methods and assumptions used to estimate fair value: The City maintains investment accounting records on amoritized cost and adjusts those

records to “ fair value” on a monthly basis when material. The Funds investment custodian provides market values on each investment instrument

on a monthly basis. The investments held by the Fund are widely traded in the financial markets and trading values are readily available from

numerous published sources. The Fund has elected to report its money market investments ( those investments with maturities of less than one

year) at amortized cost adjusted to fair value on a monthly basis. Unrealized gains and losses are recorded on a monthly basis and the carrying

value of its investments is considered “ fair value”.

State of California State Treasurer’s Local Agency Investment Fund ( LAIF): The City holds an investment in LAIF that is subject to being

adjusted to “ fair value”. The City is required to disclose its methods and assumptions used to estimate the fair value of its holdings in LAIF. The

City relied upon information provided by the State Treasurer in estimating the City’s fair value position of its holding in LAIF. The City had a

contractual withdrawal value of $ 41,899,252 whose pro- rata share of fair value was estimated by the state Treasurer to be $ 41,992,980. The fair

value change in this investment for the year came to an amount that was not material for presentation in the financial statements.

The State Treasurer’s Local Agency Investment Fund (“ LAIF”) is a governmental investment pool managed and directed by the California State

Treasurer and is not registered with the Securities and Exchange Commission. An oversight committee, comprised of California State officials

and various participants, provide oversight to the management of the fund. The daily operations and responsibilities of LAIF fall under the

auspices of the State Treasurer’s office. The City is a voluntary participant in the investment pool.

The management of LAIF has indicated to the City that as of June 30, 2001, the amortized cost of the pool was $ 54,496,268,373. The fair value

was $ 55,175,428,123. Included in LAIF’s investment portfolio are certain derivative securities or similar products in the form of structured notes,

totaling $ 1,517,548,000 and asset- backed securities totaling $ 937,996,000. LAIF’s ( and the City’s) exposure to risk ( credit, market or legal) is not

currently available.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 26

NOTE # 4 - FIXED ASSETS

Fixed assets of the primary government at June 30, 2001 are as follows:

Balance Acquisitions Balance

Beginning of ( Dispositions)/ End of

Year Adjustments Year

General Fixed Asset Group:

Land $ 4,554,184 $ 12,438,992 $ 16,993,176

Land Improvements 169,083 850 169,933

Capital Assets 4,374,383 ( 880,706) 3,493,677

Infrastructure - 110,591,035 110,591,035

Equipment 1,033,066 1,234,434 2,267,500

Capital Assets Before Depreciation 10,130,716 123,384,605 133,515,321

Accumulated Depreciation ( 2,102,327) ( 23,698,240) ( 25,800,567)

Net Capital Assets $ 8,028,389 $ 99,686,365 $ 107,714,754

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 27

NOTE # 4 - FIXED ASSETS ( Continued)

Balance Acquisitions Balance

Beginning of Year ( Dispositions)/ End of

Enterprise: ( as restated) Adjustments Year

Land improvements $ - $ 1 ,829,069 $ 1,829,069

Equipment 4,353,383 1,159,075 5,512,458

Capital assets 59,825,587 8 ,459,277 68,284,864

Construction in progress - 24,095,224 24,095,224

Capital Assets Before Depreciation 64,178,970 35,542,645 99,721,615

Accumulated Depreciation ( 9,329,563) ( 2,403,127) ( 11,732,690)

Net Capital Assets $ 54,849,407 $ 33,139,518 $ 87,988,925

Balance Balance

Beginning of End of

Year Dispositions Year

Internal Service:

Equipment $ 1,203,117 $ ( 474,855) $ 728,262

Accumulated Depreciation ( 220,430) ( 204,825) ( 425,255)

Totals $ 982,687 $ ( 679,680) $ 303,007

The purchase of assets through capital lease transactions have been included in the preceding categories.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

City of Brentwood – 2000/ 01 CAFR Page 28

NOTE # 5 - CHANGES IN LONG- TERM DEBT ACCOUNT GROUP

The following summarizes changes in long- term debt obligations during the year:

General Long- Term Debt

Balance Payments Balance

June 30, 2000 Additions Adjustments June 30, 2001

Bonds:

Certificates of Participation $ 1,120,000 $ - $ ( 255,000) $ 865,000

Tax allocation bonds 3,525,000 - ( 285,000) 3,240,000

Capital Improvements 5,420,000 - ( 100,000) 5,320,000

Total Bonds 10,065,000 - ( 640,000) 9,425,000

Capital Leases:

Various equipment 261,092 2 5,382 ( 10,183) 276,291

Total Capital Leases 261,092 2 5,382 ( 10,183) 276,291

Other:

Advances payable to City of Brentwood by the

Redevelopment Agency 2,334,194 - - 2,334,194

Accumulated compensated absences ( net) 487,837 1 07,516 - 595,353

Total Other 2,822,031 1 07,516 - 2,929,547

Total General

Long- Term Debt $ 13,148,123 $ 1 32,898 $ ( 650,183) $ 12,630,838

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

Page 29

City of Brentwood – 2000/ 01 CAFR

NOTE # 5 - CHANGES IN LONG- TERM DEBT ACCOUNT GROUP ( Continued)

A. Bonds

• Certificates of Participation

Certificates of Participation ( ABAG XXVI) dated October 1, 1992, to finance utility construction projects, total annual debt service

payment, including interest at 4.5 percent to 6.4 percent, $ 137,070 to $ 328,415. Final payment is due in October 2003. The payment

schedule is as follows:

Year Ending

June 30, Principal Interest Total

2002 $ 270,000 $ 46,160 $ 316,160

2003 290,000 38,415 328,415

2004 305,000 16,044 321,044

Total $ 865,000 $ 100,619 $ 965,619

• Tax Allocation Bonds

Brentwood Redevelopment Agency tax allocation bonds, Series A, dated February 1, 1990, to finance Redevelopment projects. Total

annual debt service payment, including interest at 6.7 percent, ranges from $ 405,411 to $ 561,923, with a balloon payment, which is the

final payment, due November 1, 2008. The payment schedule is as follows:

Year Ending

June 30, Principal Interest Total

2002 $ 305,000 $ 235,073 $ 540,073

2003 330,000 211,730 541,730

2004 355,000 99,750 454,750

2005 - - -

2006 - - -

Thereafter 2,250,000 256,875 2,506,875

Total $ 3,240,000 $ 803,428 $ 4,043,428

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

Page 30

City of Brentwood – 2000/ 01 CAFR

NOTE # 5 - CHANGES IN LONG- TERM DEBT ACCOUNT GROUP ( Continued)

• Capital Improvement Program Bonds

Brentwood Infrastructure Financing Authority Capital Improvement Program Bonds, Series 1996, dated June 7, 1996, to finance certain

improvements to certain roadways within the City. Total annual debt service payments, including interest at 5.25 percent, range from

$ 374,120 to $ 403,532. Final payment due June 1, 2026. The payment schedule is as follows:

Year Ending

June 30, Principal Interest Total

2002 $ 110,000 $ 279,300 $ 389,300

2003 115,000 288,532 403,532

2004 120,000 267,488 387,488

2005 125,000 261,188 386,188

2006 140,000 254,524 394,524

Thereafter 4,710,000 3,002,287 7,712,287

Total $ 5,320,000 $ 4,353,319 $ 9,673,319

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

Page 31

City of Brentwood – 2000/ 01 CAFR

B. Capital Leases

The combined Capital leases have future payments as follows:

Year Ending

June 30, Payments

2002 $ 113,259

2003 87,100

2004 37,243

2005 37,243

2006 37,243

Subtotal 312,088

Less amount representing interest ( 35,797)

Total $ 276,291

C. Other

• Advances

Loan and advances payable by the Brentwood Redevelopment Agency to the City of Brentwood pursuant to the Cooperation Agreement

between the City and the Agency. The total obligation is subordinate to any external debt of the Agency. Interest accrues equivalent to

the current Local Agency Investment Fund rate and any unpaid accrued interest is added to the total obligation on a monthly basis. The

obligation is being repaid from incremental tax revenues. There are no fixed due dates. The balance at June 30, 2001, is $ 2,334,194. The

corresponding advances receivable were recorded as assets in the appropriate funds. All governmental funds with advances due from the

Redevelopment Agency have a corresponding fund balance reserve.

• Accumulated compensated absences

The Accumulated compensated absences balance at June 30, 2001, is $ 595,353.

• North Brentwood RDA Pass- through Agreements to Other Agencies

The North Brentwood RDA has approved various pass- through agreements to other agencies. These agreements specify that amounts are

due and payable once the tax increment is received by the Agency. There are no outstanding balances at year- end.

City of Brentwood

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2001

Page 32

City of Brentwood – 2000/ 01 CAFR

NOTE # 5 - CHANGES IN LONG- TERM DEBT ACCOUNT GROUP ( Continued)

Enterprise Fund Debt

Balance Payments Balance

June 30, 2000 Additions Adjustments June 30, 2001

Capital Leases

Water fund - equipment $ 19,578 $ - $ ( 19,578) $ -

Wastewater fund - equipment 106,336 - ( 51,801) 54,535

Solid Waste - equipment 29,259 - ( 29,259) -

Solid Waste - equipment 280,136 - ( 40,793) 239,343

Total Capital Leases 435,309 - ( 141,431) 293,878

Notes Payable

Solid Waste note payable 1,118,278 - ( 131,613) 986,665

Solid Waste note payable

to BDS for settlement 343,800 - ( 57,300) 286,50